Company Name: Weight Watchers Intl.

Company Ticker: WTW US Date: 2012-11-05 Event Description: Q3 2012 Earnings Call

Market Cap: 2,807.13 Current PX: 50.44 YTD Change($): -4.57 YTD Change(%): -8.308

Bloomberg Estimates - EPS Current Quarter: 0.874 Current Year: 4.083 Bloomberg Estimates - Sales Current Quarter: 398.600 Current Year: 1817.833

Q3 2012 Earnings Call Company Participants

Lori Scherwin David P. Kirchhoff Nicholas P. Hotchkin

Other Participants
Glen J. Santangelo Chris Ferrara Brian Joseph Wang Bob L. Craig Peter C. Wahlstrom John A. Faucher

MANAGEMENT DISCUSSION SECTION

Operator
All participants, thank you for standing by. The conference call is ready to begin. Ladies and gentlemen, welcome to Weight Watchers International Third Quarter 2012 Earnings Teleconference Call. During the presentation, all participants will be in a listen-only mode. Afterwards, you'll be invited to participate in a question-and-answer session and instructions will be given at that time. As a reminder, this conference call is being recorded today, November 5, 20102. At this time, I'd like to turn the call over to Lori Scherwin of Weight Watchers International. Please go ahead.

Lori Scherwin
Thank you, operator, and thank you to everyone for joining us today for Weight Watchers International's third quarter 2012 conference call. With us on the call is Dave Kirchhoff, President and CEO; and Nick Hotchkin, CFO. At about 4 o'clock P.M. Eastern Time today, the company issued a press release, reporting its financial results for the third quarter of fiscal 2012. The purpose of this call is to provide investors with some further details regarding the company's financial results as well as to provide a general update on the company's progress. The press release is available on the company's corporate website located at www.weightwatchersinternational.com. Reconciliations of non-GAAP measures disclosed on this conference call to the most directly comparable GAAP financial measure are also available as part of the press release. Before we begin, let me remind everyone that this call will contain forward-looking statements. Investors should be aware that any forward-looking statements are subject to various risks and uncertainties that could cause actual results to differ materially from those discussed here today. These risk factors are explained in detail on the company's filings with the Securities and Exchange Commission. Please refer to these filings for a more detailed discussion of forward-looking statements and risks and uncertainties of such statements. All forward-looking statements are made as of today, and except as required by law, the company undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise.

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Company Name: Weight Watchers Intl. Company Ticker: WTW US Date: 2012-11-05 Event Description: Q3 2012 Earnings Call

Market Cap: 2,807.13 Current PX: 50.44 YTD Change($): -4.57 YTD Change(%): -8.308

Bloomberg Estimates - EPS Current Quarter: 0.874 Current Year: 4.083 Bloomberg Estimates - Sales Current Quarter: 398.600 Current Year: 1817.833

I would now like to turn the call over to David. Please go ahead.

David P. Kirchhoff
Good afternoon and thank you for joining us as we review Weight Watchers International's performance for the third quarter of fiscal 2012. Overall, 2012 is wrapping up very much in line with our prior guidance, with Q3 coming in somewhat better than our expectations and Q4 expected to come in somewhat below on the bottom-line because of factors we will discuss. On a constant currency basis, Q3 2012 total revenue was up 2.7% over the prior year period, with meeting fees down 2.4% and meeting product sale down 8.4% and Internet revenue growing 24%. Global combined paid weeks were up 9% in Q3 2012 versus the same period last year. Global meetings paid weeks were down 4.2% in Q3, while global paid weeks for our Online product were up 23%. For Q3 2012, our operating income margin was down 160 basis points versus the prior-year period up 30.7% to 30.7%. While gross margin was up 80 basis points versus prior to 59.4%, marketing as a percentage of revenue was up 90 basis points, primarily reflecting continued investment in driving awareness of our Weight Watchers Online product. G&A as a percentage of revenue was up 150 basis points versus prior, primarily reflecting investments in technology and staff to support our key strategic initiatives such as B2B. Q3 2012 EPS was $1.20 compared to $1.09 for the same period in 2011, benefiting from our share repurchases earlier this year. We experienced about $0.04 of unfavorable forex impact in the third quarter of this year versus prior. Before Nick reviews our financial results in greater detail, I'd like to provide additional context on our Q3 performance. Our results in our meetings business remained under pressure in our North American, U.K. markets and were more buoyant in our Continental European market. As expected, Q3 NACO attendances as a percentage were down high single-digits versus prior, while paid weeks as a percent performed somewhat better at low single-digit declines versus prior. As we noted on our last call, we're now at the tail end of our two-year innovation cycle, and we've been running our current marketing campaign for over two and a half years. On the positive side, our annual brand pricing measures during the third quarter showed continued overall strengthening of the Weight Watchers brand in key measures such as relevance, effectiveness, and modernity. However, right now, we're lacking news in either program or marketing to drive the kind of cut-through necessary for the current economic environment, particularly in the midst of an all-encompassing political campaign season. As I will discuss later, we plan to change this as we enter January 2013. The U.K. meetings results were more of a disappointment for us in Q3 but not entirely unexpected. The combination of a very difficult macroeconomic context in that country with the lack of program news and a much less effective 2012 marketing campaign has put pressure on this business all year long. Again, this changes as we enter 2013. Consistent with our expectations, our Continental European meetings business performed quite well in the third quarter, particularly given the very difficult economic conditions across Europe. Having attendance growth in positive mid single-digits and paid weeks growth in double-digits reflects the impact of program news and that program news and fresh marketing can have to help offset the effects of a retrenching consumer economy. Finally, our WeightWatchers.com business has continued in Q3 to deliver very solid double-digit revenue and volume growth versus the same period in 2011, benefiting from a strong entering active subscriber base and continued surge in growth in our CE and Canadian Internet businesses. U.S. Online recruitments were under more pressure in Q3, which was driven by the same factors that are affecting the NACO meetings business. As well, the WeightWatchers.com U.K. results have been weak for most of the year, again a reflection of a marketing campaign that's not cutting through as well as the effect of being in an off-cycle innovation year. Like the meetings business, the Weight Watchers Online business will have the benefit of a fully refreshed marketing campaign, along with the new program launch as we enter January 2013. I'd now like to turn the discussion over to Nick, who will review our financial and volume results in greater detail.

