(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 every Interactive Data File required to be submitted 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 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 ~~July 31, 2018~~April 26, 2019 was ~~66,623,118.~~66,998,390.

	June 30,			December 30,			March 30,			December 29,
	2018			2017			2019			2018
ASSETS
CURRENT ASSETS
Cash and cash equivalents	$	167,755		$	83,054		$	193,358		$	236,974
Receivables (net of allowances: June 30, 2018 - $2,021 and December 30, 2017 - $2,001)		27,401			23,913
Receivables (net of allowances: March 30, 2019 - $1,601 and December 29, 2018 - $1,743)								32,104			27,247
Inventories		18,649			31,728			31,859			25,851
Prepaid income taxes		49,193			43,488			39,572			33,997
Prepaid expenses and other current assets		28,457			26,805			30,543			42,355
TOTAL CURRENT ASSETS		291,455			208,988			327,436			366,424
Property and equipment, net		48,138			47,978			51,843			52,202
Operating lease assets								148,447			0
Franchise rights acquired		750,335			754,040			752,638			751,134
Goodwill		153,130			156,281			153,172			152,519
Other intangible assets, net		54,113			46,536			57,864			57,162
Deferred income taxes		15,239			12,447			17,468			16,230
Other noncurrent assets		24,142			19,730			17,316			18,870
TOTAL ASSETS	$	1,336,552		$	1,246,000		$	1,526,184		$	1,414,541
LIABILITIES AND TOTAL DEFICIT
CURRENT LIABILITIES
Portion of long-term debt due within one year	$	118,498		$	82,750		$	57,750		$	77,000
Portion of operating lease liabilities due within one year								36,125			0
Accounts payable		22,952			24,356			29,139			27,098
Salaries and wages payable		56,678			62,179			50,462			64,600
Accrued marketing and advertising		12,242			18,154			23,972			14,052
Accrued interest		25,249			10,834			35,912			28,651
Other accrued liabilities		60,125			58,251			46,599			48,218
Derivative payable		0			12,171			9,961			5,578
Income taxes payable								21,635			22,618
Deferred revenue		83,878			74,332			60,597			53,501
TOTAL CURRENT LIABILITIES		379,622			343,027			372,152			341,316
Long-term debt, net		1,644,471			1,740,612			1,651,952			1,669,708
Long-term operating lease liabilities								121,308			0
Deferred income taxes		204,304			143,591			189,226			190,258
Other		31,151			30,289			6,612			18,289
TOTAL LIABILITIES		2,259,548			2,257,519			2,341,250			2,219,571

Redeemable noncontrolling interest		4,004			4,467			3,868			3,913
TOTAL DEFICIT
Common stock, $0 par value; 1,000,000 shares authorized; 120,353 shares issued at June 30, 2018 and 118,947 shares issued at December 30, 2017		0			0
Treasury stock, at cost, 53,765 shares at June 30, 2018 and 54,258 shares at December 30, 2017		(3,189,796	)		(3,208,836	)
Common stock, $0 par value; 1,000,000 shares authorized; 120,352 shares issued at March 30, 2019 and December 29, 2018								0			0
Treasury stock, at cost, 53,375 shares at March 30, 2019 and 53,396 shares at December 29, 2018								(3,174,871	)		(3,175,624	)
Retained earnings		2,271,593			2,203,317			2,375,903			2,382,438
Accumulated other comprehensive loss		(8,797	)		(10,467	)		(19,966	)		(15,757	)
TOTAL DEFICIT		(927,000	)		(1,015,986	)		(818,934	)		(808,943	)
TOTAL LIABILITIES AND TOTAL DEFICIT	$	1,336,552		$	1,246,000		$	1,526,184		$	1,414,541

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

	Three Months Ended					Six Months Ended					Three Months Ended
	June 30,		July 1,			June 30,		July 1,			March 30,			March 31,
	2018		2017			2018		2017			2019			2018
Service revenues, net	$	343,730	$	283,001		$	672,399	$	544,477		$	306,726		$	328,669
Product sales and other, net		66,017		58,672			145,571		126,259			56,438			79,554
Revenues, net		409,747		341,673			817,970		670,736			363,164			408,223
Cost of services		128,159		120,325			267,939		245,210			128,957			139,778
Cost of product sales and other		36,794		32,335			84,236		72,416			33,259			47,442
Cost of revenues		164,953		152,660			352,175		317,626			162,216			187,220
Gross profit		244,794		189,013			465,795		353,110			200,948			221,003
Marketing expenses		55,421		41,968			154,340		128,397			114,249			98,919
Selling, general and administrative expenses		61,665		50,839			121,676		98,273			64,802			60,011
Operating income		127,708		96,206			189,779		126,440			21,897			62,073
Interest expense		35,866		27,092			71,732		55,234			35,195			35,866
Other expense (income), net		1,333		(488	)		1,097		154			303			(235	)
Gain on early extinguishment of debt		0		(1,554	)		0		(1,554	)
Income before income taxes		90,509		71,156			116,950		72,606
Provision for income taxes		19,825		25,992			7,208		16,864
Net income		70,684		45,164			109,742		55,742
(Loss) income before income taxes												(13,601	)		26,442
Benefit from income taxes												(2,875	)		(12,617	)
Net (loss) income												(10,726	)		39,059
Net loss attributable to the noncontrolling interest		36		9			90		83			39			53
Net income attributable to Weight Watchers International, Inc.	$	70,720	$	45,173		$	109,832	$	55,825
Earnings Per Share attributable to Weight Watchers International, Inc.
Net (loss) income attributable to Weight Watchers International, Inc.											$	(10,687	)	$	39,112
(Loss) Earnings Per Share attributable to Weight Watchers International, Inc.
Basic	$	1.07	$	0.70		$	1.67	$	0.87		$	(0.16	)	$	0.60
Diluted	$	1.01	$	0.67		$	1.57	$	0.83		$	(0.16	)	$	0.56
Weighted average common shares outstanding
Basic		66,400		64,269			65,761		64,124			66,964			65,123
Diluted		70,154		67,737			69,914		67,304			66,964			69,501

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

Three Months Ended

Six Months Ended

June 30,

July 1,

June 30,

July 1,

2018

2017

2018

2017

Net income

$
70,684

$
45,164

$
109,742

$
55,742

Other comprehensive (loss) gain:

Foreign currency translation (loss) gain

(3,804
)

2,630

(7,229
)

6,031

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

965

(1,026
)

1,833

(2,352
)
Foreign currency translation (loss) gain, net of taxes

(2,839
)

1,604

(5,396
)

3,679

Gain (loss) on derivatives

1,130

(1,136
)

12,297

4,377

Income tax (expense) benefit on gain on derivatives

(287
)

443

(3,119
)

(1,707
)
Gain (loss) on derivatives, net of taxes

843

(693
)

9,178

2,670

Total other comprehensive (loss) gain

(1,996
)

911

3,782

6,349

Comprehensive income

68,688

46,075

113,524

62,091

Net loss attributable to the noncontrolling interest

36

9

90

83

Foreign currency translation loss, net of taxes
   attributable to the noncontrolling interest

137

146

373

41

Comprehensive loss attributable to the noncontrolling
   interest

173

155

463

124

Comprehensive income attributable to Weight Watchers
   International, Inc.

$
68,861

$
46,230

$
113,987

$
62,215

	Three Months Ended
	March 30,			March 31,
	2019			2018
Net (loss) income	$	(10,726	)	$	39,059
Other comprehensive (loss) gain:
Foreign currency translation gain (loss)		1,714			(3,425	)
Income tax (expense) benefit on foreign currency translation gain (loss)		(435	)		868
Foreign currency translation gain (loss), net of taxes		1,279			(2,557	)
(Loss) gain on derivatives		(7,361	)		11,167
Income tax benefit (expense) on (loss) gain on derivatives		1,867			(2,832	)
(Loss) gain on derivatives, net of taxes		(5,494	)		8,335
Total other comprehensive (loss) gain		(4,215	)		5,778
Comprehensive (loss) income		(14,941	)		44,837
Net loss attributable to the noncontrolling interest		39			53
Foreign currency translation loss, net of taxes attributable to the noncontrolling interest		6			236
Comprehensive loss attributable to the noncontrolling interest		45			289
Comprehensive (loss) income attributable to Weight Watchers International, Inc.	$	(14,896	)	$	45,126

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

					Weight Watchers International, Inc.
															Accumulated
	Redeemable														Other
	Noncontrolling				Common Stock				Treasury Stock						Comprehensive			Retained
Three months ended March 30, 2019	Interest				Shares		Amount		Shares			Amount			Loss			Earnings			Total
Balance at December 29, 2018		$	3,913			120,352	$	0		53,396		$	(3,175,624	)	$	(15,757	)	$	2,382,438			$	(808,943	)

Comprehensive Loss			(45	)												(4,209	)		(10,687	)			(14,896	)

Issuance of treasury stock under stock plans										(21	)		753						(660	)			93
Compensation expense on share- based awards																			4,812				4,812
Balance at March 30, 2019		$	3,868			120,352	$	0		53,375		$	(3,174,871	)	$	(19,966	)	$	2,375,903			$	(818,934	)

					Weight Watchers International, Inc.
															Accumulated
	Redeemable														Other
	Noncontrolling				Common Stock				Treasury Stock						Comprehensive			Retained
Three months ended March 31, 2018	Interest				Shares		Amount		Shares			Amount			Loss			Earnings			Total
Balance at December 30, 2017		$	4,467			118,947	$	0		54,258		$	(3,208,836	)	$	(10,467	)	$	2,203,317			$	(1,015,986	)

Comprehensive Income			(289	)												6,014			39,112				45,126

Issuance of treasury stock under stock plans										(144	)		5,505						(2,447	)			3,058
Compensation expense on share- based awards																			4,384				4,384
Issuance of common stock						1,405													9,796				9,796
Cumulative effect of revenue accounting change																			2,933				2,933
Cumulative effect of tax accounting change																(2,485	)		(46,927	)			(49,412	)
Balance at March 31, 2018		$	4,178			120,352	$	0		54,114		$	(3,203,331	)	$	(6,938	)	$	2,210,168			$	(1,000,101	)

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

	Six Months Ended						Three Months Ended
	June 30,			July 1,			March 30,			March 31,
	2018			2017			2019			2018
Operating activities:
Net income	$	109,742		$	55,742
Adjustments to reconcile net income to cash provided by operating activities:
Net (loss) income							$	(10,726	)	$	39,059
Adjustments to reconcile net (loss) income to cash provided by operating activities:
Depreciation and amortization		21,774			25,554			11,405			11,154
Amortization of deferred financing costs and debt discount		4,122			2,861			2,208			1,914
Impairment of intangible and long-lived assets		0			60
Write-off of net assets due to cessation of Spain operations		0			70
Share-based compensation expense		9,675			4,817			4,812			4,384
Deferred tax provision		752			10,331
Deferred tax benefit								(433	)		(457	)
Allowance for doubtful accounts		54			(857	)		(290	)		(49	)
Reserve for inventory obsolescence		8,338			4,962			2,243			6,423
Foreign currency exchange rate loss		868			150
Gain on early extinguishment of debt		0			(1,802	)
Foreign currency exchange rate loss (gain)								173			(367	)
Changes in cash due to:
Receivables		(9,650	)		3,490			(3,316	)		(5,562	)
Inventories		4,999			5,887			(8,059	)		1,241
Prepaid expenses		(3,023	)		4,338			1,105			(15,088	)
Accounts payable		(798	)		(19,727	)		2,171			7,510
Accrued liabilities		(1,696	)		(28,575	)		(326	)		(2,175	)
Deferred revenue		13,259			21,847			6,925			22,932
Other long term assets and liabilities, net		(4,309	)		144			272			(6,328	)
Income taxes		14,480			8,823			(940	)		8,868
Cash provided by operating activities		168,587			98,115			7,224			73,459
Investing activities:
Capital expenditures		(7,733	)		(5,614	)		(4,059	)		(1,753	)
Capitalized software expenditures		(13,118	)		(13,419	)		(7,167	)		(5,966	)
Other items, net		(9,669	)		(86	)		3			(24	)
Cash used for investing activities		(30,520	)		(19,119	)		(11,223	)		(7,743	)
Financing activities:
Net (payments) borrowings on revolver		(25,000	)		0
Net payments on revolver								0			(25,000	)
Payments on long-term debt		(38,500	)		(83,334	)		(38,500	)		(19,250	)
Taxes paid related to net share settlement of equity awards		(11,139	)		(3,648	)		(381	)		(2,128	)
Proceeds from stock options exercised		23,262			1,258			127			14,679
Other items, net								(80	)		0
Cash used for financing activities		(51,377	)		(85,724	)		(38,834	)		(31,699	)
Effect of exchange rate changes on cash and cash equivalents		(1,989	)		2,557			(783	)		544
Net increase (decrease) in cash and cash equivalents		84,701			(4,171	)
Net (decrease) increase in cash and cash equivalents								(43,616	)		34,561
Cash and cash equivalents, beginning of period		83,054			108,656			236,974			83,054
Cash and cash equivalents, end of period	$	167,755		$	104,485		$	193,358		$	117,615

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

The accompanying consolidated financial statements include the accounts of Weight Watchers International, Inc. and all of its subsidiaries. The terms “Company” and ~~“WWI”~~“WW” as ~~used~~use d throughout these notes are used to indicate Weight Watchers International, Inc. and all of its operations consolidated for purposes of its financial statements. The Company’s ~~“meetings”~~“Digital” business refers to providing subscriptions to the Company’s digital product offerings, including the Personal Coaching + Digital product. The Company’s “Studio + Digital” business refers to providing access to the Company’s weekly in-person workshops combined ~~meetings and~~with the Company’s digital subscription product offerings to ~~the Company’s~~ commitment plan ~~subscribers (including Total Access subscribers), as well as~~subscribers.The “Studio + Digital” business also includes the provision of access to ~~meetings~~workshops for members who do not subscribe to commitment plans, including the Company’s “pay-as-you-go” ~~members and other meetings~~ members. ~~“Online” refers to Weight Watchers Online, Weight Watchers OnlinePlus, Personal Coaching and other digital subscription products.~~

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. 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.

These statements should be read in conjunction with the Company’s Annual Report on Form 10-K for fiscal ~~2017~~2018 filed on February ~~28, 2018,~~26, 2019, which includes additional information about the Company, its results of operations, its financial position and its cash flows.

For a discussion of the Company’s significant accounting policies, see “Summary of Significant Accounting Policies” in the Notes to Consolidated Financial Statements of the Company’s Annual Report on Form 10-K for fiscal 2018. For a discussion of accounting standards adopted in the current period, see Note 3.

In February 2016, the Financial Accounting Standards Board (the “FASB”) issued updated guidance regarding leases, requiring lessees to recognize a right-of-use asset and a lease liability on the balance sheet for all leases 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. The effective date of the new guidance for public companies is for fiscal years beginning after December 15, 2018 and interim periods within those fiscal years. Early adoption is permitted. In July 2018, the FASB issued updated guidance by providing an entity with an additional and optional transition method to adopt the new lease guidance. ~~The~~On December 30, 2018, the Company adopted the updated lease guidance on a modified retrospective ~~transition approach requires application~~basis as of ~~the new guidance at the beginning of the earliest comparative period presented and the optional transition method permits an entity to apply the guidance at~~ the adoption date. ~~The updated guidance is effective~~Periods prior to the adoption date continue to be reported under the historical lease accounting guidance. See Note 4 for further details.

On December 30, 2018, the Company beginning in the first quarter of fiscal 2019. The Company is currently evaluating the impact that the adoption of this guidance will have on the consolidated financial statements and related disclosures of the Company.

~~In June 2018, the FASB issued updated guidance regarding share-based payment transactions for acquiring goods and services from nonemployees. The guidance also specifies that~~adopted the updated guidance on ~~stock compensation applies to all share-based payment transactions in which a grantor acquires goods~~leases using the modified retrospective transition method. Results for reporting periods beginning on or ~~services~~after December 30, 2018 are presented under the updated guidance, while prior period amounts are not adjusted and continue to be ~~used or consumed~~reported in ~~a grantor’s own operations by issuing share-based payment awards.~~ accordance with the Company’s historical lease accounting.

The ~~effective date~~adoption of the ~~new guidance for public companies is for fiscal years beginning after December 15, 2018 and interim periods within those fiscal years. Early adoption is permitted,~~standard had a material impact on the Company’s consolidated balance sheets but no earlier than an entity’s adoption date of the revenue guidance. The updated guidance is effective for the Company beginning in the first quarter of fiscal 2019. The Company is currently evaluating the potential effects of this guidancedid not have a material impact on its consolidated ~~financial statements.~~statements of net income. The Company recorded $158,773 as a right of use asset, $167,081 of lease

For a discussion of the Company’s other significant accounting policies, see “Summary of Significant Accounting Policies” in the Notes to Consolidated Financial Statements of the Company’s Annual Report on Form 10-K for fiscal 2017. For a discussion of accounting standards adopted in the current period, see Note 3.

In March 2016, the FASB issued updated guidance on revenue from contracts with customers, which is intended to clarify the implementation guidance 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~~liabilities and $0 for retained earnings for operating leases upon adoption of the updated guidance. The standard did not have a material impact on the Company’s finance lease contracts.

A lease is defined as an arrangement that contractually specifies the right to ~~assist~~use and control an ~~entity~~identified asset for a specific period of time in exchange for consideration. Operating leases are included in operating lease assets, portion of operating lease liabilities due within one year, and long-term operating lease liabilities in the Company’s 2019 consolidated balance sheet. Finance leases are included in property and equipment, net, other accrued liabilities, and other long-term liabilities in the Company’s 2019 consolidated balance sheet. Lease assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent the Company’s obligation to make lease payments arising from the lease. Lease assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term, using the Company’s incremental borrowing rate commensurate with the lease term, based on the information available at adoption of the updated guidance. The lease asset includes scheduled lease payments made and excludes lease incentives, such as free rent periods and tenant improvement allowances. The Company has certain leases that may include an option to renew and when it is reasonably probable to exercise such option, the Company will include the renewal option terms in determining ~~whether it controls~~the lease asset and lease liability. The Company does not have any renewal options that would have a ~~specified good~~material impact on the terms of the leases and that are also reasonably expected to be exercised at this time. A lease may contain both fixed and variable payments. Variable lease payments that are linked to an index or ~~service before it is transferred to~~rate are measured based on 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 earlycurrent index or rate at adoption ~~permitted. On December 31, 2017, the Company adopted~~of the updated guidance, ~~on revenue from contracts~~or lease commencement date for new leases, with ~~customers~~ the impact of future changes in the index or rate being recorded as a period expense. Lease expense for lease payments is recognized on a ~~modified retrospective basis. See Note 4~~straight-line basis over the lease term.

The Company’s operating and finance leases are primarily for ~~further details.~~its studio locations, corporate offices, data centers and certain equipment, including automobiles.

