(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 29,~~October 22, 2020 was ~~68,010,731.~~68,093,574.

	June 27,			December 28,			September 26,			December 28,
	2020			2019			2020			2019
ASSETS
CURRENT ASSETS
Cash and cash equivalents	$	150,409		$	182,736		$	204,397		$	182,736
Receivables (net of allowances: June 27, 2020 - $1,966 and December 28, 2019 - $1,813)		37,312			30,519
Receivables (net of allowances: September 26, 2020 - $2,003 and December 28, 2019 - $1,813)								36,377			30,519
Inventories		35,191			27,204			33,298			27,204
Prepaid income taxes		23,149			8,395			20,783			8,395
Prepaid marketing and advertising		5,112			15,954			3,751			15,954
Prepaid expenses and other current assets		26,465			30,582			22,798			30,582
TOTAL CURRENT ASSETS		277,638			295,390			321,404			295,390
Property and equipment, net		60,924			54,066			57,306			54,066
Operating lease assets		140,723			151,983			131,777			151,983
Franchise rights acquired		749,923			753,445			751,664			753,445
Goodwill		151,624			157,916			152,791			157,916
Other intangible assets, net		59,907			59,031			59,606			59,031
Deferred income taxes		12,761			14,319			12,487			14,319
Other noncurrent assets		16,040			12,164			15,974			12,164
TOTAL ASSETS	$	1,469,540		$	1,498,314		$	1,503,009		$	1,498,314
LIABILITIES AND TOTAL DEFICIT
CURRENT LIABILITIES
Portion of long-term debt due within one year	$	96,250		$	96,250		$	96,250		$	96,250
Portion of operating lease liabilities due within one year		37,829			33,236			35,101			33,236
Accounts payable		25,170			29,064			27,565			29,064
Salaries and wages payable		54,196			66,656			50,781			66,656
Accrued marketing and advertising		8,951			14,815			8,561			14,815
Accrued interest		7,962			24,637			14,343			24,637
Other accrued liabilities		50,239			43,558			45,387			43,558
Derivative payable		34,667			21,597			32,542			21,597
Income taxes payable		5,175			3,644			5,807			3,644
Deferred revenue		50,946			60,613			48,012			60,613
TOTAL CURRENT LIABILITIES		371,385			394,070			364,349			394,070
Long-term debt, net		1,444,360			1,479,920			1,426,580			1,479,920
Long-term operating lease liabilities		117,254			128,464			110,034			128,464
Deferred income taxes		176,884			175,235			175,938			175,235
Other		5,201			2,446			7,259			2,446
TOTAL LIABILITIES		2,115,084			2,180,135			2,084,160			2,180,135
Redeemable noncontrolling interest		3,609			3,722			3,599			3,722
TOTAL DEFICIT
Common stock, $0 par value; 1,000,000 shares authorized; 120,649 shares issued at June 27, 2020 and 120,352 shares issued at December 28, 2019		0			0
Treasury stock, at cost, 52,669 shares at June 27, 2020 and 52,933 shares at December 28, 2019		(3,147,758	)		(3,158,274	)
Common stock, $0 par value; 1,000,000 shares authorized; 120,649 shares issued at September 26, 2020 and 120,352 shares issued at December 28, 2019								0			0
Treasury stock, at cost, 52,626 shares at September 26, 2020 and 52,933 shares at December 28, 2019								(3,146,011	)		(3,158,274	)
Retained earnings		2,538,840			2,500,083			2,596,926			2,500,083
Accumulated other comprehensive loss		(40,235	)		(27,352	)		(35,665	)		(27,352	)
TOTAL DEFICIT		(649,153	)		(685,543	)		(584,750	)		(685,543	)
TOTAL LIABILITIES AND TOTAL DEFICIT	$	1,469,540		$	1,498,314		$	1,503,009		$	1,498,314

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

	Three Months Ended				Six Months Ended				Three Months Ended					Nine Months Ended
	June 27,		June 29,		June 27,		June 29,		September 26,			September 28,		September 26,		September 28,
	2020		2019		2020		2019		2020			2019		2020		2019
Service revenues, net	$	292,997	$	313,768	$	617,654	$	620,494	$	282,310		$	298,041	$	899,964	$	918,535
Product sales and other, net		40,640		55,255		116,344		111,694		38,389			50,526		154,733		162,219
Revenues, net		333,637		369,023		733,998		732,188		320,699			348,567		1,054,697		1,080,754
Cost of services		108,006		122,121		243,572		251,078		99,485			122,374		343,056		373,452
Cost of product sales and other		30,960		31,088		84,764		64,347		31,118			31,424		115,882		95,771
Cost of revenues		138,966		153,209		328,336		315,425		130,603			153,798		458,938		469,223
Gross profit		194,671		215,814		405,662		416,763		190,096			194,769		595,759		611,531
Marketing expenses		41,894		49,967		159,828		164,216		38,262			36,327		198,090		200,543
Selling, general and administrative expenses		101,792		60,374		166,318		125,176		59,192			63,713		225,509		188,889
Goodwill impairment		0		0		3,665		0		0			0		3,665		0
Operating income		50,985		105,473		75,851		127,371		92,642			94,729		168,495		222,099
Interest expense		30,995		34,732		62,546		69,927		29,735			33,118		92,281		103,045
Other expense, net		416		438		438		741
Other (income) expense, net										(211	)		1,460		230		2,201
Income before income taxes		19,574		70,303		12,867		56,703		63,118			60,151		75,984		116,853
Provision for income taxes		5,592		16,586		4,942		13,711		8,604			13,123		13,546		26,834
Net income		13,982		53,717		7,925		42,992		54,514			47,028		62,438		90,019
Net loss attributable to the noncontrolling interest		24		117		18		156		11			58		30		214
Net income attributable to WW International, Inc.	$	14,006	$	53,834	$	7,943	$	43,148	$	54,525		$	47,086	$	62,468	$	90,233
Earnings per share attributable to WW International, Inc.
Basic	$	0.21	$	0.80	$	0.12	$	0.64	$	0.80		$	0.70	$	0.92	$	1.34
Diluted	$	0.20	$	0.78	$	0.11	$	0.62	$	0.78		$	0.68	$	0.89	$	1.30
Weighted average common shares outstanding
Basic		67,641		67,124		67,538		67,044		68,013			67,298		67,697		67,129
Diluted		69,799		69,141		69,898		69,268		70,002			69,617		69,936		69,364

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

	Three Months Ended						Six Months Ended						Three Months Ended						Nine Months Ended
	June 27,			June 29,			June 27,			June 29,			September 26,			September 28,			September 26,			September 28,
	2020			2019			2020			2019			2020			2019			2020			2019
Net income	$	13,982		$	53,717		$	7,925		$	42,992		$	54,514		$	47,028		$	62,438		$	90,019
Other comprehensive gain (loss):
Foreign currency translation gain (loss)		4,990			1,801			(4,830	)		3,515			4,004			(2,983	)		(827	)		532
Income tax (expense) benefit on foreign currency translation gain (loss)		(1,267	)		(457	)		1,232			(892	)		(1,017	)		757			215			(135	)
Foreign currency translation gain (loss), net of taxes		3,723			1,344			(3,598	)		2,623			2,987			(2,226	)		(612	)		397
Gain (loss) on derivatives		364			(10,819	)		(12,592	)		(18,180	)		2,125			(4,251	)		(10,467	)		(22,431	)
Income tax (expense) benefit on gain (loss) on derivatives		(93	)		2,744			3,212			4,611			(541	)		1,078			2,673			5,689
Gain (loss) on derivatives, net of taxes		271			(8,075	)		(9,380	)		(13,569	)		1,584			(3,173	)		(7,794	)		(16,742	)
Total other comprehensive gain (loss)		3,994			(6,731	)		(12,978	)		(10,946	)		4,571			(5,399	)		(8,406	)		(16,345	)
Comprehensive income (loss)		17,976			46,986			(5,053	)		32,046
Comprehensive income														59,085			41,629			54,032			73,674
Net loss attributable to the noncontrolling interest		24			117			18			156			11			58			30			214
Foreign currency translation (gain) loss, net of taxes attributable to the noncontrolling interest		(3	)		(12	)		95			(6	)		(1	)		44			93			38
Comprehensive loss attributable to the noncontrolling interest		21			105			113			150			10			102			123			252
Comprehensive income (loss) attributable to WW International, Inc.	$	17,997		$	47,091		$	(4,940	)	$	32,196
Comprehensive income attributable to WW International, Inc.													$	59,095		$	41,731		$	54,155		$	73,926

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

				WW International, Inc.																						WW International, Inc.

														Accumulated																						Accumulated
	Redeemable													Other									Redeemable													Other
Three Months Ended June 27, 2020	Noncontrolling			Common Stock				Treasury Stock						Comprehensive			Retained
Three Months Ended September 26, 2020																							Noncontrolling			Common Stock				Treasury Stock						Comprehensive			Retained
	Interest			Shares		Amount		Shares			Amount			Loss			Earnings			Total			Interest			Shares		Amount		Shares			Amount			Loss			Earnings			Total
Balance at March 28, 2020	$	3,630			120,352	$	0		52,899		$	(3,156,907	)	$	(44,226	)	$	2,496,660		$	(704,473	)
Balance at June 27, 2020																							$	3,609			120,649	$	0		52,669		$	(3,147,758	)	$	(40,235	)	$	2,538,840		$	(649,153	)
Comprehensive income (loss)		(21	)												3,991			14,006			17,997			(10	)												4,570			54,525			59,095
Issuance of treasury stock under stock plans									(230	)		9,149						(12,579	)		(3,430	)									(43	)		1,747						(2,468	)		(721	)
Compensation expense on share- based awards																		38,686			38,686																			6,029			6,029
Issuance of common stock					297													2,067			2,067
Balance at June 27, 2020	$	3,609			120,649	$	0		52,669		$	(3,147,758	)	$	(40,235	)	$	2,538,840		$	(649,153	)
Balance at September 26, 2020																							$	3,599			120,649	$	0		52,626		$	(3,146,011	)	$	(35,665	)	$	2,596,926		$	(584,750	)

				WW International, Inc.																						WW International, Inc.

														Accumulated																						Accumulated
	Redeemable													Other									Redeemable													Other
Six Months Ended June 27, 2020	Noncontrolling			Common Stock				Treasury Stock						Comprehensive			Retained
Nine Months Ended September 26, 2020																							Noncontrolling			Common Stock				Treasury Stock						Comprehensive			Retained
	Interest			Shares		Amount		Shares			Amount			Loss			Earnings			Total			Interest			Shares		Amount		Shares			Amount			Loss			Earnings			Total
Balance at December 28, 2019	$	3,722			120,352	$	0		52,933		$	(3,158,274	)	$	(27,352	)	$	2,500,083		$	(685,543	)	$	3,722			120,352	$	0		52,933		$	(3,158,274	)	$	(27,352	)	$	2,500,083		$	(685,543	)
Comprehensive (loss) income		(113	)												(12,883	)		7,943			(4,940	)
Comprehensive income (loss)																								(123	)												(8,313	)		62,468			54,155
Issuance of treasury stock under stock plans									(264	)		10,516						(13,904	)		(3,388	)									(307	)		12,263						(16,372	)		(4,109	)
Compensation expense on share- based awards																		42,651			42,651																			48,680			48,680
Issuance of common stock					297													2,067			2,067						297													2,067			2,067
Balance at June 27, 2020	$	3,609			120,649	$	0		52,669		$	(3,147,758	)	$	(40,235	)	$	2,538,840		$	(649,153	)
Balance at September 26, 2020																							$	3,599			120,649	$	0		52,626		$	(3,146,011	)	$	(35,665	)	$	2,596,926		$	(584,750	)

				WW International, Inc.																						WW International, Inc.

														Accumulated																						Accumulated
	Redeemable													Other									Redeemable													Other
Three Months Ended June 29, 2019	Noncontrolling			Common Stock				Treasury Stock						Comprehensive			Retained
Three Months Ended September 28, 2019																							Noncontrolling			Common Stock				Treasury Stock						Comprehensive			Retained
	Interest			Shares		Amount		Shares			Amount			Loss			Earnings			Total			Interest			Shares		Amount		Shares			Amount			Loss			Earnings			Total
Balance at March 30, 2019	$	3,868			120,352	$	0		53,375		$	(3,174,871	)	$	(19,966	)	$	2,375,903		$	(818,934	)
Balance at June 29, 2019																							$	3,763			120,352	$	0		53,089		$	(3,164,409	)	$	(26,709	)	$	2,420,958		$	(770,160	)
Comprehensive income (loss)		(105	)												(6,743	)		53,834			47,091			(102	)												(5,355	)		47,086			41,731
Issuance of treasury stock under stock plans									(286	)		10,462						(13,651	)		(3,189	)									(43	)		1,633						(2,049	)		(416	)
Compensation expense on share- based awards																		4,872			4,872																			5,243			5,243
Balance at June 29, 2019	$	3,763			120,352	$	0		53,089		$	(3,164,409	)	$	(26,709	)	$	2,420,958		$	(770,160	)
Balance at September 28, 2019																							$	3,661			120,352	$	0		53,046		$	(3,162,776	)	$	(32,064	)	$	2,471,238		$	(723,602	)

				WW International, Inc.																						WW International, Inc.

														Accumulated																						Accumulated
	Redeemable													Other									Redeemable													Other
Six Months Ended June 29, 2019	Noncontrolling			Common Stock				Treasury Stock						Comprehensive			Retained
Nine Months Ended September 28, 2019																							Noncontrolling			Common Stock				Treasury Stock						Comprehensive			Retained
	Interest			Shares		Amount		Shares			Amount			Loss			Earnings			Total			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	)	$	3,913			120,352	$	0		53,396		$	(3,175,624	)	$	(15,757	)	$	2,382,438		$	(808,943	)
Comprehensive income (loss)		(150	)												(10,952	)		43,148			32,196			(252	)												(16,307	)		90,233			73,926
Issuance of treasury stock under stock plans									(307	)		11,215						(14,312	)		(3,097	)									(350	)		12,848						(16,360	)		(3,512	)
Compensation expense on share- based awards																		9,684			9,684																			14,927			14,927
Balance at June 29, 2019	$	3,763			120,352	$	0		53,089		$	(3,164,409	)	$	(26,709	)	$	2,420,958		$	(770,160	)
Balance at September 28, 2019																							$	3,661			120,352	$	0		53,046		$	(3,162,776	)	$	(32,064	)	$	2,471,238		$	(723,602	)

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

	Six Months Ended						Nine Months Ended
	June 27,			June 29,			September 26,			September 28,
	2020			2019			2020			2019
Operating activities:
Net income	$	7,925		$	42,992		$	62,438		$	90,019
Adjustments to reconcile net income to cash provided by operating activities:
Depreciation and amortization		24,983			22,693			37,402			33,543
Amortization of deferred financing costs and debt discount		4,383			4,680			6,614			6,876
Goodwill impairment		3,665			0			3,665			0
Share-based compensation expense		42,651			9,684			48,680			14,927
Deferred tax provision (benefit)		7,209			(2,294	)		5,302			(5,631	)
Allowance for doubtful accounts		28			(303	)		(77	)		(140	)
Reserve for inventory obsolescence		6,695			4,244			11,978			6,898
Foreign currency exchange rate loss		1,216			527			847			1,793
Changes in cash due to:
Receivables		(7,006	)		982			(5,602	)		944
Inventories		(14,198	)		(8,608	)		(16,470	)		(6,064	)
Prepaid expenses		1,593			26,599			7,115			33,299
Accounts payable		202			656			2,966			1,337
Accrued liabilities		(27,545	)		(20,447	)		(31,321	)		(17,812	)
Deferred revenue		(9,252	)		2,920			(12,836	)		5,535
Other long term assets and liabilities, net		3,473			(2,185	)		4,895			(1,114	)
Income taxes		1,496			(2,346	)		1,828			(12,729	)
Cash provided by operating activities		47,518			79,794			127,424			151,681
Investing activities:
Capital expenditures		(19,349	)		(7,601	)		(20,469	)		(10,479	)
Capitalized software expenditures		(14,849	)		(16,208	)		(22,189	)		(24,082	)
Other items, net		(5,051	)		120			(5,094	)		244
Cash used for investing activities		(39,249	)		(23,689	)		(47,752	)		(34,317	)
Financing activities:
Net (payments) borrowings on revolver		0			0			0			0
Payments on long-term debt		(38,500	)		(107,750	)		(57,750	)		(107,750	)
Taxes paid related to net share settlement of equity awards		(4,152	)		(4,227	)		(4,953	)		(4,796	)
Proceeds from stock options exercised		2,283			326			2,364			475
Other items, net		(581	)		(218	)		(623	)		(350	)
Cash used for financing activities		(40,950	)		(111,869	)		(60,962	)		(112,421	)
Effect of exchange rate changes on cash and cash equivalents		354			(565	)		2,951			(2,755	)
Net decrease in cash and cash equivalents		(32,327	)		(56,329	)
Net increase in cash and cash equivalents								21,661			2,188
Cash and cash equivalents, beginning of period		182,736			236,974			182,736			236,974
Cash and cash equivalents, end of period	$	150,409		$	180,645		$	204,397		$	239,162

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

The accompanying consolidated financial statements include the accounts of WW International, Inc. and all of its subsidiaries. The terms “Company” and “WW” as used throughout these notes are used to indicate WW International, Inc. and all of its operations consolidated for purposes of its financial statements. The Company’s “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 with the Company’s digital subscription product offerings to commitment plan subscribers. The “Studio + Digital” business also includes the provision of access to workshops for members who do not subscribe to commitment plans, including the Company’s “pay-as-you-go” members.

The consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States (“GAAP”) for interim financial information and include amounts that are based on management’s best estimates and judgments. While all available information has been considered, actual amounts could differ from those estimates. For example, the global outbreak of the coronavirus (COVID-19) has had and will continue to have a significant adverse impact on the Company’s business as well as on the business environment and the markets in which it operates. This global health crisis has also had a significant adverse effect on overall economic conditions and the Company expects consumer demand to continue to be negatively impacted due to changes in consumer behavior and confidence and health concerns. The situation remains dynamic and subject to rapid and possibly significant change, with the United States and ~~accordingly~~other countries continuing to struggle with rolling outbreaks of the virus. Accordingly, the full extent of the magnitude and duration of the negative impact to the Company’s business from the COVID-19 pandemic cannot be predicted with certainty. The Company considered the impact of COVID-19 on the assumptions and estimates used when preparing its Quarterly Report on Form 10-Q quarterly financial statements. These assumptions and estimates may change, as new events occur and additional information is obtained, and such future changes may have an adverse impact on the Company's results of operations, financial position and liquidity. The consolidated financial statements include all of the Company’s majority-owned subsidiaries. All entities acquired, and any entity of which a majority interest was acquired, are included in the consolidated financial statements from the date of acquisition. All intercompany accounts and transactions have been eliminated in consolidation. The Company’s operating results for any interim period are not necessarily indicative of future or annual results. The consolidated financial statements are unaudited and, accordingly, they do not include all of the information necessary for a comprehensive presentation of results of operations, financial position and cash flow activity required by GAAP for complete financial statements but, in the opinion of management, reflect all adjustments including those of a normal recurring nature necessary for a fair statement of the interim results presented.

These statements should be read in conjunction with the Company’s Annual Report on Form 10-K for fiscal 2019 filed on February 25, 2020, which includes additional information about the Company, its results of operations, its financial position and its cash flows.

In December 2019, the Financial Accounting Standards Board (the “FASB”) issued updated guidance simplifying the accounting for income taxes by removing certain exceptions to the general principles in Topic 740 as well as by improving consistent application of GAAP by clarifying and amending existing guidance. The effective date of the new guidance for public companies is for fiscal years beginning after December 15, 2020 and interim periods within those fiscal years. Early adoption is permitted. The Company does not expect the adoption of this guidance to have a material impact on its consolidated financial statements.

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 2019. For a discussion of accounting standards adopted in the current year, see Note 3.

In August 2018, the FASB issued updated guidance addressing customer’s accounting for implementation costs incurred in a cloud computing arrangement that is a service contract, which requires customers to apply internal-use software guidance to determine the implementation costs that are able to be capitalized. Capitalized implementation costs are required to be amortized over the term of the arrangement, beginning when the cloud computing arrangement is ready for its intended use. The effective date of the new guidance for public companies is for fiscal years beginning after December 15, 2019 and interim periods within those fiscal years. Early adoption is permitted. On December 29, 2019, the Company adopted the updated guidance on a prospective basis to all software implementation costs incurred after the date of adoption. The adoption of this guidance did not have a material impact onon the Company’s consolidated financial statements.

A lease is defined as an arrangement that contractually specifies the right to use and control an 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 consolidated balance sheets. Finance leases are included in property and equipment, net, other accrued liabilities, and other long-term liabilities in the Company’s consolidated balance sheets. 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, since the Company’s lessors do not provide an implicit rate, nor is one readily available. The incremental borrowing rate is calculated based on the Company’s credit yield curve and adjusted for collateralization, credit quality and economic environment impact, all where applicable. The lease asset includes scheduled lease payments 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 the lease asset and lease liability. The Company does not have any renewal options that would have a material impact on the terms of the leases and that are also reasonably expected to be exercised as of ~~June 27,~~September 26, 2020. A lease may contain both fixed and variable payments. Variable lease payments that are linked to an index or rate are measured based on the current index or rate at the implementation of the lease accounting standard, or lease commencement date for new leases, with 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 straight-line basis over the lease term.

The Company’s operating and finance leases are primarily for its studios, corporate offices, data centers and certain equipment, including automobiles.

At ~~June 27,~~September 26, 2020 and December 28, 2019, the Company’s lease assets and lease liabilities were as follows:

	June 27, 2020		December 28, 2019		September 26, 2020		December 28, 2019
Assets:
Operating lease assets	$	140,723	$	151,983	$	131,777	$	151,983
Finance lease assets		268		259		240		259
Total leased assets	$	140,991	$	152,242	$	132,017	$	152,242

Liabilities:
Current
Operating	$	37,829	$	33,236	$	35,101	$	33,236
Finance		132		126		112		126
Noncurrent
Operating	$	117,254	$	128,464	$	110,034	$	128,464
Finance		90		96		92		96
Total lease liabilities	$	155,305	$	161,922	$	145,339	$	161,922

For the three and ~~six~~nine months ended ~~June 27,~~September 26, 2020 and ~~June 29,~~September 28, 2019, the components of the Company’s lease expense were as follows:

	Three Months Ended					Six Months Ended					Three Months Ended				Nine Months Ended
	June 27,			June 29,		June 27,			June 29,		September 26,		September 28,		September 26,			September 28,
	2020			2019		2020			2019		2020		2019		2020			2019
Operating lease cost:
Fixed lease cost	$	12,499		$	12,363	$	25,140		$	25,735	$	12,040	$	12,906	$	37,181		$	38,641
Variable lease cost		(15	)		0		(4	)		0		0		0		(4	)		0
Total operating lease cost	$	12,484		$	12,363	$	25,136		$	25,735	$	12,040	$	12,906	$	37,177		$	38,641
Finance lease cost:
Amortization of leased assets		41			138		106			218		42		132		148			350
Interest on lease liabilities		3			5		6			13		3		4		9			17
Total finance lease cost	$	44		$	143	$	112			231	$	45	$	136	$	157		$	367
Total lease cost	$	12,528		$	12,506	$	25,248		$	25,966	$	12,085	$	13,042	$	37,334		$	39,008

At ~~June 27,~~September 26, 2020 and December 28, 2019, the Company’s weighted average remaining lease term and weighted average discount rates were as follows:

	June 27, 2020		December 28, 2019		September 26, 2020		December 28, 2019
Weighted Average Remaining Lease Term (years)
Operating leases		6.91		7.06		6.91		7.06
Finance leases		2.40		2.43		2.36		2.43

Weighted Average Discount Rate
Operating leases		6.94		7.02		6.90		7.02
Finance leases		5.60		5.97		5.56		5.97

The Company’s leases have remaining lease terms of 0 to 12 years with a weighted average lease term of 6.91 years as of ~~June 27,~~September 26, 2020.

