WeightWatchers 2015 Annual Report Download - page 34

interest on the amount prepaid to prepay $148.0 million in aggregate principal amount of term loans under the
Tranche B-1 Term Facility (defined hereafter).
Net income and EPS for the full year of fiscal 2013 were impacted by a $21.7 million ($13.3 million after
tax), or $0.24 per fully diluted share, early extinguishment of debt charge recorded in fiscal 2013 resulting from
the write-off of fees in connection with our April 2013 debt refinancing.
Net Tax Benefit
In fiscal 2014, we recognized a $2.4 million net tax benefit related to an intercompany loan write-off in
connection with the closure of our China business partially offset by the recognition of a valuation allowance
related to tax benefits for foreign losses that are not expected to be realized.
UK Self-Employment Matter
We received an adverse tax ruling in the United Kingdom that our UK leaders should have been classified
as employees for UK tax purposes and, as such, we should have withheld tax from our leaders pursuant to the
“Pay As You Earn” and national insurance contributions collection rules and remitted such amounts to Her
Majesty’s Revenue and Customs, or HMRC. In connection with this ruling, we recorded a charge of
approximately $36.7 million, of which approximately $4.2 million was with respect to fiscal 2009 and
approximately $32.5 million was with respect to fiscal years 2001 through 2008, to cost of revenues in the fourth
quarter of fiscal 2009. We subsequently recorded a charge of approximately $4.1 million and $3.0 million in
fiscal 2010 and fiscal 2011, respectively. In December 2012, we reached an agreement with HMRC to settle the
matter in its entirety for approximately $36.8 million. Based upon the settlement amount, we determined that
$14.5 million of the reserved amount represented an over-accrual and as such was reversed to cost of revenues.
As part of the settlement amount, the settlement agreement provided for an amount of interest to be paid which
resulted in a $7.1 million increase to interest expense. The net benefit associated with the settlement was an
increase of $7.4 million to income before income taxes. The reserve for this matter at the end of fiscal 2012
equaled approximately $7.3 million in the aggregate based on the exchange rates at the end of fiscal 2012. In
January 2013, $6.8 million was paid to HMRC, representing the balance due over the approximately
$30.0 million paid to HMRC in February 2012, and the balance of the reserve was used to pay associated costs.
Long-Term Debt
On March 15, 2012, the composition of our then-existing credit facilities, or collectively, the Prior WWI
Credit Facility, changed as a result of our amending and restating the Prior WWI Credit Facility to, among other
things, extend the maturity of certain of our term loan facilities and our revolving credit facility and to obtain
new commitments for the borrowing of an additional $1,449.4 million of term loans to finance the purchases of
shares of our common stock in our previously disclosed “modified Dutch auction” tender offer for our common
stock and from Artal Holdings pursuant to the related share purchase agreement in the first six months of fiscal
2012. Following the amendment of the Prior WWI Credit Facility, (i) $33.1 million in aggregate principal
amount of the Term A-1 Loan and $301.8 million in aggregate principal amount of the Term C Loan were
converted into, and $849.4 million in aggregate principal amount of commitments to borrow new term loans
were provided under, the new Term E Loan (as defined hereafter), (ii) $107.0 million in aggregate principal
amount of the Term B Loan and $119.1 million in aggregate principal amount of the Term D Loan were
converted into, and $600.0 million in aggregate principal amount of commitments to borrow new term loans
were provided under, the new Term F Loan, and (iii) $262.0 million in aggregate principal amount of
commitments under the Revolver A-1 were converted into the new revolving credit facility, Revolver A-2. The
loans outstanding under each term loan facility existing prior to the amendment of the Prior WWI Credit Facility
and the loans and commitments outstanding under the Revolver A-1, in each case that were not converted into
the Term E Loan, the Term F Loan or the Revolver A-2, as applicable, continued to remain outstanding under the
Prior WWI Credit Facility as the Term A-1 Loan, the Term B Loan, the Term C Loan, the Term D Loan or the
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