At March 30, 2019, the Company’s lease assets and lease liabilities were as follows:

~~In October 2016,~~For the ~~FASB issued updated guidance on intra-equity transfers of assets other than inventory which is intended to improve~~three months ended March 30, 2019, the accounting for income tax consequences by eliminating the deferral of tax effects of intra-entity asset transfers other than inventory within the consolidated entity. The current guidance to defer the recognition of any tax impact on the transfer of inventory within the consolidated entity until it is sold to a third party remains unaffected. The updated guidance is effective for annual periods beginning after December 15, 2017 and interim periods within those fiscal years, with early adoption permitted. The updated guidance must be applied on a modified retrospective basis through a cumulative-effect adjustment directly to retained earnings ascomponents of the ~~beginning of the period of adoption. The Company adopted this guidance the first day of the first quarter of 2018, and~~Company’s lease expense were as a result, recorded a net deferred tax liability with a corresponding cumulative adjustment to decrease retained earnings of $48,624 associated with an intra-entity transfer of certain intellectual property rights related to the Company’s non-U.S. business to its Canadian entity. ~~Before the~~ 2017 Tax Act was passed, the Company’s position was that this transaction was net neutral from a tax perspective and therefore a cumulative effect entry might not be required. However, after further analysis of the new tax law during the first quarter of 2018, the Company concluded an entry ~~to retained earnings was necessary.~~ follows:

In February 2018, the FASB issued updated guidance on tax effects of items within accumulated other comprehensive income resulting from Tax Cuts and Jobs Act of 2017 (the “2017 Tax Act”). This update eliminates the stranded tax effects from the Act and permits a company to make an accounting policy election to reclassify those effects from accumulated other comprehensive income (“AOCI”) to retained earnings. The updated guidance is effective for the Company beginning in the first quarter of fiscal 2019 and early adoption is permitted. The Company adopted this guidance the first day of the first quarter of fiscal 2018, and the election was made to reclassify the income tax effects of the 2017 Tax Act from accumulated other comprehensive loss to retained earnings, resulting in a $2,485 increase to retained earnings in the consolidated balance sheet at March 31, 2018. There were no other income tax effects related to the application of the 2017 Tax Act with the adoption of this updated guidance.

InAt March ~~2018,~~30, 2019, the ~~FASB issued guidance pursuant to the amendments issued by the staff of the U.S. Securities~~Company’s weighted average remaining lease term and ~~Exchange Commission~~. The amendments provide guidance on when to record and disclose provisional amounts for certain income tax effects of the 2017 Tax Act. The amendments also require any provisional amounts or subsequent adjustments to be included in net income from continuing operations. Additionally, this guidance discusses required disclosures that an entity must make with regard to the 2017 Tax Act. This guidance is effective immediatelyweighted average discount rates were as new information is available to adjust provisional amounts that were previously recorded. The Company adopted this guidance and will continue to evaluate indicators that may give rise to a change in our tax provision as a result of the 2017 Tax Act. See Note 9follows: ~~for additional information on the 2017 Tax Act.~~

The Company’s leases have remaining lease terms of 0 to 14 years with a weighted average lease term of 7.45 years.

At March 30, 2019, the maturity of the Company’s lease liabilities in each of the next five fiscal years and thereafter were as follows:

Minimum commitments under non-cancelable obligations, primarily for office and rental facilities operating leases at December 29, 2018, consisted of the following:

Total rent expense charged to operations for office and rental facilities under these operating leases for the three months ended March 31, 2018 was $10,791.

Supplemental cash flow information related to leases for the three months ended March 30, 2019 were as follows:

The Company elected the package of practical expedients permitted under the transition guidance within the new standard, which allowed the Company not to reassess whether any expired or existing contracts contained leases, to carry forward existing lease classifications and not to reassess initial direct costs for existing leases. In addition, the Company elected the benefit of hindsight practical expedient in determining the lease term for existing leases upon adoption of the updated guidance.

The Company has lease agreements with lease and non-lease components and has elected the practical expedient not to separate non-lease components from lease components and instead to account for each separate lease component and non-lease component as a single lease component.

The Company has elected the short-term lease exception accounting policy, whereby the recognition requirements of the updated guidance is not applied and lease expense is recorded on a straight-line basis with respect to leases with an initial term of 12 months or less.

On December 31, 2017, the Company adopted the updated guidance on revenue from contracts with customers using the modified retrospective method applied to those contracts which were not completed as of December 31, 2017. Results for reporting periods beginning after December 31, 2017 are presented under the updated guidance, while prior period amounts are not adjusted and continue to be reported in accordance with the Company’s historical revenue accounting.

The Company recorded a net increase to opening retained earnings of $2,145 as of December 31, 2017 due to the cumulative impact of adopting the updated guidance, inclusive of a $3,501 decrease to deferred revenue, a decrease of $568 to prepaid expenses and other current assets and an increase to the deferred income tax liability of $788.

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.

~~WWI~~The Company earns revenue from subscriptions for its digital products and by conducting ~~meetings,~~workshops, for which it charges a fee, predominantly through commitment plans, prepayment plans or the “pay-as-you-go” arrangement. ~~WWI~~The Company also earns revenue ~~from subscriptions for the Company’s Online products,~~by selling consumer products (including publications) in its ~~meetings,~~workshops, online through its ecommerce platform and to its franchisees, collecting commissions from franchisees, collecting royalties related to licensing agreements, selling magazine subscriptions, publishing, selling advertising space on its websites and in copies of its publications and By Mail product sales.

Commitment ~~plans,~~plan revenues, prepaid ~~meeting~~workshop fees and magazine subscription revenue isare recorded to deferred revenue and amortized into revenue as control is transferred over the period earned since ~~the~~these performance obligations are satisfied over time. In the meetings business, WWI generally charges non-refundable registration and starter fees in exchange for an introductory information session and materials it provides to new members. Revenue from these registration and starter fees is considered immaterial in the context of the contract and are recorded to deferred revenue and amortized into revenue over the commitment period. OnlineDigital subscription revenues, consisting of the fees associated with subscriptions for the Company’s ~~Online subscription~~Digital products, including its

Personal Coaching + Digital product, are deferred and recognized on a straight-line basis as control is transferred over the subscription period. One-time ~~Online~~Digital sign-up fees are considered immaterial in the context of the contract and the related revenue is recorded to deferred revenue and amortized into revenue over the commitment period. In the Studio + Digital business, the Company generally charges non-refundable registration and starter fees in exchange for access to the Company’s digital subscription products, an introdu ctory information session and materials it provides to new members. Revenue from these registration and starter fees is considered immaterial in the context of the contract and is recorded to deferred revenue and amortized into revenue over the commitment period. Revenue from “pay-as-you-go” ~~meeting~~workshop fees, consumer product sales and By Mail, commissions and royalties is recognized at the point in time control is transferred, which is when services are rendered, products are shipped to customers and title and risk of loss passes to the customers, and commissions and royalties are earned, respectively. Revenue from advertising in magazines is recognized when advertisements are published. Revenue from magazine sales is recognized when the magazine is sent to the customer. For revenue transactions that involve multiple performance obligations, the amount of revenue recognized is determined using the relative fair value approach, which is generally based on each performance obligation’s stand-alone selling price. Discounts to customers, including free registration offers, are recorded as a deduction from gross revenue in the period such revenue was recognized. Revenue from advertising on its websites is recognized when the advertisement is viewed by the user.

The Company grants refunds in aggregate amounts that historically have not been material. Because the period of payment of the refund generally approximates the period revenue was originally recognized, refunds are recorded as a reduction of revenue over the same period.

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

Three Months Ended June 30, 2018

North

Continental

United

America

Europe

Kingdom

Other

Total

Meeting Fees

$
142,767

$
29,402

$
14,551

$
5,992

$
192,712

Online Subscription Revenues

101,099

39,342

6,955

3,622

151,018

Service revenues, net

$
243,866

$
68,744

$
21,506

$
9,614

$
343,730

Product sales and other, net

40,672

12,848

7,704

4,793

66,017

Revenues, net

$
284,538

$
81,592

$
29,210

$
14,407

$
409,747

	Three Months Ended March 30, 2019
	North		Continental		United
	America		Europe		Kingdom		Other		Total
Digital Subscription Revenues	$	98,760	$	40,183	$	6,418	$	3,494	$	148,855
Studio + Digital Fees		117,599		23,949		11,263		5,060		157,871
Service Revenues, net	$	216,359	$	64,132	$	17,681	$	8,554	$	306,726
Product sales and other, net		33,652		12,025		6,930		3,831		56,438
Revenues, net	$	250,011	$	76,157	$	24,611	$	12,385	$	363,164

Six Months Ended July 1, 2017

North

Continental

United

America

Europe

Kingdom

Other

Total

Meeting Fees

$
253,665

$
46,764

$
26,141

$
12,785

$
339,355

Online Subscription Revenues

141,682

47,243

10,200

5,997

205,122

Service revenues, net

$
395,347

$
94,007

$
36,341

$
18,782

$
544,477

Product sales and other, net

76,372

24,907

14,093

10,887

126,259

Revenues, net

$
471,719

$
118,914

$
50,434

$
29,669

$
670,736

	Three Months Ended March 31, 2018
	North		Continental		United
	America		Europe		Kingdom		Other		Total
Digital Subscription Revenues	$	92,240	$	36,161	$	6,563	$	3,583	$	138,547
Studio + Digital Fees		140,152		29,080		14,382		6,508		190,122
Service Revenues, net	$	232,392	$	65,241	$	20,945	$	10,091	$	328,669
Product sales and other, net		46,787		17,290		9,339		6,138		79,554
Revenues, net	$	279,179	$	82,531	$	30,284	$	16,229	$	408,223

For Service Revenues, the Company typically collects payment in advance of providing services. Any amounts collected in advance of services being provided are recorded in deferred revenue. In the 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 are as follows:~~

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 are as follows:

Revenue recognized from amounts included in current deferred revenue as of December ~~30, 2017~~29, 2018 was ~~$67,090~~$47,869 for the ~~six months~~first quarter ended ~~June~~March 30, ~~2018.~~2019. The Company’s long-term deferred revenue, which is included in other liabilities on the Company’s consolidated balance sheet, had a balance of ~~$1,501~~$694 at ~~June~~March 30, ~~2018~~2019 related to 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 agreements.

The Company elected to apply the updated guidance only to contracts that were not completed as of December 31, 2017, the date of adoption. The Company does not disclose the value of unsatisfied performance obligations for contracts with an original expected length of one year or less. The Company expenses sales commissions when incurred (amortization period would have been one year or less) and these expenses are recorded within selling, general and administrative expenses. The Company treats shipping and handling fees as fulfillment costs and not as a separate performance obligation, and as a result, any fees received from customers are included in the transaction price allocated to the performance obligation of providing goods with a corresponding amount accrued within cost of product sales and other for amounts paid to applicable carriers. Sales tax, value-added tax, and other taxes the Company collects concurrent with revenue-producing activities are excluded from revenue.

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 ~~six~~three months ended ~~June~~March 30, ~~2018,~~2019, the change in the carrying value of franchise rights acquired is due to the effect of exchange rate changes.

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, Inc. (formerly known as WeightWatchers.com, Inc.) in 2005, ~~the acquisitions of~~ the Company’s franchised territories ~~the acquisitions of~~and the majority interest in Vigilantes do Peso Marketing Ltda. ~~and of Knowplicity, Inc., d/b/a Wello, in fiscal 2014 and the acquisition of Weilos, Inc. in fiscal 2015.~~ For the ~~six~~three months ended ~~June~~March 30, ~~2018,~~2019, the change in the carrying amount of goodwill iswas due to the effect of exchange rate changes as follows:

The Company reviews goodwill and other indefinite-lived intangible assets, including franchise rights acquired with indefinite lives, 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 6, 2018 and May 7, 2017, each the first day of fiscal May, on its goodwill and other indefinite-lived intangible assets. In addition, for the Company’s Brazil reporting unit only, given the ongoing challenging economic environment, the negative performance trends and the Company’s reduced expectations regarding the future impact of its business growth strategies in the country, the Company performed an interim goodwill impairment analysis at December 30, 2017.

In performing its annual impairment analysis as of May 6, 2018 and May 7, 2017, the Company determined that the carrying amounts of its goodwill reporting units and franchise rights acquired with indefinite lives units of account did not exceed their respective fair values and therefore, no impairment existed. In performing the interim goodwill impairment analysis for its Brazil reporting unit, the Company recorded a $13,323 impairment charge at December 30, 2017.

~~For all reporting units, except for Brazil, there was significant headroom in the impairment analysis.~~ Based on the results of the Company’s annual impairment test performed for all of its reporting units except for Brazil, as of the June 30, 2018 balance sheet date, the Company estimated that for reporting units that hold approximately ~~97.0%~~ ~~of the Company’s goodwill, those units had a fair value at least 50% higher than the respective reporting unit’s carrying amount.~~ ~~Based on the results of the Company’s annual~~ ~~impairment test performed for its Brazil reporting unit, the fair value of this reporting unit exceeded its carrying value by approximately~~ 10~~%, and~~

accordingly a relatively small change in the underlying assumptions would likely cause a change in the results of the impairment assessment and, as such, could result in an impairment of the goodwill related to Brazil, for which the carrying amount is ~~$5,054.~~

When determining fair value, the Company utilizes various assumptions, including projections of future cash flows, 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. In the event such a result occurred, the Company would be required to record a corresponding charge, which would impact earnings. The Company would also be required to reduce the carrying amounts of the related assets on its balance sheet. The Company continues to evaluate these assumptions and believes that these assumptions are appropriate.

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

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. The Company has determined the appropriate reporting unit for purposes of assessing annual impairment to be the country for all reporting units. For all of the Company’s reporting units except for Brazil (see below), the Company estimated future cash flows by utilizing the historical debt-free cash flows (cash flows provided by operating activities 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 cost of capital, which included the cost 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. The cost of debt was determined by estimating the Company’s current borrowing rate.

As it relates to the impairment analysis for Brazil, the Company estimated future debt free cash flows in contemplation of its growth strategies for that market. In developing these projections, the Company considered the historical impact of similar growth strategies in other markets as well as the current market conditions in Brazil. The Company then discounted the estimated future cash flows utilizing a discount rate which was calculated using the average cost of capital, which included the cost 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 significantly higher growth rates projected in the May 6, 2017 annual impairment test. The cost of debt was determined by estimating the Company’s current borrowing rate.

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

In performing the impairment analysis for indefinite-lived franchise rights acquired, the fair value 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 meetings business and a relief from royalty methodology for franchise rights related to the Company’s Online 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. 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 in the country in which the acquisitions have occurred. In its hypothetical start-up approach analysis for fiscal 2018, the Company 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 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 in the goodwill impairment analysis.

The carrying values of finite-lived intangible assets as of ~~June~~March 30, ~~2018~~2019 and December ~~30, 2017~~29, 2018 were as follows:

	June 30, 2018				December 30, 2017				March 30, 2019				December 29, 2018
	Gross				Gross				Gross				Gross
	Carrying		Accumulated		Carrying		Accumulated		Carrying		Accumulated		Carrying		Accumulated
	Amount		Amortization		Amount		Amortization		Amount		Amortization		Amount		Amortization
Capitalized software costs	$	116,249	$	99,512	$	111,617	$	94,697	$	125,356	$	105,221	$	121,508	$	102,659
Website development costs		96,106		68,886		90,096		61,125		109,704		82,333		105,710		77,825
Trademarks		11,378		10,916		11,231		10,833		11,694		11,063		11,620		11,010
Other		13,723		4,029		3,793		3,546		13,985		4,258		13,967		4,149
Trademarks and other intangible assets	$	237,456	$	183,343	$	216,737	$	170,201	$	260,739	$	202,875	$	252,805	$	195,643
Franchise rights acquired		4,321		4,321		4,526		4,526		8,098		4,378		8,110		4,319
Total finite-lived intangible assets	$	241,777	$	187,664	$	221,263	$	174,727	$	268,837	$	207,253	$	260,915	$	199,962

Aggregate amortization expense for finite-lived intangible assets was recorded in the amounts of ~~$6,832~~$7,556 and ~~$14,242~~$7,410 for the three ~~and six~~ months ended ~~June~~March 30, ~~2018, respectively. Aggregate amortization expense for finite-lived intangible assets was recorded in the amounts of $9,015~~2019 and ~~$18,190 for the three and six months ended July 1, 2017,~~March 31, 2018, respectively.

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

	June 30, 2018									December 30, 2017									March 30, 2019									December 29, 2018
	Principal Balance		Unamortized Deferred Financing Costs		Unamortized Debt Discount		Effective Rate ⁽¹⁾			Principal Balance		Unamortized Deferred Financing Costs		Unamortized Debt Discount		Effective Rate ⁽¹⁾			Principal Balance		Unamortized Deferred Financing Costs		Unamortized Debt Discount		Effective Rate ⁽¹⁾			Principal Balance		Unamortized Deferred Financing Costs		Unamortized Debt Discount		Effective Rate ⁽¹⁾
New Revolving Credit Facility due November 29, 2022	$	0	$	0	$	0		4.34	%	$	25,000	$	0	$	0		4.15	%
Former Tranche B-2 Term Facility due April 2, 2020		0		0		0		0.00	%		0		0		0		4.76	%
New Term Loan Facility due November 29, 2024		1,501,500		9,009		28,233		7.24	%		1,540,000		9,783		30,433		6.84	%
Revolving Credit Facility due November 29, 2022																			$	0	$	0	$	0		0.00	%	$	0	$	0	$	0		4.39	%
Term Loan Facility due November 29, 2024																				1,443,750		7,957		24,933		8.14	%		1,482,250		8,307		26,033		7.53	%
Notes due December 1, 2025		300,000		1,289		0		8.57	%		300,000		1,422		0		8.82	%		300,000		1,158		0		8.62	%		300,000		1,202		0		8.69	%
Total		1,801,500	$	10,298	$	28,233		7.44	%		1,865,000	$	11,205	$	30,433		4.96	%	$	1,743,750	$	9,115	$	24,933		8.22	%	$	1,782,250	$	9,509	$	26,033		7.63	%
Less: Current Portion		118,498									82,750									57,750									77,000
Unamortized Deferred Financing Costs		10,298									11,205									9,115									9,509
Unamortized Debt Discount		28,233									30,433									24,933									26,033
Total Long-Term Debt	$	1,644,471								$	1,740,612								$	1,651,952								$	1,669,708

On November 29, 2017, the Company refinanced its then-existing credit facilities (hereinafter referred to as “the November 2017 debt refinancing”) consisting of $1,930,386 of borrowings under a term loan facility and an undrawn $50,000 revolving credit facility with $1,565,000 of borrowings under its new credit facilities, consisting of a $1,540,000 term loan facility, and a $150,000 revolving credit facility (of which $25,000 was drawn upon at the time of the November 2017 debt refinancing) (collectively, the ~~“New Credit~~“Credit Facilities”), and $300,000 in aggregate principal amount of 8.625% Senior Notes due 2025 (the “Notes”). During the fourth quarter of fiscal 2017, the Company incurred fees of $53,832 (which included $30,800 of a debt discount) in connection with the November 2017 debt refinancing. In addition, the Company recorded a loss on early extinguishment of debt of $10,524 in connection thereto. This early extinguishment of debt write-off was comprised of $5,716 of deferred financing fees paid in connection with the November 2017 debt refinancing and $4,808 of pre-existing deferred financing fees.

The ~~New~~ Credit Facilities were issued under a new credit agreement, dated November 29, 2017 (the “Credit Agreement”), among the Company, as borrower, the lenders party thereto, JPMorgan Chase Bank, N.A. (“JPMorgan Chase”), as administrative agent and an issuing bank, Bank of America, N.A., as an issuing bank, and Citibank, N.A., as an issuing bank. The ~~New~~ Credit Facilities consist of (1) $1,540,000 in aggregate principal amount of senior secured tranche B term loans due in 2024 (the ~~“New Term~~“Term Loan Facility”) and (2) a $150,000 senior secured revolving credit facility (which includes borrowing capacity available for letters of credit) due in 2022 (the ~~“New Revolving~~“Revolving Credit Facility”).

As of ~~June~~March 30, ~~2018,~~2019, the Company had ~~$1,501,500~~$1,443,750 of debt outstanding under the ~~New~~ Credit Facilities, with ~~$148,735~~$148,841 of availability and ~~$1,265~~$1,159 in issued but undrawn letters of credit outstanding under the ~~New~~ Revolving Credit Facility. ~~Outstanding balances~~There was no outstanding balance under the ~~New~~ Revolving Credit Facility ~~are included in the current portion of long-term debt on the accompanying consolidated balance sheet~~ as of ~~December~~March 30, ~~2017 included in these consolidated financial statements.~~ 2019.

