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

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

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

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

Commitment plan revenues, prepaid workshop fees and magazine subscription revenue are recorded to deferred revenue and amortized into revenue as control is transferred over the period earned since these performance obligations are satisfied over time. Digital subscription revenues, consisting of the fees associated with subscriptions for the Company’s Digital products, including its

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

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

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

	Three Months Ended				Six Months Ended
	June 29,		June 30,		June 29,		June 30,
	2019		2018		2019		2018
Digital Subscription Revenues	$	156,969	$	151,018	$	305,824	$	289,565
Studio + Digital Fees		156,799		192,712		314,670		382,834
Service Revenues, net	$	313,768	$	343,730	$	620,494	$	672,399
Product sales and other, net		55,255		66,017		111,694		145,571
Revenues, net	$	369,023	$	409,747	$	732,188	$	817,970

	Three Months Ended June 29, 2019
	North		Continental		United
	America		Europe		Kingdom		Other		Total
Digital Subscription Revenues	$	102,851	$	43,586	$	6,993	$	3,539	$	156,969
Studio + Digital Fees		116,958		23,681		11,498		4,662		156,799
Service Revenues, net	$	219,809	$	67,267	$	18,491	$	8,201	$	313,768
Product sales and other, net		35,835		10,062		6,034		3,324		55,255
Revenues, net	$	255,644	$	77,329	$	24,525	$	11,525	$	369,023

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

	Six Months Ended June 29, 2019
	North		Continental		United
	America		Europe		Kingdom		Other		Total
Digital Subscription Revenues	$	201,611	$	83,769	$	13,411	$	7,033	$	305,824
Studio + Digital Fees		234,557		47,630		22,761		9,722		314,670
Service Revenues, net	$	436,168	$	131,399	$	36,172	$	16,755	$	620,494
Product sales and other, net		69,488		22,087		12,964		7,155		111,694
Revenues, net	$	505,656	$	153,486	$	49,136	$	23,910	$	732,188

	Six Months Ended June 30, 2018
	North		Continental		United
	America		Europe		Kingdom		Other		Total
Digital Subscription Revenues	$	193,338	$	75,503	$	13,519	$	7,205	$	289,565
Studio + Digital Fees		282,919		58,482		28,933		12,500		382,834
Service Revenues, net	$	476,257	$	133,985	$	42,452	$	19,705	$	672,399
Product sales and other, net		87,458		30,138		17,043		10,932		145,571
Revenues, net	$	563,715	$	164,123	$	59,495	$	30,637	$	817,970

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:

	Deferred		Deferred
	Revenue		Revenue-Long Term
Balance as of December 29, 2018	$	53,501	$	961
Net increase (decrease) during the period		3,422		(492	)
Balance as of June 29, 2019	$	56,923	$	469

Revenue recognized from amounts included in current deferred revenue as of December 29, 2018 was $52,507 for the six months ended June 29, 2019. The Company’s long-term deferred revenue, which is included in other liabilities on the Company’s consolidated balance sheet, had a balance of $469 at June 29, 2019 related to upfront payments received as an inducement for entering into certain sales-based royalty agreements with third party licensees. This revenue is amortized on a straight-line basis over the term of the applicable agreement.

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