Nicholas P. Hotchkin

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Company Name: Weight Watchers Intl. Company Ticker: WTW US Date: 2012-11-05 Event Description: Q3 2012 Earnings Call

Market Cap: 2,807.13 Current PX: 50.44 YTD Change($): -4.57 YTD Change(%): -8.308

Bloomberg Estimates - EPS Current Quarter: 0.874 Current Year: 4.083 Bloomberg Estimates - Sales Current Quarter: 398.600 Current Year: 1817.833

Thanks, Dave, and good afternoon, everyone. I've had a great first two months at Weight Watchers, and I'm excited to be with an organization that has such an important mission as well as a terrific business model. Furthermore, my early days have confirmed my going-in belief that this company has a large portfolio of future growth opportunities. On to the numbers; picking up where Dave left off, let me start with WeightWatchers.com. Third quarter Internet revenues rose 22% versus the prior-year period, or 24% on a constant currency basis. Paid weeks grew 23% in Q3, with double-digit growth in the U.S. and even stronger growth in Continental Europe and Canada. As we expected, overall global recruitments in Q3 were slightly positive, driven by strength in Continental Europe and Canada, partially offset by softness elsewhere, particularly in the U.K. Among other factors, U.S. recruitments were impacted in Q3 from lapping last year's "buy-one, get-one" and other promotions that we did not repeat this year. This negatively impacted U.S. recruitment volume, but we benefited from higher price realization versus the same period in 2011. Looking forward, we remain comfortable with our current guidance of 15% to 20% second half growth in paid weeks, yielding full-year growth of 25% to 30% for WeightWatchers.com. On to the meetings business, starting with North America; total NACO revenue in Q3 2012 was down 3.3% versus the same period in fiscal 2011. This represents moderation versus the 6.4% decline we saw in the second quarter versus prior and the 9% decline in the first quarter versus prior. NACO Q3 2012 paid weeks declined 3.6%, while attendance declined 9.4% versus the prior-year period. In-meeting product sales declined 6.6% versus Q3 2011, due to lower attendance versus the prior-year quarter, partially offset by an increase in product sales per attendance, which grew 3.1% versus prior. Similar to WeightWatchers.com, Q3 volumes in NACO were negatively impacted by lapping a BOGO and another promotion that we did not repeat this year. This negatively affected recruitment but, as with WeightWatchers.com, benefited revenue per paid week versus prior. Similar to the first half, part of the weakness in NACO stemmed from the regional at-work issue that we have discussed throughout the year. Importantly, while the regional at work business was still down considerably versus Q3 2011, the business performed in line with our expectations and has stabilized, leaving us well situated for the 2013 selling season, which begins this month. Also, importantly, the strategic national accounts part of the business continues to perform very well and, while still a small part of the overall B2B business, it is growing by double-digits. Consistent with our previous guidance, we expect the full year negative impact to operating income associated with the at work issue to be about $19 million. While Q3 showed a moderation in the negative trends NACO has experienced this year, we note that the consumer backdrop has remained muted. In addition, like many other businesses, we were directly affected by Hurricane Sandy last week with significant drops in enrollment levels and attendances throughout the Northeast. While we quickly restored normal business operations across most of this critical region, we do expect certain key markets such as New Jersey and Long Island, both high-penetration markets for us, to continue to be adversely affected through the next few weeks. It is difficult to precisely estimate the impact of the hurricane, but we would anticipate a potential impact of 1.5% to 2% on attendances and paid weeks in the fourth quarter. For the fourth quarter, while we continue to expect high single-digit declines in paid weeks, we now expect low double-digit declines in attendances versus the same period in 2011. Towards the end of the quarter, we acquired our first franchise in some time, the Southeastern Ontario region in Canada for $17 million. Since the quarter end, we also purchased an additional franchise, covering part of the Adirondacks in New York and Vermont. These franchises are relatively small and will have de minimis impact on financial results for fiscal 2012. As a reminder, franchise acquisitions have always been an opportunistic use of our free cash flow as they make strategic and financial sense. Owning more of the North American meeting system gives us greater control of the brand, lets us cut back redundant back office spend, and enables us to better leverage both national marketing and the field infrastructure. For these reasons among others, franchise acquisitions tend to be accretive in the first full year following purchase. Next, the U.K. meetings business; the business continued to witness volume and revenue declines versus prior and at accelerating rates as compared to the first half of the year and our prior expectations. Third quarter paid weeks declined 12.5% versus the prior-year period, and attendances were down 17.5% versus prior. We expect further pressure in Q4,

Page 3 of 14

Company Name: Weight Watchers Intl. Company Ticker: WTW US Date: 2012-11-05 Event Description: Q3 2012 Earnings Call

Market Cap: 2,807.13 Current PX: 50.44 YTD Change($): -4.57 YTD Change(%): -8.308

Bloomberg Estimates - EPS Current Quarter: 0.874 Current Year: 4.083 Bloomberg Estimates - Sales Current Quarter: 398.600 Current Year: 1817.833

with volume down in the 20% range versus prior. Our 2012 marketing approach clearly did not meet our expectations, and we are looking forward to 2013 when the U.K. will be launching a fresh new approach which is more in line with the playbook we have employed in the U.S. and Continental Europe. We look forward to upcoming calls when we can share more details. Finally, the Continental Europe meetings business; Q3 2012 paid weeks grew 12.1% versus prior, and attendances were up 4.9% versus prior, with France and Germany leading the way on the heels of the ProPoints 2.0 innovation and ad campaigns rolled out earlier this year. We expect continued growth in Continental Europe in Q4, albeit at slower rates than in Q3. Now, to review some key financial metrics for the quarter; our other revenues, which includes franchise commissions and licensing revenue, declined 8.1% on a constant currency basis versus the same period last year. In Q3, gross margin rose 80 basis points to 59.4%, driven by a mix shift in revenues, with growth in the WeightWatchers.com business offset by weakness in the meetings business. Pressure in the meetings business remains a function of softer volumes as well as incremental expense associated with the retail upgrade; one-time expenses associated with a call center upgrade; and contraction in, in meeting product sales margin, due primarily to lower sales of enrollment products. For the full year, we now expect gross margin expansion of about 100 basis points versus prior, as compared to our earlier expectation of 100 to 150 basis points versus 2011. This is due to deceleration in fourth quarter gross margin leverage, driven by both higher costs and lower volumes. Meetings pricing, as measured by lecture income per paid week, was up about 2% on a constant currency basis or about flat on a reported basis. This had a greater impact in Q3 versus earlier in fiscal 2012 as we start to realize more benefits from the price increases taken last year, particularly in NACO and the U.S. WeightWatchers.com business. We'd note that about 60% of active NACO members are now in the higher price, and we'd expect more price realization as we look forward towards 2013. Marketing spend was up in Q3 in support of our new initiatives, namely in the WeightWatchers.com business in Continental Europe where we started TV for the first time this year. Marketing rose 8.9% versus prior on a constant currency basis and was up 90 basis points as a percent of sales. As expected, this was less of an increase than we saw in the first half of 2012, but it was also less than we thought for the quarter itself, largely due to timing which shifted roughly $4 million of marketing expense from the third quarter into the fourth quarter. As such, despite the lower-than-expected Q3 marketing expense, we continue to expect marketing to be up 300 basis points year-over-year for fiscal 2012. G&A expense as a percent of revenue rose in Q3 2012 versus prior by 150 basis points to 13.5% as we continue to invest in our growth initiatives including B2B, technology, and customer relationship management. There were also costs this quarter related to our headquarters office move next year, which we previously expected to incur in Q4. For the full year, we still expect G&A expense to be up about 100 basis points versus prior. As a result of the factors I've just discussed, our total company Q3 operating income declined 4.6%, or 2.2% on a constant currency basis, with reported OI margin down 160 basis points versus the prior-year period to 30.7%. In the quarter, foreign currency negatively impacted our total company revenue by approximately 2.1%, operating income by approximately 2.3%, and net income by approximately 2.5% versus the prior-year period, resulting in a roughly negative $0.04 impact to fully diluted EPS. We have no change in our prior expectations regarding share count, with about 56 million shares outstanding on average in the second half, leading to a full-year average count of approximately 61 million shares, driven by the tender and the related share repurchase we executed earlier this year. We also continue to expect a tax rate of 38.5% for the full year. Further, we continue to expect full year 2012 interest expense to be in the range of $85 million, inclusive of $3.5 million of incremental amortization of fees related to the share repurchase transactions. We ended the quarter with $2.4 billion of debt and $2.3 billion of net debt. Our net debt to EBITDAS ratio was 4.3 times at the end of the third quarter and we expect to finish the year at roughly 4.4 times, consistent with prior guidance. In Q3, we generated $121 million cash flow from operations. The main uses of cash included $79-million