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 and each guarantor, subject to customary exceptions, including:

Under the terms of the Credit Agreement, depending on the Company’s Consolidated First Lien Net Debt Leverage Ratio (as ~~defined~~used 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 ~~New~~ Term Loan Facility 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”).

Borrowings under the ~~New~~ Term Loan Facility bear interest at a rate per annum equal to, at the Company’s option, either (1) an applicable margin plus a base rate determined by reference to the highest of (a) 0.50% per annum plus the higher of (i) the Federal Funds Effective Rate and (ii) the Overnight Bank Funding Rate as determined by the Federal Reserve Bank of New York, (b) the prime rate of JPMorgan Chase 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 1.75% or (2) an applicable margin plus a LIBOR rate determined by reference to the costs 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 0.75%. Borrowings under the ~~New~~ Revolving Credit Facility bear interest at a rate per annum equal to an applicable margin based upon a 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 higher of (i) the Federal Funds Effective Rate and (ii) the Overnight Bank Funding Rate as determined by the Federal Reserve Bank of New York, (b) the prime rate of JPMorgan Chase 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% or (2) a LIBOR rate determined by reference to the costs of funds for U.S. dollar deposits for the interest period relevant to such borrowing adjusted for certain additional costs. As of ~~June~~March 30, ~~2018,~~2019, the applicable margins for the LIBOR rate borrowings under the ~~New~~ Term Loan Facility and the ~~New~~ Revolving Credit Facility were 4.75% and ~~2.75%~~2.00%, respectively.

On a quarterly basis, the Company pays a commitment fee to the lenders under the ~~New~~ Revolving Credit Facility in respect of unutilized commitments thereunder, which commitment fee fluctuates depending upon the Company’s Consolidated First Lien Net Debt Leverage Ratio. Based on the Company’s Consolidated First Lien Net Debt Leverage Ratio as of ~~June~~March 30, ~~2018,~~2019, the commitment fee was ~~0.50%~~0.25% per annum. The Company’s Consolidated First Lien Net Debt Leverage Ratio as of March 30, 2019 was 2.91:1.00.

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, the ~~New~~ Revolving Credit Facility includes a maintenance covenant that will require, in certain circumstances, compliance with certain first lien secured net leverage ratios.

As of ~~June~~March 30, ~~2018,~~2019, the Company was in compliance with all applicable financial covenants in the Credit Agreement governing the ~~New~~ Credit Facilities.

~~As of June 30, 2018, 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 $41,498 to the lenders in the second quarter of fiscal 2019.

The Notes were issued pursuant to an Indenture, dated as of November 29, 2017 (the “Indenture”), among the Company, the guarantors named therein and The Bank of New York Mellon, as trustee. The Indenture contains customary covenants, events of default and other provisions 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 Notes accrue interest at a rate per annum equal to 8.625% and are due on December 1, 2025. Interest on the Notes is payable semi-annually on June 1 and December 1 of each year, beginning on June 1, 2018. On or after December 1, 2020, the Company may on any one or more occasions redeem some or all of the Notes at a purchase price equal to 104.313% of the principal amount of the Notes, plus accrued and unpaid interest, if any, to, but not including, the redemption date, such optional redemption price decreasing to 102.156% on or after December 1, 2021 and to 100.000% on or after December 1, 2022. Prior to December 1, 2020, the Company may on any one or more occasions redeem up to 40% of the aggregate principal amount of the Notes with an amount not to exceed the net proceeds of certain equity offerings at 108.625% of the aggregate principal amount thereof, plus accrued and unpaid interest, if any, to, but not including, the redemption date. Prior to December 1, 2020, the Company may redeem some or all of the Notes at a make-whole price plus accrued and unpaid interest, if any, to, but not including, the redemption date. If a change of control occurs, the Company must offer to purchase for cash the Notes at a purchase price equal to 101% of the principal amount of the Notes, plus accrued and unpaid interest, if any, to, but not including, the purchase date. Following the sale of certain assets and subject to certain conditions, the Company must offer to purchase for cash the Notes at a purchase price equal to 100% of the principal amount of the Notes, plus accrued and unpaid interest, if any, to, but not including, the purchase date. The Notes are guaranteed on a senior unsecured basis by the Company’s subsidiaries that guarantee the ~~New~~ Credit Facilities.

At ~~June~~March 30, ~~2018,~~2019, the Company had ~~$1,801,500~~$1,743,750 outstanding under the ~~New~~ Credit Facilities and the Notes, consisting of the ~~New~~ Term Loan Facility of ~~$1,501,500,~~$1,443,750, $0 drawn down on the ~~New~~ Revolving Credit Facility and $300,000 in aggregate principal amount of Notes issued and outstanding.

At ~~June~~March 30, ~~2018~~2019 and December ~~30, 2017,~~29, 2018, the Company’s debt consisted of both fixed and variable-rate instruments. An interest rate swap was entered into to hedge a portion of the cash flow exposure associated with the Company’s variable-rate borrowings. See Note 1112 for information on the Company’s interest rate swap. The weighted average interest rate (which includes amortization of deferred financing costs and debt discount) on the Company’s outstanding debt, exclusive of the impact of the swap, was ~~7.46%~~approximately 8.22% and ~~7.12%~~7.73% per annum based on interest rates at ~~June~~March 30, ~~2018~~2019 and December ~~30, 2017,~~29, 2018, respectively. The weighted average interest rate (which includes amortization of deferred financing costs and debt discount) on the Company’s outstanding debt, including the impact of the swap, was ~~7.41%~~approximately 7.50% and ~~7.34%~~7.46% per annum based on interest rates at ~~June~~March 30, ~~2018~~2019 and December ~~30, 2017,~~29, 2018, respectively.

Basic earnings per share (“EPS”) are calculated utilizing the weighted average number of common shares outstanding during the periods presented. Diluted EPS 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:~~(loss) earnings per share:

	Three Months Ended				Six Months Ended				Three Months Ended
	June 30,		July 1,		June 30,		July 1,		March 30,			March 31,
	2018		2017		2018		2017		2019			2018
Numerator:
Net income attributable to
Net (loss) income attributable to
Weight Watchers International, Inc.	$	70,720	$	45,173	$	109,832	$	55,825	$	(10,687	)	$	39,112
Denominator:
Weighted average shares of common stock outstanding		66,400		64,269		65,761		64,124		66,964			65,123
Effect of dilutive common stock equivalents		3,754		3,468		4,153		3,180		—			4,378
Weighted average diluted common shares outstanding		70,154		67,737		69,914		67,304		66,964			69,501
Earnings per share attributable to Weight Watchers International, Inc.
(Loss) earnings per share attributable to Weight Watchers International, Inc.
Basic	$	1.07	$	0.70	$	1.67	$	0.87	$	(0.16	)	$	0.60
Diluted	$	1.01	$	0.67	$	1.57	$	0.83	$	(0.16	)	$	0.56

The number of anti-dilutive common stock equivalents excluded from the calculation of the weighted average number of common shares for diluted EPS was 324,223 and ~~868~~594 for the three months ended ~~June~~March 30, 2019 and March 31, 2018, ~~and July 1, 2017,~~ respectively. The number of anti-dilutive common stock equivalents excluded from the calculation of the weighted average number of common shares for diluted EPS was 399 and 956 for the six months ended June 30, 2018 and July 1, 2017, respectively.

On May 6, 2008 and May 12, 2004, respectively, the Company’s shareholders approved the 2008 Stock Incentive Plan (the “2008 Plan”) and the 2004 Stock Incentive Plan (the “2004 Plan”). On May 6, 2014, the Company’s shareholders approved the 2014 Stock Incentive Plan (as amended and restated, the “2014 Plan”, and together with the 2004 Plan and the 2008 Plan, the “Stock Plans”), 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 growth 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 long-term equity incentive compensation program has historically included time-vesting non-qualified stock option and/or restricted stock unit (including performance-based stock unit with both time- and performance-vesting criteria (“PSUs”)) awards. The Company’s Board of Directors or a committee thereof administers the 2014 Plan.

In fiscal 2018, the Company granted 81.3 PSUs in May 2018 having both time- and performance-vesting criteria. The time-vesting criteria for these PSUs will be satisfied upon continued employment (with limited exceptions) on the third anniversary of the grant date (i.e., May 15, 2021). The performance-vesting criteria for these PSUs will be satisfied if the Company has achieved a certain annual operating income objective for the performance period of fiscal 2020. 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 achievement percentage, rounded down to avoid the issuance of fractional shares. The applicable achievement percentage shall increase in the event the Company has achieved a certain revenue target during such performance period. If all of these awards fully meet the time-vesting criteria and the minimum performance condition is attained, depending on the Company’s achievement, the number of shares of the Company’s common stock issuable under these PSUs range from 27.0 to 161.8. The Company is currently accruing compensation expense to what it believes is the probable outcome upon vesting.

In fiscal 2017, the Company granted 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 upon continued employment (with limited exceptions) 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 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, in the case of the performance criteria, taking into account that the fiscal 2017 performance objective was satisfied at the "maximum" achievement level and assuming the minimum performance condition is attained in each of fiscal 2018 and fiscal 2019, depending on the Company's performance achievement in those two years, the number of shares of the Company's common stock issuable under these PSUs range from ~~106.0 to 227.2.~~ The Company is currently accruing compensation expense to what it believes is the probable outcome upon vesting.

In fiscal 2016, the Company granted 289.9 PSUs having both time- and performance-vesting criteria. The time-vesting criteria for these PSUs will be satisfied upon continued employment (with limited exceptions) on the third anniversary of the grant date (i.e., May 16, 2019). The performance-vesting criteria for these PSUs ~~will be~~was satisfied ifwhen 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 below 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~~the time-vesting criteria, shall be equal to (x) the target number of PSUs granted multiplied by (y) 166.67%, 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 54.9 to 274.8. The Company is currently accruing compensation expense to what it believes is the probable outcome upon vesting.

~~On December 22, 2017, the Tax Cuts and Jobs Act of 2017 (the “2017 Tax Act”) was enacted~~, which, among other things, lowered the U.S. corporate income tax rate to 21% from 35% and established a modified territorial system requiring a mandatory deemed repatriation tax on undistributed earnings of foreign subsidiaries. Beginning in 2018, the 2017 Tax Act also requires a minimum tax on certain earnings generated by foreign subsidiaries while providing for tax-free repatriation of such earnings through a 100% dividends-received deduction. The Company’s effective income tax rate in 2017 included a provisional charge of $56,560, recorded in the fourth quarter of 2017, related to the 2017 Tax Act using information and estimates available as of December 30, 2017. Given the significant complexity of the 2017 Tax Act, recent and anticipated further guidance from the U.S. Treasury about implementing the 2017 Tax Act and the potential for additional guidance from the SEC or the FASB related to the 2017 Tax Act or additional information becoming available, the Company’s provisional charge may be adjusted during 2018 and is expected to be finalized no later than the fourth quarter of 2018. Other provisions of the 2017 Tax Act that impact future tax years are still being assessed. The aforementioned guidance and additional information regarding the 2017 Tax Act may also impact the Company’s 2018 effective income tax rate, exclusive of any adjustment to the provisional charge.

Additionally, the Company continues to evaluate the impact of the Global Intangible Low Taxes Income (“GILTI”) provisions under the 2017 Tax Act which are complex and subject to continuing regulatory interpretation by the U.S. Internal Revenue Service (“IRS”). The Company is required to make an accounting policy election of either (1) treating taxes due on future U.S. inclusions in taxable income related to GILTI as a current period expense when incurred (the “period cost policy”) or (2) factoring such amounts into the Company’s measurement of its deferred taxes (the “deferred policy”). The Company’s accounting policy election with respect to the new GILTI Tax rules will depend, in part, on further guidance issued by the IRS, and on analyzing its global income to determine whether it can reasonably estimate the tax impact. While the Company has included an estimate of GILTI in its estimated effective tax rate for 2018, it has not completed its analysis and is not yet able to determine which method to elect. Adjustments related to the amount of GILTI Tax recorded in its consolidated financial statements may be required based on the outcome of this election.

The effective tax rates for the three ~~and six~~ months ended ~~June~~March 30, 2019 and March 31, 2018 were ~~21.9%~~21.1% and ~~6.2%, respectively. The effective tax rates for the three and six months ended July 1, 2017 were 36.5% and 23.2%~~(47.7%), respectively. For the ~~six~~three months ended ~~June~~March 30, 2019, the primary difference between the U.S. federal statutory tax rate and the Company’s consolidated effective tax rate was due to $1,462 of higher state income tax expenses versus the prior year period and a $856 tax expense related to global intangible low-taxed income (“GILTI”). The effective tax rate was partially offset by a $648 tax benefit related to foreign-derived intangible income (“FDII”). For the three months ended March 31, 2018, the primary difference between the U.S. federal statutory tax rate and the Company’s consolidated effective tax rate was due to the ~~$22,155~~$18,105 tax benefit related to tax windfalls from stock compensation and a $1,859 tax benefit related to the cessation of operations of the Company’s Mexican subsidiary.

~~For the six months ended July 1, 2017, the primary difference~~The differences between the U.S. federal statutory tax rate and the Company’s consolidated effective tax rate ~~was due to~~were as follows:

In March 2019, two substantially identical class action complaints alleging violations of the ~~$11,633 tax benefit related to~~federal securities laws were filed by individual shareholders against the ~~cessation of operations~~Company, certain of the Company’s ~~Spanish~~current officers and the Company’s former controlling shareholder, Artal Group S.A., in the United States District Court for the Southern District of New York.

One complaint was filed on behalf of all purchasers of the Company’s common stock and the other on behalf of all purchasers of the Company’s securities, between May 4, 2018 and February 26, 2019, inclusive (the “Class Period”). The complaints allege that, during the Class Period, the defendants disseminated materially false and misleading statements and/or concealed or recklessly disregarded material adverse facts. The complaints allege claims under Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, as amended, and Rule 10b-5 thereunder. The plaintiffs seek to recover unspecified damages on behalf of the class members. The Company believes that the suits are without merit and intends to vigorously defend them.

~~subsidiary, partially offset by $604 of tax expense related to tax shortfalls in connection with the updated guidance on stock compensation~~On March 26, 2019, the Company ~~adopted~~received a shareholder litigation demand letter alleging breaches of fiduciary duties by certain current and former Company directors and executive officers, to the alleged injury of the Company. The allegations in the ~~first quarter~~letter relate to those contained in the ongoing securities class action litigation. In response to the letter, pursuant to Virginia law, the Board of ~~fiscal 2017.~~Directors is creating a special committee to review and evaluate the facts and circumstances surrounding the claims made in the demand letter.

~~The differences between the U.S. federal statutory tax rate and the Company’s consolidated effective tax rate is as follows:~~Other Litigation Matters

Due to the nature of the Company’s activities, it is also, at times, subject to other 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 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 ~~June~~March 30, ~~2018~~2019 and December ~~30, 2017,~~29, 2018, the Company had in effect an interest rate swap with a notional amount totaling $1,250,000.

On July 26, 2013, in order to hedge a portion of its variable rate debt, the Company entered into a forward-starting interest rate swap with an effective date of March 31, 2014 and a termination date of April 2, 2020. The initial notional amount of this swap was $1,500,000. During the term of this swap, the notional amount decreased from $1,500,000 effective March 31, 2014 to $1,250,000 on April 3, 2017, and will decrease to $1,000,000 on April 1, 2019. This interest rate swap effectively fixes the variable interest rate on the notional amount of this swap at 2.41%. This swap qualifies for hedge accounting and, therefore, changes in the fair value of this swap have been recorded in accumulated other comprehensive loss.

On June 11, 2018, in order to hedge a portion of its variable rate debt, the Company entered into a forward-starting interest rate swap (hereinafter referred to as “future swap”) with an effective date of April 2, 2020 and a termination date of March 31, 2024. The initial notional amount of this swap is $500,000. During the term of this swap, the notional amount will decrease from $500,000 effective April 2, 2020 to $250,000 on March 31, 2021. This interest rate swap effectively fixes the variable interest rate on the notional amount of this swap at 3.1005%. This swap qualifies for hedge accounting and, therefore, changes in the fair value of this swap have been recorded in accumulated other comprehensive loss.

As of ~~June~~March 30, ~~2018~~2019 and December ~~30, 2017,~~29, 2018, cumulative unrealized ~~gains (losses)~~losses for qualifying hedges were reported as a component of accumulated other comprehensive loss in the ~~amount~~amounts of ~~$2,625~~$6,669 ($~~3,458~~8,995 before taxes) and ~~$(5,392) (($8,839)~~$1,175 ($1,634 before taxes), respectively. As of ~~June~~March 30, 2018, the fair value of the Company’s currently effective swap was an asset of $5,104 which is included in prepaid expenses and other current assets in the consolidated balance sheet. As of June 30, 2018, the fair value of the future swap was a liability of $1,943, which is included in other liabilities in the consolidated balance sheet. As of December 30, 2017,2019, the fair value of the Company’s currently effective swap was a current asset of $2,229, which is included in other current assets in the consolidated balance sheet. As of March 30, 2019, the fair value of the Company’s future swap was a liability of ~~$12,171~~$9,961, which is included in derivative payable in the consolidated balance sheet. As of December 29, 2018, the fair value of the Company’s currently effective swap included a current asset of $3,526 and a noncurrent asset of $398, which are included in other current assets and other noncurrent assets, respectively, in the consolidated balance sheet. As of December 29, 2018, the fair value of the Company’s future swap was a liability of $5,578, which is included in derivative payable in the consolidated balance sheet.

The Company is hedging forecasted transactions for periods not exceeding the next ~~six~~five years. The Company expects approximately ~~$675~~$690 ($~~905~~925 before taxes) of derivative gains included in accumulated other comprehensive loss at ~~June~~March 30, ~~2018,~~2019, 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 interest rate swap agreements as of ~~June~~March 30, ~~2018~~2019 and December ~~30, 2017.~~29, 2018. The fair value of the Company’s borrowings under the ~~New~~ Revolving Credit Facility approximated a carrying value of $0 ~~and $25,000~~ at ~~June~~March 30, ~~2018~~2019 and December ~~30, 2017,~~29, 2018, respectively, due to the nature of the debt (Level 2 input).

The fair value of the Company’s ~~New~~ Credit Facilities is determined by utilizing average bid prices on or near the end of each fiscal quarter (Level 2 input). As of ~~June~~March 30, ~~2018~~2019 and December ~~30, 2017,~~29, 2018, the fair value of the Company’s long-term debt was approximately ~~$1,812,744~~$1,628,502 and ~~$1,810,085,~~$1,757,717, respectively, as compared to the carrying value (net of deferred financing costs and debt discount) of ~~$1,762,969~~$1,709,702 and ~~$1,798,362,~~$1,746,708, 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 1112 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 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 three months ended ~~June~~March 30, ~~2018~~2019 and the fiscal year ended December ~~30, 2017.~~29, 2018.

