10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C.  20549

FORM 10-Q

[X]  Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the Quarterly Period Ended June 30, 2018

or

[ ]  Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the transition period from _____  to _____

Commission file number 000-19364

TIVITY HEALTH, INC.

(Exact name of registrant as specified in its charter)

Delaware	62-1117144
(State or other jurisdiction of	(I.R.S. Employer
incorporation or organization)	Identification No.)

701 Cool Springs Boulevard, Franklin, TN  37067

(Address of principal executive offices) (Zip code)

(615) 614-4929

(Registrant's telephone number, including area code)

(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, or 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.

Large accelerated filer	☒	Accelerated filer	☐	Smaller reporting company	☐
Non-accelerated filer	☐	(Do not check if a smaller reporting company)		Emerging growth company	☐

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 Act).

Yes ☐ No ☒

As of July 31, 2018, there were outstanding 40,006,661 shares of the registrant’s common stock, par value $.001 per share (“common stock”).

Tivity Health, Inc.

Form 10-Q

Table of Contents

			Page
PartI
	Item 1.	Financial Statements	3
	Item 2.	Management's Discussion andAnalysisof Financial Conditionand Results of Operations	21
	Item 3.	Quantitative and Qualitative Disclosures About Market Risk	29
	Item 4.	ControlsandProcedures	29
Part II
	Item 1.	Legal Proceedings	30
	Item 1A.	Risk Factors	30
	Item 6.	Exhibits	31

2

PARTI

Item 1. Financial Statements

TIVITY HEALTH, INC.

CONSOLIDATED BALANCE SHEETS

(In thousands)

(Unaudited)

ASSETS

	June 30, 2018			December 31, 2017
Current assets:
Cash and cash equivalents	$	66,995		$	28,440
Accounts receivable, net		68,762			55,113
Prepaid expenses		4,249			3,444
Other current assets		4,746			2,180
Cash convertible notes hedges		141,246			134,079
Income taxes receivable		636			39
Total current assets		286,634			223,295
Property and equipment:
Leasehold improvements		10,396			10,384
Computer equipment and related software		22,330			19,508
Furniture and office equipment		8,193			8,194
Capital projects in process		2,649			1,105
		43,568			39,191
Less accumulated depreciation		(30,791	)		(28,533	)
		12,777			10,658
Other assets		26,069			13,315
Long-term deferred tax asset		9,912			25,166
Intangible assets, net		29,049			29,049
Goodwill, net		334,680			334,680
Total assets	$	699,121		$	636,163

See accompanying notes to the consolidated financial statements.

3

TIVITY HEALTH, INC.

CONSOLIDATED BALANCE SHEETS

(In thousands, except share and per share data)

(Unaudited)

LIABILITIES AND STOCKHOLDERS’ EQUITY

	June 30, 2018			December 31, 2017
Current liabilities:
Accounts payable	$	26,622		$	26,804
Accrued salaries and benefits		5,993			15,018
Accrued liabilities		41,762			33,527
Other current liabilities		3,792			984
Cash conversion derivative		141,246			134,079
Current portion of debt		150,007			145,959
Current portion of long-term liabilities		2,244			2,262
Total current liabilities		371,666			358,633
Other long-term liabilities		7,595			5,577
Stockholders' equity:
Preferred stock $.001 par value, 5,000,000 shares authorized,    none outstanding		—			—
Common stock $.001 par value, 120,000,000 shares authorized,    39,963,683 and 39,729,580 shares outstanding, respectively		40			40
Additional paid-in capital		352,230			349,243
Accumulated deficit		(4,228	)		(49,148	)
Treasury stock, at cost, 2,254,953 shares in treasury		(28,182	)		(28,182	)
Total stockholders' equity		319,860			271,953
Total liabilities and stockholders' equity	$	699,121		$	636,163

See accompanying notes to the consolidated financial statements.

4

TIVITY HEALTH, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except earnings (loss) per share data)

(Unaudited)

	Three Months Ended					Six Months Ended
	June 30,					June 30,
	2018		2017			2018		2017
Revenues	$	151,865	$	138,914		$	301,795	$	279,884
Cost of services (exclusive of depreciation and    amortization of $995, $648, $1,970 and $1,305,    respectively, included below)		109,022		99,071			217,299		201,470
Selling, general & administrative expenses		7,756		8,176			16,334		16,538
Depreciation and amortization		1,135		789			2,257		1,576
Restructuring and related charges		118		(52	)		124		685
Operating income		33,834		30,930			65,781		59,615
Interest expense		3,482		4,130			6,936		7,964
Income before income taxes		30,352		26,800			58,845		51,651
Income tax expense		7,669		9,560			14,826		18,931
Income from continuing operations		22,683		17,240			44,019		32,720
Income (loss) from discontinued operations, net of    income tax		901		(3,673	)		901		(3,893	)
Net income	$	23,584	$	13,567		$	44,920	$	28,827
Earnings (loss) per share - basic:
Continuing operations	$	0.57	$	0.44		$	1.10	$	0.84
Discontinued operations	$	0.02	$	(0.09	)	$	0.02	$	(0.10	)
Net income (loss)	$	0.59	$	0.35		$	1.13	$	0.74
Earnings (loss) per share - diluted:
Continuing operations	$	0.52	$	0.41		$	1.01	$	0.79
Discontinued operations	$	0.02	$	(0.09	)	$	0.02	$	(0.09	)
Net income (loss)	$	0.54	$	0.32		$	1.03	$	0.70
Comprehensive income	$	23,584	$	17,957		$	44,920	$	33,329
Weighted average common shares and equivalents:
Basic		39,899		39,246			39,841		39,158
Diluted		43,284		42,369			43,437		41,456

See accompanying notes to the consolidated financial statements.

5

TIVITY HEALTH, INC.

CONSOLIDATED STATEMENTS OFCOMPREHENSIVE INCOME (LOSS)

(In thousands)

(Unaudited)

	Six Months Ended June 30,
	2018		2017
Net income	$	44,920	$	28,827
Other comprehensive income, net of tax:
Foreign currency translation adjustment, net of tax		—		1,458
Release of cumulative translation adjustment to loss from discontinued    operations due to substantial liquidation of foreign entity		—		3,044
Total other comprehensive income, net of tax	$	—	$	4,502
Comprehensive income	$	44,920	$	33,329

See accompanying notes to the consolidated financial statements.

6

TIVITY HEALTH, INC.

CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY

For the Six Months Ended June 30, 2018

(In thousands)

(Unaudited)

	Preferred Stock		Common Stock		Additional Paid-in Capital			Accumulated Deficit			Treasury Stock			Total
Balance, December 31, 2017	$	—	$	40	$	349,243		$	(49,148	)	$	(28,182	)	$	271,953
Comprehensive income		—		—		—			44,920			—			44,920
Exercise of stock options		—		—		1,135			—			—			1,135
Tax withholding for share-based    compensation		—		—		(1,398	)		—			—			(1,398	)
Share-based employee compensation    expense		—		—		3,250			—			—			3,250
Balance, June 30, 2018	$	—	$	40	$	352,230		$	(4,228	)	$	(28,182	)	$	319,860

See accompanying notes to the consolidated financial statements.

7

TIVITY HEALTH, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

(Unaudited)

	Six Months Ended June 30,
	2018			2017
Cash flows from operating activities:
Income from continuing operations	$	44,019		$	32,720
Income (loss) from discontinued operations		901			(3,893	)
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		2,257			1,589
Amortization of deferred loan costs		1,050			1,246
Amortization of debt discount		4,140			3,911
Share-based employee compensation expense		3,250			3,362
(Gain) loss on sale of TPHS business		(1,304	)		444
Loss on release of cumulative translation adjustment		—			3,044
Deferred income taxes		15,254			18,755
Increase in accounts receivable, net		(13,890	)		(4,398	)
Decrease in other current assets		756			869
Decrease in accounts payable		(1,869	)		(1,480	)
Decrease in accrued salaries and benefits		(9,928	)		(11,953	)
Decrease in other current liabilities		(4,563	)		(2,268	)
Other		1,227			(1,888	)
Net cash flows provided by operating activities	$	41,300		$	40,060
Cash flows from investing activities:
Acquisition of property and equipment	$	(3,673	)	$	(2,244	)
Proceeds from sale of MeYou Health		1,416			—
Net cash flows used in investing activities	$	(2,257	)	$	(2,244	)
Cash flows from financing activities:
Proceeds from issuance of long-term debt	$	13,675		$	274,425
Payments of long-term debt		(14,216	)		(308,496	)
Payments related to tax withholding for share-based compensation		(1,398	)		(1,066	)
Exercise of stock options		1,135			2,757
Deferred loan costs		—			(2,452	)
Change in cash overdraft and other		343			1,558
Net cash flows used in financing activities	$	(461	)	$	(33,274	)
Effect of exchange rate changes on cash	$	(27	)	$	1,652
Net increase in cash and cash equivalents	$	38,555		$	6,194
Cash and cash equivalents, beginning of period	$	28,440		$	1,602
Cash and cash equivalents, end of period	$	66,995		$	7,796

See accompanying notes to the consolidated financial statements.

8

TIVITY HEALTH, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

1. Basis of Presentation

Our financial statements and accompanying notes are prepared in accordance with generally accepted accounting principles in the United States (“U.S. GAAP”).  In our opinion, the accompanying consolidated financial statements of Tivity Health, Inc. and its wholly-owned subsidiaries (collectively, “Tivity Health,” the “Company,” or such terms as “we,” "us,” or “our”) reflect all adjustments, consisting only of normal recurring adjustments, necessary for a fair statement.

Our results from continuing operations do not include the results of the total population health services (“TPHS”) business, which we sold to Sharecare, Inc. (“Sharecare”) effective July 31, 2016.  Results of operations for the TPHS business have been classified as discontinued operations for all periods presented in the accompanying consolidated financial statements.  See Note 4 for further information.

We have omitted certain financial information that is normally included in financial statements prepared in accordance with U.S. GAAP but that is not required for interim reporting purposes.  You should read the accompanying consolidated financial statements in conjunction with the financial statements and notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2017.

2. Recent RelevantAccounting Standards

On January 1, 2018, we adopted Accounting Standards Codification (“ASC”) Topic 606, “Revenue from Contracts with Customers” (“ASC Topic 606”) using the modified retrospective method, pursuant to which we applied ASC Topic 606 to (i) all new contracts entered into after January 1, 2018 and (ii) contracts that were not completed as of January 1, 2018.  In accordance with this approach, our results for periods prior to January 1, 2018 were not revised and continue to be reported in accordance with our historical accounting under ASC Topic 605, “Revenue Recognition.”  For contracts that were modified prior to January 1, 2018, we have not retrospectively restated the contract for those modifications in accordance with the contract modification guidance in ASC 606-10-25-12 and ASC 606-10-25-13 but instead, using the practical expedient available under ASC 606-10-65-1(f)(4), have reflected the aggregate effect of all modifications when identifying the satisfied and unsatisfied performance obligations, determining the transaction price, and allocating the transaction price.

The cumulative impact of our adoption of ASC Topic 606 was not material to record as of January 1, 2018, and there was no material impact on our consolidated income statement, balance sheet, or cash flows for the quarter ended March 31, 2018.  For example, we do not have any material contract assets or contract liabilities as defined under ASC Topic 606.  In addition, the incremental costs of obtaining a contract with a customer (for example, sales commissions) that would have been recognized as an asset on January 1, 2018 were not material to record.  See Note 3 for a further discussion of revenue recognition.

On January 1, 2018, we adopted Accounting Standards Update (“ASU”) No. 2016-15, “Statement of Cash Flows” (Topic 230) (“ASU 2016-15”).  ASU 2016-15 addresses how certain cash receipts and cash payments are presented and classified in the statement of cash flows and is to be applied using a retrospective approach.  The adoption of this standard did not have a material impact on our consolidated financial statements and related disclosures and did not result in a reclassification to items in prior periods.

