(Former name, former address and former fiscal year, if changed since last report)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically ~~and posted on its corporate Web site, if any,~~ every Interactive Data File required to be submitted ~~and posted~~ pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit ~~and post~~ such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

The number of shares of common stock outstanding as of ~~October 31, 2017~~July 28, 2022 was ~~64,530,211.~~

	September 30,			December 31,			July 2,			January 1,
	2017			2016			2022			2022
ASSETS
CURRENT ASSETS
Cash and cash equivalents	$	178,247		$	108,656		$	148,595		$	153,794
Receivables (net of allowances: September 30, 2017 - $1,994 and December 31, 2016 - $2,973)		22,267			27,518
Receivables (net of allowances: July 2, 2022 - $1,906 and January 1, 2022 - $1,726)								32,277			29,321
Inventories		23,421			32,629			32,330			30,566
Prepaid income taxes		33,446			35,528			22,758			30,478
Prepaid expenses and other current assets		23,166			30,880			29,500			27,014
TOTAL CURRENT ASSETS		280,547			235,211			265,460			271,173

Property and equipment, net		48,755			49,574			31,913			37,219
Operating lease assets								83,777			89,902
Franchise rights acquired		754,652			748,619			756,750			785,195
Goodwill		170,731			166,138			159,932			157,374
Trademarks and other intangible assets, net		48,829			58,612
Other intangible assets, net								61,991			61,126
Deferred income taxes								14,570			11,259
Other noncurrent assets		11,978			12,822			16,220			15,686
TOTAL ASSETS	$	1,315,492		$	1,270,976		$	1,390,613		$	1,428,934

LIABILITIES AND TOTAL DEFICIT
CURRENT LIABILITIES
Portion of long-term debt due within one year	$	31,429		$	21,000		$	—		$	—
Portion of operating lease liabilities due within one year								18,431			20,297
Accounts payable		19,388			40,639			24,526			22,444
Salaries and wages payable		51,867			49,638			61,951			57,401
Accrued marketing and advertising		15,929			18,067			7,756			15,904
Accrued interest		16,425			16,939			5,282			5,085
Other accrued liabilities		54,383			51,251			41,395			45,728
Derivative payable		21,129			31,974			307			14,670
Income taxes payable								937			1,748
Deferred revenue		82,660			62,880			47,637			45,855
TOTAL CURRENT LIABILITIES		293,210			292,388			208,222			229,132

Long-term debt		1,884,842			1,981,299
Long-term debt, net								1,420,194			1,418,104
Long-term operating lease liabilities								73,210			78,157
Deferred income taxes		187,676			175,115			142,878			157,718
Other		30,480			25,048			2,217			2,227
TOTAL LIABILITIES		2,396,208			2,473,850			1,846,721			1,885,338

Redeemable noncontrolling interest		4,636			4,699

TOTAL DEFICIT
Common stock, $0 par value; 1,000,000 shares authorized; 118,947 shares issued at September 30, 2017 and at December 31, 2016		0			0

Treasury stock, at cost, 54,422 shares at September 30, 2017 and 55,021 shares at December 31, 2016		(3,214,938	)		(3,237,346	)
Common stock, $0 par value; 1,000,000 shares authorized; 122,052 shares issued at July 2, 2022 and 122,052 shares issued at January 1, 2022								0			0
Treasury stock, at cost, 51,691 shares at July 2, 2022 and 51,988 shares at January 1, 2022								(3,107,324	)		(3,120,149	)
Retained earnings		2,144,459			2,056,893			2,661,818			2,682,349
Accumulated other comprehensive loss		(14,873	)		(27,120	)		(10,602	)		(18,604	)
TOTAL DEFICIT		(1,085,352	)		(1,207,573	)		(456,108	)		(456,404	)
TOTAL LIABILITIES AND TOTAL DEFICIT	$	1,315,492		$	1,270,976		$	1,390,613		$	1,428,934

The accompanying notes are an integral part of the consolidated financial statements.

	Three Months Ended					Nine Months Ended					Three Months Ended					Six Months Ended
	September 30,		October 1,			September 30,			October 1,		July 2,			July 3,		July 2,			July 3,
	2017		2016			2017			2016		2022			2021		2022			2021
Service revenues, net	$	273,219	$	232,571		$	817,696		$	727,889
Subscription revenues, net											$	240,391		$	272,871	$	497,376		$	552,691
Product sales and other, net		50,468		48,248			176,726			169,601		29,063			38,508		69,838			90,484
Revenues, net		323,687		280,819			994,422			897,490		269,454			311,379		567,214			643,175

Cost of services		118,073		111,515			363,284			355,945
Cost of subscription revenues												84,129			95,825		170,170			194,929
Cost of product sales and other		28,526		25,001			100,943			86,521		22,363			29,528		53,985			68,786
Cost of revenues		146,599		136,516			464,227			442,466		106,492			125,353		224,155			263,715
Gross profit		177,088		144,303			530,195			455,024		162,962			186,026		343,059			379,460

Marketing expenses		30,310		30,078			158,707			157,791		51,857			57,154		159,427			174,088
Selling, general and administrative expenses		55,400		47,433			153,671			143,152		71,319			69,199		134,877			142,870
Franchise rights acquired and goodwill impairments												26,420			—		26,420			—
Operating income		91,378		66,792			217,817			154,081		13,366			59,673		22,335			62,502

Interest expense		26,993		28,329			82,227			86,963		19,255			20,293		37,926			49,416
Other expense (income), net		125		(146	)		278			397
Gain on early extinguishment of debt		0		0			(1,554	)		0
Income before income taxes		64,260		38,609			136,866			66,721

Provision for income taxes		19,593		3,989			36,457			12,420
Net income		44,667		34,620			100,409			54,301
Net loss attributable to the noncontrolling interest		52		38			135			99
Net income attributable to Weight Watchers International, Inc.	$	44,719	$	34,658		$	100,544		$	54,400

Earnings Per Share attributable to Weight Watchers International, Inc.
Other expense, net												1,613			381		1,956			143
Early extinguishment of debt												—			29,169		—			29,169
(Loss) income before income taxes												(7,502	)		9,830		(17,547	)		(16,226	)
(Benefit from) provision for income taxes												(2,879	)		970		(4,681	)		(6,859	)
Net (loss) income											$	(4,623	)	$	8,860	$	(12,866	)	$	(9,367	)
(Net loss) earnings per share
Basic	$	0.69	$	0.54		$	1.57		$	0.85	$	(0.07	)	$	0.13	$	(0.18	)	$	(0.14	)
Diluted	$	0.65	$	0.53		$	1.48		$	0.83	$	(0.07	)	$	0.12	$	(0.18	)	$	(0.14	)

Weighted average common shares outstanding
Basic		64,463		63,782			64,237			63,690		70,305			69,588		70,195			69,336
Diluted		68,686		65,841			67,939			65,872		70,305			71,160		70,195			69,336

The accompanying notes are an integral part of the consolidated financial statements.

Three Months Ended

Nine Months Ended

September 30,

October 1,

September 30,

October 1,

2017

2016

2017

2016

Net income

$
44,667

$
34,620

$
100,409

$
54,301

Other comprehensive gain :

Foreign currency translation gain (loss)

5,673

(1,496
)

$
11,704

10,167

Income tax (expense) benefit on foreign currency translation gain (loss)

(2,206
)

583

(4,559
)

(3,935
)
Foreign currency translation gain (loss), net of taxes

3,467

(913
)

7,145

6,232

Gain (loss) on derivatives

4,105

8,136

8,482

(9,984
)
Income tax (expense) benefit on gain (loss) on derivatives

(1,601
)

(3,173
)

(3,308
)

3,863

Gain (loss) on derivatives, net of taxes

2,504

4,963

5,174

(6,121
)
Total other comprehensive gain

5,971

4,050

12,319

111

Comprehensive income

50,638

38,670

112,728

54,412

Less: Net loss attributable to the noncontrolling interest

52

38

135

99

Less: Foreign currency translation (gain) loss, net of taxes
attributable to the noncontrolling interest

(113
)

19

(72
)

(450
)
Comprehensive (income) loss attributable to the noncontrolling interest

(61
)

57

63

(351
)
Comprehensive income attributable to Weight Watchers International, Inc.

$
50,577

$
38,727

$
112,791

$
54,061

	Three Months Ended						Six Months Ended
	July 2,			July 3,			July 2,			July 3,
	2022			2021			2022			2021
Net (loss) income	$	(4,623	)	$	8,860		$	(12,866	)	$	(9,367	)
Other comprehensive (loss) gain:
Foreign currency translation (loss) gain		(8,325	)		2,857			(8,466	)		1,737
Income tax benefit (expense) on foreign currency translation (loss) gain		2,089			(720	)		2,125			(438	)
Foreign currency translation (loss) gain, net of taxes		(6,236	)		2,137			(6,341	)		1,299
Gain on derivatives		4,402			1,522			19,158			6,726
Income tax expense on gain on derivatives		(1,106	)		(383	)		(4,815	)		(1,694	)
Gain on derivatives, net of taxes		3,296			1,139			14,343			5,032
Total other comprehensive (loss) gain		(2,940	)		3,276			8,002			6,331
Comprehensive (loss) income	$	(7,563	)	$	12,136		$	(4,864	)	$	(3,036	)

The accompanying notes are an integral part of the consolidated financial statements.


Three Months Ended July 2, 2022											Accumulated
											Other
	Common Stock				Treasury Stock						Comprehensive			Retained
	Shares		Amount		Shares			Amount			Loss			Earnings			Total
Balance at April 2, 2022		122,052	$	0		51,923		$	(3,117,434	)	$	(7,662	)	$	2,675,767		$	(449,329	)
Comprehensive loss												(2,940	)		(4,623	)		(7,563	)
Issuance of treasury stock under stock plans						(232	)		10,110						(11,613	)		(1,503	)
Compensation expense on share-based awards															2,287			2,287
Balance at July 2, 2022		122,052	$	0		51,691		$	(3,107,324	)	$	(10,602	)	$	2,661,818		$	(456,108	)


Six Months Ended July 2, 2022											Accumulated
											Other
	Common Stock				Treasury Stock						Comprehensive			Retained
	Shares		Amount		Shares			Amount			Loss			Earnings			Total
Balance at January 1, 2022		122,052	$	0		51,988		$	(3,120,149	)	$	(18,604	)	$	2,682,349		$	(456,404	)
Comprehensive (loss) income												8,002			(12,866	)		(4,864	)
Issuance of treasury stock under stock plans						(297	)		12,825						(14,651	)		(1,826	)
Compensation expense on share-based awards															6,986			6,986
Balance at July 2, 2022		122,052	$	0		51,691		$	(3,107,324	)	$	(10,602	)	$	2,661,818		$	(456,108	)


Three Months Ended July 3, 2021											Accumulated
											Other
	Common Stock				Treasury Stock						Comprehensive			Retained
	Shares		Amount		Shares			Amount			Loss			Earnings			Total
Balance at April 3, 2021		121,801	$	0		52,471		$	(3,139,855	)	$	(22,094	)	$	2,606,171		$	(555,778	)
Comprehensive income												3,276			8,860			12,136
Issuance of treasury stock under stock plans						(260	)		10,526						(14,384	)		(3,858	)
Compensation expense on share-based awards															7,851			7,851
Issuance of common stock	251														1,752			1,752
Balance at July 3, 2021		122,052	$	0		52,211		$	(3,129,329	)	$	(18,818	)	$	2,610,250		$	(537,897	)


Six Months Ended July 3, 2021											Accumulated
											Other
	Common Stock				Treasury Stock						Comprehensive			Retained
	Shares		Amount		Shares			Amount			Loss			Earnings			Total
Balance at January 2, 2021		121,470	$	0		52,497		$	(3,140,903	)	$	(25,149	)	$	2,617,841		$	(548,211	)
Comprehensive (loss) income												6,331			(9,367	)		(3,036	)
Issuance of treasury stock under stock plans						(286	)		11,574						(15,467	)		(3,893	)
Compensation expense on share-based awards															13,192			13,192
Issuance of common stock	582														4,051			4,051
Balance at July 3, 2021		122,052	$	0		52,211		$	(3,129,329	)	$	(18,818	)	$	2,610,250		$	(537,897	)

The accompanying notes are an integral part of the consolidated financial statements.

	Nine Months Ended						Six Months Ended
	September 30,			October 1,			July 2,			July 3,
	2017			2016			2022			2021
Operating activities:
Net income	$	100,409		$	54,301
Adjustments to reconcile net income to cash provided by operating activities:
Net loss							$	(12,866	)	$	(9,367	)
Adjustments to reconcile net loss to cash provided by operating activities:
Depreciation and amortization		38,331			39,145			22,792			26,093
Amortization of deferred financing costs		4,292			4,631
Amortization of deferred financing costs and debt discount								2,509			3,533
Impairment of franchise rights acquired and goodwill								26,420			—
Impairment of intangible and long-lived assets		670			91			112			224
Write-off of net assets due to cessation of Spain operations		70			0
Share-based compensation expense		9,372			4,366			6,986			13,192
Deferred tax provision		6,393			9,171
Deferred tax benefit								(21,164	)		(2,811	)
Allowance for doubtful accounts		(775	)		43			127			(90	)
Reserve for inventory obsolescence		6,280			3,823			2,565			3,830
Foreign currency exchange rate loss		158			222
Gain on early extinguishment of debt		(1,840	)	0
Foreign currency exchange rate loss (gain)								2,229			(44	)
Early extinguishment of debt								—			29,169
Changes in cash due to:
Receivables		6,768			2,546			(7,499	)		730
Inventories		4,821			(4,830	)		(4,351	)		6,527
Prepaid expenses		9,711			(8,313	)		6,864			(11,481	)
Accounts payable		(19,622	)		(7,209	)		3,211			3,337
Accrued liabilities		(21,459	)		(20,123	)		(1,039	)		(16,699	)
Deferred revenue		16,692			12,199			3,342			976
Other long term assets and liabilities, net		5,907			2,726			(2,329	)		(2,125	)
Income taxes		18,627			1,128			(1,496	)		(6,742	)
Cash provided by operating activities		184,805			93,917			26,413			38,252

Investing activities:
Capital expenditures		(10,755	)		(4,556	)		(1,066	)		(984	)
Capitalized software expenditures		(20,242	)		(21,888	)		(18,019	)		(17,447	)
Cash paid for acquisitions		0			(2,898	)		(4,350	)		(10,849	)
Other items, net		(130	)		(174	)		(20	)		(1,534	)
Cash used for investing activities		(31,127	)		(29,516	)		(23,455	)		(30,814	)

Financing activities:
Payments on revolver		0			(48,000	)
Net (payments) borrowings on revolver								0			0
Proceeds from long term debt								—			1,500,000
Financing costs and debt discount								—			(37,315	)
Payments on long-term debt		(88,387	)		(160,073	)		—			(1,509,000	)
Taxes paid related to net share settlement of equity awards		(4,894	)		0			(1,925	)		(4,223	)
Excess tax benefit of share-based compensation		0			964
Proceeds from stock options exercised		4,925			35			—			4,469
Payment of dividends		0			(11	)
Other items, net								(61	)		(80	)
Cash used for financing activities		(88,356	)		(207,085	)		(1,986	)		(46,149	)
Effect of exchange rate changes on cash and cash equivalents		4,269			202			(6,171	)		(1,612	)
Net increase (decrease) in cash and cash equivalents		69,591			(142,482	)
Net decrease in cash and cash equivalents								(5,199	)		(40,323	)
Cash and cash equivalents, beginning of period		108,656			241,526			153,794			165,887
Cash and cash equivalents, end of period	$	178,247		$	99,044		$	148,595		$	125,564

The accompanying notes are an integral part of the consolidated financial statements.

The accompanying consolidated financial statements include the accounts of ~~Weight Watchers~~WW International, Inc. and all of its subsidiaries. The terms “Company” and ~~“WWI”~~“WW” as used throughout these notes isare used to indicate ~~Weight Watchers~~WW International, Inc. and all of its operations consolidated for purposes of its financial statements. The Company’s ~~“meetings”~~“Digital” business refers to providing ~~access to combined meetings and digital offerings~~subscriptions to the Company’s digital product offerings, including Personal Coaching + Digital and Digital 360 as applicable. The Company’s “Workshops + Digital” business refers to providing unlimited access to the Company’s workshops combined with the Company’s digital subscription product offerings to commitment plan subscribers, ~~(including Total Access subscribers),~~including former Digital 360 members as applicable. It also includes the provision of access to workshops for members who do not subscribe to commitment plans, including the Company’s “pay-as-you-go” members. In the second quarter of fiscal 2022, the Company ceased offering its Digital 360 product. More than a majority of associated members were transitioned from the Company’s Digital business to its Workshops + Digital business during the second quarter, with a de minimis number transitioning during the beginning of the third quarter of fiscal 2022. The cessation of this product offering and these transitions of former Digital 360 members at the then-current pricing for such product impacted the number of End of Period Subscribers in each business as well as ~~access to meetings to~~ the ~~Company’s “pay-as-you-go” members~~associated Paid Weeks and ~~other meetings members. “Online” refers to Weight Watchers Online, Weight Watchers OnlinePlus, Personal Coaching and other digital subscription products.~~Revenues for each business.

The consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States ~~of America~~ (“GAAP”) for interim financial information and include amounts that are based on management’s best estimates and judgments. While all available information has been considered, actual amounts could differ from those estimates. For example, the Company considered the impact of COVID-19 and its variants on the assumptions and estimates used when preparing its Quarterly Report on Form 10-Q quarterly financial statements. These assumptions and estimates may change as new events occur and additional information is obtained, and such future changes may have an adverse impact on the Company's results of operations, financial position and liquidity. The consolidated financial statements include all of the Company’s majority-owned subsidiaries. All entities acquired, and any entity of which a majority interest was acquired, are included in the consolidated financial statements from the date of acquisition. All intercompany accounts and transactions have been eliminated in consolidation. The Company’s operating results for any interim period are not necessarily indicative of future or annual results. The consolidated financial statements are unaudited and, accordingly, they do not include all of the information necessary for a comprehensive presentation of results of operations, financial position and cash flow activity required by GAAP for complete financial statements but, in the opinion of management, reflect all adjustments including those of a normal recurring nature necessary for a fair statement of the interim results presented.

In the second quarter of fiscal 2022, the Company identified and recorded out-of-period adjustments related to income tax errors resulting primarily from the reversal of (i) a basis difference related to goodwill and other intangibles and (ii) a U.S. federal income tax receivable that should have been adjusted in prior fiscal years. The impact of correcting these errors, which were immaterial to prior period financial statements and corrected in the second quarter of fiscal 2022, resulted in an income tax benefit of $2,150 and decreased net loss by $2,150 for the three and six months ended July 2, 2022.

These statements should be read in conjunction with the Company’s Annual Report on Form 10-K for fiscal ~~2016~~2021 filed on March 1, ~~2017,~~2022, which includes additional information about the Company, its results of operations, its financial position and its cash flows.

In the third quarter of fiscal 2016, the Company identified and recorded out-of-period adjustments primarily to reverse a foreign tax receivable originally recorded in fiscal 2008 that should have been reversed in fiscal 2009. The impact of these income tax errors, which increased provision for income taxes and decreased net income attributable to the Company by $2,684, was immaterial to prior period financial statements and thus corrected in the third quarter of fiscal 2016.

In ~~February 2016,~~October 2021, the Financial Accounting Standards Board ~~(the “FASB”)~~ issued updated guidance ~~regarding leases, requiring lessees~~to improve the accounting for acquired revenue contracts with customers in a business combination by addressing diversity in practice and inconsistency related to (i) recognition of an acquired contract liability and (ii) payment terms and their effect on subsequent revenue recognized by the acquirer. The amendments in this update require an acquiring entity to recognize and measure contract assets and contract liabilities acquired in a ~~right-of-use asset and a lease liability on the balance sheet for all leases~~business combination in accordance with the exception of short-term leases. For lessees, leases will continue to be classified as either operating or finance leases in the income statement. Lessor accounting is similar to the current model but will be updated to align with certain changes to the lessee model. Lessors will continue to classify leases as operating, direct financing or sales-type leases.Topic 606. The effective date of the new guidance for public companies is for fiscal years beginning after December 15, ~~2018~~2022 and interim periods within those fiscal years. Early adoption is permitted. The new guidance ~~must~~should be ~~adopted using a modified retrospective transition and requires application of the new guidance at the beginning of the earliest comparative period presented. The updated guidance is~~applied prospectively to business combinations occurring on or after its effective ~~for~~date. On January 2, 2022, the Company ~~beginning in the first quarter of fiscal 2019. The Company is currently evaluating the impact that the adoption of~~early adopted this ~~guidance will have on the consolidated financial statements and related disclosures of the Company.~~

~~In March 2016, the FASB issued~~ updated guidance on ~~revenue from contracts with customers,~~a prospective basis, which ~~is intended to clarify the implementation guidance~~did not have a material impact on principal versus agent considerations. The amendments in this update do not change the core principle of the guidance, but are intended to improve the operability and understandability of the implementation guidance on principal versus agent considerations by including indicators to assist an entity in determining whether it controls a specified good or service before it is transferred to the customer. In April 2016, the FASB issued updated guidance on revenue from contracts with customers, which is intended to clarify guidance related to identifying performance obligations and licensing implementation guidance contained in the new revenue recognition standard. In May 2016, the FASB issued updated guidance on revenue from contracts with customers, which is intended to provide narrow scope guidance and practical expedients contained in the new revenue standard. In December 2016, the FASB issued updated guidance on revenue from contracts with customers for technical corrections and improvements on narrow aspects within the original and amended guidance. The amendments in these updates are effective for annual periods beginning after December 15, 2017 and interim periods within those fiscal years, with early adoption permitted. The Company continues to makeits consolidated financial statements.

At July 2, 2022 and ~~in evaluating the effect of adoption on the consolidated financial statements.~~ The Company plans on adopting this guidance on a modified retrospective basis. While the completion of this assessment is still ongoing, based on the progress to date, the Company does not expect the new standard will have a material impact on its revenue recognition accounting policy or its consolidated financial statements.

In January 2017, the FASB issued amended guidance to simplify the accounting for goodwill impairment. This guidance removes Step 2 of the goodwill impairment test, which requires a hypothetical purchase price allocation. Under the amended guidance, a goodwill impairment charge will now be recognized for the amount by which the carrying value of a reporting unit exceeds its fair value, not to exceed the carrying amount of goodwill. This guidance is effective for interim and annual periods beginning after December 15, 2019, with early adoption permitted for any impairment tests performed after January 1, ~~2017. The Company is currently evaluating~~2022, the ~~impact that the adoption of this guidance will have on the consolidated financial statements~~Company’s lease assets and ~~related disclosures of the Company.~~lease liabilities, primarily for its studios and corporate offices, were as follows:

In August 2017, the FASB issued amended guidance to improve accounting for hedging activities. The amendments in this update better align an entity’s risk management activities and financial reporting for hedging relationships through changes to both the designation and measurement guidance for qualifying hedging relationships and the presentation of hedge results. To meet that objective, the amendments expand and refine hedge accounting for both nonfinancial and financial risk components and align the recognition and presentation of the effects of the hedging instrument and the hedged item in the financial statements. This guidance is effective for interim and annual periods beginning after December 15, 2018. Early adoption is permitted as of the issuance date. The Company plans to adopt this guidance the first day of the fourth quarter of fiscal 2017, which will not have a material impact on the consolidated financial statements and related disclosures of the Company.

For ~~a discussion~~the three and six months ended July 2, 2022 and July 3, 2021, the components of the Company’s ~~other significant accounting policies, see “Summary~~lease expense were as follows:

At July 2, 2022 and January 1, 2022, the Company’s weighted average remaining lease term and weighted average discount rates were as follows:

The Company’s leases have remaining lease terms of ~~Significant Accounting Policies” in~~0 to 10 years with a weighted average lease term of 7.14 years as of July 2, 2022.

At July 2, 2022, the ~~Notes to Consolidated Financial Statements~~maturity of the Company’s ~~Annual Report on Form 10-K~~lease liabilities in each of the next five fiscal years and thereafter were as follows:

Supplemental cash flow information related to leases for ~~fiscal 2016. For a discussion of accounting standards adopted in~~ the ~~current year, see Note 3.~~six months ended July 2, 2022 and July 3, 2021 were as follows:

Revenues are recognized when control of the promised services or goods is transferred to the Company’s customers, in an amount that reflects the consideration it expects to be entitled to in exchange for those services or goods.

The following table presents the Company’s revenues disaggregated by revenue source:

The following tables present the Company’s revenues disaggregated by revenue source and segment:

For Subscription Revenues, the Company can collect payment in advance of providing services. Any amounts collected in advance of services being provided are recorded in deferred revenue. In ~~March 2016,~~ the ~~FASB issued updated guidance on stock compensation~~case where amounts are not collected, but the service has been provided and the revenue has been recognized, the amounts are recorded in accounts receivable. The opening and ending balances of the Company’s deferred revenues were as follows:

Revenue recognized from amounts included in current deferred revenue as of January 1, 2022 was $43,372 for the six months ended July 2, 2022. Revenue recognized from amounts included in current deferred revenue as of January 2, 2021 was $48,227 for the six months ended July 3, 2021. The Company’s long-term deferred revenue, which is ~~intended~~included in other liabilities on the Company’s consolidated balance sheet, represents revenue that will not be recognized during the next fiscal year and is generally related to ~~simplify several aspects~~upfront payments received as an inducement for entering into certain sales-based royalty agreements with third party licensees. This revenue is amortized on a straight-line basis over the term of the ~~accounting~~applicable agreement.

On February 18, 2022, the Company acquired the entire issued share capital of its Republic of Ireland franchisee, Denross Limited, and its Northern Ireland franchisee, Checkweight Limited, as follows:

On August 16, 2021, the Company acquired substantially all of the assets of its franchisee for ~~share-based payment transactions, including~~certain territories in Maine, Weight Watchers of Maine, Inc., for a purchase price of $2,250. Payment was in the ~~income tax consequences, classification of awards as either equity or liabilities, and classification of applicable income tax consequences on the statement~~form of cash ~~flows. This guidance requires recognition of excess tax benefits~~($1,999), cash in reserves ($225) and ~~shortfalls (resulting from an increase or decrease in the fair~~assumed net liabilities ($26). The total purchase price was allocated to goodwill ($2,153), customer relationship value ~~of an award from grant date to the vesting date) in the provision for income taxes as a discrete item in the quarterly period in which they occur. In addition, these amounts~~($56) and franchise rights acquired ($41). The goodwill will be ~~classified~~deductible for tax purposes.

On March 22, 2021, the Company acquired substantially all of the assets of its Michigan franchisee, The WW Group, Inc., and its Ontario, Canada franchisee, The WW Group Co., as ~~an operating activity~~follows:

These acquisitions have been accounted for under the purchase method of accounting and, accordingly, earnings of the acquired franchises have been included in the consolidated ~~statement~~operating results of cash flows instead of as a financing activity. The amendments requiring recognition of excess tax benefits and tax shortfalls in the income statement must be applied prospectively (See Note 10), and entities may elect to apply the amendments related to the presentation of excess tax benefits on the statement of cash flows using either a prospective or retrospective transition method. In May 2017, the FASB issued updated guidance on stock compensation which is intended to clarify when changes to the terms and conditions to a share-based payment transaction requires modification accounting.

~~The company adopted this guidance during the first quarter of fiscal 2017. As required by the standard,~~ the Company ~~recognized prospectively any excess tax benefits in~~since the ~~consolidated statements~~date of net income for the three and nine months ended September 30, 2017 and applied the amendments relating to the presentation of excess tax benefits on the statement of cash flows using the prospective method. For the first nine months ended October 1, 2016, the Company recorded $588 of excess tax benefits in equity. For the first nine months ended October 1, 2016, the Company paid taxes of $1,978 related to net share settlement of equity awards. As permitted under the guidance, the Company will continue to account for forfeitures in compensation cost by estimating the number of awards that are expected to vest.acquisition.

In August 2016, the FASB issued updated guidance on the statement of cash flows presentation of certain transactions where diversity in practice exists. The Company adopted this guidance during the first quarter of 2017, which had no impact on the consolidated statement of cash flows.

In January 2017, the FASB issued updated guidance to assist Companies with evaluating whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses. The Company early adopted this guidance during the first quarter of 2017. The adoption of this guidance had no impact on the consolidated financial statements.

On October 18, 2015 (the “Agreement Date”), the Company entered into the following agreements with Oprah Winfrey: the Strategic Collaboration Agreement, the Winfrey Purchase Agreement (defined below), and the Winfrey Option Agreement (defined below). The transactions contemplated by these agreements are collectively referred to herein as the “Winfrey Transaction”. Details of the Strategic Collaboration Agreement, Winfrey Purchase Agreement and Winfrey Option Agreement are below. See Note 16 for related party transactions with Ms. Winfrey.

The Company and Ms. Winfrey granted each other certain intellectual property rights under the Strategic Collaboration Agreement. The agreement has an initial term of five years, with additional successive one-year renewal terms. During the term of this agreement, Ms. Winfrey will consult with the Company and participate in developing, planning, executing and enhancing the Weight Watchers program and related initiatives, and provide it with services in her discretion to promote the Company and its programs, products and services.

On October 19, 2015, pursuant to the Share Purchase Agreement between the Company and Ms. Winfrey (the “Winfrey Purchase Agreement”), the Company issued and sold to Ms. Winfrey an aggregate of 6,362 shares of the Company’s common stock (the “Purchased Shares”) at a price per share of $6.79 for an aggregate cash purchase price of $43,199. The Company recorded fees related to the issuance of the Purchased Shares totaling $2,315, of which $1,700 was recorded as a reduction of equity in the fourth quarter of fiscal 2015. The Purchased Shares are subject to certain demand registration rights and piggyback rights held by Ms. Winfrey under the Winfrey Purchase Agreement.

The Purchased Shares were not transferrable by Ms. Winfrey within the first two years of the Agreement Date, subject to certain limited exceptions. Thereafter, Ms. Winfrey may generally transfer up to 15% of the Purchased Shares prior to the third anniversary of the Agreement Date, up to 30% prior to the fourth anniversary of the Agreement Date and up to 60% prior to the fifth anniversary of the Agreement Date. On or after the fifth anniversary of the Agreement Date, Ms. Winfrey will be permitted to transfer all of the Purchased Shares. In the event that Ms. Winfrey proposes to transfer any Purchased Shares or Winfrey Option Shares (defined below), the Company will have (a) a right of first offer with respect to such shares if such transfer is (i) for 1% or more of the Company’s issued and outstanding common stock and is proposed to be made pursuant to Rule 144 under the Securities Act of 1933, as amended or (ii) proposed to be sold under a resale shelf registration statement or (b) a right of first refusal with respect to such shares if such transfer is (i) for 1% or more of the Company’s issued and outstanding common stock and is proposed to be made to a competitor of the Company or (ii) for 5% or more of the Company’s issued and outstanding common stock. Such transfer restrictions, right of first offer and right of first refusal terminate if Ms. Winfrey then has the right to be nominated as a director and has met certain eligibility requirements under the Winfrey Purchase Agreement, but is not elected as a director of the Company. If Ms. Winfrey is elected as a director of the Company, she shall receive compensation for her services as a director consistent with that of other non-executive directors of the Company. Such transfer restrictions also terminate if there is a change of control, including if another person (or group), other than Artal Luxembourg S.A. and Ms. Winfrey and their respective affiliates, acquires more than 50% of the total voting power of the Company.