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Company Name: Weight Watchers Intl. Company Ticker: WTW US Date: 2012-11-05 Event Description: Q3 2012 Earnings Call

Market Cap: 2,807.13 Current PX: 50.44 YTD Change($): -4.57 YTD Change(%): -8.308

Bloomberg Estimates - EPS Current Quarter: 0.874 Current Year: 4.083 Bloomberg Estimates - Sales Current Quarter: 398.600 Current Year: 1817.833

debt reduction, $16-million capital expenditure including software capitalization, $17 million for the Canadian acquisition, and $10 million in dividend payments to our shareholders. Year-to-date cash flow from operations remains strong at $301 million. Our overall priorities for cash flow remain unchanged, invest in our growth initiatives, reduce our debt levels, return cash to shareholders through our quarterly dividend, and opportunistically execute franchise acquisitions. I'll now turn this back to Dave for some concluding remarks on the outlook and our strategic priorities.

David P. Kirchhoff
Thanks, Nick. We're now in the process of wrapping 2012, a year that has been difficult from a financial and operating perspective, but also a year that has been very important in making critical progress against our long-term strategic plan. We expect to enter 2013 with a much stronger game plan than was the case in 2012, which includes the following five key highlights. One, a new global program innovation; our global and regional program development teams have been working intensely throughout the year to ready our next new major program innovation. We will be able to provide greater details and context when we begin introducing the program innovation to our current meetings members and Online subscribers in early December. Our focus, when we launched PointsPlus and ProPoints two years ago, was to create a much stronger and more future-facing nutritional platform for our members that reflected many of the advancements in nutritional science that had occurred over the previous 12 years. Given the core role that points and tracking play in the day-to-day of our members' lives, it was not surprising that this program news had particularly significant effect on both media and member buzz. Our new innovation launch for 2013 continues our efforts to fully revamp and expand our program platform, now with a much larger focus on behavior change techniques. While we do not expect this new innovation to have the same kind of enrollment impact as the 2011 PointsPlus launch, we do see it as a far more significant enhancement than what we did in January 2012. And, we view it as a critical step in the ongoing evolution of how we help our members not only to lose their weight, but also to create a real path to keep the weight off. Two, refreshed and new marketing campaigns; we will complement our program innovation launches with new and fully refreshed marketing campaigns across our major markets. The U.S. and U.K. will be launching completely new campaigns that build upon everything that worked in the previous NACO campaign. Our CE markets will take their successful current campaigns and build upon them with a range of new creative treatments, new celebrities, and other significant improvements. Over the past three years, we have aggressively invested to build our brand and to drive awareness of our Weight Watchers Online product. More recently, we have focused on gaining a stronger analytical understanding of which marketing media is performing for us and which is less optimal. With these insights, we will enter 2013 with a more optimized advertising media mix in both TV and digital, which will allow us to continue to drive customer acquisition but at a lower overall level of spend. Three, refresh the U.S. retail infrastructure; as of the end of October, we now have converted approximately 65% of the total system, and we remain on track to be about 80% through our retail upgrade for North America by December 31. We expect this initiative to be effectively 100% completed by the end of 2013. Four, revitalize B2B business. All of the issues that created the pressure on our regional small account business are now behind us. We will be entering 2013 with a segmented offering that recognizes the crucial differences in needs between our regional small accounts and our national strategic account businesses. In the small account business, we have been transitioning new accounts back to the familiar 13 and 17-week series offerings and away from monthly pass. In the strategic account business, the focus will remain on offering monthly pass from Weight Watchers Online. Throughout the year, the new B2B management team has also been completely revamping the sales and operations of this business and we will enter 2013 with some much stronger and more consistent selling capability. With the remediation efforts in the small account business behind us, we can also focus more of our attention to building the strategic accounts business which had a great year despite the many distractions to the team.

Page 5 of 14

Company Name: Weight Watchers Intl. Company Ticker: WTW US Date: 2012-11-05 Event Description: Q3 2012 Earnings Call

Market Cap: 2,807.13 Current PX: 50.44 YTD Change($): -4.57 YTD Change(%): -8.308

Bloomberg Estimates - EPS Current Quarter: 0.874 Current Year: 4.083 Bloomberg Estimates - Sales Current Quarter: 398.600 Current Year: 1817.833