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

Six Months Ended June 30, 2018

(Loss) Gain
on Qualifying
Hedges

Loss on
Foreign
Currency
Translation

Total

Beginning Balance at December 30, 2017

$
(5,392
)

$
(5,075
)

$
(10,467
)
Other comprehensive income (loss) before
   reclassifications, net of tax

7,236

(5,396
)

1,840

Amounts reclassified from accumulated other
   comprehensive loss, net of tax^(b)

1,942

0

1,942

Adoption of accounting standard

(1,161
)

(1,324
)

(2,485
)
Net current period other comprehensive income
   (loss) including noncontrolling interest

8,017

(6,720
)

1,297

Less: net current period other comprehensive
  loss attributable to the noncontrolling
   interest

0

373

373

Ending Balance at June 30, 2018

$
2,625

$
(11,422
)

$
(8,797
)

	Three Months Ended March 30, 2019
	Loss on Qualifying Hedges			Loss on Foreign Currency Translation			Total
Beginning Balance at December 29, 2018	$	(1,175	)	$	(14,582	)	$	(15,757	)
Other comprehensive (loss) income before reclassifications, net of tax		(4,552	)		1,279			(3,273	)
Amounts reclassified from accumulated other comprehensive loss, net of tax^(b)		(942	)		0			(942	)
Net current period other comprehensive (loss) income including noncontrolling interest		(5,494	)		1,279			(4,215	)
Less: net current period other comprehensive loss attributable to the noncontrolling interest		0			6			6
Ending Balance at March 30, 2019	$	(6,669	)	$	(13,297	)	$	(19,966	)

Six Months Ended July 1, 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 income before
   reclassifications, net of tax

(2,915
)

2,892

(23
)
Amounts reclassified from accumulated other
   comprehensive loss, net of tax^(b)

5,585

787

6,372

Net current period other comprehensive income
   including noncontrolling interest

2,670

3,679

6,349

Less: net current period other comprehensive
   income attributable to the noncontrolling
   interest

0

41

41

Ending Balance at July 1, 2017

$
(13,332
)

$
(7,398
)

$
(20,730
)

	Three months ended March 31, 2018
	(Loss) Gain on Qualifying Hedges			Loss on Foreign Currency Translation			Total
Beginning Balance at December 30, 2017	$	(5,392	)	$	(5,075	)	$	(10,467	)
Other comprehensive income (loss) before reclassifications, net of tax		6,651			(2,557	)		4,094
Amounts reclassified from accumulated other comprehensive loss, net of tax(b)		1,684		0				1,684
Adoption of accounting standard		(1,161	)		(1,324	)		(2,485	)
Net current period other comprehensive income (loss) including noncontrolling interest		7,174			(3,881	)		3,293
Less: net current period other comprehensive loss attributable to the noncontrolling interest	0				236			236
Ending Balance at March 31, 2018	$	1,782		$	(8,720	)	$	(6,938	)

	Three Months Ended						Six Months Ended							Three Months Ended
	June 30,			July 1,			June 30,			July 1,				March 30,			March 31,
	2018			2017			2018			2017				2019			2018
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	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	$	(346	)	$	(3,905	)	$	(2,603	)	$	(9,155	)	Interest expense	$	1,262		$	(2,257	)	Interest expense
		(346	)		(3,905	)		(2,603	)		(9,155	)	Income before income taxes		1,262			(2,257	)	(Loss) income before income taxes
		88			1,523			661			3,570		Provision for income taxes		(320	)		573		Benefit from income taxes
	$	(258	)	$	(2,382	)	$	(1,942	)	$	(5,585	)	Net income	$	942		$	(1,684	)	Net (loss) income
Loss on Foreign Currency Translation	$	0		$	(80	)	$	0		$	(787	)	Other expense (income), net
		0			(80	)		0			(787	)	Income before income taxes
		0			0			0			0		Provision for income taxes
	$	0		$	(80	)	$	0		$	(787	)	Net income

The Company has four reportable segments based on an integrated geographical structure as follows: North America, 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. Information about the Company’s reportable segments is as follows:

Net Income

Three Months Ended

Six Months Ended

June 30, 2018

July 1, 2017

June 30, 2018

July 1, 2017

Segment operating income:

North America

$
112,040

$
79,073

$
174,393

$
113,189

Continental Europe

32,478

22,767

50,409

27,823

United Kingdom

6,035

6,672

9,903

9,245

Other

3,452

3,263

5,037

4,941

Total segment operating income

154,005

111,775

239,742

155,198

General corporate expenses

26,297

15,569

49,963

28,758

Interest expense

35,866

27,092

71,732

55,234

Other expense (income), net

1,333

(488
)

1,097

154

Gain on early extinguishment of debt

0

(1,554
)

0

(1,554
)
Provision for income taxes

19,825

25,992

7,208

16,864

Net income

70,684

45,164

109,742

55,742

Net loss attributable to the noncontrolling interest

36

9

90

83

Net income attributable to Weight Watchers
International, Inc.

$
70,720

$
45,173

$
109,832

$
55,825

	Depreciation and Amortization
	Three Months Ended
	March 30, 2019		March 31, 2018
North America	$	9,303	$	9,480
Continental Europe		381		301
United Kingdom		285		366
Other		112		144
Total segment depreciation and amortization		10,081		10,291
General corporate depreciation and amortization		3,532		2,777
Depreciation and amortization	$	13,613	$	13,068

Due to the adoption of the updated lease accounting guidance the Company has a right of use operating lease asset of $148,447 as of March 30, 2019, of which 53% is in the North America reportable segment and 42% is general corporate related.

As previously disclosed, on October 18, 2015, the Company entered into the Strategic Collaboration Agreement with Oprah Winfrey, under which she will 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.

In addition to the Strategic Collaboration Agreement, Ms. Winfrey and her related entities provided services to the Company totaling ~~$689~~$1,283 and ~~$1,988~~$1,299 for the three ~~and six~~ months ended ~~June~~March 30, ~~2018, respectively~~2019 and ~~$874 and $2,556 for the three and six months ended July 1, 2017,~~March 31, 2018, respectively, which services included advertising, production and related fees.

The Company’s accounts payable to parties related to Ms. Winfrey at ~~June~~March 30, ~~2018~~2019 and December ~~30, 2017~~29, 2018 was ~~$233~~$58 and ~~$828,~~$62, respectively.

In March 2018, 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, and the Option Agreement, dated October 18, 2015, between the Company and Ms. Winfrey, Ms. Winfrey sold 954 of the shares she purchased under such purchase agreement and exercised a portion of her stock options resulting in the sale of 1,405 shares issuable under such options, respectively.

The Company undertook an organizational realignment which resulted in the elimination of certain positions and termination of employment for certain employees worldwide in the three months ended March 30, 2019. The Company recorded expenses in connection with employee termination benefit costs of $6,331 ($4,727 after tax) during the three months ended March 30, 2019. These expenses impacted cost of revenues by $1,425 and selling, general and administrative expense by $4,906. The Company does not anticipate recording additional expenses in connection with this organizational realignment. All expenses were recorded to general corporate expenses and therefore there was no impact to the segments.

The liability for these expenses at March 30, 2019 was $6,147, and $184 of payments were made during the first fiscal quarter ended March 30, 2019.

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 and prospects 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” 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 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” and ~~“WWI”~~“WW” refer to Weight Watchers 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; 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 and Other is also a reportable segment. Our ~~“meetings”~~“Digital” business refers to providing subscriptions to our digital product offerings, including the Personal Coaching + Digital product. Our “Studio + Digital” business refers to providing access to our weekly in-person workshops combined ~~meetings and~~with our digital subscription product offerings to ~~the Company’s~~ commitment plan ~~subscribers (including Total Access subscribers), as well as~~subscribers. Our “Studio + Digital” business also includes the provision of access to ~~meetings~~workshops for members who do not subscribe to commitment plans, including our “pay-as-you-go” ~~members and other meetings~~ members. ~~“Online” refers to Weight Watchers Online, Weight Watchers OnlinePlus, Personal Coaching and other digital subscription products.~~

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 terms used in this Quarterly Report on Form 10-Q are our trademarks: Weight Watchers^®and WW Freestyle^TM.

You should read the following discussion in conjunction with our Annual Report on Form 10-K for fiscal ~~2017~~2018 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. We present within this Quarterly Report on Form 10-Q the non-GAAP financial measures earnings before interest, taxes, depreciation, amortization and stock-based compensation (“EBITDAS”)~~, earnings before interest, taxes, depreciation, amortization, stock-based compensation and goodwill impairment (“Adjusted EBITDAS”)~~ and net debt. See “—Liquidity and Capital Resources—EBITDAS ~~Adjusted EBITDAS~~ and Net Debt” for the calculations. 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 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 franchise rights acquired with indefinite lives, 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 6, 2018 and May 7, 2017, each the first day of fiscal May, on our goodwill and other indefinite-lived intangible assets. In addition, for our Brazil reporting unit only, given the ongoing challenging economic environment, the negative performance trends and our reduced expectations regarding the future impact of our business growth strategies in the country, we performed an interim goodwill impairment analysis at December 30, 2017.

In performing our goodwill impairment analysis for our reporting units for fiscal 2018 and fiscal 2017 no impairment was identified as the respective fair values of each reporting unit exceeded its carrying value. ~~In performing the interim goodwill impairment analysis for our Brazil reporting unit at December 30, 2017, we recorded a $13.3 million impairment charge.~~ In performing the impairment analysis for our franchise rights acquired with indefinite lives for fiscal 2018 and fiscal 2017, 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 impairment 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 estimates and assumptions and believe that they are appropriate.

In performing our annual impairment analysis, we also considered the trading value of both our equity and debt. If the trading values of both our equity and debt were to significantly decline from their current levels, we may have to take an impairment charge at the appropriate time, which could be material. For additional information on risks associated with our recognizing asset impairment charges, see “Item 1A. Risk Factors” of our Annual Report on Form 10-K for fiscal 2017.

~~The following is a more detailed discussion of our goodwill and franchise rights acquired impairment analysis.~~

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 unit. We have determined the appropriate reporting unit for purposes of assessing annual impairment to be the country for all reporting units. The values of goodwill in the United States, Canada, Brazil and other countries as of the June 30, 2018 balance sheet date were $97.8 million, $40.8 million, $4.6 million and $9.9 million, respectively.

Based on the results of our annual impairment test performed for all of our reporting units except for Brazil, as of the June 30, 2018 balance sheet date, we estimated that for reporting units that hold 97.0% of our goodwill, those units had a fair value at least 50% higher than the respective reporting unit’s carrying amount. Based on the results of our annual impairment test performed for our Brazil reporting unit as of the June 30, 2018 balance sheet date, we estimated that this reporting unit holds 3.0% of our goodwill, and the fair value of this reporting unit was approximately 10% higher than its carrying value.

For all of our reporting units except for Brazil (see below), we estimated future cash flows by utilizing the historical debt-free cash flows (cash flows provided by operating activities 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 cost of capital, which included the cost 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. The cost of debt was determined by estimating our current borrowing rate.

~~The following are the more significant assumptions utilized in our annual impairment analysis (except for Brazil) for fiscal 2018 and fiscal 2017:~~

As it relates to our impairment analysis for Brazil, we estimated future debt free cash flows in contemplation of our growth strategies for that market. In developing these projections, we considered the historical impact 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 of capital, which included the cost 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, all as reflected in the discount rate. A further risk premium was included to reflect the risk associated with the significantly higher growth rates projected in the May 6, 2017 annual impairment test. ~~The cost of debt was determined by estimating the Company’s current borrowing rate.~~

~~The following are the more significant assumptions utilized in our interim and our annual impairment analysis for Brazil for fiscal 2018 and fiscal 2017:~~

Finite-lived franchise rights acquired are amortized over 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 our 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 meetings business and a relief from royalty methodology for our franchise rights related to our Online 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 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 as of the June 30, 2018 balance sheet date were $671.9 million, $54.9 million, $12.0 million, $6.7 million and $4.8 million, respectively.

~~Based on the results of our fiscal 2017 annual impairment analysis, we estimated that 100.0% of our franchise rights acquired had a fair value at least 50% higher than their carrying amount.~~

In our hypothetical start-up approach analysis for fiscal 2018, 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 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 in the goodwill impairment analysis.

In performing this impairment analysis for fiscal 2018, for the year of maturity we assumed meeting room revenue (comprised of Meeting Fees and revenues from products sold to members in meetings) growth of 37.2% to 59.3% in the year of maturity from fiscal 2017, in each case, earned in the applicable country and assumed cumulative annual revenue growth rates for the years beyond the year of maturity of 1.7%. For the year of maturity and beyond, we assumed operating income margin rates of 7.7% to 24.9%.

For a discussion of the ~~other~~ critical accounting policies affecting us, see “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations—Critical Accounting Policies” of our Annual Report on Form 10-K for fiscal ~~2017.~~2018. Our critical accounting policies have not changed since the end of fiscal ~~2017.~~2018.

Our management reviews and analyzes several key performance indicators in order to manage our business and assess the quality and potential variability of our cash flows and earnings. These key performance indicators include:

THREE MONTHS ENDED ~~JUNE~~MARCH 30, ~~2018~~2019 COMPARED TO THE THREE MONTHS ENDED ~~JULY 1, 2017~~MARCH 31, 2018

The table below sets forth selected financial information for the ~~second~~first quarter of fiscal 2019 from our consolidated statements of net income for the three months ended March 30, 2019 versus selected financial information for the first quarter of fiscal 2018 from our consolidated statements of net income for the three months ended ~~June 30, 2018 versus selected financial information for the second quarter of fiscal 2017 from our consolidated statements of net income for the three months ended July 1, 2017:~~March 31, 2018:

	(In millions, except per share amounts)																(In millions, except per share amounts)
	For The Three Months Ended												% Change				For The Three Months Ended													% Change
	June 30, 2018			July 1, 2017			Increase/ (Decrease)			% Change			Constant Currency				March 30, 2019			March 31, 2018			Increase/ (Decrease)			% Change				Constant Currency
Revenues, net	$	409.7		$	341.7		$	68.1			19.9	%		17.6	%		$	363.2		$	408.2		$	(45.1	)		(11.0	%)			(8.5	%)
Cost of revenues		165.0			152.7			12.3			8.1	%		6.2	%			162.2			187.2			(25.0	)		(13.4	%)			(11.1	%)

Gross profit		244.8			189.0			55.8			29.5	%	��	26.8	%			200.9			221.0			(20.1	)		(9.1	%)			(6.4	%)
Gross Margin %		59.7	%		55.3	%												55.3	%		54.1	%

Marketing expenses		55.4			42.0			13.5			32.1	%		28.3	%			114.2			98.9			15.3			15.5	%			19.2	%
Selling, general & administrative expenses		61.7			50.8			10.8			21.3	%		20.0	%			64.8			60.0			4.8			8.0	%			10.3	%
Operating income		127.7			96.2			31.5			32.7	%		29.7	%			21.9			62.1			(40.2	)		(64.7	%)			(63.2	%)
Operating Income Margin %		31.2	%		28.2	%												6.0	%		15.2	%

Interest expense		35.9			27.1			8.8			32.4	%		32.4	%			35.2			35.9			(0.7	)		(1.9	%)			(1.9	%)
Other expense (income), net		1.3			(0.5	)		1.8			100.0	%	*	100.0	%	*		0.3			(0.2	)		0.5			(100.0	%)	*		(100.0	%)	*
Gain on early extinguishment of debt		0.0			(1.6	)		1.6			(100.0	%)	*	(100.0	%)	*
Income before income taxes		90.5			71.2			19.4			27.2	%		23.1	%
Provision for income taxes		19.8			26.0			(6.2	)		(23.7	%)		(27.2	%)
Net income		70.7			45.2			25.5			56.5	%		52.0	%
(Loss) income before income taxes																		(13.6	)		26.4			(40.0	)		(100.0	%)	*		(100.0	%)	*

Benefit from income taxes																		(2.9	)		(12.6	)		9.7			(77.2	%)			(79.7	%)
Net (loss) income																		(10.7	)		39.1			(49.8	)		(100.0	%)	*		(100.0	%)	*
Net loss attributable to the noncontrolling interest		0.0			0.0			0.0		100.0%		*	100.0%			*		0.0			0.1			(0.0	)		(27.0	%)			(17.0	%)

Net income attributable to Weight Watchers International, Inc.	$	70.7		$	45.2		$	25.5			56.6	%		52.1	%
Net (loss) income attributable to Weight Watchers International, Inc.																	$	(10.7	)	$	39.1		$	(49.8	)		(100.0	%)	*		(100.0	%)	*
	��
Weighted average diluted shares outstanding		70.2			67.7			2.4			3.6	%		3.6	%			67.0			69.5			(2.5	)		(3.7	%)			(3.7	%)
Diluted earnings per share	$	1.01		$	0.67		$	0.34			51.2	%		46.9	%
Diluted (loss) earnings per share																	$	(0.16	)	$	0.56		$	(0.72	)		(100.0	%)	*		(100.0	%)	*

Revenues in the ~~second~~first quarter of fiscal ~~2018~~2019 were ~~$409.7~~$363.2 million, ~~an increase~~a decrease of ~~$68.1~~$45.1 million, or ~~19.9%~~11.0%, versus the ~~second~~first quarter of fiscal ~~2017.~~2018. Excluding the impact of foreign currency, which ~~positively~~negatively impacted our revenues for the ~~second~~first quarter of fiscal ~~2018~~2019 by ~~$8.0~~$10.2 million, revenues in the ~~second~~first quarter of fiscal ~~2018~~2019 would have ~~increased 17.6%~~decreased 8.5% versus the prior year period. This ~~increase~~decrease was driven primarily by the revenue ~~growth~~declines in ~~all major markets.~~North America and the United Kingdom. See “—Segment Results” for additional details on revenues.

Total cost of revenues in the ~~second~~first quarter of fiscal ~~2018 increased $12.3~~2019 decreased $25.0 million, or ~~8.1%~~13.4%, versus the prior year period. Gross profit ~~increased $55.8~~decreased $20.1 million, or ~~29.5%~~9.1%, in the ~~second~~first quarter of fiscal 2019 compared to the first quarter of fiscal 2018 ~~compared to the second quarter of fiscal 2017~~ primarily due to the ~~increase~~decrease in revenues. Excluding the impact of foreign currency, which ~~positively~~negatively impacted gross profit for the ~~second~~first quarter of fiscal ~~2018~~2019 by ~~$5.2~~$5.9 million, gross profit in the ~~second~~first quarter of fiscal ~~2018~~2019 would have ~~increased 26.8%~~decreased 6.4% versus the prior year period. Gross margin in the ~~second~~first quarter of fiscal ~~2018~~2019 increased ~~4.4%~~1.2% to ~~59.7%~~55.3% versus ~~55.3%~~54.1% in the ~~second~~first quarter of fiscal ~~2017.~~2018. Gross margin expansion was driven primarily by ~~improved operating leverage and~~ a mix shift to the higher margin ~~Online business.~~Digital business and cycling against the impact of an inventory obsolescence reserve taken in the first quarter of fiscal 2018 partially offset by fixed cost deleverage.

Marketing expenses for the ~~second~~first quarter of fiscal ~~2018~~2019 increased ~~$13.5~~$15.3 million, or ~~32.1%~~15.5%, versus the ~~second~~first quarter of fiscal ~~2017.~~2018. Excluding the impact of foreign currency, which ~~increased~~decreased marketing expenses for the ~~second~~first quarter of fiscal ~~2018~~2019 by ~~$1.6~~$3.6 million, marketing expenses in the ~~second~~first quarter of fiscal ~~2018~~2019 would have increased ~~28.3%~~19.2% versus the ~~second~~first quarter of fiscal ~~2017.~~2018. This increase in marketing expense was largely due to ~~investments in digital marketing initiatives~~increased TV and ~~our Summer of Impact campaign, as well as investments in evolving our brand.~~Online media expense, production costs and agency fees, all on a global basis. Marketing expenses as a percentage of revenue increased to ~~13.5%~~31.5% in the ~~second~~first quarter of fiscal ~~2018~~2019 as compared to ~~12.3%~~24.2% in the prior year period.

Selling, general and administrative expenses for the ~~second~~first quarter of fiscal ~~2018~~2019 increased ~~$10.8~~$4.8 million, or ~~21.3%~~8.0%, versus the ~~second~~first quarter of fiscal ~~2017.~~2018. Excluding the impact of foreign currency, which ~~increased~~decreased selling, general and administrative expenses for the ~~second~~first quarter of fiscal ~~2018~~2019 by ~~$0.7~~$1.4 million, selling, general and administrative expenses in the ~~second~~first quarter of fiscal ~~2018~~2019 would have increased ~~20.0%~~10.3% versus the prior year period. The increase in selling, general and administrative expenses in the ~~second~~first quarter of fiscal ~~2018~~2019 was driven primarily by ~~higher compensation and incentive-related costs.~~expenses related to our organizational realignment in the quarter. Selling, general and administrative expenses as a percentage of revenue for the ~~second~~first quarter of fiscal ~~2018~~2019 increased to ~~15.0%~~17.8% from ~~14.9%~~14.7% for the ~~second~~first quarter of fiscal ~~2017.~~2018.