On January 1, 2018, we adopted ASU No. 2017-09, “Compensation-Stock Compensation (Topic 718): Scope of Modification Accounting” (“ASU 2017-09”), which clarifies when changes to the terms or conditions of a share-based payment award must be accounted for as modifications.  ASU 2017-09 is to be applied prospectively to awards modified on or after January 1, 2018.  The adoption of this standard did not have an impact on our consolidated financial statements and related disclosures.

9

In February 2016, the Financial Accounting Standards Board (“FASB”) issued ASU No. 2016-02, “Leases”(“ASU 2016-02”), which requires that lessees recognize assets and liabilities for leases with lease terms greater than twelve months in the statement of financial position, and is effective for us on January 1, 2019. ASU 2016-02 also requires improved disclosures to help users of financial statements better understand the amount, timing and uncertainty of cash flows arising from leases. The standard is required to be adopted using a modified retrospective transition method, which will require the cumulative effect of initially applying the standard to be recognized as an adjustment to beginning retained earnings as of January 1, 2019.  We are currently conducting analysis to quantify the adoption impact of the provisions of the new standard and evaluating our current leases. We believe we are following an appropriate timeline to allow for proper recognition, presentation and disclosure upon adoption effective January 1, 2019.

In January 2017, the FASB issued ASU No. 2017-04, “Intangibles - Goodwill and Other” (“ASU 2017-04”), which simplifies the subsequent measurement of goodwill by eliminating step two from the goodwill impairment test.  ASU 2017-04 is effective for annual and interim impairment tests in fiscal years beginning after December 15, 2019 and is required to be applied prospectively. Early adoption is allowed for annual goodwill impairment tests performed on testing dates after January 1, 2017. We do not anticipate that adopting this standard will have an impact on our consolidated financial statements and related disclosures.

3. Revenue Recognition

Beginning in 2018, we account for revenue from contracts with customers in accordance with ASC Topic 606.  The unit of account in ASC Topic 606 is a performance obligation, which is a promise in a contract to transfer to a customer either a distinct good or service (or bundle of goods or services) or a series of distinct goods or services provided over a period of time. ASC Topic 606 requires that a contract's transaction price, which is the amount of consideration to which an entity expects to be entitled in exchange for transferring promised goods or services to a customer, is to be allocated to each performance obligation in the contract based on relative standalone selling prices and recognized as revenue when or as the performance obligation is satisfied.

We earn revenue from our three programs, SilverSneakers® senior fitness, Prime® Fitness and WholeHealth Living^TM.  We provide the SilverSneakers senior fitness program to members of Medicare Advantage and Medicare Supplement plans through our contracts with such plans.  We offer Prime Fitness, a fitness facility access program, through contracts with employers, commercial health plans, and other sponsoring organizations that allow their members to individually purchase the program.  We sell our WholeHealth Living program primarily to health plans.

The significant majority of our customer contracts contain one performance obligation - to stand ready to provide access to our network of fitness locations and fitness programming - which is satisfied over time as services are rendered each month over the contract term.  There are generally no performance obligations that are unsatisfied at the end of a particular month.  There was no material revenue recognized during the three and six months ended June 30, 2018 from performance obligations satisfied in a prior period.

Our fees are variable month to month and are generally billed per member per month (“PMPM”), or billed based on a combination of PMPM and member visits to a network location.  We bill PMPM fees by multiplying the contractually negotiated PMPM rate by the number of members eligible for or receiving our services during the month.  We bill for member visits approximately one month in arrears once actual member visits are known.  Payments from customers are typically due within 30 days of invoice date.  When material, we capitalize costs to obtain contracts with customers and amortize them over the expected recovery period. 

Our customer contracts include variable consideration, which is allocated to each distinct month over the contract term based on eligible members and/or member visits each month.  The allocated consideration corresponds directly with the value to our customers of our services completed for the month.  Under the majority of our contracts, we recognize revenue each month using the practical expedient available under ASC 606-10-55-18, which provides that revenue is recognized in the amount for which we have the right to invoice. 

Although we evaluate our financial performance and make resource allocation decisions based upon the results of our single operating and reportable segment, we believe the following information depicts how our revenues and cash flows are affected by economic factors.  For the three and six months ended June 30, 2018, revenue from our SilverSneakers program, which is predominantly contracted with Medicare Advantage and Medicare Supplement plans, comprised approximately 81% of our consolidated revenues, while revenue from our Prime Fitness and WholeHealth Living programs comprised approximately 16% and 3% of our consolidated revenues, respectively.

Sales and usage-based taxes are excluded from revenues.

10

4. Discontinued Operations

On July 27, 2016, we entered into a Membership Interest Purchase Agreement (the “Purchase Agreement”) with Sharecare and Healthways SC, LLC, a newly formed Delaware limited liability company and wholly owned subsidiary of the Company, pursuant to which Sharecare acquired the TPHS business, which closed effective July 31, 2016 (“Closing”).

At Closing, Sharecare delivered to the Company an Adjustable Convertible Equity Right (the “ACER”) with an initial face value of $30.0 million.  The ACER was convertible into shares of common stock of Sharecare on July 31, 2018 at an initial conversion price of $249.87 per share, subject to customary adjustment for stock splits, stock dividends and other reorganizations of Sharecare.  

The Purchase Agreement provided for post-closing adjustments based on, among other things, any successful claims for indemnification by Sharecare (which may result in a reduction in the face amount of the ACER, unless the Company elects, in its sole discretion, to satisfy any such successful claims with cash payments), none of which such claims had been made as of June 30, 2018.

As of each of December 31, 2017 and June 30, 2018, we have recorded the $39.8 million face value of the ACER at an estimated carrying value of $10.8 million, which is classified as an equity receivable included in other assets. 

The following table presents financial results of the TPHS business included in “loss from discontinued operations” for the three and six months ended June 30, 2018 and 2017.

	Three Months Ended June 30,						Six Months Ended June 30,
(In thousands)	2018			2017			2018			2017
Revenues	$	—		$	—		$	—		$	—
Cost of services		30			38			30			258
Selling, general & administrative expenses		48			20			48			157
Distribution from joint venture		—			98			—			98
Pretax income (loss) on discontinued operations	$	(78	)	$	40		$	(78	)	$	(317	)
Pretax loss on release of cumulative translation    adjustment (1)		—			(3,044	)		—			(3,044	)
Pretax income (loss) on sale of TPHS business (2)		1,304			(134	)		1,304			(444	)
Total pretax income (loss) on discontinued    operations	$	1,226		$	(3,138	)	$	1,226		$	(3,805	)
Income tax expense		325			535			325			88
Income (loss) from discontinued operations, net of    income tax	$	901		$	(3,673	)	$	901		$	(3,893	)

(1) During the second quarter of 2017, we substantially liquidated foreign entities that were part of our TPHS business, resulting in a release of the cumulative translation adjustment of $3.0 million into loss from discontinued operations.

(2) Includes $1.4 million received during the three months ended June 30, 2018 from a release of escrow funds related to the sale of MeYou Health, LLC in June 2016.

5. Share-Based Compensation

We currently havethree types of share-based awardsoutstandingto our employees and directors:stock options, restrictedstock units,andmarketstock units. We believethatourshare-basedawards alignthe interests of our employees anddirectors withthoseofourstockholders.

We recognize share-based compensation expense for the market stock units if the requisite service period is rendered, even if the market condition is never satisfied. For the three and six months ended June 30, 2018, we recognized share-based compensation costs of $1.8 million and $3.3 million, respectively.  For the three and six months ended June 30, 2017, we recognized share-based compensation costs of $1.9 million and $3.4 million, respectively.  We account for forfeitures as they occur.  

11

A summary of our stock options as of June 30, 2018 and the changes during the six months ended June 30, 2018 is presented below:

Options	Shares (In thousands)			Weighted Average Exercise Price Per Share		Weighted Average Remaining Contractual Term		Aggregate Intrinsic Value (In thousands)
Outstanding at January 1, 2018		507		$	12.98
Granted		70			38.68
Exercised		(97	)		11.70
Forfeited		—			—
Expired		—			—
Outstanding at June 30, 2018		480		$	16.98		4.5	$	8,988
Exercisable at June 30, 2018		410		$	13.28		3.6	$	8,979

The weighted-average grant-date fair value of options granted during the three months ended June 30, 2018 was $20.60.

The followingtableshows a summary ofour restricted stock units as of June 30, 2018,aswellas activity during the six months ended June 30, 2018:

	Restricted Stock and Restricted Stock Units
	Shares (In thousands)			Weighted- Average Grant Date Fair Value
Nonvested at January 1, 2018		572		$	17.60
Granted		66			38.56
Vested		(165	)		18.27
Forfeited		(21	)		23.04
Nonvested at June 30, 2018		452		$	20.17

The followingtableshows a summary ofourmarket stock unitsas of June 30, 2018, as wellas activity during the six months ended June 30, 2018:

	Market Stock Units
	Shares (In thousands)			Weighted- Average Grant Date Fair Value
Nonvested at January 1, 2018		373		$	9.01
Granted		—			—
Vested		(6	)		6.48
Forfeited		(29	)		17.44
Nonvested at June 30, 2018		338		$	8.32

12

6. Income Taxes

For the three and six months ended June 30, 2018, we had an effective income tax rate from continuing operations of 25.3% and 25.2%, respectively.  For the three and six months ended June 30, 2017, we had an effective income tax rate from continuing operations of 35.7% and 36.7%, respectively.  The lower effective income tax rate in 2018 is primarily a result of the Tax Cuts and Jobs Act of 2017 (the “Tax Act”).

At June 30, 2018, we had approximately $47.0 million of federal loss carryforwards, approximately $101.7 million of state loss carryforwards, and approximately $4.6 million of foreign tax credits.

We file income tax returns in the U.S. Federal jurisdiction and in various state and foreign jurisdictions.  Tax years remaining subject to examination in the U.S. Federal jurisdiction include 2014 to present.

7. Debt

The Company's debt, net of unamortized deferred loan costs, consistedof the following at June 30, 2018 and December 31, 2017:

(In thousands)	June 30, 2018			December 31, 2017
Cash Convertible Notes, net of unamortized    discount	$	150,000		$	145,861
Capital lease obligations and other		7			549
		150,007			146,410
Less: deferred loan costs		—			(451	)
		150,007			145,959
Less: current portion		(150,007	)		(145,959	)
	$	—		$	—

Credit Facility

On June 8, 2012, we entered into the Fifth Amended and Restated Revolving Credit and Term Loan Agreement (as amended, the “Prior Credit Agreement”).  The Prior Credit Agreement provided us with a $125 million revolving credit facility that included a swingline sub facility of $20 million and a $75 million sub facility for letters of credit.  The Prior Credit Agreement also provided a $200 million term loan facility and an uncommitted incremental accordion facility of $100 million.  Borrowings under the Prior Credit Agreement generally bore interest at variable rates based on a margin or spread in excess of either (1) the one-month, two-month, three-month or six-month rate (or with the approval of affected lenders, nine-month or twelve-month rate) for Eurodollar deposits (“LIBOR”), which may not be less than zero), or (2) the greatest of (a) the SunTrust Bank prime lending rate, (b) the federal funds rate plus 0.50% and (c) one-month LIBOR plus 1.00% (the “Base Rate”), as selected by the Company.  The LIBOR margin varied between 1.75% and 3.00%, and the Base Rate margin varied between 0.75% and 2.00%, depending on our leverage ratio.  The Prior Credit Agreement also provided for an annual fee ranging between 0.30% and 0.50% of the unused commitments under the revolving credit facility. 

On April 21, 2017, we entered into a new Revolving Credit and Term Loan Agreement (the “Credit Agreement”) with a group of lenders, which replaced the Prior Credit Agreement.  The Credit Agreement provides us with (1) a $100 million revolving credit facility that includes a $25 million sublimit for swingline loans and a $75 million sublimit for letters of credit, (2) a $70 million term loan A facility, (3) a $150 million delayed draw term loan facility, and (4) an uncommitted incremental accordion facility of $100 million.

