WeightWatchers 2013 Annual Report Download - page 101

Download and view the complete annual report

Please find page 101 of the 2013 WeightWatchers annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 138

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105
  • 106
  • 107
  • 108
  • 109
  • 110
  • 111
  • 112
  • 113
  • 114
  • 115
  • 116
  • 117
  • 118
  • 119
  • 120
  • 121
  • 122
  • 123
  • 124
  • 125
  • 126
  • 127
  • 128
  • 129
  • 130
  • 131
  • 132
  • 133
  • 134
  • 135
  • 136
  • 137
  • 138

WEIGHT WATCHERS INTERNATIONAL, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
On December 12, 2013, the Company made a strategic decision to shut down its China operations. As a
result of this decision, the Company incurred a charge of $2,500 related to severance and the impairment of
property, plant and equipment and amortizable intangible assets.
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 28, 2013 and December 29, 2012. As a result of this review, the Company recorded a
$1,166 franchise rights acquired impairment charge related to its Mexico and Hong Kong operations in fiscal
2013 and determined that no impairment existed in fiscal 2012. 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 and other factors associated with the
acquired franchise territories. For the year ended December 28, 2013, the change in the carrying value of
franchise rights acquired is due to the Company’s acquisitions of certain of its franchisees during fiscal 2013, as
described in Note 3, the impairment charge noted above and the effect of exchange rate changes as follows:
WWI
Segment
WW.com
Segment Total
Balance as of December 29, 2012 ......................... $774,514 $ 9,181 $783,695
Franchise rights acquired during the year ................... 34,501 30,669 65,170
Impairment charge ..................................... (1,166) 0 (1,166)
Effect of exchange rate changes ........................... (9,703) (1,161) (10,864)
Balance as of December 28, 2013 ......................... $798,146 $38,689 $836,835
Goodwill is due to the acquisition of the Company by H.J. Heinz Company (“Heinz”) in 1978, the
acquisition of WW.com in 2005 and the acquisitions of the Company’s franchised territories. For the year ended
December 28, 2013, the change in the carrying amount of goodwill is due to the Company’s acquisitions of
certain of its franchisees during fiscal 2013, as described in Note 3, and the effect of exchange rate changes as
follows:
WWI
Segment
WW.com
Segment Total
Balance as of December 29, 2012 ........................... $32,033 $30,693 $62,726
Goodwill acquired during the year ........................... 9,998 7,532 17,530
Effect of exchange rate changes ............................. (562) (400) (962)
Balance as of December 28, 2013 ........................... $41,469 $37,825 $79,294
Aggregate amortization expense for finite-lived intangible assets was recorded in the amounts of $24,562,
$17,796, and $16,545 for the fiscal years ended December 28, 2013, December 29, 2012 and December 31, 2011,
respectively.
F-15