WeightWatchers 2011 Annual Report Download - page 98

WEIGHT WATCHERS INTERNATIONAL, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
obligations under the Term A Loan, the term loan facility consisted of the Additional Term A Loan, the Term B
Loan, the Term C Loan and the Term D Loan. Following the maturity and payment in full of obligations under
Revolver I, the Revolver consisted solely of Revolver II, with a total of $332,647 of outstanding and available
credit.
At December 31, 2011, the Company had $1,051,801 outstanding under the WWI Credit Facility, all of
which was comprised of term loans. Revolver II had $0 outstanding and $331,620 available.
At December 31, 2011, the Additional Term A Loan bore interest at a rate equal to LIBOR plus 0.875% per
annum; the Term B Loan bore interest at a rate equal to LIBOR plus 1.25% per annum; the Term C Loan bore
interest at a rate equal to LIBOR plus 2.125% per annum; the Term D Loan bore interest at a rate equal to
LIBOR plus 2.25% per annum; and the Revolver II bore interest at a rate equal to LIBOR plus 2.25% per annum.
In addition to paying interest on outstanding principal under the WWI Credit Facility, at the end of fiscal 2011,
the Company was required to pay a commitment fee to the lenders under the Revolver II with respect to the
unused commitments at a rate equal to 0.4375% per annum.
The WWI Credit Facility contains customary covenants including covenants that, in certain circumstances,
restrict the Company’s ability to incur additional indebtedness, pay dividends on and redeem capital stock, make
other payments, including investments, sell its assets and enter into consolidations, mergers and transfers of all or
substantially all of its assets. The WWI Credit Facility also requires the Company to maintain specified financial
ratios and satisfy certain financial condition tests. At the end of fiscal 2011, the Company was in compliance
with all of the required financial ratios and also met all of the financial condition tests and expects to continue to
do so for the foreseeable future. The WWI Credit Facility contains customary events of default. Upon the
occurrence of an event of default under the WWI Credit Facility, the lenders thereunder may cease making loans
and declare amounts outstanding to be immediately due and payable. The WWI Credit Facility is guaranteed by
certain of the Company’s existing and future subsidiaries. Substantially all the assets of the Company
collateralize the WWI Credit Facility.
The Company amended the WWI Credit Facility on June 26, 2009 to allow it to make loan modification
offers to all lenders of any tranche of term loans or revolving loans to extend the maturity date of such loans and/
or reduce or eliminate the scheduled amortization. Any such loan modifications would be effective only with
respect to such tranche of term loans or revolving loans and only with respect to those lenders that accept the
Company’s offer. Loan modification offers may be accompanied by increased pricing and/or fees payable to
accepting lenders. This amendment also provides for up to an additional $200,000 of incremental term loan
financing through the creation of a new tranche of term loans, provided that the aggregate principal amount of
such new term loans cannot exceed the amount then outstanding under the Company’s existing revolving credit
facility. In addition, the proceeds from such new tranche of term loans must be used solely to repay certain
outstanding revolving loans and permanently reduce the commitments of certain revolving lenders. In connection
with this amendment, the Company incurred fees of $4,058 during fiscal 2009.
On April 8, 2010, the Company amended the WWI Credit Facility pursuant to a loan modification offer to
all lenders of all tranches of term loans and revolving loans to, among other things, extend the maturity date of
such loans. In connection with this amendment, certain lenders converted a total of $454,480 of their outstanding
term loans under the Term A Loan ($151,775) and Additional Term A Loan ($302,705) into term loans under the
new Term C Loan which matures on June 30, 2015 (or 2013, upon the occurrence of certain events described in
the WWI Credit Facility agreement), and a total of $241,875 of their outstanding term loans under the Term B
Loan into term loans under the new Term D Loan which matures on June 30, 2016. In addition, certain lenders
converted a total of $332,647 of their outstanding Revolver I commitments into commitments under the new
F-14