In consideration of Ms. Winfrey entering into the Strategic Collaboration Agreement and the performance of her obligations thereunder, on the Agreement Date, the Company granted Ms. Winfrey a fully vested option (the “Winfrey Option”) to purchase 3,513 shares of common stock at an exercise price of $6.97 per share, which remains outstanding in full. The term sheet, and related terms and conditions, for the Winfrey Option are referred to herein as the “Winfrey Option Agreement”. Based on the Black Scholes option pricing method, the Company recorded $12,759 of compensation expense in the fourth quarter of fiscal 2015 for the Winfrey Option. At the date of the grant, the Company used a dividend yield of 0.0%, 63.88% volatility and a risk-free interest rate of 1.36%. Compensation expense is included as a component of selling, general and administrative expenses.

Subject to certain limited exceptions, shares of common stock issuable upon exercise of the Winfrey Option (the “Winfrey Option Shares”) generally could not be transferred by Ms. Winfrey within the first year of the Agreement Date. Ms. Winfrey generally could have transferred up to 20% of the Winfrey Option Shares prior to the second anniversary of the Agreement Date, and generally may transfer up to 40% prior to the third anniversary of the Agreement Date, up to 60% prior to the fourth anniversary of the Agreement Date and up to 80% prior to the fifth anniversary of the Agreement Date. On or after the fifth anniversary of the Agreement Date, Ms. Winfrey will be permitted to transfer all of the Winfrey Option Shares. Pursuant to the Winfrey Purchase Agreement, in the event that Ms. Winfrey proposes to transfer any Winfrey Option Shares, the Company will have a right of first offer or a right of first refusal with respect to such shares as described above. Such transfer restrictions terminate under the same director service and change of control circumstances that would result in the termination of the transfer restrictions relating to the Purchased Shares as described above.

On June 27, 2016, the Company acquired substantially all of the assets of its franchisee for certain territories in South Florida, Weight Watchers of Greater Miami, Inc., for a purchase price of $3,250 (the “Miami Acquisition”). Payment was in the form of cash ($2,898) plus cash in reserves ($300) and assumed net liabilities of ($52). The total purchase price has been allocated to franchise rights acquired ($114), goodwill ($2,945) and customer relationship value ($191). The acquisition of the franchisee has been accounted for under the purchase method of accounting and, accordingly, earnings of the acquired franchisee have been included in the consolidated operating results of the Company since the date of acquisition. The goodwill will be deductible for tax purposes.

Franchise rights acquired are due to acquisitions of the Company’s franchised territories as well as the acquisition of franchise promotion agreements and other factors associated with the acquired franchise territories. For the ~~nine~~six months ended ~~September 30, 2017,~~July 2, 2022, the change in the carrying value of franchise rights acquired iswas due to the impairments of the Canada and New Zealand units of account as discussed below, the effect of exchange rate ~~changes.~~changes and the Northern Ireland franchisee acquisition as described in Note 5.

Goodwill primarily relates to the acquisition of the Company by The Kraft Heinz Company (successor to H.J. Heinz ~~Company~~Company) in 1978, and the ~~acquisition~~Company’s acquisitions of WW.com, LLC (formerly known as WW.com, Inc. and WeightWatchers.com, Inc.) in 2005 ~~the acquisitions of~~and the Company’s franchised territories, the acquisitions of the majority interest in Vigilantes do Peso Marketing Ltda. (“VPM”) and of Knowplicity, Inc., d/b/a Wello, in fiscal 2014 and the acquisition of Weilos, Inc. in fiscal 2015.territories. See Note 5 for additional information about acquisitions by the Company. For the ~~nine~~six months ended ~~September 30, 2017,~~July 2, 2022, the change in the carrying amount of goodwill iswas due to the Republic of Ireland franchisee and Northern Ireland franchisee acquisitions as described in Note 5, the impairment of the Company's wholly-owned subsidiary Kurbo, Inc. (“Kurbo”) as discussed below and the effect of exchange rate changes as follows:

North

United

Continental

America

Kingdom

Europe

Other

Total

Balance as of December 31, 2016

$
137,543

$
1,145

$
6,884

$
20,566

$
166,138

Effect of exchange rate changes

3,195

98

831

469

4,593

Balance as of September 30, 2017

$
140,738

$
1,243

$
7,715

$
21,035

$
170,731

	North			Continental			United
	America			Europe			Kingdom			Other			Total
Balance as of January 2, 2021	$	145,071		$	7,792		$	1,268		$	1,486		$	155,617
Goodwill acquired during the period		2,153			—			—			—			2,153
Effect of exchange rate changes		306			(606	)		(14	)		(82	)		(396	)
Balance as of January 1, 2022	$	147,530		$	7,186		$	1,254		$	1,404		$	157,374
Goodwill acquired during the period		—			—			5,936			—			5,936
Goodwill impairment		(1,101	)		—			—			—			(1,101	)
Effect of exchange rate changes		(805	)		(732	)		(654	)		(86	)		(2,277	)
Balance as of July 2, 2022	$	145,624		$	6,454		$	6,536		$	1,318		$	159,932

~~The Company reviews goodwill and other indefinite-lived intangible assets, including~~Franchise Rights Acquired

Finite-lived franchise rights acquired ~~with indefinite lives,~~are amortized over the remaining contractual period, which is generally less than one year. Indefinite-lived franchise rights acquired are tested for potential impairment on at least an annual basis or more often if events so ~~require. The Company performed fair value impairment testing as of May 7, 2017 and May 8, 2016, each the first day of fiscal May, on its goodwill and other indefinite-lived intangible assets.~~require.

In performing ~~its annual~~the impairment analysis ~~as of May 7, 2017, the Company determined that the carrying amounts of its goodwill reporting units and~~for indefinite-lived franchise rights acquired, with indefinite lives units of account did not exceed their respective fair values and therefore, no impairment existed. For all reporting units, except for Brazil, there was significant headroom in the impairment analysis. Based on the results of this test for Brazil, the fair value ~~of this reporting unit exceeded its~~for franchise rights acquired is estimated using a discounted cash flow approach referred to as the hypothetical start-up approach for franchise rights related to the Company’s Workshops + Digital business and a relief from royalty methodology for franchise rights related to the Company’s Digital business. The aggregate estimated fair value for these rights is then compared to the carrying value ~~by approximately 10%,~~of the unit of account for those franchise rights. The Company has determined the appropriate unit of account for purposes of assessing impairment to be the combination of the rights in both the Workshops + Digital business and ~~accordingly a relatively small change~~the Digital business in the ~~underlying assumptions would likely cause a change~~country in which the applicable acquisition occurred. The net book values of these franchise rights in the ~~results~~United States, Canada, United Kingdom, Australia and New Zealand as of the ~~impairment assessment~~July 2, 2022 balance sheet date were $698,383, $34,556, $10,899, $6,125 and ~~as such, could result in an impairment of the goodwill related to Brazil,~~$3,574, respectively.

In its hypothetical start-up approach analysis for ~~which the carrying amount is $20,044.~~

~~When determining fair value,~~fiscal 2022, the Company ~~utilizes various assumptions, including projections~~assumed that the year of maturity was reached after 7 years. Subsequent to the year of maturity, the Company estimated future cash flows for the Workshops + Digital business in each country based on assumptions regarding revenue growth ~~rates~~ and discount rates. A change in these underlying assumptions would cause a change in the results of the tests and, as such, could cause fair value to be less than the carrying amounts and result in an impairment of those assets.operating income margins. In the ~~event~~Company’s relief from royalty approach analysis for fiscal 2022, the cash flows associated with the Digital business in each country were based on the expected Digital revenue for such country and the application of a ~~result occurred,~~royalty rate based on current market terms. The cash flows for the ~~Company would be required to record a corresponding charge,~~Workshops + Digital and the Digital businesses were discounted utilizing rates which ~~would impact earnings. The Company would also be~~

~~required to reduce~~were calculated using the ~~carrying amounts~~weighted-average cost of capital, which included the ~~related assets on its balance sheet. The Company continues to evaluate these assumptions~~cost of equity and ~~believes that these assumptions are appropriate.~~

~~The following is a discussion~~the cost of ~~the goodwill and franchise rights acquired impairment analysis.~~debt.

In performing the impairment analysis for goodwill, the fair value for the Company’s reporting units is estimated using a discounted cash flow approach. This approach involves projecting future cash flows attributable to the reporting unit and discounting those estimated cash flows using an appropriate discount rate. The estimated fair value is then compared to the carrying value of the reporting ~~units.~~unit. The Company has determined the appropriate reporting unit for purposes of assessing annual impairment to be the country for all reporting units. The net book values of goodwill in the United States, Canada and other countries as of the July 2, 2022 balance sheet date were $104,019, $41,605 and $14,308, respectively.

For all of the Company’s reporting units ~~except for Brazil (see below),~~tested as of May 8, 2022, the Company estimated future cash flows by utilizing the historical debt-free cash flows (cash flows provided by ~~operating activities~~operations less capital expenditures) attributable to that country and then applied expected future operating income growth rates for such country. The Company utilized operating income as the basis for measuring its potential growth because it believes it is the best indicator of the performance of its business. The Company then discounted the estimated future cash flows utilizing a discount rate which was calculated using the ~~average~~weighted-average cost of capital, which included the cost of equity and the cost of debt.

The ~~cost~~Company reviews indefinite-lived intangible assets, including franchise rights acquired with indefinite lives, and goodwill for potential impairment on at least an annual basis or more often if events so require. The Company performed fair value impairment testing as of ~~equity was determined by combining a risk-free rate~~May 8, 2022 and May 9, 2021, each the first day of ~~return~~fiscal May, on its indefinite-lived intangible assets and a market risk premium for the Company’s peer group. The risk-free rate of return was determined based on the average rate of long-term U.S. Treasury securities. The market risk premium was determined by reviewing external market data. The cost of debt was determined by estimating the Company’s current borrowing rate.goodwill.

~~As it relates to the~~In performing its annual impairment analysis ~~for Brazil,~~as of May 8, 2022, the Company ~~estimated future debt free cash flows in contemplation~~determined that (i) the carrying amounts of its ~~growth strategies for that market. In developing these projections,~~Canada and New Zealand franchise rights acquired with indefinite lived units of account exceeded their respective fair values and, as a result, the Company ~~considered~~recorded impairment charges for its Canada and New Zealand units of account of $24,485 and $834, respectively, in the ~~historical impact~~second quarter of ~~similar growth strategies in~~fiscal 2022; and (ii) the carrying amounts of all of its other ~~markets~~franchise rights acquired with indefinite lived units of account did not exceed their respective fair values and, therefore, 0 impairment existed with respect thereto. In performing its annual impairment analysis as ~~well~~of May 9, 2021, the Company determined that the carrying amounts of its franchise rights acquired with indefinite lived units of account did not exceed their respective fair values and, therefore, 0 impairment existed. In performing its annual impairment analysis as of May 8, 2022 and May 9, 2021, the ~~current market conditions in Brazil. The~~ Company ~~then discounted~~determined that the ~~estimated~~carrying amounts of its goodwill reporting units did not exceed their respective fair values and, therefore, 0 impairment existed.

When determining fair value, the Company utilizes various assumptions, including projections of future cash flows, ~~utilizing~~growth rates and discount rates. A change in these underlying assumptions could cause a ~~discount rate~~change in the results of the impairment assessments and, as such, could cause fair value to be less than the carrying amounts and result in an impairment of those assets. In the event such a result occurred, the Company would be required to record a corresponding charge, which ~~was calculated using~~would impact earnings. The Company would also be required to reduce the ~~average cost~~carrying amounts of ~~capital, which included~~ the ~~cost~~related assets on its balance sheet.

Based on the results of ~~equity and the cost of debt. The cost of equity was determined by combining a risk-free rate of return and a market risk premium for~~ the Company’s peer group. The risk-free rate of return was determined based on the average rate of long-term U.S. Treasury securities. The market risk premium was determined by reviewing external market data including the current economic conditions in Brazil and the country specific risk thereon. A further risk premium was included to reflect the risk associated with the rate of growth projected in the analysis. The cost of debt was determined by estimating the Company’s current borrowing rate.

~~Finite-lived~~May 8, 2022 annual franchise rights acquired ~~are amortized over the remaining contractual period, which is generally less than one year.~~

~~In performing the~~ impairment analysis performed for ~~indefinite-lived~~its United States unit of account, which holds 92.7% of the Company’s franchise rights acquired as of the July 2, 2022 balance sheet date, the estimated fair value ~~for~~of this unit of account exceeded its carrying value by approximately 15%. Based on the results of the Company’s May 8, 2022 annual franchise rights acquired isimpairment analysis performed for its Canada and New Zealand units of account, which hold 4.6 % and 0.5%, respectively, of the Company’s franchise rights acquired as of the July 2, 2022 balance sheet date, the estimated ~~using~~fair values of these units of account were equal to their respective carrying values. Accordingly, a ~~discounted cash flow approach referred to~~change in the underlying assumptions for the United States, Canada and New Zealand may change the results of the impairment assessment and, as such, could result in an impairment of the ~~hypothetical start-up approach for~~ franchise rights acquired related to the United States, Canada and New Zealand, for which the net book values were $698,383, $34,556 and $3,574, respectively,as of July 2, 2022. Based on the results of the Company’s ~~meetings business and a relief from royalty methodology for~~May 8, 2022 annual franchise rights acquired impairment analysis performed for its remaining units of account, which collectively hold 2.2% of the Company’s franchise rights acquired as of the July 2, 2022 balance sheet date, the estimated fair values of these units of account exceeded their respective carrying values by over 100%.

Based on the results of the Company’s May 8, 2022 annual goodwill impairment analysis performed for all of its reporting units, all units, except for the Republic of Ireland, had an estimated fair value at least 35% higher than the respective unit’s carrying amount. Collectively, these reporting units represented 97.3% of the Company’s total goodwill as of the July 2, 2022 balance sheet date. Based on the results of the Company’s May 8, 2022 annual goodwill impairment analysis performed for its Republic of Ireland reporting unit, which holds 2.7% of the Company’s goodwill as of the July 2, 2022 balance sheet date, the estimated fair value of this reporting unit exceeded its carrying value by approximately 14%. Accordingly, a change in the underlying assumptions for the Republic of Ireland may change the results of the impairment assessment and, as such, could result in an impairment of the goodwill related to the ~~Company’s Online business. The aggregate estimated fair~~Republic of Ireland, for which the net book value ~~for these rights is then compared to~~was $4,265 as of July 2, 2022.

On August 10, 2018, the ~~carrying value~~Company acquired substantially all of the ~~unit~~assets of ~~account~~Kurbo Health, Inc., a family-based healthy lifestyle coaching program, for ~~those franchise rights.~~a net purchase price of $3,063, of which $1,101 was allocated to goodwill. The goodwill was deductible annually for tax purposes. The Company ~~has~~ determined ~~the appropriate unit of account for purposes of assessing impairment to be the combination of the rights~~ in the ~~meetings and Online businesses~~second quarter of fiscal 2022 to exit the Kurbo business in the ~~country in which the acquisitions have occurred. In~~third quarter of fiscal 2022 as part of its ~~hypothetical start-up approach analysis for fiscal 2017,~~strategic plan. As a result of this determination, the Company ~~assumed that the year~~recorded an impairment charge of maturity was reached after 7 years. Subsequent to the year of maturity, the Company estimated future cash flows for the meetings business in each country based on assumptions regarding revenue growth and operating income margins. The cash flows associated with the Online business were based on the expected Online revenue for such country and the application of a market-based royalty rate. The cash flows for the meetings and Online businesses were discounted utilizing rates consistent with those utilized$1,101 in the second quarter of fiscal 2022, which comprised the entire goodwill ~~impairment analysis.~~balance for Kurbo.

The carrying values of finite-lived intangible assets as of ~~September 30, 2017~~July 2, 2022 and ~~December 31, 2016~~January 1, 2022 were as follows:

	September 30, 2017				December 31, 2016				July 2, 2022				January 1, 2022
	Gross				Gross				Gross				Gross
	Carrying		Accumulated		Carrying		Accumulated		Carrying		Accumulated		Carrying		Accumulated
	Amount		Amortization		Amount		Amortization		Amount		Amortization		Amount		Amortization
Capitalized software costs	$	133,255	$	114,806	$	126,737	$	101,316	$	116,162	$	99,661	$	115,065	$	94,771
Website development costs		132,927		103,295		119,971		87,736		125,276		88,231		110,678		78,629
Trademarks		11,220		10,792		11,092		10,647		12,138		11,783		12,116		11,677
Other		8,066		7,746		7,945		7,434		13,936		5,846		14,021		5,677
Trademarks and other intangible assets	$	285,468	$	236,639	$	265,745	$	207,133	$	267,512	$	205,521	$	251,880	$	190,754
Franchise rights acquired		4,593		4,593		4,551		4,551		8,156		4,942		7,905		4,766
Total finite-lived intangible assets	$	290,061	$	241,232	$	270,296	$	211,684	$	275,668	$	210,463	$	259,785	$	195,520

Aggregate amortization expense for finite-lived intangible assets was recorded in the amounts of ~~$9,120~~$8,761 and ~~$27,310~~$16,935 for the three and ~~nine~~six months ended ~~September 30, 2017,~~July 2, 2022, respectively. Aggregate amortization expense for finite-lived intangible assets was recorded in the amounts of ~~$9,137~~$8,035 and ~~$26,161~~$16,033 for the three and ~~nine~~six months ended ~~October 1, 2016,~~July 3, 2021, respectively. The franchise rights acquired related to the VPM acquisition were amortized ratably over a 2 year period. The franchise rights acquired related to the Miami Acquisition were amortized ratably over a 3 month period.

Estimated amortization expense of existing finite-lived intangible assets for the next five fiscal years and thereafter is as follows:

September 30, 2017

December 31, 2016

Principal
Balance

Effective Rate ⁽¹⁾

Principal
Balance

Effective Rate ⁽¹⁾

Revolving Facility due April 2, 2018

$
0

0.00
%

$
0

3.35
%
Tranche B-1 Term Facility due April 2, 2016

0

0.00
%

0

3.96
%
Tranche B-2 Term Facility due April 2, 2020

1,930,386

4.68
%

2,021,250

4.41
%
Total

1,930,386

4.68
%

2,021,250

4.38
%
Less: Current Portion

31,429

21,000

Unamortized Deferred Financing Costs

14,115

18,951

Total Long-Term Debt

$
1,884,842

$
1,981,299

	July 2, 2022									January 1, 2022
	Principal Balance		Unamortized Deferred Financing Costs		Unamortized Debt Discount		Effective Rate ⁽¹⁾			Principal Balance		Unamortized Deferred Financing Costs		Unamortized Debt Discount		Effective Rate ⁽¹⁾
Revolving Credit Facility due April 13, 2026	$	—	$	—	$	—		0.00	%	$	0	$	—	$	—		2.61	%
Term Loan Facility due April 13, 2028		945,000		6,375		13,213		4.62	%		945,000		6,930		14,362		4.48	%
Senior Secured Notes due April 15, 2029		500,000		5,218		—		4.65	%		500,000		5,604		—		4.70	%
Total	$	1,445,000	$	11,593	$	13,213		4.63	%	$	1,445,000	$	12,534	$	14,362		5.15	%
Less: Current portion		—									—
Unamortized deferred financing costs		11,593									12,534
Unamortized debt discount		13,213									14,362
Total long-term debt	$	1,420,194								$	1,418,104

The Company’s credit facilities at the end of the first quarter of fiscal 2013 consisted of the following term loan facilities and revolving credit facilities: a tranche B loan (“Term B Loan”), a tranche C loan (“Term C Loan”), a tranche D loan (“Term D Loan”), a tranche E loan (“Term E Loan”), a tranche F loan (“Term F Loan”), revolving credit facility A-1 (“Revolver A-1”) and revolving credit facility A-2 (“Revolver A-2”).

On April ~~2, 2013,~~13, 2021, the Company ~~refinanced~~(1) repaid in full approximately $1,189,750 in aggregate principal amount of senior secured tranche B term loans due in 2024 under its then-existing credit facilities ~~pursuant to~~and (2) redeemed all of the $300,000 in aggregate principal amount of its then-outstanding 8.625% Senior Notes due in 2025 (the “Discharged Senior Notes”). On April 13, 2021, the Company’s then-existing credit facilities included a senior secured revolving credit facility (which included borrowing capacity available for letters of credit) due in 2022 with $175,000 in an aggregate principal amount of commitments. There were 0 outstanding borrowings under such revolving credit facility on that date. The Company funded such repayment of loans and redemption of notes with cash on hand as well as with proceeds received from approximately $1,000,000 in an aggregate principal amount of borrowings under its new ~~Credit Agreement~~credit facilities (as amended ~~supplemented or otherwise modified,~~from time to time, the “Credit Facilities”) and proceeds received from the issuance of $500,000 in aggregate principal amount of 4.500% Senior Secured Notes due 2029 (the “Senior Secured Notes”), each as described below. These transactions are collectively referred to herein as the “April 2021 debt refinancing”. During the second quarter of fiscal 2021, the Company incurred fees of $37,910 (which included $12,939 of a prepayment penalty on the Discharged Senior Notes and $5,000 of a debt discount on its Term Loan Facility (as defined below)) in connection with the April 2021 debt refinancing. In addition, the Company recorded a loss on early extinguishment of debt of $29,169 in connection thereto. This early extinguishment of debt charge was comprised of $12,939 of a prepayment penalty on the Discharged Senior Notes, $9,017 of financing fees paid in connection with the April 2021 debt refinancing and the write-off of $7,213 of pre-existing deferred financing fees and debt discount.

The Credit Facilities were issued under a credit agreement, dated April 13, 2021 (as amended from time to time, the “Credit Agreement”), among the Company, as borrower, the lenders party thereto, ~~JPMorgan Chase~~and Bank of America, N.A. (“Bank of America”), as administrative agent and an issuing ~~bank, The Bank of Nova Scotia, as revolving agent, swingline lender and an issuing bank, and the other parties thereto.~~bank. The Credit ~~Agreement provides for (a) a revolving credit facility (including swing line loans and letters~~Facilities consist of ~~credit)~~(1) $1,000,000 in ~~an initial~~ aggregate principal amount of ~~$250,000 that will mature on April 2, 2018~~senior secured tranche B term loans due in 2028 (the ~~“Revolving~~“Term Loan Facility”)~~, (b) an initial term B-1 loan credit facility~~ and (2) $175,000 in an aggregate principal amount of ~~$300,000 that matured on April~~commitments under a senior secured revolving credit facility (which includes borrowing capacity available for letters of credit) due in 2026 (the “Revolving Credit Facility”).

In December 2021, the Company made voluntary prepayments at par in an aggregate amount of $52,500 in respect of its outstanding term loans under the Term Loan Facility. As a result of these prepayments, the Company wrote off a debt discount and deferred financing fees of $1,183 in the aggregate in the fourth quarter of fiscal 2021.

As of July 2, ~~2016 (the “Tranche B-1 Term Facility”) and (c) an initial term B-2 loan credit facility~~2022, the Company had $945,000 in an aggregate principal amount of $2,100,000 that will mature on April 2, 2020 (the “Tranche B-2 Term Facility”, and together with the Tranche B-1 Term Facility, the “Term Facilities”; the Term Facilities and Revolving Facility collectively, the “WWI Credit Facility”). In connection with this refinancing, the Company used the proceeds from borrowings under the Term Facilities to pay off a total of $2,399,904 of outstanding loans, consisting of $128,759 of Term B Loans, $110,602 of Term C Loans, $117,612 of Term D Loans, $1,125,044 of Term E Loans, $817,887 of Term F Loans, $21,247 of loans under the Revolver A-1 and $78,753 of loans under the Revolver A-2. Following the refinancing of a total of $2,399,904 of loans, at April 2, 2013, the Company had $2,400,000 debt outstanding under the Term Facilities and $248,848 of availability under the Revolving Facility. The Company incurred fees of $44,817 during the second quarter of fiscal 2013 in connection with this refinancing. In the second quarter of fiscal 2013, the Company wrote-off fees associated with this refinancing which resulted in the Company recording a charge of $21,685 in early extinguishment of debt.

On September 26, 2014, the Company and certain lenders entered into an agreement amending the Credit Agreement that, among other things, eliminated the Financial Covenant (as defined in the Credit Agreement) with respect to the Revolving Facility. In connection with this amendment, the Company wrote-off deferred financing fees of approximately $1,583 in the third quarter of fiscal 2014. Concurrently with and in order to effect this amendment, the Company reduced the amount of the Revolving Facility from $250,000 to $50,000.

Under the terms of the Credit Agreement, depending on the Company’s Consolidated Leverage Ratio (as defined in the Credit Agreement), on an annual basis on or about the time the Company is required to deliver its financial statements for any fiscal year, the Company is obligated to offer to prepay a portion of the outstanding principal amount of the Term Facilities in an aggregate amount determined by a percentage of its annual excess cash flow (as defined in the Credit Agreement) (said payment, a “Cash Flow Sweep”). On March 13, 2015, the Company commenced an offer to prepay at a discount to par up to $75,000 in aggregate principal amount of term loans outstanding under the ~~Tranche B-1 Term~~Credit Facilities, with $173,911 of availability and $1,089 in issued but undrawn letters of credit outstanding under the Revolving Credit Facility. ~~On March 20, 2015,~~There were 0 outstanding borrowings under the Revolving Credit Facility as of July 2, 2022.

All obligations under the Credit Agreement are guaranteed by, subject to certain exceptions, each of the Company’s current and future wholly-owned material domestic restricted subsidiaries. All obligations under the Credit Agreement, and the guarantees of those obligations, are secured by substantially all of the assets of the Company ~~accepted offers with a discount equal~~and each guarantor, subject to ~~or greater than 9.00% in respect of such term loans. On March 25, 2015,~~customary exceptions, including:

The Credit Facilities require the Company ~~paid an aggregate amount~~to prepay outstanding term loans, subject to certain exceptions, with:

The foregoing mandatory prepayments will be used to reduce the installments of ~~cash proceeds totaling $57,389 plus an amount sufficient to pay accrued and unpaid interest~~principal on the ~~amount prepaid to prepay $63,065 in aggregate principal amount of such term~~Term Loan Facility. The Company may voluntarily repay outstanding loans under the ~~Tranche B-1 Term Facility. This expenditure reduced, on a dollar~~Credit Facilities at any time without penalty, except for ~~dollar basis, the Company’s $59,728 obligation~~customary “breakage” costs with respect to make a mandatory excess cash flow prepayment offer to the term loan lenders under the terms of the Credit Agreement. In addition, the Company made a voluntary prepayment at par on March 25, 2015 of $2,500 in respect of such termLIBOR loans under the Tranche B-1 Term Facility to reduce the remaining excess cash flow prepayment obligation for fiscal 2014. As a result of this prepayment, the Company wrote-off fees of $326, incurred fees of $601 and recorded a gain on early extinguishment of debt of $4,749, inclusive of these fees, in the first quarter of fiscal 2015.Credit Facilities.

On June 17, 2015, the Company commenced another offer to prepay at a discount to par up to $229,000 in aggregate principal amount of term loans outstanding under the Tranche B-1 Term Facility. On June 22, 2015, the Company accepted offers with a discount equal to or greater than 9.00% in respect of such term loans. On June 26, 2015, the Company paid an aggregate amount of cash proceeds totaling $77,225 plus an amount sufficient to pay accrued and unpaid interest on the amount prepaid to prepay $84,862 in aggregate principal amount of such term loans under the Tranche B-1 Term Facility. As a result of this prepayment, the Company wrote-off fees of $321, incurred fees of $641 and recorded a gain on early extinguishment of debt of $6,677, inclusive of these fees, in the second quarter of fiscal 2015.

On July 14, 2015, the Company drew down the $48,000 available on its Revolving Facility in order to enhance its cash position and to provide additional financial flexibility. As of January 2, 2016, the revolver borrowing was classified as a short-term liability in consideration of the fact that the terms of the Revolving Facility require an assessment as to whether there have been any material adverse changes with respect to the Company in connection with the Company’s monthly interest elections. Although the revolver borrowing was classified as a short-term liability as of January 2, 2016, absent any change in fact and circumstance, the Company had, and continues to have, the ability to extend and not repay the Revolving Facility until its due date of April 2, 2018.

On April 1, 2016, the Company paid in full, with cash on hand, a principal amount of term loans equal to $144,323, which constituted the entire remaining principal amount of term loans outstanding under the Tranche B-1 Term Facility due April 2, 2016.

On July 29, 2016, the Company paid down, with cash on hand, a principal amount of $25,000 of the $48,000 outstanding under its Revolving Facility. On September 16, 2016, the Company paid down, with cash on hand, the remaining outstanding principal amount of $23,000 on its Revolving Facility.

~~On May 18, 2017, the Company commenced another offer to prepay at a discount to par up to $75,000 in aggregate principal amount of term loans outstanding under the Tranche B-2 Term Facility.~~ ~~On May 24, 2017, the Company accepted offers with a discount equal to or greater than 3.28% in respect of such term loans. On May 25, 2017,~~ ~~the Company paid an aggregate amount of cash proceeds totaling~~ ~~$73,030 plus an amount sufficient to pay accrued and unpaid interest on the amount prepaid to prepay $75,507 in aggregate principal amount of such term loans under the Tranche B-2 Term Facility~~. As a result of this prepayment, the Company wrote-off fees of $618, incurred fees of $305 and recorded a gain on early extinguishment of debt of $1,554, inclusive of these fees, in the second quarter of fiscal 2017.

At September 30, 2017 under the WWI Credit Facility, the Company had $1,930,386 outstanding consisting entirely of a term loan under the Tranche B-2 Term Facility. At September 30, 2017, the Revolving Facility had $0 outstanding, $2,165 in issued but undrawn letters of credit outstanding thereunder and $47,835 in available unused commitments thereunder. The proceeds from borrowings under the Revolving Facility (including swing line loans and letters of credit) are available to be used for working capital and general corporate purposes.

~~At September 30, 2017, i~~n accordance with the terms of the Credit Agreement, it is probable that the Company will have a Cash Flow Sweep obligation of approximately $11,216 to the term loan lenders in the second quarter of fiscal 2018.