Five, continued investment in our WeightWatchers.com business; much of 2012 has been focused on rolling out the full toolkit of web and mobile apps across our major geographies as the WeightWatchers.com business outside the U.S. has become increasingly important to us, both from a top line and bottom-line perspective. As well, the team has been working hard to ready the Weight Watchers Online product to have full functionality to support the new program launch, which will create even greater differentiation from the much narrower competitive applications currently available in either web or mobile platforms. The unique selling proposition of the online product is that it builds upon the proven and trusted Weight Watchers brand and program and makes them more engaging through useful tools and technology. We will look to aggressively press that advantage in the marketplace next year. As is typical for this time of the year, we're still in our budgeting process, and we will not be in a position to provide earnings guidance for 2013 until we release our Q4 results in February. That said, I would like to provide some key thoughts and considerations for next year. One, starting customer base; we expect our meetings business membership base to enter 2013 about 10% smaller than was the case when we entered fiscal 2012. For context, we would need to drive roughly 10% enrollment growth for the year, a substantial turnaround from the trends we experienced in 2012, for us to get to flat versus prior on meetings paid weeks for the full year 2013. On the positive side, we expect to benefit by entering 2013 with an Online subscriber base that is about 15% larger than was the case last year. Two, new programming campaigns versus macro economy and competition; we're not anticipating any tailwinds from the consumer economy in North America for 2013, and we expect conditions in Europe and the U.K. to be the same or worse than 2012. As well, we recognize that in an environment where there is pressure on consumer discretionary spend that the proliferation of so-called free apps has the potential to create additional pressure on our ability to recruit new people. Our plan is to overcome these challenges with major program improvements as well as new marketing campaigns that allow us to rise above the clutter and noise and to create further differentiation in our offering versus other alternatives. Three, efficiencies versus investments; as noted, we expect to see significant improvements in our marketing efficiency in 2013 versus 2012. This will be somewhat offset by the impact of higher costs resulting from initiatives such as B2B as well as the depreciation and amortization associated with our retail rollout and systems investments among other factors. Our B2B investments will be focused on people and technology as we continue to build this platform. Given macro health trends and the need for prevention, the long-term context for Weight Watchers is only going to get stronger. Clinical evidence continues to pile up that shows over and over the inherent strength of Weight Watchers to deliver medically significant weight loss cost effectively in its scale. The most recent example of this was featured in the Journal of Obesity in which an NIH-funded study researchers were surprised to discover that Weight Watchers was at least as good, if not better, than the significantly more expensive behavior modification program delivered in an academic clinical setting, previously considered the gold standard of lifestyle-based weight loss treatments. This adds to the high-profile research featured last year in the Lancet and British Medical Journal. All of these studies show the same underlying driver of our success. We are unmatched in our ability to keep customers engaged in a behavior change process for long periods of time. Weight loss effectiveness is purely a function of combining a sustainable program with continued engagement so that new habits and patterns have time to set in. Nobody comes close to us in accomplishing this. We will be even better at this next year when we further integrate our new state-of-the-art program with a combination of group support, website, activity monitors, apps and other tools to help people stay actively engaged and on track. We believe that this comprehensive value proposition gives us a decisive advantage over any competitive offering. We will further leverage these advantages in both the B2C and B2B context. Guidance; overall, our 2012 outlook is essentially in line with our expectations, though with some puts and takes across the quarters. Based on the specifics of our outlook that Nick discussed, we're narrowing our guidance for 2012 full year EPS to be between $4.00 and $4.10 versus a range of $4.00 to $4.20 previously provided. This range includes about $0.05 from incremental investment costs not included in previous guidance as well as $0.02 to $0.03 from projected negative impact from Hurricane Sandy. The actions that make up these incremental $0.05 include, one, the acceleration of the transition to a new call center that will be up and running, with improved customer service capability ahead of

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Company Name: Weight Watchers Intl. Company Ticker: WTW US Date: 2012-11-05 Event Description: Q3 2012 Earnings Call

Market Cap: 2,807.13 Current PX: 50.44 YTD Change($): -4.57 YTD Change(%): -8.308

Bloomberg Estimates - EPS Current Quarter: 0.874 Current Year: 4.083 Bloomberg Estimates - Sales Current Quarter: 398.600 Current Year: 1817.833

our program innovation; and two, our decision to air a different combination of ads at the tail end of Q4 versus our original plan, which will result in the pull-forward of certain advertising production costs into 2012. Finally, I want to mention that we're planning on holding an Investors Day in the first half of next year, where we will be focusing on our long-term strategic plans and milestones. At this time, operator, I would like to take questions.

Q&A
Operator
Thank you. We'll now take questions from the telephone lines. [Operator Instructions] The first question is from Glen Santangelo from Credit Suisse. Please go ahead. <Q - Glen J. Santangelo>: Yeah, thanks. And, good evening. David, I just want to talk to you about the situation in the U.K. Clearly, it continues to be a challenge for the company. I'm curious in getting your perspective. What do you think you can do to correct the situation there? Obviously, they had a less-than-effective marketing campaign. But, when you look at Continental Europe, it continues to do well, particularly on a growth perspective. And, as I think about those economic climates as being relatively similar, which could be a false assumption, I'm just curious as to why the problems are so centric in the U.K. <A - David P. Kirchhoff>: Yeah. We would actually have the same point of view in terms of comparability of macroeconomic context between the U.K. and CE. Really the difference you're seeing is that in the case of CE they're executing much more consistently against their marketing playbook. And, the gap is pretty significant right now versus what we have currently in the U.K. And, furthermore, they did a better job I think of pushing out program news and the program news was relatively more significant for them; whereas, the U.K. did not have as nearly a significant program news in 2012. And, I think the significance of that is something that we've seen pretty consistently during this difficult economic climate is that across our markets, when we have compelling advertising and news program and service news, we're able to break free of the macroeconomic context, consumer confidence trends, et cetera, and drive results that separate. Whereas, when we're relatively more quiet in terms of the impact of that our marketing programs are happening as well as the lack of program news, we find that we end up getting pulled down by the economy almost at a disproportionate rate. I think the implication for that is a few-fold. First off, for me what it suggests is that, from here on out, our operating assumption needs to be that every single year across our major markets we need meaningful program news or meaningful news in either program, technology, and/or service. The second thing it means is that we have to execute very consistently against our marketing playbook in each one of our major countries and whatever we have out there has to feel fresh and sharp to drive people's imagination, inspiration, everything else. We didn't have that in the U.K.; you see the impact on the business. We did have it in CE; you see the impact on that business. <Q - Glen J. Santangelo>: Thanks for that. If I could just ask one follow-up; I did want to talk to you about the investment policy in Q4. Sounds like you're spending a nickel in Q4 and I think if I heard you just correctly in your closing remarks that's going to be a new call center and the decision to run some new TV ads in December and so you're pulling some costs forward. Where's that call center? Is it in the U.S. and or is it in Europe? And, then secondly, as you think about these new marketing campaigns and product rollouts for January 1, should we expect to see those in the next couple of weeks? And, any elaboration on what we should expect would be helpful. <A - David P. Kirchhoff>: Absolutely. The call center that I referenced is specifically in the U.S. and it represents a change of we outsource our call center, and we're changing over call center vendors to someone with a capability set that we think is going to be much more robust for us going forward across both our B2C and B2B businesses. So, it was an important step for us to take. But, it had a series of one-time costs associated with the transition to the tune of about $3 million and we made the decision to try to pull that into 2012 so that we'd be up and running with it as we entered the January weight loss season. So that's really a cost that otherwise would have been borne in 2013; we made the decision to pull into 2012. On the advertising, what you typically see with us well, first off, the program launches