At ~~June 27,~~September 26, 2020, the maturity of the Company’s lease liabilities in each of the next five fiscal years and thereafter were as follows:

	Operating Leases		Finance Leases		Total		Operating Leases		Finance Leases		Total
Remainder of fiscal 2020	$	24,854	$	69	$	24,923	$	11,670	$	38	$	11,708
2021		41,038		84		41,122		41,296		90		41,386
2022		29,712		55		29,767		29,884		59		29,943
2023		21,542		24		21,566		21,577		26		21,603
2024		16,169		5		16,174		16,165		5		16,170
Thereafter		65,826		0		65,826		65,922		0		65,922
Total lease payments	$	199,141	$	237	$	199,378	$	186,514	$	218	$	186,732
Less imputed interest		44,058		15		44,073		41,379		14		41,393
Present value of lease liabilities	$	155,083	$	222	$	155,305	$	145,135	$	204	$	145,339

Supplemental cash flow information related to leases for the ~~six~~nine months ended ~~June 27,~~September 26, 2020 and ~~June 29,~~September 28, 2019 were as follows:

	Six Months Ended				Nine Months Ended
	June 27,		June 29,		September 26,		September 28,
	2020		2019		2020		2019
Cash paid for amounts included in the measurement of lease liabilities
Operating cash flows from operating leases	$	24,997	$	25,738	$	37,123	$	38,664
Operating cash flows from finance leases	$	6	$	13	$	9	$	17
Financing cash flows from finance leases	$	106	$	218	$	148	$	350

Leased assets obtained in exchange for new operating lease liabilities	$	8,881	$	12,084	$	9,281	$	26,270
Leased assets obtained in exchange for new finance lease liabilities	$	118	$	92	$	127	$	105

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

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

	Three Months Ended				Six Months Ended				Three Months Ended				Nine Months Ended
	June 27,		June 29,		June 27,		June 29,		September 26,		September 28,		September 26,		September 28,
	2020		2019		2020		2019		2020		2019		2020		2019
Digital Subscription Revenues	$	177,921	$	156,969	$	352,466	$	305,824	$	188,731	$	153,940	$	541,197	$	459,764
Studio + Digital Fees		115,076		156,799		265,188		314,670		93,579		144,101		358,767		458,771
Service Revenues, net	$	292,997	$	313,768	$	617,654	$	620,494	$	282,310	$	298,041	$	899,964	$	918,535
Product sales and other, net		40,640		55,255		116,344		111,694		38,389		50,526		154,733		162,219
Revenues, net	$	333,637	$	369,023	$	733,998	$	732,188	$	320,699	$	348,567	$	1,054,697	$	1,080,754

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

	Three Months Ended June 27, 2020										Three Months Ended September 26, 2020
	North		Continental		United						North		Continental		United
	America		Europe		Kingdom		Other		Total		America		Europe		Kingdom		Other		Total
Digital Subscription Revenues	$	115,922	$	50,704	$	7,571	$	3,724	$	177,921	$	122,120	$	53,230	$	9,227	$	4,154	$	188,731
Studio + Digital Fees		86,131		17,858		8,001		3,086		115,076		69,111		14,288		7,515		2,665		93,579
Service Revenues, net	$	202,053	$	68,562	$	15,572	$	6,810	$	292,997	$	191,231	$	67,518	$	16,742	$	6,819	$	282,310
Product sales and other, net		25,472		9,257		4,165		1,746		40,640		23,964		8,993		3,730		1,702		38,389
Revenues, net	$	227,525	$	77,819	$	19,737	$	8,556	$	333,637	$	215,195	$	76,511	$	20,472	$	8,521	$	320,699

	Three Months Ended June 29, 2019										Three Months Ended September 28, 2019
	North		Continental		United						North		Continental		United
	America		Europe		Kingdom		Other		Total		America		Europe		Kingdom		Other		Total
Digital Subscription Revenues	$	102,851	$	43,586	$	6,993	$	3,539	$	156,969	$	101,579	$	42,230	$	6,608	$	3,523	$	153,940
Studio + Digital Fees		116,958		23,681		11,498		4,662		156,799		108,338		20,644		10,733		4,386		144,101
Service Revenues, net	$	219,809	$	67,267	$	18,491	$	8,201	$	313,768	$	209,917	$	62,874	$	17,341	$	7,909	$	298,041
Product sales and other, net		35,835		10,062		6,034		3,324		55,255		33,767		8,264		5,592		2,903		50,526
Revenues, net	$	255,644	$	77,329	$	24,525	$	11,525	$	369,023	$	243,684	$	71,138	$	22,933	$	10,812	$	348,567

	Six Months Ended June 27, 2020										Nine Months Ended September 26, 2020
	North		Continental		United						North		Continental		United
	America		Europe		Kingdom		Other		Total		America		Europe		Kingdom		Other		Total
Digital Subscription Revenues	$	232,272	$	97,341	$	15,147	$	7,706	$	352,466	$	354,391	$	150,572	$	24,374	$	11,860	$	541,197
Studio + Digital Fees		198,974		39,377		19,130		7,707		265,188		268,086		53,665		26,645		10,371		358,767
Service Revenues, net	$	431,246	$	136,718	$	34,277	$	15,413	$	617,654	$	622,477	$	204,237	$	51,019	$	22,231	$	899,964
Product sales and other, net		79,986		21,091		10,488		4,779		116,344		103,949		30,084		14,219		6,481		154,733
Revenues, net	$	511,232	$	157,809	$	44,765	$	20,192	$	733,998	$	726,426	$	234,321	$	65,238	$	28,712	$	1,054,697

	Six Months Ended June 29, 2019										Nine Months Ended September 28, 2019
	North		Continental		United						North		Continental		United
	America		Europe		Kingdom		Other		Total		America		Europe		Kingdom		Other		Total
Digital Subscription Revenues	$	201,611	$	83,769	$	13,411	$	7,033	$	305,824	$	303,190	$	125,999	$	20,019	$	10,556	$	459,764
Studio + Digital Fees		234,557		47,630		22,761		9,722		314,670		342,896		68,274		33,493		14,108		458,771
Service Revenues, net	$	436,168	$	131,399	$	36,172	$	16,755	$	620,494	$	646,086	$	194,273	$	53,512	$	24,664	$	918,535
Product sales and other, net		69,488		22,087		12,964		7,155		111,694		103,255		30,350		18,556		10,058		162,219
Revenues, net	$	505,656	$	153,486	$	49,136	$	23,910	$	732,188	$	749,341	$	224,623	$	72,068	$	34,722	$	1,080,754

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:

Revenue recognized from amounts included in current deferred revenue as of December 28, 2019 was ~~$55,479~~$59,898 for the ~~six~~nine months ended ~~June 27,~~September 26, 2020. The Company’s long-term deferred revenue, which is included in other liabilities on the Company’s consolidated balance sheet, had a balance of ~~$74~~$50 and $54 at ~~June 27,~~September 26, 2020 and December 28, 2019, respectively, for revenue that will not be recognized during the next fiscal year and is generally 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 applicable agreement.

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~~nine months ended ~~June 27,~~September 26, 2020, the change in the carrying value of franchise rights acquired was primarily 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) in 1978 and the Company’s acquisitions of WW.com, Inc. (formerly known as WeightWatchers.com, Inc.) in 2005, the Company’s franchised territories and the majority interest in Vigilantes do Peso Marketing Ltda. For the ~~six~~nine months ended ~~June 27,~~September 26, 2020, the change in the carrying amount of goodwill was due to the impairment charge of the Company’s Brazil reporting unit and the effect of exchange rate changes as follows:

	North			Continental		United									North			Continental		United
	America			Europe		Kingdom			Other			Total			America			Europe		Kingdom			Other			Total
Balance as of December 28, 2019	$	143,940		$	7,015	$	1,213		$	5,748		$	157,916		$	143,940		$	7,015	$	1,213		$	5,748		$	157,916
Goodwill impairment		0			0		0			(3,665	)		(3,665	)		0			0		0			(3,665	)		(3,665	)
Effect of exchange rate changes		(1,817	)		15		(69	)		(756	)		(2,627	)		(933	)		228		(31	)		(724	)		(1,460	)
Balance as of June 27, 2020	$	142,123		$	7,030	$	1,144		$	1,327		$	151,624
Balance as of September 26, 2020															$	143,007		$	7,243	$	1,182		$	1,359		$	152,791

Finite-lived franchise rights acquired are amortized over the remaining contractual period, which is generally less than one year. Indefinite-lived franchise rights acquired are tested on an annual basis for impairment.

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 Studio + Digital business and a relief from royalty methodology for franchise rights related to the Company’s Digital business. The aggregate estimated fair value for these rights is then compared to the carrying value of the unit of account for those franchise rights. The Company has determined the appropriate unit of account for purposes of assessing impairment to be the combination of the rights in both the Studio + Digital business and the Digital business in the country in which the applicable acquisition occurred. The book values of these franchise rights in the United States, Canada, United Kingdom, Australia and New Zealand as of the ~~June 27,~~September 26, 2020 balance sheet date were $671,914, ~~$52,724, $11,114, $6,170,~~$53,915, $11,483, $6,316, and ~~$4,546,~~$4,633, respectively.

In its hypothetical start-up approach analysis for fiscal 2020, 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 Studio + Digital business in each country based on assumptions regarding revenue growth and operating income margins. The cash flows associated with the Digital business in each country were based on the expected Digital revenue for such country and the application of a royalty rate based on current market terms. The cash flows for the Studio + Digital and Digital businesses were discounted utilizing rates consistent with those utilized in the annual goodwill 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 unit. The Company has 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 and other countries as of the ~~June 27,~~September 26, 2020 balance sheet date were $102,968, ~~$39,155~~$40,040 and ~~$9,501,~~$9,783, respectively.

For all of the Company’s reporting units tested as of May 3, 2020, the Company estimated future cash flows by utilizing the historical debt-free cash flows (cash flows provided by operations less capital expenditures) attributable to that country and then applied expected future operating income growth rates for such country. The Company utilized operating income as the basis for measuring its potential growth because it believes it is the best indicator of the performance of its business. The Company then discounted the estimated future cash flows utilizing a discount rate which was calculated using the weighted-average cost of capital, which included the cost of equity and the cost of debt.

The Company reviews indefinite-lived intangible assets, including franchise rights acquired with indefinite lives, and goodwill for potential impairment on at least an annual basis or more often if events so require. The Company performed fair value impairment testing as of May 3, 2020 and May 5, 2019, each the first day of fiscal May, on its indefinite-lived intangible assets and goodwill.

In performing its annual impairment analysis as of May 3, 2020 and May 5, 2019, the Company determined that the carrying amounts of its franchise rights acquired with indefinite lives units of account and goodwill reporting units did not exceed their respective fair values and, therefore, 0 impairment existed.

When determining fair value, the Company utilizes various assumptions, including projections of future cash flows, growth rates and discount rates. A change in these underlying assumptions could cause a change in the results of the impairment assessments and, as such, could cause fair value to be less than the carrying amounts and result in an impairment of those assets. In the event such a result occurred, 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 performed its~~Based on the results of the Company’s annual franchise rights acquired impairment analysis ~~for franchise rights acquired~~performed for all of its units of account, as ~~of the balance sheet dated June 27, 2020. Each of the units of account~~ except for Canada and New Zealand, as of the September 26, 2020 balance sheet date, those units had an estimated fair value at least 35% higher than the respective unit’s carrying amount. Collectively, these units of account represent ~~92.3%~~92.2% of the Company’s total franchise rights acquired. Based on the results of the Company’s annual franchise rights acquired impairment test performed for its Canada unit of account, which holds ~~7.1%~~7.2% of the Company’s franchise rights acquired as of the ~~June 27,~~September 26, 2020 balance sheet date, the estimated fair value of this unit of account exceeded its carrying value by approximately 16.5%. Based on the results of the Company’s annual franchise rights acquired impairment test performed for its New Zealand unit of account, which holds 0.6% of the Company’s franchise rights acquired as of the ~~June 27,~~September 26, 2020 balance sheet date, the estimated fair value of this unit of account exceeded its carrying value by approximately 9.8%. Accordingly, a change in the underlying assumptions for New Zealand may change the results of the impairment assessment and, as such, could result in an impairment of the franchise rights acquired related to New Zealand, for which the net book value is ~~$4,546~~$4,633 as of ~~June 27,~~September 26, 2020.

Based on the results of the Company’s May 3, 2020 annual goodwill impairment test performed for all of its reporting units as of the ~~June 27,~~September 26, 2020 balance sheet date, there was significant headroom in the goodwill impairment analysis for those units, with the difference between the carrying value and the fair value exceeding 100%.

With respect to the Company’s Brazil reporting unit, during the first quarter of fiscal 2020, the Company made a strategic decision to shift to an exclusively Digital business in that country. The Company determined that making this decision together with the negative impact of COVID-19, the ongoing challenging economic environment in Brazil and the Company’s reduced expectations regarding the reporting unit’s future operating cash flows required the Company to perform an interim goodwill impairment analysis. In performing this discounted cash flow analysis, the Company determined that the carrying amount of this reporting unit exceeded its fair value and as a result recorded an impairment charge of $3,665, which comprises the remaining balance of goodwill for this reporting unit.

As it relates to the goodwill 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 growth strategies under the current market conditions in Brazil. The Company then discounted the estimated future cash flows utilizing a discount rate which was calculated using the weighted-average cost of capital, which included the cost of equity and the cost of debt.

The carrying values of finite-lived intangible assets as of ~~June 27,~~September 26, 2020 and December 28, 2019 were as follows:

	June 27, 2020				December 28, 2019				September 26, 2020				December 28, 2019
	Gross				Gross				Gross				Gross
	Carrying		Accumulated		Carrying		Accumulated		Carrying		Accumulated		Carrying		Accumulated
	Amount		Amortization		Amount		Amortization		Amount		Amortization		Amount		Amortization
Capitalized software costs	$	124,804	$	101,929	$	119,537	$	97,588	$	127,891	$	105,530	$	119,537	$	97,588
Website development costs		86,503		59,182		77,823		50,748		91,098		63,406		77,823		50,748
Trademarks		11,945		11,345		11,869		11,228		11,974		11,402		11,869		11,228
Other		14,008		4,897		14,003		4,637		14,043		5,062		14,003		4,637
Trademarks and other intangible assets	$	237,260	$	177,353	$	223,232	$	164,201	$	245,006	$	185,400	$	223,232	$	164,201
Franchise rights acquired		7,877		4,421		8,180		4,618		7,866		4,463		8,180		4,618
Total finite-lived intangible assets	$	245,137	$	181,774	$	231,412	$	168,819	$	252,872	$	189,863	$	231,412	$	168,819

Aggregate amortization expense for finite-lived intangible assets was recorded in the amounts of ~~$7,386~~$7,557 and ~~$14,551~~$22,108 for the three and ~~six~~nine months ended ~~June 27,~~September 26, 2020, respectively. Aggregate amortization expense for finite-lived intangible assets was recorded in the amounts of ~~$7,485~~$6,973 and ~~$15,041~~$22,014 for the three and ~~six~~nine months ended ~~June 29,~~September 28, 2019, respectively.

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

Remainder of fiscal 2020	$	14,376	$	7,525
Fiscal 2021	$	22,767	$	25,100
Fiscal 2022	$	12,701	$	15,034
Fiscal 2023	$	3,229	$	4,961
Fiscal 2024 and thereafter	$	10,290	$	10,389

	June 27, 2020									December 28, 2019									September 26, 2020									December 28, 2019
	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⁾
Revolving Credit Facility due November 29, 2022	$	0	$	0	$	0		2.94	%	$	0	$	0	$	0		0.00	%	$	0	$	0	$	0		2.94	%	$	0	$	0	$	0		0.00	%
Term Loan Facility due November 29, 2024		1,266,750		5,766		19,433		6.76	%		1,305,250		6,418		21,634		7.93	%		1,247,500		5,439		18,333		6.54	%		1,305,250		6,418		21,634		7.93	%
Notes due December 1, 2025		300,000		941		0		8.62	%		300,000		1,028		0		8.72	%		300,000		898		0		8.62	%		300,000		1,028		0		8.72	%
Total	$	1,566,750	$	6,707	$	19,433		6.97	%	$	1,605,250	$	7,446	$	21,634		8.07	%	$	1,547,500	$	6,337	$	18,333		6.84	%	$	1,605,250	$	7,446	$	21,634		8.07	%
Less: Current portion		96,250									96,250									96,250									96,250
Unamortized deferred financing costs		6,707									7,446									6,337									7,446
Unamortized debt discount		19,433									21,634									18,333									21,634
Total long-term debt	$	1,444,360								$	1,479,920								$	1,426,580								$	1,479,920

On November 29, 2017, the Company refinanced its then-existing credit facilities (hereinafter referred to as “the November 2017 debt refinancing”) with proceeds received from $1,565,000 in an aggregate principal amount 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, as amended from time to time, the “Credit Facilities”) and proceeds received from $300,000 in aggregate principal amount from the issuance 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 Credit Facilities were issued under a new credit agreement, dated November 29, 2017 (as amended from time to time, 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 Credit Facilities initially consisted of (1) $1,540,000 in aggregate principal amount of senior secured tranche B term loans due in 2024 (the “Term Loan Facility”) and (2) a $150,000 in an aggregate principal amount of commitments under a senior secured revolving credit facility (which included borrowing capacity available for letters of credit) due in 2022 (the “Revolving Credit Facility”).

On June 14, 2020, the Company entered into an amendment to the Credit Agreement (the “Credit Agreement Amendment”) that provided for an increase in the aggregate principal amount of commitments under the Company’s Revolving Credit Facility by $25,000, providing the Company with $175,000 in aggregate principal amount of commitments under the Revolving Credit Facility, and that included certain other amendments to the Credit Agreement, which among other things, relaxed the requirements of the financial maintenance covenant under the Credit Agreement until the end of the second fiscal quarter of 2022, as further detailed below.

On both May 31, 2019 and October 10, 2019, the Company made a voluntary prepayment at par of $50,000 in an aggregate amount of its outstanding term loans under the Term Loan Facility. As a result of these prepayments, the Company wrote off deferred financing fees of $526 in the aggregate in fiscal 2019.

As previously disclosed, on March 23, 2020, as a precautionary measure in light of the COVID-19 outbreak, the Company drew down $148,000 in an aggregate principal amount under the Revolving Credit Facility in order to enhance its cash position and to provide additional financial flexibility. The revolver borrowing was classified as a short-term liability in connection with the Company’s monthly interest elections. The Company repaid $148,000 in aggregate principal amount of borrowings under the Revolving Credit Facility on June 5, 2020.

As of ~~June 27,~~September 26, 2020, the Company had ~~$1,266,750~~$1,247,500 in an aggregate principal amount of loans outstanding under its Credit Facilities, with $173,846 of availability and $1,154 in issued but undrawn letters of credit outstanding under the Revolving Credit Facility. There were 0 outstanding borrowings under the Revolving Credit Facility as of ~~June 27,~~September 26, 2020.

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 Leverage Ratio (as defined in the Credit Agreement), on an annual basis on or about the time the Company is required to deliver its financial statements for any fiscal year, the Company is obligated to offer to prepay a portion of the outstanding principal amount of the Term 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 Term Loan Facility and, after giving effect to the Credit Agreement Amendment, the Revolving Credit Facility, in each case, 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 cost of funds for U.S. dollar deposits for the interest period relevant to such borrowing adjusted for certain additional costs, provided that LIBOR is not lower than a floor of 0.75%. Borrowings under the Revolving Credit Facility bear interest at a rate per annum equal to an applicable margin based upon a leverage-based pricing grid (except as otherwise described below), 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 cost of funds for U.S. dollar deposits for the interest period relevant to such borrowing adjusted for certain additional costs. Under the terms of the Credit Agreement Amendment, a new level in the leverage based pricing grid was added providing for an applicable margin for extensions of credit under the Revolving Credit Facility of 3.00% when the Consolidated First Lien Leverage Ratio discussed below is greater than or equal to 3.75:1.00. As of ~~June 27,~~September 26, 2020, the applicable margins for the LIBOR rate borrowings under the Term Loan Facility and the Revolving Credit Facility were 4.75% and 2.25%, 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 the Company fails to do so, its borrowings will be based off of the alternative base rate plus a margin.

On a quarterly basis, the Company pays a commitment fee to the lenders under the Revolving Credit Facility in respect of unutilized commitments thereunder, which commitment fee fluctuates depending upon the Company’s Consolidated First Lien Leverage Ratio. Under the terms of the Credit Agreement Amendment, a new level in the leverage based pricing grid was added providing for a commitment fee of 0.625% when the Consolidated First Lien Leverage Ratio discussed below is greater than or equal to 3.75:1.00. Based on the Company’s Consolidated First Lien Leverage Ratio as of ~~June 27,~~September 26, 2020, the commitment fee was 0.35% per annum. The Company’s Consolidated First Lien Leverage Ratio as of ~~June 27,~~September 26, 2020 was ~~3.03:~~2.80:1.00.

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, if the aggregate principal amount of extensions of credit outstanding under the Revolving Credit Facility as of any fiscal quarter end exceeds 33 1/3% of the amount of the aggregate commitments under the Revolving Credit Facility in effect on such date, the Company must be in compliance with a Consolidated First Lien Leverage Ratio of 3.75:1.00, provided, however, that the Credit Agreement Amendment increased the required Consolidated First Lien Leverage Ratio to 4.50:1.00, commencing with the second fiscal quarter of 2020 through the end of fiscal 2020, with a further step up to 5.00:1.00 for fiscal 2021, before stepping down to 4.50:1.00 for the first fiscal quarter of 2022, and again to 3.75:1.00, commencing with the second fiscal quarter of 2022 (such increases in the Consolidated First Lien Leverage Ratio and the timing applicable thereto, collectively, the “Financial Covenant Relief Period”). The Financial Covenant Relief Period is subject to the Company’s continued compliance with certain conditions, which include meeting a Consolidated First Lien Leverage Ratio of 3.75:1.00 with respect to certain types of investments, restricted payments and prepayments of junior debt during the Financial Covenant Relief Period. If at any time the Company expects that it will not be in compliance with the conditions of the Financial Covenant Relief Period, the Company expects it will reduce its extensions of credit under the Revolving Credit Facility to $58,333 or less prior to the last day of such fiscal quarter so that it is not required to comply with the conditions of the Financial Covenant Relief Period. In any such event, the Company would be able to reborrow the full amount under the Revolving Credit Facility subsequent to such fiscal quarter end given that the applicable Consolidated First Lien Leverage Ratio to be tested during the Financial Covenant Relief Period is only tested as of the last day of each fiscal quarter.

As of ~~June 27,~~September 26, 2020, the Company was in compliance with all applicable financial covenants and the applicable Consolidated First Lien Leverage Ratio in the Credit Agreement governing the Revolving Credit Facility though it was not required to comply at such time.