We used the proceeds of the term loan A and cash on hand to repay all of the outstanding indebtedness under the Prior Credit Agreement and to pay transaction costs and expenses.  Proceeds of revolving loans and delayed draw term loans may be used to repay outstanding indebtedness (including amounts payable upon or in respect of any conversion of the Cash Convertible Notes discussed below and the repayment of any revolving loans borrowed for such purposes), to finance working capital needs, to finance acquisitions, to finance the repurchase of our common stock, to finance capital expenditures and for other general corporate purposes of the Company and its subsidiaries.  As further detailed below under “1.50% Cash Convertible Senior Notes Due 2018”, on July 2, 2018, we borrowed $100.0 million under the delayed draw term loan, which was used to repay the principal amount of the Cash Convertible Notes.  No additional amounts may be borrowed under the delayed draw term after July 2, 2018.

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We are required to repay any outstanding revolving loans in full on April 21, 2022.  The term loan A was repaid in full during 2017 and may not be re-borrowed.We are required to repay the delayed draw term loan in quarterly principal installments calculated as follows: (1) for each of the first six quarters following the time of borrowing (beginning with the fourth quarter of 2018 and ending with the first quarter of 2020), 1.250% of the aggregate principal amount of the delayed draw term loan funded as of the last day of the immediately preceding quarter; and (2) for each of the remaining quarters prior to maturity on April 21, 2022, 1.875% of the aggregate principal amount of the delayed draw term loan funded as of the last day of the immediately preceding quarter.  At maturity on April 21, 2022, the entire unpaid principal balance of the delayed draw term loan is due and payable. As ofJune 30, 2018, we had not borrowed any amounts under the delayed draw term loan, and availability under the revolving credit facility totaled $93.7 million.

Borrowings under the Credit Agreement generally bear interest at variable rates based on a margin or spread in excess of either (1) one-month, two-month, three-month or six-month LIBOR (or with the approval of affected lenders, 12-month LIBOR), which may not be less than zero, or (2) the greatest of (a) the SunTrust Bank prime lending rate, (b) the federal funds rate plus 0.50%, and (c) one-month LIBOR plus 1.00% (the “Base Rate”), as selected by the Company.  The LIBOR margin varies between 1.50% and 2.75%, and the Base Rate margin varies between 0.50% and 1.75%, depending on our net leverage ratio.  The Credit Agreement also provides for annual commitment fees ranging between 0.20% and 0.50% of the unused commitments under the revolving credit facility and the delayed draw term loan facility and annual letter of credit fees on the daily outstanding availability under outstanding letters of credit at the applicable LIBOR margin.  Extensions of credit under the Credit Agreement are secured by guarantees from all of the Company’s active material domestic subsidiaries and by security interests in substantially all of the Company’s and such subsidiaries’ assets.

The Credit Agreement contains financial covenants that require us to maintain, as defined, (1) specified maximum ratios or levels of funded debt to EBITDA and (2) specified minimum ratios or levels of fixed charge coverage. The Credit Agreement also contains various other affirmative and negative covenants that are typical for financings of this type.  Among other things, they limit repurchases of our common stock and the amount of dividends that we can pay to holders of our common stock.

1.50% Cash Convertible Senior Notes Due 2018

On July 16, 2013, we completed the issuance of $150.0 million aggregate principal amount of cash convertible senior notes due July 2018 (the “Cash Convertible Notes”), which bore interest at a rate of 1.50% per year, payable semiannually in arrears on January 1 and July 1 of each year, beginning on January 1, 2014. The Cash Convertible Notes matured on July 2, 2018.  All of the holders elected to convert their Cash Convertible Notes for settlement on July 2, 2018, and none of the Cash Convertible Notes were repurchased or converted into cash prior to such date.  We classified the Cash Convertible Notes, net of the unamortized discount, and related deferred loan costs as a current liability at June 30, 2018 and at December 31, 2017.

The cash conversion feature of the Cash Convertible Notes was a derivative liability (the “Cash Conversion Derivative”) that required bifurcation from the Cash Convertible Notes in accordance with FASB ASC Topic 815, “Derivatives and Hedging” (“ASC Topic 815”), and was carried at fair value.  Due to the classification of the Cash Convertible Notes as a current liability at June 30, 2018 and December 31, 2017, the Cash Conversion Derivative was recorded in current liabilities at June 30, 2018 and December 31, 2017.  The fair value of the Cash Conversion Derivative at the time of issuance of the Cash Convertible Notes was $36.8 million, which was recorded as a debt discount for purposes of accounting for the debt component of the Cash Convertible Notes.

The debt discount was amortized over the term of the Cash Convertible Notes using the effective interest method.  For the three and six months ended June 30, 2018, we recorded $2.1 million and $4.1 million, respectively, of interest expense related to the amortization of the debt discount based upon an effective interest rate of 5.7%.  For the three and six months ended June 30, 2017, we recorded $2.0 million and $3.9 million, respectively, of interest expense related to the amortization of the debt discount based upon an effective interest rate of 5.7%.  We also recognized interest expense of $0.6 million and $1.1 million for each of the three and six months ended June 30, 2018 and 2017, respectively, related to the contractual interest rate of 1.50% per year. The net carrying amount of the Cash Convertible Notes at June 30, 2018 and December 31, 2017 was $150.0 million and $145.9 million, respectively, net of the unamortized discount of $0 and $4.1 million, respectively.

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In connection with the issuance of the Cash Convertible Notes, we entered into privately negotiated convertible note hedge transactions (the “Cash Convertible Notes Hedges”), which were cash-settled and were intended to reduce our exposure to potential cash payments that we would be required to make if holders elected to convert the Cash Convertible Notes at a time when our stock price exceeded the conversion price. The initial cost of the Cash Convertible Notes Hedges was $36.8 million. Due to the classification of the Cash Convertible Notes as a current liability at June 30, 2018 and December 31, 2017, the Cash Convertible Notes Hedges were classified in current assets at June 30, 2018 and December 31, 2017.  The Cash Convertible Notes Hedges were recorded as a derivative asset under ASC Topic 815 and were carried at fair value.  See Note 9 for additional information regarding the Cash Convertible Notes Hedges and the Cash Conversion Derivative and their fair values.

On July 2, 2018, we repaid the $150.0 million aggregate principal amount of the Cash Convertible Notes using a combination of available cash and proceeds from borrowings under the delayed draw term loan facility of $100.0 million.  In addition, on July 2, 2018 we settled the Cash Conversion Derivative of $141.2 million, which was fully funded by payments made by the counterparties for the settlement of the Cash Convertible Notes Hedges.  Subsequent to July 2, 2018, the Credit Agreement provides capacity to borrow under a $100 million revolving credit facility that includes a $25 million sublimit for swingline loans and a $75 million sublimit for letters of credit.

In July 2013, we also sold separate privately negotiated warrants (the “Warrants”) initially relating, in the aggregate, to a notional number of shares of our common stock underlying the Cash Convertible Notes Hedges. The Warrants have an initial strike price of approximately $25.95 per share.  The Warrants will be net share settled by our issuing a number of shares of our common stock per Warrant with a value corresponding to the excess of the market price per share of our common stock (as measured on each warrant exercise date under the terms of the Warrants) over the applicable strike price of the Warrants. The Warrants meet the definition of derivatives under the guidance in ASC Topic 815; however, because these instruments have been determined to be indexed to our own stock and meet the criteria for equity classification under ASC Topic 815, the Warrants have been accounted for as an adjustment to our additional paid-in-capital.

When the market value per share of our common stock exceeds the strike price of the Warrants, the Warrants have a dilutive effect on net income per share, and the “treasury stock” method is used in calculating the dilutive effect on earnings per share.  See Note 11 for additional information on such dilutive effect.

8. Commitments and Contingencies

On November 6, 2017, United Healthcare issued a press release announcing expansion of its fitness benefits (“United Press Release”), and the market price of the Company's shares of common stock dropped on that same day. In connection with the United Press Release, two lawsuits have been filed against the Company as described below.  We intend to vigorously defend ourselves against both complaints.

Weiner and Denham Lawsuits

On November 20, 2017, Eric Weiner, claiming to be a stockholder of the Company, filed a complaint on behalf of stockholders who purchased the Company's common stock between February 24, 2017 and November 3, 2017 (“Weiner Lawsuit”).  The Weiner Lawsuit was filed as a class action in the U.S. District Court for the Middle District of Tennessee, naming the Company, the Company's chief executive officer, chief financial officer and chief accounting officer as defendants.  The complaint alleges that the defendants violated Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 (the “Exchange Act”) and Rule 10b-5 promulgated under the Exchange Act in making false and misleading statements and omissions related to the United Press Release.  The complaint seeks monetary damages on behalf of the purported class.  On April 3, 2018, the Court entered an order appointing the Oklahoma Firefighters Pension and Retirement System as lead plaintiff, designated counsel for the lead plaintiff, and established certain deadlines for the case.

On January 26, 2018, Charles Denham, claiming to be a stockholder of the Company, filed a purported shareholder derivative action, on behalf of the Company, in the U.S. District Court for the Middle District of Tennessee, naming the Company as a nominal defendant and the Company's chief executive officer, chief financial officer, chief accounting officer, current directors of the Company and a former director of the Company, as defendants.  The complaint asserts claims for breach of fiduciary duty, waste, and unjust enrichment, largely tracking allegations in the Weiner Lawsuit.  The complaint further alleges that certain defendants engaged in insider trading.  The plaintiff seeks monetary damages on behalf of the Company, certain corporate governance and internal procedural reforms, and other equitable relief.

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Other

Additionally, from time to time, we are subject to contractual disputes, claims and legal proceedings that arise from time to time in the ordinary course of our business.  While we are unable to estimate a range of potential losses, we do not believe that any of the legal proceedings pending against us as of the date of this report, some of which are expected to be covered by insurance policies, will have a material adverse effect on our financial statements.  As these matters are subject to inherent uncertainties, our view of these matters may change in the future. We expense legal costs as incurred.

9. Fair Value Measurements

We account for certain assets and liabilities at fair value. Fair value is defined as the price that would be received upon sale of an asset or paid upon transfer of a liability in an orderly transaction between market participants at the measurement date, assuming the transaction occurs in the principal or most advantageous market for that asset or liability.

Fair Value Hierarchy

The hierarchy below lists three levels of fair value based on the extent to which inputs used in measuring fair value are observable in the market. We categorize each of our fair value measurements in one of these three levels based on the lowest level input that is significant to the fair value measurement in its entirety. These levels are:

Level 1: Quoted prices in active markets for identical assets or liabilities;

Level 2: Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-based valuation techniques in which all significant assumptions are observable in the market or can be corroborated by observable market data for substantially the full term of the assets or liabilities; and

Level 3: Unobservable inputs that are supported by little or no market activity and typically reflect management's estimates of assumptions that market participants would use in pricing the asset or liability.

Assets andLiabilitiesMeasuredat Fair ValueonaRecurring Basis

Thefollowingtablepresents ourassetsandliabilities measuredat fairvalueonarecurringbasisat June 30, 2018 and December 31, 2017:

(In thousands)	June 30, 2018		December 31, 2017
Assets:
Cash Convertible Notes Hedges	$	141,246	$	134,079
Liabilities:
Cash Conversion Derivative	$	141,246	$	134,079

As described in Note 7, the Cash Convertible Notes Hedges and Cash Conversion Derivative were settled upon their maturity on July 2, 2018.  At June 30, 2018, the fair values of these instruments were measured using their actual values to be settled on July 2, 2018, which were considered Level 2 inputs.  At December 31, 2017, the fair values of the Cash Convertible Notes Hedges and the Cash Conversion Derivative were measured using Level 3 inputs because these instruments were not actively traded. They were valued using an option pricing model that used observable and unobservable market data for inputs, such as expected time to maturity of the derivative instruments, the risk-free interest rate, the expected volatility of our common stock, and other factors. The Cash Convertible Notes Hedges and the Cash Conversion Derivative were designed such that changes in their fair values would offset one another, with minimal impact to the consolidated statements of operations. Therefore, the sensitivity of changes in the unobservable inputs to the option pricing model for such instruments was mitigated.