Page 7 of 14

Company Name: Weight Watchers Intl. Company Ticker: WTW US Date: 2012-11-05 Event Description: Q3 2012 Earnings Call

Market Cap: 2,807.13 Current PX: 50.44 YTD Change($): -4.57 YTD Change(%): -8.308

Bloomberg Estimates - EPS Current Quarter: 0.874 Current Year: 4.083 Bloomberg Estimates - Sales Current Quarter: 398.600 Current Year: 1817.833

as you might have as you heard me reference, we're going to be entering what we refer to as the soft launch phase in the beginning of December in most of our major markets. That's where we have a chance to share it with the people that are still attending our meetings during the relatively slow holiday season. It gives our service providers a chance to get more comfortable delivering the new program in a live context, if you will, so that they can get their sea legs as we enter into the January campaign where things tend to get a little bit crazy. So that's going to be happening in the beginning of December. In terms of the advertising, most of those spots or virtually all those spots will be happening after Christmas. However, depending on the lineup of spots we choose to use, the second we make a decision to air it for even just one day in 2012 we have to pick up all of that production cost. So, what that really does is it's pulling forward advertising production cost that we had thought was going to end up in 2013 and it's pulling it into 2012. And so, really, in terms of the overall economics of the business, it's none of these things are meaningful. It's really timing shifts between Q1 2013 versus Q4 2012. <Q - Glen J. Santangelo>: Okay. Thank you.

Operator
Thank you. Your next question is from Chris Ferrara of Bank of America. Please go ahead. <Q - Chris Ferrara>: Hi, thanks. How are you guys? <A - David P. Kirchhoff>: Good, Chris. How are you doing? <A - Nicholas P. Hotchkin>: Good, Chris. <Q - Chris Ferrara>: Okay. I just wanted to talk about the 10% enrollment growth that you need to go positive in meetings, right, in a year that understanding enrollments this year in January were better than they were every year but 2011. That said, right, when you have Jessica Simpson lined up and new products news that you're saying is fundamentally different, maybe not the buzz, why is 10% enrollment growth such a difficult bogie to match? <A - David P. Kirchhoff>: Well, here's the context I would put it in, is that we did much better than that for the vast majority of 2011 versus 2010. So, to your point, it's not as though we've never seen it before. However, I think that if we're just trying to provide context. It's coming across a year that's relatively softer. I'm not in a position right now, obviously, to speculate on exactly where we think our volume is going to be as we go into next year, other than to just try to temper and at least give some context for people to think about it as they think about trying to model our business for next year on what would be required for us to hit different milestones from a volume perspective. <Q - Chris Ferrara>: Yeah. I'm trying to figure it out, though. So, you're saying there is no message in that. You're just providing context but you really have no idea whether you can do the.... <A - David P. Kirchhoff>: Yeah. No, to your point, we're not actually there is no hidden message where we're trying to guide people toward any sort of volume growth assumptions next year. What we thought would be helpful was that for those folks that were modeling is to just give them a sense of what would be effectively the break-even, if you will, for that we would have to achieve, in other words, to hit flat paid weeks of 2013 versus 2012 given that we're going to be starting the year 10% lower. And, then from that, you can do your own extrapolation in terms of what you think is reasonable and use that to basically then drive into the amount of paid weeks per volume growth you might expect to see for us next year. <Q - Chris Ferrara>: Okay. And, putting context around this product launch, right, so you're if hear what you're saying, you don't expect it to have the buzz obviously that a PointsPlus did, but you're saying it's a fundamental modification. I know you're not in a position to talk details around it but why can you talk a little bit about the nature of why it wouldn't generate buzz like a PointsPlus would have?

Page 8 of 14

Company Name: Weight Watchers Intl. Company Ticker: WTW US Date: 2012-11-05 Event Description: Q3 2012 Earnings Call

Market Cap: 2,807.13 Current PX: 50.44 YTD Change($): -4.57 YTD Change(%): -8.308

Bloomberg Estimates - EPS Current Quarter: 0.874 Current Year: 4.083 Bloomberg Estimates - Sales Current Quarter: 398.600 Current Year: 1817.833

<A - David P. Kirchhoff>: Well, I think the thing about PointsPlus is that it was really a in the world of Weight Watchers and Weight Watchers members, changing the formula is a really big deal and it tends to create a lot of commotion, mostly positive, some frustration because people get frustrated about having to change programs. But, in general, it's creating an enormous amount of conversation, to the extent that it was apparently worthy of Page 1 coverage in the New York Times. I love, love, love this new program that we're going to be launching. I think it's hugely important to us. I think it's a really critical step for us to take as an organization. But, I don't expect it to have that same buzz-worthiness that a once-every-10-to-12-year change in the points formula will have that's based mostly on intuition. But, I think what I would point out is that when we launched PointsPlus we didn't launch it because we thought it was going to blow the doors off in terms of buzz and January enrollments and all these types of things; we did it because we felt that it was the right thing to do because it was a better nutritional platform for us going forward. Our new program that we're going to launch, we're doing it not because we think it's going to generate huge buzz or enrollments in January, but rather because we feel that it is a better platform for helping people not just lose weight but keep it off. Therefore, it's the right thing to do. Now, it's up to us to try to find ways of making as much noise around that as possible. The messaging for it I think it's just it's inherently more nuanced than the messaging of "oh my gosh, they changed the points formula." So that's why I would temper a little bit. But, what I would say is, to me, it is a much more significant change versus what we did in 2012. <Q - Chris Ferrara>: Okay. That's great. I appreciate the color. And, just on marketing, it sounds like using the word efficiency for 2013, does that mean is marketing going to come down in 2013 on a preliminary basis? <A - David P. Kirchhoff>: Yes. That's pretty much what we said. So, you weren't imagining that. But, here let me put a little bit more context around that. I think the thing is that, if you look at where we spend money, it is primarily in television and digital. And, within digital, you have banner campaigns, you've got search, you've got affiliate programs, you've got eCRM, you've got social media, you have all these things. And, effectively, what the trick is in thinking about direct response marketing and optimizing cost per acquisition. Effectively, what the marketers have to try to do is come up with an attribution model, if you will, where they give credit to different placements for driving customer acquisitions, enrollments, online subscription, those types of things. We've been in the market in a very big way and in and particularly over the past two years, what we have now been able to do with the data set that we've accumulated, we're able to look backwards, do a lot of statistical and other types of analysis to come to some judgments on which aspects of those overall programs digital and television that we think are delivering the best bang for the buck and which do we think are going to be less efficient and basically re-jigger the mix, if you will, so that we can drive towards more efficient CPAs which would allow us to continue driving volume in the business, but doing at a lower level spend. <Q - Chris Ferrara>: Got it. Thank you.