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 Credit Facilities.

At ~~June 27,~~September 26, 2020, the Company had ~~$1,566,750~~$1,547,500 outstanding under the Credit Facilities and the Notes, consisting of borrowings under the Term Loan Facility of ~~$1,266,750,~~$1,247,500, $0 drawn down on the Revolving Credit Facility and $300,000 in aggregate principal amount of Notes issued and outstanding.

At ~~June 27,~~September 26, 2020 and December 28, 2019, the Company’s debt consisted of both fixed and variable-rate instruments. Interest rate swaps were entered into to hedge a portion of the cash flow exposure associated with the Company’s variable-rate borrowings. See Note 12 for information on the Company’s interest rate swaps. 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 swaps then in effect, was approximately ~~7.12~~6.95% and 8.08% per annum at ~~June 27,~~September 26, 2020 and December 28, 2019, respectively, based on interest rates on these dates. 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 swaps then in effect, was approximately ~~7.37%~~7.34% and 7.59% per annum at ~~June 27,~~September 26, 2020 and December 28, 2019, respectively, based on interest rates on these dates.

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 earnings per share:

	Three Months Ended				Six Months Ended				Three Months Ended				Nine Months Ended
	June 27,		June 29,		June 27,		June 29,		September 26,		September 28,		September 26,		September 28,
	2020		2019		2020		2019		2020		2019		2020		2019
Numerator:
Net income attributable to WW International, Inc.	$	14,006	$	53,834	$	7,943	$	43,148	$	54,525	$	47,086	$	62,468	$	90,233
Denominator:
Weighted average shares of common stock outstanding		67,641		67,124		67,538		67,044		68,013		67,298		67,697		67,129
Effect of dilutive common stock equivalents		2,158		2,017		2,360		2,224		1,989		2,319		2,239		2,235
Weighted average diluted common shares outstanding		69,799		69,141		69,898		69,268		70,002		69,617		69,936		69,364
Earnings per share attributable to WW International, Inc.
Basic	$	0.21	$	0.80	$	0.12	$	0.64	$	0.80	$	0.70	$	0.92	$	1.34
Diluted	$	0.20	$	0.78	$	0.11	$	0.62	$	0.78	$	0.68	$	0.89	$	1.30

The number of anti-dilutive common stock equivalents excluded from the calculation of the weighted average number of common shares for diluted EPS was ~~4,075~~5,358 and ~~2,032~~1,687 for the three months ended ~~June 27,~~September 26, 2020 and ~~June 29,~~September 28, 2019, 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 ~~2,849~~3,589 and ~~1,975~~1,793 for the ~~six~~nine months ended ~~June 27,~~September 26, 2020 and ~~June 29,~~September 28, 2019, respectively.

On May 6, 2008, the Company’s shareholders approved the 2008 Stock Incentive Plan (the “2008 Plan”). On May 6, 2014, the Company’s shareholders approved the 2014 Stock Incentive Plan (as amended and restated, the “2014 Plan”), which replaced the 2008 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. From time to time, the Company has granted fully-vested shares of its common stock to individuals in connection with special circumstances. The Company’s Board of Directors or a committee thereof administers the 2014 Plan.

In fiscal 2019, the Company granted 280.1 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. 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 2021. 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 Company is currently accruing compensation expense to what it believes is the probable outcome upon vesting.

In fiscal 2018, the Company granted 81.3 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. 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. 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 was satisfied upon continued employment (with limited exceptions) on May 15, 2020. The performance-vesting criteria for two-thirds of these PSUs was satisfied when the Company 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 of the fiscal 2017 and fiscal 2018 performance years. The performance-vesting criteria for the fiscal 2019 performance year was not satisfied. When the performance measure was met, if at all, for a particular 2017 Award Performance Year (i.e., each fiscal year over a three-year period, fiscal 2017 through fiscal 2019), that portion of units was “banked” for potential issuance following the satisfaction of the time-vesting criteria. Such portion of units “banked” was equal to (x) the target number of PSUs granted for the applicable 2017 Award Performance Year multiplied by (y) the applicable achievement percentage (166.67% in the case of fiscal 2017 and fiscal 2018), rounded down to avoid the issuance of fractional shares. Pursuant to these awards, the number of PSUs that became vested in fiscal 2020 upon the satisfaction of the time-vesting criteria was 122.6. The Company accrued compensation expense in an amount equal to the 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 was satisfied upon continued employment (with limited exceptions) on the third anniversary of the grant date. The performance-vesting criteria for these PSUs was satisfied when the Company 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 became vested in fiscal 2019 upon the satisfaction of the time-vesting criteria of 219.3 was calculated as (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. The Company accrued compensation expense in an amount equal to the outcome upon vesting.

The effective tax rates for the three and ~~six~~nine months ended ~~June 27,~~September 26, 2020 were ~~28.6%~~13.6% and ~~38.4%~~17.8%, respectively. The effective tax rates for the three and ~~six~~nine months ended ~~June 29,~~September 28, 2019 were ~~23.6%~~21.8% and ~~24.2%~~23.0%, respectively. For the ~~six~~nine months ended ~~June 27,~~September 26, 2020, the tax expense was impacted by a tax benefit related to the reversal of the 2018, 2019 and 2020 tax impact of global intangible low-taxed income (“GILTI”) and a tax windfall from stock compensation, partially offset by an impairment of the Company’s Brazil reporting unit which has a full valuation allowance and an increase to tax reserves related to a foreign income tax ~~audit, partially offset by a tax windfall from stock compensation.~~audit. For the ~~six~~nine months ended ~~June 27,~~September 26, 2020, the difference between the U.S. federal statutory tax rate and the Company’s consolidated effective tax rate was primarily due to tax expense ~~related to global intangible low-taxed income (“GILTI”), state income tax expense and tax expense~~ from income earned in foreign ~~jurisdictions.~~jurisdictions and state income tax expense, partially offset by a tax benefit related to foreign-derived intangible income (“FDII”). For the ~~six~~nine months ended ~~June 29,~~September 28, 2019, the difference between the U.S. federal statutory tax rate and the Company’s consolidated effective tax rate was primarily due to tax expense related to income earned in foreign jurisdictions, tax expense related to GILTI and state income tax expense, partially offset by tax benefits related to FDII, the reversal of tax reserves no longer needed ~~foreign-derived intangible income~~ and the cessation of certain publishing operations.

On March 27, 2020, the Coronavirus Aid, Relief and Economic Security (CARES) Act (the “CARES Act”) was signed into law. The CARES Act includes provisions relating to modifications to the net interest deduction limitation, net operating loss carryforward rules, refundable payroll tax credits and deferment of the employer portion of certain payroll taxes.

On July 20, 2020, the U.S. Treasury Department released final regulations under Internal Revenue Code Section 951A (TD 9902) permitting a taxpayer to elect to exclude from its GILTI inclusion items of income subject to a high effective rate of foreign tax. ~~The Company is currently assessing the impact~~As a result of the ~~new legislation,~~final regulations, the Company recorded a $7,566 discrete tax benefit in ~~conjunction with~~ the ~~CARES Act,~~three months ended September 26, 2020 related to the 2018 and ~~believes the overall impact will benefit the Company’s fiscal 2020 effective tax rate.~~2019 taxes previously accrued attributable to GILTI.

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. (“Artal”), in the United States District Court for the Southern District of New York. The actions were consolidated and lead plaintiffs were appointed in June 2019. A consolidated amended complaint was filed on July 29, 2019, naming as defendants the Company, certain of the Company’s current officers and directors, and Artal and certain of its affiliates. A second consolidated amended complaint was filed on September 27, 2019. The operative complaint asserts claims on behalf of all purchasers of the Company’s common stock between May 4, 2018 and February 26, 2019, inclusive (the “Class Period”), including purchasers of the Company’s common stock traceable to the May 2018 secondary offering of the Company’s common stock by certain of its shareholders. The complaint alleges that, during the Class Period, the defendants disseminated materially false and misleading statements and/or concealed or recklessly disregarded material adverse facts. The complaint alleges claims under Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, as amended, and Rule 10b-5 thereunder, and with respect to the secondary offering, under Sections 11, 12(a)(2), and 15 of the Securities Act of 1933, as amended. The plaintiffs seek to recover unspecified damages on behalf of the class members. The Company believes that the action is without merit and intends to vigorously defend it. The Company filed a motion to dismiss the complaint on October 31, 2019.

Between March and July 2019, the Company received shareholder litigation demands 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 demands relate to those contained in the ongoing securities class action litigation. In response to the demands, pursuant to Virginia law, the Board of Directors has created a special committee to investigate and evaluate the claims made in the demands. In addition, four derivative complaints were filed, each making allegations against certain of the Company’s officers and directors and/or Artal and certain of its affiliates. First, on June 13, 2019, a shareholder derivative complaint was filed in the Southern District of New York against certain of the Company’s officers and directors alleging, among other things, that the defendants breached fiduciary duties to the alleged injury of the Company. The plaintiff voluntarily dismissed the complaint on July 8, 2019 and the Company agreed to treat the complaint as a litigation demand. Second, on July 23, 2019, another shareholder derivative complaint was filed in the Southern District of New York against certain of the Company’s officers and directors alleging, among other things, that the defendants breached fiduciary duties to the alleged injury of the Company. The plaintiff voluntarily dismissed the complaint the same day. Third, on October 25, 2019, another shareholder derivative complaint was filed in the Southern District of New York against certain of the Company’s officers and directors alleging, among other things, that the defendants breached fiduciary duties to the alleged injury of the Company. Finally, on December 16, 2019, a shareholder derivative complaint was filed in New York Supreme Court against certain of the Company’s officers and directors, and Artal and certain of its affiliates, alleging, among other things, that the defendants breached fiduciary duties to the alleged injury of the Company. This action and the derivative action filed October 25, 2019 have each been stayed pending a decision on the defendants’ motion to dismiss the securities class action. The Company believes that these actions are without merit and intends to vigorously defend them.

Two substantially similar class action complaints were filed by individual Studio + Digital members against the Company in the United States District Court for the Southern District of New York (the “SDNY”) in May 2020 (the ~~“New York~~“Vodden Matter”) and the Superior Court of California in Ventura County in June 2020 (the ~~“California~~“Quintanilla Matter”~~, and together with the New York Matter, the “2020 Class Actions”~~). The complaints were filed on behalf of all Studio + Digital members nationwide and regard the fees charged for Studio + Digital memberships since the temporary replacement of in-person workshops with virtual workshops in March 2020 in response to the COVID-19 pandemic. The complaints ~~allege~~alleged, among other things, that the Company’s decision to charge its members the full Studio + Digital membership fee while only providing a virtual workshop experience violated state consumer protection laws in New York and/or California, as applicable, and gave rise to claims for breach of contract, fraud, and other tort causes of action based on the same factual allegations that are the basis for the breach of contract claim. The plaintiffs ~~seek~~sought to recover damages plus injunctive relief to enjoin the Company from engaging in similar conduct in the future on behalf of the class members. The Company believes that the 2020 Class Actions are without merit and intends to vigorously defend them. The Company filed a notice to remove the California Matter to the United States District Court for the Central District of California on July 30, 2020 and a motion to dismiss the New York Matter on August 3, 2020.

The Company filed a motion to dismiss the Vodden Matter on August 3, 2020 and, in response, the plaintiff filed a notice of voluntary dismissal without prejudice on August 17, 2020. The Company filed a notice to remove the Quintanilla Matter to the United States District Court for the Central District of California on July 30, 2020 and per the parties’ stipulation, the case was transferred to the SDNY on August 7, 2020. On September 23, 2020, the Company filed a motion to dismiss all of the plaintiff’s claims with prejudice. At the parties’ September 29, 2020 preliminary conference, the court issued an order permitting the plaintiff to either submit her opposition to the motion to dismiss or file an amended complaint by October 14, 2020. On October 14, 2020, the plaintiff filed an amended complaint with predominantly the same claims. The Company intends to file another motion to dismiss the Quintanilla Matter on or about November 4, 2020. The Company believes that the Quintanilla Matter is without merit and intends to vigorously defend it.

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 27,~~September 26, 2020, the Company had in effect interest rate swaps with an aggregate notional amount totaling $750,000. As of December 28, 2019, the Company had in effect an interest rate swap with a notional amount totaling $1,000,000, which expired by its terms on April 2, 2020.

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 to $1,000,000 on April 1, 2019. This interest rate swap effectively fixed the variable interest rate on the notional amount of this swap at 2.41%. This swap qualified for hedge accounting and, therefore, changes in the fair value of this swap were 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 (the “2018 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 fixed the variable interest rate on the notional amount of this swap at 3.1005%. On June 7, 2019, in order to hedge a portion of its variable rate debt, the Company entered into a forward-starting interest rate swap (together with the 2018 swap, the “current swaps”) with an effective date of April 2, 2020 and a termination date of March 31, 2024. The notional amount of this swap is $250,000. This interest rate swap effectively fixed the variable interest rate on the notional amount of this swap at 1.901%. The current swaps qualify for hedge accounting and, therefore, changes in the fair value of the current swaps have been recorded in accumulated other comprehensive loss.

As of ~~June 27,~~September 26, 2020 and December 28, 2019, cumulative unrealized losses for qualifying hedges were reported as a component of accumulated other comprehensive loss in the amounts of ~~$24,909~~$23,323 ($~~33,448~~31,323 before taxes) and $15,529 ($20,856 before taxes), respectively. As of ~~June 27,~~September 26, 2020, the aggregate fair value of the Company’s current swaps was a liability of ~~$34,667,~~$32,542, which is included in derivative payable in the consolidated balance sheet. As of December 28, 2019, the fair value of the Company’s then-effective swap was a liability of $1,881, which is included in derivative payable in the consolidated balance sheet. As of December 28, 2019, the aggregate fair value of the Company’s current swaps was a liability of $19,716, which is included in derivative payable in the consolidated balance sheet.

The Company is hedging forecasted transactions for periods not exceeding the next four years. The Company expects approximately ~~$7,560~~$6,422 ($~~10,134~~8,609 before taxes) of derivative losses included in accumulated other comprehensive loss at ~~June 27,~~September 26, 2020, 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 27,~~September 26, 2020 and December 28, 2019. The fair value of the Company’s borrowings under the Revolving Credit Facility approximated a carrying value of $0 at both ~~June 27,~~September 26, 2020 and December 28, 2019.

The fair value of the Company’s Credit Facilities is determined by utilizing average bid prices on or near the end of each fiscal quarter (Level 2 input). As of ~~June 27,~~September 26, 2020 and December 28, 2019, the fair value of the Company’s long-term debt was approximately ~~$1,536,502~~$1,533,476 and $1,597,852, respectively, as compared to the carrying value (net of deferred financing costs and debt discount) of ~~$1,540,610~~$1,522,830 and $1,576,170, 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 12 for disclosures related to derivative financial instruments.

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

			Fair Value Measurements Using:								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)		Total Fair Value		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Interest rate swap liability at June 27, 2020	$	34,667	$	0	$	34,667	$	0
Interest rate swap liability at September 26, 2020									$	32,542	$	0	$	32,542	$	0
Interest rate swap liability at December 28, 2019	$	21,597	$	0	$	21,597	$	0	$	21,597	$	0	$	21,597	$	0

The Company did 0t have any transfers into or out of Levels 1 and 2 and did not maintain any assets or liabilities classified as Level 3 during the ~~six~~nine months ended ~~June 27,~~September 26, 2020 and the fiscal year ended December 28, 2019.

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

	Six Months Ended June 27, 2020									Nine Months Ended September 26, 2020
	Loss on Qualifying Hedges			Loss on Foreign Currency Translation			Total			Loss on Qualifying Hedges			Loss on Foreign Currency Translation			Total
Beginning balance at December 28, 2019	$	(15,529	)	$	(11,823	)	$	(27,352	)	$	(15,529	)	$	(11,823	)	$	(27,352	)
Other comprehensive loss before reclassifications, net of tax		(12,765	)		(3,598	)		(16,363	)		(13,937	)		(612	)		(14,549	)
Amounts reclassified from accumulated other comprehensive loss, net of tax^(b)		3,385			0			3,385			6,143			0			6,143
Net current period other comprehensive loss including noncontrolling interest		(9,380	)		(3,598	)		(12,978	)		(7,794	)		(612	)		(8,406	)
Less: Net current period other comprehensive loss attributable to the noncontrolling interest		0			95			95			0			93			93
Ending balance at June 27, 2020	$	(24,909	)	$	(15,326	)	$	(40,235	)
Ending balance at September 26, 2020										$	(23,323	)	$	(12,342	)	$	(35,665	)

	Six Months Ended June 29, 2019									Nine Months Ended September 28, 2019
	Loss on Qualifying Hedges			Loss on Foreign Currency Translation			Total			Loss on Qualifying Hedges			Loss on Foreign Currency Translation			Total
Beginning balance at December 29, 2018	$	(1,175	)	$	(14,582	)	$	(15,757	)	$	(1,175	)	$	(14,582	)	$	(15,757	)
Other comprehensive (loss) income before reclassifications, net of tax		(12,255	)		2,623			(9,632	)		(15,585	)		397			(15,188	)
Amounts reclassified from accumulated other comprehensive loss, net of tax^(b)		(1,314	)		0			(1,314	)		(1,157	)		0			(1,157	)
Net current period other comprehensive (loss) income including noncontrolling interest		(13,569	)		2,623			(10,946	)		(16,742	)		397			(16,345	)
Less: Net current period other comprehensive income attributable to the noncontrolling interest		0			(6	)		(6	)
Ending balance at June 29, 2019	$	(14,744	)	$	(11,965	)	$	(26,709	)
Less: Net current period other comprehensive loss attributable to the noncontrolling interest											0			38			38
Ending balance at September 28, 2019										$	(17,917	)	$	(14,147	)	$	(32,064	)

	Three Months Ended						Six Months Ended							Three Months Ended						Nine Months Ended
	June 27,			June 29,			June 27,			June 29,				September 26,			September 28,			September 26,			September 28,
	2020			2019			2020			2019				2020			2019			2020			2019
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						Amounts Reclassified from Accumulated Other Comprehensive Loss						Affected Line Item in the Statement Where Net Income is Presented
(Loss) Gain on Qualifying Hedges
Interest rate contracts	$	(3,438	)	$	498		$	(4,537	)	$	1,760		Interest expense	$	(3,698	)	$	(210	)	$	(8,235	)	$	1,550		Interest expense
		(3,438	)		498			(4,537	)		1,760		Income before income taxes		(3,698	)		(210	)		(8,235	)		1,550		Income before income taxes
		873			(126	)		1,152			(446	)	Provision from income taxes		939			53			2,092			(393	)	Provision from income taxes
	$	(2,565	)	$	372		$	(3,385	)	$	1,314		Net income	$	(2,759	)	$	(157	)	$	(6,143	)	$	1,157		Net income

The Company has 4 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.

	Total Revenue, net				Total Revenue, net				Total Revenue, net				Total Revenue, net
	Three Months Ended				Six Months Ended				Three Months Ended				Nine Months Ended
	June 27, 2020		June 29, 2019		June 27, 2020		June 29, 2019		September 26, 2020		September 28, 2019		September 26, 2020		September 28, 2019
North America	$	227,525	$	255,644	$	511,232	$	505,656	$	215,195	$	243,684	$	726,426	$	749,341
Continental Europe		77,819		77,329		157,809		153,486		76,511		71,138		234,321		224,623
United Kingdom		19,737		24,525		44,765		49,136		20,472		22,933		65,238		72,068
Other		8,556		11,525		20,192		23,910		8,521		10,812		28,712		34,722
Total revenue, net	$	333,637	$	369,023	$	733,998	$	732,188	$	320,699	$	348,567	$	1,054,697	$	1,080,754

	Net Income					Net Income
	Three Months Ended					Nine Months Ended
	September 26, 2020			September 28, 2019		September 26, 2020		September 28, 2019
Segment operating income:
North America	$	79,978		$	83,998	$	204,748	$	216,281
Continental Europe		37,159			32,679		92,360		73,518
United Kingdom		4,056			3,271		7,406		6,829
Other		1,551			1,435		1,582		2,829
Total segment operating income		122,744			121,383		306,096		299,457
General corporate expenses		30,102			26,654		137,601		77,358
Interest expense		29,735			33,118		92,281		103,045
Other (income) expense, net		(211	)		1,460		230		2,201
Provision for income taxes		8,604			13,123		13,546		26,834
Net income	$	54,514		$	47,028	$	62,438	$	90,019
Net loss attributable to the noncontrolling interest		11			58		30		214
Net income attributable to WW International, Inc.	$	54,525		$	47,086	$	62,468	$	90,233

Net Income

Net Income

Three Months Ended

Six Months Ended

June 27, 2020

June 29, 2019

June 27, 2020

June 29, 2019

Segment operating income:

North America
$
79,526

$
91,169

$
124,771

$
132,282

Continental Europe

41,629

30,764

55,200

40,839

United Kingdom

4,187

4,308

3,350

3,557

Other

2,804

1,726

30

1,396

Total segment operating income

128,146

127,967

183,351

178,074

General corporate expenses

77,161

22,494

107,500

50,703

Interest expense

30,995

34,732

62,546

69,927

Other expense, net

416

438

438

741

Provision for income taxes

5,592

16,586

4,942

13,711

Net income
$
13,982

$
53,717

$
7,925

$
42,992

Net loss attributable to the noncontrolling interest

24

117

18

156

Net income attributable to WW International, Inc.
$
14,006

$
53,834

$
7,943

$
43,148

	Depreciation and Amortization				Depreciation and Amortization				Depreciation and Amortization				Depreciation and Amortization
	Three Months Ended				Six Months Ended				Three Months Ended				Nine Months Ended
	June 27, 2020		June 29, 2019		June 27, 2020		June 29, 2019		September 26, 2020		September 28, 2019		September 26, 2020		September 28, 2019
North America	$	10,019	$	9,081	$	20,546	$	18,386	$	9,496	$	9,048	$	30,041	$	27,434
Continental Europe		396		395		784		776		409		496		1,192		1,272
United Kingdom		248		139		510		425		252		164		762		588
Other		86		107		182		218		91		103		273		321
Total segment depreciation and amortization		10,749		9,722		22,022		19,805		10,248		9,811		32,268		29,615
General corporate depreciation and amortization		4,222		4,037		7,344		7,568		4,403		3,235		11,748		10,804
Depreciation and amortization	$	14,971	$	13,759	$	29,366	$	27,373	$	14,651	$	13,046	$	44,016	$	40,419

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

As previously disclosed, on December 15, 2019, the Company entered into an amendment of the Strategic Collaboration Agreement with Ms. Winfrey, pursuant to which, among other things, the Initial Term of the Strategic Collaboration Agreement was extended until April 17, 2023 (with no additional successive renewal terms) after which a second term will commence and continue through the earlier of the date of the Company’s 2025 annual meeting of shareholders or May 31, 2025. Ms. Winfrey will continue to provide the above-described services during the remainder of the Initial Term and, during the second term, will provide certain consulting and other services to the Company. In consideration of Ms. Winfrey entering into the amendment to the Strategic Collaboration Agreement and the performance of her obligations thereunder, on December 15, 2019 the Company granted Ms. Winfrey a fully vested option to purchase 3,276 shares of the Company’s common stock (the "Winfrey Amendment Option") which became exercisable on May 6, 2020, the date on which shareholder approval of such option was obtained. The amendment to the Strategic Collaboration Agreement became operative on May 6, 2020 when the Company’s shareholders approved the Winfrey Amendment Option. Based on the Black Scholes option pricing method as of May 6, 2020, the Company recorded $32,686 of compensation expense in the second quarter of fiscal 2020 for the Winfrey Amendment Option. The Company used a dividend yield of 0.0%, 63.68% volatility and a risk-free interest rate of 0.41%. Compensation expense is included as a component of selling, general and administrative expenses.