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The followingtable presents our financial instrumentsmeasuredat fair valueon arecurring basis using unobservableinputs (Level 3):

(In thousands)	Balance at December 31, 2017			Purchases of Level 3 Instruments		Settlements of Level 3 Instruments		Gains (Losses) Included in Earnings			Balance at June 30, 2018
Cash Convertible Notes Hedges	$	134,079		$	—	$	—	$	7,167		$	141,246
Cash Conversion Derivative		(134,079	)		—		—		(7,167	)		(141,246	)

The gains and losses includedinearnings noted above representthe change inthe fair valueof thesefinancialinstruments andwere recordedeach period in the consolidatedstatements ofoperations asselling,generalandadministrativeexpenses.

Fair Value of Other Financial Instruments

InadditiontotheCash ConvertibleNotesHedges and the CashConversionDerivative,theestimatedfairvaluesofwhicharedisclosedabove,theestimatedfair valueof eachclassof financialinstruments at June 30, 2018 was asfollows:

Cashandcashequivalents–Thecarryingamountof$67.0millionapproximatesfairvaluebecauseoftheshortmaturityof those instruments (less than three months).

Debt–TheestimatedfairvalueofoutstandingborrowingsundertheCreditAgreement,which includesarevolvingcreditfacilityandatermloanfacility (see Note 7), and theCashConvertibleNotesaredeterminedbasedonthefairvaluehierarchyasdiscussedabove.

Therevolvingcreditfacilityisnot activelytradedandthereforeisclassifiedas a Level2valuationbasedonthemarketforsimilarinstruments.Theestimatedfair valueisbasedontheaverageofthepricessetbytheissuingbankgivencurrentmarketconditionsandisnotnecessarilyindicative oftheamountwecouldrealizeinacurrentmarketexchange. There were no outstanding borrowings under the Credit Agreement at June 30, 2018.

Prior to their maturity on July 2, 2018, the Cash Convertible Notes were actively traded and therefore are classified as Level 1 valuations. The fair value at June 30, 2018 was $291.2 million, which is based on the actual settlement value of the Cash Convertible Notes on July 2, 2018, and the par value was $150.0 million. The carrying amount of the Cash Convertible Notes at June 30, 2018 was $150.0 million.

10. Derivative Instruments and Hedging Activities

We use derivative instruments to manage risks related to the Cash Convertible Notes, which matured and were repaid on July 2, 2018.  We account for derivatives in accordance with ASC Topic 815, which establishes accounting and reporting standards requiring that certain derivative instruments be recorded on the balance sheet as either an asset or liability measured at fair value. Additionally, changes in the derivative's fair value will be recognized currently in earnings unless specific hedge accounting criteria are met.  We do not execute transactions or hold derivative financial instruments for trading or other purposes.

DerivativeInstrumentsNotDesignatedas HedgingInstruments

TheCash ConversionDerivative and CashConvertibleNotesHedges were settled on July 2, 2018 in conjunction with the maturity of the Cash Convertible Notes.  They did not qualify for hedge accounting treatment underU.S. GAAP and were measured at fair value, with gains and losses recognized immediatelyintheconsolidatedstatementsofoperations. Thesederivative instruments not designated as hedging instruments didnot havea material impacton our consolidatedstatements ofcomprehensive income for the three and six months ended June 30, 2018and 2017.

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The CashConversion Derivative was accounted for as a derivativeliability and carried at fair value. In order to offset the risk associatedwith the Cash ConversionDerivative, we entered intoCashConvertible Notes Hedges, which were cash-settled and were intended to reduce our exposure to potential cash payments that we would be required tomake if holders elected to convertthe Cash Convertible Notes at a timewhen our stock price exceeds theconversion price. The CashConvertible Notes Hedges were accounted for as a derivative asset and carried at fair value.

The gains and losses resulting from a change in fair values of the Cash Conversion Derivative and the Cash Convertible Notes Hedges are reported in the consolidated statements of comprehensive income (loss).

(In thousands)	For the Three Months Ended						For the Six Months Ended
	June 30, 2018			June 30, 2017			June 30, 2018			June 30, 2017			Statements of Operations Classification
Cash Convertible Notes Hedges:
Net unrealized gain (loss)	$	(15,897	)	$	78,431		$	7,167		$	112,515		Selling, general and    administrative expenses
Cash Conversion Derivative:
Net unrealized (loss) gain	$	15,897		$	(78,431	)	$	(7,167	)	$	(112,515	)	Selling, general and    administrative expenses

Financial Instruments

Theestimated grossfair values of derivativeinstrumentsat June 30, 2018 and December 31, 2017 wereas follows:

(In thousands)	June 30, 2018		December 31, 2017
Assets:
Derivatives not designated as hedging instruments:
Cash Convertible Notes Hedges	$	141,246	$	134,079
Liabilities:
Derivatives not designated as hedging instruments:
Cash conversion derivative	$	141,246	$	134,079

See Note 9 for more information on fair value measurements.

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11. Earnings (Loss) Per Share

Thefollowingisareconciliationofthenumeratoranddenominatorofbasicanddilutedearnings(loss)pershareforthe three and six months ended June 30, 2018and 2017:

(In thousands except per share data)	ThreeMonths Ended June 30,					Six Months Ended June 30,
	2018		2017			2018		2017
Numerator:
Income from continuing operations    - numerator for earnings per share	$	22,683	$	17,240		$	44,019	$	32,720
Income (loss) from discontinued operations    - numerator for earnings (loss) per share		901		(3,673	)		901		(3,893	)
Net income - numerator for earnings (loss) per share	$	23,584	$	13,567		$	44,920	$	28,827
Denominator:
Shares used for basic income (loss) per share		39,899		39,246			39,841		39,158
Effect of dilutive stock options and    restricted stock units outstanding:
Non-qualified stock options		277		481			295		462
Restricted stock units		332		602			368		606
Market stock units		489		312			511		303
Warrants related to Cash Convertible Notes		2,287		1,728			2,422		927
Shares used for diluted income (loss) per share		43,284		42,369			43,437		41,456
Earnings (loss) per share - basic:
Continuing operations	$	0.57	$	0.44		$	1.10	$	0.84
Discontinued operations	$	0.02	$	(0.09	)	$	0.02	$	(0.10	)
Net income (loss)	$	0.59	$	0.35		$	1.13	$	0.74
Earnings (loss) per share - diluted:
Continuing operations	$	0.52	$	0.41		$	1.01	$	0.79
Discontinued operations	$	0.02	$	(0.09	)	$	0.02	$	(0.09	)
Net income (loss)	$	0.54	$	0.32		$	1.03	$	0.70
Dilutive securities outstanding not included in the    computation of earnings (loss) per share    because their effect is anti-dilutive:
Non-qualified stock options		59		—			29		8
Restricted stock units		42		3			28		10

(1) Figures may not add due to rounding.

Market stock units outstanding are considered contingently issuable shares, and certain of these stock units were excluded from the calculations of diluted earnings per share for all periods presented as the performance criteria had not been met as of the end of the reporting periods.

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12. Accumulated OCI

There were no changes in accumulated other comprehensive income (loss) (“OCI”) for the six months ended June 30, 2018.  The following tables summarize the changes in accumulated OCI, net of tax, for the six months ended June 30, 2017:

(In thousands)	Foreign Currency Translation Adjustments
Accumulated OCI, net of tax, as of January 1, 2017	$	(4,502	)
Other comprehensive income before reclassifications, net of tax of $225		1,458
Amounts reclassified from accumulated OCI, net of tax of $0		3,044
Accumulated OCI, net of tax, as of June 30, 2017	$	—

There were no reclassifications out of accumulated OCI for the six months ended June 30, 2018 and 2017.

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

Overview

Tivity Health, Inc. (the “Company”) was founded and incorporated in Delaware in 1981.  Through our three programs, SilverSneakers senior fitness, Prime Fitness and WholeHealth Living, we are focused on advancing long-lasting health and vitality, especially in aging populations.  The SilverSneakers senior fitness program is offered to members of Medicare Advantage and Medicare Supplement plans.  We also offer Prime Fitness, a fitness facility access program, through commercial health plans, employers, and other sponsoring organizations.  Our national network of fitness centers delivers both SilverSneakers and Prime Fitness.  In addition, a small portion of our fitness center network is available for discounted access through our WholeHealth Living program.  Our fitness networks encompass approximately 16,000 participating locations and more than 1,000 alternative locations that provide classes outside of traditional fitness centers. Through our WholeHealth Living program, which we sell primarily to health plans, we offer a continuum of services related to complementary, alternative, and physical medicine.  Our WholeHealth Living network includes relationships with approximately 80,000 complementary, alternative, and physical medicine practitioners to serve individuals through health plans and employers who seek health services such as chiropractic care, acupuncture, physical therapy, occupational therapy, speech therapy, and more.

Effective July 31, 2016, we sold our total population health services (“TPHS”) business to Sharecare.  Results of operations for the TPHS business have been classified as discontinued operations for all periods presented in the consolidated financial statements.

The Company is headquartered at 701 Cool Springs Boulevard, Franklin, Tennessee37067.

Forward-Looking Statements

This report contains forward-looking statements, which are based upon current expectations, involve a number of risks and uncertainties, and are subject to the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995.  Forward-looking statements include all statements that are not historical statements of fact and those regarding the intent, belief, or expectations of the Company, including, without limitation, all statements regarding the Company's future earnings, revenues, and results of operations.  Readers are cautioned that any such forward-looking statements are not guarantees of future performance and involve significant risks and uncertainties, and that actual results may vary from those in the forward-looking statements as a result of various factors, including, but not limited to:

• our ability to develop and implement effective strategies;

• the effectiveness of the reorganization of our business and our ability to realize the anticipated benefits;

• our ability to sign and implement new contracts with new or existing customers;

• our ability to accurately forecast the costs required to successfully implement new contracts;

• ourabilityto renew and/or maintaincontracts withour customers underexistingterms or restructure thesecontracts on terms that would not havea materialnegative impacton our results of operations;

• our ability to effectively compete againstother entities, whose financial, research, staff, and marketing resources may exceed ourresources;

• our ability to accurately forecast ourrevenues, margins, earningsand net income, as well as any potential charges that we may incur asa result of changes in our business andleadership;

• ourabilityto anticipatechangeandrespondto emergingtrendsfor healthcare andthe impact of the same ondemandfor ourservices;

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• the risks associated with deriving a significant concentration of our revenues from a limited number of customers;

• ourabilityand/ortheabilityofourcustomerstoenrollparticipantsandtoaccuratelyforecasttheirlevelofenrollmentand participationinourprogramsinamannerandwithinthetimeframeanticipatedbyus;

• the impact of severe or adverse weather conditions on member participation in our programs;

• theabilityofourcustomerstomaintainthenumberofcoveredlivesenrolledintheplansduringthetermsofouragreements;

• ourabilitytoserviceourdebt,makeprincipalandinterestpaymentsasthosepaymentsbecomedue,andremainincompliance withourdebtcovenants;

• therisksassociatedwithchangesinmacroecononmicconditions;

• ourabilitytointegrateneworacquiredbusinesses,services,technologies, solutions, or productsintoourbusiness andtoaccuratelyforecasttherelatedcosts;

• ourabilitytoanticipateandrespondtostrategicchanges,opportunities,andemergingtrendsinourindustryand/orbusinessand toaccuratelyforecasttherelatedimpactonourrevenuesandearnings;

• theimpactofanyimpairmentofourgoodwill,intangibleassets,orotherlong-termassets;

• ourabilitytodevelopnewproducts and services;

• ourabilitytoobtainadequatefinancingtoprovidethecapitalthatmaybenecessarytosupportour current or futureoperations;

• therisksassociatedwithdataprivacyorsecuritybreaches,computerhacking,networkpenetrationandotherillegalintrusionsof ourinformationsystemsorthoseofthird-partyvendorsorotherserviceproviders,whichmayresultinunauthorizedaccessby thirdpartiestocustomer,employeeorourinformationorpatienthealthinformationand may leadto a disruption in our business, costs to modify, enhance, or remediate our cybersecurity measures, enforcementactions,finesor litigationagainstus, or damage to our business reputation;

• theimpactofanyneworproposedlegislation,regulationsandinterpretationsrelatingtoMedicare,MedicareAdvantage, or Medicare Supplement;

• currentgeopoliticalturmoil,thecontinuingthreatofdomesticorinternationalterrorism,andthepotentialemergenceofahealth pandemicor an infectiousdiseaseoutbreak;

• the impact of the Tax Act and any additional new or proposed tax legislation;

• theimpactoflegalproceedingsinvolvingusand/oroursubsidiaries; and

• otherrisksdetailedinour Annual Report on Form 10-K for the fiscal year ended December 31, 2017 and our other filings with the Securities and Exchange Commission.

