WeightWatchers 2015 Annual Report Download - page 54

Tax
Our effective tax rate was 41.1% for fiscal 2015 as compared to 35.9% for fiscal 2014. This increase in effective
tax rate was driven by increases in our net tax expense in fiscal 2015 associated with an increase in Federal and state
tax reserves and the write-off of a deferred tax asset related to inventory reserves. This increase in net tax expense was
offset by a decrease in net tax expense due to the change in the valuation allowance related to tax benefits for foreign
losses that are not expected to be realized.
Net Income Attributable to the Company and Earnings Per Share
Net income attributable to the Company in fiscal 2015 reflected an $84.9 million, or 72.1%, decline from net
income attributable to the Company in fiscal 2014. Excluding the impact of foreign currency, which negatively
impacted net income attributable to the Company in fiscal 2015 by $11.0 million, net income attributable to the
Company in fiscal 2015 would have declined by 62.8% versus the prior year. Excluding the impact of restructuring
charges, expenses associated with the Winfrey Transaction and the gain on the early extinguishment of debt from fiscal
2015 and the impact of restructuring charges, the gain on the Brazil acquisition, and the China tax benefit partially
offset by the recognition of a valuation allowance from fiscal 2014, net income attributable to the Company in fiscal
2015 would have declined 66.1%, or 56.6% on a constant currency basis, from net income attributable to the Company
in fiscal 2014. This decline in net income attributable to the Company was primarily driven by the decrease in
operating income in fiscal 2015 versus the prior year.
Earnings per fully diluted share, or EPS, in fiscal 2015 was $0.56. Excluding the impact of restructuring charges,
expenses associated with the Winfrey Transaction and the gain on the early extinguishment of debt from fiscal 2015
and the impact of restructuring charges, the gain on the Brazil acquisition, and the China tax benefit partially offset by
the recognition of a valuation allowance from fiscal 2014, EPS would have been $0.67 in fiscal 2015 as compared to
$2.05 in the prior year. Foreign currency had a negative $0.19 impact on EPS in fiscal 2015. In addition, fiscal 2015
EPS was negatively impacted by $0.02 due to the increased share count resulting from Ms. Winfrey’s equity
investment in the Company and the related Winfrey Option.
Segment Results
Metrics and Business Trends
The following tables set forth key metrics by reportable segment for fiscal 2015 and the percentage change in
those metrics versus the prior year:
Fiscal 2015
GAAP Constant Currency
(in millions unless otherwise stated)
Service
Revenues
Product
Sales &
Other
Total
Revenues
Service
Revenues
Product
Sales &
Other
Total
Revenues
Total
Paid
Weeks
Incoming
Active
Base
EOP
Active
Base
(in thousands)
North America ................... $639.4 $116.0 $ 755.4 $647.0 $116.9 $ 763.9 92.6 1,617.8 1,531.5
UK............................. 87.6 37.2 124.8 94.6 40.2 134.8 17.3 277.8 263.1
CE ............................. 176.1 53.0 229.1 211.1 63.3 274.4 32.8 551.9 530.7
Other(1) ......................... 34.3 20.8 55.1 42.5 23.2 65.8 4.3 62.1 64.3
Total ........................... $937.4 $227.1 $1,164.4 $995.3 $243.6 $1,238.8 147.0 2,509.5 2,389.6
% Change Fiscal 2015 vs. Fiscal 2014
North America .................... -19.5% -24.3% -20.3% -19.1% -24.0% -19.9% -20.9% -21.7% -5.3%
UK ............................. -19.4% -22.8% -20.4% -7.9% -11.7% -9.1% -14.3% -6.6% -5.3%
CE ............................. -23.7% -22.0% -23.3% -8.4% -6.3% -7.9% -8.0% 4.4% -3.8%
Other(1) .......................... -28.6% -26.9% -27.9% -15.9% -20.9% -17.7% -11.0% -12.6% 3.7%
Total ............................ -20.7% -23.8% -21.3% -15.9% -17.8% -16.3% -17.3% -15.3% -4.8%
Note: Totals may not sum due to rounding
(1) Represents Asia Pacific and emerging markets operations and franchise revenues.
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