In addition to the Strategic Collaboration Agreement, Ms. Winfrey and her related entities provided services to the Company totaling ~~$823~~$305 and ~~$1,761~~$2,066 for the three and ~~six~~nine months ended ~~June 27,~~September 26, 2020, respectively, and ~~$720~~$662 and ~~$2,003~~$2,665 for the three and ~~six~~nine months ended ~~June 29,~~September 28, 2019, respectively, which services included advertising, production and related fees. Also, during the three months ended September 28, 2019, the Company received advertising services from entities related to Ms. Winfrey at no charge with an estimated value of $330.

~~Also, entities~~Entities related to Ms. Winfrey were reimbursed for actual costs incurred in connection with the WW Presents: Oprah’s 2020 Vision tour totaling ~~$141~~$2 and ~~$1,650~~$1,653 for the three and ~~six~~nine months ended ~~June 27,~~September 26, 2020, respectively.

The Company’s accounts payable to parties related to Ms. Winfrey at ~~June 27,~~September 26, 2020 and December 28, 2019 was ~~$268~~$198 and $72, respectively.

In June 2020, as permitted by the transfer provisions set forth in the previously disclosed Share Purchase Agreement, dated October 18, 2015, between the Company and Ms. Winfrey, as amended, and the previously disclosed Winfrey Option Agreement, dated October 18, 2015, between the Company and Ms. Winfrey, Ms. Winfrey sold 604 of the shares she purchased under such purchase agreement and exercised a portion of her stock options granted in 2015 resulting in the sale of 297 shares issuable under such options, respectively.

As previously disclosed, in the second quarter of fiscal 2020, in connection with its cost-savings initiative, the Company committed to a plan of reduction in force which has resulted and will result in the elimination of certain positions and termination of employment for certain employees worldwide. The Company had previously estimated this plan would cost $14,000. This estimate has been revised to $22,500 driven primarily by the strategic cost reductions to the Company’s global Studio + Digital operations to adjust to anticipated consumer demand. During the second ~~quarter~~and third quarters of fiscal 2020, the Company reduced its total headcount by approximately ~~27%.~~35% since the end of fiscal 2019. As of ~~June 27,~~September 26, 2020, the Company had approximately 1311 employees, a majority of whom were part-time employees. ~~The Company had previously estimated this plan would cost $12,000. This estimate has been revised to $14,000.~~ The Company recorded expenses in connection with employee termination benefit costs of ~~$11,209~~$2,251 ($~~8,325~~1,680 after tax) and $13,459 ($9,996 after tax) during the three and ~~six~~nine months ended ~~June 27, 2020.~~September 26, 2020, respectively. These expenses impacted cost of revenues by ~~$6,503~~$1,062 and $7,565 and selling, general and administrative expenses by ~~$4,706~~$1,189 and $5,894 in the three and ~~six~~nine months ended ~~June 27, 2020.~~September 26, 2020, respectively. All expenses were recorded to general corporate expenses and, therefore, there was no impact to the segments. For the three and ~~six~~nine months ended ~~June 27,~~September 26, 2020, the Company made payments of ~~$3,667~~$4,419 and $8,086, respectively, towards the liability for these ~~expenses.~~expenses and increased provision estimates by $20 for each respective period. The Company expects the remaining liability of ~~$7,542~~$5,393 to be paid in full no later than the end of fiscal 2021. The Company anticipates recording additional expenses in connection with this restructuring of approximately ~~$2,800.~~$9,000.

As previously disclosed, in the first quarter of fiscal 2019, the Company undertook an organizational realignment which resulted in the elimination of certain positions and termination of employment for certain employees worldwide. The Company recorded expenses in connection with employee termination benefit costs of $6,331 ($4,727 after tax) during the ~~six~~nine months ended ~~June 29,~~September 28, 2019 (all expenses were recorded in the first quarter of fiscal 2019). These expenses impacted cost of revenues by $1,425 and selling, general and administrative expenses by $4,906 in the ~~six~~nine months ended ~~June 29,~~September 28, 2019. The Company did not record 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. For the fiscal year ended December 28, 2019, the Company made payments of $5,077 towards the liability for these expenses and lowered provision estimates by $83. For the ~~six~~nine months ended ~~June 27,~~September 26, 2020, the Company made payments of ~~$1,049~~$1,052 towards the liability for these expenses and lowered provision estimates by ~~$76. The Company expects the remaining~~$119. As of September 26, 2020, there was 0 outstanding liability ~~of $46 to be paid in full in fiscal 2020.~~related thereto.

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, ~~or the Securities Act,~~ 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 and the impact of the COVID-19 virus under the heading “Management’s Discussion and Analysis of Financial Condition and Results of Operations.” We have generally used the words “may,” “will,” “could,” “expect,” “anticipate,” “believe,” “estimate,” “plan,” “intend,” “aim” and similar expressions in this Quarterly Report on Form 10-Q to identify forward-looking statements. We have based these forward-looking statements on our current views with respect to future events and financial performance. Actual results could differ materially from those projected in these forward-looking statements. These forward-looking statements are subject to risks, uncertainties and assumptions, including, among other things:

You should not put undue reliance on any forward-looking statements. You should understand that many important factors, including those discussed under the heading “Risk Factors”, 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.

WW International, Inc., formerly known as 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 “WW” refer to WW International, Inc. and all of its operations consolidated for purposes of its financial statements; “North America” refers to our North American Company-owned operations; “Continental Europe” refers to our Continental Europe Company-owned operations; “United Kingdom” refers to our United Kingdom Company-owned operations; 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 “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 with our digital subscription product offerings to commitment plan subscribers. Our “Studio + Digital” business also includes the provision of access to workshops for members who do not subscribe to commitment plans, including our “pay-as-you-go” members.

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 myWW^TM.

You should read the following discussion in conjunction with our Annual Report on Form 10-K for fiscal 2019 that includes additional information about us, our results of operations, our financial position and our cash flows, and with our unaudited consolidated financial statements and related notes included in Item 1 of this Quarterly Report on Form 10-Q (collectively referred to as the “Consolidated Financial Statements”).

To supplement our consolidated results presented in accordance with accounting principles generally accepted in the United States, or GAAP, we have disclosed non-GAAP financial measures of operating results that exclude or adjust certain items. Gross profit, gross profit margin, operating income and operating income margin are discussed in this Quarterly Report on Form 10-Q both as reported (on a GAAP basis) and as adjusted (on a non-GAAP basis), ~~as applicable,~~ with respect to the ~~second~~third quarter of fiscal 2020 to exclude the impact of the charges associated with our previously disclosed 2020 organizational restructuring plan, and with respect to the first nine months of fiscal 2020 to exclude the impact of the one-time stock compensation expense associated with the previously disclosed option granted to Ms. Oprah Winfrey in connection with the Company extending its partnership with Ms. Winfrey (the “Winfrey Stock Compensation expense”) and the charges associated with our previously disclosed 2020 organizational restructuring plan, and with respect to the first six months of fiscal 2020 to exclude the impact of the Winfrey Stock Compensation expense,, the 2020 restructuring charges and the impairment charge for our goodwill related to our Brazil reporting ~~unit.~~unit, as applicable. We generally refer to such non-GAAP measures as excluding or adjusting for the impact of the Winfrey Stock Compensation expense, 2020 restructuring charges and goodwill impairment charge. We also 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, 2020 restructuring charges and goodwill impairment (“Adjusted EBITDAS”); total debt less unamortized deferred financing costs, unamortized debt discount and cash on hand (i.e., net debt); and a net debt/Adjusted EBITDAS ratio. See “—Liquidity and Capital Resources—EBITDAS, Adjusted EBITDAS and Net Debt” for the reconciliations of these non-GAAP financial measures to the most comparable GAAP financial measure in each case. Our management believes these non-GAAP financial measures provide useful supplemental information to investors regarding the performance of our business and are useful for period-over-period comparisons of the performance of our business. While we believe that these non-GAAP financial measures are useful in evaluating our business, this information should be considered as supplemental in nature and is not meant to be considered in isolation or as a substitute for the related financial information prepared in accordance with GAAP. In addition, these non-GAAP financial measures may not be the same as similarly entitled measures reported by other companies.

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

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 Studio + Digital business and a relief from royalty methodology for our franchise rights related to our Digital business. The aggregate estimated fair value for these rights is then compared to the carrying value of the unit of account for those franchise rights. We have determined the appropriate unit of account for purposes of assessing impairment to be the combination of the rights in both the Studio + Digital business and Digital business in the country in which the applicable acquisition occurred. The book values of these franchise rights in the United States, Canada, United Kingdom, Australia, and New Zealand as of the ~~June 27,~~September 26, 2020 balance sheet date were $671.9 million, ~~$52.7~~$53.9 million, ~~$11.1~~$11.5 million, ~~$6.2~~$6.3 million, and ~~$4.5~~$4.6 million, respectively.

In our hypothetical start-up approach analysis for fiscal 2020, 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 Studio + Digital business in each country based on assumptions regarding revenue growth and operating income margins. The cash flows associated with the Digital business in each country were based on the expected Digital revenue for such country and the application of a royalty rate based on current market terms. The cash flows for the Studio + Digital and Digital businesses were discounted utilizing rates consistent with those utilized in the annual goodwill 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 and other countries as of the ~~June 27,~~September 26, 2020 balance sheet date were $103.0 million, ~~$39.1~~$40.0 million and ~~$9.5~~$9.8 million, respectively.

For all of our reporting units tested as of May 3, 2020, we estimated future cash flows by utilizing the historical debt-free cash flows (cash flows provided by operations less capital expenditures) attributable to that country and then applied expected future operating income growth rates for such country. We utilized operating income as the basis for measuring our potential growth because we believe it is the best indicator of the performance of our business. We then discounted the estimated future cash flows utilizing a discount rate which was calculated using the weighted-average cost of capital, which included the cost of equity and the cost of debt.

We review indefinite-lived intangible assets, including franchise rights acquired with indefinite lives, and goodwill for potential impairment on at least an annual basis or more often if events so require. We performed fair value impairment testing as of May 3, 2020 and May 5, 2019, each the first day of fiscal May, on our indefinite-lived intangible assets and goodwill.

In performing our annual impairment analysis as of May 3, 2020 and May 5, 2019, we determined that the carrying amounts of our franchise rights acquired with indefinite lives units of account and goodwill reporting units did not exceed their respective fair values and, therefore, no impairment existed.

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

In performing our annual impairment analysis, we also considered the trading value of both our equity and debt. If the 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 2019.

~~We performed~~Based on the results of our annual ~~impairment analysis for~~ franchise rights acquired impairment analysis performed for all of our units of account, ~~as of the balance sheet dated June 27, 2020. Each of the units of account~~ except for Canada and New Zealand, as of the September 26, 2020 balance sheet date, those units had an estimated fair value at least 35% higher than the respective unit’s carrying amount. Collectively, these units of account represent ~~92.3%~~92.2% of our total franchise rights acquired. Based on the results of our annual franchise rights acquired impairment test performed for our Canada unit of account, which holds ~~7.1%~~7.2% of our franchise rights acquired as of the ~~June 27,~~September 26, 2020 balance sheet date, the estimated fair value of this unit of account exceeded its carrying value by approximately 16.5%. Based on the results of our annual franchise rights acquired impairment test performed for our New Zealand unit of account, which holds 0.6% of our franchise rights acquired as of the ~~June 27,~~September 26, 2020 balance sheet date, the estimated fair value of this unit of account exceeded its carrying value by approximately 9.8%. Accordingly, a change in the underlying assumptions for New Zealand may change the results of the impairment assessment and, as such, could result in an impairment of the franchise rights acquired related to New Zealand, for which the net book value is ~~$4.5~~$4.6 million as of ~~June 27,~~September 26, 2020.

In performing this impairment analysis for fiscal 2020, for the year of maturity, we assumed Studio + Digital revenue (comprised of Studio + Digital Fees and revenues from products sold to members in studios) growth of (30.6%) to (39.3%) in the year of maturity from fiscal 2019, 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 0.2% to 12.4%.

Based on the results of our May 3, 2020 annual goodwill impairment test performed for all of our reporting units as of the ~~June 27,~~September 26, 2020 balance sheet date, there was significant headroom in the goodwill impairment analysis for those units, with the difference between the carrying value and the fair value exceeding 100%.

The following are the more significant assumptions utilized in our annual impairment analyses for fiscal 2020 and fiscal 2019:

	June 27,	June 29,	Fiscal	Fiscal
	2020	2019	2020	2019
Debt-Free Cumulative Annual Cash Flow Growth Rate	4.0% to 13.9%	4.2%	4.0% to 13.9%	4.2%
Discount Rate	9.5%	9.0%	9.5%	9.0%

With respect to our Brazil reporting unit, during the first quarter of fiscal 2020, we made a strategic decision to shift to an exclusively Digital business in that country. We determined that making this decision together with the negative impact of COVID-19, the ongoing challenging economic environment in Brazil and our reduced expectations regarding the reporting unit’s future operating cash flows required us to perform an interim goodwill impairment analysis. In performing this discounted cash flow analysis, we determined that the carrying amount of this reporting unit exceeded its fair value and as a result recorded an impairment charge of $3.7 million, which comprises the remaining balance of goodwill for this reporting unit.

As it relates to our goodwill 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 growth strategies under the current market conditions in Brazil. We then discounted the estimated future cash flows utilizing a discount rate which was calculated using the weighted-average cost of capital, which included the cost of equity and the cost of debt.

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 2019. Our critical accounting policies have not changed since the end of fiscal 2019.

Our management team regularly reviews and analyzes a number of financial and operating metrics, including the key performance indicators listed below, in order to manage our business, measure our performance, identify trends affecting our business, determine the allocation of resources, make decisions regarding corporate strategies and assess the quality and potential variability of our cash flows and earnings. We also believe that these key performance indicators are useful to both management and investors for forecasting purposes and to facilitate comparisons to our historical operating results. These metrics are supplemental to our GAAP results and include operational measures.

In March 2020, the World Health Organization categorized the outbreak of the novel coronavirus (COVID-19) as a pandemic. It continues to spread globally and to impact our business operations and the markets in which we operate. While the outbreak of COVID-19 did not have a significant effect on our reported results for the first quarter of fiscal 2020, it did have a significant effect on our reported results for the second ~~quarter~~and third quarters of fiscal 2020. The pandemic initially caused a significant decline in recruitments for both our Digital and our Studio + Digital businesses, beginning in the middle of March 2020, as compared to the prior year period. Starting in the middle of April 2020, ~~and continuing through the end of the second quarter of fiscal 2020,~~ Digital recruitment trends returned to ~~growth on a weekly basis,~~growth. Our third quarter fiscal 2020 Digital recruitments were higher as compared to the prior year period. This weekly growth trend accelerated through the end of the second quarter of fiscal 2020. Driven by this increase in Digital recruitments, total global recruitments returned to growth on a weekly basis, beginning in the middle of May 2020 through the end of the quarter, as compared to the prior year period. More recently, in July, which is a seasonally low-volume period, weekly Digital recruitment trends were positive compared to the prior year period. The recruitment mix shift in the second quarter of fiscal 2020 reflected the strength of our Digital business and the closure of our studios, with approximately 90% of recruits since mid-March coming from our Digital business. Our Studio + Digital business continued to experience significant declines in ~~recruitment on a weekly basis~~recruitments as compared to the prior year period through the end of the ~~second~~third quarter, a trend that ~~has continued through July 2020 and~~ is expected to continue ~~throughout~~in the ~~third~~fourth quarter of fiscal 2020 and potentially in subsequent periods. With approximately 90% of recruitments in the third quarter of fiscal 2020 coming from our Digital business, the recruitment mix shift in the quarter reflected the strength of our Digital business and the limited re-opening of our studios. This ~~negative~~ trend in Studio + Digital recruitments ~~was reflected in~~throughout the ~~significant decline in~~COVID-19 pandemic negatively impacted revenues in the ~~second~~third quarter of fiscal 2020 as compared to the prior year period. ~~Since the escalation of COVID-19 in mid-March through the end of the second quarter of fiscal 2020,~~The pandemic has not materially impacted our member cancellation rates ~~did not increase materially year-over-year.~~year-over-year to date. Overall member retention remained above ten months as of the end of the ~~second~~third quarter of fiscal 2020. These trends are reflected in ~~our subscriber levels as~~the number of End of Period Subscribers for the ~~end of the second~~third quarter of fiscal 2020, which ~~were~~was up 9%5% as compared to the prior year period, consisting of ~~3.9~~3.8 million Digital subscribers and ~~1.1~~0.9 million Studio + Digital subscribers.

The extent to which our operations and business trends will continue in future periods to be impacted by, and any unforeseen costs will result from, the ongoing outbreak of COVID-19 will depend largely on future developments, which are highly uncertain and cannot be accurately predicted. These developments include, among other things, new information that may emerge concerning the severity of the outbreak, ~~and~~ health implications and vaccine availability, actions by government authorities to contain the outbreak or treat its impact, and changes in consumer behavior resulting from the outbreak and such government actions. We continue to actively monitor the ongoing global outbreak of COVID-19 and its impact and related developments and expect, similar to the ~~second~~third quarter of fiscal 2020, that it will significantly impact our reported results for the ~~third~~fourth quarter of fiscal 2020 and may potentially do so in subsequent periods.

In response to the public health crisis posed by COVID-19, we suspended our in-person workshops and moved quickly to transition these workshops to an entirely virtual experience. In June 2020, we began a phased re-opening with reduced operations of a limited number of our studio locations. We plan to continue these re-openings and resume in-person workshops where we can in a manner that promotes the health and safety of our employees and members. However, during these uncertain times, we may need to close re-opened studios, or may not be able to open studios as ~~planned.~~planned or may need to further reduce operations. We continue to serve our members virtually, both via our Digital business and through virtual workshops now available to our Studio + Digital subscribers. Nevertheless, our business operations, recruitment trends with respect to our Studio + Digital business and ~~in-workshop~~in-studio product sales remain substantially affected by our suspension of our in-person ~~workshops.~~workshops and reduced operations. We expect that applicable regulatory restrictions, including continued or reinstated stay-at-home requirements and restrictions on in-person group gatherings, may impact our ability to re-open our studio locations and may impose restrictions on how we conduct our in-person workshops as they resume, including as a result of social distancing requirements. ~~We expect that our~~Our ability to re-open studio locations and applicable regulatory restrictions on our workshops will vary by jurisdiction. Additionally, as we re-open studio locations, we may incur additional operating costs on a studio-by-studio basis.

We are accelerating our strategic digital transformation. This acceleration began with the launch of virtual workshops as previously discussed, and we expect to continue to evolve our virtual experience and offerings for our members. For example, we continue to work towards the launch of a new digitally-enabled, community-focused and coach-led offering ~~later~~ this year, which will reflect learnings from our current virtual workshops and ongoing test pilots. We are reallocating certain resources and will incur additional costs to support this acceleration.

As we continue to address the impact of the pandemic, and the related evolving legal and consumer landscape, we are ~~actively planning~~focused on how to best meet our members’ and consumers’ needs as restrictions are lifted or reinstated and we continue our digital transformation. ~~As part of this planning, we~~We are consolidating certain of our studios into branded studio locations and are also closing certain branded studio locations. The decision to re-open a studio location, if at all, or consolidate studio locations, will be influenced by a number of factors, including applicable legal restrictions, consumer confidence and preferences, changes in consumer behavior, and the protection of the health and safety of our employees and members, and will be dependent on aligning with our digital and brand strategy. ~~We currently expect that the~~The current number of our ~~future~~ studio locations ~~will be~~is lower than that prior to the ~~pandemic.~~pandemic, and we expect it to remain below pre-COVID-19 levels for the foreseeable future. As a result, we have incurred and will incur costs associated with our real estate realignment.

Due to the negative impact of COVID-19, and the uncertainty of the full extent of the magnitude and duration of such impact on our business and the economies and financial markets in which we operate, we implemented a $100.0 million cost-savings initiative with respect to our cost structure. We undertook this initiative to proactively manage our liquidity so we can maintain flexibility to respond to evolving business and consumer conditions arising from the pandemic, as well as continue to fund investments in innovating our program and long-term debt obligations. Additionally, in June 2020, we amended our Credit Agreement (as defined below) to relax the requirements of the financial maintenance covenant until the end of the second quarter of fiscal 2022 so as to provide additional flexibility for accessing liquidity available under our Revolving Credit Facility (as defined below). See “—Liquidity and Capital Resources—Long-Term Debt—Senior Secured Credit Facilities” for additional details on this amendment. We expect to continue to assess the evolving impact of the COVID-19 pandemic, and intend to refine our cost-savings initiative and resource allocation accordingly. For additional information on our cash flows and long-term debt, see “—Liquidity and Capital Resources.”

While we expect the effects of the pandemic and the related responses to negatively impact our results of operations, cash flows and financial position, the uncertainty ~~over~~of the full extent of the duration and severity of the economic and operational impacts of COVID-19 means we cannot reasonably estimate the related financial impact at this time. For more information, see “Item 1A. Risk Factors” in Part II of this Quarterly Report on Form 10-Q. We continue to believe that our powerful communities and our ability to inspire people to adopt healthy habits will be invaluable to people across the globe as they continue to acclimate to new social and economic environments, and that they uniquely position us in the markets in which we operate.

THREE MONTHS ENDED ~~JUNE 27,~~SEPTEMBER 26, 2020 COMPARED TO THE THREE MONTHS ENDED ~~JUNE 29,~~SEPTEMBER 28, 2019

The table below sets forth selected financial information for the ~~second~~third quarter of fiscal 2020 from our consolidated statements of net income for the three months ended ~~June 27,~~September 26, 2020 versus selected financial information for the ~~second~~third quarter of fiscal 2019 from our consolidated statements of net income for the three months ended ~~June 29,~~September 28, 2019.