Borrowings under the ~~Credit Agreement~~Term Loan Facility bear interest at a rate per annum equal to, at the Company’s option, ~~LIBOR plus~~either (1) an applicable margin orplus a base rate determined by reference to the highest of (a) 0.50% per annum plus the Federal Funds Effective Rate as determined by the Federal Reserve Bank of New York, (b) the prime rate of Bank of America and (c) the LIBOR rate determined by reference to the cost of funds for U.S. dollar deposits for an interest period of one month adjusted for certain additional costs, plus 1.00%; provided that such rate is not lower than a floor of 1.50% or (2) an applicable ~~margin.~~margin plus a LIBOR rate determined by reference to the cost of funds for U.S. dollar deposits for the interest period relevant to such borrowing adjusted for certain additional costs, provided that LIBOR is not lower than a floor of 0.50%. Borrowings under the ~~Tranche B-2 Term~~Revolving Credit Facility ~~is subject~~bear interest at a rate per annum equal to an applicable margin based upon a ~~minimum interest~~leverage-based pricing grid, plus, at the Company’s option, either (1) a base rate determined by reference to the highest of (a) 0.50% per annum plus the Federal Funds Effective Rate as determined by the Federal Reserve Bank of New York, (b) the prime rate of ~~0.75%~~Bank of America and (c) the LIBOR rate determined by reference to the cost of funds for U.S. dollar deposits for an interest period of one month adjusted for certain additional costs, plus 1.00%; provided that such rate is not lower than a floor of 1.00% or (2) a LIBOR rate determined by reference to the cost of funds for U.S. dollar deposits for the interest period relevant to such borrowing adjusted for certain additional costs, provided such rate is not lower than a floor of 0. As of July 2, 2022, the applicable margins for the LIBOR rate borrowings under the Term Loan Facility and the ~~base rate under~~Revolving Credit Facility were 3.50% and 2.75%, respectively. In the ~~Tranche B-2 Term Facility~~event that LIBOR is ~~subject to a minimum interest rate of 1.75%. Under the terms of~~phased out as is currently expected, the Credit Agreement ~~in the event~~provides that the Company ~~receives~~and the administrative agent may amend the Credit Agreement to replace the LIBOR definition therein with a ~~corporate rating~~successor rate subject to notifying the lending syndicate of ~~BB- (or lower)~~such change and not receiving within five business days of such notification objections to such replacement rate from ~~S&P and~~lenders holding at least a corporate rating of Ba3 (or lower) from Moody’s, the applicable margin relating to the Term Facilities would increase by 25 basis points. On February 21, 2014, both S&P and Moody’s issued revised corporate ratingsmajority of the Company of B+ and B1, respectively. As a result, effective February 21, 2014, the applicable margin on borrowings under the Tranche B-1 Term Facility went from 2.75% to 3.00% and on borrowings under the Tranche B-2 Term Facility went from 3.00% to 3.25%. The applicable margin relating to the Revolving Facility will fluctuate depending upon the Company’s Consolidated Leverage Ratio. At April 1, 2016, the date of payment of theaggregate principal amount of loans and commitments then outstanding under the ~~Tranche B-1 Term Facility discussed above,~~Credit Agreement; provided that such lending syndicate may not object to a SOFR-based successor rate contained in any such amendment. If the Company fails to do so, its borrowings ~~under~~will be based off of the ~~Tranche B-1 Term Facility bore interest at LIBOR~~alternative base rate plus an applicable margin of 3.00%. At September 30, 2017, borrowings under the Tranche B-2 Term Facility bore interest at LIBOR plus an applicable margin of 3.25%. Based on the Company’s Consolidated Leverage Ratio as of September 30, 2017, had there been any borrowings under the Revolving Facility, it would have borne interest at LIBOR plus an applicable margin of 2.50%. a margin.

On a quarterly basis, the Company ~~will pay~~pays a commitment fee to the lenders under the Revolving Credit Facility in respect of unutilized commitments thereunder, which commitment fee ~~will fluctuate~~fluctuates depending upon the Company’s Consolidated ~~Leverage Ratio. Based on the Company’s Consolidated~~First Lien Leverage Ratio ~~as of September 30, 2017 and December 31, 2016,~~(as defined in the commitment fee was 0.50% per annum. For the nine months ended September 30, 2017 and the fiscal year ended December 31, 2016, the Company paid $183 and $31, respectively, in commitment fees. The Company also will pay customary letter of credit fees and fronting fees under the Revolving Facility, which totaled $36 for the nine months ended September 30, 2017 and $49 for the fiscal year ended December 31, 2016.Credit Agreement).

The Credit Agreement contains other customary terms, including (1) representations, warranties and affirmative covenants, (2) negative covenants, including ~~covenants that,~~limitations on indebtedness, liens, mergers, acquisitions, asset sales, investments, distributions, prepayments of subordinated debt, amendments of material agreements governing subordinated indebtedness, changes to lines of business and transactions with affiliates, in each case subject to baskets, thresholds and other exceptions, and (3) customary events of default.

The availability of certain ~~circumstances, restrict~~baskets and the ability to enter into certain transactions are also subject to compliance with certain financial ratios. In addition, if the aggregate principal amount of extensions of credit outstanding under the Revolving Credit Facility as of any fiscal quarter end exceeds 35% of the amount of the aggregate commitments under the Revolving Credit Facility in effect on such date, the Company must be in compliance with a Consolidated First Lien Leverage Ratio of 5.75:1.00 for the period ending after the first fiscal quarter of 2022 through and including with the first fiscal quarter of 2023, with a step down to 5.50:1.00 for the period ending after the first fiscal quarter of 2023 through and including with the first fiscal quarter of 2024, with an additional step down to 5.25:1.00 for the period ending after the first fiscal quarter of 2024 through and including with the first fiscal quarter of 2025 and again to 5.00:1.00, for the period following the first fiscal quarter of 2025. As of July 2, 2022, the Company’s ~~ability to incur additional indebtedness, pay dividends on~~actual Consolidated First Lien Leverage Ratio was 4.60:1.00 and ~~redeem capital stock, make other payments, including investments, sell~~there were 0 borrowings under its ~~assets and enter into consolidations, mergers and transfers of all or substantially all of its assets. The WWI~~Revolving Credit Facility ~~does~~and total letters of credit issued were $1,089. The Company may not ~~require~~be able to satisfy the Consolidated First Lien Leverage Ratio in the future, and as a result, it may effectively limit the amount of funds the Company is able to ~~meet any financial maintenance covenants and is guaranteed by certain of~~borrow under the ~~Company’s existing and future subsidiaries. Substantially all of the Company’s assets secure the WWI~~Revolving Credit Facility.

The Senior Secured Notes were issued pursuant to an Indenture, dated as of April 13, 2021 (as amended, supplemented or modified from time to time, the “Indenture”), among the Company, the guarantors named therein and ~~December 31, 2016, the Company’s~~The Bank of New York Mellon, as trustee and notes collateral agent. The Indenture contains customary terms, events of default and covenants for an issuer of non-investment grade debt ~~consisted entirely~~securities. These covenants include limitations on indebtedness, liens, mergers, acquisitions, asset sales, investments, distributions, prepayments of ~~variable-rate instruments. An interest rate swap was entered into~~subordinated debt and transactions with affiliates, in each case subject to hedge a portion of the cash flow exposure associated with the Company’s variable-rate borrowings. The weighted average interest rate (which includes amortization of deferred financing costs) on the Company’s outstanding debt, exclusive of the impact of the swap, was approximately 4.68%baskets, thresholds and 4.41% per annum based on interest rates at September 30, 2017 and December 31, 2016, respectively. The weighted average interest rate (which includes amortization of deferred financing costs) on the Company’s outstanding debt, including the impact of the swap, was approximately 5.19% and 5.32% per annum based on interest rates at September 30, 2017 and December 31, 2016, respectively.other exceptions.

Basic (net loss) earnings per share ~~(“EPS”) are~~is calculated utilizing the weighted average number of common shares outstanding during the periods presented. Diluted ~~EPS~~(net loss) earnings per share is calculated utilizing the weighted average number of common shares outstanding during the periods presented adjusted for the effect of dilutive common stock equivalents.

The following table sets forth the computation of basic and diluted ~~EPS:~~(net loss) earnings per share data:

	Three Months Ended				Nine Months Ended				Three Months Ended					Six Months Ended
	September 30,		October 1,		September 30,		October 1,		July 2,			July 3,		July 2,			July 3,
	2017		2016		2017		2016		2022			2021		2022			2021
Numerator:
Net income attributable to
Weight Watchers International, Inc.	$	44,719	$	34,658	$	100,544	$	54,400
Net (loss) income									$	(4,623	)	$	8,860	$	(12,866	)	$	(9,367	)
Denominator:
Weighted average shares of common stock outstanding		64,463		63,782		64,237		63,690		70,305			69,588		70,195			69,336
Effect of dilutive common stock equivalents		4,223		2,059		3,702		2,182		—			1,572		—			—
Weighted average diluted common shares outstanding		68,686		65,841		67,939		65,872		70,305			71,160		70,195			69,336
Earnings per share attributable to Weight Watchers International, Inc.
(Net loss) earnings per share
Basic	$	0.69	$	0.54	$	1.57	$	0.85	$	(0.07	)	$	0.13	$	(0.18	)	$	(0.14	)
Diluted	$	0.65	$	0.53	$	1.48	$	0.83	$	(0.07	)	$	0.12	$	(0.18	)	$	(0.14	)

The number of anti-dilutive common stock equivalents excluded from the calculation of the weighted average number of common shares for diluted ~~EPS~~(net loss) earnings per share was ~~1,862~~8,732 and ~~1,921~~4,724 for the three months ended ~~September 30, 2017~~July 2, 2022 and ~~October 1, 2016, respectively,~~July 3, 2021, respectively. The number of anti-dilutive common stock equivalents excluded from the calculation of the weighted average number of common shares for diluted net loss per share was 7,848 and ~~1,230 and 1,448~~6,426 for the ~~nine~~six months ended ~~September 30, 2017~~July 2, 2022 and ~~October 1, 2016,~~July 3, 2021, respectively.

The effective tax rates for the three and ~~May 12, 2004, respectively,~~six months ended July 2, 2022 were 38.4% and 26.7%, respectively. For the six months ended July 2, 2022, the tax benefit was primarily driven by a tax benefit recorded for out-of-period income tax adjustments, which was partially offset by tax expense related to tax shortfalls from stock compensation. For the six months ended July 2, 2022, the difference between the U.S. federal statutory tax rate and the Company’s ~~shareholders approved~~consolidated effective tax rate was primarily due to tax benefits related to foreign-derived intangible income (“FDII”) and out-of-period income tax adjustments, partially offset by state income tax expense, tax expense from income earned in foreign jurisdictions and tax expense related to tax shortfalls from stock compensation.

The effective tax rates for the ~~2008 Stock Incentive Plan (the “2008 Plan”)~~three and six months ended July 3, 2021 were 9.9% and 42.3%, respectively. For the six months ended July 3, 2021, the tax expense was impacted by tax windfalls from stock compensation. For the six months ended July 3, 2021, the difference between the U.S. federal statutory tax rate and the ~~2004 Stock Incentive Plan (the “2004 Plan”)~~Company’s consolidated effective tax rate was primarily due to state income tax expense and tax expense from income earned in foreign jurisdictions, partially offset by a tax benefit related to FDII. ~~On May 6, 2014,~~

The Internal Revenue Service notified the ~~Company’s shareholders approved~~Company of certain penalties assessed related to the ~~2014 Stock Incentive Plan (as amended~~annual disclosure and restated, the “2014 Plan”), which replaced the 2008 Plan and 2004 Plan for all equity-based awards granted on or after May 6, 2014. The 2014 Plan is designed to promote the long-term financial interests and growthreporting requirements of the Company by attracting, motivating and retaining employees with the ability to contribute to the success of the business and to align compensation for the Company’s employees over a multi-year period directly with the interests of the shareholders of the Company. The Company’s Board of Directors or a committee thereof administers the 2014 Plan.

Pursuant to the restricted stock provisions of the 2014 Plan, in fiscal 2016 the Compensation and Benefits Committee of the Company’s Board of Directors (the “Compensation Committee”) determined to grant 289.9 performance-based stock unit (“PSU”) awards having both time- and performance-vesting criteria. The time-vesting criteria for these PSUs will be satisfied on the third anniversary of the grant date (i.e., May 16, 2019). The performance-vesting criteria for these PSUs will be satisfied if the Company has achieved a Debt Ratio (as defined in the applicable term sheet for these PSU awards and based on a Debt to EBITDAS ratio (each, as defined therein)) at levels at or above a “threshold” level performance of 4.5x over the performance period from December 31, 2017 to December 29, 2018. Pursuant to these awards, the number of PSUs that become vested, if any, upon the satisfaction of both vesting criteria, shall be equal to (x) the target number of PSUs granted multiplied by (y) the applicable Debt Ratio achievement percentage, rounded down to avoid the issuance of fractional shares. If all of these awards fully meet the time-vesting criteria and the minimum performance condition is attained, depending on the Company’s Debt Ratio achievement, the number of shares of the Company’s common stock issuable under these PSUs range from 61.7 to 308.4.Affordable Care Act. The Company is ~~currently accruing compensation expense~~in the process of appealing this determination and does not believe it has any liability with respect to ~~what it believes is the probable outcome upon vesting.~~this matter.

Additionally, pursuant to the restricted stock provisions of the 2014 Plan, in fiscal 2017 the Compensation Committee determined to grant 98.5 PSUs in May 2017 and 47.9 PSUs in July 2017, all having both time- and performance-vesting criteria. The time-vesting criteria for these PSUs will be satisfied on May 15, 2020. The performance-vesting criteria for these PSUs will be satisfied if the Company has achieved, in the case of the May 2017 awards, certain annual operating income objectives and, in the case of the July 2017 award, certain net income or operating income objectives, as applicable for each performance year, in each fiscal year over a three-year period (i.e., fiscal 2017 through fiscal 2019) (each, a “2017 Award Performance Year”). When the performance measure has been met for a particular 2017 Award Performance Year, that portion of units is “banked” for potential issuance following the satisfaction of the three-year time-vesting criteria. Such portion of units to be “banked” shall be equal to (x) the target number of PSUs granted for the applicable 2017 Award Performance Year multiplied by (y) the applicable achievement percentage, rounded down to avoid the issuance of fractional shares. If all of these awards fully meet the time-vesting criteria and the minimum performance condition is attained in each 2017 Award Performance Year, depending on the Company’s performance achievement, the number of shares of the Company’s common stock issuable under these PSUs range from 48.8 to 244.0. The Company is currently accruing compensation expense to what it believes is the probable outcome upon vesting.

The effective tax rates for the three and nine months ended September 30, 2017 were 30.5% and 26.6%, respectively. The effective tax rates for the three and nine months ended October 1, 2016 were 10.3% and 18.6%, respectively.

For the nine months ended September 30, 2017, the primary difference between the US federal statutory tax rate and the Company’s consolidated effective tax rate was due to the $11,633 tax benefit related to the cessation of operations of the Company’s Spanish subsidiary recorded in the first quarter of fiscal 2017 and a $2,255 reversal of tax reserves resulting from an updated transfer pricing study.

For the three months and nine months ended October 1, 2016 the primary differences between the US federal statutory tax rate and the Company’s consolidated effective tax rate were due to $11,438 net tax benefits arising from a research and development tax credit and a Section 199 deduction for the tax years 2012 through 2016, partially offset by $2,684 of income tax expenses recorded for out-of-period adjustments. See Note 1 for additional information on these adjustments. For the nine months ended October 1, 2016, the difference between the US federal statutory tax rate and the Company’s consolidated effective tax rate was also due to the reversal of a $2,500 valuation allowance related to tax benefits for foreign losses that are now expected to be realized.

~~The differences between the US federal statutory tax rate and the Company’s consolidated effective tax rate is as follows:~~

~~On January 7, 2016, an OnlinePlus~~ member filed a putative class action complaint against the Company in the Supreme Court of New York, New York County, asserting class claims for breach of contract and violations of the New York General Business Law. On February 5, 2016, the Company removed the case to the United States District Court, Southern District of New York. On March 18, 2016, the plaintiff filed an amended complaint, alleging that, as a result of the temporary glitches in the Company’s website and app in November and December 2015, the Company has: (1) breached its Subscription Agreement with its Online~~Plus~~ members; and (2) engaged in deceptive acts and practices in violation of Section 350 of the New York General Business Law. The plaintiff is seeking unspecified actual, punitive and statutory damages, as well as his attorneys’ fees and costs incurred in connection with this action. The Company filed a motion to dismiss on May 6, 2016. The plaintiff filed his opposition papers on June 9, 2016 and the Company filed its reply papers on June 23, 2016. The Court granted the Company’s motion to dismiss on November 14, 2016. On November 16, 2016, the plaintiff filed a timely notice of appeal of the Court’s decision to the Second Circuit Court of Appeals and on January 31, 2017, the plaintiff filed his brief in support of appeal. The Company filed its opposition brief on April 5, 2017, and the plaintiff filed his reply brief on April 25, 2017. On October 25, 2017, the Second Circuit conducted oral arguments on the plaintiff’s appeal. On November 2, 2017, the Second Circuit issued its decision denying the plaintiff’s appeal and affirming the lower court’s dismissal of the case. The plaintiff has until November 16, 2017 to file a petition for a rehearing with the Second Circuit, or until January 31, 2018 to file a petition for appeal with the United States Supreme Court.

Due to the nature of the Company’s activities, it is, ~~also,~~ at times, subject to pending and threatened legal actions that arise out of the ordinary course of business. In the opinion of management, the disposition of any such matters is not expected, individually or in the aggregate, to have a material adverse effect on the Company’s results of operations, financial condition or cash flows. However, the results of legal actions cannot be predicted with certainty. Therefore, it is possible that the Company’s results of operations, financial condition or cash flows could be materially adversely affected in any particular period by the unfavorable resolution of one or more legal actions.

As of ~~September 30, 2017~~July 2, 2022 and ~~December 31, 2016,~~January 1, 2022, the Company had in effect an interest rate ~~swap~~swaps with aan aggregate notional amount totaling ~~$1,250,000 and $1,500,000, respectively.~~$500,000.

On ~~July 26, 2013,~~June 11, 2018, in order to hedge a portion of its variable rate debt, the Company entered into a forward-starting interest rate swap (the “2018 swap”) with an effective date of ~~March 31, 2014~~April 2, 2020 and a termination date of ~~April 2, 2020.~~March 31, 2024. The initial notional amount of this swap was ~~$1,500,000.~~$500,000. During the term of this swap, the notional amount decreased from ~~$1,500,000~~$500,000 effective April 2, 2020 to $250,000 on March 31, ~~2014 to $1,250,000 on April 3, 2017, and will decrease to $1,000,000 on April 1, 2019.~~2021. This interest rate swap effectively ~~fixes~~fixed the variable interest rate on the notional amount of this swap at ~~2.38%~~3.1005%. On June 7, 2019, in order to hedge a portion of its variable rate debt, the Company entered into a forward-starting interest rate swap (the “2019 swap”, and together with the 2018 swap, the “current swaps”) with an effective date of April 2, 2020 and a termination date of March 31, 2024. The notional amount of this swap is $250,000. This interest rate swap ~~qualifies~~effectively fixed the variable interest rate on the notional amount of this swap at 1.901%. The current swaps qualify for hedge accounting and, therefore, changes in the fair value of ~~this swap~~the current swaps have been recorded in accumulated other comprehensive loss.

As of ~~September 30, 2017 and December 31, 2016,~~July 2, 2022, the cumulative unrealized ~~losses~~gain for qualifying hedges ~~were~~was reported as a component of accumulated other comprehensive income in the amount of $3,500 ($4,536 before taxes). As of January 1, 2022, the cumulative unrealized loss for qualifying hedges was reported as a component of accumulated other comprehensive loss in the ~~amounts~~amount of ~~$10,828~~$10,843 ($~~17,751~~14,622 before taxes).

The following table presents the aggregate fair value of the Company’s derivative financial instruments by balance sheet classification and ~~$16,002 ($26,232 before taxes), respectively.~~location:

The Company is hedging forecasted transactions for periods not exceeding the next ~~three~~two years. The Company expects approximately ~~$5,183~~$356 ($~~8,497~~476 before taxes) of net derivative ~~losses~~gains included in accumulated other comprehensive loss at ~~September 30, 2017,~~July 2, 2022, based on current market rates, will be reclassified into earnings within the next 12 months.

Accounting guidance on fair value measurements for certain financial assets and liabilities requires that assets and liabilities carried at fair value be classified and disclosed in one of the following three categories:

When measuring fair value, the Company is required to maximize the use of observable inputs and minimize the use of unobservable inputs.

The Company’s significant financial instruments include long-term debt and an interest rate swap ~~agreement~~agreements as of ~~September 30, 2017~~July 2, 2022 and ~~December 31, 2016.~~January 1, 2022. Since there were 0 outstanding borrowings under the Revolving Credit Facility as of July 2, 2022 and January 1, 2022, the fair value approximated a carrying value of $0 at both July 2, 2022 and January 1, 2022.

The fair value of the Company’s ~~Term~~Credit Facilities is determined by utilizing average bid prices on or near the end of each fiscal quarter (Level 2 input). As of ~~September 30, 2017~~July 2, 2022 and ~~December 31, 2016,~~January 1, 2022, the fair value of the Company’s long-term debt was approximately ~~$1,897,108~~$1,058,883 and ~~$1,671,920,~~$1,389,306, respectively, as compared to the carrying value (net of ~~deferring~~deferred financing ~~costs)~~costs and debt discount) of ~~$1,916,271~~$1,420,194 and ~~$2,002,299,~~$1,418,104, respectively.

The fair values for the Company’s derivative financial instruments are determined using observable current market information such as the prevailing LIBOR interest rate and LIBOR yield curve rates and include consideration of counterparty credit risk. See Note 1211 for disclosures related to derivative financial instruments.

The following table presents the aggregate fair value of the Company’s derivative financial instruments:

The Company did ~~not~~0t have any transfers into or out of Levels 1 and 2 and did not maintain any assets or liabilities classified as Level 3 during the ~~nine~~six months ended ~~September 30, 2017~~July 2, 2022 and the fiscal year ended ~~December 31, 2016.~~January 1, 2022.

Amounts reclassified out of accumulated other comprehensive loss ~~are~~were as follows:

Three Months Ended

Nine Months Ended

September 30,

October 1,

September 30,

October 1,

2017

2016

2017

2016

Details about Other Comprehensive
Loss Components

Amounts Reclassified from
Accumulated Other
Comprehensive Loss

Amounts Reclassified from
Accumulated Other
Comprehensive Loss

Affected Line Item in the
Statement Where Net
Income is Presented
Loss on Qualifying Hedges

Interest rate contracts

$
(3,422
)

$
(6,185
)

$
(12,577
)

$
(18,555
)

Interest expense

(3,422
)

(6,185
)

(12,577
)

(18,555
)

Income before income taxes

1,335

2,412

4,905

7,236

Provision for income taxes

$
(2,087
)

$
(3,773
)

$
(7,672
)

$
(11,319
)

Net income
Loss on Foreign Currency Translation

$
0

$
0

$
(787
)

$
0

Other expense (income), net

0

0

(787
)

0

Income before income taxes

0

0

0

0

Provision for income taxes

$
0

$
0

$
(787
)

$
0
��

Net income

The Company has ~~four~~4 reportable segments based on an integrated geographical structure as follows: North America, ~~United Kingdom,~~ Continental Europe (CE), United Kingdom and Other. Other consists of Australia, New Zealand and emerging markets operations and franchise revenues and related costs, all of which have been grouped together as if they were a single reportable segment because they do not meet any of the quantitative thresholds and are immaterial for separate disclosure. To be consistent with the information that is presented to the chief operating decision maker, the Company does not include intercompany activity in the segment results.

									Total Revenues, net				Total Revenues, net
	Total Revenue								Three Months Ended				Six Months Ended
	Three Months Ended				Nine Months Ended				July 2,		July 3,		July 2,		July 3,
	September 30, 2017		October 1, 2016		September 30, 2017		October 1, 2016		2022		2021		2022		2021
North America	$	223,677	$	192,899	$	695,397	$	613,287	$	188,014	$	207,629	$	392,327	$	428,945
Continental Europe										61,743		77,936		132,644		159,831
United Kingdom		25,473		23,480		75,907		80,093		12,757		17,002		27,196		36,070
Continental Europe		60,665		50,675		179,580		163,429
Other		13,872		13,765		43,538		40,681		6,940		8,812		15,047		18,329
Total revenue	$	323,687	$	280,819	$	994,422	$	897,490
Total revenues, net									$	269,454	$	311,379	$	567,214	$	643,175

	Net (Loss) Income					Net Loss
	Three Months Ended					Six Months Ended
	July 2,			July 3,		July 2,			July 3,
	2022			2021		2022			2021
Segment operating income (loss):
North America	$	26,514		$	61,395	$	48,028		$	88,977
Continental Europe		28,021			33,451		48,464			53,505
United Kingdom		1,102			2,040		(1,099	)		2,583
Other		890			1,983		811			2,087
Total segment operating income		56,527			98,869		96,204			147,152
General corporate expenses		43,161			39,196		73,869			84,650
Interest expense		19,255			20,293		37,926			49,416
Other expense, net		1,613			381		1,956			143
Early extinguishment of debt		—			29,169		—			29,169
(Benefit from) provision for income taxes		(2,879	)		970		(4,681	)		(6,859	)
Net (loss) income	$	(4,623	)	$	8,860	$	(12,866	)	$	(9,367	)

Net Income

Three Months Ended

Nine Months Ended

September 30, 2017

October 1, 2016

September 30, 2017

October 1, 2016

Segment operating income:

North America

$
76,206

$
50,614

$
189,397

$
133,113

United Kingdom

5,968

4,864

15,213

10,780

Continental Europe

27,097

18,872

54,920

39,602

Other

1,473

2,998

6,413

6,111

Total segment operating income

110,744

77,348

265,943

189,606

General corporate expenses

19,366

10,556

48,126

35,525

Interest expense

26,993

28,329

82,227

86,963

Other expense (income), net

125

(146
)

278

397

Gain on early extinguishment of debt

0

0

(1,554
)

0

Provision for income taxes

19,593

3,989

36,457

12,420

Net income

44,667

34,620

100,409

54,301

Net loss attributable to the noncontrolling interest

52

38

135

99

Net income attributable to Weight Watchers
International, Inc.

$
44,719

$
34,658

$
100,544

$
54,400

As ~~more fully described in Note 4,~~previously disclosed, on October 18, 2015, the Company entered into the Strategic Collaboration Agreement with ~~Ms.~~Oprah Winfrey, under which she ~~will~~would consult with the Company and participate in developing, planning, executing and enhancing the ~~Weight Watchers~~WW program and related initiatives, and provide it with services in her discretion to promote the Company and its programs, products and ~~services.~~services for an initial term of five years (the “Initial Term”).

As previously disclosed, on December 15, 2019, the Company entered into an amendment of the Strategic Collaboration Agreement with Ms. Winfrey, pursuant to which, among other things, the Initial Term of the Strategic Collaboration Agreement was extended until April 17, 2023 (with no additional successive renewal terms) after which a second term will commence and continue through the earlier of the date of the Company’s 2025 annual meeting of shareholders or May 31, 2025. Ms. Winfrey will continue to provide the above-described services during the remainder of the Initial Term and, during the second term, will provide certain consulting and other services to the Company.

In addition to the Strategic Collaboration Agreement, Ms. Winfrey and her related entities provided services to the Company totaling ~~$364~~$144 and ~~$2,920~~$576 for the three and ~~nine~~six months ended ~~September 30, 2017,~~July 2, 2022, respectively, and ~~$368~~$192 and ~~$2,054~~$666 for the three and ~~nine~~six months ended ~~October 1, 2016,~~July 3, 2021, respectively, which services included advertising, production and related fees.

The Company’s accounts payable to parties related to Ms. Winfrey at ~~September 30, 2017~~July 2, 2022 and ~~December 31, 2016~~January 1, 2022 was ~~$364~~$50 and ~~$1,123,~~$120, respectively.

During the six months ended July 3, 2021, as permitted by the transfer provisions set forth in the previously disclosed Share Purchase Agreement, dated October 18, 2015, between the Company and Ms. Winfrey, as amended, and the previously disclosed Winfrey Option Agreement, dated October 18, 2015, between the Company and Ms. Winfrey, Ms. Winfrey sold 1,542 of the shares she purchased under such purchase agreement and exercised a portion of her stock options granted in fiscal 2015 resulting in the sale of 581 shares issuable under such options, respectively.

As previously disclosed, in the second quarter of fiscal 2022, the Company committed to a restructuring plan consisting of (i) an organizational realignment to simplify the Company’s corporate structure and reduce associated costs (the “Organizational Realignment”) and (ii) a continued rationalization of its real estate portfolio resulting in the termination of certain of the Company’s operating leases (together with the Organizational Realignment, the “2022 Plan”). In connection with the 2022 Plan, the Company previously expected to record restructuring charges ranging between $18,000 to $22,000 in the aggregate in fiscal 2022. The Company revised its estimate and currently expects to record restructuring expenses of approximately $27,000 in fiscal 2022 related to this plan. For both the three and six months ended July 2, 2022, the Company recorded restructuring expenses totaling $19,117 ($14,313 after tax).

The Organizational Realignment has resulted and will result in the elimination of certain positions and termination of employment for certain employees worldwide. In connection with its Organizational Realignment, the Company previously expected to record charges of approximately $12,000 to $16,000 in the aggregate with respect to employee termination benefit costs (consisting primarily of general and administrative expenses), the majority of which were recorded in the second quarter of fiscal 2022. The Company revised its estimate and currently expects to record restructuring expenses with respect to employee termination benefit costs of approximately $20,000 in fiscal 2022.

In connection with the termination of certain of its operating leases, the Company continues to expect to record charges of approximately $6,000 in the aggregate consisting of lease termination and other related costs in fiscal 2022.

Substantially all of these costs arising from the 2022 Plan are expected to result in cash expenditures related to separation payments, other employee termination expenses and lease termination payments. For the three and six months ended July 2, 2022, the components of the Company’s restructuring expenses were as follows:

For the three and six months ended July 2, 2022, restructuring expenses were recorded in the Company’s consolidated statements of net income as follows:

All expenses were recorded to general corporate expenses and, therefore, there was no impact to the segments.

For the six months ended July 2, 2022, the Company made payments of $467 towards the liability for the lease termination costs. For the six months ended July 2, 2022, the Company made payments of $3,387 towards the liability for the employee termination benefit costs.

The Company expects the remaining lease termination liability of $2,326 and the remaining employee termination benefit liability of $11,520 to be paid in full by the end of fiscal 2023.

As previously disclosed, in the first quarter of fiscal 2021, as the Company continued to evaluate its cost structure, anticipate consumer demand and focus on costs, the Company committed to a plan which has resulted in the termination of operating leases and elimination of certain positions worldwide. For the fiscal year ended January 1, 2022, the Company recorded restructuring expenses totaling $21,534 ($16,109 after tax).

For the fiscal year ended January 1, 2022, the components of the Company’s restructuring expenses were as follows:

For the fiscal year ended January 1, 2022, restructuring expenses were recorded in the Company’s consolidated statements of net income as follows:

All expenses were recorded to general corporate expenses and, therefore, there was no impact to the segments.

For the fiscal year ended January 1, 2022, the Company made payments of $7,640 towards the liability for the lease termination costs and decreased provision estimates by $3. For the fiscal year ended January 1, 2022, the Company made payments of $4,802 towards the liability for the employee termination benefit costs.

For the six months ended July 2, 2022, the Company made payments of $482 towards the liability for the lease termination costs, decreased provision estimates by $683 and incurred additional lease termination and other related costs of $121. For the six months ended July 2, 2022, the Company made payments of $2,815 towards the liability for the employee termination benefit costs, increased provision estimates by $113 and incurred additional employee termination benefit costs of $148.

The Company expects the remaining lease termination liability of $295 and the remaining employee termination benefit liability of $1,490 to be paid in full in fiscal 2023.

Except for historical information contained herein, this Quarterly Report on Form 10-Q includes “forward-looking statements,” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, or the Exchange Act, including, in particular, the statements about our plans, strategies, objectives and prospects and the impact of the COVID-19 virus under the heading “Management’s Discussion and Analysis of Financial Condition and Results of Operations.” We have generally used the words “may,” “will,” “could,” “expect,” “anticipate,” “believe,” “estimate,” “plan,” ~~“intend”~~“intend,” “aim” and similar expressions in this Quarterly Report on Form 10-Q to identify forward-looking statements. We have based these forward-looking statements on our current views with respect to future events and financial performance. Actual results could differ materially from those projected in these forward-looking statements. These forward-looking statements are subject to risks, uncertainties and assumptions, including, among other things:

You should not put undue reliance on any forward-looking statements. You should understand that many important factors, including those discussed herein, could cause our results to differ materially from those expressed or suggested in any forward-looking statement. Except as required by law, we do not undertake any obligation to update or revise these forward-looking statements to reflect new information or events or circumstances that occur after the date of this Quarterly Report on Form 10-Q or to reflect the occurrence of unanticipated events or otherwise.