Operating income in the ~~second~~first quarter of fiscal ~~2018 increased $31.5~~2019 decreased $40.2 million, or ~~32.7%~~64.7%, versus the prior year period. Excluding the impact of foreign currency, which ~~positively~~negatively impacted operating income for the ~~second~~first quarter of fiscal ~~2018~~2019 by ~~$2.9~~$0.9 million, operating income in the ~~second~~first quarter of fiscal ~~2018~~2019 would have ~~increased 29.7%~~decreased 63.2% versus the prior year period. This ~~increase~~decrease in operating income was driven by ~~higher~~lower operating income in ~~North America and Continental Europe~~all reportable segments as compared to the prior year period. Operating income margin in the ~~second~~first quarter of fiscal ~~2018 increased 3.0%~~2019 decreased 9.2% to ~~31.2%~~6.0% versus ~~28.2%~~15.2% in the ~~second~~first quarter of fiscal ~~2017.~~2018. This ~~increase~~decrease in operating income margin was driven ~~by an increase in gross margin partially offset~~primarily by an increase in marketing ~~expenses~~ as a percentage of ~~revenue,~~revenues and to a lesser extent an increase in selling, general and administrative expenses as a percentage of ~~revenue, all as compared to the prior year period.~~revenues.

Interest expense in the ~~second~~first quarter of fiscal ~~2018 increased $8.8~~2019 decreased $0.7 million, or ~~32.4%~~1.9%, versus the ~~second~~first quarter of fiscal ~~2017.~~2018. The ~~increase~~decrease in interest expense was driven primarily by ~~higher interest expense arising~~a decrease in our outstanding indebtedness resulting from ~~the interest rates under our New Term Loan Facility (defined hereafter) and on our Notes (defined hereafter) in connection with our November 2017 debt refinancing.~~scheduled principal repayments. The effective interest rate on our debt, based on interest incurred (which includes amortization of our deferred financing costs and debt discount) and our average borrowings during the ~~second~~first quarter of fiscal ~~2018~~2019 and the ~~second~~first quarter of fiscal ~~2017~~2018 and excluding the impact of our interest rate swap, increased to ~~7.73%~~8.22% per annum at the end of the ~~second~~first quarter of fiscal ~~2018~~2019 from ~~4.66%~~7.15% per annum at the end of the ~~second~~first quarter of fiscal ~~2017.~~2018. Including the impact of our interest rate swap, the effective interest rate on our debt, based on interest incurred (which includes amortization of our deferred financing costs and debt discount) and our average borrowings during the ~~second~~first quarter of fiscal 2019 and the first quarter of fiscal 2018, ~~and the second quarter of fiscal 2017,~~ increased to ~~7.80%~~7.93% per annum at the end of the ~~second~~first quarter of fiscal ~~2018~~2019 from ~~5.44%~~7.64% per annum at the end of the ~~second~~first quarter of fiscal ~~2017.~~ 2018. See “—Liquidity and Capital Resources—Long-Term Debt” for additional details regarding our ~~current and prior credit facilities and our Notes,~~debt, including interest rates ~~on our debt outstanding,~~ and payments ~~on our debt.~~ thereon. For additional details on our interest rate swap, 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 ~~$1.8~~$0.5 million in the ~~second~~first quarter of fiscal ~~2018~~2019 to ~~$1.3~~$0.3 million of expense as compared to ~~$0.5~~$0.2 million of income in the prior year period.

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 our then-existing 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.

Our effective tax rate for the ~~second~~first quarter of fiscal ~~2018~~2019 was ~~21.9%~~21.1% as compared to ~~36.5%~~(47.7%) for the ~~second~~first quarter of fiscal ~~2017.~~2018. The effective tax rate in the ~~second~~first quarter of fiscal 2019 was impacted by $1.5 million of higher state income tax expenses versus the prior year period and a $0.9 million tax expense related to global intangible low-taxed income, or GILTI. The effective tax rate was partially offset by a $0.6 million tax benefit related to foreign-derived intangible income, or FDII. Our effective tax rate in the first quarter of fiscal 2018 was impacted by the ~~$4.1~~$18.1 million tax benefit related to tax windfalls from stock ~~compensation.~~compensation and a $1.9 million tax benefit related to the cessation of operations of our Mexican subsidiary.

Net loss attributable to the Company in the first quarter of fiscal 2019 reflected a $49.8 million, or 127.3%, decline from net income attributable to the Company in the ~~second~~first quarter of fiscal ~~2018 increased $25.5 million, or 56.6%, from the second quarter of fiscal 2017.~~ 2018. Excluding the impact of foreign currency, which ~~positively~~negatively impacted net income attributable to the Company in the ~~second~~first quarter of fiscal ~~2018~~2019 by ~~$2.0~~$0.6 million, net loss attributable to the Company in the first quarter of fiscal 2019 would have reflected a 125.8% decline from net income attributable to the Company in the ~~second~~first quarter of fiscal ~~2018 would have increased by 52.1% versus the prior year period.~~ 2018.

Earnings per fully diluted share, or EPS, in the ~~second~~first quarter of fiscal 2019 was a loss of $0.16 compared to income of $0.56 in the first quarter of fiscal 2018. EPS for the first quarter of fiscal 2019 included a $0.07 expense in connection with our organizational realignment in the quarter and EPS for the first quarter of fiscal 2018 ~~was $1.01 compared to $0.67 in the second quarter of fiscal 2017. EPS for the second quarter of fiscal 2017~~ included a $0.25 tax benefit from Oprah Winfrey’s exercise of ~~$0.01 in connection with the gain on early extinguishment~~a portion of ~~debt.~~her stock options.

~~The following tables set forth key metrics by reportable segment for the second quarter~~Summary of ~~fiscal 2018 and the percentage change in those metrics versus the prior year period:~~

Q2 2018

GAAP

Constant Currency

Product

Product

Total

Service

Sales &

Total

Service

Sales &

Total

Paid

Incoming

EOP

Revenues

Other

Revenues

Revenues

Other

Revenues

Weeks

Subscribers

Subscribers

(in thousands)

North America

$
243.9

$
40.7

$
284.5

$
243.2

$
40.6

$
283.7

40.9

3,034.3

2,997.0

CE

68.7

12.8

81.6

64.2

11.9

76.1

13.6

1,040.1

1,020.6

UK

21.5

7.7

29.2

20.2

7.2

27.5

5.3

389.1

383.5

Other ⁽¹⁾

9.6

4.8

14.4

9.7

4.8

14.5

1.4

106.5

100.8

Total

$
343.7

$
66.0

$
409.7

$
337.3

$
64.5

$
401.8

61.2

4,569.9

4,502.0

% Change Q2 2018 vs. Q2 2017

North America

20.0
%

13.6
%

19.1
%

19.7
%

13.4
%

18.7
%

28.3
%

28.1
%

28.5
%
CE

36.1
%

16.8
%

32.7
%

27.1
%

8.6
%

23.8
%

31.7
%

34.4
%

30.2
%
UK

8.8
%

15.6
%

10.5
%

2.3
%

8.6
%

3.9
%

15.9
%

18.9
%

15.2
%
Other ⁽¹⁾

0.9
%

(8.1
%)

(2.3
%)

1.9
%

(8.6
%)

(1.8
%)

8.0
%

25.1
%

29.7
%
Total

21.5
%

12.5
%

19.9
%

19.2
%

10.0
%

17.6
%

27.3
%

28.6
%

27.6
%

	(In millions, except per share amounts)
	For The Three Months Ended													% Change
	March 30, 2019			March 31, 2018			Increase/ (Decrease)			% Change				Constant Currency
Revenues, net	$	363.2		$	408.2		$	(45.1	)		(11.0	%)			(8.5	%)
Cost of revenues		162.2			187.2			(25.0	)		(13.4	%)			(11.1	%)

Gross profit		200.9			221.0			(20.1	)		(9.1	%)			(6.4	%)
Gross Margin %		55.3	%		54.1	%

Marketing expenses		114.2			98.9			15.3			15.5	%			19.2	%
Selling, general & administrative expenses		64.8			60.0			4.8			8.0	%			10.3	%
Operating income		21.9			62.1			(40.2	)		(64.7	%)			(63.2	%)
Operating Income Margin %		6.0	%		15.2	%

Interest expense		35.2			35.9			(0.7	)		(1.9	%)			(1.9	%)
Other expense (income), net		0.3			(0.2	)		0.5			(100.0	%)	*		(100.0	%)	*
(Loss) income before income taxes		(13.6	)		26.4			(40.0	)		(100.0	%)	*		(100.0	%)	*

Benefit from income taxes		(2.9	)		(12.6	)		9.7			(77.2	%)			(79.7	%)
Net (loss) income		(10.7	)		39.1			(49.8	)		(100.0	%)	*		(100.0	%)	*
Net loss attributable to the noncontrolling interest		0.0			0.1			(0.0	)		(27.0	%)			(17.0	%)

Net (loss) income attributable to Weight Watchers International, Inc.	$	(10.7	)	$	39.1		$	(49.8	)		(100.0	%)	*		(100.0	%)	*

Weighted average diluted shares outstanding		67.0			69.5			(2.5	)		(3.7	%)			(3.7	%)
Diluted (loss) earnings per share	$	(0.16	)	$	0.56		$	(0.72	)		(100.0	%)	*		(100.0	%)	*

Q2 2018

Meeting Fees

Meeting

Incoming

EOP

Online Subscription
Revenues

Online

Incoming

EOP

Constant

Paid

Meeting

Meeting

Constant

Paid

Online

Online

GAAP

Currency

Weeks

Subscribers

Subscribers

GAAP

Currency

Weeks

Subscribers

Subscribers

(in thousands)

(in thousands)

North America

$
142.8

$
142.4

15.4

1,119.4

1,082.7

$
101.1

$
100.8

25.5

1,914.9

1,914.3

CE

29.4

27.4

3.5

266.9

247.3

39.3

36.7

10.2

773.2

773.3

UK

14.6

13.7

2.9

209.6

203.6

7.0

6.5

2.4

179.4

179.9

Other ⁽¹⁾

6.0

6.1

0.6

48.6

45.2

3.6

3.6

0.7

57.9

55.5

Total

$
192.7

$
189.6

22.4

1,644.5

1,578.9

$
151.0

$
147.7

38.8

2,925.4

2,923.1

% Change Q2 2018 vs. Q2 2017

North America

10.1
%

9.8
%

10.7
%

12.4
%

10.5
%

37.5
%

37.1
%

42.0
%

39.5
%

41.6
%
CE

18.6
%

10.6
%

14.9
%

18.0
%

14.1
%

53.1
%

42.9
%

38.5
%

41.3
%

36.3
%
UK

3.7
%

(2.4
%)

7.8
%

10.7
%

7.8
%

21.1
%

13.8
%

27.5
%

30.0
%

24.8
%
Other ⁽¹⁾

(8.0
%)

(6.6
%)

(8.8
%)

24.7
%

27.4
%

20.1
%

20.3
%

28.3
%

25.5
%

31.7
%
Total

10.1
%

8.3
%

10.3
%

13.4
%

11.1
%

39.8
%

36.8
%

39.8
%

39.0
%

38.8
%

~~The increase in North America~~the first quarter of fiscal 2019 were $363.2 million, a decrease of $45.1 million, or 11.0%, versus the first quarter of fiscal 2018. Excluding the impact of foreign currency, which negatively impacted our revenues for the first quarter of fiscal 2019 by $10.2 million, revenues in the ~~second~~first quarter of fiscal ~~2018~~2019 would have decreased 8.5% versus the prior year ~~period~~period. This decrease was driven primarily by the ~~increase~~revenue declines in ~~Service Revenues. This increase in Service~~North America and the United Kingdom. See “—Segment Results” for additional details on revenues.

Total cost of revenues in the ~~second~~first quarter of fiscal 2019 decreased $25.0 million, or 13.4%, versus the prior year period. Gross profit decreased $20.1 million, or 9.1%, in the first quarter of fiscal 2019 compared to the first quarter of fiscal 2018 primarily due to the decrease in revenues. Excluding the impact of foreign currency, which negatively impacted gross profit for the first quarter of fiscal 2019 by $5.9 million, gross profit in the first quarter of fiscal 2019 would have decreased 6.4% versus the prior year ~~period~~period. Gross margin in the first quarter of fiscal 2019 increased 1.2% to 55.3% versus 54.1% in the first quarter of fiscal 2018. Gross margin expansion was driven primarily by a mix shift to the higher margin Digital business and cycling against the impact of an inventory obsolescence reserve taken in the first quarter of fiscal 2018 partially offset by fixed cost deleverage.

Marketing expenses for the first quarter of fiscal 2019 increased $15.3 million, or 15.5%, versus the first quarter of fiscal 2018. Excluding the impact of foreign currency, which decreased marketing expenses for the first quarter of fiscal 2019 by $3.6 million, marketing expenses in the first quarter of fiscal 2019 would have increased 19.2% versus the first quarter of fiscal 2018. This increase in marketing expense was largely due to increased TV and Online ~~Subscription Revenues~~media expense, production costs and agency fees, all on a global basis. Marketing expenses as a percentage of revenue increased to 31.5% in the first quarter of fiscal 2019 as compared to 24.2% in the prior year period.

Selling, general and administrative expenses for the first quarter of fiscal 2019 increased $4.8 million, or 8.0%, versus the first quarter of fiscal 2018. Excluding the impact of foreign currency, which decreased selling, general and administrative expenses for the first quarter of fiscal 2019 by $1.4 million, selling, general and administrative expenses in the first quarter of fiscal 2019 would have increased 10.3% versus the prior year period. The increase in selling, general and administrative expenses in the first quarter of fiscal 2019 was driven primarily by expenses related to our organizational realignment in the quarter. Selling, general and administrative expenses as a percentage of revenue for the first quarter of fiscal 2019 increased to 17.8% from 14.7% for the first quarter of fiscal 2018.

Operating income in the first quarter of fiscal 2019 decreased $40.2 million, or 64.7%, versus the prior year period. Excluding the impact of foreign currency, which negatively impacted operating income for the first quarter of fiscal 2019 by $0.9 million, operating income in the first quarter of fiscal 2019 would have decreased 63.2% versus the prior year period. This decrease in operating income was driven by lower operating income in all reportable segments as compared to the prior year period. Operating income margin in the first quarter of fiscal 2019 decreased 9.2% to 6.0% versus 15.2% in the first quarter of fiscal 2018. This decrease in operating income margin was driven primarily by an increase in marketing as a percentage of revenues and to a lesser extent an increase in ~~Meeting Fees. The increase~~selling, general and administrative expenses as a percentage of revenues.

Interest expense in ~~North America Total Paid Weeks was driven by~~ the ~~higher number of Incoming Subscribers at the beginning of the second quarter fiscal 2018 versus the beginning of the second~~first quarter of fiscal ~~2017, higher Online recruitments~~2019 decreased $0.7 million, or 1.9%, versus the first quarter of fiscal 2018. The decrease in ~~the quarter~~interest expense was driven primarily by ~~the successful launch~~a decrease in our outstanding indebtedness resulting from scheduled principal repayments. The effective interest rate on our debt, based on interest incurred (which includes amortization of our ~~new WW Freestyle program~~deferred financing costs and ~~improved retention in~~debt discount) and our average borrowings during the ~~second~~first quarter of fiscal 2019 and the first quarter of fiscal 2018 ~~versus~~and excluding the ~~prior year period.~~

~~The increase in North America product sales~~impact of our interest rate swap, increased to 8.22% per annum at the end of the first quarter of fiscal 2019 from 7.15% per annum at the end of the first quarter of fiscal 2018. Including the impact of our interest rate swap, the effective interest rate on our debt, based on interest incurred (which includes amortization of our deferred financing costs and ~~other in~~debt discount) and our average borrowings during the ~~second~~first quarter of fiscal 2019 and the first quarter of fiscal 2018, ~~versus~~increased to 7.93% per annum at the ~~prior year period was driven primarily by an increase in product sales.~~

~~The increase in Continental Europe revenues in~~end of the ~~second~~first quarter of fiscal ~~2018 versus~~2019 from 7.64% per annum at the ~~prior year period was driven primarily by~~end of the ~~increase in Service Revenues. This increase in Service Revenues in the second~~first quarter of fiscal ~~2018 versus the prior year period was driven~~2018. See “—Liquidity and Capital Resources—Long-Term Debt” for additional details regarding our debt, including interest rates and payments thereon. For additional details on our interest rate swap, 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 ~~by the increase in Online Subscription Revenues. The increase in Continental Europe Total Paid Weeks was driven by the higher number of Incoming Subscribers at the beginning~~ of the ~~second~~impact of foreign currency on intercompany transactions, increased by $0.5 million in the first quarter of fiscal ~~2018 versus the beginning~~2019 to $0.3 million of ~~the second quarter~~expense as compared to $0.2 million of ~~fiscal 2017, higher recruitments~~income in ~~the quarter driven by the successful launch of our new program and improved retention in the second quarter of fiscal 2018 versus the prior year period.~~

~~The increase in Continental Europe product sales and other in the second quarter of fiscal 2018 versus the prior year period was driven by an increase in both product sales and licensing revenue.~~

The increase in UK revenues in the second quarter of fiscal 2018 versus the prior year period was driven primarily by the increase in Service Revenues. The increase in UK Total Paid Weeks was driven by the higher number of Incoming Subscribers at the beginning of the second quarter of fiscal 2018 versus the beginning of the second quarter of fiscal 2017, higher recruitments, primarily in our Online business driven by the successful launch of our new program and improved retention in the second quarter of fiscal 2018 versus the prior year period.

Our effective tax rate for the ~~second~~first quarter of fiscal ~~2018~~2019 was 21.1% as compared to (47.7%) for the first quarter of fiscal 2018. The effective tax rate in the first quarter of fiscal 2019 was impacted by $1.5 million of higher state income tax expenses versus the prior year period and a $0.9 million tax expense related to global intangible low-taxed income, or GILTI. The effective tax rate was ~~driven by an increase in product sales,~~ partially offset by a ~~decline in licensing revenue.~~$0.6 million tax benefit related to foreign-derived intangible income, or FDII

Other revenues in the second quarter of fiscal 2018 declined versus the prior year period. Although Service Revenues increased in the second quarter of fiscal 2018 versus the prior year period, a decrease in product sales and other more than offset such increase. The increase in Other Total Paid Weeks was driven primarily by the higher number of Incoming Online Subscribers at the beginning of the second quarter of fiscal 2018 versus the beginning of the second quarter of fiscal 2017 and recruitment strength in our Online business driven by the successful launch of our new program. Our effective tax rate in the first quarter of fiscal 2018 ~~versus~~was impacted by the ~~prior year period.~~$18.1 million tax benefit related to tax windfalls from stock compensation and a $1.9 million tax benefit related to the cessation of operations of our Mexican subsidiary.

~~SIX MONTHS ENDED JUNE 30, 2018 COMPARED TO THE SIX MONTHS ENDED JULY 1, 2017~~Net (Loss) Income Attributable to the Company and (Loss) Earnings Per Share

~~The table below sets forth selected financial information~~Net loss attributable to the Company in the first quarter of fiscal 2019 reflected a $49.8 million, or 127.3%, decline from net income attributable to the Company in the first quarter of fiscal 2018. Excluding the impact of foreign currency, which negatively impacted net income attributable to the Company in the first quarter of fiscal 2019 by $0.6 million, net loss attributable to the Company in the first quarter of fiscal 2019 would have reflected a 125.8% decline from net income attributable to the Company in the first quarter of fiscal 2018.