	(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 27, 2020			June 29, 2019			Increase/ (Decrease)			% Change			Constant Currency			September 26, 2020			September 28, 2019			Increase/ (Decrease)			% Change				Constant Currency
Revenues, net	$	333.6		$	369.0		$	(35.4	)		(9.6	%)		(8.7	%)	$	320.7		$	348.6		$	(27.9	)		(8.0	%)			(9.4	%)
Cost of revenues		139.0			153.2			(14.2	)		(9.3	%)		(8.5	%)		130.6			153.8			(23.2	)		(15.1	%)			(16.2	%)

Gross profit		194.7			215.8			(21.1	)		(9.8	%)		(8.8	%)		190.1			194.8			(4.7	)		(2.4	%)			(4.0	%)
Gross Margin %		58.3	%		58.5	%											59.3	%		55.9	%

Marketing expenses		41.9			50.0			(8.1	)		(16.2	%)		(15.5	%)		38.3			36.3			1.9			5.3	%			3.2	%
Selling, general & administrative expenses		101.8			60.4			41.4			68.6	%		69.5	%		59.2			63.7			(4.5	)		(7.1	%)			(7.9	%)
Operating income		51.0			105.5			(54.5	)		(51.7	%)		(50.4	%)		92.6			94.7			(2.1	)		(2.2	%)			(4.2	%)
Operating Income Margin %		15.3	%		28.6	%											28.9	%		27.2	%

Interest expense		31.0			34.7			(3.7	)		(10.8	%)		(10.8	%)		29.7			33.1			(3.4	)		(10.2	%)			(10.2	%)
Other expense, net		0.4			0.4			(0.0	)		(5.0	%)		(5.0	%)
Other (income) expense, net																	(0.2	)		1.5			(1.7	)		100.0	%	*		100.0	%	*
Income before income taxes		19.6			70.3			(50.7	)		(72.2	%)		(70.2	%)		63.1			60.2			3.0			4.9	%			1.8	%

Provision for income taxes		5.6			16.6			(11.0	)		(66.3	%)		(63.9	%)		8.6			13.1			(4.5	)		(34.4	%)			(38.6	%)
Net income		14.0			53.7			(39.7	)		(74.0	%)		(72.1	%)		54.5			47.0			7.5			15.9	%			13.0	%
Net loss attributable to the noncontrolling interest		0.0			0.1			(0.1	)		(79.1	%)		(71.2	%)		0.0			0.1			(0.0	)		(80.6	%)			(73.5	%)

Net income attributable to WW International, Inc.	$	14.0		$	53.8		$	(39.8	)		(74.0	%)		(72.1	%)	$	54.5		$	47.1		$	7.4			15.8	%			12.9	%

Weighted average diluted shares outstanding		69.8			69.1			0.7			1.0	%		1.0	%		70.0			69.6			0.4			0.6	%			0.6	%
Diluted earnings per share	$	0.20		$	0.78		$	(0.58	)		(74.2	%)		(72.4	%)	$	0.78		$	0.68		$	0.10			15.2	%			12.3	%

Certain results for the ~~second~~third quarter of fiscal 2020 are adjusted to exclude the impact of the $32.7 million one-time stock compensation expense associated with the previously disclosed option granted to Ms. Winfrey in connection with the Company extending its partnership with Ms. Winfrey and the $11.2$2.3 million of charges associated with our previously disclosed 2020 organizational restructuring plan. See “Non-GAAP Financial Measures” above. The table below sets forth a reconciliation of certain of those components of our selected financial data for the three months ended ~~June 27,~~September 26, 2020 which have been adjusted.

			Gross					Operating					Gross					Operating
	Gross		Profit			Operating		Income			Gross		Profit			Operating		Income
(in millions except percentages)	Profit		Margin			Income		Margin			Profit		Margin			Income		Margin
Second Quarter of Fiscal 2020	$	194.7		58.3	%	$	51.0		15.3	%
Third Quarter of Fiscal 2020											$	190.1		59.3	%	$	92.6		28.9	%
Adjustments to reported amounts ⁽¹⁾
Winfrey Stock Compensation expense		—					32.7
2020 restructuring charges		6.5					11.2					1.1					2.3
Total adjustments ⁽¹⁾		6.5					43.9					1.1					2.3
Second Quarter of Fiscal 2020, as adjusted ⁽¹⁾	$	201.2		60.3	%	$	94.9		28.4	%
Third Quarter of Fiscal 2020, as adjusted ⁽¹⁾											$	191.2		59.6	%	$	94.9		29.6	%

Revenues in the ~~second~~third quarter of fiscal 2020 were ~~$333.6~~$320.7 million, a decrease of ~~$35.4~~$27.9 million, or ~~9.6%~~8.0%, versus the ~~second~~third quarter of fiscal 2019. Excluding the impact of foreign currency, which ~~negatively~~positively impacted our revenues for the ~~second~~third quarter of fiscal 2020 by ~~$3.4~~$4.8 million, revenues in the ~~second~~third quarter of fiscal 2020 would have decreased ~~8.7%~~9.4% versus the prior year period. This decrease was driven by lower revenues related to Studio + Digital Fees and in-studio product sales as a result of the closure of a majority of our studios due to the COVID-19 pandemic. Furthermore, the subsequent reopening of a limited number of our studios in each market was further impacted by the strategic realignment of our Studio + Digital business. See “—Segment Results” for additional details on revenues.

Total cost of revenues in the ~~second~~third quarter of fiscal 2020 decreased ~~$14.2~~$23.2 million, or ~~9.3%~~15.1%, versus the prior year period. Excluding the impact of ~~$6.5~~$1.1 million of 2020 restructuring charges, total cost of revenues in the ~~second~~third quarter of fiscal 2020 would have decreased by ~~13.5%~~15.8%, or ~~12.8%~~16.9% on a constant currency basis, versus the prior year period. Gross profit decreased ~~$21.1~~$4.7 million, or ~~9.8%~~2.4%, in the ~~second~~third quarter of fiscal 2020 compared to the ~~second~~third quarter of fiscal 2019. Excluding the impact of foreign currency, which ~~negatively~~positively impacted gross profit for the ~~second~~third quarter of fiscal 2020 by ~~$2.2~~$3.1 million, gross profit in the ~~second~~third quarter of fiscal 2020 would have decreased ~~8.8%~~4.0% versus the prior year period. Excluding the impact of ~~$6.5~~$1.1 million of 2020 restructuring charges, gross profit in the ~~second~~third quarter of fiscal 2020 would have decreased by ~~6.8%~~1.9%, or ~~5.8%~~3.5% on a constant currency basis, versus the prior year period primarily due to the decrease in revenues. Gross margin in the ~~second~~third quarter of fiscal 2020 ~~decreased 0.1%~~increased 3.4% to ~~58.3%~~59.3% versus ~~58.5%~~55.9% in the ~~second~~third quarter of fiscal 2019. Excluding the impact of ~~$6.5~~$1.1 million of 2020 restructuring charges, gross margin in the ~~second~~third quarter of fiscal 2020 would have increased ~~1.8%~~3.7% to ~~60.3%~~59.6% versus the prior year period. Gross margin increase was driven primarily by a mix shift to our higher margin Digital business.

Marketing expenses for the ~~second~~third quarter of fiscal 2020 ~~decreased $8.1~~increased $1.9 million, or ~~16.2%~~5.3%, versus the ~~second~~third quarter of fiscal 2019. Excluding the impact of foreign currency, which ~~decreased~~increased marketing expenses for the ~~second~~third quarter of fiscal 2020 by ~~$0.3~~$0.8 million, marketing expenses in the ~~second~~third quarter of fiscal 2020 would have ~~decreased 15.5%~~increased 3.2% versus the ~~second~~third quarter of fiscal 2019. This ~~decrease~~increase in marketing expenses was largely due to ~~decreased~~increased TV media and ~~Online media costs.~~production costs in our Continental European markets. Marketing expenses as a percentage of revenue for the ~~second~~third quarter of fiscal 2020 ~~decreased~~increased to ~~12.6%~~11.9% from ~~13.5%~~10.4% for the ~~second~~third quarter of fiscal 2019.

Selling, general and administrative expenses for the ~~second~~third quarter of fiscal 2020 ~~increased $41.4~~decreased $4.5 million, or ~~68.6%~~7.1%, versus the ~~second~~third quarter of fiscal 2019. Excluding the impact of foreign currency, which ~~decreased~~increased selling, general and administrative expenses for the ~~second~~third quarter of fiscal 2020 by $0.5 million, selling, general and administrative expenses in the ~~second~~third quarter of fiscal 2020 would have ~~increased 69.5%~~decreased 7.9% versus the prior year period. Excluding the impact of the ~~$32.7 million Winfrey Stock Compensation expense and $4.7~~$1.2 million of 2020 restructuring charges, selling, general and administrative expenses in the ~~second~~third quarter of fiscal 2020 would have ~~increased~~decreased by ~~6.7%~~9.0%, or ~~7.5%~~9.7% on a constant currency basis, versus the prior year period. The ~~increase~~decrease in selling, general and administrative expenses in the ~~second~~third quarter of fiscal 2020 was driven primarily by ~~higher~~lower salary and related costs, travel & entertainment and ~~charitable contributions~~professional fees versus the prior year period. Selling, general and administrative expenses as a percentage of revenue for the ~~second~~third quarter of fiscal 2020 increased to ~~30.5%~~18.5% from ~~16.4%~~18.3% for the ~~second~~third quarter of fiscal 2019.

Operating income in the ~~second~~third quarter of fiscal 2020 decreased ~~$54.5~~$2.1 million, or ~~51.7%~~2.2%, versus the prior year period. Excluding the impact of foreign currency, which ~~negatively~~positively impacted operating income for the ~~second~~third quarter of fiscal 2020 by ~~$1.4~~$1.9 million, operating income in the ~~second~~third quarter of fiscal 2020 would have decreased ~~50.4%~~4.2% versus the prior year period. Excluding the impact of the ~~$32.7 million Winfrey Stock Compensation expense and the $11.2~~$2.3 million of 2020 restructuring charges, operating income in the ~~second~~third quarter of fiscal 2020 would have increased by 0.2%, or decreased by ~~10.0%, or 8.7%~~1.8% on a constant currency basis, versus the prior year period. This decrease in operating income was driven primarily by the decrease in gross profit and increase in selling, general and administrative expenses, partially offset by the decrease in marketing expenses, as compared to the prior year period. Operating income margin in the ~~second~~third quarter of fiscal 2020 ~~decreased 13.3%~~increased 1.7% to ~~15.3%~~28.9% versus ~~28.6%~~27.2% in the ~~second~~third quarter of fiscal 2019. Excluding the impact of the ~~Winfrey Stock Compensation expense and~~ 2020 restructuring charges, operating income margin in the ~~second~~third quarter of fiscal 2020 would have ~~decreased~~increased by ~~0.1%~~2.4%, or ~~would have been flat~~2.3% on a constant currency basis, versus the prior year period. The increase in operating income margin was driven primarily by an increase in gross margin, partially offset by an increase in marketing expenses as a percentage of revenue.

Interest expense in the ~~second~~third quarter of fiscal 2020 decreased ~~$3.7~~$3.4 million, or ~~10.8%~~10.2%, versus the ~~second~~third quarter of fiscal 2019. The decrease in interest expense was driven primarily by a decrease in our outstanding indebtedness resulting from 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~~third quarter of fiscal 2020 and the ~~second~~third quarter of fiscal 2019 and excluding the impact of our interest rate swaps then in effect, decreased to ~~6.42%~~6.57% per annum at the end of the ~~second~~third quarter of fiscal 2020 from ~~8.12%~~7.82% per annum at the end of the ~~second~~third quarter of fiscal 2019. Including the impact of our interest rate swaps then in effect, 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~~third quarter of fiscal 2020 and the ~~second~~third quarter of fiscal 2019, decreased to ~~7.25%~~7.53% per annum at the end of the ~~second~~third quarter of fiscal 2020 from ~~8.00%~~7.87% per annum at the end of the ~~second~~third quarter of fiscal 2019. 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 swaps, see “Item 3. Quantitative and Qualitative Disclosures about Market Risk” in Part I of this Quarterly Report on Form 10-Q.

Other (income) expense, net, which consists primarily of the impact of foreign currency on intercompany transactions, ~~was $0.4~~changed by $1.7 million ~~of expense~~ in the ~~second~~third quarter of fiscal 2020 to $0.2 million of income as compared to ~~$0.4~~$1.5 million of expense in the prior year period.

Our effective tax rate for the ~~second~~third quarter of fiscal 2020 was ~~28.6%~~13.6% as compared to ~~23.6%~~21.8% for the ~~second~~third quarter of fiscal 2019. The tax expense in the ~~second~~third quarter of fiscal 2020 was impacted by a tax ~~reserves~~benefit related to ~~a foreign~~the reversal of the 2018, 2019 and 2020 tax impact of global intangible low-taxed income, ~~tax audit, partially offset by a tax windfall from stock compensation.~~or GILTI. For the ~~second~~third quarter of fiscal 2020, the difference between the U.S. federal statutory tax rate and our consolidated effective tax rate was primarily due to tax expense ~~related to global intangible low-taxed~~from income ~~or GILTI,~~earned in foreign jurisdictions and state income tax ~~expense.~~expense, partially offset by a tax benefit related to foreign-derived intangible income, or FDII. For the ~~second~~third quarter of fiscal 2019, the difference between the U.S. federal statutory tax rate and our consolidated effective tax rate was primarily due to tax expense related to income earned in foreign jurisdictions and tax expense related to GILTI, partially offset by a tax ~~benefits~~benefit related to ~~the reversal of~~FDII and favorable tax ~~reserves no longer needed, the cessation of certain publishing operations and foreign-derived intangible income, or FDII.~~return adjustments.

On March 27, 2020, the Coronavirus Aid, Relief and Economic Security Act, or the CARES Act, was signed into law. The CARES Act includes provisions relating to modifications to the net interest deduction limitation, net operating loss carryforward rules, refundable payroll tax credits and deferment of the employer portion of certain payroll taxes.

On July 20, 2020, the U.S. Treasury Department released final regulations under Internal Revenue Code Section 951A (TD 9902) permitting a taxpayer to elect to exclude from its GILTI inclusion items of income subject to a high effective rate of foreign tax. ~~We are currently assessing the impact~~As a result of the ~~new legislation,~~final regulations, we recorded a $7.6 million discrete tax benefit in ~~conjunction with~~ the ~~CARES Act, and believe the overall impact will benefit our~~third quarter of fiscal 2020 ~~effective tax rate.~~related to the 2018 and 2019 taxes previously accrued attributable to GILTI.

Net income attributable to the Company in the ~~second~~third quarter of fiscal 2020 reflected a $~~39.8~~7.4 million, or ~~74.0%~~15.8%, ~~decrease~~increase from the ~~second~~third quarter of fiscal 2019. Excluding the impact of foreign currency, which ~~negatively~~positively impacted net income attributable to the Company in the ~~second~~third quarter of fiscal 2020 by ~~$1.0~~$1.3 million, net income attributable to the Company in the ~~second~~third quarter of fiscal 2020 would have ~~decreased 72.1%~~increased 12.9% from the ~~second~~third quarter of fiscal 2019. Net income attributable to the Company in the ~~second~~third quarter of fiscal 2020 included a ~~$24.4 million impact from the Winfrey Stock Compensation expense and an $8.3~~$1.7 million impact from 2020 restructuring charges.

Earnings per fully diluted share, or EPS, in the ~~second~~third quarter of fiscal 2020 was ~~$0.20~~$0.78 compared to ~~$0.78~~$0.68 in the ~~second~~third quarter of fiscal 2019. EPS for the ~~second~~third quarter of fiscal 2020 included a ~~$0.35 impact from the Winfrey Stock Compensation expense and a $0.12~~$0.02 impact from 2020 restructuring charges. Additionally, EPS for the third quarter of fiscal 2020 included a $0.11 tax benefit related to the reversal of the 2018 and 2019 tax impact of GILTI.

The following tables set forth key metrics by reportable segment for the ~~second~~third quarter of fiscal 2020 and the percentage change in those metrics versus the prior year period:

	Q2 2020																											Q3 2020
	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	$	202.1		$	25.5		$	227.5		$	202.5		$	25.5		$	228.1			41.1			3,251.2			3,209.2		$	191.2		$	24.0		$	215.2		$	191.4		$	24.0		$	215.3			40.1			3,209.2			2,990.3
CE		68.6			9.3			77.8			69.8			9.4			79.3			16.5			1,262.9			1,272.6			67.5			9.0			76.5			64.1			8.5			72.6			15.8			1,272.6			1,206.3
UK		15.6			4.2			19.7			16.1			4.3			20.4			5.0			404.1			383.7			16.7			3.7			20.5			16.0			3.6			19.5			5.0			383.7			367.9
Other ⁽¹⁾		6.8			1.7			8.6			7.5			1.8			9.3			1.3			116.1			97.6			6.8			1.7			8.5			6.7			1.7			8.4			1.2			97.6			97.9
Total	$	293.0		$	40.6		$	333.6		$	296.0		$	41.1		$	337.0			63.9			5,034.2			4,963.1		$	282.3		$	38.4		$	320.7		$	278.2		$	37.7		$	315.9			62.1			4,963.1			4,662.4

	% Change Q2 2020 vs. Q2 2019																											% Change Q3 2020 vs. Q3 2019
North America		(8.1	%)		(28.9	%)		(11.0	%)		(7.9	%)		(28.7	%)		(10.8	%)		5.0	%		10.2	%		9.1	%		(8.9	%)		(29.0	%)		(11.7	%)		(8.8	%)		(29.0	%)		(11.6	%)		5.7	%		9.1	%		4.8	%
CE		1.9	%		(8.0	%)		0.6	%		3.8	%		(6.2	%)		2.5	%		9.4	%		9.1	%		11.9	%		7.4	%		8.8	%		7.6	%		1.9	%		3.2	%		2.0	%		11.0	%		11.9	%		11.0	%
UK		(15.8	%)		(31.0	%)		(19.5	%)		(12.9	%)		(28.6	%)		(16.7	%)		(4.4	%)		3.1	%		(0.9	%)		(3.5	%)		(33.3	%)		(10.7	%)		(7.8	%)		(36.4	%)		(14.8	%)		(2.7	%)		(0.9	%)		(4.5	%)
Other ⁽¹⁾		(17.0	%)		(47.5	%)		(25.8	%)		(8.7	%)		(45.7	%)		(19.4	%)		(1.4	%)		5.9	%		(5.0	%)		(13.8	%)		(41.4	%)		(21.2	%)		(14.7	%)		(43.1	%)		(22.3	%)		(7.3	%)		(5.0	%)		(5.2	%)
Total		(6.6	%)		(26.5	%)		(9.6	%)		(5.7	%)		(25.7	%)		(8.7	%)		5.1	%		9.2	%		8.6	%		(5.3	%)		(24.0	%)		(8.0	%)		(6.7	%)		(25.4	%)		(9.4	%)		6.0	%		8.6	%		5.3	%

	Q2 2020																														Q3 2020
	Digital Subscription Revenues						Digital			Incoming			EOP			Studio + Digital Fees						Studio + Digital			Incoming			EOP			Digital Subscription Revenues						Digital			Incoming			EOP			Studio + Digital Fees						Studio + Digital			Incoming			EOP
				Constant			Paid			Digital			Digital						Constant			Paid			Studio + Digital			Studio + Digital						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	$	115.9		$	116.2			30.4			2,311.3			2,475.4		$	86.1		$	86.3			10.7			940.0			733.9		$	122.1		$	122.2			31.8			2,475.4			2,416.4		$	69.1		$	69.2			8.3			733.9			573.9
CE		50.7			51.6			13.9			1,032.1			1,104.7			17.9			18.2			2.6			230.7			167.8			53.2			50.5			13.9			1,104.7			1,064.7			14.3			13.6			1.9			167.8			141.5
UK		7.6			7.8			3.0			220.8			249.9			8.0			8.3			2.0			183.2			133.8			9.2			8.8			3.4			249.9			255.7			7.5			7.2			1.6			133.8			112.2
Other ⁽¹⁾		3.7			4.1			0.9			72.2			69.7			3.1			3.4			0.4			43.9			27.9			4.2			4.1			0.9			69.7			72.5			2.7			2.7			0.3			27.9			25.4
Total	$	177.9		$	179.7			48.3			3,636.4			3,899.7		$	115.1		$	116.2			15.6			1,397.8			1,063.4		$	188.7		$	185.6			49.9			3,899.7			3,809.4		$	93.6		$	92.6			12.2			1,063.4			853.1

	% Change Q2 2020 vs. Q2 2019																														% Change Q3 2020 vs. Q3 2019
North America		12.7	%		13.0	%		17.0	%		17.4	%		24.0	%		(26.4	%)		(26.2	%)		(18.8	%)		(4.3	%)		(22.3	%)		20.2	%		20.3	%		24.7	%		24.0	%		24.1	%		(36.2	%)		(36.2	%)		(33.1	%)		(22.3	%)		(36.6	%)
CE		16.3	%		18.4	%		16.3	%		12.9	%		20.8	%		(24.6	%)		(23.1	%)		(17.0	%)		(5.3	%)		(24.8	%)		26.0	%		19.5	%		20.2	%		20.8	%		21.2	%		(30.8	%)		(34.2	%)		(28.2	%)		(24.8	%)		(32.1	%)
UK		8.3	%		12.0	%		18.7	%		14.5	%		28.1	%		(30.4	%)		(28.0	%)		(26.3	%)		(7.9	%)		(30.3	%)		39.6	%		33.3	%		33.2	%		28.1	%		29.2	%		(30.0	%)		(33.0	%)		(38.3	%)		(30.3	%)		(40.1	%)
Other ⁽¹⁾		5.2	%		14.8	%		15.4	%		17.5	%		17.4	%		(33.8	%)		(26.6	%)		(24.2	%)		(8.8	%)		(35.8	%)		17.9	%		16.0	%		14.5	%		17.4	%		18.1	%		(39.2	%)		(39.4	%)		(39.5	%)		(35.8	%)		(39.3	%)
Total		13.3	%		14.5	%		16.8	%		15.9	%		23.2	%		(26.6	%)		(25.9	%)		(19.7	%)		(5.1	%)		(24.2	%)		22.6	%		20.5	%		23.8	%		23.2	%		23.5	%		(35.1	%)		(35.8	%)		(33.3	%)		(24.2	%)		(36.5	%)

The decrease in North America revenues in the ~~second~~third quarter of fiscal 2020 versus the prior year period was driven primarily by ~~both a decrease in product sales and other and~~ a decrease in Service Revenues. The decrease in Service Revenues in the ~~second~~third quarter of fiscal 2020 versus the prior year period was driven by a decrease in Studio + Digital Fees, partially offset by an increase in Digital Subscription Revenues. Studio + Digital Fees were negatively impacted by the significant recruitment decline in the ~~second~~third quarter of fiscal 2020 driven by the closure of a majority of our studios ~~as a result of~~due to the COVID-19 pandemic. Furthermore, the subsequent reopening of a limited number of our studios was further impacted by the strategic realignment of our Studio + Digital business. The increase in North America Total Paid Weeks was driven by the higher number of Incoming Digital Subscribers at the beginning of the ~~second~~third quarter of fiscal 2020 versus the beginning of the ~~second~~third quarter of fiscal 2019 and higher Digital recruitments in the ~~second~~third quarter of fiscal 2020 versus the prior year period. Higher Digital recruitments in the ~~second~~third quarter of fiscal 2020 were driven by the appeal of the myWW program and our digital tools, as well as strong marketing execution versus the prior year period.

The decrease in North America product sales and other in the ~~second~~third quarter of fiscal 2020 versus the prior year period was driven primarily by a decrease in in-studio product sales.

The increase in Continental Europe revenues in the ~~second~~third quarter of fiscal 2020 versus the prior year period was driven primarily by an increase in Service ~~Revenues, partially offset by a decrease in product sales and other.~~Revenues. The increase in Service Revenues in the ~~second~~third quarter of fiscal 2020 versus the prior year period was driven by an increase in Digital Subscription Revenues, partially offset by a decrease in Studio + Digital Fees. Studio + Digital Fees were negatively impacted by the significant recruitment decline in the ~~second~~third quarter of fiscal 2020 driven by the closure of a majority of our studios ~~as a result of~~due to the COVID-19 pandemic. Furthermore, the subsequent reopening of a limited number of our studios was further impacted by the strategic realignment of our Studio + Digital business. The increase in Continental Europe Total Paid Weeks was driven primarily by the higher number of Incoming Digital Subscribers at the beginning of the ~~second~~third quarter of fiscal 2020 versus the beginning of the ~~second~~third quarter of fiscal 2019 and higher Digital recruitments in the ~~second~~third quarter of fiscal 2020 versus the prior year period. Higher Digital recruitments in the ~~second~~third quarter of fiscal 2020 were driven by the appeal of the myWW program and our digital tools, as well as strong marketing execution versus the prior year period.