Operator
Thank you. Our next question is from Brian Wang of Barclays. Please go ahead. <Q - Brian Joseph Wang>: Great. Thank you. Just a quick follow-up on some of the last points that were made; just on the 10% enrollment growth necessary next year that you discussed, can you just talk a little bit about obviously, the small accounts business is down a lot, especially in the beginning of the year last year. Wouldn't that at least partially make up for, if you could get obviously, under the assumption you get a lot of that back, wouldn't that make up for a lot of the that 10% growth necessary? <A - David P. Kirchhoff>: Well, I think, Brian, what you're obviously going to spend some time going through with the benefit of this call and this transcript is you'll be going through some of your own modeling efforts in trying to piece together some of those data pieces. Certainly, as you heard me reference, having the a lot of the execution issues for the small accounts business behind us gives us an opportunity to start of 2013 in a much better place. I think, when you model out and look at the entirety of what 10% means across the entire NACO business, you would probably come to the conclusion that fixing what we did in the at work business just on its own would not be nearly enough to

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Company Name: Weight Watchers Intl. Company Ticker: WTW US Date: 2012-11-05 Event Description: Q3 2012 Earnings Call

Market Cap: 2,807.13 Current PX: 50.44 YTD Change($): -4.57 YTD Change(%): -8.308

Bloomberg Estimates - EPS Current Quarter: 0.874 Current Year: 4.083 Bloomberg Estimates - Sales Current Quarter: 398.600 Current Year: 1817.833

make up for what you'd have to do to get to that 10% enrollment growth. Given that historically one way to maybe dimensionalize is that historically the at work business has been about 12% of our North American attendances. This year because the issues it's down to closer to, say, 10%. So, reverting that back, you can imagine how that doesn't get you nearly all the way there. <Q - Brian Joseph Wang>: That's fair. And, then just on the new call center, obviously, you said you've pulled it forward into 4Q. Do you have just the timing on the potential opening for that just to I'm assuming you built in a cushion little bit of a cushion to make sure that it's up and running and fully functional before, obviously, you hit the most important time of the year. <A - David P. Kirchhoff>: Yes. There's a really robust plan in place that will don't make me go through all the details of it but there's a really robust plan in place in the transition across the two vendors to make sure that we handle that in a single swipe. But, we're very tuned into the fact that, whatever happens, we need to be bulletproof as we go into January 1. <Q - Brian Joseph Wang>: Great. And, then just one final one on the obviously, you made these a couple of small franchise acquisitions this quarter and even since the last quarter. Does that mean I think it's been a few years since you made one prior to that. Is it something that you find more attractive? I know a lot of the international franchise licenses are still out there. Have you looked at using some of the cash flow for that? <A - Nicholas P. Hotchkin>: Look thanks, Brian. It's Nick. Great question. Look, we've found franchise acquisitions consistently attractive from a strategic and a financial standpoint. The field infrastructure synergies, for example, the back office synergies and G&A savings too, all make them accretive in the first full year of operations. So, it's an opportunistic play for us. In terms of other opportunities going forward, of course, it depends more on franchisees' willingness to sell than anything else. And that tends to be impacted as much by family financial planning than anything else. Are folks potentially more interested in selling in a year like 2012 versus a banner year at 2011? Maybe but, bottom line, we like them. We'll continue to pursue them opportunistically. <Q - Brian Joseph Wang>: Great. Thank you.

Operator
Thank you. The next question is from Bob Craig, Stifel, Nicolaus. Please go ahead. <Q - Bob L. Craig>: Good evening, everybody. <A - David P. Kirchhoff>: Hi, Bob. <Q - Bob L. Craig>: David, are you at all concerned that the early launch using Jessica Simpson stole any thunder form early next year's marketing campaigns? <A - David P. Kirchhoff>: No. One of the things, when you work with Jessica who by the way is doing great is that whether we put her on advertising or not, she's in the public eye. So and I think the good news for us is that she's having good success. And so, right now the public eye is favorable. But, it's she is given how high profile she is, I think there's only so much we can do on that front. But, she has been doing great on the program. We're so thrilled with the success that she's having. We think that there is a great partnership to be had that we're going to be actively pursuing and building with her as well as continuing to work with other folks such as Jennifer Hudson, Charles Barkley, et cetera. So, I think from our point of view we're really happy with the amount of material that we have to work going into our 2013 campaigns. <Q - Bob L. Craig>: Okay. David, I think in the past you've mentioned some internal gating or limiting factors in building the large corporate business, things like the data mining capability, et cetera. Where do you stand in that regard now?

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Company Name: Weight Watchers Intl. Company Ticker: WTW US Date: 2012-11-05 Event Description: Q3 2012 Earnings Call

Market Cap: 2,807.13 Current PX: 50.44 YTD Change($): -4.57 YTD Change(%): -8.308

Bloomberg Estimates - EPS Current Quarter: 0.874 Current Year: 4.083 Bloomberg Estimates - Sales Current Quarter: 398.600 Current Year: 1817.833

