WeightWatchers 2011 Annual Report Download - page 78

Off-Balance Sheet Transactions
As part of our ongoing business, we do not participate in transactions that generate relationships with
unconsolidated entities or financial partnerships established for the purpose of facilitating off-balance sheet
arrangements or other contractually narrow or limited purposes, such as entities often referred to as structured
finance or special purpose entities.
Related Parties
For a discussion of related party transactions affecting us, see “Item 12. Certain Relationships and Related
Transactions, and Director Independence” in Part III of this Annual Report on Form 10-K.
Seasonality
Our business is seasonal, with revenues generally decreasing at year end and during the summer months.
Our operating income for the first half of the year is generally the strongest. Our advertising schedule supports
the three key enrollment-generating seasons of the year: winter, spring and fall, with winter having the highest
concentration of advertising spending. The timing of certain holidays, particularly Easter, which precedes the
spring marketing campaign and occurs between March 22 and April 25, may affect our results of operations and
the year-to-year comparability of our results. For example, in fiscal 2009, Easter fell on April 12, which meant
that our spring marketing campaign began in the second quarter of fiscal 2009 as opposed to beginning in the
first quarter as it did in fiscal 2008. The introduction of Monthly Pass in the meetings business has resulted in
less seasonality with regard to our meeting fee revenues because its revenues are amortized over the related
subscription period. While WeightWatchers.com experiences seasonality similar to the meetings business in
terms of new subscriber sign-ups, its revenue tends to be less seasonal because it amortizes subscription revenue
over the related subscription period.
Recently Issued Accounting Pronouncements
In September 2011, the Financial Accounting Standards Board, or the FASB, issued updated guidance on
the periodic testing of goodwill for impairment. This guidance will allow companies to assess qualitative factors
to determine if it is more-likely-than-not that goodwill might be impaired and whether it is necessary to perform
the two-step goodwill impairment test required under current accounting standards. This guidance is applicable
for fiscal years beginning after December 15, 2011, with early adoption permitted. The adoption of this guidance
is not expected to have a material effect on our consolidated financial position, results of operations or cash
flows.
In June 2011, the FASB issued authoritative guidance requiring companies to present the total of
comprehensive income, the components of net income and the components of other comprehensive income either
in a single continuous statement of comprehensive income or in two separate but consecutive statements. The
provisions of the guidance are effective for fiscal years, and interim periods within those years, beginning after
December 15, 2011. In December 2011, the FASB issued an amendment deferring the effective date for the
presentation of reclassification adjustments out of accumulated other comprehensive income. Since the guidance
amends the disclosure requirements concerning comprehensive income, its adoption will not affect our
consolidated financial position, results of operations or cash flows.
In May 2011, the FASB issued authoritative fair value guidance entitled “Fair Value Measurement:
Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP and
IFRSs”. Some of the amendments included in the guidance clarify the FASB’s intent about the application of
existing fair value measurement requirements. Other amendments change a particular principle or requirement
for measuring fair value or for disclosing information about fair value measurements. This guidance is effective
for interim and annual periods beginning after December 15, 2011. We are currently evaluating the full impact of
this guidance, but do not expect it to have a material impact on the disclosures in our consolidated financial
statements in future filings.
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