The ~~decrease~~increase in Continental Europe product sales and other in the ~~second~~third quarter of fiscal 2020 versus the prior year period was driven primarily by ~~a decrease~~an increase in ~~licensing.~~product sales.

The decrease in UK revenues in the ~~second~~third quarter of fiscal 2020 versus the prior year period was driven by ~~both a decrease in Service Revenues and~~ a decrease in product sales and ~~other.~~other and, to a lesser extent, a decrease in Service Revenues. The decrease in Service Revenues in the ~~second~~third quarter of fiscal 2020 versus the prior year period was driven by a decrease in Studio + Digital Fees, partially offset by an increase in Digital Subscription Revenues. The decrease in UK Total Paid Weeks was driven primarily by the significant Studio + Digital recruitment decline in the ~~second~~third quarter of fiscal 2020 driven by the closure of a majority of our studios ~~as a result of~~due to the COVID-19 ~~pandemic,~~pandemic. Furthermore, the subsequent reopening of a limited number of our studios was further impacted by the strategic realignment of our Studio + Digital business, partially offset by the increase in Digital recruitments and by the higher number of Incoming Digital Subscribers at the beginning of the ~~second~~third quarter of fiscal 2020 versus the beginning of the ~~second~~third quarter of fiscal 2019.

The decrease in UK product sales and other in the ~~second~~third quarter of fiscal 2020 versus the prior year period was driven primarily by a decrease in in-studio product sales.

The decrease in Other revenues in the ~~second~~third quarter of fiscal 2020 versus the prior year period was driven by both a decrease in ~~product sales and other~~Service Revenues and a decrease in ~~Service Revenues.~~product sales and other. The decrease in Service Revenues in the ~~second~~third quarter of fiscal 2020 versus the prior year period was driven by a decrease in Studio + Digital Fees.

The decrease in Other product sales and other in the ~~second~~third quarter of fiscal 2020 versus the prior year period was driven ~~primarily~~ by both a decrease in ~~in-studio product sales~~franchise commissions and a decrease in ~~franchise commissions.~~product sales.

~~SIX~~NINE MONTHS ENDED ~~JUNE 27,~~SEPTEMBER 26, 2020 COMPARED TO THE ~~SIX~~NINE MONTHS ENDED ~~JUNE 29,~~SEPTEMBER 28, 2019

The table below sets forth selected financial information for the first ~~six~~nine months of fiscal 2020 from our consolidated statements of net income for the ~~six~~nine months ended ~~June 27,~~September 26, 2020 versus selected financial information for the first ~~six~~nine months of fiscal 2019 from our consolidated statements of net income for the ~~six~~nine months ended ~~June 29,~~September 28, 2019:

	(In millions, except per share amounts)															(In millions, except per share amounts)
	For The Six Months Ended												% Change			For The Nine Months Ended												% Change
	June 27, 2020			June 29, 2019			Increase/ (Decrease)			% Change			Constant Currency			September 26, 2020			September 28, 2019			Increase/ (Decrease)			% Change			Constant Currency
Revenues, net	$	734.0		$	732.2		$	1.8			0.2	%		1.2	%	$	1,054.7		$	1,080.8		$	(26.1	)		(2.4	%)		(2.2	%)
Cost of revenues		328.3			315.4			12.9			4.1	%		4.9	%		458.9			469.2			(10.3	)		(2.2	%)		(2.0	%)

Gross profit		405.7			416.8			(11.1	)		(2.7	%)		(1.6	%)		595.8			611.5			(15.8	)		(2.6	%)		(2.4	%)
Gross Margin %		55.3	%		56.9	%											56.5	%		56.6	%

Marketing expenses		159.8			164.2			(4.4	)		(2.7	%)		(1.9	%)		198.1			200.5			(2.5	)		(1.2	%)		(1.0	%)
Selling, general & administrative expenses		166.3			125.2			41.1			32.9	%		33.7	%		225.5			188.9			36.6			19.4	%		19.7	%
Goodwill impairment		3.7			—			3.7			100.0	%		100.0	%		3.7			—			3.7			100.0	%		100.0	%
Operating income		75.9			127.4			(51.5	)		(40.4	%)		(39.5	%)		168.5			222.1			(53.6	)		(24.1	%)		(24.5	%)
Operating Income Margin %		10.3	%		17.4	%											16.0	%		20.6	%

Interest expense		62.5			69.9			(7.4	)		(10.6	%)		(10.6	%)		92.3			103.0			(10.8	)		(10.4	%)		(10.4	%)
Other expense, net		0.4			0.7			(0.3	)		(40.7	%)		(40.7	%)		0.2			2.2			(2.0	)		(89.6	%)		(89.6	%)
Income before income taxes		12.9			56.7			(43.8	)		(77.3	%)		(75.3	%)		76.0			116.9			(40.9	)		(35.0	%)		(35.6	%)

Provision for income taxes		4.9			13.7			(8.8	)		(64.0	%)		(59.6	%)		13.5			26.8			(13.3	)		(49.5	%)		(49.3	%)
Net income		7.9			43.0			(35.1	)		(81.6	%)		(80.2	%)		62.4			90.0			(27.6	)		(30.6	%)		(31.5	%)
Net loss attributable to the noncontrolling interest		0.0			0.2			(0.1	)		(88.3	%)		(83.1	%)		0.0			0.2			(0.2	)		(86.2	%)		(80.5	%)

Net income attributable to WW International, Inc.	$	7.9		$	43.1		$	(35.2	)		(81.6	%)		(80.3	%)	$	62.5		$	90.2		$	(27.8	)		(30.8	%)		(31.6	%)

Weighted average diluted shares outstanding		69.9			69.3			0.6			0.9	%		0.9	%		69.9			69.4			0.6			0.8	%		0.8	%
Diluted earnings per share	$	0.11		$	0.62		$	(0.51	)		(81.8	%)		(80.4	%)	$	0.89		$	1.30		$	(0.41	)		(31.3	%)		(32.2	%)

Certain results for the first ~~six~~nine months of fiscal 2020 are adjusted to exclude the impact of the $32.7 million one-time stock compensation expense associated with the previously disclosed option granted to Ms. Winfrey in connection with the Company extending its partnership with Ms. Winfrey, the ~~$11.2~~$13.5 million of charges associated with our previously disclosed 2020 organizational restructuring plan and the $3.7 million impairment charge for goodwill related to our Brazil reporting unit. See “Non-GAAP Financial Measures” above. The table below sets forth a reconciliation of certain of those components of our selected financial data for the first ~~six~~nine months ended ~~June 27,~~September 26, 2020 which have been adjusted.

			Gross					Operating					Gross					Operating
	Gross		Profit			Operating		Income			Gross		Profit			Operating		Income
(in millions except percentages)	Profit		Margin			Income		Margin			Profit		Margin			Income		Margin
First Six Months of Fiscal 2020	$	405.7		55.3	%	$	75.9		10.3	%
First Nine Months of Fiscal 2020											$	595.8		56.5	%	$	168.5		16.0	%
Adjustments to reported amounts ⁽¹⁾
Winfrey Stock Compensation expense		—					32.7					—					32.7
2020 restructuring charges		6.5					11.2					7.6					13.5
Goodwill impairment		—					3.7					—					3.7
Total adjustments ⁽¹⁾		6.5					47.6					7.6					49.8
First Six Months of Fiscal 2020, as adjusted ⁽¹⁾	$	412.2		56.2	%	$	123.4		16.8	%
First Nine Months of Fiscal 2020, as adjusted ⁽¹⁾											$	603.3		57.2	%	$	218.3		20.7	%

Revenues in the first ~~six~~nine months of fiscal 2020 were ~~$734.0~~$1,054.7 million, ~~an increase~~a decrease of ~~$1.8~~$26.1 million, or ~~0.2%~~2.4%, versus the first ~~six~~nine months of fiscal 2019. Excluding the impact of foreign currency, which negatively impacted our revenues for the first ~~six~~nine months of fiscal 2020 by ~~$7.1~~$2.3 million, revenues in the first ~~six~~nine months of fiscal 2020 would have ~~increased 1.2%~~decreased 2.2% versus the prior year period. This ~~increase~~decrease was driven primarily by ~~revenue growth~~lower revenues related to Studio + Digital Fees and in-studio product sales as a result of the closure of substantially all of our studios due to the COVID-19 pandemic. Furthermore, the subsequent reopening of a limited number of our studios in ~~North America and Continental Europe, including revenue received in connection with~~each market was further impacted by the ~~WW Presents: Oprah’s 2020 Vision~~ ~~tour.~~strategic realignment of our Studio + Digital business. See “—Segment Results” for additional details on revenues.

Total cost of revenues in the first ~~six~~nine months of fiscal 2020 ~~increased $12.9~~decreased $10.3 million, or ~~4.1%~~2.2%, versus the prior year period. Excluding the impact of ~~$6.5~~$7.6 million of 2020 restructuring charges, total cost of revenues in the first ~~six~~nine months of fiscal 2020 would have ~~increased~~decreased by ~~2.0%~~3.8%, or ~~2.9%~~3.6% on a constant currency basis, versus the prior year period. Gross profit decreased ~~$11.1~~$15.8 million, or ~~2.7%~~2.6%, in the first ~~six~~nine months of fiscal 2020 compared to the first ~~six~~nine months of fiscal 2019. Excluding the impact of foreign currency, which negatively impacted gross profit for the first ~~six~~nine months of fiscal 2020 by ~~$4.4~~$1.3 million, gross profit in the first ~~six~~nine months of fiscal 2020 would have decreased ~~1.6%~~2.4% versus the prior year period. Excluding the impact of ~~$6.5~~$7.6 million of 2020 restructuring charges, gross profit in the first ~~six~~nine months of fiscal 2020 would have decreased by ~~1.1%~~1.3%, or ~~would have been flat~~1.1% on a constant currency basis, versus the prior year period. Gross margin decreased to ~~55.3%~~56.5% in the first ~~six~~nine months of fiscal 2020 as compared to ~~56.9%~~56.6% in the prior year period. Excluding the impact of ~~$6.5~~$7.6 million of 2020 restructuring charges, gross margin in the first ~~six~~nine months of fiscal 2020 would have ~~decreased 0.8%~~increased 0.6% to ~~56.2%~~57.2% versus the prior year period. Gross margin ~~decline~~increase was driven by a mix shift to our higher margin Digital business, partially offset by the net profit from the WW Presents: Oprah’s 2020 Vision tour as a percentage of ~~revenue, almost fully offset by a mix shift to our higher margin Digital business.~~revenue.

Marketing expenses for the first ~~six~~nine months of fiscal 2020 decreased ~~$4.4~~$2.5 million, or ~~2.7%~~1.2%, versus the first ~~six~~nine months of fiscal 2019. Excluding the impact of foreign currency, which decreased marketing expenses for the first ~~six~~nine months of fiscal 2020 by ~~$1.3~~$0.5 million, marketing expenses in the first ~~six~~nine months of fiscal 2020 would have decreased ~~1.9%~~1.0% versus the first ~~six~~nine months of fiscal 2019. ~~This decrease in marketing expenses was largely due to decreased TV production and agency fees globally.~~ Marketing expenses as a percentage of revenue ~~decreased~~increased to ~~21.8%~~18.8% in the first ~~six~~nine months of fiscal 2020 as compared to ~~22.4%~~18.6% in the prior year period.

Selling, general and administrative expenses for the first ~~six~~nine months of fiscal 2020 increased ~~$41.1~~$36.6 million, or ~~32.9%~~19.4%, versus the first ~~six~~nine months of fiscal 2019. Excluding the impact of foreign currency, which decreased selling, general and administrative expenses for the first ~~six~~nine months of fiscal 2020 by ~~$1.0~~$0.5 million, selling, general and administrative expenses in the first ~~six~~nine months of fiscal 2020 would have increased ~~33.7%~~19.7% versus the prior year period. Excluding the impact of the $32.7 million Winfrey Stock Compensation expense and ~~$4.7~~$5.9 million of 2020 restructuring charges, selling, general and administrative expenses in the first ~~six~~nine months of fiscal 2020 would have ~~increased~~decreased by ~~3.0%~~1.0%, or ~~3.8%~~0.8% on a constant currency basis, ~~versus the prior year period. The increase in selling, general and administrative expenses in the first six months of fiscal 2020 was driven primarily by higher salary and related costs~~ versus the prior year period. Selling, general and administrative expenses as a percentage of revenue increased to ~~22.7%~~21.4% in the first ~~six~~nine months of fiscal 2020 as compared to ~~17.1%~~17.5% in the prior year period.

In performing our interim impairment analysis for our Brazil reporting unit, we determined that, based on the fair values calculated, the carrying amount of goodwill related to our Brazil reporting unit exceeded our fair value and recorded an impairment charge of $3.7 million for the first ~~six~~nine months of fiscal 2020.

Operating income in the first ~~six~~nine months of fiscal 2020 decreased ~~$51.5~~$53.6 million, or ~~40.4%~~24.1%, versus the prior year period. Excluding the impact of foreign currency, which ~~negatively~~positively impacted operating income for the first ~~six~~nine months of fiscal 2020 by ~~$1.2~~$0.7 million, operating income in the first ~~six~~nine months of fiscal 2020 would have decreased ~~39.5%~~24.5% versus the prior year period. Excluding the impact of the $32.7 million Winfrey Stock Compensation expense, the ~~$11.2~~$13.5 million of 2020 restructuring charges and the $3.7 million goodwill impairment charge related to our Brazil reporting unit, operating income in the first ~~six~~nine months of fiscal 2020 would have decreased by ~~3.1%~~1.7%, or ~~1.4%~~1.6% on a constant currency basis, versus the prior year period. This decrease in operating income was driven primarily by ~~the~~a decrease in gross profit and increase in selling, general and administrative expenses, partially offset by ~~the~~a decrease in marketing expenses, as compared to the prior year period. Operating income margin in the first ~~six~~nine months of fiscal 2020 decreased ~~7.1%~~4.6% to ~~10.3%~~16.0% versus ~~17.4%~~20.6% in the first ~~six~~nine months of fiscal 2019. Excluding the impact of the Winfrey Stock Compensation expense, 2020 restructuring charges and goodwill impairment, operating income margin in the first ~~six~~nine months of fiscal 2020 would have ~~decreased~~increased by ~~0.6%, or 0.5%~~0.1% both as reported and on a constant currency basis versus the prior year period. This decrease in operating income margin was driven primarily by a decrease in the gross margin and by an increase in selling, general and administrative expenses as a percentage of revenue, partially offset by a decrease in marketing as a percentage of revenue.

Interest expense in the first ~~six~~nine months of fiscal 2020 decreased ~~$7.4~~$10.8 million, or ~~10.6%~~10.4%, versus the first ~~six~~nine months of fiscal 2019. The decrease in interest expense was driven primarily by a decrease in our outstanding indebtedness resulting from 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~~nine months of fiscal 2020 and the first ~~six~~nine months of fiscal 2019 and excluding the impact of our interest rate swaps then in effect, decreased to ~~6.97%~~6.84% per annum at the end of the first ~~six~~nine months of fiscal 2020 from ~~8.17%~~8.06% per annum at the end of the first ~~six~~nine months of fiscal 2019. Including the impact of our interest rate swaps then in effect, 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~~nine months of fiscal 2020 and the first ~~six~~nine months of fiscal 2019, decreased to ~~7.52%~~7.53% per annum at the end of the first ~~six~~nine months of fiscal 2020 from ~~7.97%~~7.93% per annum at the end of the first ~~six~~nine months of fiscal 2019. 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 swaps, see “Item 3. Quantitative and Qualitative Disclosures about Market Risk” in Part I of this Quarterly Report on Form 10-Q.

Other expense, net, which consists primarily of the impact of foreign currency on intercompany transactions, decreased by ~~$0.3~~$2.0 million in the first ~~six~~nine months of fiscal 2020 to ~~$0.4~~$0.2 million of expense as compared to ~~$0.7~~$2.2 million of expense in the prior year period.

Our effective tax rate for the first ~~six~~nine months of fiscal 2020 was ~~38.4%~~17.8% as compared to ~~24.2%~~23.0% for the first ~~six~~nine months of fiscal 2019. The tax expense for the first ~~six~~nine months of fiscal 2020 was impacted by a tax benefit related to the reversal of the 2018, 2019 and 2020 tax impact of GILTI and a tax windfall from stock compensation, partially offset by an impairment of our Brazil reporting unit which has a full valuation allowance and an increase to tax reserves related to a foreign income tax ~~audit, partially offset by a tax windfall from stock compensation.~~audit. For the first ~~six~~nine months of fiscal 2020, the difference between the U.S. federal statutory tax rate and our consolidated effective tax rate was primarily due to tax expense ~~related to GILTI, state income tax expense and tax expense~~ from income earned in foreign ~~jurisdictions.~~jurisdictions and state income tax expense, partially offset by a tax benefit related to FDII. For the first ~~six~~nine months of fiscal 2019, the difference between the U.S. federal statutory tax rate and our consolidated effective tax rate was primarily due to tax expense related to income earned in foreign jurisdictions, tax expense related to GILTI and state income tax expense, partially offset by tax benefits related to FDII, the reversal of tax reserves no longer needed ~~FDII~~ and the cessation of certain publishing operations.

On March 27, 2020, the CARES Act was signed into law. The CARES Act includes provisions relating to modifications to the net interest deduction limitation, net operating loss carryforward rules, refundable payroll tax credits and deferment of the employer portion of certain payroll taxes.

On July 20, 2020, the U.S. Treasury Department released final regulations under Internal Revenue Code Section 951A (TD 9902) permitting a taxpayer to elect to exclude from its GILTI inclusion items of income subject to a high effective rate of foreign tax. ~~We are currently assessing the impact~~As a result of the ~~new legislation,~~final regulations, we recorded a $7.6 million discrete tax benefit in ~~conjunction with~~ the ~~CARES Act, and believe the overall impact will benefit our~~third quarter of fiscal 2020 ~~effective tax rate.~~related to the 2018 and 2019 taxes previously accrued attributable to GILTI.

Net income attributable to the Company in the first ~~six~~nine months of fiscal 2020 reflected a $~~35.2~~27.8 million, or ~~81.6%~~30.8%, decrease from the first ~~six~~nine months of fiscal 2019. Excluding the impact of foreign currency, which ~~negatively~~positively impacted net income attributable to the Company in the first ~~six~~nine months of fiscal 2020 by ~~$0.6~~$0.8 million, net income attributable to the Company in the first ~~six~~nine months of fiscal 2020 would have decreased ~~80.3%~~31.6% from the first ~~six~~nine months of fiscal 2019. Net income attributable to the Company in the first ~~six~~nine months of fiscal 2020 included a $24.4 million impact from the Winfrey Stock Compensation expense, ~~an $8.3~~a $10.0 million impact from 2020 restructuring charges and a $2.7 million impact from the goodwill impairment charge related to our Brazil reporting unit.

EPS in the first ~~six~~nine months of fiscal 2020 was ~~$0.11~~$0.89 compared to ~~$0.62~~$1.30 in the first ~~six~~nine months of fiscal 2019. EPS for the first ~~six~~nine months of fiscal 2020 included a $0.35 impact from the Winfrey Stock Compensation expense, a ~~$0.12~~$0.14 impact from 2020 restructuring charges and a $0.04 impact from the goodwill impairment charge related to our Brazil reporting unit. Additionally, EPS for the first ~~six~~nine months of fiscal 2020 included a $0.11 tax benefit related to the reversal of the 2018 and 2019 tax impact of GILTI. EPS for the first nine months of fiscal 2019 included a $0.07 expense in connection with our previously disclosed 2019 organizational realignment.

The following tables set forth key metrics by reportable segment for the first ~~six~~nine months of fiscal 2020 and the percentage change in those metrics versus the prior year period:


	First Half of 2020																											First Nine Months of Fiscal 2020
	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	$	431.2		$	80.0		$	511.2		$	431.9		$	80.0		$	511.9			83.5			2,722.1			3,209.2		$	622.5		$	104.0		$	726.4		$	623.2		$	104.0		$	727.2			123.6			2,722.1			2,990.3
CE		136.7			21.1			157.8			139.9			21.6			161.6			32.5			1,059.9			1,272.6			204.2			30.1			234.3			204.0			30.2			234.2			48.3			1,059.9			1,206.3
UK		34.3			10.5			44.8			35.1			10.7			45.8			10.5			361.4			383.7			51.0			14.2			65.2			51.1			14.3			65.4			15.4			361.4			367.9
Other ⁽¹⁾		15.4			4.8			20.2			16.9			4.9			21.8			2.9			101.8			97.6			22.2			6.5			28.7			23.6			6.6			30.2			4.1			101.8			97.9
Total	$	617.7		$	116.3		$	734.0		$	623.8		$	117.3		$	741.1			129.3			4,245.3			4,963.1		$	900.0		$	154.7		$	1,054.7		$	902.0		$	155.0		$	1,057.0			191.4			4,245.3			4,662.4

	% Change First Half of 2020 vs. First Half of 2019																											% Change First Nine Months of Fiscal 2020 vs. First Nine Months of Fiscal 2019
North America		(1.1	%)		15.1	%		1.1	%		(1.0	%)		15.2	%		1.2	%		8.4	%		6.4	%		9.1	%		(3.7	%)		0.7	%		(3.1	%)		(3.5	%)		0.8	%		(2.9	%)		7.5	%		6.4	%		4.8	%
CE		4.0	%		(4.5	%)		2.8	%		6.5	%		(2.1	%)		5.3	%		10.6	%		12.7	%		11.9	%		5.1	%		(0.9	%)		4.3	%		5.0	%		(0.7	%)		4.2	%		10.8	%		12.7	%		11.0	%
UK		(5.2	%)		(19.1	%)		(8.9	%)		(2.8	%)		(17.5	%)		(6.7	%)		1.1	%		8.3	%		(0.9	%)		(4.7	%)		(23.4	%)		(9.5	%)		(4.4	%)		(23.2	%)		(9.3	%)		(0.2	%)		8.3	%		(4.5	%)
Other ⁽¹⁾		(8.0	%)		(33.2	%)		(15.5	%)		0.6	%		(31.1	%)		(8.9	%)		3.3	%		1.8	%		(5.0	%)		(9.9	%)		(35.6	%)		(17.3	%)		(4.3	%)		(34.6	%)		(13.1	%)		(0.1	%)		1.8	%		(5.2	%)
Total		(0.5	%)		4.2	%		0.2	%		0.5	%		5.0	%		1.2	%		8.2	%		8.0	%		8.6	%		(2.0	%)		(4.6	%)		(2.4	%)		(1.8	%)		(4.5	%)		(2.2	%)		7.5	%		8.0	%		5.3	%