We undertake no obligation to update or revise any such forward-looking statements.

CustomerContracts

Our customer contracts generallyhave initial terms of approximately three years.  Some of our contractsallow the customer to terminate early and/or determine on an annual basis to which of their members they will offer our programs.

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Business Strategy

Our “A-B-C-D” strategy, which will leverage both our traditional physical footprint and developing digital platforms, is designed to (A) add new members in our three existing networks - SilverSneakers, Prime Fitness and WholeHealth Living, (B) build engagement and participation among our current eligible members, (C) collaborate with partners to add new products and services that will leverage the value of our brand, and (D) deepen relationships with our partners and their instructors within our national network.  In addition to the A-B-C-D strategy, we are focused on supporting the ability of our health plan customers to meet the needs of their members as well as providing a valuable service to improve the health and well-being of the consumers we serve through our networks and with our programs.

We engage and support our members based on the needs and preferences of our customers.  Within our fitness networks, we have approximately 16,000 participating locations and more than 1,000 alternative locations that provide classes outside of traditional fitness centers.  More than 14,000 of these participating locations within the national network provide access to SilverSneakers members, and more than 10,000 of these locations offer access to Prime Fitness members. 

Critical Accounting Policies

We describe oursignificant accountingpolicies inNote 1to the consolidatedfinancial statements in our Annual Report on Form 10-K for the fiscal year ended December 31, 2017.  We preparethe consolidatedfinancial statements inconformity with U.S. GAAP, which requires us to makeestimates and judgments that affect the reported amounts of assets andliabilitiesandrelateddisclosures at the date of the financial statements and the reported amounts of revenues andexpensesduring the reporting period.Actual results may differ from those estimates.

We believe the following accounting policies are the most critical inunderstanding the estimates and judgments that are involved in preparing our financial statements and the uncertainties that could impact our results of operations, financialcondition and cash flows.

Revenue Recognition

Beginning in 2018, we account for revenue from contracts with customers in accordance with ASC Topic 606.  The unit of account in ASC Topic 606 is a performance obligation, which is a promise in a contract to transfer to a customer either a distinct good or service (or bundle of goods or services) or a series of distinct goods or services provided over a period of time. ASC Topic 606 requires that a contract’s transaction price, which is the amount of consideration to which an entity expects to be entitled in exchange for transferring promised goods or services to a customer, is to be allocated to each performance obligation in the contract based on relative standalone selling prices and recognized as revenue when or as the performance obligation is satisfied.

We earn revenue from our three programs, SilverSneakers senior fitness, Prime Fitness and WholeHealth Living.  We provide the SilverSneakers senior fitness program to members of Medicare Advantage and MedicareSupplement plans through our contracts with such plans.  We offer Prime Fitness, a fitness facility access program, through contracts with employers, commercial health plans, and other sponsoring organizations that allow their members to individually purchase the program.  We sell our WholeHealth Living program primarily to health plans.

The significant majority of our customer contracts contain one performance obligation - to stand ready to provide access to our network of fitness locations and fitness programming - which is satisfied over time as services are rendered each month over the contract term.  There are generally no performance obligations that are unsatisfied at the end of a particular month.  There was no material revenue recognized during the three and six months ended June 30, 2018 from performance obligations satisfied in a prior period.  

Our fees are variable month to month and are generally billed per member per month (“PMPM”), or billed based on a combination of PMPM and member visits to a network location.  We bill PMPM fees by multiplying the contractually negotiated PMPM rate by the number of members eligible for or receiving our services during the month.  We bill for member visits approximately one month in arrears once actual member visits are known.  Payments from customers are typically due within 30 days of invoice date.  When material, we capitalize costs to obtain contracts with customers and amortize them over the expected recovery period.  

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Our customer contracts include variable consideration, which is allocated to each distinct month over the contract term based on eligible members and/or member visits each month.  The allocated consideration corresponds directly with the value to our customers of our services completed for the month.  Under the majority of our contracts, we recognize revenue each month using the practical expedient available under ASC 606-10-55-18, which provides that revenue is recognized in the amount for which we have the right to invoice.  

Although we evaluate our financial performance and make resource allocation decisions based upon the results of our single operating and reportable segment, we believe the following information depicts how our revenues and cash flows are affected by economic factors.  For the three and six months ended June 30, 2018, revenue from our SilverSneakers program, which is predominantly contracted with Medicare Advantage and Medicare Supplement plans, comprised approximately 81% of our consolidated revenues, while revenue from our Prime Fitness and WholeHealth Living programs comprised approximately 16% and 3% of our consolidated revenues, respectively.

Sales and usage-based taxes are excluded from revenues.

Impairment of Intangible Assets and Goodwill

We reviewgoodwillfor impairment at thereportingunitlevel (operatingsegmentor onelevelbelowanoperatingsegment) on an annualbasis (duringthe fourth quarter of our fiscal year) ormore frequently wheneverevents orcircumstances indicatethat the carryingvalue may not be recoverable. We have a single reporting unit.

As part of the impairment evaluation, we may elect to perform a qualitative assessment to determinewhether it is more likely than not that the fair valueof the reportingunit is less thanits carrying value.If we elect not to perform a qualitativeassessment or we determine that it is more likely than not that the fair valueof the reportingunit is less thanits carrying value, we perform a quantitative review as described below.

During a quantitative review of goodwill,we estimatethefair value of thereporting unit based on our market capitalization and compare such fair value to the carrying value of the reporting unit.  If the fair value of the reporting unit exceeds its carrying amount, no impairment is indicated. If the fair value of the reporting unit is less than its carrying amount, impairment of goodwill is measured as the excess of the carrying amount over fair value.

Except for a tradename that has an indefinite life and is not subject to amortization, we amortize identifiable intangible assets over their estimated useful lives using the straight-line method.We assess the potential impairment of intangible assets subject to amortizationwhenever events orchanges in circumstances indicate thatthe carrying values may not be recoverable. If we determine thatthe carrying value of other identifiable intangible assetsmay not be recoverable,we calculateany impairment using an estimate of the asset's fair value based on the estimated price that would be received to sell the asset in an orderly transaction between marketparticipants.  We estimated the fair value of our indefinite-lived intangible asset, a tradename, using a present value technique, which requires management's estimate of future revenues attributable to this tradename, estimation of the long-term growth rate and royalty rate for this revenue, and determination of our weighted average cost of capital.  Changes in these estimates and assumptions could materially affect the estimate of fair value for the tradename.

Income Taxes

The objectives of accounting for incometaxes are to recognize theamount of taxes payable or refundable for the current year and deferred tax liabilities and assets for the future tax consequences of events that have been recognized in an entity's financial statements or tax returns.  Accounting for income taxes requires significant judgment in evaluatingtax positions andin determining income tax provisions, including determination ofdeferred tax assets, deferred tax liabilities, and any valuation allowances that might be required against deferred tax assets.

Valuationallowances areestablished whennecessaryto reduce deferredtax assets to the amountsthat areexpectedtobe realized. When we determine that it is more likely than not thatwe will be able torealize ourdeferred tax assets in the future, an adjustment to the deferredtax asset is madeand reflectedin income. This determination will be made by considering various factors, including the reversaland timing of existingtemporary differences, tax planning strategies,and estimatesoffuture taxable income exclusive of the reversal of temporarydifferences.

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We recognize the tax benefit from an uncertain tax position onlyif itis more likely than not that the tax position will be sustainedonexaminationbythetaxingauthorities, basedonthetechnicalmerits of theposition.Thetax benefitsrecognizedin the financial statements from suchaposition should bemeasured basedon the largest benefit that hasagreater than 50% likelihood of being realized upon ultimate settlement.U.S. GAAPalso providesguidance on derecognition ofincome tax assets andliabilities, classificationof current and deferred income tax assets and liabilities, accounting for interest and penalties associated withtax positions, andincometax disclosures.Judgmentisrequiredinassessingthefuturetax consequences ofeventsthat havebeen recognized inour financialstatements or tax returns.Variations in the actual outcome of these future tax consequences could materially impact our consolidated financial position, results of operations, and cash flows.

The Tax Act was signed into law on December 22, 2017 and includes a number of changes to existing U.S. tax laws that impact us, most notably, a reduction of the U.S. corporate income tax rate from 35% to 21% for tax years beginning after December 31, 2017.  The Tax Act also provided for a one-time transition tax on certain foreign earnings and the acceleration of depreciation for certain assets placed into service after September 27, 2017.  In addition, it provides for prospective changes beginning in 2018, including acceleration of tax revenue recognition and additional limitations on executive compensation and the deductibility of interest.  We are currently evaluating the Tax Act with our professional advisers; we cannot predict at this time the full impact of the Tax Act on the Company in future periods.

Executive Overviewof Results

The key financialresults for the three and six months ended June 30, 2018 are:

• Revenues from continuing operations of:

o $151.9 million for the three months ended June 30, 2018, up 9.3% from $138.9 million for the same period in 2017; and

o $301.8 million for the six months ended June 30, 2018, up 7.8% from $279.9 million for the same period in 2017.

• Restructuring charges of $0.1 million for the six months ended June 30, 2018, compared to $0.7 million for the six months ended June 30, 2017;

• Pre-tax income from continuing operations of:

o $30.4 million for the three months ended June 30, 2018, up 13.3% from $26.8 million for the same period in 2017; and

o $58.8 million for the six months ended June 30, 2018, up 13.9% from $51.7 million for the same period in 2017.

• Earnings per diluted share from continuing operations of:

o $0.52 for the three months ended June 30, 2018, up 26.8% from $0.41 for the same period in 2017; and

o $1.01 for the six months ended June 30, 2018, up 27.8% from $0.79 for the same period in 2017; and

• Income (loss) from discontinued operations, net of income tax, of:

o $0.9 million for the three months ended June 30, 2018 compared to ($3.7) million for the same period in 2017; and

o $0.9 million for the six months ended June 30, 2018 compared to ($3.9) million for the same period in 2017.

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Results of Operations

The followingtable sets forth the components of the consolidated statements of operations for the three and six months ended June 30, 2018 and 2017 expressedas a percentage of revenues from continuing operations.

	ThreeMonths Ended June 30,						Six Months Ended June 30,
	2018			2017			2018			2017
Revenues		100.0	%		100.0	%		100.0	%		100.0	%
Cost of services (exclusive of    depreciation and amortization    included below)		71.8	%		71.3	%		72.0	%		72.0	%
Selling, general and administrative    expenses		5.1	%		5.9	%		5.4	%		5.9	%
Depreciation and amortization		0.7	%		0.6	%		0.7	%		0.6	%
Restructuring and related charges		0.1	%		(0.0	)%		0.0	%		0.2	%
Operating income (1)		22.3	%		22.3	%		21.8	%		21.3	%
Interest expense		2.3	%		3.0	%		2.3	%		2.8	%
Income before income taxes (1)		20.0	%		19.3	%		19.5	%		18.5	%
Income tax expense		5.0	%		6.9	%		4.9	%		6.8	%
Income from continuing    operations (1)		14.9	%		12.4	%		14.6	%		11.7	%
Income (loss) from discontinued    operations, net of tax		0.6	%		(2.6	)%		0.3	%		(1.4	)%
Net income (1)		15.5	%		9.8	%		14.9	%		10.3	%

(1) Figures may not add due to rounding.

Revenues

Revenues from continuing operations for the three and six months ended June 30, 2018 increased $13.0 million and $21.9 million, respectively, or 9.3% and 7.8%, respectively, over the same periods in 2017, primarily due to a net increase in the number of members either eligible or enrolled to participate in our fitness solutions.