~~Weight Watchers~~WW International, Inc. is a Virginia corporation with its principal executive offices in New York, New York. In this Quarterly Report on Form 10-Q unless the context indicates otherwise: “we,” “us,” “our,” the ~~“Company”~~“Company,” “Weight Watchers” and ~~“WWI”~~“WW” refer to ~~Weight Watchers~~WW International, Inc. and all of its operations consolidated for purposes of its financial statements; “North America” refers to our North American Company-owned operations; “Continental Europe” refers to our Continental Europe Company-owned operations; “United Kingdom” refers to our United Kingdom ~~Company-owned operations; “Continental Europe” refers to our Continental Europe~~ Company-owned operations; and “Other” refers to Australia, New Zealand and emerging markets operations and franchise revenues and related costs. Each of North America, Continental Europe, United Kingdom ~~Continental Europe~~ and Other is also a reportable segment. Our ~~“meetings”~~“Digital” business refers to providing subscriptions to our digital product offerings, including Personal Coaching + Digital and Digital 360 as applicable. Our “Workshops + Digital” business refers to providing unlimited access to our workshops combined ~~meetings and~~with our digital subscription product offerings to ~~the Company’s~~ commitment plan subscribers, ~~(including Total Access subscribers),~~including former Digital 360 members as applicable. It also includes the provision of access to workshops for members who do not subscribe to commitment plans, including our “pay-as-you-go” members. In the second quarter of fiscal 2022, we ceased offering our Digital 360 product. More than a majority of associated members were transitioned from our Digital business to our Workshops + Digital business during the second quarter, with a de minimis number transitioning during the beginning of the third quarter of fiscal 2022. The cessation of this product offering and these transitions of former Digital 360 members at the then-current pricing for such product impacted the number of End of Period Subscribers in each business as well as ~~access to meetings to our “pay-as-you-go” members~~the associated Paid Weeks and ~~other meetings members. “Online” refers to Weight Watchers Online, Weight Watchers OnlinePlus, Personal Coaching and other digital subscription products.~~Revenues for each business.

Our fiscal year ends on the Saturday closest to December 31st and consists of either 52- or 53-week periods. In this Quarterly Report on Form 10-Q:

The following ~~term~~terms used in this Quarterly Report on Form 10-Q isare our ~~trademark:~~ trademarks: Digital 360^®, PersonalPoints^TM and Weight Watchers^®.

You should read the following discussion in conjunction with our Annual Report on Form 10-K for fiscal ~~2016~~2021 that includes additional information about us, our results of operations, our financial position and our cash flows, and with our unaudited consolidated financial statements and related notes included in Item 1 of this Quarterly Report on Form 10-Q (collectively referred to as the “Consolidated Financial Statements”).

To supplement our consolidated results presented in accordance with accounting principles generally accepted in the United States, or GAAP, we have disclosed non-GAAP financial measures of operating results that exclude or adjust certain items. Gross profit, gross profit margin, operating income, operating income margin and components thereof are discussed in this Quarterly Report on Form 10-Q both as reported (on a GAAP basis) and as adjusted (on a non-GAAP basis), as applicable, with respect to (i) the second quarter of fiscal 2022 to exclude (a) the impact of impairment charges for our franchise rights acquired related to our Canada and New Zealand units of account and the impairment charge for our goodwill related to our wholly-owned subsidiary Kurbo, Inc. (“Kurbo”) and (b) the net impact of (x) charges associated with our previously disclosed 2022 restructuring plan (the “2022 plan”) and (y) the reversal of certain of the charges associated with our previously disclosed 2021 organizational restructuring plan (the “2021 plan”); (ii) the first six months of fiscal 2022 to exclude (a) the impact of impairment charges for our franchise rights acquired related to our Canada and New Zealand units of account and the impairment charge for our goodwill related to Kurbo, and (b) the net impact of (x) charges associated with the 2022 plan, (y) charges associated with the 2021 plan or the reversal of certain of the charges associated with the 2021 plan, as applicable, and (z) the reversal of certain of the charges associated with our previously disclosed 2020 organizational restructuring plan (the “2020 plan”); and (iii) the second quarter and first six months of fiscal 2021 to exclude the net impact of (x) charges associated with the 2021 plan and (y) the reversal of certain of the charges associated with the 2020 plan. We generally refer to such non-GAAP measures as follows: (i) with respect to the adjustments for the second quarter and first six months of fiscal 2022, as excluding or adjusting for the impact of franchise rights acquired and goodwill impairments and the net impact of restructuring charges; and (ii) with respect to the adjustments for the second quarter and first six months of fiscal 2021, as excluding or adjusting for the net impact of restructuring charges. We also present within this Quarterly Report on Form 10-Q the non-GAAP financial ~~measures~~measures: earnings before interest, taxes, depreciation, amortization and stock-based compensation (“EBITDAS”); earnings before interest, taxes, depreciation, amortization, stock-based compensation, franchise rights acquired and goodwill impairments, net ~~debt.~~restructuring charges, and early extinguishment of debt with respect to the Company’s previously disclosed April 2021 debt refinancing and voluntary debt prepayments (“Adjusted EBITDAS”); total debt less unamortized deferred financing costs, unamortized debt discount and cash on hand (i.e., net debt); and a net debt/Adjusted EBITDAS ratio. See “—Liquidity and Capital Resources—~~EBITDAS”~~EBITDAS, Adjusted EBITDAS and Net Debt” for the ~~calculations.~~reconciliations of these non-GAAP financial measures to the most comparable GAAP financial measure in each case. Our management believes these non-GAAP financial measures provide useful supplemental information to investors regarding the performance of our business and are useful for period-over-period comparisons of the performance of our business. While we believe that these non-GAAP financial measures are useful in evaluating our business, this information should be considered as supplemental in nature and is not meant to be considered in isolation or as a substitute for the related financial information prepared in accordance with GAAP. In addition, these non-GAAP financial measures may not be the same as similarly entitled measures reported by other companies.

As exchange rates are an important factor in understanding period-to-period comparisons, we believe in certain cases the presentation of results on a constant currency basis in addition to reported results helps improve investors’ ability to understand our operating results and evaluate our performance in comparison to prior periods. Constant currency information compares results between periods as if exchange rates had remained constant period-over-period. We use results on a constant currency basis as one measure to evaluate our performance. In this Quarterly Report on Form 10-Q, we calculate constant currency by calculating ~~current-~~

~~year~~current-year results using prior-year foreign currency exchange rates. We generally refer to such amounts calculated on a constant currency basis as excluding or adjusting for the impact of foreign currency or being on a constant currency basis. These results should be considered in addition to, not as a substitute for, results reported in accordance with GAAP and are not meant to be considered in isolation. Results on a constant currency basis, as we present them, may not be comparable to similarly titled measures used by other companies and are not measures of performance presented in accordance with GAAP.

~~We review goodwill and other indefinite-lived intangible assets, including~~Finite-lived franchise rights acquired ~~with indefinite lives,~~are amortized over the remaining contractual period, which is generally less than one year. Indefinite-lived franchise rights acquired are tested for potential impairment on at least an annual basis or more often if events so require. We performed fair value impairment testing as of May 7, 2017 and May 8, 2016, each the first day of fiscal May, on our goodwill and other indefinite-lived intangible assets. In performing our goodwill impairment analysis for our reporting units for fiscal 2017 and fiscal 2016, no impairment was identified as the fair value of those units exceeded their respective carrying value. require.

In performing the impairment analysis for our indefinite-lived franchise rights acquired, ~~with indefinite lives~~the fair value for ~~fiscal 2017 and fiscal 2016, we determined that the carrying amounts of these units of account did not exceed their respective fair values and therefore no impairment existed.~~

~~With respect to~~ our analysis, a change in the underlying assumptions would cause a change in the results of the impairment assessments and, as such, could result in an impairment of those assets, which would impact earnings. We would also be required to reduce the carrying amounts of the related assets on our balance sheet. We continue to evaluate these assumptions and believe that they are appropriate.

~~The following is a more detailed discussion of our fiscal 2017 goodwill and~~ franchise rights acquired is estimated using a discounted cash flow approach referred to as the hypothetical start-up approach for our franchise rights related to our Workshops + Digital business and a relief from royalty methodology for our franchise rights related to our Digital business. The aggregate estimated fair value for these rights is then compared to the carrying value of the unit of account for those franchise rights. We have determined the appropriate unit of account for purposes of assessing impairment ~~analysis.~~to be the combination of the rights in both the Workshops + Digital business and the Digital business in the country in which the applicable acquisition occurred. The net book values of these franchise rights in the United States, Canada, United Kingdom, Australia and New Zealand as of the July 2, 2022 balance sheet date were $698.4 million, $34.6 million, $10.9 million, $6.1 million and $3.6 million, respectively.

In our hypothetical start-up approach analysis for fiscal 2022, we assumed that the year of maturity was reached after 7 years. Subsequent to the year of maturity, we estimated future cash flows for the Workshops + Digital business in each country based on assumptions regarding revenue growth and operating income margins. In our relief from royalty approach analysis for fiscal 2022, the cash flows associated with the Digital business in each country were based on the expected Digital revenue for such country and the application of a royalty rate based on current market terms. The cash flows for the Workshops + Digital and the Digital businesses were discounted utilizing rates which were calculated using the weighted-average cost of capital, which included the cost of equity and the cost of debt.

In performing the impairment analysis for goodwill, the fair value for our reporting units is estimated using a discounted cash flow approach. This approach involves projecting future cash flows attributable to the reporting unit and discounting those estimated cash flows using an appropriate discount rate. The estimated fair value is then compared to the carrying value of the reporting ~~units.~~unit. We have determined the appropriate reporting unit for purposes of assessing annual impairment to be the country for all reporting units. The net book values of goodwill in the United States, Canada ~~Brazil~~ and other countries ~~at September 30, 2017 were $97.8 million, $43.0 million, $19.5 million and $10.4 million, respectively.~~

~~Based on the results of our annual impairment test performed~~ as of the first day of fiscal May (May 7, 2017), we estimated that for reporting units that hold approximately 88.9% of our goodwill, those units had a fair value at least 50% higher than the respective reporting unit’s carrying amount. In Brazil, which holds 11.1% of our goodwill, the fair value of this reporting unit exceeded its carrying value by approximately 10%.July 2, 2022 balance sheet date were $104.0 million, $41.6 million and $14.3 million, respectively.

For all of our reporting units ~~except for Brazil (see below),~~tested as of May 8, 2022, we estimated future cash flows by utilizing the historical debt-free cash flows (cash flows provided by ~~operating activities~~operations less capital expenditures) attributable to that country and then applied expected future operating income growth rates for such country. We utilized operating income as the basis for measuring our potential growth because we believe it is the best indicator of the performance of our business. We then discounted the estimated future cash flows utilizing a discount rate which was calculated using the ~~average~~weighted-average cost of capital, which included the cost of equity and the cost of debt. ~~The cost~~

We review indefinite-lived intangible assets, including franchise rights acquired with indefinite lives, and goodwill for potential impairment on at least an annual basis or more often if events so require. We performed fair value impairment testing as of ~~equity was determined by combining a risk-free rate~~May 8, 2022 and May 9, 2021, each the first day of ~~return~~fiscal May, on our indefinite-lived intangible assets and a market risk premium for the Company’s peer group. The risk-free rate of return was determined based on the average rate of long-term U.S. Treasury securities. The market risk premium was determined by reviewing external market data. The cost of debt was determined by estimating our current borrowing rate.goodwill.

~~The following are the more significant assumptions utilized in~~In performing our annual impairment analysis ~~(except for Brazil) for fiscal 2017 and fiscal 2016:~~

~~As it relates to our impairment analysis for Brazil,~~as of May 8, 2022, we ~~estimated future debt free cash flows in contemplation~~determined that (i) the carrying amounts of our ~~growth strategies~~Canada and New Zealand franchise rights acquired with indefinite lived units of account exceeded their respective fair values and, as a result, we recorded impairment charges for ~~that market. In developing these projections, we considered the historical impact~~our Canada and New Zealand units of similar growth strategies in other markets as well as the current market conditions in Brazil. We then discounted the estimated future cash flows utilizing a discount rate which was calculated using the average cost account of ~~capital, which included the cost of equity~~$24.5 million and the cost of debt. The cost of equity was determined by combining a risk-free rate of return and a market risk premium for the Company’s peer group. The risk-free rate of return was determined based on the average rate of long-term U.S. Treasury securities. The market risk premium was determined by reviewing external market data including the current economic conditions in Brazil and the country specific risk thereon. A further risk premium was included to reflect the risk associated with the rate of growth projected $0.8 million, respectively, in the ~~analysis. The cost~~second quarter of ~~debt was determined by estimating~~fiscal 2022; and (ii) the ~~Company’s current borrowing rate.~~

~~The following are the more significant assumptions utilized in~~carrying amounts of all of our other franchise rights acquired with indefinite lived units of account did not exceed their respective fair values and, therefore, no impairment existed with respect thereto. In performing our annual impairment analysis ~~for Brazil for fiscal 2017 and fiscal 2016:~~

~~Finite-lived franchise rights acquired are amortized over~~as of May 9, 2021, we determined that the ~~remaining contractual period, which is generally less than one year. In performing the impairment analysis for our indefinite-lived franchise rights acquired, the fair value for~~carrying amounts of our franchise rights acquired ~~is estimated using a discounted cash flow approach referred to~~with indefinite lived units of account did not exceed their respective fair values and, therefore, no impairment existed. In performing our annual impairment analysis as of May 8, 2022 and May 9, 2021, the ~~hypothetical start-up approach for~~Company determined that the carrying amounts of our ~~franchise rights related to our meetings business~~goodwill reporting units did not exceed their respective fair values and, ~~a relief from royalty methodology for our franchise rights related to our Online business. The aggregate estimated~~therefore, no impairment existed.

When determining fair value, ~~for~~we utilize various assumptions, including projections of future cash flows, growth rates and discount rates. A change in these ~~rights is then compared~~underlying assumptions could cause a change in the results of the impairment assessments and, as such, could cause fair value to be less than the carrying amounts and result in an impairment of those assets. In the event such a result occurred, we would be required to record a corresponding charge, which would impact earnings. We would also be required to reduce the carrying amounts of the related assets on our balance sheet. We continue to evaluate these assumptions and believe that these assumptions are appropriate.

In performing our annual impairment analysis, we also considered the trading value of both our equity and debt. If the ~~unit~~trading values of ~~account for those franchise rights. We~~both our equity and debt were to significantly decline from their levels at the time of testing, we may have ~~determined~~to take an impairment charge at the appropriate ~~unit~~time, which could be material. For additional information on risks associated with our recognizing asset impairment charges, see “Item 1A. Risk Factors” of ~~account~~our Annual Report on Form 10-K for purposes of assessing impairment to be the combination of the rights in the meetings and Online businesses in the country in which the acquisitions have occurred. The values of these franchise rights in the United States, Canada, United Kingdom, Australia, and New Zealand at September 30, 2017 were $671.9 million, $58.0 million, $12.7 million, $7.0 million, and $5.1 million, respectively.fiscal 2021.

Based on the results of our ~~fiscal 2017~~May 8, 2022 annual franchise rights acquired impairment analysis ~~we estimated that approximately 100.0%~~performed for our United States unit of account, which holds 92.7% of our franchise rights acquired ~~had a~~as of the July 2, 2022 balance sheet date, the estimated fair value ~~at least 40% higher than~~of this unit of account exceeded its carrying value by approximately 15%. Based on the results of our May 8, 2022 annual franchise rights acquired impairment analysis performed for our Canada and New Zealand units of account, which hold 4.6% and 0.5%, respectively, of our franchise rights acquired as of the July 2, 2022 balance sheet date, the estimated fair values of these units of account were equal to their respective carrying ~~amount.~~

~~In our hypothetical start-up approach analysis~~values. Accordingly, a change in the underlying assumptions for ~~fiscal 2017, we assumed that~~ the ~~year~~United States, Canada and New Zealand may change the results of ~~maturity was reached after 7 years. Subsequent~~the impairment assessment and, as such, could result in an impairment of the franchise rights acquired related to the ~~year~~United States, Canada and New Zealand, for which the net book values were $698.4 million, $34.6 million and $3.6 million, respectively,as of maturity, we estimated future cash flows for the meetings business in each country based on assumptions regarding revenue growth and operating income margins. The cash flows associated with the Online business were basedJuly 2, 2022. Based on the ~~expected Online revenue~~results of our May 8, 2022 annual franchise rights acquired impairment analysis performed for ~~such country and~~our remaining units of account, which collectively hold 2.2% of our franchise rights acquired as of the ~~application~~July 2, 2022 balance sheet date, the estimated fair values of ~~a market-based royalty rate. The cash flows for the meetings and Online businesses were discounted utilizing rates consistent with those utilized in the goodwill impairment analysis.~~these units of account exceeded their respective carrying values by over 100%.

In performing this impairment analysis for fiscal ~~2017,~~2022, in our hypothetical start-up approach analysis, for the year of maturity, we assumed ~~meeting room~~Workshops + Digital revenue (comprised of ~~Meeting~~Workshops + Digital Fees ~~(defined hereafter)~~ and revenues from products sold to members in ~~meetings)~~studios) growth of ~~16.2%~~23.0% to ~~58.3%~~106.2% in the year of maturity from fiscal ~~2016,~~2021, in each case, earned in the applicable country and assumed cumulative annual revenue growth rates for the years beyond the year of maturity of ~~1.9%~~2.4%. For the year of maturity and beyond, we assumed operating income margin rates of ~~7.1%~~(3.0%) to ~~22.5%~~8.8%. In our relief from royalty approach, we assumed Digital revenue growth in each country of (25.6%) to 16.1% for fiscal 2022.

~~Other~~ Based on the results of our May 8, 2022 annual goodwill impairment analysis performed for all of our reporting units, all units, except for the Republic of Ireland, had an estimated fair value at least 35% higher than the respective unit’s carrying amount. Collectively, these reporting units represented 97.3% of our total goodwill as of the July 2, 2022 balance sheet date. Based on the results of our May 8, 2022 annual goodwill impairment analysis performed for our Republic of Ireland reporting unit, which holds 2.7% of our goodwill as of the July 2, 2022 balance sheet date, the estimated fair value of this reporting unit exceeded its carrying value by approximately 14%. Accordingly, a change in the underlying assumptions for the Republic of Ireland may change the results of the impairment assessment and, as such, could result in an impairment of the goodwill related to the Republic of Ireland, for which the net book value was $4.3 million as of July 2, 2022.

The following are the more significant assumptions utilized in our annual impairment analyses for fiscal 2022 and fiscal 2021:

On August 10, 2018, we acquired substantially all of the assets of Kurbo Health, Inc., a family-based healthy lifestyle coaching program, for a net purchase price of $3.1 million, of which $1.1 million was allocated to goodwill. The goodwill was deductible annually for tax purposes. We determined in the second quarter of fiscal 2022 to exit the Kurbo business in the third quarter of fiscal 2022 as part of our strategic plan. As a result of this determination, we recorded an impairment charge of $1.1 million in the second quarter of fiscal 2022, which comprised the entire goodwill balance for Kurbo.

~~For a discussion of the other~~Information concerning our critical accounting policies ~~affecting us, see “Item 7. Management’s Discussion and Analysis~~is set forth in “Note 2. Summary of ~~Financial Condition and Results of Operations—Critical~~Significant Accounting Policies” of our audited consolidated financial statements contained in our Annual Report on Form 10-K for fiscal ~~2016.~~2021. Our critical accounting policies have not changed since the end of fiscal ~~2016.~~2021.

Our management team regularly reviews and analyzes ~~several~~a number of financial and operating metrics, including the key performance indicators listed below, in order to manage our business, measure our performance, identify trends affecting our business, determine the allocation of resources, make decisions regarding corporate strategies and assess the quality and potential variability of our cash flows and earnings. ~~These~~We also believe that these key performance indicators ~~include:~~

~~Revenues—Our “Service Revenues” consist of “Meeting Fees”~~are useful to both management and ~~“Online Subscription Revenues”. “Meeting Fees” consist of the fees associated with~~investors for forecasting purposes and to facilitate comparisons to our ~~subscription plans for combined meetings and digital offerings and other payment arrangements for access~~historical operating results. These metrics are supplemental to ~~meetings. “Online Subscription Revenues” consist of the fees associated with subscriptions for~~ our Online subscription products, including our Personal Coaching product. In addition, “product sales and other” consists of sales of products to members in meetings and online, revenues from licensing, magazine subscriptions, publishing and third-party advertising in publications, payments from the sale of third-party website advertising and the By Mail product, other revenues, and, in the case of the consolidated financialGAAP results and ~~Other reportable segment, franchise fees with respect to commitment plans and commissions.~~include operational measures.

•

Revenues—Our “Subscription Revenues” consist of “Digital Subscription Revenues” and “Workshops + Digital Fees”. “Digital Subscription Revenues” consist of the fees associated with subscriptions for our Digital offerings, including Personal Coaching + Digital and Digital 360 as applicable. “Workshops + Digital Fees” consist of the fees associated with our subscription plans for combined workshops and digital offerings and other payment arrangements for access to workshops. In addition, “product sales and other” consists of sales of consumer products via e-commerce, in studios and through our trusted partners, revenues from licensing and publishing, other revenues, and, in the case of the consolidated financial results and Other reportable segment, franchise fees with respect to commitment plans and royalties.

Paid Weeks—The “Paid Weeks” metric reports paid weeks by Weight Watchers customers in Company-owned operations for a given period as follows: (i) “Meeting Paid Weeks” is the sum of total paid commitment plan weeks (including Total Access) and total “pay-as-you-go” weeks; (ii) “Online Paid Weeks” is the total paid subscription weeks for our digital subscription products (including Personal Coaching); and (iii) “Total Paid Weeks” is the sum of Meeting Paid Weeks and Online Paid Weeks.

•

Paid Weeks—The “Paid Weeks” metric reports paid weeks by WW customers in Company-owned operations for a given period as follows: (i) “Digital Paid Weeks” is the total paid subscription weeks for our digital subscription products (including Personal Coaching + Digital and Digital 360 as applicable); (ii) “Workshops + Digital Paid Weeks” is the sum of total paid commitment plan weeks which include workshops and digital offerings and total “pay-as-you-go” weeks; and (iii) “Total Paid Weeks” is the sum of Digital Paid Weeks and Workshops + Digital Paid Weeks.

Incoming Subscribers—“Subscribers” refer to meetings members and Online subscribers who participate in recurring billing programs. The “Incoming Subscribers” metric reports Weight Watchers subscribers in Company-owned operations at a given period start as follows: (i) “Incoming Meeting Subscribers” is the total number of Weight Watchers commitment plan subscribers (including Total Access); (ii) “Incoming Online Subscribers” is the total number of Weight Watchers Online, Weight Watchers Online~~Plus~~ and Personal Coaching subscribers; and (iii) “Incoming Subscribers” is the sum of Incoming Meeting Subscribers and Incoming Online Subscribers. Recruitment and retention are key drivers for this metric.

•

Incoming Subscribers—“Subscribers” refer to Digital subscribers and Workshops + Digital subscribers who participate in recur bill programs in Company-owned operations. The “Incoming Subscribers” metric reports WW subscribers in Company-owned operations at a given period start as follows: (i) “Incoming Digital Subscribers” is the total number of Digital, including Personal Coaching + Digital and Digital 360 (as applicable), subscribers; (ii) “Incoming Workshops + Digital Subscribers” is the total number of commitment plan subscribers that have access to combined workshops and digital offerings; and (iii) “Incoming Subscribers” is the sum of Incoming Digital Subscribers and Incoming Workshops + Digital Subscribers. Recruitment and retention are key drivers for this metric.

End of Period Subscribers—The “End of Period Subscribers” metric reports Weight Watchers subscribers in Company-owned operations at a given period end as follows: (i) “End of Period Meeting Subscribers” is the total number of Weight Watchers commitment plan subscribers (including Total Access); (ii) “End of Period Online Subscribers” is the total number of Weight Watchers Online, Weight Watchers Online~~Plus~~ ~~and~~
•
End of Period Subscribers—The “End of Period Subscribers” metric reports WW subscribers in Company-owned operations at a given period end as follows: (i) “End of Period Digital Subscribers” is the total number of Digital, including Personal Coaching + Digital and Digital 360 (as applicable), subscribers; (ii) “End of Period Workshops + Digital Subscribers” is the total number of commitment plan subscribers that have access to combined workshops and digital offerings; and (iii) “End of Period Subscribers” is the sum of End of Period Digital Subscribers and End of Period Workshops + Digital Subscribers. Recruitment and retention are key drivers for this metric.

•

Gross profit and operating expenses as a percentage of revenue.

In the second quarter of fiscal 2022, we ceased offering our Digital 360 product. More than a majority of associated members were transitioned from our Digital business to our Workshops + Digital business during the second quarter, with a de minimis number transitioning during the beginning of the third quarter of fiscal 2022. The cessation of this product offering and these transitions of former Digital 360 members at the then-current pricing for such product impacted the number of End of Period ~~Meeting~~ Subscribers in each business as well as the associated Paid Weeks and Revenues for each business. For additional details on the cessation of our Digital 360 offering and the impact of those former Digital 360 members who transitioned from our Digital business to our Workshops + Digital business, see “—Segment Results.”

COVID-19 PANDEMIC

The novel coronavirus (including its variants, COVID-19) pandemic continues to evolve and have unpredictable impacts on consumer sentiment and behavior and on our business operations and the markets in which we operate. We have seen significant shifts in consumer sentiment with respect to the weight loss and wellness marketplace, which we believe in part is attributable to the evolution of the pandemic. COVID-19 has had a significant effect on our recruitments since its onset. Our Workshops + Digital recruitments were substantially negatively impacted during the first year of the pandemic. While Digital recruitments were strong in the beginning of the COVID-19 pandemic, a subsequent turn in consumer sentiment drove a decline in Digital recruitments. Given the long-term subscription model of our business, these declines in recruitment continued to impact the number of our End of Period ~~Online Subscribers. Recruitment~~Subscribers in the second quarter of fiscal 2022, which declined compared to the prior year period. Additionally, our mix shift toward our Digital business, which was significant during the onset of the pandemic, especially when amplified by the nature of our subscription business, negatively impacted revenue. Over the longer term, it remains uncertain how the COVID-19 pandemic will impact consumer demand for our products and ~~retention~~services and consumer preferences and behavior generally.

The extent to which our operations and business trends will continue in future periods to be impacted by, and any unforeseen costs will result from, the ongoing outbreak of COVID-19 will depend largely on future developments, which are ~~key drivers~~highly uncertain and cannot be accurately predicted. These developments include, among other things, the severity of any variant or surges in COVID-19 cases, new information about health implications, vaccine availability and hesitancy, and actions by government authorities to contain the outbreak or treat its impact. This dynamic situation is driving uncertainty at the macroeconomic, local and consumer levels. We continue to actively monitor the ongoing global outbreak of COVID-19 and its impact and related developments.

As we continue to address the impact of the pandemic, and the related evolving legal and consumer landscape, we are focused on how to best meet our members’ and consumers’ needs. We continue to serve our members virtually, both via our Digital business and through virtual workshops, and to evolve our workshop strategy as we evaluate our cost structure and respond to shifting consumer sentiment. We consolidated certain of our studios and continue to close certain other branded studio locations. We continually evaluate our studio locations, and the decision to operate at any particular studio location is influenced by a number of factors, including consumer confidence and preferences, changes in consumer sentiment and behavior, the protection of the health and safety of our employees and members and applicable legal restrictions, and is dependent on cost efficiencies and alignment with our strategy. The current number of our studio locations is significantly lower than that prior to the pandemic, and we expect it to remain below pre-COVID-19 levels. As a result, we have incurred, and may continue to incur, significant costs associated with our real estate realignment.

While we expect the effects of the pandemic and the related responses, including shifts in consumer sentiment and behavior, to negatively impact our results of operations, cash flows and financial position, the uncertainty of the full extent of the duration and severity of the consumer, economic and operational impacts of COVID-19 means we cannot reasonably estimate the related financial impact at this time. For more information, see “Item 1A. Risk Factors” in Part I of our Annual Report on Form 10-K for ~~this metric.~~

THREE MONTHS ENDED ~~SEPTEMBER 30, 2017~~JULY 2, 2022 COMPARED TO THE THREE MONTHS ENDED ~~OCTOBER 1, 2016~~JULY 3, 2021

The table below sets forth selected financial information for the ~~third~~second quarter of fiscal ~~2017~~2022 from our consolidated statements of net income for the three months ended ~~September 30, 2017~~July 2, 2022 versus selected financial information for the ~~third~~second quarter of fiscal ~~2016~~2021 from our consolidated statements of net income for the three months ended ~~October 1, 2016:~~July 3, 2021.

(In millions, except per share amounts)

For The Three Months Ended

September 30, 2017

October 1, 2016

Increase/
(Decrease)

%
Change

% Change
Constant
Currency

Revenues, net

$
323.7

$
280.8

$
42.9

15.3
%

13.9
%
Cost of revenues

146.6

136.5

10.1

7.4
%

6.3
%

Gross profit

177.1

144.3

32.8

22.7
%

21.0
%
Gross Margin %

54.7
%

51.4
%

Marketing expenses

30.3

30.1

0.2

0.8
%

(0.6
)%
Selling, general & administrative expenses

55.4

47.4

8.0

16.8
%

15.8
%

Operating income

91.4

66.8

24.6

36.8
%

34.4
%
Operating Income Margin %

28.2
%

23.8
%

Interest expense

27.0

28.3

(1.3
)

(4.7
%)

(4.7
%)
Other expense (income), net

0.1

(0.1
)

0.2

100.0
%

100.0
%
Income before income taxes

64.3

38.6

25.7

66.4
%

62.3
%

Provision for income taxes

19.6

4.0

15.6

100.0%

100.0%

Net income

44.7

34.6

10.0

29.0
%

25.8
%
Net loss attributable to the noncontrolling interest

0.1

0.0

0.0

35.6
%

31.7
%

Net income attributable to Weight Watchers International, Inc.

$
44.7

$
34.7

$
10.1

29.0
%

25.8
%

Weighted average diluted shares outstanding

68.7

65.8

2.8

4.3
%

4.3
%
Diluted earnings per share

$
0.65

$
0.53

$
0.12

23.7
%

20.6
%

	(In millions, except per share amounts)
	For The Three Months Ended
	July 2, 2022			July 3, 2021			Increase/ (Decrease)			% Change				% Change Constant Currency
Revenues, net	$	269.5		$	311.4		$	(41.9	)		(13.5	%)			(10.0	%)
Cost of revenues		106.5			125.4			(18.9	)		(15.0	%)			(12.6	%)
Gross profit		163.0			186.0			(23.1	)		(12.4	%)			(8.3	%)
Gross Margin %		60.5	%		59.7	%

Marketing expenses		51.9			57.2			(5.3	)		(9.3	%)			(5.9	%)
Selling, general & administrative expenses		71.3			69.2			2.1			3.1	%			5.3	%
Franchise rights acquired and goodwill impairments		26.4			—			26.4			100.0	%			100.0	%
Operating income		13.4			59.7			(46.3	)		(77.6	%)			(72.6	%)
Operating Income Margin %		5.0	%		19.2	%

Interest expense		19.3			20.3			(1.0	)		(5.1	%)			(5.1	%)
Other expense, net		1.6			0.4			1.2		100.0		%	*	100.0		%	*
Early extinguishment of debt		—			29.2			(29.2	)		(100.0	%)			(100.0	%)
(Loss) income before income taxes		(7.5	)		9.8			(17.3	)		(100.0	%)	*		(100.0	%)	*

(Benefit from) provision for income taxes		(2.9	)		1.0			(3.8	)		(100.0	%)	*		(100.0	%)	*
Net (loss) income	$	(4.6	)	$	8.9		$	(13.5	)		(100.0	%)	*		(100.0	%)	*

Weighted average diluted shares outstanding		70.3			71.2			(0.9	)		(1.2	%)			(1.2	%)
Diluted (net loss) earnings per share	$	(0.07	)	$	0.12		$	(0.19	)		(100.0	%)	*		(100.0	%)	*

Certain results for the second quarter of fiscal 2022 are adjusted to exclude the impact of the $26.4 million of franchise rights acquired and goodwill impairments and the net impact of the $19.1 million of 2022 plan restructuring charges and the reversal of $0.6 million of 2021 plan restructuring charges. See “Non-GAAP Financial Measures” above. The table below sets forth a reconciliation of certain of those components of our selected financial data for the three months ended July 2, 2022 which have been adjusted.