<A - David P. Kirchhoff>: We're continuing to make great progress against it and understanding and appreciating the importance of that question, this is one of the reasons why we felt that it would be helpful and useful for us to have a good solid Investor Day in the first half of next year because that would really allow us a chance to lay out the B2B and healthcare strategy by way of example in all its glory, including all the key milestones and everything else, in terms of what needs to be in place when, how much investment do we think is going to needed to get there, and what does success ultimately look like as well as providing something that I think the investment community has been looking for, for a long time, which is a long-term perspective on what to look for from this company from a top and bottom-line growth perspective. So, let me defer most of the specifics of it to that. And, above and beyond that, what I would say is that we've been making great progress this year in terms of developing the underlying customer database infrastructure, putting on the CRM tools, business intelligence, everything else. Really, the next frontier for us in terms of data mining is going to be pushing out data capture into our at work meetings and into our what we call our traveler meetings, which would be Weight Watchers meetings that are happening in say church, synagogue, community center, things like that. We're already getting real-time data pulled in from our Weight Watchers centers. Once we have enough critical mass and data being brought in across, it really does significantly enhance our ability of them providing real-time reporting back to our corporate clients. So, we're making good progress against that and it's worked. It's obviously, going to be taking us well into 2013. <Q - Bob L. Craig>: Okay, great. Last one from me; any early read on investment spending levels in 2013? What I'm really trying to get to is the swing factor. I think on the last call you mentioned $39 million in 2012 versus $20 million in 2011. Any gauge on 2013 at this point? <A - David P. Kirchhoff>: I think and I'll ask Nick to give me a backup on this just to provide context, which is a lot we've been doing a lot of CapEx this year with the regional rollout. So that's been a fair bit of capital that we've been deploying, going from 20% to probably by the end of this year 80% complete with the North American retail network. Therefore, going from 80% to 100% would presumably be less. The flipside is that we're going to be ramping up a little bit investment behind technology, so that's the data capture and all that kind of stuff. And so, there's going to be some puts and takes. But I think what you're seeing is that we had a slug of CapEx that was associated with putting in ERP, doing a corporate-wide Oracle initiative over a series of years that's largely now behind us. 2011 and 2012 became significantly driven by capital requirement became driven by our efforts around the retail rollout. Then that starts to wind down and then going forward, the capital expenditures becomes much more focused around technology and data capture. <Q - Bob L. Craig>: Okay.... <A - Nicholas P. Hotchkin>: Look, Dave, I think that's very fair. In terms of CapEx, the uptick this year was driven by the items Dave mentioned. Going-forward assumption right now, obviously, pending the finalization of our plan, I wouldn't expect CapEx to be markedly different next year, less spend on retail transformation. But, of course, we've got the build-out of our new headquarters coming into CapEx too. In terms of the initiative spend, yeah, look, we've previously talked about $39 million and $20 million incremental for this year. Given the call center expenditure, that's more like $42 million total and $23 million incremental versus 2011 for this year. And, we'll be finalizing the 2013 plan in the next couple of months. <Q - Bob L. Craig>: Great. Thanks for the color.

Operator
Thank you. The next question is from Peter Wahlstrom of Morningstar Investment Research. Please go ahead. <Q - Peter C. Wahlstrom>: Good afternoon. Thanks for taking my question. <A - David P. Kirchhoff>: Sure.

Page 11 of 14

Company Name: Weight Watchers Intl. Company Ticker: WTW US Date: 2012-11-05 Event Description: Q3 2012 Earnings Call

Market Cap: 2,807.13 Current PX: 50.44 YTD Change($): -4.57 YTD Change(%): -8.308

Bloomberg Estimates - EPS Current Quarter: 0.874 Current Year: 4.083 Bloomberg Estimates - Sales Current Quarter: 398.600 Current Year: 1817.833

<Q - Peter C. Wahlstrom>: Now that you've cycled through last September's price increase for Online in the U.S. and roughly, what, 60% of people are on the new pricing strategy, have you identified any pushback from former subscribers who are looking to rejoin? And, then maybe taking a step back, assuming that that message isn't overly received as a negative, is there a case against doing that, raising prices again in 2013, particularly as you're adding new features to Online? <A - David P. Kirchhoff>: So, just a couple of points of clarification. First off, monthly pass is at about 60% and that price increase went in at the beginning of December last year. The Weight Watchers Online price increase went in closer to, say, September of last year, if memory serves. So, Weight Watchers Online is now close to 70% of the customer base in the U.S. is at the higher price point versus, say, 60% for monthly pass. So that's just more housekeeping, if you will. I think the important thing from our point of view is that, despite the price increases, we haven't seen any negative impact on retention at all, which is where we would've expected to see some of the blowback if there was going to be blowback. So that leads us to believe that it's not likely an issue. And, then particularly with Weight Watchers Online, you're going from $17.95 to $18.95. I'm not sure that the psychology around that would be that compelling. In some respects, I think it was a bigger deal for us to go from $39.95 to $42.95 on the meeting side, even though it's still less than $10 a week and we still advertise it that way. But, I think what happens when you do and in the case of monthly pass, we hadn't touched pricing since 2006. That's almost six years, so it was time. In the case of Weight Watchers Online, we've added great functionality, everything else. We've been able to raise price successfully a number of times over the past. But, right now, we certainly haven't announced any plans or any indications of touching pricing in 2013. <Q - Peter C. Wahlstrom>: Okay. And, then as a quick follow-up, obviously, you've done quite well in the Online space. Have you also continued to see momentum in signing up men? I know that, from what I recall, roughly 15% of your new signups were from men. You're seeing still continued improvement in this population? <A - David P. Kirchhoff>: What's been encouraging for us this year is that, to your point, historically men, for example, in Weight Watchers Online were about 8% to 9% of total mix. This year it has been in the low mid-teens throughout the majority of this year. What's been encouraging is that even when we've gone off air and some time after being off air with the men's campaign is that we've seen that percentage of mix hold up pretty nicely. And so, I don't have any doubt that we've made great progress this year in terms of materially shifting the male consumer's perception that Weight Watchers has a viable option for them. And so, from our point of view, the efforts that we've placed around advertising to men over the past 18 months, I would qualify as being highly successful in terms of shifting the brand. <Q - Peter C. Wahlstrom>: Okay. Thank you.

Operator
Thank you. The next question is from John Faucher of JPMorgan. Please go ahead. <Q - John A. Faucher>: Yes, thanks. Two questions here; the first is it seemed as though there was a slight change in tone in terms of your discussion of the free app issue. Is this something where you've seen something going on in the market where you've got a heightened level of concern here? And, then the second is, as we look at the marketing spending discussion, I'm assuming it sounds like marketing is going to be down on a dollar basis, which would obviously put it down as a percentage of sales, so obviously a pretty nice benefit from an operating leverage standpoint. Is there anything that you can see now that's going to work in the other direction, something that's going to put a little bit of negative pressure in terms of your operating leverage for next year? Thanks. <A - David P. Kirchhoff>: So, on the first question on apps, part of the reason I wanted to proactively bring it up was just because it's been a constant part of conversation and dialogue with the investment community and I wanted to basically be responsive to it. Here's my take on apps is that they're they have, obviously, been out there for some period of time. Lots of people are downloading free apps. They're all over the place. There is lots of companies developing free apps. It's like ten guys and a box of pizza and you have a free app. What I've seen, and I've spent a lot

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Company Name: Weight Watchers Intl. Company Ticker: WTW US Date: 2012-11-05 Event Description: Q3 2012 Earnings Call

Market Cap: 2,807.13 Current PX: 50.44 YTD Change($): -4.57 YTD Change(%): -8.308