Cost of Services

While cost of services from continuing operations (excluding depreciation and amortization) as a percentage of revenues did not materially change overall from the three months ended June 30, 2017 (71.3%) to the three months ended June 30, 2018 (71.8%) or from the six months ended June 30, 2017 (72.0%) to the six months ended June 30, 2018 (72.0%), there were offsetting increases and decreases within cost of services.  Cost of services as a percentage of revenues increased due to a higher number of average visits per member per month in 2018 compared to 2017, and the related costs were not fully offset by incremental revenue from such visits due to certain customer contracts in which our revenue per member is fixed, while our costs are variable.  This increase was mostly offset by lower expenses in 2018 related to salaries and benefits as well as business separation costs associated with the separation of the Network Solutions business from the disposed TPHS business.  

Selling, General and AdministrativeExpenses

Selling, general and administrative expenses from continuing operations as a percentage of revenues did not materially change from the three months ended June 30, 2017 (5.9%) to the three months ended June 30, 2018 (5.1%) or fromthe six months ended June 30, 2017 (5.9%) to the six months ended June 30, 2018 (5.4%).    

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Depreciationand Amortization

Depreciationand amortization expensefrom continuing operations increased $0.3 million and $0.7 million for the three and six months ended June 30, 2018, respectively, primarily due to increased depreciation expense related to computer software and hardware.  

Restructuring and Related Charges

In the third quarter of 2016, we began implementing a reorganization of our corporate support infrastructure, which was largely completed during the first quarter of 2017 (the "2016 Restructuring Plan").  During the six months ended June 30, 2017, we incurred approximately $0.7 million in restructuring charges from continuing operations, which consisted primarily of severance and other employee-related costs, related to the 2016 Restructuring Plan. 

Interest Expense

Interest expense from continuing operations decreased $0.6 million and $1.0 million from the three and six months ended June 30, 2017, respectively, compared to the same periods in 2018, primarily due to a lower average level of outstanding borrowings under our credit agreement during 2018 compared to 2017.  

Income TaxExpense

See Note 6 of the notes to consolidated financial statements in this report for a discussion of income tax expense.

Liquidityand Capital Resources

Overview

As of June 30, 2018, we had a working capital deficit of $85.0 million, which was negatively impacted by the classification of the Cash Convertible Notes, net of unamortized discount, of $150.0 million as a current liability at June 30, 2018 (as discussed in Note 7 of the notes to consolidated financial statements in this report).  On July 2, 2018 we repaid the $150.0 million aggregate principal amount of the Cash Convertible Notes using a combination of available cash and proceeds from borrowings under the delayed draw term loan facility of $100.0 million.  The majority of borrowings under the delayed draw term loan are classified as a long-term liability and are not included in the calculation of working capital.  

On April 21, 2017, we entered into the Credit Agreement, which replaced the Prior Credit Agreement.  The Credit Agreement provides us with (1) a $100 million revolving credit facility that includes a $25 million sublimit for swingline loans and a $75 million sublimit for letters of credit, (2) a $70 million term loan A facility, (3) a $150 million delayed draw term loan facility, and (4) an uncommitted incremental accordion facility of $100 million.

We used the proceeds of the term loan A and cash on hand to repay all of the outstanding indebtedness under the Prior Credit Agreement and to pay transaction costs and expenses.  As of June 30, 2018, our availability under the Credit Agreement included $93.7 million under the revolving credit facility and $150.0 million under the delayed draw term loan.  Proceeds of revolving loans and delayed draw term loans may be used to repay outstanding indebtedness (including amounts payable upon or in respect of any conversion of the Cash Convertible Notes discussed below and the repayment of any revolving loans borrowed for such purposes), to finance working capital needs, to finance acquisitions, to finance the repurchase of our common stock, to finance capital expenditures and for other general corporate purposes of the Company and its subsidiaries.  On July 2, 2018 we borrowed $100.0 million under the delayed draw term loan, which was used to repay the principal amount of the Cash Convertible Notes.  No additional amounts may be borrowed under the delayed draw term after July 2, 2018.

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We are required to repay any outstanding revolving loans in full on April 21, 2022.  The term loan A was repaid in full during 2017 and may not be re-borrowed.  We are required to repay the delayed draw term loan in quarterly principal installments calculated as follows: (1) for each of the first six quarters following the time of borrowing (beginning with the fourth quarter of 2018 and ending with the first quarter of 2020), 1.250% of the aggregate principal amount of the delayed draw term loan funded as of the last day of the immediately preceding quarter; and (2) for each of the remaining quarters prior to maturity on April 21, 2022, 1.875% of the aggregate principal amount of the delayed draw term loan funded as of the last day of the immediately preceding quarter.  At maturity on April 21, 2022, the entire unpaid principal balance of the delayed draw term loan is due and payable.

Cash Flows Provided by Operating Activities

Operating activities during the six months ended June 30, 2018 provided cash of $41.3 million compared to $40.1 million during the six months ended June 30, 2017.The slight increase in operating cash flow is primarily due to an increase in net income, mostly offset by a decrease in cash collections on accounts receivable due to timing.  

Cash Flows Used in Investing Activities

Investing activities during the six months ended June 30, 2018 used $2.3 million in cash, compared to $2.2 million during the six months ended June 30, 2017, which was primarily due to increased capital expenditures primarily related to digital applications and platforms, offset by proceeds received during the six months ended June 30, 2018 from a release of escrow funds related to the sale of MeYou Health LLC in June 2016.      

Cash Flows Provided By/Used in Financing Activities

Financing activities during the six months ended June 30, 2018 used $0.5 million in cash, compared to $33.3 million during the six months ended June 30, 2017.  This change is primarily due to higher net borrowings on debt during the six months ended June 30, 2017.

Credit Facility

For a detailed description of the Credit Agreement, refer to Note 7 of the notes to consolidated financial statements in this report.  The Credit Agreement contains financial covenants that require us to maintain specified ratios or levels at June 30, 2018 of (1) a maximum total funded debt to EBITDA of 3.75 and (2) a minimum total fixed charge coverage of 1.50.  We were in compliance with all of the financial covenant requirements of the Credit Agreement as of June 30, 2018. 

CashConvertibleSeniorNotes

We satisfied the Cash Convertible Notes upon their maturity on July 2, 2018 through a combination of available cash, payments made by the counterparties under the Cash Convertible Notes Hedges, and available credit under the Credit Agreement, as further described in Note 7 of the notes to consolidated financial statements in this report.  

For a detailed description of the related warrants, refer to Note 7 of the notes to consolidated financial statements included in this report.  If the market price per share of our common stock exceeds the strike price of the warrants on any warrant exercise date, we will be obligated to issue to the option counterparties a number of shares based on the amount by which the then-current market price per share of our common stock exceeds the then-effective strike price of each warrant.  We will not receive any additional proceeds if the warrants are exercised.  

General

We believe that cash flows from operating activities, our available cash, and our anticipated available credit under the Credit Agreement will continue to enable us to meet our contractual obligations and fund our current operations and debt payments for at least the next 12 months.  We cannot assure you that we will be able to secure additional financing if needed and, if such funds are available, whether the terms or conditions will be acceptable to us.

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If contract development accelerates or acquisition opportunities arise, we may need to issue additional debt or equity securities to provide the funding for these increased growth opportunities. We may also issue debt or equity securities in connection with futureacquisitionsor strategic alliances.  We cannot assure you that we would be able to issue additional debt orequity securities onterms that wouldbeacceptableto us.

RecentRelevant Accounting Standards

See Note 2 of the notes to consolidated financial statements included in this report for discussion of recent relevant accounting standards.

Item 3.Quantitativeand QualitativeDisclosures About MarketRisk

We are subject to market risk related to interest rate changes, primarily as a result of the Credit Agreement.  Borrowings under the Credit Agreement generally bear interest at variable rates based on a margin or spread in excess of either (1) one-month, two-month, three-month or six-month LIBOR (or with the approval of affected lenders, twelve-month LIBOR), which may not be less than zero, or (2) the greatest of (a) the SunTrust Bank prime lending rate, (b) the federal funds rate plus 0.50%, and (c) one-month LIBOR plus 1.00% (the “Base Rate”), as selected by the Company.  The LIBOR margin varies between 1.50% and 2.75%, and the Base Rate margin varies between 0.50% and 1.75%, depending on our net leverage ratio. 

A one-point interest rate change inour floating rate debt would not have resultedina material changein interest expense for the three and six months ended June 30, 2018.

Item 4. Controls and Procedures

Evaluation of DisclosureControls and Procedures

The Company's principal executive officer and principal financial officer have reviewed and evaluated the effectiveness of the Company's disclosure controls and procedures (as defined in Rule 13a-15(e) and 15d-15(e) promulgated under the Exchange Act) as of June 30, 2018.  Based on that evaluation, the principal executive officer and principal financial officer have concluded that the Company's disclosure controls and procedures are effective.  They are designed to ensure that information required to be disclosed by the Company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in the U.S. Securities and Exchange Commission’s rules and forms and to ensure that information required to be disclosed by the Company in the reports that it files or submits under the Exchange Act is accumulated and communicated to the Company's management, including the principal executive officer and principal financial officer, to allow timely decisions regarding required disclosure.

Changes in Internal Control Over Financial Reporting

There have been no changes in the Company's internal controls over financial reporting during the three months ended June 30, 2018 that have materially affected, or are reasonably likely to materially affect, the Company's internal control over financial reporting.

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Part IIOther Information

Item 1.Legal Proceedings

There have been no material developments with respect to any previously reported legal proceedings since the disclosures contained in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2017.

Item 1A.Risk Factors

Reference is made to “Part I — Item 1A. Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2017 for information concerning risk factors. In connection with the repayment of our Cash Convertible Notes, certain of the risk factors included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2017 have changed due to the elimination of risks related to the Cash Convertible Notes.

The following risk factors included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2017 are deleted in their entirety:

• “The accounting for the Cash Convertible Notes and related cash convertible notes hedge transactions may result in volatility to our consolidated statements of comprehensive income (loss)”; and

• “We are subject to counterparty risk with respect to the Cash Convertible Note Hedges.”

The following risk factor included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2017 has changed and is restated in its entirety below.

The performance of our business and the level of our indebtedness could prevent us from meeting the obligations under our credit agreement or have an adverse effect on our future financial condition, our ability to raise additional capital, or our ability to react to changes in the economy or our industry.

On April 21, 2017, we entered into a new Revolving Credit and Term Loan Agreement (the "Credit Agreement") with a group of lenders. As of June 30, 2018, we had no borrowings outstanding under the Credit Agreement.  On July 2, 2018 we borrowed $100.0 million under the delayed draw term loan, which was used to repay the principal amount of the Cash Convertible Notes.

Our ability to service our indebtedness will depend on our ability to generate cash in the future.  We cannot assure you that our business will generate sufficient cash flow from operations or that future borrowings will be available in an amount sufficient to enable us to service our indebtedness or to fund other liquidity needs.

The Credit Agreement contains various financial covenants and limits repurchases of our common stock and the amount of dividends that we can pay to holders of our common stock.  A breach of any of these covenants could result in a default under the Credit Agreement in which all amounts outstanding under the Credit Agreement may become immediately due and payable and all commitments under the Credit Agreement to extend further credit may be terminated.

Our indebtedness could adversely affect our future financial condition or our ability to react to changes in the economy or industry by, among other things:

• increasing our vulnerability to a downturn in general economic conditions, loss of revenue and/or profit margins in our business, or to increases in interest rates, particularly with respect to the portion of our outstanding debt that is subject to variable interest rates;

• potentially limiting our ability to obtain additional financing or to obtain such financing on favorable terms;

• causing us to dedicate a portion of future cash flow from operations to service or pay down our debt, which reduces the cash available for other purposes, such as operations, capital expenditures, and future business opportunities; and

• possibly limiting our ability to adjust to changing market conditions and placing us at a competitive disadvantage compared to our competitors who may be less leveraged.