Certain results for the second quarter of fiscal 2021 are adjusted to exclude the net impact of the $6.0 million of 2021 plan restructuring charges and the reversal of $0.8 million of 2020 plan restructuring charges. See “Non-GAAP Financial Measures” above. The table below sets forth a reconciliation of certain of those components of our selected financial data for the three months ended July 3, 2021 which have been adjusted.

Revenues infor the ~~third~~second quarter of fiscal ~~2017~~2022 were ~~$323.7~~$269.5 million, ~~an increase~~a decrease of ~~$42.9~~$41.9 million, or ~~15.3%~~13.5%, versus the ~~third~~second quarter of fiscal ~~2016.~~2021. Excluding the impact of foreign currency, which ~~positively~~negatively impacted our revenues ~~for~~in the ~~third~~second quarter of fiscal ~~2017~~2022 by ~~$3.9~~$10.7 million, revenues infor the ~~third~~second quarter of fiscal ~~2017~~2022 would have ~~increased 13.9%~~decreased 10.0% versus the prior year period. This ~~increase~~decrease was driven primarily by ~~revenue growth~~lower Subscription Revenues reflecting lower sign-ups primarily due to worsened consumer sentiment and our PersonalPoints program not resonating with consumers to the extent anticipated. This worsened consumer sentiment was due in ~~all major markets.~~part to the evolution of the COVID-19 pandemic as well as the likely impact of certain macro factors including increasing inflation, social and political unrest and challenged economic growth. See “—Segment Results” for additional details on revenues.

Total cost of revenues infor the ~~third~~second quarter of fiscal ~~2017 increased $10.1~~2022 decreased $18.9 million, or ~~7.4%~~15.0%, versus the ~~prior year period. Gross profit increased $32.8 million, or 22.7%, in the third~~second quarter of fiscal ~~2017 compared to the third quarter of fiscal 2016 primarily due to the increase in revenues.~~2021. Excluding the impact of foreign currency, which ~~positively impacted gross profit for~~decreased cost of revenues in the ~~third~~second quarter of fiscal ~~2017~~2022 by ~~$2.5~~$3.0 million, ~~gross profit in~~cost of revenues for the ~~third~~second quarter of fiscal ~~2017~~2022 would have ~~increased 21.0%~~decreased 12.6% versus the prior year period. ~~Gross margin~~Excluding the net impact of the $3.9 million of restructuring charges in the ~~third~~second quarter of fiscal ~~2017 increased 3.3% to 54.7% versus 51.4%~~2022 and the net impact of the $5.0 million of restructuring charges in the ~~third~~second quarter of fiscal 2016. Gross margin expansion was primarily driven by improved leverage in both the meetings and Online businesses and a mix shift to the higher margin Online business. This expansion was partially offset by lower2021, total cost of revenues ~~in our high margin licensing business.~~

~~Marketing expenses~~ for the ~~third~~second quarter of fiscal ~~2017 increased $0.2~~2022 would have decreased by 14.8%, or 12.3% on a constant currency basis, versus the prior year period.

Gross profit for the second quarter of fiscal 2022 decreased $23.1 million, or ~~0.8%~~12.4%, versus the ~~third~~second quarter of fiscal ~~2016.~~2021. Excluding the impact of foreign currency, which negatively impacted gross profit in the second quarter of fiscal 2022 by $7.7 million, gross profit for the second quarter of fiscal 2022 would have decreased 8.3% versus the prior year period. Excluding the net impact of the $3.9 million of restructuring charges in the second quarter of fiscal 2022 and the net impact of the $5.0 million of restructuring charges in the second quarter of fiscal 2021, gross profit for the second quarter of fiscal 2022 would have decreased by 12.6%, or 8.6% on a constant currency basis, versus the prior year period primarily due to the decrease in revenues. Gross margin for the second quarter of fiscal 2022 increased to 60.5% versus 59.7% for the second quarter of fiscal 2021. Excluding the impact of foreign currency, gross margin in the second quarter of fiscal 2022 would have increased 1.2% to 60.9% versus the prior year period. Excluding the net impact of restructuring charges in the second quarter of fiscal 2022 and the net impact of restructuring charges in the second quarter of fiscal 2021, gross margin for the second quarter of fiscal 2022 would have increased 0.6% to 61.9% versus the prior year period. Excluding the impact of foreign currency, the net impact of restructuring charges in the second quarter of fiscal 2022 and the net impact of restructuring charges in the second quarter of fiscal 2021, gross margin for the second quarter of fiscal 2022 would have increased 1.0% to 62.3% versus the prior year period. The gross margin increase was driven primarily by margin expansion in the Workshops + Digital business resulting from a more efficient studio footprint and a reduction in labor costs.

Marketing expenses for the second quarter of fiscal 2022 decreased $5.3 million, or 9.3%, versus the second quarter of fiscal 2021. Excluding the impact of foreign currency, which decreased marketing expenses in the second quarter of fiscal 2022 by $1.9 million, marketing expenses for the ~~third~~second quarter of fiscal ~~2017 by $0.4 million, marketing expenses in the third quarter of fiscal 2017~~2022 would have decreased ~~0.6%~~5.9% versus the ~~third quarter of fiscal 2016.~~prior year period. This decrease in marketing expenses was primarily due to a decline in TV media. Marketing expenses as a percentage of revenue ~~were 9.4% in~~for the ~~third~~second quarter of fiscal ~~2017 as compared~~2022 increased to ~~10.7% in~~19.2% from 18.4% for the ~~prior year period.~~second quarter of fiscal 2021.

Selling, general and administrative expenses for the ~~third~~second quarter of fiscal ~~2017~~2022 increased ~~$8.0~~$2.1 million, or ~~16.8%~~3.1%, versus the ~~third~~second quarter of fiscal ~~2016.~~2021. Excluding the impact of foreign currency, which ~~increased~~decreased selling, general and administrative expenses in the second quarter of fiscal 2022 by $1.5 million, selling, general and administrative expenses for the ~~third~~second quarter of fiscal ~~2017 by $0.4~~2022 would have increased 5.3% versus the prior year period. Excluding the net impact of the $14.6 million of restructuring charges in the second quarter of fiscal 2022 and the net impact of the $0.2 million of restructuring charges in the second quarter of fiscal 2021, selling, general and administrative expenses infor the ~~third~~second quarter of fiscal ~~2017~~2022 would have ~~increased 15.8%~~decreased by 17.8%, or 15.6% on a constant currency basis, versus the prior year period. ~~The increase~~This decrease in selling, general and administrative expenses ~~in the third quarter of fiscal 2017~~ was primarily ~~driven by higher~~due to lower stock compensation ~~and incentive related costs.~~expense. Selling, general and administrative expenses as a percentage of revenue ~~were 17.1%~~ for the second quarter of fiscal 2022 increased to 26.5% from 22.2% for the second quarter of fiscal 2021. Excluding the net impact of restructuring charges in the second quarter of fiscal 2022 and the net impact of restructuring charges in the second quarter of fiscal 2021, selling, general and administrative expenses as a percentage of revenue for the second quarter of fiscal 2022 would have decreased by 1.1%, or 1.4% on a constant currency basis, versus the prior year period.

In performing our annual impairment analysis as of May 8, 2022, we determined that the carrying amounts of our Canada and New Zealand franchise rights acquired with indefinite lived units of account exceeded their respective fair values and, as a result, we recorded impairment charges for our Canada and New Zealand units of account of $24.5 million and $0.8 million, respectively, in the second quarter of fiscal 2022. In addition, we determined in the second quarter of fiscal 2022 to exit the Kurbo business in the third quarter of fiscal ~~2017~~2022 as ~~compared to 16.9% for~~part of our strategic plan. As a result of this determination, we recorded an impairment charge of $1.1 million in the ~~third~~second quarter of fiscal ~~2016.~~2022, which comprised the entire goodwill balance for Kurbo.

Operating income for the ~~third~~second quarter of fiscal ~~2017 increased $24.6~~2022 decreased $46.3 million, or ~~36.8%~~77.6%, versus the ~~third~~second quarter of fiscal ~~2016.~~2021. Excluding the impact of foreign currency, which ~~positively~~negatively impacted operating income in the second quarter of fiscal 2022 by $3.0 million, operating income for the ~~third~~second quarter of fiscal ~~2017 by $1.6~~2022 would have decreased 72.6% versus the prior year period. Excluding the impact of the $26.4 million ~~operating income~~ of franchise rights acquired and goodwill impairments in the ~~third~~second quarter of fiscal ~~2017~~2022, the net impact of the $18.6 million of restructuring charges in the second quarter of fiscal 2022 and the net impact of the $5.2 million of restructuring charges in the second quarter of fiscal 2021, operating income for the second quarter of fiscal 2022 would have decreased by 10.1%, or 3.5% on a constant currency basis, versus the prior year period. Operating income margin for the second quarter of fiscal 2022 decreased to 5.0% versus 19.2% for the second quarter of fiscal 2021. Excluding the impact of the franchise rights acquired and goodwill impairments in the second quarter of fiscal 2022, the net impact of restructuring charges in the second quarter of fiscal 2022 and the net impact of restructuring charges in the second quarter of fiscal 2021, operating income margin for the second quarter of fiscal 2022 would have increased ~~34.4%~~by 0.8%, or 1.5% on a constant currency basis, versus the prior year period. This increase in operating income margin was driven primarily by ~~higher operating income~~a decrease in ~~all major markets~~selling, general and administrative expenses as ~~compared to the prior year period. Operating income margin increased 4.4% for the third quarter~~a percentage of ~~fiscal 2017 compared to the third quarter of fiscal 2016. This increase in operating income margin was primarily driven by~~revenue and an increase in gross margin, partially offset by an increase in marketing expenses as ~~compared to~~a percentage of revenue, versus the prior year period.

Interest expense infor the ~~third~~second quarter of fiscal ~~2017~~2022 decreased ~~$1.3~~$1.0 million, or ~~4.7%~~5.1%, versus the ~~third~~second quarter of fiscal ~~2016.~~2021. The decrease in interest expense was driven primarily by ~~(i) the decrease in the notional amount~~lower interest rates under our Term Loan Facility (as defined below) and on our Senior Secured Notes (as defined below) as a result of our ~~interest rate swap from $1.5 billion to $1.25 billion and (ii) the decrease in our average~~April 2021 debt ~~outstanding which decreased to $1.9 billion in the third quarter of fiscal 2017 from $2.0 billion in the third quarter of fiscal 2016. These decreases were offset by an increase in LIBOR rates.~~ refinancing (as defined below).The effective interest rate on our debt, based on interest incurred (which includes amortization of our deferred financing ~~costs)~~costs and debt discount) and our average borrowings during the ~~third~~second quarter of fiscal ~~2017~~2022 and the ~~third~~second quarter of fiscal ~~2016~~2021 and excluding the impact of our interest rate ~~swap, increased to 4.85%~~swaps then in effect, remained flat at 4.73% per annum at the end of the ~~third~~second quarter of fiscal ~~2017 from 4.33% per annum at~~2022 compared to the end of the ~~third~~second quarter of fiscal ~~2016.~~2021. Including the impact of our interest rate ~~swap, our~~swaps then in effect, the effective interest rate on our debt, based on interest incurred (which includes amortization of our deferred financing ~~costs)~~costs and debt discount) and our average borrowings during the ~~third~~second quarter of fiscal ~~2017~~2022 and the ~~third~~second quarter of fiscal ~~2016, increased~~2021, decreased to ~~5.56%~~5.30% per annum at the end of the ~~third~~second quarter of fiscal ~~2017~~2022 from ~~5.53%~~5.32% per annum at the end of the ~~third~~second quarter of fiscal ~~2016.~~ 2021. See “—Liquidity and Capital Resources—Long-Term Debt” for additional details regarding our debt, including interest rates ~~on our debt outstanding~~ and payments ~~on our debt.~~ thereon. For additional details on our interest rate ~~swap,~~swaps, see “Item 3. Quantitative and Qualitative Disclosures about Market Risk” in Part I of this Quarterly Report on Form 10-Q.

Other expense, ~~(income),~~ net, which consists primarily of the impact of foreign currency on intercompany transactions, increased by ~~$0.2~~$1.2 million infor the ~~third~~second quarter of fiscal ~~2017~~2022 to ~~$0.1~~$1.6 million of expense as compared to ~~$0.1~~$0.4 million of ~~income~~expense for the second quarter of fiscal 2021.

In the second quarter of fiscal 2021, we wrote-off $29.2 million of fees in connection with our April 2021 debt refinancing that we recorded as an early extinguishment of debt charge, comprised of $12.9 million of a prepayment penalty on the ~~prior year period.~~Discharged Senior Notes (as defined below), $9.0 million of financing fees and $7.2 million of pre-existing deferred financing fees and debt discount. For additional details on this refinancing, see “—Liquidity and Capital Resources—Long-Term Debt”.

Our effective tax rate for the ~~third~~ second quarter of fiscal ~~2017~~2022 was ~~30.5%~~38.4% as compared to ~~10.3%~~9.9% for the ~~third~~ second quarter of fiscal ~~2016.~~ 2021. The tax benefit for the second quarter of fiscal 2022 was primarily driven by a tax benefit recorded for out-of-period income tax adjustments, which was partially offset by tax expense related to tax shortfalls from stock compensation. For the second quarter of fiscal 2022, the difference between the U.S. federal statutory tax rate and our consolidated effective tax rate was primarily due to tax benefits related to foreign-derived intangible income, or FDII, and out-of-period income tax adjustments, partially offset by state income tax expense, tax expense from income earned in foreign jurisdictions and tax expense related to tax shortfalls from stock compensation.The tax expense for the ~~third~~second quarter of fiscal ~~2017 reflects a one-time~~2021 was impacted by tax ~~benefit~~windfalls from stock compensation. For the second quarter of ~~$2.3 million related to a reversal of~~fiscal 2021, the difference between the U.S. federal statutory tax ~~reserves resulting from an updated transfer pricing study. The~~rate and our consolidated effective tax rate ~~in the third quarter of fiscal 2016~~ was ~~impacted by an $11.4 million net tax benefit~~primarily due to ~~a research~~state income tax expense and ~~development credit and a Section 199 deduction for~~ tax ~~years 2012 through 2015,~~expense from income earned in foreign jurisdictions, partially offset by ~~$2.7 million of out-of-period adjustments in income taxes in the third quarter of fiscal 2016.~~a tax benefit related to FDII.

Net (Loss) Income ~~Attributable to the Company~~ and Diluted (Net Loss) Earnings Per Share

Net ~~income attributable to~~loss for the ~~Company in the third~~ second quarter of fiscal ~~2017 increased $10.1~~2022 was $4.6 million ~~or 29.0%, from~~compared to net income for the ~~third~~second quarter of fiscal ~~2016. Excluding~~2021 of $8.9 million. Net loss for the ~~impact of foreign currency, which positively impacted net income attributable to the Company in the third~~ second quarter of fiscal ~~2017~~2022 was negatively impacted by ~~$1.1~~$1.7 million ~~net income attributable to~~of foreign currency. Net loss for the ~~Company in the third~~ second quarter of fiscal ~~2017 would have increased by 25.8% versus~~2022 included a $21.3 million impact from franchise rights acquired and goodwill impairments and a $13.9 million net impact from restructuring charges. Net income for the ~~prior year period.~~ second quarter of fiscal 2021 included a $21.8 million impact from the write-off of fees related to our April 2021 debt refinancing and a $3.9 million net impact from restructuring charges.

~~Earnings~~Diluted net loss per share for the second quarter of fiscal 2022 was $0.07 compared to earnings per fully diluted share, or EPS, inof $0.12 for the ~~third~~ second quarter of fiscal ~~2017 was $0.65 compared to $0.53 in~~2021. Diluted net loss per share for the ~~third~~second quarter of fiscal ~~2016. Earnings per fully diluted share~~2022 included a $0.30 impact from franchise rights acquired and goodwill impairments and a $0.20 net impact from restructuring charges. EPS for the ~~third~~second quarter of fiscal ~~2017~~2021 included a ~~$0.03 tax benefit~~$0.31 impact from the write-off of fees related to the reversal of tax reserves resulting from an updated transfer pricing study. This benefit was offset by the higher share count in the third quarter of fiscal 2017 which was driven by the higher average stock price, which, diluted EPS by $0.03. Earnings per fully diluted share for the third quarter of fiscal 2016 included a $0.13 net benefit driven by a lower tax rate of 10.3% for the third quarter of fiscal 2016. This benefit was primarily comprised of a $0.17 net tax benefit in connection with a research and development creditour April 2021 debt refinancing and a ~~Section 199 deduction for the tax years 2012 through 2015, partially offset by a $0.04 expense for out-of-period tax adjustments.~~ $0.05 net impact from restructuring charges.

The following tables set forth key metrics by reportable segment for the ~~third~~ second quarter of fiscal ~~2017~~2022 and the percentage change in those metrics versus the prior year period:

	Q3 2017																											Q2 2022
	GAAP									Constant Currency																		GAAP									Constant Currency
				Product									Product						Total												Product									Product						Total
	Service			Sales &			Total			Service			Sales &			Total			Paid			Incoming			EOP			Subscription			Sales &			Total			Subscription			Sales &			Total			Paid			Incoming			EOP
	Revenues			Other			Revenues			Revenues			Other			Revenues			Weeks			Subscribers			Subscribers			Revenues			Other			Revenues			Revenues			Other			Revenues			Weeks			Subscribers			Subscribers
																						(in thousands)																											(in thousands)
North America	$	193.7		$	29.9		$	223.7		$	193.2		$	29.9		$	223.0			30.0			2,332.5			2,200.2		$	166.9		$	21.1		$	188.0		$	167.3		$	21.2		$	188.5			37.8			2,986.2			2,805.1
CE																													56.6			5.1			61.7			64.2			5.8			70.1			15.1			1,189.5			1,118.9
UK		19.0			6.5			25.5			19.1			6.5			25.6			4.4			332.9			320.7			10.9			1.9			12.8			12.1			2.1			14.2			3.4			270.1			254.8
CE		51.2			9.5			60.7			48.7			9.0			57.7			9.9			784.1			756.7
Other ⁽¹⁾		9.3			4.5			13.9			9.0			4.4			13.4			1.2			77.7			77.9			6.0			0.9			6.9			6.4			1.0			7.4			1.2			99.6			88.7
Total	$	273.2		$	50.5		$	323.7		$	269.9		$	49.9		$	319.8			45.4			3,527.2			3,355.5		$	240.4		$	29.1		$	269.5		$	250.1		$	30.1		$	280.2			57.5			4,545.4			4,267.5

	% Change Q3 2017 vs. Q3 2016																											% Change Q2 2022 vs. Q2 2021
North America		17.0	%		9.5	%		16.0	%		16.7	%		9.2	%		15.6	%		21.0	%		21.5	%		19.1	%		(8.3	%)		(17.8	%)		(9.4	%)		(8.1	%)		(17.5	%)		(9.2	%)		(8.7	%)		(5.5	%)		(11.2	%)
CE																													(18.4	%)		(40.2	%)		(20.8	%)		(7.3	%)		(32.2	%)		(10.1	%)		(12.4	%)		(11.8	%)		(12.2	%)
UK		9.8	%		4.7	%		8.5	%		10.2	%		4.9	%		8.8	%		9.5	%		10.9	%		6.5	%		(23.2	%)		(33.9	%)		(25.0	%)		(14.5	%)		(26.5	%)		(16.5	%)		(23.4	%)		(20.6	%)		(24.4	%)
CE		26.1	%		(5.9	%)		19.7	%		20.0	%		(10.5	%)		13.9	%		23.8	%		22.1	%		23.8	%
Other ⁽¹⁾		1.8	%		(1.4	%)		0.8	%		(1.7	%)		(3.6	%)		(2.4	%)		1.0	%		3.4	%		4.5	%		(18.9	%)		(33.5	%)		(21.2	%)		(13.0	%)		(30.1	%)		(15.8	%)		(8.3	%)		(6.9	%)		(9.6	%)
Total		17.5	%		4.6	%		15.3	%		16.1	%		3.3	%		13.9	%		19.8	%		20.1	%		18.4	%		(11.9	%)		(24.5	%)		(13.5	%)		(8.3	%)		(21.9	%)		(10.0	%)		(10.7	%)		(8.3	%)		(12.3	%)

	Q3 2017																														Q2 2022
	Meeting Fees						Meeting			Incoming			EOP			Online Subscription Revenues						Online			Incoming			EOP			Digital Subscription Revenues ⁽²⁾						Digital			Incoming			EOP			Workshops + Digital Fees ⁽²⁾						Workshops + Digital			Incoming Workshops			EOP Workshops
				Constant			Paid			Meeting			Meeting						Constant			Paid			Online			Online						Constant			Paid			Digital			Digital						Constant			Paid			+ Digital			+ Digital
	GAAP			Currency			Weeks			Subscribers			Subscribers			GAAP			Currency			Weeks			Subscribers			Subscribers			GAAP			Currency			Weeks		⁽²⁾	Subscribers			Subscribers		⁽²⁾	GAAP			Currency			Weeks ⁽²⁾			Subscribers			Subscribers		⁽²⁾
										(in thousands)															(in thousands)															(in thousands)															(in thousands)
North America	$	122.4		$	122.1			13.0			980.2			924.9		$	71.3		$	71.1			17.0			1,352.4			1,275.3		$	114.4		$	114.7			30.1			2,450.7			2,174.6		$	52.5		$	52.6			7.7			535.4			630.5
CE																																48.8			55.4			13.7			1,088.3			1,009.8			7.8			8.9			1.4			101.1			109.1
UK		13.3			13.4			2.6			188.8			180.3			5.7			5.7			1.8			144.1			140.4			6.6			7.4			2.5			206.0			182.8			4.3			4.8			0.9			64.1			72.0
CE		23.4			22.3			2.7			216.7			206.2			27.7			26.4			7.2			567.3			550.5
Other ⁽¹⁾		6.5			6.3			0.7			35.5			35.6			2.9			2.7			0.5			42.2			42.3			4.4			4.7			1.0			81.4			72.8			1.6			1.7			0.2			18.2			15.9
Total	$	165.6		$	164.0			18.9			1,421.2			1,346.9		$	107.6		$	105.9			26.6			2,106.0			2,008.6		$	174.2		$	182.2			47.3			3,826.6			3,440.0		$	66.2		$	67.9			10.2			718.8			827.6

	% Change Q3 2017 vs. Q3 2016																														% Change Q2 2022 vs. Q2 2021
North America		13.8	%		13.4	%		14.5	%		16.2	%		14.1	%		23.1	%		22.7	%		26.5	%		25.7	%		23.1	%		(12.1	%)		(11.9	%)		(12.1	%)		(6.8	%)		(16.5	%)		1.5	%		1.7	%		7.7	%		1.1	%		13.8	%
CE																																(19.5	%)		(8.6	%)		(13.8	%)		(12.1	%)		(14.4	%)		(10.8	%)		1.4	%		4.7	%		(9.1	%)		15.7	%
UK		5.2	%		5.6	%		4.6	%		6.1	%		1.1	%		22.4	%		22.8	%		17.3	%		18.1	%		14.4	%		(31.1	%)		(23.3	%)		(27.5	%)		(22.9	%)		(29.9	%)		(6.7	%)		3.9	%		(9.4	%)		(12.3	%)		(5.9	%)
CE		10.0	%		4.8	%		4.9	%		4.0	%		4.9	%		43.8	%		36.8	%		32.8	%		30.8	%		32.7	%
Other ⁽¹⁾		1.2	%		(2.2	%)		3.4	%		7.6	%		7.9	%		3.3	%		(0.7	%)		(1.8	%)		0.1	%		1.8	%		(10.6	%)		(4.1	%)		(1.3	%)		(0.3	%)		(2.6	%)		(35.1	%)		(30.4	%)		(30.7	%)		(28.2	%)		(32.0	%)
Total		12.0	%		10.8	%		11.2	%		12.5	%		10.6	%		27.1	%		25.2	%		26.7	%		25.8	%		24.4	%		(15.2	%)		(11.3	%)		(13.4	%)		(9.3	%)		(16.5	%)		(2.0	%)		0.6	%		4.3	%		(2.8	%)		10.6	%

The ~~increase~~decrease in North America revenues infor the ~~third~~ second quarter of fiscal ~~2017~~2022 versus the prior year period was ~~primarily~~ driven by a decrease in Subscription Revenues and, to a lesser extent, a decrease in product sales and other. The decrease in Subscription Revenues for the ~~increase~~second quarter of fiscal 2022 versus the prior year period was driven by a decrease in ~~Service~~Digital Subscription Revenues. Digital Subscription Revenues were negatively impacted by both the recruitment decline during the second quarter of fiscal 2022 as compared to the prior year period and the lower number of Incoming Digital Subscribers at the beginning of the second quarter of fiscal 2022 versus the beginning of the second quarter of fiscal 2021. This decline in recruitments was driven primarily by worsened consumer sentiment in the current environment and our PersonalPoints program not resonating with consumers to the extent anticipated. Additionally, the transition of our former Digital 360 members to our Workshops + Digital business negatively impacted Digital Subscription Revenues in the second quarter of fiscal 2022. The ~~increase~~decrease in North America Total Paid Weeks for the second quarter of fiscal 2022 versus the prior year period was driven primarily by both lower recruitments for the ~~higher~~second quarter of fiscal 2022 versus the prior year period and the lower number of Total Incoming Subscribers at the beginning of the ~~third~~ second quarter of fiscal ~~2017~~2022 versus the beginning of the ~~third~~ second quarter of fiscal ~~2016, improved retention versus the prior year period and recruitment strength in our Online business in the third quarter of fiscal 2017 versus the prior year period.~~2021.

The ~~increase~~decrease in North America product sales and other infor the ~~third~~ second quarter of fiscal ~~2017~~2022 versus the prior year period was ~~primarily~~ driven ~~by an increase in product sales partially offset~~primarily by a ~~decline~~decrease in ~~licensing revenue.~~e-commerce product sales.

The ~~increase~~decrease in UKContinental Europe revenues infor the ~~third~~ second quarter of fiscal ~~2017~~2022 versus the prior year period was ~~primarily~~ driven by a decrease in Subscription Revenues and, to a lesser extent, a decrease in product sales and other. The decrease in Subscription Revenues for the ~~increase in Service Revenues. This increase in Service Revenues in the third~~ second quarter of fiscal ~~2017~~2022 versus the prior year period was ~~primarily the result of an increase~~driven by a decrease in ~~Online~~Digital Subscription Revenues. Digital Subscription Revenues ~~and improved retention.~~

~~The increase in UK product sales and other in~~were negatively impacted by both the ~~third~~ recruitment decline during the second quarter of fiscal ~~2017~~2022 as compared to the prior year period and the lower number of Incoming Digital Subscribers at the beginning of the second quarter of fiscal 2022 versus the beginning of the second quarter of fiscal 2021. This decline in recruitments was driven primarily by worsened consumer sentiment in the current environment and our PersonalPoints program not resonating with consumers to the extent anticipated. The decrease in Continental Europe Total Paid Weeks for the second quarter of fiscal 2022 versus the prior year period was driven primarily ~~driven~~ by ~~an increase in product sales, partially offset by a decline in licensing revenue.~~

~~The increase in Continental Europe revenues in~~both lower recruitments for the ~~third~~second quarter of fiscal ~~2017~~2022 versus the prior year period ~~was primarily driven by~~ and the ~~increase in Service Revenues. The increase in Continental Europe Total Paid Weeks was driven by the higher~~lower number of Total Incoming Subscribers at the beginning of the ~~third~~ second quarter of fiscal ~~2017~~2022 versus the beginning of the ~~third~~ second quarter of fiscal ~~2016, improved retention versus the prior year period and recruitment strength in our Online business in the third quarter of fiscal 2017 versus the prior year period.~~2021.

The ~~increase in Continental Europe Service Revenues was partially offset by the decline~~decrease in Continental Europe product sales and other infor the ~~third~~ second quarter of fiscal ~~2017 versus the prior year period.~~

~~The decline in Other revenues in the third quarter of fiscal 2017~~2022 versus the prior year period was driven primarily ~~driven~~ by a decrease in e-commerce product sales.

The decrease in UK revenues for the ~~positive impact~~second quarter of ~~foreign currency. Excluding~~fiscal 2022 versus the ~~impact of foreign currency, Other revenues would have decreased,~~prior year period was driven by a decrease in ~~Service~~Subscription Revenues ~~due~~and, to ~~price discounting.~~

~~The~~a lesser extent, a decrease in product sales and ~~other~~other. The decrease in Subscription Revenues for the ~~third~~ second quarter of fiscal ~~2017~~2022 versus the ~~third quarter of fiscal 2016~~prior year period was ~~primarily~~ driven by a decrease in ~~other~~Digital Subscription Revenues. Digital Subscription Revenues were negatively impacted by both the lower number of Incoming Digital Subscribers at the beginning of the second quarter of fiscal 2022 versus the beginning of the second quarter of fiscal 2021and the recruitment decline during the second quarter of fiscal 2022 as compared to the prior year period. This decline in recruitments was driven primarily by worsened consumer sentiment in the current environment and our PersonalPoints program not resonating with consumers to the extent anticipated. The decrease in UK Total Paid Weeks for the second quarter of fiscal 2022 versus the prior year period was driven primarily by both lower recruitments for the second quarter of fiscal 2022 versus the prior year period and the lower number of Total Incoming Subscribers at the beginning of the second quarter of fiscal 2022 versus the beginning of the second quarter of fiscal 2021.

The decrease in UK product sales ~~partially offset~~and other for the second quarter of fiscal 2022 versus the prior year period was driven primarily by ~~commissions received from~~a decrease in e-commerce product sales.

The decrease in Other revenues for the second quarter of fiscal 2022 versus the prior year period was driven by a decrease in Subscription Revenues and, to a lesser extent, a decrease in product sales and other. The decrease in Subscription Revenues for the second quarter of fiscal 2022 versus the prior year period was driven by both a decrease in Workshops + Digital Fees and a decrease in Digital Subscription Revenues. Subscription Revenues were negatively impacted by both the recruitment decline during the second quarter of fiscal 2022 as compared to the prior year period and the lower number of Total Incoming Subscribers at the beginning of the second quarter of fiscal 2022 versus the beginning of the second quarter of fiscal 2021. This decline in recruitments was driven primarily by worsened consumer sentiment in the current environment and our ~~franchisees.~~PersonalPoints program not resonating with consumers to the extent anticipated.