Earnings per fully diluted share, or EPS, in the first quarter of fiscal 2019 was a loss of $0.16 compared to income of $0.56 in the first quarter of fiscal 2018. EPS for the first ~~six months~~quarter of fiscal 2019 included a $0.07 expense in connection with our organizational realignment in the quarter and EPS for the first quarter of fiscal 2018 included a $0.25 tax benefit from ~~our consolidated statements~~Oprah Winfrey’s exercise of ~~net income for the six months ended June 30, 2018 versus selected financial information for the first six months~~a portion of ~~fiscal 2017 from our consolidated statements of net income for the six months ended July 1, 2017:~~her stock options.

(In millions, except
per share amounts)

For The Six Months Ended

% Change

June 30, 2018

July 1, 2017

Increase/
(Decrease)

%
Change

Constant
Currency

Revenues, net

$
818.0

$
670.7

$
147.2

22.0
%

18.5
%

Cost of revenues

352.2

317.6

34.5

10.9
%

8.0
%

Gross profit

465.8

353.1

112.7

31.9
%

28.0
%

Gross Margin %

56.9
%

52.6
%

Marketing expenses

154.3

128.4

25.9

20.2
%

15.7
%

Selling, general & administrative expenses

121.7

98.3

23.4

23.8
%

21.7
%

Operating income

189.8

126.4

63.3

50.1
%

45.5
%

Operating Income Margin %

23.2
%

18.9
%

Interest expense

71.7

55.2

16.5

29.9
%

29.9
%

Other expense, net

1.1

0.2

0.9

100.0
%*
  100.0%

*
Gain on early extinguishment of debt

0.0

(1.6
)

1.6

(100.0
%)
*
(100.0
%)
*
Income before income taxes

116.9

72.6

44.3

61.1
%

53.0
%

Provision for income taxes

7.2

16.9

(9.7
)

(57.3
%)

(68.0
%)

Net income

109.7

55.7

54.0

96.9
%

89.6
%

Net loss attributable to the noncontrolling
   interest

0.1

0.1

0.0

7.8
%

16.3
%

Net income attributable to Weight
   Watchers International, Inc.

$
109.8

$
55.8

$
54.0

96.7
%

89.5
%

Weighted average diluted shares outstanding

69.9

67.3

2.6

3.9
%

3.9
%

Diluted earnings per share

$
1.57

$
0.83

$
0.74

89.4
%

82.5
%

	(In millions, except per share amounts)
	For The Three Months Ended													% Change
	March 30, 2019			March 31, 2018			Increase/ (Decrease)			% Change				Constant Currency
Revenues, net	$	363.2		$	408.2		$	(45.1	)		(11.0	%)			(8.5	%)
Cost of revenues		162.2			187.2			(25.0	)		(13.4	%)			(11.1	%)

Gross profit		200.9			221.0			(20.1	)		(9.1	%)			(6.4	%)
Gross Margin %		55.3	%		54.1	%

Marketing expenses		114.2			98.9			15.3			15.5	%			19.2	%
Selling, general & administrative expenses		64.8			60.0			4.8			8.0	%			10.3	%
Operating income		21.9			62.1			(40.2	)		(64.7	%)			(63.2	%)
Operating Income Margin %		6.0	%		15.2	%

Interest expense		35.2			35.9			(0.7	)		(1.9	%)			(1.9	%)
Other expense (income), net		0.3			(0.2	)		0.5			(100.0	%)	*		(100.0	%)	*
(Loss) income before income taxes		(13.6	)		26.4			(40.0	)		(100.0	%)	*		(100.0	%)	*

Benefit from income taxes		(2.9	)		(12.6	)		9.7			(77.2	%)			(79.7	%)
Net (loss) income		(10.7	)		39.1			(49.8	)		(100.0	%)	*		(100.0	%)	*
Net loss attributable to the noncontrolling interest		0.0			0.1			(0.0	)		(27.0	%)			(17.0	%)

Net (loss) income attributable to Weight Watchers International, Inc.	$	(10.7	)	$	39.1		$	(49.8	)		(100.0	%)	*		(100.0	%)	*

Weighted average diluted shares outstanding		67.0			69.5			(2.5	)		(3.7	%)			(3.7	%)
Diluted (loss) earnings per share	$	(0.16	)	$	0.56		$	(0.72	)		(100.0	%)	*		(100.0	%)	*

Revenues in the first ~~six months~~quarter of fiscal ~~2018~~2019 were ~~$818.0~~$363.2 million, ~~an increase~~a decrease of ~~$147.2~~$45.1 million, or ~~22.0%~~11.0%, versus the first ~~six months~~quarter of fiscal ~~2017.~~2018. Excluding the impact of foreign currency, which ~~positively~~negatively impacted our revenues for the first ~~six months~~quarter of fiscal ~~2018~~2019 by ~~$22.8~~$10.2 million, revenues in the first ~~six months~~quarter of fiscal ~~2018~~2019 would have ~~increased 18.5%~~decreased 8.5% versus the prior year period. This ~~increase~~decrease was driven primarily by the revenue ~~growth~~declines in ~~all major markets.~~North America and the United Kingdom. See “—Segment Results” for additional details on revenues.

Total cost of revenues in the first ~~six months~~quarter of fiscal ~~2018 increased $34.5~~2019 decreased $25.0 million, or ~~10.9%~~13.4%, versus the prior year period. Gross profit ~~increased $112.7~~decreased $20.1 million, or ~~31.9%~~9.1%, in the first ~~six months~~quarter of fiscal ~~2018~~2019 compared to the first ~~six months~~quarter of fiscal ~~2017~~2018 primarily due to the ~~increase~~decrease in revenues. Excluding the impact of foreign currency, which ~~positively~~negatively impacted gross profit for the first ~~six months~~quarter of fiscal ~~2018~~2019 by ~~$13.7~~$5.9 million, gross profit in the first ~~six months~~quarter of fiscal ~~2018~~2019 would have ~~increased 28.0%~~decreased 6.4% versus the prior year period. Gross margin in the first ~~six months~~quarter of fiscal ~~2018~~2019 increased ~~4.3%~~1.2% to ~~56.9%~~55.3% versus ~~52.6%~~54.1% in the first ~~six months~~quarter of fiscal ~~2017.~~2018. Gross margin expansion was driven primarily by ~~improved operating leverage and~~ a mix shift to the higher margin ~~Online business.~~Digital business and cycling against the impact of an inventory obsolescence reserve taken in the first quarter of fiscal 2018 partially offset by fixed cost deleverage.

Marketing expenses for the first ~~six months~~quarter of fiscal ~~2018~~2019 increased ~~$25.9~~$15.3 million, or ~~20.2%~~15.5%, versus the first ~~six months~~quarter of fiscal ~~2017.~~2018. Excluding the impact of foreign currency, which ~~increased~~decreased marketing expenses for the first ~~six months~~quarter of fiscal ~~2018~~2019 by ~~$5.8~~$3.6 million, marketing expenses in the first ~~six months~~quarter of fiscal ~~2018~~2019 would have increased ~~15.7%~~19.2% versus the first ~~six months~~quarter of fiscal ~~2017.~~2018. This increase in marketing expense was largely due to ~~investments in digital marketing initiatives~~increased TV and ~~our Summer of Impact campaign, as well as investments in evolving our brand.~~Online media expense, production costs and agency fees, all on a global basis. Marketing expenses as a percentage of revenue ~~decreased~~increased to ~~18.9%~~31.5% in the first ~~six months~~quarter of fiscal ~~2018~~2019 as compared to ~~19.1%~~24.2% in the prior year period.

Selling, general and administrative expenses for the first ~~six months~~quarter of fiscal ~~2018~~2019 increased ~~$23.4~~$4.8 million, or ~~23.8%~~8.0%, versus the first ~~six months~~quarter of fiscal ~~2017.~~2018. Excluding the impact of foreign currency, which ~~increased~~decreased selling, general and administrative expenses for the first ~~six months~~quarter of fiscal ~~2018~~2019 by ~~$2.1~~$1.4 million, selling, general and administrative expenses in the first ~~six months~~quarter of fiscal ~~2018~~2019 would have increased ~~21.7%~~10.3% versus the prior year period. The increase in selling, general and administrative expenses in the first ~~six months~~quarter of fiscal ~~2018~~2019 was driven primarily by ~~higher compensation and incentive-related costs.~~expenses related to our organizational realignment in the quarter. Selling, general and administrative expenses as a percentage of revenue for the first ~~six months~~quarter of fiscal ~~2018~~2019 increased to ~~14.9%~~17.8% from 14.7% for the first ~~six months~~quarter of fiscal ~~2017.~~2018.

Operating income ~~for~~in the first ~~six months~~quarter of fiscal ~~2018 increased $63.3~~2019 decreased $40.2 million, or ~~50.1%~~64.7%, versus the ~~first six months of fiscal 2017.~~prior year period. Excluding the impact of foreign currency, which ~~positively~~negatively impacted operating income for the first ~~six months~~quarter of fiscal ~~2018~~2019 by ~~$5.8~~$0.9 million, operating income in the first ~~six months~~quarter of fiscal ~~2018~~2019 would have ~~increased 45.5%~~decreased 63.2% versus the prior year period. This ~~increase~~decrease in operating income was driven by ~~higher~~lower operating income in all ~~major markets~~reportable segments as compared to the prior year period. Operating income margin ~~for~~in the first ~~six months~~quarter of fiscal ~~2018 increased 4.4%~~2019 decreased 9.2% to ~~23.2%~~6.0% versus ~~18.9% for~~15.2% in the first ~~six months~~quarter of fiscal ~~2017.~~2018. This ~~increase~~decrease in operating income margin was driven primarily by an increase in ~~gross margin~~marketing as a percentage of revenues and to a ~~decrease~~lesser extent an increase in ~~marketing~~selling, general and administrative expenses as a percentage of ~~revenue, both as compared to the prior year period.~~revenues.

Interest expense in the first ~~six months~~quarter of fiscal ~~2018 increased $16.5~~2019 decreased $0.7 million, or ~~29.9%~~ 1.9%, versus the first ~~six months~~quarter of fiscal ~~2017.~~2018. The ~~increase~~decrease in interest expense was driven primarily by ~~higher interest expense arising~~a decrease in our outstanding indebtedness resulting from ~~the interest rates under our New Term Loan Facility and on our Notes in connection with our November 2017 debt refinancing.~~scheduled principal repayments. The effective interest rate on our debt, based on interest incurred (which includes amortization of our deferred financing costs and debt discount) and our average borrowings during the first ~~six months~~quarter of fiscal ~~2018~~2019 and the first ~~six months~~quarter of fiscal ~~2017~~2018 and excluding the impact of our interest rate swap, increased to ~~7.44%~~8.22% per annum at the end of the first ~~six months~~quarter of fiscal ~~2018~~2019 from ~~4.64%~~7.15% per annum at the end of the first ~~six months~~quarter of fiscal ~~2017.~~2018. Including the impact of our interest rate swap, the effective interest rate on our debt, based on interest incurred (which includes amortization of our deferred financing costs and debt discount) and our average borrowings during the first ~~six months~~quarter of fiscal 2019 and the first quarter of fiscal 2018, ~~and the first six months of fiscal 2017,~~ increased to ~~7.72%~~7.93% per annum at the end of the first ~~six months~~quarter of fiscal ~~2018~~2019 from ~~5.56%~~7.64% per annum at the end of the first ~~six months~~quarter of fiscal ~~2017.~~ 2018. See “—Liquidity and Capital Resources—Long-Term Debt” for

additional details regarding our ~~current and prior credit facilities and our Notes,~~debt, including interest rates ~~on our debt outstanding,~~ and payments ~~on our debt.~~ thereon. For additional details on our interest rate swap, 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 ~~$0.9~~$0.5 million in the first ~~six months~~quarter of fiscal ~~2018~~2019 to ~~$1.1~~$0.3 million of expense as compared to $0.2 million of ~~expense~~income in the prior year period.

Our effective tax rate for the first ~~six months~~quarter of fiscal ~~2018~~2019 was ~~6.2%~~21.1% as compared to ~~23.2%~~(47.7%) for the first ~~six months~~quarter of fiscal ~~2017.~~2018. The effective tax rate in the first ~~six months~~quarter of fiscal 2019 was impacted by $1.5 million of higher state income tax expenses versus the prior year period and a $0.9 million tax expense related to global intangible low-taxed income, or GILTI. The effective tax rate was partially offset by a $0.6 million tax benefit related to foreign-derived intangible income, or FDII. Our effective tax rate in the first quarter of fiscal 2018 was impacted by the ~~$22.2~~$18.1 million tax benefit related to tax windfalls from stock compensation and a $1.9 million tax benefit related to the cessation of operations of our Mexican subsidiary.

~~The effective tax rate in the first six months of fiscal 2017 was impacted by an $11.6 million tax benefit related to the cessation of operations of our Spanish subsidiary.~~

Net loss attributable to the Company in the first quarter of fiscal 2019 reflected a $49.8 million, or 127.3%, decline from net income attributable to the Company in the first ~~six months~~quarter of fiscal ~~2018 increased $54.0 million, or 96.7%, from the first six months of fiscal 2017.~~ 2018. Excluding the impact of foreign currency, which ~~positively~~negatively impacted net income attributable to the Company in the first ~~six months~~quarter of fiscal ~~2018~~2019 by ~~$4.0~~$0.6 million, net loss attributable to the Company in the first quarter of fiscal 2019 would have reflected a 125.8% decline from net income attributable to the Company in the first ~~six months~~quarter of fiscal ~~2018 would have increased by 89.5% versus the prior year period.~~ 2018.

Earnings per fully diluted share, or EPS, in the first ~~six months~~quarter of fiscal ~~2018~~2019 was ~~$1.57~~a loss of $0.16 compared to ~~$0.83~~income of $0.56 in the first ~~six months~~quarter of fiscal ~~2017.~~2018. EPS for the first ~~six months~~quarter of fiscal 2019 included a $0.07 expense in connection with our organizational realignment in the quarter and EPS for the first quarter of fiscal 2018 included a $0.25 tax benefit from ~~Ms.~~Oprah Winfrey’s exercise of a portion of her stock options. EPS for the first six months of fiscal 2017 included a tax benefit of (i) $0.18 that was offset by $0.01 of expense, both related to the cessation of operations of our Spanish subsidiary and (ii) $0.01 gain on early extinguishment of debt.

The following tables set forth key metrics by reportable segment for the first ~~six months~~quarter of fiscal ~~2018~~2019 and the percentage change in those metrics versus the prior year period:


	First Half 2018																											Q1 2019
	GAAP									Constant Currency																		GAAP									Constant Currency
				Product									Product						Total												Product									Product						Total
	Service			Sales &			Total			Service			Sales &			Total			Paid			Incoming			EOP			Service			Sales &			Total			Service			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	$	476.3		$	87.5		$	563.7		$	474.8		$	87.3		$	562.1			78.2			2,116.4			2,997.0		$	216.4		$	33.7		$	250.0		$	217.1		$	33.8		$	250.9			37.9			2,558.5			2,950.5
CE		134.0			30.1			164.1			121.2			27.1			148.3			26.3			723.2			1,020.6			64.1			12.0			76.2			69.6			13.0			82.7			14.3			940.2			1,157.5
UK		42.5			17.0			59.5			38.9			15.5			54.4			10.3			296.1			383.5			17.7			6.9			24.6			18.9			7.4			26.3			5.2			333.7			391.9
Other ⁽¹⁾		19.7			10.9			30.6			19.6			10.8			30.3			2.7			78.3			100.8			8.6			3.8			12.4			9.5			4.0			13.5			1.4			100.0			109.6
Total	$	672.4		$	145.6		$	818.0		$	654.5		$	140.7		$	795.1			117.5			3,213.9			4,502.0		$	306.7		$	56.4		$	363.2		$	315.1		$	58.2		$	373.3			58.7			3,932.3			4,609.5

	% Change First Half 2018 vs. First Half 2017																											% Change Q1 2019 vs. Q1 2018
North America		20.5	%		14.5	%		19.5	%		20.1	%		14.2	%		19.2	%		28.1	%		23.1	%		28.5	%		(6.9	%)		(28.1	%)		(10.4	%)		(6.6	%)		(27.8	%)		(10.1	%)		1.5	%		20.9	%		(2.8	%)
CE		42.5	%		21.0	%		38.0	%		29.0	%		8.6	%		24.7	%		32.9	%		28.1	%		30.2	%		(1.7	%)		(30.5	%)		(7.7	%)		6.7	%		(24.6	%)		0.2	%		13.1	%		30.0	%		11.3	%
UK		16.8	%		20.9	%		18.0	%		7.0	%		10.3	%		7.9	%		15.7	%		11.7	%		15.2	%		(15.6	%)		(25.8	%)		(18.7	%)		(9.8	%)		(20.7	%)		(13.2	%)		2.7	%		12.7	%		0.7	%
Other ⁽¹⁾		4.9	%		0.5	%		3.3	%		4.2	%		(0.8	%)		2.4	%		7.5	%		8.4	%		29.7	%		(15.2	%)		(37.5	%)		(23.7	%)		(6.1	%)		(34.2	%)		(16.7	%)		4.2	%		27.8	%		2.9	%
Total		23.5	%		15.3	%		22.0	%		20.2	%		11.4	%		18.5	%		27.4	%		22.6	%		27.6	%		(6.7	%)		(29.1	%)		(11.0	%)		(4.1	%)		(26.8	%)		(8.5	%)		4.2	%		22.4	%		0.9	%

	First Half 2018																															Q1 2019
	Meeting Fees						Meeting			Incoming			EOP			Online Subscription Revenues						Online				Incoming			EOP			Digital Subscription Revenues						Digital			Incoming			EOP			Studio + Digital Fees						Studio + Digital			Incoming			EOP
				Constant			Paid			Meeting			Meeting						Constant			Paid			��	Online			Online						Constant			Paid			Digital			Digital						Constant			Paid			Studio + Digital			Studio + Digital
	GAAP			Currency			Weeks			Subscribers			Subscribers			GAAP			Currency			Weeks				Subscribers			Subscribers			GAAP			Currency			Weeks			Subscribers			Subscribers			GAAP			Currency			Weeks			Subscribers			Subscribers
										(in thousands)																(in thousands)															(in thousands)															(in thousands)
North America	$	282.9		$	282.1			30.2			865.8			1,082.7		$	193.3		$	192.7			48.0				1,250.6			1,914.3		$	98.8		$	99.1			24.6			1,648.4			1,968.2		$	117.6		$	118.0			13.2			910.1			982.3
CE		58.5			52.9			6.8			188.5			247.3			75.5			68.3			19.5				534.6			773.3			40.2			43.7			11.2			730.3			913.9			23.9			26.0			3.1			209.9			243.6
UK		28.9			26.5			5.7			161.7			203.6			13.5			12.4			4.6				134.3			179.9			6.4			6.9			2.4			160.1			192.8			11.3			12.0			2.7			173.6			199.1
Other ⁽¹⁾		12.5			12.5			1.3			34.0			45.2			7.2			7.1			1.5				44.3			55.5			3.5			3.9			0.8			55.3			61.4			5.1			5.6			0.6			44.7			48.1
Total	$	382.8		$	373.9			44.0			1,250.1			1,578.9		$	289.6		$	280.6			73.5				1,963.9			2,923.1		$	148.9		$	153.5			39.0			2,594.0			3,136.5		$	157.9		$	161.6			19.7			1,338.4			1,473.0

	% Change First Half 2018 vs. First Half 2017																															% Change Q1 2019 vs. Q1 2018
North America		11.5	%		11.2	%		12.9	%		16.4	%		10.5	%		36.5	%		36.0	%		40.0	%			28.2	%		41.6	%		7.1	%		7.4	%		9.3	%		31.8	%		2.8	%		(16.1	%)		(15.8	%)		(10.5	%)		5.1	%		(12.2	%)
CE		25.1	%		13.1	%		15.2	%		9.8	%		14.1	%		59.8	%		44.6	%		40.3	%			36.1	%		36.3	%		11.1	%		20.7	%		19.9	%		36.6	%		18.2	%		(17.6	%)		(10.6	%)		(6.0	%)		11.3	%		(8.7	%)
UK		10.7	%		1.3	%		7.0	%		4.5	%		7.8	%		32.5	%		21.4	%		28.6	%			21.8	%		24.8	%		(2.2	%)		4.5	%		9.3	%		19.2	%		7.5	%		(21.7	%)		(16.3	%)		(2.7	%)		7.3	%		(5.0	%)
Other ⁽¹⁾		(2.2	%)		(2.6	%)		(6.9	%)		7.7	%		27.4	%		20.1	%		18.5	%		24.8	%			9.0	%		31.7	%		(2.5	%)		8.1	%		12.1	%		24.9	%		6.2	%		(22.2	%)		(13.9	%)		(4.2	%)		31.6	%		(1.0	%)
Total		12.8	%		10.2	%		11.8	%		13.4	%		11.1	%		41.2	%		36.8	%		39.0	%			29.3	%		38.8	%		7.4	%		10.8	%		12.2	%		32.1	%		7.2	%		(17.0	%)		(15.0	%)		(8.6	%)		7.1	%		(10.4	%)

The ~~increase~~decrease in North America revenues in the first ~~six months~~quarter of fiscal ~~2018~~2019 versus the prior year period was driven by both a decrease in Service Revenues and a decrease in product sales and other. This decrease in Service Revenues in the first quarter of fiscal 2019 versus the prior year period was driven primarily by the ~~increase~~decrease in ~~Service Revenues. This increase in Service Revenues in the first six months of fiscal 2018 versus the prior year period was driven primarily~~Studio + Digital Fees, partially offset by ~~the increase in Online Subscription Revenues and to a lesser extent~~ an increase in ~~Meeting Fees.~~Digital Subscription Revenues. The

increase in North America Total Paid Weeks was driven by the higher number of Incoming Subscribers at the beginning of the first quarter fiscal ~~2018~~2019 versus the beginning of the first quarter of fiscal ~~2017, higher Online~~2018, almost fully offset by the lower recruitments in the quarter. Lower recruitments in the quarter were driven by cycling against the successful launch of our ~~new~~ WW Freestyle program in December 2017 and ~~improved retention in the first six months of fiscal 2018 versus the prior year period.~~by ineffective marketing.