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Item 6.Exhibits

(a) Exhibits

10.1	Form of Restricted Stock Unit Award Agreement (for Directors) under the Company’s Amended and Restated 2014 Stock Incentive Plan
31.1	Certification pursuant to section 302 of the Sarbanes-Oxley Act of2002 made by Donato Tramuto, Chief Executive Officer
31.2	Certificationpursuant to section 302 of the Sarbanes-Oxley Act of2002 madeby Adam Holland, Chief Financial Officer
32	CertificationPursuant to 18 U.S.C section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 madeby Donato Tramuto, Chief Executive Officer, and Adam Holland,Chief Financial Officer
101.INS	XBRL Instance Document
101.SCH	XBRL Taxonomy Extension Schema
101.CAL	XBRL Taxonomy Extension Calculation Linkbase
101.DEF	XBRL Taxonomy Extension Definition Linkbase
101.LAB	XBRL Taxonomy Extension Label Linkbase
101.PRE	XBRL Taxonomy Extension Presentation Linkbase

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SIGNATURES

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 hereunto duly authorized.

			Tivity Health, Inc.
			(Registrant)
Date:	August 3, 2018	By	/s/ Adam Holland
			Chief Financial Officer
			(Principal Financial Officer)

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EX-10.1

Exhibit 10.1

TIVITY HEALTH, INC.

AMENDED AND RESTATED 2014 STOCK INCENTIVE PLAN

RESTRICTED STOCK UNIT AWARD AGREEMENT

(DIRECTORS)

This RESTRICTED STOCK UNIT AWARD AGREEMENT (the "Agreement"), dated GRANT DATE (“Grant Date”), is by and between Tivity Health, Inc., a Delaware corporation (the "Company"), and PARTICIPANT NAME (the "Director"), under the Company's Amended and Restated 2014 Stock Incentive Plan (the "Plan").  Terms not otherwise defined herein shall have the meanings given to them in the Plan.

Section 1.Restricted Stock Unit Award.  The Director is hereby granted NUMBER OF SHARES restricted stock units (the "Restricted Stock Units").  Each Restricted Stock Unit represents the right to receive one share of the Company's Common Stock, $.001 par value (the "Stock"), subject to the terms and conditions of this Agreement and the Plan.  

Section 2.Vesting of the Award.  Except as otherwise provided in Section 3 below, the Restricted Stock Units will vest on the earlier to occur of (i) the first anniversary of the Grant Date, and (ii) the first annual meeting of the stockholders of the Company that occurs after the Grant Date (such earlier date, the "Vesting Date"), as long as the Director is serving as a director of the Company on the Vesting Date. The Company shall issue one share of the Stock to the Director for each vested Restricted Stock Unit (the “Distributed Shares”) at the time the Restricted Stock Unit vests.  The Distributed Shares shall be represented by a certificate or by a book-entry.

Section 3.Termination or Expiration of Director’s Position on the Board

3.1Termination or Resignation from Board Following At Least Three Terms as a Director.  If the Director shall cease to serve as a director of the Corporation for any reason other than involuntary removal by the stockholders for cause and if the Director has (x)(A) served at least five years as a director of the Corporation, or (B)(i) served at least three years as a director of the Corporation and (ii) offered to resign from the Board on or after such Director’s 72^nd birthday, which offer to resign has been accepted by the Corporation, and (y) in any case of (A) or (B) above, given the Corporation at least one month prior written notice of the Director’s intent not to stand for re-election at the end of the Director’s then-current term (provided that the notice requirement in this Section 3.1(y) shall not apply in the event that the Director ceases to serve as a director of the Corporation as a result of the Corporation’s request therefor), the Restricted Stock Units granted hereunder shall not be forfeited and shall be paid to the Director on the same schedule as provided in Section 2 (or otherwise) as if the Director had continued to serve through each Vesting Date.

3.2Termination by Reason of Death or Disability.  If the Director shall cease to serve as a director of the Corporation by reason of death or Disability (as defined in the Plan), the Restricted Stock Units granted hereunder shall immediately vest.

3.3Termination for any Other Reason.  If the Director shall cease to be a director of the Corporation for any reason (including removal by the stockholders for cause) other than as set forth in Section 3.1 or Section 3.2 above, all Restricted Stock Units that have not vested prior to the date the Director ceases to be a director of the Corporation will be forfeited and the Director shall have no further rights with respect to such Restricted Stock Units.

Section 4.Voting Rights and Dividends.  Prior to the Vesting Date, the Director shall be credited with cash dividend equivalents with respect to the Restricted Stock Unitsat the time of any payment of dividends to stockholders on shares of Common Stock in accordance with the terms set forth in the Plan, and such dividend equivalents shall be paid (in cash, without interest) to the Director when the Restricted Stock Units to which they relate vest in accordance with this Agreement.  The Director shall not have any voting rights with respect to the Stock underlying the Restricted Stock Units prior to the vesting of the Restricted Stock Units and the issuance of Stock as set forth in Section 2.  A holder of Distributed Shares shall have full dividend and voting rights as a holder of Stock.

Section 5.Restrictions on Transfer; Change in Control.

5.1General Restrictions.  The Restricted Stock Units shall not be transferable by the Director (or his or her personal representative or estate) other than by will or by the laws of descent and distribution.  The terms of this Agreement shall be binding on the executors, administrators, heirs and successors of the Director.

5.2Change in Control.  All restrictions imposed on the Restricted Stock Units shall expire automatically and the Restricted Stock Units granted hereby shall be deemed fully vested upon a Change in Control, as such term is defined in the Plan, and the Distributed Shares related thereto shall be outstanding at the effective time of such Change in Control.

Section 6.Restrictive Agreement.  As a condition to the receipt of any Distributed Shares, the Director (or his or her legal representative or estate or any third party transferee), if the Company so requests, will execute an agreement in form satisfactory to the Company in which the Director or such other recipient of the shares represents that he or she is purchasing the shares for investment purposes, and not with a view to resale or distribution.  

Section 7.Adjustment.  In the event of any merger, reorganization, consolidation, recapitalization, extraordinary cash dividend, stock dividend, stock split or other change in corporate structure affecting the Stock, the number of Restricted Stock Units subject to this Agreement shall be equitably and proportionately adjusted (without duplication of Section 4) by the Committee in accordance with the Plan.

Section 8.[Intentionally Omitted]

Section 9.Plan.  This Agreement is made under and subject to the provisions of the Plan, and all of the provisions of the Plan are also provisions of this Agreement.  If there is a difference or conflict between the provisions of this Agreement and the provisions of the Plan, the provisions of the Plan will govern.  By signing this Agreement, the Director confirms that he or she has received a copy of the Plan.

Section 10.Miscellaneous.

10.1Entire Agreement.  This Agreement and the Plan contain the entire understanding and agreement between the Company and the Director concerning the Restricted Stock Units granted hereby, and supersede any prior or contemporaneous negotiations and understandings.  The Company and the Director have made no promises, agreements, conditions, or understandings relating to the Restricted Stock Units, either orally or in writing, that are not included in this Agreement or the Plan.

10.2Captions.  The captions and section numbers appearing in this Agreement are inserted only as a matter of convenience.  They do not define, limit, construe, or describe the scope or intent of the provisions of this Agreement.

10.3Counterparts.  This Agreement may be executed in counterparts, each of which when signed by the Company and the Director will be deemed an original and all of which together will be deemed the same Agreement.

10.4Notice.  All notices required to be given under this Agreement shall be deemed to be received if delivered or mailed as provided for herein, to the parties at the following addresses, or to such other address as either party may provide in writing from time to time.

To the Company:	Tivity Health, Inc.
	701 Cool Springs Blvd
	Franklin, Tennessee 37067

To the Director:	PARTICIPANT NAME
(Director name and address)	Address on File
	at the Company

10.5Amendment.  Subject to the restrictions contained in the Plan, the Committee may amend the terms of this Agreement, prospectively or retroactively, but, subject to Section 7 above, no such amendment shall impair the rights of the Director hereunder without the Director's consent.

10.6Governing Law.  This Agreement shall be governed and construed exclusively in accordance with the law of the State of Delaware applicable to agreements to be performed in the State of Delaware to the extent it may apply.

10.7Validity; Severability.  If, for any reason, any provision hereof shall be determined to be invalid or unenforceable, the validity and effect of the other provisions hereof shall not be affected thereby.  Whenever possible, each provision of this Agreement will be interpreted in such manner as to be effective and valid under applicable law, but if any provision of this Agreement is held to be invalid, illegal or unenforceable in any respect under any applicable law or rule in any jurisdiction, such invalidity, illegality or unenforceability will not affect any other provision or any other jurisdiction, but this Agreement will be reformed, construed and enforced in such jurisdiction as if such invalid, illegal or unenforceable provision had never been contained herein.  If any court determines that any provision of this Agreement is unenforceable but has the power to reduce the scope or duration of such provision, as the case may be, such provision, in its reduced form, shall then be enforceable.

10.8Interpretation; Resolution of Disputes.  It is expressly understood that the Committee is authorized to administer, construe and make all determinations necessary or appropriate to the administration of the Plan and this Agreement, all of which shall be binding upon the Director.  Any dispute or disagreement which may arise under, or as a result of, or in any way related to, the interpretation, construction or application of this Agreement shall be determined by the Board.  Any determination made hereunder shall be final, binding and conclusive on the Director and the Company for all purposes.

10.9Successors in Interest.  This Agreement shall inure to the benefit of and be binding upon any successor to the Company.  This Agreement shall inure to the benefit of the Director’s legal representative and permitted assignees.  All obligations imposed upon the Director and all rights granted to the Company under this Agreement shall be binding upon the Director 's heirs, executors, administrators, successors and assignees.

[remainder of page intentionally left blank; signature page follows]

IN WITNESS WHEREOF, the parties have caused the Restricted Stock Unit Agreement to be duly executed as of the day and year first written above.

TIVITY HEALTH, INC.

/s/ Donato Tramuto

Name: Donato Tramuto

Title: Chief Executive Officer

DIRECTOR: PARTICIPANT NAME

Online Grant Acceptance Satisfies Signature Requirement

EX-31.1

Exhibit 31.1

CERTIFICATION

I, Donato Tramuto, certify that:

1.I have reviewed this quarterly report on Form 10-Q of Tivity Health, Inc.;

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5.The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date:    August 3, 2018

/s/ Donato Tramuto

Donato Tramuto

Chief Executive Officer

EX-31.2

Exhibit 31.2

CERTIFICATION

I, Adam Holland, certify that:

1.I have reviewed this quarterly report on Form 10-Q of Tivity Health, Inc.;

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5.The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date:    August 3, 2018

/s/ Adam Holland

Adam Holland

Chief Financial Officer

EX-32

Exhibit 32

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Tivity Health, Inc. (the "Company") on Form 10-Q for the quarter ended June 30, 2018, as filed with the Securities and Exchange Commission on the date hereof (the "Report"), we, Donato Tramuto, Chief Executive Officer of the Company, and Adam Holland, Chief Financial Officer of the Company, each certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/ Donato Tramuto

Donato Tramuto

Chief Executive Officer

August 3, 2018

/s/ Adam Holland

Adam Holland

Chief Financial Officer

August 3, 2018

XML

Document and Entity Information - shares	6 Months Ended
	Jun. 30, 2018	Jul. 31, 2018
Document And Entity Information [Abstract]
Entity Registrant Name	TIVITY HEALTH, INC.
Entity Central Index Key	0000704415
Current Fiscal Year End Date	--12-31
Entity Filer Category	Large Accelerated Filer
Document Fiscal Year Focus	2018
Document Fiscal Period Focus	Q2
Trading Symbol	TVTY
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Jun. 30, 2018
Entity Common Stock, Shares Outstanding		40,006,661