The decrease in Other product sales and other for the second quarter of fiscal 2022 versus the prior year period was driven primarily by a decrease in product sales.

~~NINE~~SIX MONTHS ENDED ~~SEPTEMBER 30, 2017~~JULY 2, 2022 COMPARED TO THE ~~NINE~~SIX MONTHS ENDED ~~OCTOBER 1, 2016~~JULY 3, 2021

The table below sets forth selected financial information for the first ~~nine~~six months of fiscal ~~2017~~2022 from our consolidated statements of net income for the ~~nine~~six months ended ~~September 30, 2017~~July 2, 2022 versus selected financial information for the first ~~nine~~six months of fiscal ~~2016~~2021 from our consolidated statements of net income for the ~~nine~~six months ended ~~October 1, 2016:~~July 3, 2021.

	(In millions, except per share amounts)
	For The Nine Months Ended															(In millions, except per share amounts)
																For The Six Months Ended
	September 30, 2017			October 1, 2016			Increase/ (Decrease)			% Change			% Change Constant Currency			July 2, 2022			July 3, 2021			Increase/ (Decrease)			% Change				% Change Constant Currency
Revenues, net	$	994.4		$	897.5		$	96.9			10.8	%		11.5	%	$	567.2		$	643.2		$	(76.0	)		(11.8	%)			(9.2	%)
Cost of revenues		464.2			442.5			21.8			4.9	%		5.6	%		224.2			263.7			(39.6	)		(15.0	%)			(13.2	%)

Gross profit		530.2			455.0			75.2			16.5	%		17.2	%		343.1			379.5			(36.4	)		(9.6	%)			(6.4	%)
Gross Margin %		53.3	%		50.7	%											60.5	%		59.0	%

Marketing expenses		158.7			157.8			0.9			0.6	%		1.7	%		159.4			174.1			(14.7	)		(8.4	%)			(6.1	%)
Selling, general & administrative expenses		153.7			143.2			10.5			7.3	%		7.7	%		134.9			142.9			(8.0	)		(5.6	%)			(4.0	%)

Franchise rights acquired and goodwill impairments																	26.4			—			26.4			100.0	%			100.0	%
Operating income		217.8			154.1			63.7			41.4	%		41.7	%		22.3			62.5			(40.2	)		(64.3	%)			(56.8	%)
Operating Income Margin %		21.9	%		17.2	%											3.9	%		9.7	%

Interest expense		82.2			87.0			(4.7	)		(5.4	%)		(5.4	%)		37.9			49.4			(11.5	)		(23.3	%)			(23.3	%)
Other expense, net		0.3			0.4			(0.1	)		29.9	%		29.9	%		2.0			0.1			1.8		100.0		%	*	100.0		%	*
Gain on early extinguishment of debt		(1.6	)		0.0			(1.6	)		100.0	%		100.0	%
Income before income taxes		136.9			66.7			70.2			105.1	%		106.0	%
Early extinguishment of debt																	—			29.2			(29.2	)		(100.0	%)			(100.0	%)
Loss before income taxes																	(17.5	)		(16.2	)		(1.3	)		(8.1	%)			(20.6	%)

Provision for income taxes		36.5			12.4			24.0		100.0%			100.0%
Net income		100.4			54.3			46.1			84.9	%		85.4	%
Net loss attributable to the noncontrolling interest		0.1			0.1			0.0			36.4	%		18.5	%

Net income attributable to Weight Watchers International, Inc.	$	100.5		$	54.4		$	46.1			84.8	%		85.3	%
Benefit from income taxes																	(4.7	)		(6.9	)		2.2			31.7	%			57.0	%
Net loss																$	(12.9	)	$	(9.4	)	$	(3.5	)		(37.4	%)			(6.1	%)

Weighted average diluted shares outstanding		67.9			65.9			2.1			3.1	%		3.1	%		70.2			69.3			0.9			1.2	%			1.2	%
Diluted earnings per share	$	1.48		$	0.83		$	0.65			79.2	%		79.7	%
Diluted net loss per share																$	(0.18	)	$	(0.14	)	$	(0.05	)		(35.7	%)			(4.8	%)

Certain results for the first six months of fiscal 2022 are adjusted to exclude the impact of the $26.4 million of franchise rights acquired and goodwill impairments and the net impact of the $19.1 million of 2022 plan restructuring charges, the reversal of $0.3 million of 2021 plan restructuring charges and the reversal of $0.1 million of 2020 plan restructuring charges. See “Non-GAAP Financial Measures” above. The table below sets forth a reconciliation of certain of those components of our selected financial data for the first six months ended July 2, 2022 which have been adjusted.

Certain results for the first six months of fiscal 2021 are adjusted to exclude the net impact of the $11.6 million of 2021 plan restructuring charges and the reversal of $0.8 million of 2020 plan restructuring charges. See “Non-GAAP Financial Measures” above. The table below sets forth a reconciliation of certain of those components of our selected financial data for the first six months ended July 3, 2021 which have been adjusted.

Revenues infor the first ~~nine~~six months of fiscal ~~2017~~2022 were ~~$994.4~~$567.2 million, ~~an increase~~a decrease of ~~$96.9~~$76.0 million, or ~~10.8%~~11.8%, versus the first ~~nine~~six months of fiscal ~~2016.~~2021. Excluding the impact of foreign currency, which negatively impacted our revenues in the first six months of fiscal 2022 by $17.0 million, revenues for the first ~~nine~~six months of fiscal ~~2017 by $6.0 million, revenues in the first nine months of fiscal 2017~~2022 would have ~~increased 11.5%~~decreased 9.2% versus the prior year period. This ~~increase~~decrease was driven primarily by ~~revenue growth, on a constant currency basis,~~lower Subscription Revenues reflecting lower sign-ups primarily due to worsened consumer sentiment and our PersonalPoints program not resonating with consumers to the extent anticipated. This worsened consumer sentiment was due in ~~all major markets.~~part to the evolution of the COVID-19 pandemic as well as the likely impact of certain macro factors including increasing inflation, social and political unrest and challenged economic growth. See “—Segment Results” for additional details on revenues.

Total cost of revenues for the first six months of fiscal 2022 decreased $39.6 million, or 15.0%, versus the first six months of fiscal 2021. Excluding the impact of foreign currency, which decreased cost of revenues in the first ~~nine~~six months of fiscal ~~2017 increased $21.8~~2022 by $4.9 million, ~~or 4.9%,~~cost of revenues for the first six months of fiscal 2022 would have decreased 13.2% versus the prior year period. ~~Gross profit increased $75.2~~Excluding the net impact of the $3.8 million ~~or 16.5%,~~of restructuring charges in the first ~~nine~~six months of fiscal ~~2017 compared to~~2022 and the net impact of the $10.2 million of restructuring charges in the first ~~nine~~six months of fiscal ~~2016 primarily due to~~2021, total cost of revenues for the ~~increase in revenues.~~first six months of fiscal 2022 would have decreased by 13.1%, or 11.2% on a constant currency basis, versus the prior year period.

Gross profit for the first six months of fiscal 2022 decreased $36.4 million, or 9.6%, versus the first six months of fiscal 2021. Excluding the impact of foreign currency, which negatively impacted gross profit in the first six months of fiscal 2022 by $12.2 million, gross profit for the first ~~nine~~six months of fiscal ~~2017 by $2.9 million, gross profit in the first nine months of fiscal 2017~~2022 would have ~~increased 17.2%~~decreased 6.4% versus the prior year period. Excluding the net impact of the $3.8 million of restructuring charges in the first six months of fiscal 2022 and the net impact of the $10.2 million of restructuring charges in the first six months of fiscal 2021, gross profit for the first six months of fiscal 2022 would have decreased by 11.0%, or 7.8% on a constant currency basis, versus the prior year period primarily due to the decrease in revenues. Gross margin for the first six months of fiscal 2022 increased to 60.5% versus 59.0% for the first six months of fiscal 2021. Excluding the impact of foreign currency, gross margin in the first ~~nine~~six months of fiscal ~~2017~~2022 would have increased ~~2.6%~~1.8% to ~~53.3%~~60.8% versus ~~50.7%~~the prior year period. Excluding the net impact of restructuring charges in the first ~~nine~~six months of fiscal ~~2016. Gross~~2022 and the net impact of restructuring charges in the first six months of fiscal 2021, gross margin for the first six months of fiscal 2022 would have increased 0.6% to 61.2% versus the prior year period. Excluding the impact of foreign currency, the net impact of restructuring charges in the first six months of fiscal 2022 and the net impact of restructuring charges in the first six months of fiscal 2021, gross margin for the first six months of fiscal 2022 would have increased 0.9% to 61.5% versus the prior year period. The gross margin increase was driven primarily by margin expansion ~~was primarily driven by improved leverage~~ in ~~both~~ the ~~meetings and Online businesses~~Workshops + Digital business resulting from a more efficient studio footprint and a ~~mix shift to the higher margin Online business. This expansion was partially offset by lower revenues~~reduction in ~~our high margin licensing business.~~labor costs.

Marketing expenses for the first ~~nine~~six months of fiscal ~~2017 increased $0.9~~2022 decreased $14.7 million, or ~~0.6%~~8.4%, versus the first ~~nine~~six months of fiscal ~~2016.~~2021. Excluding the impact of foreign currency, which decreased marketing expenses in the first six months of fiscal 2022 by $4.0 million, marketing expenses for the first ~~nine~~six months of fiscal ~~2017 by $1.8 million,~~2022 would have decreased 6.1% versus the prior year period. This decrease in marketing expenses was primarily due to a decline in ~~the first nine months of fiscal 2017 would have increased 1.7% versus the first nine months of fiscal 2016.~~ TV media.Marketing expenses as a percentage of revenue ~~decreased to 16.0% in~~for the first ~~nine~~six months of fiscal ~~2017 as compared~~2022 increased to ~~17.6% in~~28.1% from 27.1% for the ~~prior year period.~~first six months of fiscal 2021.

Selling, general and administrative expenses for the first ~~nine~~six months of fiscal ~~2017 increased $10.5~~2022 decreased $8.0 million, or ~~7.3%~~5.6%, versus the first ~~nine~~six months of fiscal ~~2016.~~2021. Excluding the impact of foreign currency, which decreased selling, general and administrative expenses ~~for~~in the first ~~nine~~six months of fiscal ~~2017~~2022 by ~~$0.5~~$2.3 million, selling, general and administrative expenses infor the first ~~nine~~six months of fiscal ~~2017~~2022 would have ~~increased 7.7%~~decreased 4.0% versus the prior year period. ~~The increase~~Excluding the net impact of the $14.9 million of restructuring charges in the first six months of fiscal 2022 and the net impact of the $0.6 million of restructuring charges in the first six months of fiscal 2021, selling, general and administrative expenses for the first six months of fiscal 2022 would have decreased by 15.7%, or 14.1% on a constant currency basis, versus the prior year period. This decrease in selling, general and administrative expenses ~~in the first nine months of fiscal 2017~~ was primarily due to lower stock compensation expense and lower bonus expense driven by ~~higher compensation~~a change in timing of payment and ~~incentive related costs.~~a reduction in headcount. Selling, general and administrative expenses as a percentage of revenue for the first ~~nine~~six months of fiscal ~~2017 decreased~~2022 increased to ~~15.5%~~23.8% from ~~16.0%~~22.2% for the first ~~nine~~six months of fiscal ~~2016.~~2021. Excluding the net impact of restructuring charges in the first six months of fiscal 2022 and the net impact of restructuring charges in the first six months of fiscal 2021, selling, general and administrative expenses as a percentage of revenue for the first six months of fiscal 2022 would have decreased by 1.0%, or 1.2% on a constant currency basis, versus the prior year period.

In performing our annual impairment analysis as of May 8, 2022, we determined that the carrying amounts of our Canada and New Zealand franchise rights acquired with indefinite lived units of account exceeded their respective fair values and, as a result, we recorded impairment charges for our Canada and New Zealand units of account of $24.5 million and $0.8 million, respectively, in the second quarter of fiscal 2022. In addition, we determined in the second quarter of fiscal 2022 to exit the Kurbo business in the third quarter of fiscal 2022 as part of our strategic plan. As a result of this determination, we recorded an impairment charge of $1.1 million in the second quarter of fiscal 2022, which comprised the entire goodwill balance for Kurbo.

Operating income for the first ~~nine~~six months of fiscal ~~2017 increased $63.7~~2022 decreased $40.2 million, or ~~41.4%~~64.3%, versus the first ~~nine~~six months of fiscal ~~2016.~~2021. Excluding the impact of foreign currency, which negatively impacted operating income in the first six months of fiscal 2022 by $4.7 million, operating income for the first ~~nine~~six months of fiscal ~~2017 by $0.6~~2022 would have decreased 56.8% versus the prior year period. Excluding the impact of the $26.4 million ~~operating income~~ of franchise rights acquired and goodwill impairments in the first ~~nine~~six months of fiscal ~~2017~~2022, the net impact of the $18.7 million of restructuring charges in the first six months of fiscal 2022 and the net impact of the $10.7 million of restructuring charges in the first six months of fiscal 2021, operating income for the first six months of fiscal 2022 would have decreased by 7.9%, or increased by 0.2% on a constant currency basis, versus the prior year period. Operating income margin for the first six months of fiscal 2022 decreased to 3.9% versus 9.7% for the first six months of fiscal 2021. Excluding the impact of the franchise rights acquired and goodwill impairments in the first six months of fiscal 2022, the net impact of restructuring charges in the first six months of fiscal 2022 and the net impact of restructuring charges in the first six months of fiscal 2021, operating income margin for the first six months of fiscal 2022 would have increased ~~41.7%~~by 0.5%, or 1.2% on a constant currency basis, versus the prior year period. This increase in operating income margin was driven by higher operating income in all major markets as compared to the prior year period. Operating income margin increased 4.7% for the first nine months of fiscal 2017 compared to the first nine months of fiscal 2016. This increase in operating income margin was primarily ~~driven~~ by ~~an increase in gross margin and to a lesser extent a decrease in marketing expenses as a percentage of revenue and~~ a decrease in selling, general and administrative expenses as a percentage of revenue ~~all~~and an increase in gross margin, partially offset by an increase in marketing expenses as ~~compared to~~a percentage of revenue, versus the prior year period.

Interest expense infor the first ~~nine~~six months of fiscal ~~2017~~2022 decreased ~~$4.7~~$11.5 million, or ~~5.4%~~23.3%, versus the first ~~nine~~six months of fiscal ~~2016.~~2021. The decrease in interest expense was driven primarily by ~~(i) the decrease in the notional amount~~lower interest rates under our Term Loan Facility and on our Senior Secured Notes as a result of our ~~interest rate swap from $1.5 billion to $1.25 billion; (ii) the decrease in our average~~April 2021 debt outstanding under the Tranche B-2 Term Facility (defined hereafter) which decreased to $2.0 billion in the first nine months of fiscal 2017 from $2.1 billion in the first nine months of fiscal 2016; (iii) the payment in full in April 2016 of the principal amount of loans outstanding under the Tranche B-1 Term Facility (defined hereafter) and (iv) the aggregate payments in the third quarter of fiscal 2016 of the outstanding principal amount of $48.0 million on the Revolving Facility (defined hereafter). The increase in LIBOR rates offset the benefits set forth in items (i) through (iii).refinancing. The effective interest rate on our debt, based on interest incurred (which includes amortization of our deferred financing ~~costs)~~costs and debt discount) and our average borrowings during the first ~~nine~~six months of fiscal ~~2017~~2022 and the first ~~nine~~six months of fiscal ~~2016~~2021 and excluding the impact of our interest rate ~~swap, increased~~swaps then in effect, decreased to ~~4.68%~~4.63% per annum at the end of the first ~~nine~~six months of fiscal ~~2017~~2022 from ~~4.31%~~5.66% per annum at the end of the first ~~nine~~six months of fiscal ~~2016.~~2021. Including the impact of our interest rate ~~swap, our~~swaps then in effect, the effective interest rate on our debt, based on interest incurred (which includes amortization of our deferred financing ~~costs)~~costs and debt discount) and our average borrowings during the first ~~nine~~six months of fiscal ~~2017~~2022 and the first ~~nine~~six months of fiscal ~~2016, increased~~2021, decreased to ~~5.52%~~5.22% per annum at the end of the first ~~nine~~six months of fiscal ~~2017~~2022 from ~~5.48%~~6.43% per annum at the end of the first ~~nine~~six months of fiscal ~~2016.~~ 2021. See “—Liquidity and Capital Resources—Long-Term Debt” for additional details regarding our debt, including interest rates ~~on our debt outstanding, the Revolving Facility~~ and payments ~~on our debt.~~ thereon. For additional details on our interest rate ~~swap,~~swaps, see “Item 3. Quantitative and Qualitative Disclosures about Market Risk” in Part I of this Quarterly Report on Form 10-Q.

Other expense, net, which consists primarily of the impact of foreign currency on intercompany transactions, ~~decreased~~increased by ~~$0.1~~$1.8 million infor the first ~~nine~~six months of fiscal ~~2017~~2022 to ~~$0.3~~$2.0 million of expense as compared to ~~$0.4~~$0.1 million inof expense for the ~~prior year period.~~first six months of fiscal 2021.

In May 2017, we paid an aggregate amount of cash proceeds totaling $73.0 million plus an amount sufficient to pay accrued and unpaid interest on the amount prepaid to prepay $75.5 million in aggregate principal amount of term loans under the Tranche B-2 Term Facility. As a result of this prepayment, we wrote-off fees of $0.6 million, incurred fees of $0.3 million and recorded a gain on early extinguishment of debt of $1.6 million, inclusive of these fees, in the second quarter of fiscal ~~2017.~~2021, we wrote-off $29.2 million of fees in connection with our April 2021 debt refinancing that we recorded as an early extinguishment of debt charge, comprised of $12.9 million of a prepayment penalty on the Discharged Senior Notes, $9.0 million of financing fees and $7.2 million of pre-existing deferred financing fees and debt discount. For additional details on this refinancing, see “—Liquidity and Capital Resources—Long-Term Debt”.

Our effective tax rate for the first ~~nine~~six months of fiscal ~~2017~~2022 was ~~26.6%~~26.7% as compared to ~~18.6%~~42.3% for the first ~~nine~~six months of fiscal ~~2016.~~ 2021. The tax benefit for the first six months of fiscal 2022 was primarily driven by a tax benefit recorded for out-of-period income tax adjustments, which was partially offset by tax expense related to tax shortfalls from stock compensation. For the first six months of fiscal 2022, the difference between the U.S. federal statutory tax rate and our consolidated effective tax rate was primarily due to tax benefits related to FDII and to out-of-period income tax adjustments, partially offset by state income tax expense, tax expense from income earned in foreign jurisdictions and tax expense related to tax shortfalls from stock compensation. The tax expense for the first ~~nine~~six months of fiscal ~~2017~~2021 was impacted by ~~the following one-time discrete items occurring in~~tax windfalls from stock compensation. For the first ~~nine~~six months of fiscal ~~2017: (i) an $11.6 million~~2021, the difference between the U.S. federal statutory tax rate and our consolidated effective tax rate was primarily due to state income tax expense and tax expense from income earned in foreign jurisdictions, partially offset by a tax benefit related to ~~the cessation of operations of our Spanish subsidiary~~FDII.

Net Loss and ~~(ii) by $2.3 million related to the reversal of tax reserves resulting from an updated transfer pricing study. The effective tax rate~~Diluted Net Loss Per Share

Net loss for the first ~~nine~~six months of fiscal ~~2016~~2022 was ~~impacted by: (i) an $11.4~~$12.9 million, ~~net tax benefit due to a research and development credit and a Section 199 deduction for tax years 2012 through 2015 and (ii) the reversal of a $2.5~~which increased $3.5 million valuation allowance related to tax benefits for foreign losses that are now expected to be realized. These benefits were partially offset by $2.7 million of out-of-period adjustments in income taxes in the third quarter of fiscal 2016.

~~Net income attributable to the Company in the first nine months of fiscal 2017 increased $46.1 million,~~, or ~~84.8%~~37.4%, from the net loss for the first ~~nine~~six months of fiscal ~~2016.~~ 2021 of $9.4 million. Excluding the impact of foreign currency, which negatively impacted net ~~income attributable to the Company~~loss in the first ~~nine~~six months of fiscal ~~2017~~2022 by ~~$0.3~~$2.9 million, net ~~income attributable to the Company in~~loss for the first ~~nine~~six months of fiscal ~~2017~~2022 would have increased ~~by 85.3% versus~~6.1% from the prior year period.

~~Earnings per fully diluted share, or EPS, in~~Net loss for the first ~~nine~~six months of fiscal 2022 included a $21.3 million impact from franchise rights acquired and goodwill impairments and a $14.0 million net impact from restructuring charges. Net loss for the first six months of fiscal 2021 included a $21.8 million impact from the write-off of fees related to our April 2021 debt refinancing and an $8.0 million net impact from restructuring charges.

Diluted net loss per share for the first six months of fiscal ~~2017~~2022 was ~~$1.48~~$0.18 compared to ~~$0.83 in~~diluted net loss per share of $0.14 for the first ~~nine~~six months of fiscal ~~2016. Earnings~~2021. Diluted net loss per ~~fully diluted~~ share in for the first ~~nine~~six months of fiscal ~~2017~~2022 included ~~(i)~~ a ~~tax benefit of $0.18 that was offset by $0.01 of expense, both related to the cessation of operations of our Spanish subsidiary; (ii)~~ $0.30 impact from franchise rights acquired and goodwill impairments and a ~~$0.01 gain on early extinguishment of debt and (iii) a $0.03~~$0.20 net ~~tax benefit related to the reversal of tax reserves resulting~~impact from ~~an updated transfer pricing study. Earnings~~restructuring charges. Diluted net loss per ~~fully diluted~~ share infor the first ~~nine~~six months of fiscal ~~2016~~2021 included ~~(i)~~ a ~~$0.17 net tax benefit in connection with a research and development credit and a Section 199 deduction for~~$0.31 impact from the ~~tax years 2012 through 2015 and (ii) a $0.04 benefit for the reversal~~write-off of ~~a valuation allowance~~fees related to ~~tax benefits for foreign losses that are expected to be realized, partially offset by~~ our April 2021 debt refinancing and a ~~$0.04 expense for out-of-period tax adjustments.~~ $0.12 net impact from restructuring charges.

The following tables set forth key metrics by reportable segment for the first ~~nine~~six months of fiscal ~~2017~~2022 and the percentage change in those metrics versus the prior year period:


	First Nine Months Of Fiscal 2017																											First Half of Fiscal 2022
	GAAP									Constant Currency																		GAAP									Constant Currency
				Product									Product						Total												Product									Product						Total
	Service			Sales &			Total			Service			Sales &			Total			Paid			Incoming			EOP			Subscription			Sales &			Total			Subscription			Sales &			Total			Paid			Incoming			EOP
	Revenues			Other			Revenues			Revenues			Other			Revenues			Weeks			Subscribers			Subscribers			Revenues			Other			Revenues			Revenues			Other			Revenues			Weeks			Subscribers			Subscribers
																						(in thousands)																											(in thousands)
North America	$	589.1		$	106.3		$	695.4		$	588.7		$	106.2		$	695.0			91.0			1,719.2			2,200.2		$	343.2		$	49.1		$	392.3		$	343.6		$	49.2		$	392.8			76.4			2,734.9			2,805.1
CE																													118.3			14.3			132.6			130.6			15.7			146.4			30.5			1,094.1			1,118.9
UK		55.3			20.6			75.9			60.3			22.5			82.9			13.3			265.1			320.7			23.1			4.1			27.2			24.7			4.3			29.1			6.9			245.0			254.8
CE		145.2			34.4			179.6			145.8			34.8			180.6			29.7			564.7			756.7
Other ⁽¹⁾		28.1			15.4			43.5			26.9			15.1			42.0			3.7			72.2			77.9			12.8			2.3			15.0			13.6			2.4			16.0			2.5			94.5			88.7
Total	$	817.7		$	176.7		$	994.4		$	821.7		$	178.7		$	1,000.4			137.7			2,621.1			3,355.5		$	497.4		$	69.8		$	567.2		$	512.6		$	71.7		$	584.2			116.4			4,168.6			4,267.5

	% Change First Nine Months of Fiscal 2017 vs. First Nine Months of Fiscal 2016																											% Change First Half of Fiscal 2022 vs. First Half of Fiscal 2021
North America		13.8	%		11.4	%		13.4	%		13.7	%		11.3	%		13.3	%		17.8	%		12.3	%		19.1	%		(7.0	%)		(18.1	%)		(8.5	%)		(6.9	%)		(18.0	%)		(8.4	%)		(6.2	%)		(3.1	%)		(11.2	%)
CE																													(15.0	%)		(30.5	%)		(17.0	%)		(6.1	%)		(23.8	%)		(8.4	%)		(11.1	%)		(7.2	%)		(12.2	%)
UK		(4.1	%)		(8.1	%)		(5.2	%)		4.6	%		0.6	%		3.5	%		6.2	%		0.8	%		6.5	%		(20.7	%)		(41.0	%)		(24.6	%)		(15.2	%)		(37.2	%)		(19.4	%)		(22.4	%)		(24.3	%)		(24.4	%)
CE		14.7	%		(6.6	%)		9.9	%		15.2	%		(5.6	%)		10.5	%		18.9	%		6.4	%		23.8	%
Other ⁽¹⁾		9.3	%		3.2	%		7.0	%		4.4	%		1.2	%		3.2	%		4.9	%		12.2	%		4.5	%		(17.1	%)		(22.3	%)		(17.9	%)		(11.7	%)		(18.4	%)		(12.8	%)		(7.4	%)		(3.2	%)		(9.6	%)
Total		12.3	%		4.2	%		10.8	%		12.9	%		5.4	%		11.5	%		16.4	%		9.7	%		18.4	%		(10.0	%)		(22.8	%)		(11.8	%)		(7.3	%)		(20.8	%)		(9.2	%)		(8.7	%)		(5.8	%)		(12.3	%)

	First Nine Months Of Fiscal 2017																														First Half of Fiscal 2022
	Meeting Fees						Meeting			Incoming			EOP			Online Subscription Revenues						Online			Incoming			EOP			Digital Subscription Revenues ⁽²⁾						Digital			Incoming			EOP			Workshops + Digital Fees ⁽²⁾						Workshops + Digital			Incoming Workshops			EOP Workshops
				Constant			Paid			Meeting			Meeting						Constant			Paid			Online			Online						Constant			Paid			Digital			Digital						Constant			Paid			+ Digital			+ Digital
	GAAP			Currency			Weeks			Subscribers			Subscribers			GAAP			Currency			Weeks			Subscribers			Subscribers			GAAP			Currency			Weeks		⁽²⁾	Subscribers			Subscribers		⁽²⁾	GAAP			Currency			Weeks ⁽²⁾			Subscribers			Subscribers		⁽²⁾
										(in thousands)															(in thousands)															(in thousands)															(in thousands)
North America	$	376.1		$	375.9			39.7			743.9			924.9		$	213.0		$	212.8			51.3			975.3			1,275.3		$	239.8		$	240.1			61.5			2,186.9			2,174.6		$	103.4		$	103.5			15.0			548.0			630.5
CE																																102.3			112.9			27.8			998.5			1,009.8			16.0			17.7			2.7			95.7			109.1
UK		39.4			43.1			7.9			154.8			180.3			15.9			17.3			5.4			110.3			140.4			14.4			15.4			5.1			179.7			182.8			8.7			9.3			1.8			65.3			72.0
CE		70.2			70.6			8.6			171.7			206.2			75.0			75.2			21.1			393.0			550.5
Other ⁽¹⁾		19.3			18.3			2.0			31.6			35.6			8.9			8.6			1.7			40.6			42.3			9.3			9.9			2.1			76.0			72.8			3.5			3.7			0.5			18.5			15.9
Total	$	505.0		$	507.8			58.3			1,102.0			1,346.9		$	312.7		$	313.9			79.5			1,519.1			2,008.6		$	365.7		$	378.3			96.5			3,441.1			3,440.0		$	131.7		$	134.3			19.9			727.4			827.6

	% Change First Nine Months of Fiscal 2017 vs. First Nine Months of Fiscal 2016																														% Change First Half of Fiscal 2022 vs. First Half of Fiscal 2021
North America		12.5	%		12.5	%		13.5	%		15.3	%		14.1	%		16.0	%		15.9	%		21.4	%		10.0	%		23.1	%		(8.6	%)		(8.5	%)		(9.1	%)		(6.3	%)		(16.5	%)		(3.0	%)		(2.9	%)		8.3	%		12.3	%		13.8	%
CE																																(14.4	%)		(5.5	%)		(11.6	%)		(5.8	%)		(14.4	%)		(18.6	%)		(10.0	%)		(4.9	%)		(20.1	%)		15.7	%
UK		(8.4	%)		(0.0	%)		0.5	%		1.1	%		1.1	%		8.6	%		18.1	%		15.6	%		0.3	%		14.4	%		(25.7	%)		(20.7	%)		(25.3	%)		(23.5	%)		(29.9	%)		(10.8	%)		(4.4	%)		(12.4	%)		(26.2	%)		(5.9	%)
CE		1.1	%		1.7	%		1.6	%		(0.4	%)		4.9	%		31.1	%		31.5	%		27.8	%		9.7	%		32.7	%
Other ⁽¹⁾		9.1	%		3.7	%		7.8	%		16.2	%		7.9	%		9.5	%		5.7	%		1.5	%		9.3	%		1.8	%		(8.7	%)		(2.7	%)		(0.7	%)		2.8	%		(2.6	%)		(33.2	%)		(29.0	%)		(28.7	%)		(21.9	%)		(32.0	%)
Total		8.8	%		9.4	%		9.5	%		10.4	%		10.6	%		18.6	%		19.1	%		22.1	%		9.2	%		24.4	%		(11.1	%)		(8.1	%)		(10.7	%)		(7.1	%)		(16.5	%)		(6.8	%)		(4.9	%)		2.9	%		1.0	%		10.6	%

The ~~increase~~decrease in North America revenues infor the first ~~nine~~six months of fiscal 2017 versus the prior year period was primarily driven by the increase in Service Revenues. The increase in North America Total Paid Weeks was driven by both the higher number of Incoming Subscribers at the beginning of fiscal 2017 versus the beginning of fiscal 2016 and higher recruitments primarily in the Online business in the first nine months of fiscal 2017 versus the prior year period.

The increase in North America product sales and other in the first nine months of fiscal 2017 versus the prior year period was primarily driven by an increase in product sales, partially offset by a decline in licensing revenue.

~~The decline in UK revenues in the first nine months of fiscal 2017~~2022 versus the prior year period was driven by ~~the negative impact of foreign currency. Excluding the impact of foreign currency, UK revenues would have increased, driven by an increase~~a decrease in ~~Service~~Subscription Revenues onand, to a ~~constant currency basis. This increase~~lesser extent, a decrease in ~~Service~~product sales and other. The decrease in Subscription Revenues ~~was the result of recruitment strength in our Online business in~~for the first ~~nine~~six months of fiscal ~~2017~~2022 versus the prior year ~~period.~~period was driven primarily by a decrease in Digital Subscription Revenues. Digital Subscription Revenues were negatively impacted by both the recruitment decline during the first six months of fiscal 2022 as compared to the prior year period and the lower number of Incoming Digital Subscribers at the beginning of fiscal 2022 versus the beginning of fiscal 2021. This decline in recruitments was driven primarily by worsened consumer sentiment in the current environment and our PersonalPoints program not resonating with consumers to the extent anticipated. Additionally, the transition of our former Digital 360 members to our Workshops + Digital business negatively impacted Digital Subscription Revenues in the first six months of fiscal 2022. The decrease in North America Total Paid Weeks for the first six months of fiscal 2022 versus the prior year period was driven primarily by both lower recruitments for the first six months of fiscal 2022 versus the prior year period and the lower number of Total Incoming Subscribers at the beginning of fiscal 2022 versus the beginning of fiscal 2021.