	First Half of 2020																														First Nine Months of Fiscal 2020
	Digital Subscription Revenues						Digital			Incoming			EOP			Studio + Digital Fees						Studio + Digital			Incoming			EOP			Digital Subscription Revenues						Digital			Incoming			EOP			Studio + Digital Fees						Studio + Digital			Incoming			EOP
				Constant			Paid			Digital			Digital						Constant			Paid			Studio + Digital			Studio + Digital						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	$	232.3		$	232.6			59.9			1,870.5			2,475.4		$	199.0		$	199.2			23.6			851.6			733.9		$	354.4		$	354.8			91.6			1,870.5			2,416.4		$	268.1		$	268.4			32.0			851.6			573.9
CE		97.3			99.6			26.9			863.4			1,104.7			39.4			40.3			5.6			196.6			167.8			150.6			150.1			40.8			863.4			1,064.7			53.7			53.9			7.5			196.6			141.5
UK		15.1			15.5			5.9			189.7			249.9			19.1			19.6			4.6			171.8			133.8			24.4			24.3			9.3			189.7			255.7			26.6			26.8			6.2			171.8			112.2
Other ⁽¹⁾		7.7			8.4			1.8			61.4			69.7			7.7			8.5			1.0			40.4			27.9			11.9			12.5			2.7			61.4			72.5			10.4			11.1			1.4			40.4			25.4
Total	$	352.5		$	356.2			94.5			2,984.9			3,899.7		$	265.2		$	267.6			34.8			1,260.4			1,063.4		$	541.2		$	541.8			144.4			2,984.9			3,809.4		$	358.8		$	360.2			47.0			1,260.4			853.1

	% Change First Half of 2020 vs. First Half of 2019																														% Change First Nine Months of Fiscal 2020 vs. First Nine Months of Fiscal 2019
North America		15.2	%		15.4	%		18.2	%		13.5	%		24.0	%		(15.2	%)		(15.1	%)		(10.4	%)		(6.4	%)		(22.3	%)		16.9	%		17.0	%		20.4	%		13.5	%		24.1	%		(21.8	%)		(21.7	%)		(17.7	%)		(6.4	%)		(36.6	%)
CE		16.2	%		18.9	%		16.2	%		18.2	%		20.8	%		(17.3	%)		(15.3	%)		(10.2	%)		(6.4	%)		(24.8	%)		19.5	%		19.1	%		17.6	%		18.2	%		21.2	%		(21.4	%)		(21.0	%)		(15.7	%)		(6.4	%)		(32.1	%)
UK		12.9	%		15.9	%		18.5	%		18.5	%		28.1	%		(16.0	%)		(13.9	%)		(14.9	%)		(1.0	%)		(30.3	%)		21.8	%		21.6	%		23.5	%		18.5	%		29.2	%		(20.4	%)		(20.0	%)		(22.5	%)		(1.0	%)		(40.1	%)
Other ⁽¹⁾		9.6	%		19.4	%		17.3	%		11.0	%		17.4	%		(20.7	%)		(13.0	%)		(14.8	%)		(9.5	%)		(35.8	%)		12.4	%		18.3	%		16.4	%		11.0	%		18.1	%		(26.5	%)		(21.2	%)		(22.4	%)		(9.5	%)		(39.3	%)
Total		15.3	%		16.5	%		17.6	%		15.1	%		23.2	%		(15.7	%)		(15.0	%)		(11.1	%)		(5.8	%)		(24.2	%)		17.7	%		17.8	%		19.7	%		15.1	%		23.5	%		(21.8	%)		(21.5	%)		(18.2	%)		(5.8	%)		(36.5	%)

The ~~increase~~decrease in North America revenues in the first ~~six~~nine months of fiscal 2020 versus the prior year period was driven by a decrease in Service Revenues, partially offset by an increase in product sales and ~~other, partially offset by a decrease in Service Revenues. This~~other. The decrease in Service Revenues in the first ~~six~~nine months of fiscal 2020 versus the prior year period was driven by a decrease in Studio + Digital Fees, partially offset by an increase in Digital Subscription Revenues. Studio + Digital Fees were negatively impacted by the significant recruitment decline in the second ~~quarter~~and third quarters of fiscal 2020 driven by the closure of substantially all of our studios ~~as a result of~~due to the COVID-19 pandemic. Furthermore, the subsequent reopening of a limited number of our studios was further impacted by the strategic realignment of our Studio + Digital business. The increase in North America Total Paid Weeks in the first ~~six~~nine months of fiscal 2020 was driven primarily by the higher number of Incoming Subscribers at the beginning of fiscal 2020 versus the beginning of fiscal 2019 and higher Digital recruitments in the first ~~six~~nine months of fiscal 2020 versus the prior year period. Higher Digital recruitments in the first ~~six~~nine months of fiscal 2020 were driven by the successful launch of the new myWW program, the appeal of the program and our digital tools, and strong marketing execution versus the prior year period.

The increase in North America product sales and other in the first ~~six~~nine months of fiscal 2020 versus the prior year period was driven primarily by revenue received in connection with the WW Presents: Oprah’s 2020 Vision ~~tour.~~tour, partially offset by a decrease in in-studio product sales.

The increase in Continental Europe revenues in the first ~~six~~nine months of fiscal 2020 versus the prior year period was driven by an increase in Service ~~Revenues, partially offset by a decrease in product sales and other. This~~Revenues. The increase in Service Revenues in the first ~~six~~nine months of fiscal 2020 versus the prior year period was driven by an increase in Digital Subscription Revenues, partially offset by a decrease in Studio + Digital Fees. Studio + Digital Fees were negatively impacted by the significant recruitment decline in the second ~~quarter~~and third quarters of fiscal 2020 driven by the closure of substantially all of our studios ~~as a result of~~due to the COVID-19 pandemic. Furthermore, the subsequent reopening of a limited number of our studios was further impacted by the strategic realignment of our Studio + Digital business. The increase in Continental Europe Total Paid Weeks was driven primarily by the higher number of Incoming Subscribers at the beginning of fiscal 2020 versus the beginning of fiscal 2019 and higher Digital recruitments in the first ~~six~~nine months of fiscal 2020 versus the prior year period. Higher Digital recruitments in the first ~~six~~nine months of fiscal 2020 were driven by the successful launch of the new myWW program, the appeal of the program and our digital tools, and strong marketing execution versus the prior year period.

The decrease in Continental Europe product sales and other in the first six months of fiscal 2020 versus the prior year period was driven by a decrease in licensing, partially offset by an increase in product sales.

The decrease in UK revenues in the first ~~six~~nine months of fiscal 2020 versus the prior year period was driven by both a decrease in product sales and other and a decrease in Service Revenues. ~~This~~The decrease in Service Revenues in the first ~~six~~nine months of fiscal 2020 versus the prior year period was driven by a decrease in Studio + Digital Fees, partially offset by an increase in Digital Subscription Revenues. Studio + Digital Fees were negatively impacted by the significant recruitment decline in the second ~~quarter~~and third quarters of fiscal 2020 driven by the closure of substantially all of our studios ~~as a result of~~due to the COVID-19 pandemic. Furthermore, the subsequent reopening of a limited number of our studios was further impacted by the strategic realignment of our Studio + Digital business. The ~~increase~~minimal decrease in UK Total Paid Weeks was driven primarily by lower Studio + Digital recruitments, partially offset by the higher number of Incoming Subscribers at the beginning of fiscal 2020 versus the beginning of fiscal 2019 and higher Digital recruitments in the first ~~six~~nine months of fiscal 2020 versus the prior year period. Higher Digital recruitments in the first ~~six~~nine months of fiscal 2020 were driven by the successful launch of the new myWW program, the appeal of the program and our digital tools, and strong marketing execution versus the prior year period.

The decrease in UK product sales and other in the first ~~six~~nine months of fiscal 2020 versus the prior year period was driven primarily by a decrease in in-studio product sales.

The decrease in Other revenues in the first ~~six~~nine months of fiscal 2020 versus the prior year period was driven by both a decrease in product sales and other and a decrease in Service Revenues. The decrease in Service Revenues in the first ~~six~~nine months of fiscal 2020 versus the prior year period was driven primarily by ~~the~~a decrease in Studio + Digital Fees. Studio + Digital Fees were negatively impacted by the significant recruitment decline in the second ~~quarter~~and third quarters of fiscal 2020 driven by the closure of substantially all of our studios ~~as a result of~~due to the COVID-19 pandemic. Furthermore, the subsequent reopening of a limited number of our studios was further impacted by the strategic realignment of our Studio + Digital business.

The decrease in Other product sales and other in the first ~~six~~nine months of fiscal 2020 versus the prior year period was driven primarily by a decrease in ~~in-studio~~ product sales and a decrease in franchise commissions.

Cash flows provided by operating activities have historically supplied, and are expected to continue to supply, us with our primary source of liquidity. We use these cash flows, supplemented with long-term debt and short-term borrowings, to fund our operations and global strategic initiatives, pay down debt and engage in selective acquisitions. We currently believe that cash generated by operations, our cash on hand of approximately ~~$150.4~~$204.4 million and our $173.8 million of availability under our Revolving Credit Facility at ~~June 27,~~September 26, 2020 and our cost-savings initiative described below will provide us with sufficient liquidity to meet our obligations for the next twelve months. In addition, if necessary, we have the flexibility to delay investments or reduce marketing spend.

Due to the negative impact of COVID-19, and the uncertainty of the full extent of the magnitude and duration of such impact on our business and the economies and financial markets in which we operate, we implemented a $100.0 million cost-savings initiative with respect to our cost structure. We undertook this initiative to proactively manage our liquidity so we can maintain flexibility to respond to evolving business and consumer conditions arising from the pandemic, as well as continue to fund investments in innovating our program and long-term debt obligations. In connection with this initiative, we instituted a number of measures throughout our operations to mitigate expenses and reduce costs as well as ensure liquidity and the availability of our Revolving Credit Facility. ~~While we have targeted $100.0 million of~~As with any potential cost-savings measures, we may not be able to recognize all identified potential savings.Even if we are able to recognize the identified savings, the magnitude of our cost-savings initiative may be insufficient to address the evolving and uncertain economic impact of COVID-19 and resulting liquidity needs. To the extent that we do not successfully manage our costs, our liquidity and financial results, as well as our ability to access our Revolving Credit Facility, may be adversely affected. Additionally, in June 2020, we amended our Credit Agreement (as defined below) to relax the requirements of the financial maintenance covenant until the end of the second quarter of fiscal 2022 so as to provide additional flexibility for accessing liquidity available under our Revolving Credit Facility (as defined below). See “—Liquidity and Capital Resources—Long-Term Debt—Senior Secured Credit Facilities” for additional details on this amendment.

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 (each as defined below). Such transactions could be privately negotiated or open market transactions, pursuant to tender offers or otherwise. Subject to any applicable limitations contained in the agreements governing, or terms of, our indebtedness, any such purchases made by us may be funded by the use of cash on our balance sheet 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:

	June 27,			December 28,			Increase/			September 26,			December 28,			Increase/
	2020			2019			(Decrease)			2020			2019			(Decrease)
	(in millions)									(in millions)
Total current assets	$	277.6		$	295.4		$	(17.8	)	$	321.4		$	295.4		$	26.0
Total current liabilities		371.4			394.1			(22.7	)		364.3			394.1			(29.7	)
Working capital deficit		(93.7	)		(98.7	)		(4.9	)		(42.9	)		(98.7	)		(55.7	)
Cash and cash equivalents		150.4			182.7			(32.3	)		204.4			182.7			21.7
Current portion of long-term debt		96.3			96.3			0.0			96.3			96.3			0.0
Working capital deficit, excluding cash and cash equivalents and current portion of long-term debt	$	(147.9	)	$	(185.2	)	$	(37.3	)	$	(151.1	)	$	(185.2	)	$	(34.1	)

The following table sets forth a summary of the primary factors contributing to the ~~$37.3~~$34.1 million decrease in our working capital deficit, excluding cash and cash equivalents and current portion of long-term debt:

	June 27,		December 28,		Increase/			Impact to Working			September 26,		December 28,		Increase/			Impact to Working
	2020		2019		(Decrease)			Capital Deficit			2020		2019		(Decrease)			Capital Deficit
	(in millions)										(in millions)
Derivative payable	$	34.7	$	21.6	$	13.1		$	13.1		$	32.5	$	21.6	$	10.9		$	10.9
Income taxes payable											$	5.8	$	3.6	$	2.2		$	2.2
Portion of operating lease liabilities due within one year	$	37.8	$	33.2	$	4.6		$	4.6		$	35.1	$	33.2	$	1.9		$	1.9
Income taxes payable	$	5.2	$	3.6	$	1.5		$	1.5
Accrued interest											$	14.3	$	24.6	$	(10.3	)	$	(10.3	)
Prepaid income taxes											$	20.8	$	8.4	$	12.4		$	(12.4	)
Deferred revenue	$	50.9	$	60.6	$	(9.7	)	$	(9.7	)	$	48.0	$	60.6	$	(12.6	)	$	(12.6	)
Prepaid income taxes	$	23.1	$	8.4	$	14.8		$	(14.8	)
Operational liabilities and other, net of assets	$	34.7	$	50.0	$	(15.3	)	$	(15.3	)	$	36.2	$	50.0	$	(13.8	)	$	(13.8	)
Accrued interest	$	8.0	$	24.6	$	(16.7	)	$	(16.7	)
Working capital deficit change, excluding cash and cash equivalents and current portion of long-term debt								$	(37.3	)								$	(34.1	)

The increase in derivative payable was due to a change in fair value driven by the change in interest rates. The decrease in ~~deferred revenue~~accrued interest was ~~driven primarily by an increase in promotional sign-up offers.~~due to the timing of debt principal payments. The increase in prepaid income taxes was primarily related to an increase in interest expense carryforward utilization as a result of the CARES Act. The decrease in deferred revenue was driven primarily by an increase in promotional sign-up offers. The decrease in operational liabilities and other, net of assets, which includes accrued salaries and wages, was driven primarily by the timing of payments. ~~The decrease in accrued interest was due to the timing of debt principal payments.~~

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

	June 27, 2020			June 29, 2019			September 26, 2020			September 28, 2019
	(in millions)						(in millions)
Net cash provided by operating activities	$	47.5		$	79.8		$	127.4		$	151.7
Net cash used for investing activities	$	(39.2	)	$	(23.7	)	$	(47.8	)	$	(34.3	)
Net cash used for financing activities	$	(41.0	)	$	(111.9	)	$	(61.0	)	$	(112.4	)

Cash flows provided by operating activities of ~~$47.5~~$127.4 million for the first ~~six~~nine months of fiscal 2020 reflected a decrease of ~~$32.3~~$24.3 million from ~~$79.8~~$151.7 million of cash flows provided by operating activities in the first ~~six~~nine months of fiscal 2019. The decrease in cash provided by operating activities was primarily the result of a decrease in net income attributable to the Company of ~~$35.2~~$27.8 million in the first ~~six~~nine months of fiscal 2020 as compared to the prior year period.

Cash flows provided by operating activities of ~~$79.8~~$151.7 million for the first ~~six~~nine months of fiscal 2019 reflected a decrease of ~~$88.8~~$103.0 million from ~~$168.6~~$254.6 million of cash flows provided by operating activities in the first ~~six~~nine months 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 ~~$66.7~~$89.7 million in the first ~~six~~nine months of fiscal 2019 as compared to the prior year period.

Net cash used for investing activities totaled ~~$39.2~~$47.8 million in the first ~~six~~nine months of fiscal 2020, an increase of ~~$15.6~~$13.4 million as compared to the first ~~six~~nine months of fiscal 2019. This increase was primarily attributable to higher capital expenditures in the first ~~six~~nine months of fiscal 2020. In the first ~~six~~nine months of fiscal 2020, we entered into a strategic collaboration agreement with ClassPass Inc. (“ClassPass”) and also invested $5.0 million in ClassPass’ recent $285.0 million Series E Preferred Stock funding round.

Net cash used for investing activities totaled ~~$23.7~~$34.3 million in the first ~~six~~nine months of fiscal 2019, a decrease of ~~$6.8~~$10.6 million as compared to the first ~~six~~nine months of fiscal 2018. This decrease was primarily attributable to ~~lower~~investments in intellectual property and the purchase of Kurbo Health, Inc. in the first nine months of fiscal 2018 partially offset by higher capital expenditures for technology in the first ~~six~~nine months of fiscal 2019.

Net cash used for financing activities totaled ~~$41.0~~$61.0 million in the first ~~six~~nine months of fiscal 2020 primarily due to $~~38.5~~57.8 million used for scheduled debt repayments under our Term Loan Facility. See “—Long-Term Debt” for additional details on debt.

Net cash used for financing activities totaled ~~$111.9~~$112.4 million in the first ~~six~~nine months of fiscal 2019 primarily due to $50.0 million used for the debt prepayment and $57.8 million used for scheduled debt repayments under our Term Loan Facility. See “—Long-Term Debt” for additional details on debt payments.

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 27,~~September 26, 2020:

	Balance		Balance
Term Loan Facility due November 29, 2024	$	1,266.8	$	1,247.5
Notes due December 1, 2025		300.0		300.0
Total		1,566.8		1,547.5
Less: Current portion		96.3		96.3
Unamortized deferred financing costs		6.7		6.3
Unamortized debt discount		19.4		18.3
Total long-term debt	$	1,444.4	$	1,426.6

On November 29, 2017, we refinanced our then-existing credit facilities (referred to herein as the November 2017 debt refinancing) with proceeds received from $1,565.0 million in an aggregate principal amount 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, as amended from time to time, referred to herein as the Credit Facilities) and proceeds received from $300.0 million in aggregate principal amount from the issuance 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 Credit Facilities were issued under a new credit agreement, dated November 29, 2017, or, as amended from time to time, 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 Credit Facilities initially consisted of (1) $1,540.0 million in aggregate principal amount of senior secured tranche B term loans due in 2024, or the Term Loan Facility, and (2) a $150.0 million in an aggregate principal amount of commitments under a senior secured revolving credit facility (which included borrowing capacity available for letters of credit) due in 2022, or the Revolving Credit Facility.

On June 14, 2020, we entered into an amendment to the Credit Agreement, or the Credit Agreement Amendment, that provided for an increase in the aggregate principal amount of commitments under our Revolving Credit Facility by $25.0 million, providing us with $175.0 million in aggregate principal amount of commitments under the Revolving Credit Facility, and that included certain other amendments to the Credit Agreement, which among other things, relaxed the requirements of the financial maintenance covenant under the Credit Agreement until the end of the second fiscal quarter of 2022, as further detailed below.

On both May 31, 2019 and October 10, 2019, we made a voluntary prepayment at par of $50.0 million in an aggregate amount of our outstanding term loans under the Term Loan Facility. As a result of these prepayments, we wrote off deferred financing fees of $0.5 million in the aggregate in fiscal 2019.

As previously disclosed, on March 23, 2020, as a precautionary measure in light of the COVID-19 outbreak, we drew down $148.0 million in an aggregate principal amount under the Revolving Credit Facility in order to enhance our cash position and to provide additional financial flexibility. The revolver borrowing was classified as a short-term liability in connection with our monthly interest elections. We repaid $148.0 million in aggregate principal amount of borrowings under the Revolving Credit Facility on June 5, 2020.

As of ~~June 27,~~September 26, 2020, we had ~~$1,266.8~~$1,247.5 million in an aggregate principal amount of loans outstanding under our Credit Facilities, with $173.8 million of availability and $1.2 million in issued but undrawn letters of credit outstanding under the Revolving Credit Facility. There were no outstanding borrowings under the Revolving Credit Facility as of ~~June 27,~~September 26, 2020.

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

Under the terms of the Credit Agreement, depending on our Consolidated First Lien Leverage Ratio (as defined in the Credit Agreement), on an annual basis on or about the time we are required to deliver our financial statements for any fiscal year, we are obligated to offer to prepay a portion of the outstanding principal amount of the Term 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 Term Loan Facility and, after giving effect to the Credit Agreement Amendment, the Revolving Credit Facility, in each case, 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 cost of funds for U.S. dollar deposits for the interest period relevant to such borrowing adjusted for certain additional costs, provided that LIBOR is not lower than a floor of 0.75%. Borrowings under the Revolving Credit Facility bear interest at a rate per annum equal to an applicable margin based upon a leverage-based pricing grid (except as otherwise described below), 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 cost of funds for U.S. dollar deposits for the interest period relevant to such borrowing adjusted for certain additional costs. Under the terms of the Credit Agreement Amendment, a new level in the leverage based pricing grid was added providing for an applicable margin for extensions of credit under the Revolving Credit Facility of 3.00% when the Consolidated First Lien Leverage Ratio discussed below is greater than or equal to 3.75:1.00. As of ~~June 27,~~September 26, 2020, the applicable margins for the LIBOR rate borrowings under the Term Loan Facility and the Revolving Credit Facility were 4.75% and 2.25%, 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 Revolving Credit Facility in respect of unutilized commitments thereunder, which commitment fee fluctuates depending upon our Consolidated First Lien Leverage Ratio. Under the terms of the Credit Agreement Amendment, a new level in the leverage based pricing grid was added providing for a commitment fee of 0.625% when the Consolidated First Lien Leverage Ratio discussed below is greater than or equal to 3.75:1.00. Based on our Consolidated First Lien Leverage Ratio as of ~~June 27,~~September 26, 2020, the commitment fee was 0.35% per annum. Our Consolidated First Lien Leverage Ratio as of ~~June 27,~~September 26, 2020 was ~~3.03:~~2.80:1.00.

The availability of certain baskets and the ability to enter into certain transactions are also subject to compliance with certain financial ratios. In addition, if the aggregate principal amount of extensions of credit outstanding under the Revolving Credit Facility as of any fiscal quarter end exceeds 33 1/3% of the amount of the aggregate commitments under the Revolving Credit Facility in effect on such date, we must be in compliance with a Consolidated First Lien Leverage Ratio of 3.75:1.00, provided, however, that the Credit Agreement Amendment increased the required Consolidated First Lien Leverage Ratio to 4.50:1.00, commencing with the second fiscal quarter of 2020 through the end of fiscal 2020, with a further step up to 5.00:1.00 for fiscal 2021, before stepping down to 4.50:1.00 for the first fiscal quarter of 2022, and again to 3.75:1.00, commencing with the second fiscal quarter of 2022 (such increases in the Consolidated First Lien Leverage Ratio and the timing applicable thereto, collectively, referred to herein as the Financial Covenant Relief Period. The Financial Covenant Relief Period is subject to our continued compliance with certain conditions, which include meeting a Consolidated First Lien Leverage Ratio of 3.75:1.00 with respect to certain types of investments, restricted payments and prepayments of junior debt during the Financial Covenant Relief Period. If at any time we expect that we will not be in compliance with the conditions of the Financial Covenant Relief Period, we expect we will reduce our extensions of credit under the Revolving Credit Facility to $58.3 million or less prior to the last day of such fiscal quarter so that we are not required to comply with the conditions of the Financial Covenant Relief Period. In any such event, we would be able to reborrow the full amount under the Revolving Credit Facility subsequent to such fiscal quarter end given that the applicable Consolidated First Lien Leverage Ratio to be tested during the Financial Covenant Relief Period is only tested as of the last day of each fiscal quarter.

As of ~~June 27,~~September 26, 2020, we were in compliance with all applicable financial covenants and the applicable Consolidated First Lien Leverage Ratio in the Credit Agreement governing the Revolving Credit Facility though we were not required to comply at such time.

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.

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, we 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, we 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, we 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, we 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, we 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 our subsidiaries that guarantee the Credit Facilities.

At ~~June 27,~~September 26, 2020, we had ~~$1,566.8~~$1,547.5 million outstanding under the Credit Facilities and the Notes, consisting of borrowings under the Term Loan Facility of ~~$1,266.8~~$1,247.5 million, $0.0 ~~million~~ drawn down on the Revolving Credit Facility and $300.0 million in aggregate principal amount of Notes issued and outstanding.

