WeightWatchers 2012 Annual Report Download - page 90

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WEIGHT WATCHERS INTERNATIONAL, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
1. Basis of Presentation
The accompanying consolidated financial statements include the accounts of Weight Watchers International,
Inc. and all of its subsidiaries. The term “Company” as used throughout these notes is used to indicate Weight
Watchers International, Inc. and all of its businesses consolidated for purposes of its financial statements. The
term “WWI” as used throughout these notes is used to indicate Weight Watchers International, Inc. and all of the
Company’s businesses other than WW.com. The term “WW.com” as used throughout these notes is used to
indicate WeightWatchers.com, Inc. and all of the Company’s Internet-based businesses.
As further discussed in Note 3, effective with its formation in February 2008, the Company consolidated the
financial statements of Weight Watchers China Limited.
2. Summary of Significant Accounting Policies
Fiscal Year:
The Company’s fiscal year ends on the Saturday closest to December 31st and consists of either 52 or 53-
week periods. Fiscal years 2012, 2011 and 2010 each contained 52 weeks. WW.com’s fiscal year ends on
December 31st of each year. This difference in fiscal years does not have a material effect on the consolidated
financial statements.
Use of Estimates:
The preparation of financial statements, in conformity with accounting principles generally accepted in the
United States of America (“US GAAP”), requires management to make estimates and assumptions that affect the
reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the
financial statements, and the reported amounts of revenues and expenses during the reporting period. On an
ongoing basis, the Company evaluates its estimates and judgments, including those related to inventories, the
impairment analysis for goodwill and other indefinite-lived intangible assets, share-based compensation, income
taxes, tax contingencies and litigation. The Company bases its estimates on historical experience and on various
other factors and assumptions that it believes to be reasonable under the circumstances, the results of which form
the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent
from other sources. Actual amounts could differ from these estimates.
Translation of Foreign Currencies:
For all foreign operations, the functional currency is the local currency. Assets and liabilities of these
operations are translated into US dollars using the exchange rate in effect at the end of each reporting period.
Income statement accounts are translated at the average rate of exchange prevailing during each reporting period.
Translation adjustments arising from the use of differing exchange rates from period to period are included in
accumulated other comprehensive income (loss).
Foreign currency gains and losses arising from the translation of intercompany receivables with the
Company’s international subsidiaries are recorded as a component of other expense (income), net, unless the
receivable is considered long-term in nature, in which case the foreign currency gains and losses are recorded as
a component of comprehensive income (loss).
F-8