The ~~increase~~decrease in UKNorth America product sales and other infor the first ~~nine~~six months of fiscal ~~2017~~2022 versus the prior year period was driven primarily by a decrease in e-commerce product sales.

The decrease in Continental Europe revenues for the first six months of fiscal 2022 versus the prior year period was driven by a decrease in ~~meeting~~Subscription Revenues and, ~~other products~~to a lesser extent, a decrease in product sales ~~almost entirely offset by the decline~~and other. The decrease in ~~licensing revenue.~~

~~The increase in Continental Europe revenues in~~Subscription Revenues for the first ~~nine~~six months of fiscal ~~2017~~2022 versus the prior year period was driven primarily ~~driven~~ by a decrease in Digital Subscription Revenues. Digital Subscription Revenues were negatively impacted by both the ~~increase in Service Revenues. This increase in Service Revenues in~~recruitment decline during the first ~~nine~~six months of fiscal ~~2017~~2022 as compared to the prior year period and the lower number of Incoming Digital Subscribers at the beginning of fiscal 2022 versus the beginning of fiscal 2021. This decline in recruitments was driven primarily by worsened consumer sentiment in the current environment and our PersonalPoints program not resonating with consumers to the extent anticipated. The decrease in Continental Europe Total Paid Weeks for the first six months of fiscal 2022 versus the prior year period was driven primarily ~~driven~~ by both lower recruitments for the ~~increase in Online Subscription Revenues. The increase in Continental Europe Total Paid Weeks was primarily driven by~~first six months of fiscal 2022 versus the ~~higher~~prior year period and the lower number of Total Incoming Subscribers at the beginning of fiscal ~~2017~~2022 versus the beginning of fiscal 2016, improved retention in the first nine months of fiscal 2017 versus the prior year period and recruitment strength in our Online business in the first nine months of fiscal 2017 versus the prior year period.2021.

The ~~increase in Continental Europe revenues was partially offset by the decline~~decrease in Continental Europe product sales and other infor the first ~~nine~~six months of fiscal ~~2017 versus the prior year period.~~

~~The increase in Other revenues in the first nine months of fiscal 2017~~2022 versus the prior year period was driven primarily by a decrease in e-commerce product sales.

The decrease in UK revenues for the first six months of fiscal 2022 versus the prior year period was driven by a decrease in Subscription Revenues and, to a lesser extent, a decrease in product sales and other. The decrease in Subscription Revenues for the ~~increase~~first six months of fiscal 2022 versus the prior year period was driven primarily by a decrease in ~~Service~~Digital Subscription Revenues. Digital Subscription Revenues were negatively impacted by both the lower number of Incoming Digital Subscribers at the beginning of fiscal 2022 versus the beginning of fiscal 2021and the recruitment decline during the first six months of fiscal 2022 as compared to the prior year period. This decline in recruitments was driven primarily by worsened consumer sentiment in the current environment and our PersonalPoints program not resonating with consumers to the extent anticipated. The ~~increase~~decrease in ~~Other~~UK Total Paid Weeks for the first six months of fiscal 2022 versus the prior year period was driven primarily ~~driven~~ by both the ~~higher~~lower number of Total Incoming Subscribers at the beginning of fiscal ~~2017~~2022 versus the beginning of fiscal ~~2016.~~2021 and lower recruitments for the first six months of fiscal 2022 versus the prior year period.

The ~~increase~~decrease in UK product sales and other for the first six months of fiscal 2022 versus the prior year period was driven primarily by a decrease in e-commerce product sales.

The decrease in Other revenues for the first six months of fiscal 2022 versus the prior year period was driven by a decrease in Subscription Revenues and, to a lesser extent, a decrease in product sales and ~~other~~other. The decrease in Subscription Revenues for the first ~~nine~~six months of fiscal ~~2017~~2022 versus the prior year period was driven primarily by a decrease in Workshops + Digital Fees. Workshops + Digital Fees were negatively impacted by both the recruitment decline during the first ~~nine~~six months of fiscal ~~2016~~2022 as compared to the prior year period and the lower number of Incoming Workshops + Digital Subscribers at the beginning of fiscal 2022 versus the beginning of fiscal 2021. This decline in recruitments was driven primarily ~~driven~~ by ~~an increase~~worsened consumer sentiment in ~~in-meeting~~the current environment and our PersonalPoints program not resonating with consumers to the extent anticipated.

The decrease in Other product sales and ~~commissions from our franchisees partially offset~~other for the first six months of fiscal 2022 versus the prior year period was driven primarily by a ~~decline~~decrease in ~~licensing revenue.~~product sales and franchise commissions.

Cash flows provided by operating activities have historically supplied, and are expected to continue to supply, us with our primary source of liquidity. We use these cash flows, supplemented with long-term debt and short-term borrowings, to fund our operations and global strategic initiatives, pay down debt and ~~opportunistically~~ engage in selective acquisitions. We currently believe that cash generated by operations, ~~during fiscal 2017,~~ our cash on hand of ~~$178.2~~approximately $148.6 million at ~~September 30, 2017~~July 2, 2022, our $173.9 million of availability under our Revolving Credit Facility (as defined below) at July 2, 2022 and our continued cost focus will provide us with sufficient liquidity to meet our obligations for the ~~next twelve months.~~short- and long-term.In addition, if necessary, we have the flexibility to delay investments or reduce marketing spend.

We continue to proactively manage our liquidity so we can maintain flexibility to fund investments in our business, honor our long-term debt obligations, and respond to evolving business and consumer conditions. To increase our flexibility and reduce our cash interest payments, we refinanced our then-existing credit facilities and then-existing senior notes in April 2021. See “—Long-Term Debt” for additional details on this refinancing. Additionally, we instituted a number of measures throughout our operations to mitigate expenses and reduce costs as well as ensure liquidity and the availability of our Revolving Credit Facility. The evolving nature, and uncertain economic impact, of the current demand environment may impact our liquidity going forward. To the extent that we do not successfully manage our costs, our liquidity and financial results, as well as our ability to access our Revolving Credit Facility, may be adversely affected.

As market conditions warrant, we may, from time to time, seek to purchase our outstanding debt securities or loans, including the Senior Secured Notes and borrowings under the Credit Facilities (each as defined below). Such transactions could be privately negotiated or open market transactions, pursuant to tender offers or otherwise. Subject to any applicable limitations contained in the agreements governing, or terms of, our indebtedness, any such purchases made by us may be funded by the use of cash on our balance sheet, the incurrence of new secured or unsecured debt, the issuance of our equity or the sale of assets. The amounts involved in any such purchase transactions, individually or in the aggregate, may be material. Any such purchases may equate to a substantial amount of a particular class or series of debt, which may reduce the trading liquidity of such class or series.

We generally operate with negative working capital that is driven in part by our commitment and subscription plans which are our primary payment method. These plans require members and subscribers to pay us for meetings and Online subscription products before we pay for our obligations in the normal course of business. These prepayments are recorded as a current liability on our balance sheet which has resulted in, and in certain circumstances has helped drive, negative working capital. This core characteristic of our business model is expected to continue. However, in a period in which revenue is increasing, we get higher working capital benefit from this deferred revenue.

The following table sets forth certain relevant measures of our balance sheet working capital deficit, excluding cash and cash equivalents and current portion of long-term debt at:

		September 30,			December 31,			Increase/			July 2,			January 1,			Increase/
		2017			2016			(Decrease)			2022			2022			(Decrease)
		(in millions)									(in millions)
Total current assets		$	280.5		$	235.2		$	45.3		$	265.5		$	271.2		$	(5.7	)
Total current liabilities			293.2			292.4			0.8			208.2			229.1			(20.9	)
Working capital deficit			(12.7	)		(57.2	)		(44.5	)
Working capital surplus												57.2			42.0			(15.2	)
Cash and cash equivalents			178.2			108.7			69.5			148.6			153.8			(5.2	)
Current portion of long-term debt			31.4			21.0			10.4			—			—			—
Working capital deficit, excluding cash and cash equivalents and current portion of long-term debt	Working capital deficit, excluding cash and cash equivalents and current portion of long-term debt	$	(159.5	)	$	(144.9	)	$	14.6		$	(91.4	)	$	(111.8	)	$	(20.4	)

The following table sets forth a summary of the primary factors contributing to ~~this $14.6~~the $20.4 million ~~increase~~decrease in our working capital ~~deficit:~~deficit, excluding cash and cash equivalents and current portion of long-term debt:

September 30,

December 31,

Increase/

Impact to

2017

2016

(Decrease)

Working Capital Deficit

(in millions)

Derivative payable

$
21.1

$
32.0

$
(10.8
)

$
(10.8
)
Operational liabilities and other, net of assets

$
60.4

$
66.8

$
(6.4
)

$
(6.4
)
Deferred revenue

$
82.7

$
62.9

$
19.8

$
19.8

Other current assets

$
23.2

$
30.9

$
(7.7
)

$
7.7

Accrued salaries and wages

$
51.9

$
49.6

$
2.2

$
2.2

Prepaid income taxes

$
33.4

$
35.5

$
(2.1
)

$
2.1

Working capital deficit change

$
14.6

									Impact to
	July 2,			January 1,		Increase/			Working
	2022			2022		(Decrease)			Capital Deficit
	(in millions)
Derivative (receivable) payable, net	$	(2.5	)	$	14.7	$	(17.2	)	$	(17.2	)
Operational liabilities and other, net of assets	$	44.5		$	54.7	$	(10.2	)	$	(10.2	)
Portion of operating lease liabilities due within one year	$	18.4		$	20.3	$	(1.9	)	$	(1.9	)
Income taxes payable	$	0.9		$	1.7	$	(0.8	)	$	(0.8	)
Accrued interest	$	5.3		$	5.1	$	0.2		$	0.2
Deferred revenue	$	47.6		$	45.9	$	1.8		$	1.8
Prepaid income taxes	$	22.8		$	30.5	$	(7.7	)	$	7.7
Working capital deficit change, excluding cash and cash equivalents and current portion of long-term debt									$	(20.4	)

The change in derivative (receivable) payable, net was due to a change in fair value driven by the change in interest rates. The decrease in operational liabilities and other, net of assets, which includes accrued salaries and wages, was driven primarily by a decrease in accrued liabilities and an increase in receivables, partially offset by an increase in account payable, all due to seasonality and timing. The decrease in prepaid income taxes was primarily ~~driven by~~due to the timing of ~~payments and seasonality. The increase in deferred revenue was driven by improved business performance.~~tax payments.

The following table sets forth a summary of ~~the Company’s~~our cash flows for the ~~nine~~six months ended:

							July 2,			July 3,
	September 30, 2017			October 1, 2016			2022			2021
	(in millions)						(in millions)
Net cash provided by operating activities	$	184.8		$	93.9		$	26.4		$	38.3
Net cash used for investing activities	$	(31.1	)	$	(29.5	)	$	(23.5	)	$	(30.8	)
Net cash used for financing activities	$	(88.4	)	$	(207.1	)	$	(2.0	)	$	(46.1	)

Cash flows provided by operating activities of ~~$184.8~~$26.4 million for the first ~~nine~~six months of fiscal ~~2017~~2022 reflected ~~an increase~~a decrease of ~~$90.9~~$11.8 million from ~~$93.9~~$38.3 million of cash flows ~~used for~~provided by operating activities infor the first ~~nine~~six months of fiscal ~~2016.~~2021. The ~~increase~~decrease in cash provided by operating activities was primarily the result of ~~$46.1 million of higher net income as well as the $43.3 million of benefit from the year-over-year change~~a decrease in ~~working capital~~ non-cash add-back adjustments, partially offset by a decrease in cash used for operating assets and liabilities in the first ~~nine~~six months of fiscal ~~2017~~2022 as compared to the prior year period.

Cash flows provided by operating activities of ~~$93.9~~$38.3 million for the first ~~nine~~six months of fiscal ~~2016~~2021 reflected ~~an increase~~a decrease of ~~$41.0~~$9.3 million from ~~$52.9~~$47.5 million of cash flows provided by operating activities infor the first ~~nine~~six months of fiscal ~~2015.~~2020. The ~~increase~~decrease in cash provided by operating activities was primarily the result of ~~$30.1 million of benefit from year-over-year~~a change in ~~working capital~~net (loss) income attributable to the Company of $17.3 million in the first ~~nine~~six months of fiscal ~~2016~~2021 as compared to the prior year period.

Net cash used for investing activities totaled ~~$31.1~~$23.5 million infor the first ~~nine~~six monthsof fiscal ~~2017,~~2022, a decrease of ~~$1.6~~$7.4 million as compared to the first ~~nine~~six monthsof fiscal ~~2016, which included~~2021. This decrease was primarily attributable to a decrease in cash paid for acquisitions in the ~~acquisition~~ first six monthsof ~~its franchisee for certain territories in South Florida for $2.9 million.~~fiscal 2022 as compared to the prior year period.

Net cash used for investing activities totaled ~~$29.5~~$30.8 million infor the first ~~nine~~six months of fiscal ~~2016, an increase~~2021, a decrease of ~~$3.3~~$8.4 million as compared to the first ~~nine~~six months of fiscal ~~2015. Our technology and operating infrastructure required less investment~~2020. This decrease was primarily attributable to lower capital expenditures, partially offset by an increase in cash paid for acquisitions, in the first ~~nine~~six months of fiscal ~~2016~~2021 as compared to the ~~first nine months of fiscal 2015.~~prior year period.

Net cash used for financing activities totaled ~~$88.4~~$2.0 million infor the first ~~nine~~six monthsof fiscal ~~2017,~~2022, a decrease of $44.2 million as compared to the first six monthsof fiscal 2021. This decrease was primarily ~~due~~attributable to ~~$73.0~~the aggregate of $37.3 million ~~used for the~~of prepayment penalties, financing costs and debt ~~prepayment and other scheduled debt repayments of $15.4 million~~discount in connection with the ~~Tranche B-2 Term Facility~~ April 2021 debt refinancing in the first ~~nine~~six months of fiscal ~~2017.~~2021.See “—Long-Term Debt” for additional details on debt.

Net cash used for financing activities totaled ~~$207.1~~$46.1 million infor the first ~~nine~~six months of fiscal ~~2016,~~2021 primarily due to ~~a $144.3~~the April 13, 2021 payment in full of approximately $1.2 billion of borrowings under our then-existing credit facilities and redemption of all of the $300.0 million aggregate principal amount of our then-existing senior notes, as well as the payment in aggregate of $37.3 million of prepayment penalties, financing costs and debt ~~repayment~~discount in connection with the ~~Tranche B-1 Term Facility and other~~April 2021 debt refinancing. In addition, there was $19.3 million used for scheduled debt repayments under our then-existing term loan facility in the first quarter of ~~$15.8~~fiscal 2021. These payments were partially offset by the proceeds received of $1,000.0 million in an aggregate principal amount of borrowings under our Term Loan Facility (as defined below) and proceeds received from the issuance of $500.0 million in aggregate principal amount of our Senior Secured Notes (as defined below) in connection with ~~the Tranche B-2 Term Facility, as well as the repayment of $48.0 million outstanding under the Revolving Facility, offset by a tax benefit~~our April 2021 debt refinancing. See “—Long-Term Debt” for ~~restricted stock units vested and stock options exercised of $1.0 million in the first nine months of fiscal 2016.~~additional details on debt.

We currently plan to meet our long-term debt obligations by using cash flows provided by operating activities and opportunistically using other means to repay or refinance our obligations as we determine appropriate.

The following schedule sets forth our long-term debt obligations at ~~September 30, 2017:~~July 2, 2022:

On April 13, 2021, we (1) repaid in full approximately $1.2 billion in aggregate principal amount of senior secured tranche B term loans due in 2024 under our then-existing credit facilities ~~at the end~~and (2) redeemed all of the ~~first~~$300.0 million in aggregate principal amount of our then-outstanding 8.625% Senior Notes due in 2025, or the Discharged Senior Notes. On April 13, 2021, our then-existing credit facilities included a senior secured revolving credit facility (which included borrowing capacity available for letters of credit) due in 2022 with $175.0 million in an aggregate principal amount of commitments. There were no outstanding borrowings under such revolving credit facility on that date. We funded such repayment of loans and redemption of notes with cash on hand as well as with proceeds received from approximately $1,000.0 million in an aggregate principal amount of borrowings under our new credit facilities (as amended from time to time, referred to herein as the Credit Facilities) and proceeds received from the issuance of $500.0 million in aggregate principal amount of 4.500% Senior Secured Notes due 2029, or the Senior Secured Notes, each as described below. These transactions are collectively referred to herein as the April 2021 debt refinancing. During the second quarter of fiscal ~~2013 consisted~~2021, we incurred fees of $37.9 million (which included $12.9 million of a prepayment penalty on the ~~following term loan facilities~~Discharged Senior Notes and ~~revolving~~ $5.0 million of a debt discount on our Term Loan Facility (as defined below)) in connection with our April 2021 debt refinancing. In addition, we recorded a loss on early extinguishment of debt of $29.2 million in connection thereto. This early extinguishment of debt charge was comprised of $12.9 million of a prepayment penalty on the Discharged Senior Notes, $9.0 million of financing fees paid in connection with our April 2021 debt refinancing and the write-off of $7.2 million of pre-existing deferred financing fees and debt discount.

The Credit Facilities were issued under a credit facilities: a tranche B loan, or Term B Loan, a tranche C loan, or Term C Loan, a tranche D loan, or Term D Loan, a tranche E loan, or Term E Loan, a tranche F loan, or Term F Loan, revolving credit facility A-1, or Revolver A-1, and revolving credit facility A-2, or Revolver A-2.

Onagreement, dated April ~~2, 2013, we refinanced our credit facilities pursuant to a new Credit Agreement,~~13, 2021 or, as amended ~~supplemented or otherwise modified,~~from time to time, the Credit Agreement, among the Company, as borrower, the lenders party thereto, ~~JPMorgan Chase~~and Bank of America, N.A., or Bank of America, as administrative agent and an issuing ~~bank, The Bank of Nova Scotia, as revolving agent, swingline lender and an issuing bank, and the other parties thereto.~~bank. The Credit ~~Agreement provides for (a) a revolving credit facility (including swing line loans and letters~~Facilities consist of ~~credit)~~(1) $1,000.0 million in ~~an initial~~ aggregate principal amount of ~~$250.0 million that will mature on April 2, 2018,~~senior secured tranche B term loans due in 2028, or the ~~Revolving~~Term Loan Facility, ~~(b) an initial term B-1 loan credit facility~~and (2) $175.0 million in an aggregate principal amount of ~~$300.0~~commitments under a senior secured revolving credit facility (which includes borrowing capacity available for letters of credit) due in 2026, or the Revolving Credit Facility.

In December 2021, we made voluntary prepayments at par in an aggregate amount of $52.5 million ~~that matured on April~~in respect of our outstanding term loans under the Term Loan Facility. As a result of these prepayments, we wrote off a debt discount and deferred financing fees of $1.2 million in the aggregate in the fourth quarter of fiscal 2021.

As of July 2, ~~2016, or Tranche B-1 Term Facility, and (c) an initial term B-2 loan credit facility~~2022, we had $945.0 million in an aggregate principal amount of $2,100.0 million that will mature on April 2, 2020, or Tranche B-2 Term Facility. We refer herein to the Tranche B-1 Term Facility together with the Tranche B-2 Term Facility as the Term Facilities, and the Term Facilities and Revolving Facility collectively as the WWI Credit Facility. In connection with this refinancing, we used the proceeds from borrowings under the Term Facilities to pay off a total of $2,399.9 million of outstanding loans consisting of $128.8 million of Term B Loans, $110.6 million of Term C Loans, $117.6 million of Term D Loans, $1,125.0 million of Term E Loans, $817.9 million of Term F Loans, $21.2 million of loans under the Revolver A-1 and $78.8 million of loans under the Revolver A-2. Following the refinancing of a total of $2,399.9 million of loans, at April 2, 2013, we had $2,400.0 million debt outstanding under ~~the Term~~our Credit Facilities, ~~and $248.8~~with $173.9 million of availability under the Revolving Facility. We incurred fees of $44.8 million during the second quarter of fiscal 2013 in connection with this refinancing. In the second quarter of fiscal 2013, we wrote-off fees associated with this refinancing which resulted in our recording a charge of $21.7 million in early extinguishment of debt.

On September 26, 2014, we entered into an agreement with certain lenders amending the Credit Agreement that, among other things, eliminated the Financial Covenant (as defined in the Credit Agreement) with respect to the Revolving Facility. In connection with this amendment, we wrote-off deferred financing fees of approximately $1.6 million in the third quarter of fiscal 2014. Concurrently with and ~~in order to effect this amendment, we reduced the amount of the Revolving Facility from $250.0 million to $50.0 million.~~

Under the terms of the Credit Agreement, depending on our Consolidated Leverage Ratio (as defined in the Credit Agreement), on an annual basis on or about the time we are required to deliver our financial statements for any fiscal year, we are obligated to offer to prepay a portion of the outstanding principal amount of the Term Facilities in an aggregate amount determined by a percentage of our annual excess cash flow (as defined in the Credit Agreement) (said payment referred to as a Cash Flow Sweep). On March 13, 2015, we commenced an offer to prepay at a discount to par up to $75.0 million in aggregate principal amount of term loans outstanding under the Tranche B-1 Term Facility. On March 20, 2015, we accepted offers with a discount equal to or greater than 9.00% in respect of such term loans. On March 25, 2015, we paid an aggregate amount of cash proceeds totaling $57.4 million plus an amount sufficient to pay accrued and unpaid interest on the amount prepaid to prepay $63.1 million in aggregate principal amount of such term loans under the Tranche B-1 Term Facility. This expenditure reduced, on a dollar for dollar basis, our $59.7 million obligation to make a mandatory excess cash flow prepayment offer to the term loan lenders under the terms of the Credit Agreement. In addition, we made a voluntary prepayment at par on March 25, 2015 of $2.5 million in respect of such term loans under the Tranche B-1 Term Facility to reduce the remaining excess cash flow prepayment obligation for fiscal 2014. As a result of this prepayment, we wrote-off fees of $0.3 million, incurred fees of $0.6 million and recorded a gain on early extinguishment of debt of $4.7 million, inclusive of these fees, in the first quarter of fiscal 2015.

On June 17, 2015, we commenced another offer to prepay at a discount to par up to $229.0 million in aggregate principal amount of term loans outstanding under the Tranche B-1 Term Facility. On June 22, 2015, we accepted offers with a discount equal to or greater than 9.00% in respect of such term loans. On June 26, 2015, we paid an aggregate amount of cash proceeds totaling $77.2 million plus an amount sufficient to pay accrued and unpaid interest on the amount prepaid to prepay $84.9 million in aggregate principal amount of such term loans under the Tranche B-1 Term Facility. As a result of this prepayment, we wrote-off fees of $0.3 million, incurred fees of $0.6 million and recorded a gain on early extinguishment of debt of $6.7 million, inclusive of these fees, in the second quarter of fiscal 2015.

On July 14, 2015, we drew down the $48.0 million available on our Revolving Facility in order to enhance our cash position and to provide additional financial flexibility. As of January 2, 2016, the revolver borrowing was classified as a short-term liability in consideration of the fact that the terms of the Revolving Facility require an assessment as to whether there have been any material adverse changes with respect to the Company in connection with our monthly interest elections. Although the revolver borrowing had classified as a short-term liability as of January 2, 2016, absent any change in fact and circumstance, we had, and continue to have, the ability to extend and not repay the Revolving Facility until its due date of April 2, 2018.

On April 1, 2016, we paid in full, with cash on hand, a principal amount of term loans equal to $144.3 million, which constituted the entire remaining principal amount of term loans outstanding under the Tranche B-1 Term Facility due April 2, 2016.

On July 29, 2016, we paid down, with cash on hand, a principal amount of $25.0 million of the $48.0 million outstanding under the Revolving Facility. On September 16, 2016, we paid down, with cash on hand, the remaining outstanding principal amount of $23.0 million on the Revolving Facility.

~~On May 18, 2017, we commenced another offer to prepay at a discount to par up to $75.0 million in aggregate principal amount of term loans outstanding under the Tranche B-2 Term Facility.~~ ~~On May 24, 2017, we accepted offers with a discount equal to or greater than 3.28% in respect of such term loans. On May 25, 2017,~~ ~~we paid an aggregate amount of cash proceeds totaling~~ $73.0 million plus an amount sufficient to pay accrued and unpaid interest on the amount prepaid to prepay $75.5 million in aggregate principal amount of such term loans under the Tranche B-2 Term Facility. As a result of this prepayment, we wrote-off fees of $0.6 million, incurred fees of $0.3 million and recorded a gain on early extinguishment of debt of $1.6 million, inclusive of these fees, in the second quarter of fiscal 2017.

At September 30, 2017, under the WWI Credit Facility, we had $1,930.4 million outstanding consisting entirely of a term loan under the Tranche B-2 Term Facility. At September 30, 2017, the Revolving Facility had $0 outstanding, $2.2$1.1 million in issued but undrawn letters of credit outstanding ~~thereunder and $47.8 million in available unused commitments thereunder. The proceeds from~~under the Revolving Credit Facility. There were no outstanding borrowings under the Revolving Credit Facility ~~(including swing line~~as of July 2, 2022.

All obligations under the Credit Agreement are guaranteed by, subject to certain exceptions, each of our current and future wholly-owned material domestic restricted subsidiaries. All obligations under the Credit Agreement, and the guarantees of those obligations, are secured by substantially all of the assets of the Company and each guarantor, subject to customary exceptions, including:

The Credit Facilities require the Company to prepay outstanding term loans, subject to certain exceptions, with:

The foregoing mandatory prepayments will be used to reduce the installments of principal on the Term Loan Facility. We may voluntarily repay outstanding loans under the Credit Facilities at any time without penalty, except for customary “breakage” costs with respect to LIBOR loans under the Credit Facilities.

Borrowings under the Term Loan Facility bear interest at a rate per annum equal to, at our option, either (1) an applicable margin plus a base rate determined by reference to the highest of (a) 0.50% per annum plus the Federal Funds Effective Rate as determined by the Federal Reserve Bank of New York, (b) the prime rate of Bank of America and (c) the LIBOR rate determined by reference to the cost of funds for U.S. dollar deposits for an interest period of one month adjusted for certain additional costs, plus 1.00%; provided that such rate is not lower than a floor of 1.50% or (2) an applicable margin plus a LIBOR rate determined by reference to the cost of funds for U.S. dollar deposits for the interest period relevant to such borrowing adjusted for certain additional costs, provided that LIBOR is not lower than a floor of 0.50%. Borrowings under the Revolving Credit Facility bear interest at a rate per annum equal to an applicable margin based upon a leverage-based pricing grid, plus, at our option, either (1) a base rate determined by reference to the highest of (a) 0.50% per annum plus the Federal Funds Effective Rate as determined by the Federal Reserve Bank of New York, (b) the prime rate of Bank of America and (c) the LIBOR rate determined by reference to the cost of funds for U.S. dollar deposits for an interest period of one month adjusted for certain additional costs, plus 1.00%; provided that such rate is not lower than a floor of 1.00% or (2) a LIBOR rate determined by reference to the cost of funds for U.S. dollar deposits for the interest period relevant to such borrowing adjusted for certain additional costs, provided such rate is not lower than a floor of zero. As of July 2, 2022, the applicable margins for the LIBOR rate borrowings under the Term Loan Facility and the Revolving Credit Facility were 3.50% and 2.75%, respectively. In the event that LIBOR is phased out as is currently expected, the Credit Agreement provides that we and the administrative agent may amend the Credit Agreement to replace the LIBOR definition therein with a successor rate subject to notifying the lending syndicate of such change and not receiving within five business days of such notification objections to such replacement rate from lenders holding at least a majority of the aggregate principal amount of loans and commitments then outstanding under the Credit Agreement; provided that such lending syndicate may not object to a SOFR-based successor rate contained in any such amendment. If we fail to do so, our borrowings will be based off of the alternative base rate plus a margin.

On a quarterly basis, we pay a commitment fee to the lenders under the Revolving Credit Facility in respect of unutilized commitments thereunder, which commitment fee fluctuates depending upon our Consolidated First Lien Leverage Ratio (as defined in the Credit Agreement).

The Credit Agreement contains other customary terms, including (1) representations, warranties and affirmative covenants, (2) negative covenants, including limitations on indebtedness, liens, mergers, acquisitions, asset sales, investments, distributions, prepayments of subordinated debt, amendments of material agreements governing subordinated indebtedness, changes to lines of business and transactions with affiliates, in each case subject to baskets, thresholds and other exceptions, and (3) customary events of default.

The availability of certain baskets and the ability to enter into certain transactions are also subject to compliance with certain financial ratios. In addition, if the aggregate principal amount of extensions of credit outstanding under the Revolving Credit Facility as of any fiscal quarter end exceeds 35% of the amount of the aggregate commitments under the Revolving Credit Facility in effect on such date, we must be in compliance with a Consolidated First Lien Leverage Ratio of 5.75:1.00 for the period ending after the first fiscal quarter of 2022 through and including with the first fiscal quarter of 2023, with a step down to 5.50:1.00 for the period ending after the first fiscal quarter of 2023 through and including with the first fiscal quarter of 2024, with an additional step down to 5.25:1.00 for the period ending after the first fiscal quarter of 2024 through and including with the first fiscal quarter of 2025 and again to 5.00:1.00, for the period following the first fiscal quarter of 2025. As of July 2, 2022, our actual Consolidated First Lien Leverage Ratio was 4.60:1.00 and there were no borrowings under our Revolving Credit Facility and total letters of ~~credit)~~credit issued were $1.1 million. We may not be able to satisfy the Consolidated First Lien Leverage Ratio in the future, and as a result, it may effectively limit the amount of funds we are ~~available~~able to borrow under the Revolving Credit Facility.

The Senior Secured Notes were issued pursuant to an Indenture, dated as of April 13, 2021, or, as amended, supplemented or modified from time to time, the Indenture, among the Company, the guarantors named therein and The Bank of New York Mellon, as trustee and notes collateral agent. The Indenture contains customary terms, events of default and covenants for an issuer of non-investment grade debt securities. These covenants include limitations on indebtedness, liens, mergers, acquisitions, asset sales, investments, distributions, prepayments of subordinated debt and transactions with affiliates, in each case subject to baskets, thresholds and other exceptions.