The ~~increase~~decrease in North America product sales and other in the first ~~six months~~quarter of fiscal ~~2018 versus the prior year period was driven by an increase in product sales.~~

~~The increase in Continental Europe revenues in the first six months of fiscal 2018~~2019 versus the prior year period was driven primarily by a decrease in product sales.

The decrease in Continental Europe revenues in the first quarter of fiscal 2019 versus the prior year period was driven by the impact of foreign currency. Excluding foreign currency, revenues in the first quarter of fiscal 2019 would have increased slightly above the prior year period driven by an increase in Service Revenues. This increase in Service Revenues in the first ~~six months~~quarter of fiscal ~~2018~~2019 versus the prior year period was driven ~~primarily~~ by ~~the~~an increase in ~~Online~~Digital Subscription ~~Revenues.~~Revenues, partially offset by a decrease in Studio + Digital Fees. The increase in Continental Europe Total Paid Weeks was driven primarily by the higher number of Incoming Subscribers at the beginning of the first quarter of fiscal ~~2018~~2019 versus the beginning of the first quarter of fiscal ~~2017, higher~~2018, partially offset by lower recruitments in the quarter. Lower recruitments in the quarter were driven by cycling against the successful launch of our new program in December 2017 and ~~improved retention in the first six months of fiscal 2018 versus the prior year period.~~by ineffective marketing.

The ~~increase~~decrease in Continental Europe product sales and other in the first ~~six months~~quarter of fiscal ~~2018~~2019 versus the prior year period was driven primarily by ~~an increase~~a decrease in product sales.

The ~~increase~~decrease in UK revenues in the first ~~six months~~quarter of fiscal ~~2018~~2019 versus the prior year period was driven by both the decrease in Service Revenues and product sales and other. This decrease in Service Revenues in the first quarter of fiscal 2019 versus the prior year period was driven primarily by the ~~increase~~decrease in ~~Service Revenues.~~Studio + Digital Fees. The increase in UK Total Paid Weeks was driven by the higher number of Incoming Subscribers at the beginning of the first quarter of fiscal ~~2018~~2019 versus the beginning of the first quarter of fiscal ~~2017, recruitment strength~~2018, partially offset by lower recruitments in ~~our Online business~~the quarter. Lower recruitments in the quarter were driven by cycling against the successful launch of our new program in December 2017 and ~~improved retention in the first six months of fiscal 2018 versus the prior year period.~~by ineffective marketing.

The ~~increase~~decrease in UK product sales and other in the first ~~six months~~quarter of fiscal ~~2018~~2019 versus the prior year period was driven primarily by a decrease in product sales.

The decrease in Other revenues in the first quarter of fiscal 2019 versus the prior year period was driven by ~~an increase~~both a decrease in Service Revenues and a decrease in product sales ~~partially offset by a decline~~and other. The decrease in ~~licensing revenue.~~

~~The increase in Other revenues~~Service Revenues in the first ~~six months~~quarter of fiscal ~~2018~~2019 versus the prior year period was driven primarily by the ~~increase~~decrease in ~~Service Revenues.~~ Studio + Digital Fees.

The ~~increase~~decrease in Other ~~Total Paid Weeks~~product sales and other in the first quarter of fiscal 2019 versus the prior year period was driven primarily by ~~the higher number of Incoming Subscribers at the beginning of fiscal 2018 versus the beginning of fiscal 2017~~a decrease in both franchise commissions and ~~recruitment strength in our Online business driven by the successful launch of our new program in the first six months of fiscal 2018 versus the prior year period.~~product sales.

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 engage in selective acquisitions. We believe that cash generated by operations during fiscal ~~2018,~~2019, our cash on hand of approximately ~~$167.8~~$193.4 million at ~~June~~March 30, ~~2018,~~2019, our ~~$148.7~~$148.8 million of availability under our ~~New~~ Revolving Credit Facility and our continued cost focus will provide us with sufficient liquidity to meet our obligations for the next twelve months.

As market conditions warrant, we may, from time to time, seek to purchase our outstanding debt securities or loans, including the Notes and borrowings under the Credit Facilities. 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 or the incurrence of new secured or unsecured debt. 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.

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:

The following table sets forth a summary of the primary factors contributing to ~~this $3.1~~the $45.5 million increase in our working capital ~~deficit:~~deficit, excluding cash and cash equivalents and current portion of long-term debt:

June 30,

December 30,

Increase/

Impact to
Working

2018

2017

(Decrease)

Capital Deficit

(in millions)

Derivative payable

$
-

$
12.2

$
(12.2
)

$
(12.2
)
Operational liabilities and other, net of assets

$
74.5

$
55.8

$
18.7

$
18.7

Deferred revenue

$
83.9

$
74.3

$
9.6

$
9.6

Other current assets

$
28.5

$
26.8

$
1.7

$
(1.7
)
Accrued salaries and wages

$
56.7

$
62.2

$
(5.5
)

$
(5.5
)
Prepaid income taxes

$
49.2

$
43.4

$
5.8

$
(5.8
)
Working capital deficit change

$
3.1

	March 30,		December 29,		Increase/			Impact to Working
	2019		2018		(Decrease)			Capital Deficit
	(in millions)
Portion of operating lease liabilities due within one year	$	36.1	$	—	$	36.1		$	36.1
Accrued interest	$	35.9	$	28.7	$	7.3		$	7.3
Deferred revenue	$	60.6	$	53.5	$	7.1		$	7.1
Derivative payable, net	$	7.7	$	2.1	$	5.7		$	5.7
Income taxes payable	$	21.6	$	22.6	$	(1.0	)	$	(1.0	)
Operational liabilities and other, net of assets	$	57.9	$	62.0	$	(4.1	)	$	(4.1	)
Prepaid income taxes	$	39.6	$	34.0	$	5.6		$	(5.6	)
Working capital deficit change, excluding cash and cash equivalents and current portion of long-term debt								$	45.5

The ~~increase~~decrease in operational liabilities and other, net of assets, ~~and the decrease in~~which includes accrued salaries and wages, ~~were~~and the increase in accrued interest was driven primarily by the timing of payments. The increase in deferred revenue was driven primarily by ~~improved business performance.~~seasonality. Portion of operating lease liabilities due within one year is due to the adoption of the updated lease accounting guidance.

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

Cash flows provided by operating activities of $7.2 million for the first quarter of fiscal 2019 reflected a decrease of $66.2 million from $73.5 million of cash flows provided by operating activities in the first quarter of fiscal 2018. The decrease in cash provided by operating activities was primarily the result of a decrease in net income attributable to the Company of $49.8 million in the first quarter of fiscal 2019 as compared to the prior year period.

Cash flows provided by operating activities of ~~$168.6~~$73.5 million for the first ~~six months~~quarter of fiscal 2018 reflected an increase of ~~$70.5~~$31.1 million from ~~$98.1~~$42.3 million of cash flows provided by operating activities in the first ~~six months~~quarter of fiscal 2017. The increase in cash provided by operating activities was primarily the result of an increase in net income attributable to the Company of ~~$54.0~~$28.5 million in the first ~~six months~~quarter of fiscal 2018 as compared to the prior year period.

Cash flows provided by operating activities of $98.1 million for the first six months of fiscal 2017 reflected an increase of $51.7 million from $46.4 million of cash flows used for operating activities in the first six months of fiscal 2016. The increase in cash provided by operating activities was primarily the result of $36.1 million of higher net income and a $9.5 million deferred tax provision benefit, as well as the $6.8 million of benefit from the year-over-year change in working capital. The working capital benefit consisted of a decrease in accounts payable, a decrease in accrued expenses and an increase in prepaid expenses. This working capital benefit was partially offset by a decrease in inventory, an increase in deferred revenue and an increase in income taxes payable in the first six months of fiscal 2017 as compared to the prior year period.

Net cash used for investing activities totaled ~~$30.5~~$11.2 million in the first ~~six months~~quarter of fiscal ~~2018,~~2019, an increase of ~~$11.4~~$3.5 million as compared to the first ~~six months~~quarter of fiscal ~~2017.~~2018. This increase was ~~due~~primarily attributable to ~~investments in intellectual properties~~ higher capital expenditures for technology in the first ~~six months~~quarter of fiscal ~~2018.~~2019.

Net cash used for investing activities totaled ~~$19.1~~$7.7 million in the first ~~six months~~quarter of fiscal ~~2017,~~2018, a decrease of ~~$0.8~~$2.7 million as compared to the first ~~six months~~quarter of fiscal ~~2016, which included~~2017. This decrease was due to a greater investment in operating infrastructure in the ~~acquisition~~first quarter of ~~its franchisee for certain territories in South Florida for $2.9 million.~~

Net cash used for financing activities totaled $38.8 million in the first quarter of fiscal 2019, primarily due to $38.5 million used for the scheduled debt repayments under our Term Loan Facility.

Net cash used for financing activities totaled ~~$51.4~~$31.7 million in the first ~~six months~~quarter of fiscal 2018, primarily due to $25.0 million of net repayments on the outstanding principal amount on the ~~New~~ Revolving Credit Facility and ~~$38.5~~$19.3 million used for the scheduled debt repayments under our ~~New~~ Term Loan Facility, which was ~~partially~~ offset by ~~$23.3~~$14.7 million in proceeds from stock options exercised.

Net cash used for financing activities totaled $85.7 million in the first six months of fiscal 2017, primarily due to $73.0 million used for the debt prepayment and other scheduled debt repayments of $10.5 million in connection with our then-existing tranche B-2 term facility in the first six months of fiscal 2017.

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 ~~June~~March 30, ~~2018:~~2019:

On November 29, 2017, we refinanced our then-existing credit facilities (referred to herein as the November 2017 debt refinancing) consisting of $1,930.4 million of borrowings under a term loan facility and an undrawn $50.0 million revolving credit facility with $1,565.0 million of borrowings under our new credit facilities, consisting of a $1,540.0 million term loan facility and a $150.0 million revolving credit facility (of which $25.0 million was drawn upon at the time of the November 2017 debt refinancing) (collectively referred to herein as the ~~New~~ Credit Facilities), and $300.0 million in aggregate principal amount of 8.625% Senior Notes due 2025, or the Notes. During the fourth quarter of fiscal 2017, we incurred fees of $53.8 million (which included $30.8 million of a debt discount) in connection with the November 2017 debt refinancing. In addition, we recorded a loss on early extinguishment of debt of $10.5 million in connection thereto. This early extinguishment of debt write-off was comprised of $5.7 million of deferred financing fees paid in connection with the November 2017 debt refinancing and $4.8 million of pre-existing deferred financing fees.

The ~~New~~ Credit Facilities were issued under a new credit agreement, dated November 29, 2017, or the Credit Agreement, among the Company, as borrower, the lenders party thereto, JPMorgan Chase Bank, N.A., or JPMorgan Chase, as administrative agent and an issuing bank, Bank of America, N.A., as an issuing bank, and Citibank, N.A., as an issuing bank. The ~~New~~ Credit Facilities consist of (1) $1,540.0 million in aggregate principal amount of senior secured tranche B term loans due in 2024, or the ~~New~~ Term Loan Facility and (2)

a $150.0 million senior secured revolving credit facility (which includes borrowing capacity available for letters of credit) due in 2022, or the ~~New~~ Revolving Credit Facility.

As of ~~June~~March 30, ~~2018,~~2019, we had ~~$1,501.5~~$1,443.8 million of debt outstanding under the ~~New~~ Credit Facilities with ~~$148.7~~$148.8 million of availability and ~~$1.3~~$1.2 million in issued but undrawn letters of credit outstanding under the ~~New~~ Revolving Credit Facility. ~~Outstanding balances~~There was no outstanding balance under the ~~New~~ Revolving Credit Facility ~~are included in the current portion of long-term debt on the accompanying consolidated balance sheet~~ as of ~~December~~March 30, ~~2017 included elsewhere in this Quarterly Report on Form 10-Q, due to our intent to repay the borrowings within the next twelve months.~~ 2019.

Under the terms of the Credit Agreement, depending on our Consolidated First Lien Net Debt Leverage Ratio (as ~~defined~~used 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 ~~New~~ Term Loan Facility in an aggregate amount determined by a percentage of our annual excess cash flow (as defined in the Credit Agreement) (said payment referred to herein as a Cash Flow Sweep).

Borrowings under the ~~New~~ 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 higher of (i) the Federal Funds Effective Rate and (ii) the Overnight Bank Funding Rate as determined by the Federal Reserve Bank of New York, (b) the prime rate of JPMorgan Chase 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 1.75% or (2) an applicable margin plus a LIBOR rate determined by reference to the costs 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 0.75%. Borrowings under the ~~New~~ 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 higher of (i) the Federal Funds Effective Rate and (ii) the Overnight Bank Funding Rate as determined by the Federal Reserve Bank of New York, (b) the prime rate of JPMorgan Chase 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% or (2) a LIBOR rate determined by reference to the costs of funds for U.S. dollar deposits for the interest period relevant to such borrowing adjusted for certain additional costs. As of ~~June~~March 30, ~~2018,~~2019, the applicable margins for the LIBOR rate borrowings under the ~~New~~ Term Loan Facility and the ~~New~~ Revolving Credit Facility were 4.75% and ~~2.75%~~2.00%, respectively. In the event that LIBOR is phased out as is currently expected, the Credit Agreement provides that the Company 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. 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 ~~New~~ Revolving Credit Facility in respect of unutilized commitments thereunder, which commitment fee fluctuates depending upon our Consolidated First Lien Net Debt Leverage Ratio. Based on our Consolidated First Lien Net Debt Leverage Ratio as of ~~June~~March 30, ~~2018,~~2019, the commitment fee was ~~0.50%~~0.25% per annum. Our Consolidated First Lien Net Debt Leverage Ratio as of March 30, 2019 was 2.91:1.00.

As of ~~June~~March 30, ~~2018,~~2019, we were in compliance with all applicable financial covenants in the Credit Agreement governing the ~~New~~ Credit Facilities.

As of June 30, 2018, in accordance with the terms of the Credit Agreement, it is probable that we will have a Cash Flow Sweep obligation of approximately $41.5 million to the lenders in the second quarter of fiscal 2019.

The Notes were issued pursuant to an Indenture, dated as of November 29, 2017, or the Indenture, among the Company, the guarantors named therein and The Bank of New York Mellon, as trustee. The Indenture contains customary covenants, events of default and other provisions 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.

subject to certain conditions, the Company must offer to purchase for cash the Notes at a purchase price equal to 100% of the principal amount of the Notes, plus accrued and unpaid interest, if any, to, but not including, the purchase date. The Notes are guaranteed on a senior unsecured basis by the Company’s subsidiaries that guarantee the ~~New~~ Credit Facilities.

At ~~June~~March 30, ~~2018,~~2019, we had ~~$1,801.5~~$1,743.8 million outstanding under the ~~New~~ Credit Facilities and the Notes, consisting of the ~~New~~ Term Loan Facility of ~~$1,501.5~~$1,443.8 million, $0 $0.0 million drawn down on the ~~New~~ Revolving Credit Facility and $300.0 million in aggregate principal amount of Notes issued and outstanding.

At ~~June~~March 30, ~~2018~~2019 and December ~~30, 2017,~~ 29, 2018, our debt consisted of both fixed and variable-rate instruments. An interest rate swap was entered into to hedge a portion of the cash flow exposure associated with our variable-rate borrowings. Further information regarding our interest rate swap can be found in Part I, Item 1 of this Quarterly Report on Form 10-Q under Note 1112 “Derivative Instruments and Hedging” in the Notes to the Consolidated Financial Statements. The weighted average interest rate (which includes amortization of deferred financing costs and debt discount) on our outstanding debt, exclusive of the impact of the swap, was ~~7.46%,~~approximately 8.22% and ~~7.12%~~7.73% per annum at ~~June~~March 30, ~~2018~~2019 and December ~~30, 2017,~~29, 2018, respectively, based on interest rates on ~~the applicable~~these dates. The weighted average interest rate (which includes amortization of deferred financing costs and debt discount) on our outstanding debt, including the impact of the swap, was ~~7.41%~~approximately 7.50% and ~~7.34%~~7.46% per annum at ~~June~~March 30, ~~2018~~2019 and December ~~30, 2017,~~29, 2018, respectively, based on interest rates on ~~the applicable~~these dates.

The following schedule sets forth our year-by-year debt obligations at ~~June~~March 30, ~~2018:~~2019:

Our accumulated other comprehensive loss includes changes in the fair value of derivative instruments and the effects of foreign currency translations. At ~~June~~March 30, ~~2018~~2019 and ~~July 1, 2017,~~March 31, 2018, the cumulative balance of changes in fair value of derivative instruments, net of taxes, was a ~~gain~~loss of ~~$2.6~~$6.7 million and a ~~loss~~gain of ~~$13.3~~$1.8 million, respectively. At ~~June~~March 30, ~~2018~~2019 and ~~July 1, 2017,~~March 31, 2018, the cumulative balance of the effects of foreign currency translations, net of taxes, was a loss of ~~$11.4~~$13.3 million and ~~$7.4~~$8.7 million, respectively.