At ~~June 27,~~September 26, 2020 and December 28, 2019, our debt consisted of both fixed and variable-rate instruments. Interest rate swaps were entered into to hedge a portion of the cash flow exposure associated with our variable-rate borrowings. Further information regarding our interest rate swaps can be found in Part I, Item 1 of this Quarterly Report on Form 10-Q under Note 12 “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 swaps then in effect, was approximately ~~7.12%~~6.95% and 8.08% per annum at ~~June 27,~~September 26, 2020 and December 28, 2019, respectively, based on interest rates on 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 swaps then in effect, was approximately ~~7.37%~~7.34% and 7.59% per annum at ~~June 27,~~September 26, 2020 and December 28, 2019, respectively, based on interest rates on these dates.

The following schedule sets forth our year-by-year debt obligations at ~~June 27,~~September 26, 2020:

Remainder of fiscal 2020	$	57.8	$	38.5
Fiscal 2021	$	77.0	$	77.0
Fiscal 2022	$	77.0	$	77.0
Fiscal 2023	$	77.0	$	77.0
Fiscal 2024	$	978.0	$	978.0
Fiscal 2025 and thereafter	$	300.0	$	300.0
Total	$	1,566.8	$	1,547.5

Our accumulated other comprehensive loss includes changes in the fair value of derivative instruments and the effects of foreign currency translations. At ~~June 27,~~September 26, 2020 and ~~June 29,~~September 28, 2019, the cumulative balance of changes in the fair value of derivative instruments, net of taxes, was a loss of ~~$24.9~~$23.3 million and ~~$14.7~~$17.9 million, respectively. At ~~June 27,~~September 26, 2020 and ~~June 29,~~September 28, 2019, the cumulative balance of the effects of foreign currency translations, net of taxes, was a loss of ~~$15.3~~$12.3 million and ~~$12.0~~$14.1 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 Credit Facilities and the 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, the addition of $250.0 million to this program. The repurchase program allows for shares to be purchased from time to time in the open market or through privately negotiated transactions. No shares will be purchased from Artal Holdings Sp. z o.o., Succursale de Luxembourg and its parents and subsidiaries under this program. The repurchase program currently has no expiration date. During the ~~six~~nine months ended ~~June 27,~~September 26, 2020 and ~~June 29,~~September 28, 2019, we repurchased no shares of our common stock under this program or otherwise.

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, stock-based compensation, 2020 restructuring charges and goodwill impairment.

The table below sets forth the reconciliation for EBITDAS and Adjusted EBITDAS, each a non-GAAP financial measure, to net loss, the most comparable GAAP financial measure, for the three and ~~six~~nine months ended ~~June 27,~~September 26, 2020 and ~~June 29,~~September 28, 2019, and EBITDAS and Adjusted EBITDAS to net income for the trailing twelve months ended ~~June 27,~~September 26, 2020:

	Three Months Ended				Six Months Ended				Trailing Twelve		Three Months Ended				Nine Months Ended
	June 27, 2020		June 29, 2019		June 27, 2020		June 29, 2019		Months		September 26, 2020		September 28, 2019		September 26, 2020		September 28, 2019		Trailing Twelve Months
Net income	$	14.0	$	53.8	$	7.9	$	43.1	$	84.4	$	54.5	$	47.1	$	62.5	$	90.2	$	91.9
Interest		31.0		34.7		62.5		69.9		127.9		29.7		33.1		92.3		103.0		124.5
Taxes		5.6		16.6		4.9		13.7		22.7		8.6		13.1		13.5		26.8		18.2
Depreciation and amortization		12.8		11.3		25.0		22.7		47.3		12.4		10.9		37.4		33.5		48.9
Stock-based compensation		38.7		4.9		42.7		9.7		53.4		6.0		5.2		48.7		14.9		54.2
EBITDAS	$	102.1	$	121.3	$	143.1	$	159.2	$	335.8	$	111.3	$	109.4	$	254.4	$	268.6	$	337.7
2020 restructuring charges		11.2		—		11.2		—		11.2		2.3		—		13.5		—		13.5
Goodwill impairment		—		—		3.7		—		3.7		—		—		3.7		—		3.7
Adjusted EBITDAS ⁽¹⁾	$	113.3	$	121.3	$	157.9	$	159.2	$	350.7	$	113.6	$	109.4	$	271.5	$	268.6	$	354.8

Reducing leverage is a capital structure priority for the Company. As of ~~June 27,~~September 26, 2020, our net debt/Adjusted EBITDAS ratio was ~~4.0x.~~3.7x.

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

	June 27, 2020		September 26, 2020
Total debt	$	1,566.8	$	1,547.5
Less: Unamortized deferred financing costs		6.7		6.3
Less: Unamortized debt discount		19.4		18.3
Less: Cash on hand		150.4		204.4
Net debt	$	1,390.2	$	1,318.4

We present EBITDAS, Adjusted EBITDAS and net debt/Adjusted EBITDAS because we consider them to be useful supplemental measures of our performance. In addition, we believe EBITDAS, Adjusted EBITDAS and net debt/Adjusted EBITDAS are useful to investors, analysts and rating agencies in measuring the ability of a company to meet its debt service obligations. See “—Non-GAAP 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 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. Historically, we experience our highest level of recruitment during the first quarter of the year, which is supported with the highest concentration of advertising spending. Therefore, our number of End of Period Subscribers in the first quarter of the year is typically higher than the number in other quarters of the year, historically reflecting a decline over the course of the year.

Corporate information and our press releases, Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K, and amendments thereto, are available free of charge on our corporate website at 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.

We use our corporate website at corporate.ww.com and certain social media channels such as our corporate Facebook page (www.facebook.com/WW), Instagram account (Instagram.com/WW) and Twitter account (@ww_us) as channels of distribution of Company information. The information we post through these channels may be deemed material. Accordingly, investors should monitor these channels, in addition to following our press releases, 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 27,~~September 26, 2020, 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 2019 have not materially changed from December 28, 2019.

At the end of the ~~second~~third quarter of fiscal 2020, borrowings under the Credit Facilities bore interest at LIBOR plus an applicable margin of 4.75%. For the 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 27,~~September 26, 2020, our interest rate swaps in effect had an aggregate notional amount of $750.0 million. Accordingly, as of ~~June 27,~~September 26, 2020, 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 swaps and the LIBOR Floor, a hypothetical 90 basis point increase in interest rates would have increased annual interest expense by approximately ~~$4.7~~$4.5 million and a hypothetical 90 basis point decrease in interest rates would have decreased annual interest expense by approximately $0.0 million. This increase and decrease is driven primarily by the interest rate applicable to our Term Loan Facility and the LIBOR Floor, respectively.

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 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 27,~~September 26, 2020, the end of the ~~second~~third quarter of fiscal 2020. 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~~third quarter of fiscal 2020, 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~~The information called for by this item is incorporated herein by reference to Note 11 “Legal” 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, in the United States District Court for the Southern District of New York. The actions were consolidated and lead plaintiffs were appointed in June 2019. A consolidated amended complaint was filed on July 29, 2019, naming as defendants the Company, certain of the Company’s current officers and directors, and Artal and certain of its affiliates. A second consolidated amended complaint was filed on September 27, 2019. The operative complaint asserts claims on behalf of all purchasers of the Company’s common stock between May 4, 2018 and February 26, 2019, inclusive, or the Class Period, including purchasers of the Company’s common stock traceablenotes to the May 2018 secondary offering of the Company’s common stock by certain of its shareholders. The complaint alleges that, during the Class Period, the defendants disseminated materially false and misleadingunaudited consolidated financial statements and/or concealed or recklessly disregarded material adverse facts. The complaint alleges claims under Sections 10(b) and 20(a) of the Exchange Act and Rule 10b-5 thereunder, and with respect to the secondary offering, under Sections 11, 12(a)(2), and 15 of the Securities Act. The plaintiffs seek to recover unspecified damages on behalf of the class members. The Company believes that the action is without merit and intends to vigorously defend it. The Company filed a motion to dismiss the complaint on October 31, 2019.

~~Between March and July 2019~~, the Company received shareholder litigation demands 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 demands relate to those contained in the ongoing securities class action litigation. In response to the demands, pursuant to Virginia law, the Board of Directors has created a special committee to investigate and evaluate the claims made in the demands. In addition, four derivative complaints were filed, each making allegations against certain of the Company’s officers and directors and/or Artal and certain of its affiliates. First,this Quarterly Report on June 13, 2019, a shareholder derivative complaint was filed in the Southern District of New York against certain of the Company’s officers and directors alleging, among other things, that the defendants breached fiduciary duties to the alleged injury of the Company. The plaintiff voluntarily dismissed the complaint on July 8, 2019 and the Company agreed to treat the complaint as a litigation demand. Second, on July 23, 2019, another shareholder derivative complaint was filed in the Southern District of New York against certain of the Company’s officers and directors alleging, among other things, that the defendants breached fiduciary duties to the alleged injury of the Company. The plaintiff voluntarily dismissed the complaint the same day. Third, on October 25, 2019, another shareholder derivative complaint was filed in the Southern District of New York against certain of the Company’s officers and directors alleging, among other things, that the defendants breached fiduciary duties to the alleged injury of the Company. Finally, on December 16, 2019, a shareholder derivative complaint was filed in New York Supreme Court against certain of the Company’s officers and directors, and Artal and certain of its affiliates, alleging, among other things, that the defendants breached fiduciary duties to the alleged injury of the Company. This action and the derivative action filed October 25, 2019 have each been stayed pending a decision on the defendants’ motion to dismiss the securities class action. The Company believes that these actions are without merit and intends to vigorously defend them.

Two substantially similar class action complaints were filed by individual Studio + Digital members against the Company in the United States District Court for the Southern District of New York in May 2020 (referred to herein as the New York Matter) and the Superior Court of California in Ventura County in June 2020 (referred to herein as the California Matter, and together with the New York Matter, referred to herein as the 2020 Class Actions). The complaints were filed on behalf of all Studio + Digital members nationwide and regard the fees charged for Studio + Digital memberships since the temporary replacement of in-person workshops with virtual workshops in March 2020 in response to the COVID-19 pandemic. The complaints allege that the Company’s decision to charge its members the full Studio + Digital membership fee while only providing a virtual experience violated state consumer protection laws in New York and/or California, as applicable, and gave rise to claims for breach of contract, fraud, and other tort causes of action based on the same factual allegations that are the basis for the breach of contract claim. The plaintiffs seek to recover damages plus injunctive relief to enjoin the Company from engaging in similar conduct in the future on behalf of the class members. The Company believes that the 2020 Class Actions are without merit and intends to vigorously defend them. The Company filed a notice to remove the California Matter to the United States District Court for the Central District of California on July 30, 2020 and a motion to dismiss the New York Matter on August 3, 2020.
Form 10-Q.

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.

There have been no material changes in the risk factors from those detailed in our Annual Report on Form 10-K for fiscal 2019 other than as disclosed in our Quarterly ~~Report~~Reports on Form 10-Q for the first ~~quarter~~and second quarters of fiscal 2020, and as updated below.

The global outbreak of the COVID-19 virus is adversely impacting, and will continue to adversely impact, our business and may adversely impact our liquidity.

The global outbreak of the coronavirus (COVID-19) has had and will continue to have a significant adverse impact on our business as well as on the business environment and the markets in which we operate. This global health crisis has also had a significant adverse effect on overall economic conditions and we expect consumer demand to continue to be negatively impacted due to changes in consumer behavior and confidence and health concerns. The situation remains dynamic and subject to rapid and possibly significant change, and accordingly the full extent of the magnitude and duration of the negative impact to our business from the COVID-19 pandemic cannot be predicted with certainty.

While we have taken steps to address the risks and impact of the COVID-19 pandemic, as a result of the pandemic, we have experienced significant disruption to our business, including with respect to decreases in member recruitment. While the recruitment disruption was temporary in our Digital business, it has been more pronounced and sustained in our Studio + Digital business, in part due to our suspension in mid-March of our in-person workshops. Our member retention in both our Digital and Studio + Digital businesses may also be significantly negatively impacted by the pandemic.

Following the suspension of our in-person workshops, we rapidly transitioned these workshops to an entirely virtual experience. In June 2020, we began a phased re-opening with reduced operations of a limited number of our studio locations. However, during these uncertain times, we may need to close re-opened studios, or may not be able to open studios as ~~planned.~~planned or may need to further reduce operations. We continue to offer virtual workshops, which may not be successful in meeting the needs or preferences of many of our members, employees and the communities in which we operate. This may result in further decreases in our recruitment as well as a significant decrease in our retention of members. The suspension of our in-person workshops and reduced operations has and will continue to adversely impact our in-studio product sales. We cannot predict how long these suspensions and reduced operations will continue as federal, state, local and foreign authorities and public health officials have adopted numerous mitigation measures to address the spread of the virus, including temporary closure requirements with respect to non-essential business operations (including our workshops) to discourage people from congregating. The duration of these requirements will also likely vary by jurisdiction. The decision to resume in-person workshops has been and will continue to be influenced by a number of factors, including applicable legal restrictions, consumer confidence and preferences and the protection of the health and safety of our employees and members, and there is substantial uncertainty regarding the manner and timing of any resumption of our in-person workshops. We may face longer closure requirements than expected and other operational restrictions with respect to some or all of our studio and other physical locations due to, among other factors, evolving and stringent federal, state, local and foreign restrictions including social distancing requirements.

Even as we are able to re-open closed studio locations and resume in-person workshops, changes in consumer behavior, including willingness to meet in groups, increasing unemployment levels and associated changes in household income, as well as health concerns may impact consumer demand for our products, customer traffic at our studio locations and recruitment and retention of members in both our Digital and Studio + Digital businesses. A number of our members may be more concerned with maintaining social distancing for a longer period if they perceive themselves to be a part of a higher at-risk group for complications arising from COVID-19. We may also find it more difficult to staff our business operations. The perceived risk of infection or health risk may adversely affect traffic to our studio locations and, in turn, our business, liquidity, financial condition and results of operations, particularly if any self-imposed or government-imposed restrictions are in place for a significant amount of time. In addition, government requirements may increase our operating costs on a studio-by-studio basis as a studio location re-opens due to, among other things, social distancing requirements and costs associated with increased cleaning and other sanitary or protective measures. As part of our ~~active planning to~~focus on best ~~meet~~meeting our members’ and consumers’ needs as COVID-related restrictions are lifted or reinstated and as we continue our digital transformation, we are consolidating certain of our studios into branded studio locations and are also closing certain branded studio locations. As a result, we have incurred and will incur costs associated with our real estate realignment. The decision to re-open a studio location, if at all, or consolidate studio locations, will be influenced by a number of factors, including applicable legal restrictions, consumer confidence and preferences, changes in consumer behavior, and the protection of the health and safety of our employees and members, and will be dependent on aligning with our digital and brand strategy. We may not be able to successfully control our studio environments and realize the intended business advantages of maintaining a select group of studio locations, which could adversely affect our Studio + Digital business and results of operations.

Our business depends on a number of third parties including vendors, landlords, lenders, marketing partners, third-party technology providers and suppliers. The COVID-19 outbreak may have a material adverse impact on these parties and their ability to meet their obligations to us. Any such failure by our third-party partners could negatively impact our ability to provide our products and services to customers. One or more of these third parties may experience financial distress, staffing shortages or liquidity challenges, file for bankruptcy protection, go out of business, or suffer disruptions in their business due to the COVID-19 outbreak. For example, the failure of any third-party technology provider to provide continuous and uninterrupted service could result in disruptions in our websites, services and products or network systems. The full extent of the impact of COVID-19 on these third-party partners continues to evolve and is uncertain.

If a significant percentage of our workforce, or the workforces of our suppliers and other third-party partners, is unable to work, whether because of illness, quarantine, limitations on travel or other government restrictions in connection with COVID-19, our operations may be negatively impacted. We also depend on senior management and other key personnel and consultants, and the illness of certain personnel or consultants could result in the loss of expertise and negatively affect our operations, brand image and goodwill.

The widespread health crisis also could adversely affect the economies and financial markets of many countries in which we operate, resulting in an economic downturn that could affect consumer demand for our products and services. Our customer purchasing patterns can be influenced by economic factors. The precise impact, and extent thereof, on our business from the disruption of financial markets and the weakening of overall economic conditions cannot be predicted with certainty. Uncertainties regarding the economic impact of COVID-19 have resulted in, and are likely to continue to result in, sustained impact on the economy. Our business is particularly sensitive to reductions in discretionary consumer spending, which may be adversely impacted by a recession or fears of a recession, volatility and declines in the stock market and increasingly pessimistic consumer sentiment due to perceived or actual economic and/or health risks. Consumers may shift purchases to lower-priced or other perceived value offerings during economic downturns. Prolonged unfavorable economic conditions, including as a result of COVID-19, and any resulting recession or slowed economic growth, may have an adverse effect on our financial condition and results of operations.

While emerging and evolving regulations impact our effective tax rate, and while we anticipate receiving certain benefits thereunder in the future, given the uncertainty of the regulatory environment, we cannot predict with certainty whether we will receive any such benefits in the future, or the extent to which we will receive such benefits, if at all.

If we are unable to generate sufficient cash or to access liquidity at the time and on terms we may require, we may encounter difficulty funding our business requirements including debt repayments when due. We may not be able to access liquidity, including our Revolving Credit Facility, or the terms and conditions of available credit may be substantially more expensive than previously expected due to changes in our operating results and general financial conditions and credit markets. We may require waivers or amendments to our existing long-term debt and these requirements may trigger pricing increases from lenders for available credit. Reductions in our liquidity position and the need to use capital for other day to day requirements of our business may affect a number of our business initiatives and long-term investments and as a result we may be required to curtail and/or postpone business investments as well as other initiatives that require capital investment.

We have implemented emergency pay policies and taken other compensation and benefit actions to support our employees during the COVID-19 business interruption, but those actions may not be sufficient to compensate them for the entire duration of any business interruption resulting from COVID-19. Those employees might seek and find other employment during that interruption, or might otherwise choose not to return to their positions, which could materially adversely affect our ability to properly staff and re-open our studio locations with experienced teams when the business interruptions caused by COVID-19 abate or end.

The COVID-19 pandemic (including governmental responses, broad economic impacts and market disruptions) has heightened the risks related to the other risk factors described in our Annual Report on Form 10-K for fiscal 2019.

We may not be able to successfully accelerate or implement our strategic digital transformation, which could adversely impact our business, financial conditions or results of operations.

We are accelerating our strategic digital transformation. This acceleration began with the launch of virtual workshops in March 2020 when we suspended our in-person workshops in response to COVID-19. We expect to continue to evolve our virtual experience and offerings for our members. For example, we continue to work towards the launch of a new digitally-enabled, community-focused and coach-led offering ~~later~~ this year, which will reflect learnings from our current virtual workshops and ongoing test pilots. We are reallocating certain resources and will incur additional costs to support this acceleration. This transition to more virtual experiences may not be successful in meeting the needs or preferences of many of our current or potential members. As a result, we may experience decreases in our recruitment and retention of members, or increased member cancellations. Additionally, we may also find it difficult to transition our coaches from in-person coaching to virtual coaching, which may negatively affect our ability to properly staff virtual workshops with experienced coaches. We may not be able to successfully launch our new virtual or other digital offerings and realize the intended business opportunities, growth prospects, including new business channels, and competitive advantages of our digital transformation. Assumptions underlying expected financial results or consumer demand and receptivity may not be met or economic or consumer conditions may deteriorate, including as a result of the impact of COVID-19, and may adversely impact our ability to successfully implement this digital strategy. If these or other factors limit our ability to successfully execute this strategic initiative, our business, financial conditions or results of operations may be adversely impacted.

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

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

		Page No.

PART I—FINANCIAL INFORMATION

Item 1.	Financial Statements		2

	Unaudited Consolidated Balance Sheets at ~~June 27,~~September 26, 2020 and December 28, 2019		2

	Unaudited Consolidated Statements of Net Income for the three and ~~six~~nine months ended ~~June 27,~~September 26, 2020 and ~~June 29,~~September 28, 2019		3

	Unaudited Consolidated Statements of Comprehensive Income for the three and ~~six~~nine months ended ~~June 27,~~September 26, 2020 and ~~June 29,~~September 28, 2019		4

	Unaudited Consolidated Statements of Changes in Total Deficit for the three and ~~six~~nine months ended ~~June 27,~~September 26, 2020 and ~~June 29,~~September 28, 2019		5

	Unaudited Consolidated Statements of Cash Flows for the ~~six~~nine months ended ~~June 27,~~September 26, 2020 and ~~June 29,~~September 28, 2019		7

	Notes to Unaudited Consolidated Financial Statements		8

Cautionary Notice Regarding Forward-Looking Statements			2627

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations		2829

Item 3.	Quantitative and Qualitative Disclosures About Market Risk		5455

Item 4.	Controls and Procedures		5455

PART II—OTHER INFORMATION

Item 1.	Legal Proceedings		5556

Item 1A.	Risk Factors		56

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds		58

Item 3.	Defaults Upon Senior Securities		58

Item 4.	Mine Safety Disclosures		58

Item 5.	Other Information		58

Item 6.	Exhibits		59

Signatures			60

Large accelerated filer	☒	Accelerated filer	☐

Non-accelerated filer	☐	Smaller reporting company	☐

		Emerging growth company	☐

	Deferred			Deferred
	Revenue			Revenue-Long Term
Balance as of December 28, 2019	$	60,613		$	54
Net (decrease) increase during the period		(9,667	)		20
Balance as of June 27, 2020	$	50,946		$	74

Exhibit Number		Description

**Exhibit ~~10.1~~3.1		~~Incremental Amendment No. 1, dated~~Amended and Restated Bylaws of WW International, Inc. (effective as of June 14, 2020, to the Credit Agreement, dated as of November 29, 2017, among WW International, Inc., the lenders from time to time party thereto, JPMorgan Chase Bank, N.A., as the Administrative Agent and an Issuing Bank, Bank of America, N.A., as an Issuing Bank and Citibank, N.A., as an Issuing Bank (filed as Exhibit 10.1 to the Company’s Current Report on Form 8-K, as filed on June 15, 2020 (File No. 001-16769), and incorporated herein by reference)October 1, 2020).

†Exhibit ~~10.2~~10.1		Offer Letter, dated July 30, 2020, ~~Form of Term Sheet for Employee Stock Option Awards~~by and ~~2020 Form of Terms~~between WW International, Inc. and ~~Conditions for Employee Stock Option Awards.~~

~~†*Exhibit 10.3~~		~~2020 Form of Term Sheet for Employee Stock Option Awards and 2020 Form of Terms and Conditions for Employee Stock Option Awards (Chief Executive Officer Annual Equity Award).~~Amy O’Keefe.

*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,~~Amy O’Keefe, Chief Financial Officer.

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

*Exhibit 101

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

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

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

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

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

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

*Exhibit 104		The cover page from WW International, Inc.’s Quarterly Report on Form 10-Q for the quarter ended ~~June 27,~~September 26, 2020, formatted in Inline XBRL (included within the Exhibit 101 attachments).


	WW INTERNATIONAL, INC.

Date: ~~August 4,~~October 29, 2020	By:	/s/ Mindy Grossman
		Mindy Grossman
		President, Chief Executive Officer and Director (Principal Executive Officer)


Date: ~~August 4,~~October 29, 2020	By:	/s/ ~~Nicholas P. Hotchkin~~Amy O’Keefe
		~~Nicholas P. Hotchkin~~Amy O’Keefe
		Chief Financial Officer ~~Operating Officer, North America and President, Emerging Markets~~ (Principal Financial Officer)