The Senior Secured Notes accrue interest at a rate per annum equal to 4.500% and will mature on April 15, 2029. Interest on the Senior Secured Notes is payable semi-annually on April 15 and October 15 of each year, beginning on October 15, 2021. On or after April 15, 2024, we may on any one or more occasions redeem some or all of the Senior Secured Notes at a purchase price equal to 102.250% of the principal amount of the Senior Secured Notes, plus accrued and unpaid interest, if any, to, but not including, the redemption date, such optional redemption price decreasing to 101.125% on or after April 15, 2025 and to 100.000% on or after April 15, 2026. Prior to April 15, 2024, we may on any one or more occasions redeem up to 40% of the aggregate principal amount of the Senior Secured Notes with an amount not to exceed the net proceeds of certain equity offerings at 104.500% of the aggregate principal amount thereof, plus accrued and unpaid interest, if any, to, but not including, the redemption date. Prior to April 15, 2024, we may redeem some or all of the Senior Secured Notes at a make-whole price plus accrued and unpaid interest, if any, to, but not including, the redemption date. In addition, during any twelve-month period ending prior to April 15, 2024, we may redeem up to 10% of the aggregate principal amount of the Senior Secured Notes at a purchase price equal to 103.000% of the principal amount of the Senior Secured Notes to be ~~used~~redeemed, plus accrued and unpaid interest, if any, to, but excluding, the redemption date. If a change of control occurs, we must offer to purchase for ~~working capital~~cash the Senior Secured Notes at a purchase price equal to 101% of the principal amount of the Senior Secured Notes, plus accrued and ~~general corporate purposes.~~ unpaid interest, if any, to, but not including, the purchase date. Following the sale of certain assets and subject to certain conditions, we must offer to purchase for cash the Senior Secured Notes at a purchase price equal to 100% of the principal amount of the Senior Secured Notes, plus accrued and unpaid interest, if any, to, but not including, the purchase date.

The Senior Secured Notes are guaranteed on a senior secured basis by our subsidiaries that guarantee the Credit Facilities. The Senior Secured Notes and the note guarantees are secured by a first-priority lien on all the collateral that secures the Credit Facilities, subject to a shared lien of equal priority with the Company’s and each guarantor’s obligations under the Credit Facilities and subject to certain thresholds, exceptions and permitted liens.

At ~~September 30, 2017~~July 2, 2022, we had $1,445.0 million outstanding under the Credit Facilities and ~~December 31, 2016,~~the Senior Secured Notes, consisting of borrowings under the Term Loan Facility of $945.0 million, $0.0 drawn down on the Revolving Credit Facility and $500.0 million in aggregate principal amount of Senior Secured Notes issued and outstanding.

At July 2, 2022 and January 1, 2022, our debt consisted ~~entirely~~ of both fixed and variable-rate instruments. ~~An interest~~Interest rate ~~swap was~~swaps were entered into to hedge a portion of the cash flow exposure associated with our variable-rate borrowings. Further information regarding our interest rate swaps can be found in Part I, Item 1 of this Quarterly Report on Form 10-Q under Note 11 “Derivative Instruments and Hedging” in the Notes to the Consolidated Financial Statements. The weighted average interest rate (which includes amortization of deferred financing ~~costs)~~costs and debt discount) on our outstanding debt, exclusive of the impact of the ~~swap,~~swaps then in effect, was approximately ~~4.68%~~4.63% and ~~4.41%~~5.11% per annum at ~~September 30, 2017~~July 2, 2022 and ~~December 31, 2016,~~January 1, 2022, respectively, based on interest rates on ~~the applicable~~these dates. The weighted average interest rate (which includes amortization of deferred financing ~~costs)~~costs and debt discount) on our outstanding debt, including the impact of the ~~swap,~~swaps then in effect, was approximately ~~5.19%~~5.12% and ~~5.32%~~5.62% per annum at ~~September 30, 2017~~July 2, 2022 and ~~December 31, 2016,~~January 1, 2022, respectively, based on interest rates on ~~the applicable~~these dates.

At September 30, 2017, in accordance with the terms of the Credit Agreement, it is probable that we will have a Cash Flow Sweep obligation of approximately $11.2 million to the term loan lenders in the second quarter of fiscal 2018.

Borrowings under the Credit Agreement bear interest at a rate equal to, at our option, LIBOR plus an applicable margin or a base rate plus an applicable margin. LIBOR under the Tranche B-2 Term Facility is subject to a minimum interest rate of 0.75% and the base rate under the Tranche B-2 Term Facility is subject to a minimum interest rate of 1.75%. Under the terms of the Credit Agreement, in the event we receive a corporate rating of BB- (or lower) from S&P and a corporate rating of Ba3 (or lower) from Moody’s, the applicable margin relating to the Term Facilities would increase by 25 basis points. On February 21, 2014, both S&P and Moody’s issued revised corporate ratings of the Company of B+ and B1, respectively. As a result, effective February 21, 2014, the applicable margin on borrowings under the Tranche B-1 Term Facility went from 2.75% to 3.00% and on borrowings under the Tranche B-2 Term Facility went from 3.00% to 3.25%. The applicable margin relating to the Revolving Facility will fluctuate depending upon our Consolidated Leverage Ratio. At April 1, 2016, the date of payment of the principal amount of loans outstanding under the Tranche B-1 Term Facility discussed above, borrowings under the Tranche B-1 Term Facility bore interest at LIBOR plus an applicable margin of 3.00%. At September 30, 2017, borrowings under the Tranche B-2 Term Facility bore interest at LIBOR plus an applicable margin of 3.25%. Based on our Consolidated Leverage Ratio as of September 30, 2017, had there been any borrowings under the Revolving Facility, it would have borne interest at LIBOR plus an applicable margin of 2.50%. On a quarterly basis, we will pay a commitment fee to the lenders under the Revolving Facility in respect of unutilized commitments thereunder, which commitment fee will fluctuate, but in no event exceed 0.50% per annum, depending upon our Consolidated Leverage Ratio. At our Consolidated Leverage Ratio of 5:49:1.00 as of September 30, 2017, the commitment fee was 0.50% per annum. We also will pay customary letter of credit fees and fronting fees under the Revolving Facility.

The Credit Agreement contains customary covenants including covenants that, in certain circumstances, restrict our ability to incur additional indebtedness, pay dividends on and redeem capital stock, make other payments, including investments, sell our assets and enter into consolidations, mergers and transfers of all or substantially all of our assets. The WWI Credit Facility does not require us to meet any financial maintenance covenants and is guaranteed by certain of our existing and future subsidiaries. Substantially all of our assets secure the WWI Credit Facility.

The following schedule sets forth our year-by-year debt obligations at ~~September 30, 2017:~~July 2, 2022:

Our accumulated other comprehensive loss includes changes in the fair value of derivative instruments and the effects of foreign currency translations. At ~~September 30, 2017~~July 2, 2022 and ~~October 1, 2016,~~July 3, 2021, the cumulative balance of changes in the fair value of derivative instruments, net of taxes, was a gain of $3.5 million and a loss of ~~$10.8 million and $29.3~~$15.9 million, respectively. At ~~September 30, 2017~~July 2, 2022 and ~~October 1, 2016,~~July 3, 2021, the cumulative balance of the effects of foreign currency translations, net of taxes, was a loss of ~~$4.0~~$14.1 million and ~~$8.3~~a loss of $2.9 million, respectively.

We do not currently pay a ~~cash dividend.~~dividend and we have no current plans to pay dividends in the foreseeable future. Any future determination to declare and pay dividends will be made at the sole discretion of our Board of Directors, after taking into account our financial condition and results of operations, capital requirements, contractual, legal, tax and regulatory restrictions, the provisions of Virginia law affecting the payment of distributions to shareholders and such other factors itour Board of Directors may deem relevant. ~~The WWI Credit Facility also contains restrictions on~~In addition, our ability to pay dividends onmay be limited by covenants in our ~~common stock.~~existing indebtedness, including the Credit Agreement governing the Credit Facilities and the Indenture governing the Senior Secured Notes, and may be limited by the agreements governing other indebtedness we or our subsidiaries incur in the future.

On October 9, 2003, our Board of Directors authorized, and we announced, a program to repurchase up to $250.0 million of our outstanding common stock. On each of June 13, 2005, May 25, 2006 and October 21, 2010, our Board of Directors authorized, and we announced, ~~adding~~the addition of $250.0 million to this program. The repurchase program allows for shares to be purchased from time to time in the open market or through privately negotiated transactions. No shares will be purchased from Artal Holdings Sp. z o.o., Succursale de Luxembourg and its parents and subsidiaries under this program. The repurchase program currently has no expiration date. During the ~~nine~~six months ended ~~September 30, 2017~~July 2, 2022 and ~~October 1, 2016,~~July 3, 2021, we repurchased no shares of our common stock ~~in the open market~~ under this program.

The WWI Credit Facility provides that we are permitted to pay dividends and extraordinary dividends, as well as repurchase shares of our common stock, so long as we are not in default under the Credit Agreement. However, payment of extraordinary dividends and stock repurchases shall not exceed $100.0 million in the aggregate in any fiscal year if our Consolidated Leverage Ratio is greater than 3.25:1. As of September 30, 2017, our Consolidated Leverage Ratio was greater than 3.25:1 and we expect that it will remain above 3.25:1 for the foreseeable future.

We define EBITDAS, a non-GAAP financial measure, as earnings before interest, taxes, depreciation, amortization and stock-based ~~compensation.~~ compensation and Adjusted EBITDAS, a non-GAAP financial measure, as earnings before interest, taxes, depreciation, amortization, stock-based compensation, franchise rights acquired and goodwill impairments, net restructuring charges and early extinguishment of debt.

The table below sets forth the ~~calculations~~reconciliations for EBITDAS and Adjusted EBITDAS, each a non-GAAP financial measure, to net (loss) income, the most comparable GAAP financial measure, for the three and ~~nine~~six months ended ~~September 30, 2017~~July 2, 2022 and ~~October 1, 2016,~~July 3, 2021, and EBITDAS and Adjusted EBITDAS to net income for the trailing twelve months ended ~~September 30, 2017:~~July 2, 2022:

	Three Months Ended						Six Months Ended
	July 2, 2022			July 3, 2021			July 2, 2022			July 3, 2021			Trailing Twelve Months
Net (loss) income	$	(4.6	)	$	8.9		$	(12.9	)	$	(9.4	)	$	63.4
Interest		19.3			20.3			37.9			49.4			76.4
Taxes		(2.9	)		1.0			(4.7	)		(6.9	)		12.0
Depreciation and amortization		10.6			11.4			21.4			23.3			43.5
Stock-based compensation		2.3			7.9			7.0			13.2			15.1
EBITDAS	$	24.7		$	49.4		$	48.8		$	69.7		$	210.4
Franchise rights acquired and goodwill impairments		26.4			—			26.4			—			26.4
2022 plan restructuring charges		19.1			—			19.1			—			19.1
2021 plan restructuring charges		(0.6	)		6.0			(0.3	)		11.6			9.7
2020 plan restructuring charges		—			(0.8	)		(0.1	)		(0.8	)		(0.9	)
Early extinguishment of debt		—			29.2			—			29.2			1.2
Adjusted EBITDAS ⁽¹⁾	$	69.6		$	83.7		$	93.9		$	109.6		$	266.0

Reducing leverage is a capital structure priority for the Company. As of July 2, 2022, our net debt/Adjusted EBITDAS ratio was 4.8x.

The table below sets forth the reconciliation for net debt, a non-GAAP financial measure, to total debt, the most comparable GAAP financial measure, for the six months ended:

Reducing leverage is a clear capital structure priority for the Company. As part of our commitment to deleveraging, we are targeting a year end 2018 net debt/EBITDAS ratio of less than 4.5x, based on improved operating performance and cash generation. As of September 30, 2017 our trailing twelve months EBITDAS was $328.3 million and our net debt/EBITDAS ratio was 5.3x.

~~The table below sets forth the calculation for net debt, a non-GAAP financial measure:~~

We present EBITDAS, Adjusted EBITDAS and net debt/Adjusted EBITDAS because we consider them to be useful supplemental measures of our performance. In addition, we believe EBITDAS, Adjusted EBITDAS and net debt/Adjusted EBITDAS are useful to investors, analysts and rating agencies in measuring the ability of a company to meet its debt service obligations. See ~~“Non-GAAP~~“—Non-GAAP Financial Measures” herein for an explanation of our use of these non-GAAP financial measures.

As part of our ongoing business, we do not participate in ~~transactions~~arrangements that generate relationships with unconsolidated entities or financial partnerships established for the purpose of facilitating off-balance sheet arrangements or other contractually narrow or limited purposes, such as entities often referred to as structured finance or special purpose entities.

Our business is seasonal due to the importance of the winter season to our overall member recruitment environment. ~~Our advertising schedule generally supports~~Historically, we experience our highest level of recruitment during the ~~three key recruitment-generating seasons~~first quarter of the ~~year: winter, spring and fall,~~year, which is supported with ~~winter having~~ the highest concentration of advertising spending. Therefore, our number of End of Period Subscribers in the first quarter of the year is typically higher than the number in other quarters of the year, historically reflecting a decline over the course of the year.

Corporate information and our press releases, Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K, and amendments thereto, are available free of charge on our corporate website at ~~www.weightwatchersinternational.com~~corporate.ww.com as soon as reasonably practicable after such material is electronically filed with or furnished to the Securities and Exchange Commission (i.e., generally the same day as the filing)., or the SEC. Moreover, we also make available at that site the Section 16 reports filed electronically by our officers, directors and 10 percent shareholders. ~~Usually these are publicly accessible no later than the business day following the filing.~~

We use our corporate website at ~~www.weightwatchersinternational.com~~,corporate.ww.com and certain social media channels such as our corporate Facebook page ~~(www.facebook.com/weightwatchers) and~~(www.facebook.com/WW), Instagram account (Instagram.com/~~weightwatchers)~~WW) and Twitter account (@ww_us) as channels of distribution of Company information. The information we post through these channels may be deemed material. Accordingly, investors should monitor these channels, in addition to following our press releases, ~~Securities and Exchange Commission~~SEC filings and public conference calls and webcasts. The contents of our website and social media channels shall not be deemed to be incorporated herein by reference.

As of ~~September 30, 2017,~~July 2, 2022, the market risk disclosures appearing in “Item 7A. Quantitative and Qualitative Disclosures about Market Risk” of our Annual Report on Form 10-K for fiscal ~~2016~~2021 have not materially changed from ~~December 31, 2016.~~January 1, 2022.

At the end of the ~~third~~second quarter of fiscal ~~2017,~~2022, borrowings under the ~~Tranche B-2 Term Facility~~Credit Facilities bore interest at LIBOR plus an applicable margin of ~~3.25%~~3.50%. For the ~~Tranche B-2~~ Term Loan Facility, the minimum interest rate for LIBOR applicable to such facility pursuant to the terms of the Credit Agreement iswas set at ~~0.75%~~0.50%, referred to herein as the ~~B-2~~ LIBOR Floor. In addition, ~~at the end~~as of ~~the third quarter of fiscal 2017,~~July 2, 2022, our interest rate ~~swap~~swaps in effect had aan aggregate notional amount of ~~$1.25 billion.~~$500.0 million. Accordingly, as of ~~the end of the third quarter of fiscal 2017,~~July 2, 2022, based on the amount of variable rate debt outstanding and the then-current LIBOR rate, after giving consideration to the impact of the interest rate ~~swap~~swaps and the ~~B-2~~ LIBOR Floor, a hypothetical 5090 basis point increase in interest rates would have increased annual interest expense by approximately ~~$3.4~~$4.0 million and a hypothetical 5090 basis point decrease in interest rates would have decreased annual interest expense by approximately $4.0 million. This increase isand decrease would have been driven primarily ~~driven~~ by the interest rate applicable to our ~~Tranche B-2~~ Term Loan Facility. This decrease is primarily driven by the lower debt balance resulting from our Tranche B-2 Term Facility prepayment of $73.0 million as well as the principal payments during the first and second quarters of fiscal 2017.

We maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed in our reports under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the ~~Securities and Exchange Commission’s~~SEC’s rules and forms, and that such information is accumulated and communicated to our management, including our principal executive officer and our principal financial officer, as appropriate, to allow timely decisions regarding required disclosures. Any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives. Our management, with the participation of our principal executive officer and our principal financial officer, has evaluated the effectiveness of the design and operation of our disclosure controls and procedures as of ~~September 30, 2017,~~July 2, 2022, the end of the ~~third~~second quarter of fiscal ~~2017.~~2022. Based upon that evaluation and subject to the foregoing, our principal executive officer and our principal financial officer concluded that, as of the end of the ~~third~~second quarter of fiscal ~~2017,~~2022, the design and operation of our disclosure controls and procedures were effective at the reasonable assurance level.

There was no change in our internal control over financial reporting that occurred during our most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

~~On January 7, 2016, an OnlinePlus~~ ~~member filed a putative class action complaint against the Company in the Supreme Court of New York, New York County, asserting class claims~~The information called for ~~breach of contract and violations~~by this item is incorporated herein by reference to Note 10 “Legal” of the ~~New York General Business Law. On February 5, 2016, the Company removed the case~~notes to the ~~United States District Court, Southern District of New York. On March 18, 2016, the plaintiff filed an amended complaint, alleging that, as a result of the temporary glitches~~unaudited consolidated financial statements contained in ~~the Company’s website and app in November and December 2015, the Company has: (1) breached its Subscription Agreement with its OnlinePlus~~ members; and (2) engaged in deceptive acts and practices in violation of Section 350 of the New York General Business Law. The plaintiff is seeking unspecified actual, punitive and statutory damages, as well as his attorneys’ fees and costs incurred in connection with this ~~action. The Company filed a motion to dismiss~~Quarterly Report on May 6, 2016. The plaintiff filed his opposition papers on June 9, 2016 and the Company filed its reply papers on June 23, 2016. The Court granted the Company’s motion to dismiss on November 14, 2016. On November 16, 2016, the plaintiff filed a timely notice of appeal of the Court’s decision to the Second Circuit Court of Appeals and on January 31, 2017, the plaintiff filed his brief in support of appeal. The Company filed its opposition brief on April 5, 2017, and the plaintiff filed his reply brief on April 25, 2017. On October 25, 2017, the Second Circuit conducted oral arguments on the plaintiff’s appeal. On November 2, 2017, the Second Circuit issued its decision denying the plaintiff’s appeal and affirming the lower court’s dismissal of the case. The plaintiff has until November 16, 2017 to file a petition for a rehearing with the Second Circuit, or until January 31, 2018 to file a petition for appeal with the United States Supreme Court.

Due to the nature of the Company’s activities, it is also, at times, subject to pending and threatened legal actions, including patent and other intellectual property actions, that arise out of the ordinary course of business. In the opinion of management, the disposition of any such matters is not expected, individually or in the aggregate, to have a material effect on the Company’s results of operations, financial condition or cash flows. However, the results of legal actions cannot be predicted with certainty. Therefore, it is possible that the Company’s results of operations, financial condition or cash flows could be materially adversely affected in any particular period by the unfavorable resolution of one or more legal actions.Form 10-Q.

There have been no material changes in the risk factors from those detailed in our Annual Report on Form 10-K for fiscal ~~2016 other than as set forth below.~~

~~We are undergoing a chief executive officer transition, which could cause disruption to our business.~~

~~In September 2016, James R. Chambers resigned as President and Chief Executive Officer and as a director of the Company. Thereafter, a search was commenced for Mr. Chambers’ successor.~~ ~~Effective July 5, 2017, Mindy Grossman was appointed President and Chief Executive Officer and as a director of the Company.~~2021.

~~Nothing~~On August 2, 2022, the Company entered into a continuity agreement with Michael Lysaght, the Company’s Chief Technology Officer, which entitles him to ~~report~~receive specified termination payments upon a change in control of the Company. The agreement has an initial term which expires on December 31, 2024 and continues to renew annually thereafter unless the Company provides 180-day advance written notice to Mr. Lysaght that the term of the agreement will not renew.However, upon the occurrence of a change in control of the Company, the term of the agreement may not terminate until the second anniversary of the date of the change in control. The severance benefits provided under ~~this item.~~the agreement to Mr. Lysaght in the event of certain qualifying terminations in connection with a change in control are as follows: (i) cash payment equal to two times the sum of his annual base salary on the date of the change in control (or, if higher, the annual base salary in effect immediately prior to when the notice of termination is given) and his target annual bonus under the Company’s bonus plan in respect of the fiscal year in which the termination occurs (or, if higher, the average annual bonus actually earned by him in respect of the three full fiscal years prior to the year in which the notice of termination is given); (ii) cash payment equal to the higher of (A) the pro rata portion of his target bonus in respect of the fiscal year in which the date of termination occurs and (B) if the Company is exceeding the performance targets established under its bonus plan for such fiscal year as of the date of termination, his actual annual bonus payable under such bonus plan based upon such achievement (such pro rata portion in either case calculated from January 1 of such year through the date of termination); and (iii) eighteen months of continued medical, dental, and vision insurance coverage (excluding accidental death and disability insurance) for him and his dependents. The foregoing description is qualified in its entirety by reference to Mr. Lysaght’s continuity agreement, the form of which is filed as Exhibit 10.27 to the Company’s Annual Report on Form 10-K for fiscal 2021 filed on March 1, 2022,and is incorporated by reference herein.

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, no par value	WW	The Nasdaq Stock Market LLC

Large accelerated filer	☐☒	Accelerated filer	☒☐

Non-accelerated filer	☐ ~~(Do not check if a smaller reporting company)~~	Smaller reporting company	☐

		Emerging growth company	☐

			Page No.

PART I—FINANCIAL INFORMATION

Item 1.	Financial Statements		2

	Unaudited Consolidated Balance Sheets at ~~September 30, 2017~~July 2, 2022 and ~~December 31, 2016~~January 1, 2022		2

	Unaudited Consolidated Statements of Net Income for the three and ~~nine~~six months ended ~~September 30, 2017~~July 2, 2022 and ~~October 1, 2016~~July 3, 2021		3

	Unaudited Consolidated Statements of Comprehensive Income for the three and ~~nine~~six months ended ~~September 30, 2017~~July 2, 2022 and ~~October 1, 2016~~July 3, 2021		4

	Unaudited Consolidated Statements of ~~Cash Flows~~Changes in Total Deficit for the ~~nine~~three and six months ended ~~September 30, 2017~~July 2, 2022 and ~~October 1, 2016~~July 3, 2021		5

	~~Notes to~~ Unaudited Consolidated ~~Financial~~ Statements of Cash Flows for the six months ended July 2, 2022 and July 3, 2021		6

	Notes to Unaudited Consolidated Financial Statements	7

Cautionary Notice Regarding Forward-Looking Statements			2126

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations		2228

Item 3.	Quantitative and Qualitative Disclosures About Market Risk		4158

Item 4.	Controls and Procedures		4258

PART II—OTHER INFORMATION

Item 1.	Legal Proceedings		4359

Item 1A.	Risk Factors		4359

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds		4359

Item 3.	Defaults Upon Senior Securities		4359

Item 4.	Mine Safety Disclosures		4359

Item 5.	Other Information		4359

Item 6.	Exhibits		4460

Signatures			45

				61

	Three Months Ended				Six Months Ended
	July 2,		July 3,		July 2,		July 3,
	2022		2021		2022		2021
Operating lease cost:
Fixed lease cost	$	7,791	$	9,782	$	15,903	$	20,826
Lease termination cost		2,220		3,208		2,100		6,360
Variable lease cost		6		5		13		9
Total operating lease cost	$	10,017	$	12,995	$	18,016	$	27,195
Finance lease cost:
Amortization of leased assets		26		37		61		80
Interest on lease liabilities		1		2		2		5
Total finance lease cost	$	27	$	39	$	63	$	85
Total lease cost	$	10,044	$	13,034	$	18,079	$	27,280

	July 2, 2022		January 1, 2022
Weighted Average Remaining Lease Term (years)
Operating leases		7.15		7.29
Finance leases		1.19		1.54

Weighted Average Discount Rate
Operating leases		7.10		7.15
Finance leases		3.34		5.31

	July 2, 2022		January 1, 2022
Assets:
Operating lease assets	$	83,777	$	89,902
Finance lease assets		102		127
Total leased assets	$	83,879	$	90,029

Liabilities:
Current
Operating	$	18,431	$	20,297
Finance		53		75
Noncurrent
Operating	$	73,210	$	78,157
Finance		15		29
Total lease liabilities	$	91,709	$	98,558

	Operating Leases		Finance Leases		Total
Remainder of fiscal 2022	$	11,847	$	32	$	11,879
Fiscal 2023		23,072		33		23,105
Fiscal 2024		16,988		4		16,992
Fiscal 2025		12,151		—		12,151
Fiscal 2026		9,571		—		9,571
Fiscal 2027		9,376		—		9,376
Thereafter		36,182		—		36,182
Total lease payments	$	119,187	$	69	$	119,256
Less imputed interest		27,546		1		27,547
Present value of lease liabilities	$	91,641	$	68	$	91,709

	Deferred		Deferred
	Revenue		Revenue-Long Term
Balance as of January 1, 2022	$	45,855	$	28
Net increase during the period		1,782		28
Balance as of July 2, 2022	$	47,637	$	56

Balance as of January 2, 2021	$	50,475	$	44
Net increase (decrease) during the period		960		(28	)
Balance as of July 3, 2021	$	51,435	$	16

Remainder of fiscal 2017	$	8,806
Fiscal 2018	$	23,263
Fiscal 2019	$	12,166
Fiscal 2020	$	3,926
Fiscal 2021 and thereafter	$	668

Remainder of fiscal 2022	$	15,746
Fiscal 2023	$	24,052
Fiscal 2024	$	13,611
Fiscal 2025	$	3,112
Fiscal 2026	$	794
Fiscal 2027	$	719
Thereafter	$	7,171

			Fair Value
	Balance Sheet Classification	Balance Sheet Location	July 2, 2022		January 1, 2022
Assets:
Interest rate swap - 2019 swap	Current asset	Prepaid expenses and other current assets	$	2,837	$	—
Interest rate swap - 2019 swap	Noncurrent asset	Other noncurrent assets		1,971		—
Total assets			$	4,808	$	—

Liabilities:
Interest rate swap - 2018 swap	Current liability	Derivative payable	$	307	$	—
Interest rate swaps - current swaps	Current liability	Derivative payable		—		14,670
Total liabilities			$	307	$	14,670

			Fair Value Measurements Using:
	Total Fair Value		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Interest rate swap liability at September 30, 2017	$	21,129	$	0	$	21,129	$	0
Interest rate swap liability at December 31, 2016	$	31,974	$	0	$	31,974	$	0

	Nine Months Ended September 30, 2017
	Loss on Qualifying Hedges			Loss on Foreign Currency Translation			Total
Beginning Balance at December 31, 2016	$	(16,002	)	$	(11,118	)	$	(27,120	)
Other comprehensive (loss) income before reclassifications, net of tax		(2,498	)		6,358			3,860
Amounts reclassified from accumulated other comprehensive loss, net of tax^(b)		7,672			787			8,459
Net current period other comprehensive income including noncontrolling interest		5,174			7,145			12,319
Less: net current period other comprehensive income attributable to the noncontrolling interest		0			(72	)		(72	)
Ending Balance at September 30, 2017	$	(10,828	)	$	(4,045	)	$	(14,873	)

	Six Months Ended July 2, 2022
	(Loss) Gain on Qualifying Hedges			Loss on Foreign Currency Translation			Total
Beginning balance at January 1, 2022	$	(10,843	)	$	(7,761	)	$	(18,604	)
Other comprehensive income (loss) before reclassifications, net of tax		11,162			(6,341	)		4,821
Amounts reclassified from accumulated other comprehensive loss, net of tax ⁽²⁾		3,181			—			3,181
Net current period other comprehensive income (loss)		14,343			(6,341	)		8,002
Ending balance at July 2, 2022	$	3,500		$	(14,102	)	$	(10,602	)

	Nine Months Ended October 1, 2016
	Loss on Qualifying Hedges			Loss on Foreign Currency Translation			Total
Beginning Balance at January 2, 2016	$	(23,135	)	$	(14,130	)	$	(37,265	)
Other comprehensive (loss) income before reclassifications, net of tax		(17,440	)		6,232			(11,208	)
Amounts reclassified from accumulated other comprehensive loss, net of tax^(b)		11,319			0			11,319
Net current period other comprehensive (loss) income including noncontrolling interest		(6,121	)		6,232			111
Less: net current period other comprehensive income attributable to the noncontrolling interest		0			(450	)		(450	)
Ending Balance at October 1, 2016	$	(29,256	)	$	(8,348	)	$	(37,604	)

	Fiscal Year Ended
	January 1, 2022
Lease termination and other related costs	$	12,688
Employee termination benefit costs		8,846
Total restructuring expenses	$	21,534

	Fiscal Year Ended
	January 2, 2021
Lease termination and other related costs	$	7,989
Employee termination benefit costs		25,103
Total restructuring expenses	$	33,092

	July 1,		July 2,
	2017		2016
Debt-Free Cumulative Annual Cash Flow Growth Rate	3.6% to 4.1%		3.1% to 4.9%
Discount Rate		8.9%		9.4%

	Fiscal 2022	Fiscal 2021
Debt-Free Cumulative Annual Cash Flow Growth Rate	1.2% to 20.6%	0.2% to 2.6%
Discount Rate	9.6%	8.5%

	Q2 2022
	Workshops + Digital Fees				Workshops + Digital		EOP Workshops
			Constant		Paid		+ Digital
	GAAP		Currency		Weeks		Subscribers
							(in thousands)
North America	$	3.7	$	3.7		0.7		113.0
CE		0.2		0.2		0.0		6.9
UK		0.2		0.3		0.1		7.3
Other		—		—		—		—
Total Attributable to Former Digital 360 Members	$	4.1	$	4.2		0.8		127.2

	Balance
Tranche B-2 Term Facility due April 2, 2020	$	1,930.4
Less: Current Portion		31.4
Unamortized Deferred Financing Costs		14.1
Total Long-Term Debt	$	1,884.8

	July 2, 2022
Term Loan Facility due April 13, 2028	$	945.0
Senior Secured Notes due April 15, 2029		500.0
Total		1,445.0
Less: Current portion		—
Unamortized deferred financing costs		11.6
Unamortized debt discount		13.2
Total long-term debt	$	1,420.2

	July 2, 2022
Total debt	$	1,445.0
Less: Unamortized deferred financing costs		11.6
Less: Unamortized debt discount		13.2
Less: Cash on hand		148.6
Net debt	$	1,271.6

Exhibit Number		Description

†*Exhibit 10.1		Separation Agreement and General Release, dated as of May 26, 2022, by and between WW International, Inc. and Nicholas Hotchkin.

*Exhibit 31.1		Rule 13a-14(a) Certification by ~~Mindy Grossman,~~Sima Sistani, Chief Executive Officer.

*Exhibit 31.2		Rule 13a-14(a) Certification by ~~Nicholas P. Hotchkin,~~Amy O’Keefe, Chief Financial Officer.

*Exhibit 32.1		Certification of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

*Exhibit 101

*EX-101.INS		Inline XBRL Instance Document – the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.

*EX-101.SCH		Inline XBRL Taxonomy Extension Schema Document

*EX-101.CAL		Inline XBRL Taxonomy Extension Calculation Linkbase Document

*EX-101.DEF		Inline XBRL Taxonomy Extension Definition Linkbase Document

*EX-101.LAB		Inline XBRL Taxonomy Extension Label Linkbase Document

*EX-101.PRE		Inline XBRL Taxonomy Extension Presentation Linkbase Document

*Exhibit 104		The cover page from WW International, Inc.’s Quarterly Report on Form 10-Q for the quarter ended July 2, 2022, formatted in Inline XBRL (included within the Exhibit 101 attachments).


	~~WEIGHT WATCHERS~~WW INTERNATIONAL, INC.

Date: ~~November 7, 2017~~August 4, 2022	By:	/s/ ~~Mindy Grossman~~Sima Sistani
		~~Mindy Grossman~~Sima Sistani
		~~President,~~ Chief Executive Officer and Director (Principal Executive Officer)


Date: ~~November 7, 2017~~August 4, 2022	By:	/s/ ~~Nicholas P. Hotchkin~~Amy O’Keefe
		~~Nicholas P. Hotchkin~~Amy O’Keefe
		Chief Financial Officer (Principal Financial ~~and Accounting~~ Officer)