We do not currently pay a 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 our Board of Directors may deem relevant. In addition, our ability to pay dividends may be limited by covenants in our existing indebtedness, including the ~~New~~ Credit Facilities and the ~~indenture~~Indenture governing the 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 $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 ~~six~~three months ended ~~June~~March 30, ~~2018~~2019 and ~~July 1, 2017,~~March 31, 2018, we repurchased no shares of our common stock in the open market under this program.

We define EBITDAS, a non-GAAP financial measure, as earnings before interest, taxes, depreciation, amortization and stock-based ~~compensation and Adjusted EBITDAS, a non-GAAP financial measure, as earnings before interest, taxes, depreciation, amortization and stock-based compensation and goodwill impairment.~~compensation. The table below sets forth the calculations for EBITDAS for the three ~~and six~~ months ended ~~June~~March 30, 2019 and March 31, 2018, and ~~July 1, 2017, and EBITDAS and Adjusted~~ EBITDAS for the trailing twelve months ended ~~June~~March 30, ~~2018:~~2019:

Reducing leverage is a capital structure priority for the Company. As of ~~June~~March 30, ~~2018,~~2019, our net debt/~~Adjusted~~ EBITDAS ratio was ~~4.0x.~~3.7x. 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 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 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 each season,~~Historically, we experience our highest level of recruitment during the first quarter of the 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, 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 reports 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 our corporate Facebook page (www.facebook.com/~~weightwatchers~~WW), Instagram account (Instagram.com/~~weightwatchers)~~WW) and Twitter account ~~(@weightwatchers)~~(@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 ~~June~~March 30, ~~2018,~~2019, 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 ~~2017~~2018 have not materially changed from December ~~30, 2017.~~29, 2018.

At the end of the ~~second~~first quarter of fiscal ~~2018,~~ 2019, borrowings under the ~~New Term Loan Facility~~Credit Facilities bore interest at LIBOR plus an applicable margin of 4.75%. For the ~~New~~ Term Loan Facility, the minimum interest rate for LIBOR applicable to such facility pursuant to the terms of the Credit Agreement is set at 0.75%, referred to herein as the LIBOR Floor. In addition, as of ~~June~~March 30, ~~2018,~~2019, our interest rate swap in effect had a notional amount of $1.25 billion. Accordingly, as of ~~June~~March 30, ~~2018,~~2019, 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 and the LIBOR Floor, a hypothetical 75100 basis point increase in interest rates would have increased annual interest expense by approximately $1.9 million and a hypothetical 75100 basis point decrease in interest rates would have decreased annual interest expense by approximately ~~$3.4~~$1.9 million. ~~This increase is~~These changes are driven primarily by the interest rate applicable to our ~~New~~ Term Loan ~~Facility. This decrease is driven primarily by~~ Facility and the lower outstanding debt balance as of ~~June~~March 30, ~~2018~~2019 as compared to December ~~30, 2017.~~29, 2018.

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 ~~June~~March 30, ~~2018,~~2019, the end of the ~~second~~first quarter of fiscal ~~2018.~~2019. 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 ~~second~~first quarter of fiscal ~~2018,~~2019, 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.

In March 2019, two substantially identical class action complaints alleging violations of the federal securities laws were filed by individual shareholders against the Company, certain of the Company’s current officers and the Company’s former controlling shareholder, Artal Group S.A., in the United States District Court for the Southern District of New York.

One complaint was filed on behalf of all purchasers of the Company’s common stock and the other on behalf of all purchasers of the Company’s securities, between May 4, 2018 and February 26, 2019, inclusive (the “Class Period”). The complaints allege that, during the Class Period, the defendants disseminated materially false and misleading statements and/or concealed or recklessly disregarded material adverse facts. The complaints allege claims under Sections 10(b) and 20(a) of the Exchange Act and Rule 10b-5 thereunder. The plaintiffs seek to recover unspecified damages on behalf of the class members. The Company believes that the suits are without merit and intends to vigorously defend them.

On March 26, 2019, the Company received a shareholder litigation demand letter alleging breaches of fiduciary duties by certain current and former Company directors and executive officers, to the alleged injury of the Company. The allegations in the letter relate to those contained in the ongoing securities class action litigation. In response to the letter, pursuant to Virginia law, the Board of Directors is creating a special committee to review and evaluate the facts and circumstances surrounding the claims made in the demand letter.

There have been no material changes in the risk factors from those detailed in our Annual Report on Form 10-K for fiscal ~~2017~~ ~~other than as set forth below~~.

~~Artal has significant influence over us and may have conflicts of interest with us or the holders of our common stock.~~

Artal owns approximately 31.4% of our outstanding common stock and has the ability to exercise significant influence over the election and removal of our directors and our corporate and management policies, including potential mergers or acquisitions, payment of dividends, asset sales, the amendment of our articles of incorporation or bylaws and other significant corporate transactions. This concentration of our ownership may delay or deter possible changes in control of our company, which may reduce the value of an investment in our common stock. So long as Artal owns 3% or more of our common stock, Artal will have the right pursuant to an agreement with us to nominate directors to our Board of Directors in proportion to its stock ownership. The interests of Artal may not coincide with our interests or the interests of other holders of our common stock.

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	WW	The Nasdaq Stock Market LLC

		Page No.

PART I—FINANCIAL INFORMATION

Item 1.	Financial Statements		2

	Unaudited Consolidated Balance Sheets at ~~June~~March 30, ~~2018~~2019 and December ~~30, 2017~~29, 2018		2

	Unaudited Consolidated Statements of Net Income for the three ~~and six~~ months ended ~~June~~March 30, ~~2018~~2019 and ~~July 1, 2017~~March 31, 2018		3

	Unaudited Consolidated Statements of Comprehensive Income for the three ~~and six~~ months ended ~~June~~March 30, ~~2018~~2019 and ~~July 1, 2017~~March 31, 2018		4

	Unaudited Consolidated Statements of ~~Cash Flows~~Changes in Total Deficit for the ~~six~~three months ended ~~June~~March 30, ~~2018~~2019 and ~~July 1, 2017~~March 31, 2018		5

	Unaudited Consolidated Statements of Cash Flows for the three months ended March 30, 2019 and March 31, 2018		6

	Notes to Unaudited Consolidated Financial Statements		67

Cautionary Notice Regarding Forward-Looking Statements			23

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations		24

Item 3.	Quantitative and Qualitative Disclosures About Market Risk		4336

Item 4.	Controls and Procedures		4337

PART II—OTHER INFORMATION

Item 1.	Legal Proceedings		4438

Item 1A.	Risk Factors		4438

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds		4438

Item 3.	Defaults Upon Senior Securities		4438

Item 4.	Mine Safety Disclosures		4438

Item 5.	Other Information		4438

Item 6.	Exhibits		4539

Signatures			4640

	Three Months Ended
	March 30,
	2019
Operating lease cost	$	13,372
Finance lease cost:
Amortization of leased assets		80
Interest on lease liabilities		8
Total finance lease cost	$	88
Total lease cost	$	13,460

	Operating Leases		Finance Leases		Total
Remainder of fiscal 2019	$	35,516	$	360	$	35,876
2020		36,625		110		36,735
2021		27,812		27		27,839
2022		18,965		—		18,965
2023		14,252		—		14,252
Thereafter		75,909		—		75,909
Total lease payments	$	209,079	$	497	$	209,576
Less imputed interest		51,646		14		51,660
Present value of lease liabilities	$	157,433	$	483	$	157,916

2019	$	63,261
2020		38,491
2021		22,341
2022		14,017
2023		9,192
2024 and thereafter		37,704
Total	$	185,006

Large accelerated filer	☒	Accelerated filer	☐

Non-accelerated filer	☐	Smaller reporting company	☐

		Emerging growth company	☐

	March 30, 2019
Assets:
Operating lease assets	$	148,447
Finance lease assets		573
Total leased assets	$	149,020

Liabilities:
Current
Operating	$	36,125
Finance		376
Noncurrent
Operating	$	121,308
Finance		107
Total lease liabilities	$	157,916

4.	March 30, 2019
Weighted Average Remaining Lease Term (years)
Operating leases		7.47
Finance leases		1.21

Weighted Average Discount Rate
Operating leases		7.03
Finance leases		4.74

	Three Months Ended June 30, 2018
	North		Continental		United
	America		Europe		Kingdom		Other		Total
Meeting Fees	$	142,767	$	29,402	$	14,551	$	5,992	$	192,712
Online Subscription Revenues		101,099		39,342		6,955		3,622		151,018
Service revenues, net	$	243,866	$	68,744	$	21,506	$	9,614	$	343,730
Product sales and other, net		40,672		12,848		7,704		4,793		66,017
Revenues, net	$	284,538	$	81,592	$	29,210	$	14,407	$	409,747

	Three Months Ended July 1, 2017
	North		Continental		United
	America		Europe		Kingdom		Other		Total
Meeting Fees	$	129,666	$	24,798	$	14,028	$	6,511	$	175,003
Online Subscription Revenues		73,535		25,701		5,745		3,017		107,998
Service revenues, net	$	203,201	$	50,499	$	19,773	$	9,528	$	283,001
Product sales and other, net		35,788		10,997		6,662		5,225		58,672
Revenues, net	$	238,989	$	61,496	$	26,435	$	14,753	$	341,673

	Six Months Ended June 30, 2018
	North		Continental		United
	America		Europe		Kingdom		Other		Total
Meeting Fees	$	282,918	$	58,482	$	28,933	$	12,500	$	382,834
Online Subscription Revenues		193,339		75,503		13,519		7,205		289,565
Service revenues, net	$	476,257	$	133,985	$	42,452	$	19,705	$	672,399
Product sales and other, net		87,458		30,138		17,043		10,932		145,571
Revenues, net	$	563,715	$	164,123	$	59,495	$	30,637	$	817,970

	Six Months Ended July 1, 2017
	North		Continental		United
	America		Europe		Kingdom		Other		Total
Meeting Fees	$	253,665	$	46,764	$	26,141	$	12,785	$	339,355
Online Subscription Revenues		141,682		47,243		10,200		5,997		205,122
Service revenues, net	$	395,347	$	94,007	$	36,341	$	18,782	$	544,477
Product sales and other, net		76,372		24,907		14,093		10,887		126,259
Revenues, net	$	471,719	$	118,914	$	50,434	$	29,669	$	670,736

	Deferred		Deferred
	Revenue		Revenue-Long Term
Balance as of December 30, 2017	$	74,332	$	2,049
Net increase (decrease) during the period		9,546		(548	)
Balance as of June 30, 2018	$	83,878	$	1,501

Remainder of fiscal 2018	$	13,051
Fiscal 2019	$	18,732
Fiscal 2020	$	10,450
Fiscal 2021	$	3,357
Fiscal 2022 and thereafter	$	8,523

Remainder of fiscal 2019	$	18,841
Fiscal 2020	$	19,365
Fiscal 2021	$	10,537
Fiscal 2022	$	2,041
Fiscal 2023 and thereafter	$	10,800

			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 asset at June 30, 2018	$	5,104	$	0	$	5,104	$	0
Interest rate swap liability at June 30, 2018	$	1,943	$	0	$	1,943	$	0
Interest rate swap liability at December 30, 2017	$	12,171	$	0	$	12,171	$	0

	Six Months Ended June 30, 2018
	(Loss) Gain on Qualifying Hedges			Loss on Foreign Currency Translation			Total
Beginning Balance at December 30, 2017	$	(5,392	)	$	(5,075	)	$	(10,467	)
Other comprehensive income (loss) before reclassifications, net of tax		7,236			(5,396	)		1,840
Amounts reclassified from accumulated other comprehensive loss, net of tax^(b)		1,942			0			1,942
Adoption of accounting standard		(1,161	)		(1,324	)		(2,485	)
Net current period other comprehensive income (loss) including noncontrolling interest		8,017			(6,720	)		1,297
Less: net current period other comprehensive loss attributable to the noncontrolling interest		0			373			373
Ending Balance at June 30, 2018	$	2,625		$	(11,422	)	$	(8,797	)

	Total Revenue, net								Total Revenue, net
	Three Months Ended				Six Months Ended				Three Months Ended
	June 30, 2018		July 1, 2017		June 30, 2018		July 1, 2017		March 30, 2019		March 31, 2018
North America	$	284,538	$	238,989	$	563,715	$	471,719	$	250,011	$	279,179
Continental Europe		81,592		61,496		164,123		118,914		76,157		82,531
United Kingdom		29,210		26,435		59,495		50,434		24,611		30,284
Other		14,407		14,753		30,637		29,669		12,385		16,229
Total revenue, net	$	409,747	$	341,673	$	817,970	$	670,736	$	363,164	$	408,223

	Q2 2018
	GAAP									Constant Currency
				Product									Product						Total
	Service			Sales &			Total			Service			Sales &			Total			Paid			Incoming			EOP
	Revenues			Other			Revenues			Revenues			Other			Revenues			Weeks			Subscribers			Subscribers
																						(in thousands)
North America	$	243.9		$	40.7		$	284.5		$	243.2		$	40.6		$	283.7			40.9			3,034.3			2,997.0
CE		68.7			12.8			81.6			64.2			11.9			76.1			13.6			1,040.1			1,020.6
UK		21.5			7.7			29.2			20.2			7.2			27.5			5.3			389.1			383.5
Other ⁽¹⁾		9.6			4.8			14.4			9.7			4.8			14.5			1.4			106.5			100.8
Total	$	343.7		$	66.0		$	409.7		$	337.3		$	64.5		$	401.8			61.2			4,569.9			4,502.0

	% Change Q2 2018 vs. Q2 2017
North America		20.0	%		13.6	%		19.1	%		19.7	%		13.4	%		18.7	%		28.3	%		28.1	%		28.5	%
CE		36.1	%		16.8	%		32.7	%		27.1	%		8.6	%		23.8	%		31.7	%		34.4	%		30.2	%
UK		8.8	%		15.6	%		10.5	%		2.3	%		8.6	%		3.9	%		15.9	%		18.9	%		15.2	%
Other ⁽¹⁾		0.9	%		(8.1	%)		(2.3	%)		1.9	%		(8.6	%)		(1.8	%)		8.0	%		25.1	%		29.7	%
Total		21.5	%		12.5	%		19.9	%		19.2	%		10.0	%		17.6	%		27.3	%		28.6	%		27.6	%

	(In millions, except per share amounts)
	For The Six Months Ended												% Change
	June 30, 2018			July 1, 2017			Increase/ (Decrease)			% Change			Constant Currency
Revenues, net	$	818.0		$	670.7		$	147.2			22.0	%		18.5	%
Cost of revenues		352.2			317.6			34.5			10.9	%		8.0	%

Gross profit		465.8			353.1			112.7			31.9	%		28.0	%
Gross Margin %		56.9	%		52.6	%

Marketing expenses		154.3			128.4			25.9			20.2	%		15.7	%
Selling, general & administrative expenses		121.7			98.3			23.4			23.8	%		21.7	%
Operating income		189.8			126.4			63.3			50.1	%		45.5	%
Operating Income Margin %		23.2	%		18.9	%

Interest expense		71.7			55.2			16.5			29.9	%		29.9	%
Other expense, net		1.1			0.2			0.9			100.0	%*	100.0%			*
Gain on early extinguishment of debt		0.0			(1.6	)		1.6			(100.0	%)	*	(100.0	%)	*
Income before income taxes		116.9			72.6			44.3			61.1	%		53.0	%

Provision for income taxes		7.2			16.9			(9.7	)		(57.3	%)		(68.0	%)
Net income		109.7			55.7			54.0			96.9	%		89.6	%
Net loss attributable to the noncontrolling interest		0.1			0.1			0.0			7.8	%		16.3	%

Net income attributable to Weight Watchers International, Inc.	$	109.8		$	55.8		$	54.0			96.7	%		89.5	%

Weighted average diluted shares outstanding		69.9			67.3			2.6			3.9	%		3.9	%
Diluted earnings per share	$	1.57		$	0.83		$	0.74			89.4	%		82.5	%

	Balance		Balance
New Term Loan Facility due November 29, 2024	$	1,501.5
Term Loan Facility due November 29, 2024			$	1,443.8
Notes due December 1, 2025		300.0		300.0
Total		1,801.5		1,743.8
Less: Current Portion		118.5		57.8
Unamortized Deferred Financing Costs		10.3		9.1
Unamortized Debt Discount		28.2		24.9
Total Long-Term Debt	$	1,644.5	$	1,652.0

	Three Months Ended				Six Months Ended				Trailing Twelve			Three Months Ended						Trailing Twelve
	June 30, 2018		July 1, 2017		June 30, 2018		July 1, 2017		Months			March 30, 2019			March 31, 2018			Months
Net Income	$	70.7	$	45.2	$	109.8	$	55.8	$	217.5
Net (Loss) Income												$	(10.7	)	$	39.1		$	174.0
Interest		35.9		27.1		71.7		55.2		129.3			35.2			35.9			141.7
Taxes		19.8		26.0		7.2		16.9		(27.9	)		(2.9	)		(12.6	)		30.2
Depreciation and Amortization		10.6		12.7		21.8		25.6		47.1			11.4			11.2			44.3
Stock-based Compensation		5.3		2.5		9.7		4.8		19.8			4.8			4.4			20.6
EBITDAS	$	142.3	$	113.4	$	220.2	$	158.3	$	385.8		$	37.9		$	77.9		$	410.8
Goodwill Impairment		-		-		-		-		13.3
Adjusted EBITDAS	$	142.3	$	113.4	$	220.2	$	158.3	$	399.1

	June 30, 2018		March 30, 2019
Total debt	$	1,801.5	$	1,743.8
Less: Unamortized deferred financing costs		10.3		9.1
Less: Unamortized debt discount		28.2		24.9
Less: Cash on hand		167.8		193.4
Net debt	$	1,595.2	$	1,516.3

Exhibit Number		Description

**Exhibit 1.1		Underwriting Agreement, dated as of May 10, 2018, by and among Weight Watchers International, Inc., Artal Luxembourg S.A. and Goldman Sachs & Co. LLC, Morgan Stanley & Co. LLC and UBS Securities LLC (filed as Exhibit 1.1 to the Company’s Current Report on Form 8-K, as filed on May 11, 2018 (File No. 001-16769), and incorporated herein by reference).

~~†*Exhibit 10.1~~		~~2018 Form of Term Sheet for Employee Performance Stock Unit Awards and 2018 Form of Terms and Conditions for Employee Performance Stock Unit Awards.~~

~~†*Exhibit 10.2~~		~~2018 Form of Term Sheet for Employee Restricted Stock Unit Awards and 2018 Form of Terms and Conditions for Employee Restricted Stock Unit Awards.~~

~~†*Exhibit 10.3~~		~~2018 Form of Term Sheet for Employee Performance Stock Unit Awards and 2018 Form of Terms and Conditions for Employee Performance Stock Unit Awards (Chief Executive Officer Annual Equity Award).~~

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

*Exhibit 31.2		Rule 13a-14(a) Certification by Nicholas P. Hotchkin, 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		XBRL Instance Document

*EX-101.SCH		XBRL Taxonomy Extension Schema

*EX-101.CAL		XBRL Taxonomy Extension Calculation Linkbase

*EX-101.DEF		XBRL Taxonomy Extension Definition Linkbase

*EX-101.LAB		XBRL Taxonomy Extension Label Linkbase

*EX-101.PRE		XBRL Taxonomy Extension Presentation Linkbase


	WEIGHT WATCHERS INTERNATIONAL, INC.

Date: ~~August 7, 2018~~May 3, 2019	By:	/s/ Mindy Grossman
		Mindy Grossman
		President, Chief Executive Officer and Director (Principal Executive Officer)


Date: ~~August 7, 2018~~May 3, 2019	By:	/s/ Nicholas P. Hotchkin
		Nicholas P. Hotchkin
		Chief Financial Officer, Operating Officer, North America and President, Emerging Markets (Principal Financial and Accounting Officer)