WeightWatchers 2012 Annual Report Download - page 77

China Joint Venture
In February 2008, we entered into a joint venture with Groupe DANONE S.A. to establish a weight
management business in the People’s Republic of China. The joint venture, 51% owned by us and 49% owned by
Groupe DANONE, commenced retail operations in China in September 2008.
In April 27, 2011, we acquired the 49% minority equity interest in the joint venture for consideration of
$1,000. Effective the date of the acquisition of the minority equity interest, we own 100% of the joint venture.
Stock Transactions
On October 9, 2003, our Board of Directors authorized and we announced a program to repurchase up to
$250.0 million of our outstanding common stock. On each of June 13, 2005, May 25, 2006 and October 21, 2010,
our Board of Directors authorized and we announced adding $250.0 million to this program. The repurchase
program allows for shares to be purchased from time to time in the open market or through privately negotiated
transactions. No shares will be purchased from Artal Holdings and its parents and subsidiaries under this
program. The repurchase program currently has no expiration date. During the twelve months ended
December 29, 2012, the Company repurchased no shares of its common stock in the open market under this
program. The repurchase of shares of common stock under the Tender Offer and from Artal Holdings pursuant to
the Purchase Agreement, as discussed further below, was not made pursuant to the repurchase program. During
the twelve months ended December 31, 2011, the Company repurchased in its first quarter 0.8 million shares of
its common stock in the open market under this program for a total cost of $31.6 million, and in its second, third
and fourth quarters no shares of its common stock under this program.
On February 23, 2012, we commenced a “modified Dutch auction” tender offer for up to $720.0 million in
value of our common stock at a purchase price not less than $72.00 and not greater than $83.00 per share, or the
Tender Offer. Prior to the Tender Offer, on February 14, 2012, we entered into an agreement, or the Purchase
Agreement, with Artal Holdings whereby Artal Holdings agreed to sell to us, at the same price as was determined
in the Tender Offer, such number of its shares of our common stock that, upon the closing of this purchase after
the completion of the Tender Offer, Artal Holdings’ percentage ownership in the outstanding shares of our
common stock would be substantially equal to its level prior to the Tender Offer. Artal Holdings also agreed not
to participate in the Tender Offer so that it would not affect the determination of the purchase price of the shares
in the Tender Offer.
The Tender Offer expired at midnight, New York time, on March 22, 2012, and on March 28, 2012 we
repurchased approximately 8.8 million shares at a purchase price of $82.00 per share. On April 9, 2012, we
repurchased approximately 9.5 million of Artal Holdings’ shares at a purchase price of $82.00 per share pursuant
to the Purchase Agreement. In March 2012, we amended and extended the WWI Credit Facility to finance these
repurchases. See “—Long-Term Debt”.
The WWI Credit Facility provides that we are permitted to pay dividends and extraordinary dividends, as
well as repurchase shares of our common stock, so long as we are not in default under the WWI Credit Facility
agreement. However, payment of extraordinary dividends and stock repurchases shall not exceed $150.0 million
in the aggregate in any fiscal year if net debt to EBITDA (as defined in the WWI Credit Facility agreement) is
equal to or greater than 3.75:1 and an investment grade rating date (as defined in the WWI Credit Facility
agreement) has not occurred. We currently do not expect this restriction to impair our ability to pay dividends or
make stock repurchases, but it could do so in the future.
Factors Affecting Future Liquidity
Any future acquisitions, joint ventures or other similar transactions could require additional capital and we
cannot be certain that any additional capital will be available on acceptable terms or at all. Our ability to fund our
capital expenditure requirements, interest, principal and dividend payment obligations and working capital
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