Bloomberg Estimates - EPS Current Quarter: 0.874 Current Year: 4.083 Bloomberg Estimates - Sales Current Quarter: 398.600 Current Year: 1817.833

of time like looking closely at them, going out to technology conferences where I've met the people that are running these companies, nice guys, hard workers. I think there's a couple of issues. First off, there's really not a business model to be found among any of these companies, which I think begs a question of sustainability over the long term. Secondly, frankly, the bigger issue that I see with free apps is an issue that has been vexing across the app space within the broader healthcare area was that you'll hear a lot of people in healthcare complaining about underneath their breath sometimes and sometimes not underneath their breath, which is people download an app and use it for two weeks and then put it away. And, the problem that I see with apps is that they're effectively calorie counters and they are applications that make counting calories a little bit easier, but they're not based on an actual program. They're not based on a lot of behavior mod science. There's really not that much there. And, I believe that, therefore, from our point of view we take every competitive challenge seriously. But, from our point of view, I think given what we have going for us and going into next year, we believe that we're going to have a value proposition that is nowhere even close to being in the same place as a lot of these applications, which were much more narrowly defined. But, we haven't seen anything different this month versus what we saw six months ago, to answer your question directly. The second question in terms of puts and takes is you probably heard me reference during my call; while the attention is on the cost savings in terms of getting better operating leverage by having a more efficient marketing mix, we are cognizant of the fact that at the same time on the G&A line you're going to see more D&A flowing through both G&A and gross margin actually related to the retail rollout as well as amortization of investments we've made in systems with customer data capture, these types of things. And, then finally, we've been building up this effectively this business unit this B2B business unit, which is sales folks, operations folks, people like that. We're effectively incubating it within our organization. And so, it has all the costs associated with it. So, effectively from a operating leverage trade-off, you're trading off improved efficiencies on marketing versus investments that show up a little bit in gross margin and show up more in G&A. <Q - John A. Faucher>: Okay. Thank you.

Operator
Thank you. [Operator Instructions] You have a follow-up from Chris Ferrara of Bank of America. Please go ahead. <Q - Chris Ferrara>: Hey. Thanks for taking it. Just wanted to ask about the so the paid weeks per attendee continue to climb, like, they're running up at a decent clip, mid to high single-digits. Does that suggest that do you see increased penetration of monthly passes? Why would the paid weeks per attendee continue to be climbing right now in North America and in most places actually? <A - David P. Kirchhoff>: Particularly, if you look at the last quarter in Q3, I think there's a couple of things I'd call out. Yes, monthly pass penetration is doing well. The second thing I'd call out is that due to some vagaries of the shift in the at work business from series to monthly pass, that has changed some of the mathematical dynamics between attendance and paid weeks levels in a way that doesn't suggest any kind of significant underlying business dynamics but is more just a function of the math of how attendances work versus paid weeks, depending on the product that you're deploying. And, then secondly, I think you could reasonably infer, if you've had a relatively softer enrollment period so, for example, when we chose not to run the BOGO promotion and a couple of other things, to the extent that that created any kind of downward pressure on enrollments for NACO during that campaign period, what that means is that effectively your membership base at that point in time is relatively "older", i.e., people further into the tenure of their membership. And, those types of vagaries can result in periodic separations between attendances and paid weeks. But, I think most importantly if you look at the propensity of someone to attend a meeting at a comparable tenure so, say for example, someone who is in their second month of Monthly Pass, are they more or less likely to attend a meeting today than was the case a year ago? What you find is that the likelihood of attending a meeting is very similar

Page 13 of 14

Company Name: Weight Watchers Intl. Company Ticker: WTW US Date: 2012-11-05 Event Description: Q3 2012 Earnings Call

Market Cap: 2,807.13 Current PX: 50.44 YTD Change($): -4.57 YTD Change(%): -8.308

Bloomberg Estimates - EPS Current Quarter: 0.874 Current Year: 4.083 Bloomberg Estimates - Sales Current Quarter: 398.600 Current Year: 1817.833

to what it was a year ago and it has more to do with some of the transitional things you sometimes see that can cause periodic disconnects between attendances and paid weeks, which is why we focus on paid weeks as the critical measure of volume. <Q - Chris Ferrara>: Got it. Thank you. And, just one last one, I promise. The rate of growth in a dotcom business in the U.S. versus elsewhere, I know you I think you quoted double-digit growth in both. But, how wide is that gap and will the U.S. be up double-digits in 2013 do you think? <A - David P. Kirchhoff>: Well, let me not speculate on 2013 explicitly, but let me talk a little bit about the dynamics that affected signups for Weight Watchers Online in the U.S. in 2011 and 2012. And, I think what you have is a confluence of a couple of events. On one hand, you have a structural shift which is increasing awareness of Weight Watchers Online in a U.S. context that's been driven by continued successful efforts around marketing to drive awareness that, in fact, there is a way of doing Weight Watchers that is purely online. And that, I think, is much at stake it's much in play right now and it's as successful as it's ever been right now, as was the case in 2011. In 2011, what you also had is on top of that you had the benefit of a huge program launch and a relatively, at the time, fresher advertising campaign that gave that added benefit in 2011. So, the fact that sign-up growth rates in 2012 have been comparable to those in 2011, I actually view as very good news given the size of the comp. And, then when I look forward to 2013 and I think about what we're going to have going for us is that we will have program news, we will have new advertising campaigns for Weight Watchers Online so that those things should be net pluses for us as we think about that business next year. <Q - Chris Ferrara>: Got it. Thanks for being patient with me. <A - David P. Kirchhoff>: Absolutely.

Operator
Thank you, Mr. Kirchhoff, you have no further questions. Please go ahead, sir.

David P. Kirchhoff
Thanks. In closing, I'd like to thank the entire Weight Watchers team, many of whom are listening on the call, for a solid Q3 performance. I'm excited about the impact of our global program innovation and our marketing strategies we'll have in 2013. Thanks for joining us today, and I look forward to speaking with you again at our next quarterly earnings release.

Operator
Thank you. The conference call has now ended. Please disconnect your lines at this time. Thank you for your participation. This transcript may not be 100 percent accurate and may contain misspellings and other inaccuracies. This transcript is provided "as is", without express or implied warranties of any kind. Bloomberg retains all rights to this transcript and provides it solely for your personal, non-commercial use. Bloomberg, its suppliers and third-party agents shall have no liability for errors in this transcript or for lost profits, losses, or direct, indirect, incidental, consequential, special or punitive damages in connection with the furnishing, performance or use of such transcript. Neither the information nor any opinion expressed in this transcript constitutes a solicitation of the purchase or sale of securities or commodities. Any opinion expressed in the transcript does not necessarily reflect the views of Bloomberg LP. COPYRIGHT 2012, BLOOMBERG LP. All rights reserved. Any reproduction, redistribution or retransmission is expressly prohibited.

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