Company: WW
Filing Date: 2025-02-28
Form Type: 10-K
Source: 0000950170-25-029511
Chunk: 397

Company: WW INTERNATIONAL, INC.
Filing Date: 2025-02-28
Form: 10-K
Item: Item 9C
Chunk 397
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 of March 30, 2024, and September 28, 2024, on its goodwill and indefinite-lived franchise rights acquired for the first and third quarters of fiscal 2024, respectively. In performing the impairment analysis for goodwill, the fair value of the reporting units is estimated using a discounted cash flow approach. The estimated fair value is then compared to the carrying value of the reporting unit. In performing the impairment analysis for indefinite-lived franchise rights acquired, fair value is estimated using a discounted cash flow approach for franchise rights related to the Workshops + Digital business and a relief from royalty methodology for franchise rights related to the Digital business. The aggregate estimated fair value of the franchise rights is compared to the carrying value of the unit of account for these rights. In performing the interim indefinite-lived franchise rights acquired impairment tests as of March 30, 2024, and September 28, 2024, management determined that the carrying value of its United States franchise rights acquired exceeded the respective fair values, and management recorded impairment charges of $251.4 million and $54.3 million, respectively. There were no goodwill impairments in the year ended December 28, 2024. As of December 28, 2024, the goodwill associated with the Clinical reporting unit was $89.7 million and the indefinite-lived franchise rights acquired (United States) was $68.6 million. As disclosed by management, when determining fair value of the reporting units and indefinite-lived franchise rights acquired, management utilizes various assumptions, including projections of future cash flows, revenue growth rates, operating income margins and discount rates.

The principal considerations for our determination that performing procedures relating to the annual and interim impairment assessments for goodwill (Clinical reporting unit) and the annual and interim impairment assessments for indefinite-lived franchise rights acquired (United States) is a critical audit matter are (i) the significant judgment by management when developing the fair value estimates of the Clinical reporting unit and indefinite-lived franchise rights acquired (United States); (ii) a high degree of auditor judgment, subjectivity, and effort in performing procedures and evaluating management’s significant assumptions related to revenue growth rates, operating income margin, and discount rate for goodwill (Clinical reporting unit) and revenue growth rates and discount rate for indefinite-lived franchise rights acquired (United States); and (iii) the audit effort involved the use of professionals with specialized skill and knowledge.

F-3

Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements. These procedures included testing