WeightWatchers 2012 Annual Report Download - page 96

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WEIGHT WATCHERS INTERNATIONAL, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
4. Franchise Rights Acquired, Goodwill and Other Intangible Assets
The Company performed its annual impairment review of goodwill and other indefinite-lived intangible
assets as of December 29, 2012 and December 31, 2011 and determined that no impairment existed. Franchise
rights acquired are due to acquisitions of the Company’s franchised territories. The franchise rights acquired
allocated to the WW.com reporting segment relate to the acquisition of franchise promotion agreements
associated with the acquired franchise territories. For the year ended December 29, 2012, the change in the
carrying value of franchise rights acquired is due to fiscal 2012 franchise acquisitions and the effect of exchange
rate changes as follows:
WWI
Segment
WW.com
Segment Total
Balance as of January 1, 2012 ............................ $764,026 $ 0 $764,026
Franchise rights acquired during the year ................... 11,302 9,181 20,483
Effect of exchange rate changes ........................... 2,498 0 2,498
Balance as of December 29, 2012 ......................... $777,826 $9,181 $787,007
Goodwill is due mainly to the acquisition of the Company by H.J. Heinz Company (“Heinz”) in 1978 and
the acquisition of WW.com in 2005. For the year ended December 29, 2012, the change in the carrying amount
of goodwill is due to fiscal 2012 franchise acquisitions and the effect of exchange rate changes, as follows:
WWI
Segment
WW.com
Segment Total
Balance as of January 1, 2012 .............................. $23,812 $26,200 $50,012
Goodwill acquired during the year ........................... 4,903 4,493 9,396
Effect of exchange rate changes .............................606
Balance as of December 29, 2012 ........................... $28,721 $30,693 $59,414
Aggregate amortization expense for finite-lived intangible assets was recorded in the amounts of $17,796,
$16,545, and $14,894 for the fiscal years ended December 29, 2012, December 31, 2011 and January 1, 2011,
respectively.
The carrying amount of finite-lived intangible assets as of December 29, 2012 and December 31, 2011 was
as follows:
December 29, 2012 December 31, 2011
Gross
Carrying
Amount
Accumulated
Amortization
Gross
Carrying
Amount
Accumulated
Amortization
Capitalized software costs ............................ $ 86,857 $ 54,134 $ 67,223 $44,003
Trademarks ........................................ 10,342 9,615 10,006 9,276
Website development costs ........................... 57,042 38,357 43,987 30,747
Other ............................................. 7,034 6,689 7,033 6,762
$161,275 $108,795 $128,249 $90,788
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