XML

CONSOLIDATED BALANCE SHEETS (Unaudited) - USD ($) $ in Thousands	Jun. 30, 2018	Dec. 31, 2017
Current assets:
Cash and cash equivalents	$ 66,995	$ 28,440
Accounts receivable, net	68,762	55,113
Prepaid expenses	4,249	3,444
Other current assets	4,746	2,180
Cash convertible notes hedges	141,246	134,079
Income taxes receivable	636	39
Total current assets	286,634	223,295
Property and equipment:
Leasehold improvements	10,396	10,384
Computer equipment and related software	22,330	19,508
Furniture and office equipment	8,193	8,194
Capital projects in process	2,649	1,105
Property and equipment, gross	43,568	39,191
Less accumulated depreciation	(30,791)	(28,533)
Property and equipment, net	12,777	10,658
Other assets	26,069	13,315
Long-term deferred tax asset	9,912	25,166
Intangible assets, net	29,049	29,049
Goodwill, net	334,680	334,680
Total assets	699,121	636,163
Current liabilities:
Accounts payable	26,622	26,804
Accrued salaries and benefits	5,993	15,018
Accrued liabilities	41,762	33,527
Other current liabilities	3,792	984
Cash conversion derivative	141,246	134,079
Current portion of debt	150,007	145,959
Current portion of long-term liabilities	2,244	2,262
Total current liabilities	371,666	358,633
Other long-term liabilities	7,595	5,577
Stockholders' equity:
Preferred stock $.001 par value, 5,000,000 shares authorized, none outstanding
Common stock $.001 par value, 120,000,000 shares authorized, 39,963,683 and 39,729,580 shares outstanding, respectively	40	40
Additional paid-in capital	352,230	349,243
Accumulated deficit	(4,228)	(49,148)
Treasury stock, at cost, 2,254,953 shares in treasury	(28,182)	(28,182)
Total stockholders' equity	319,860	271,953
Total liabilities and stockholders' equity	$ 699,121	$ 636,163

XML

CONSOLIDATED BALANCE SHEETS (Unaudited) (Parenthetical) - $ / shares	Jun. 30, 2018	Dec. 31, 2017
Stockholders' equity:
Preferred stock, par value (in dollars per share)	$ 0.001	$ 0.001
Preferred stock, shares authorized (in shares)	5,000,000	5,000,000
Preferred stock, shares outstanding (in shares)	0	0
Common stock, par value (in dollars per share)	$ 0.001	$ 0.001
Common stock, shares authorized (in shares)	120,000,000	120,000,000
Common stock, shares outstanding (in shares)	39,963,683	39,729,580
Treasury stock (in shares)	2,254,953	2,254,953

XML

CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) - USD ($) shares in Thousands, $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017
Income Statement [Abstract]
Revenues	$ 151,865	$ 138,914	$ 301,795	$ 279,884
Cost of services (exclusive of depreciation and amortization of $995, $648, $1,970 and $1,305, respectively, included below)	109,022	99,071	217,299	201,470
Selling, general & administrative expenses	7,756	8,176	16,334	16,538
Depreciation and amortization	1,135	789	2,257	1,576
Restructuring and related charges	118	(52)	124	685
Operating income	33,834	30,930	65,781	59,615
Interest expense	3,482	4,130	6,936	7,964
Income before income taxes	30,352	26,800	58,845	51,651
Income tax expense	7,669	9,560	14,826	18,931
Income from continuing operations	22,683	17,240	44,019	32,720
Income (loss) from discontinued operations, net of income tax	901	(3,673)	901	(3,893)
Net income	$ 23,584	$ 13,567	$ 44,920	$ 28,827
Earnings (loss) per share - basic:
Continuing operations	$ 0.57	$ 0.44	$ 1.10	$ 0.84
Discontinued operations	0.02	(0.09)	0.02	(0.10)
Net income (loss)	0.59	0.35	1.13	0.74
Earnings (loss) per share - diluted:
Continuing operations	0.52	0.41	1.01	0.79
Discontinued operations	0.02	(0.09)	0.02	(0.09)
Net income (loss)	$ 0.54	$ 0.32	$ 1.03	$ 0.70
Comprehensive income	$ 23,584	$ 17,957	$ 44,920	$ 33,329
Weighted average common shares and equivalents:
Basic	39,899	39,246	39,841	39,158
Diluted	43,284	42,369	43,437	41,456

XML

CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) (Parenthetical) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017
Income Statement [Abstract]
Cost of services, depreciation and amortization	$ 995	$ 648	$ 1,970	$ 1,305

XML

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (Unaudited) $ in Thousands	6 Months Ended
	Jun. 30, 2017 USD ($)
Statement Of Income And Comprehensive Income [Abstract]
Net income	$ 28,827
Other comprehensive income, net of tax:
Foreign currency translation adjustment, net of tax	1,458
Release of cumulative translation adjustment to loss from discontinued operations due to substantial liquidation of foreign entity	3,044
Total other comprehensive income, net of tax	4,502
Comprehensive income	$ 33,329

XML

CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY (Unaudited) - 6 months ended Jun. 30, 2018 - USD ($) $ in Thousands	Total	Common Stock	Additional Paid-in Capital	Accumulated Deficit	Treasury Stock
Balance at Dec. 31, 2017	$ 271,953	$ 40	$ 349,243	$ (49,148)	$ (28,182)
Comprehensive income	44,920			44,920
Exercise of stock options	1,135		1,135
Tax withholding for share-based compensation	(1,398)		(1,398)
Share-based employee compensation expense	3,250		3,250
Balance at Jun. 30, 2018	$ 319,860	$ 40	$ 352,230	$ (4,228)	$ (28,182)

XML

CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017
Cash flows from operating activities:
Income from continuing operations	$ 44,019	$ 32,720
Income (loss) from discontinued operations	901	(3,893)
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	2,257	1,589
Amortization of deferred loan costs	1,050	1,246
Amortization of debt discount	4,140	3,911
Share-based employee compensation expense	3,250	3,362
(Gain) loss on sale of TPHS business	(1,304)	444
Loss on release of cumulative translation adjustment		3,044
Deferred income taxes	15,254	18,755
Increase in accounts receivable, net	(13,890)	(4,398)
Decrease in other current assets	756	869
Decrease in accounts payable	(1,869)	(1,480)
Decrease in accrued salaries and benefits	(9,928)	(11,953)
Decrease in other current liabilities	(4,563)	(2,268)
Other	1,227	(1,888)
Net cash flows provided by operating activities	41,300	40,060
Cash flows from investing activities:
Acquisition of property and equipment	(3,673)	(2,244)
Proceeds from sale of MeYou Health	1,416
Net cash flows used in investing activities	(2,257)	(2,244)
Cash flows from financing activities:
Proceeds from issuance of long-term debt	13,675	274,425
Payments of long-term debt	(14,216)	(308,496)
Payments related to tax withholding for share-based compensation	(1,398)	(1,066)
Exercise of stock options	1,135	2,757
Deferred loan costs		(2,452)
Change in cash overdraft and other	343	1,558
Net cash flows used in financing activities	(461)	(33,274)
Effect of exchange rate changes on cash	(27)	1,652
Net increase in cash and cash equivalents	38,555	6,194
Cash and cash equivalents, beginning of period	28,440	1,602
Cash and cash equivalents, end of period	$ 66,995	$ 7,796

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Basis of Presentation

6 Months Ended

Jun. 30, 2018

Organization Consolidation And Presentation Of Financial Statements [Abstract]

Basis of Presentation

1. Basis of Presentation

Our financial statements and accompanying notes are prepared in accordance with generally accepted accounting principles in the United States (“U.S. GAAP”).  In our opinion, the accompanying consolidated financial statements of Tivity Health, Inc. and its wholly-owned subsidiaries (collectively, “Tivity Health,” the “Company,” or such terms as “we,” "us,” or “our”) reflect all adjustments, consisting only of normal recurring adjustments, necessary for a fair statement.

Our results from continuing operations do not include the results of the total population health services (“TPHS”) business, which we sold to Sharecare, Inc. (“Sharecare”) effective July 31, 2016.  Results of operations for the TPHS business have been classified as discontinued operations for all periods presented in the accompanying consolidated financial statements.  See Note 4 for further information.

We have omitted certain financial information that is normally included in financial statements prepared in accordance with U.S. GAAP but that is not required for interim reporting purposes.  You should read the accompanying consolidated financial statements in conjunction with the financial statements and notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2017.

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Recent Relevant Accounting Standards

6 Months Ended

Jun. 30, 2018

New Accounting Pronouncements And Changes In Accounting Principles [Abstract]

Recent Relevant Accounting Standards

2. Recent RelevantAccounting Standards

On January 1, 2018, we adopted Accounting Standards Codification (“ASC”) Topic 606, “Revenue from Contracts with Customers” (“ASC Topic 606”) using the modified retrospective method, pursuant to which we applied ASC Topic 606 to (i) all new contracts entered into after January 1, 2018 and (ii) contracts that were not completed as of January 1, 2018.  In accordance with this approach, our results for periods prior to January 1, 2018 were not revised and continue to be reported in accordance with our historical accounting under ASC Topic 605, “Revenue Recognition.”  For contracts that were modified prior to January 1, 2018, we have not retrospectively restated the contract for those modifications in accordance with the contract modification guidance in ASC 606-10-25-12 and ASC 606-10-25-13 but instead, using the practical expedient available under ASC 606-10-65-1(f)(4), have reflected the aggregate effect of all modifications when identifying the satisfied and unsatisfied performance obligations, determining the transaction price, and allocating the transaction price.

The cumulative impact of our adoption of ASC Topic 606 was not material to record as of January 1, 2018, and there was no material impact on our consolidated income statement, balance sheet, or cash flows for the quarter ended March 31, 2018.  For example, we do not have any material contract assets or contract liabilities as defined under ASC Topic 606.  In addition, the incremental costs of obtaining a contract with a customer (for example, sales commissions) that would have been recognized as an asset on January 1, 2018 were not material to record.  See Note 3 for a further discussion of revenue recognition.

On January 1, 2018, we adopted Accounting Standards Update (“ASU”) No. 2016-15, “Statement of Cash Flows” (Topic 230) (“ASU 2016-15”).  ASU 2016-15 addresses how certain cash receipts and cash payments are presented and classified in the statement of cash flows and is to be applied using a retrospective approach.  The adoption of this standard did not have a material impact on our consolidated financial statements and related disclosures and did not result in a reclassification to items in prior periods.

On January 1, 2018, we adopted ASU No. 2017-09, “Compensation-Stock Compensation (Topic 718): Scope of Modification Accounting” (“ASU 2017-09”), which clarifies when changes to the terms or conditions of a share-based payment award must be accounted for as modifications.  ASU 2017-09 is to be applied prospectively to awards modified on or after January 1, 2018.  The adoption of this standard did not have an impact on our consolidated financial statements and related disclosures.

In February 2016, the Financial Accounting Standards Board (“FASB”) issued ASU No. 2016-02, “Leases”(“ASU 2016-02”), which requires that lessees recognize assets and liabilities for leases with lease terms greater than twelve months in the statement of financial position, and is effective for us on January 1, 2019. ASU 2016-02 also requires improved disclosures to help users of financial statements better understand the amount, timing and uncertainty of cash flows arising from leases. The standard is required to be adopted using a modified retrospective transition method, which will require the cumulative effect of initially applying the standard to be recognized as an adjustment to beginning retained earnings as of January 1, 2019.  We are currently conducting analysis to quantify the adoption impact of the provisions of the new standard and evaluating our current leases. We believe we are following an appropriate timeline to allow for proper recognition, presentation and disclosure upon adoption effective January 1, 2019.

In January 2017, the FASB issued ASU No. 2017-04, “Intangibles - Goodwill and Other” (“ASU 2017-04”), which simplifies the subsequent measurement of goodwill by eliminating step two from the goodwill impairment test.  ASU 2017-04 is effective for annual and interim impairment tests in fiscal years beginning after December 15, 2019 and is required to be applied prospectively. Early adoption is allowed for annual goodwill impairment tests performed on testing dates after January 1, 2017. We do not anticipate that adopting this standard will have an impact on our consolidated financial statements and related disclosures.

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Revenue Recognition

6 Months Ended

Jun. 30, 2018

Revenue From Contract With Customer [Abstract]

Revenue Recognition

3. Revenue Recognition

Beginning in 2018, we account for revenue from contracts with customers in accordance with ASC Topic 606.  The unit of account in ASC Topic 606 is a performance obligation, which is a promise in a contract to transfer to a customer either a distinct good or service (or bundle of goods or services) or a series of distinct goods or services provided over a period of time. ASC Topic 606 requires that a contract's transaction price, which is the amount of consideration to which an entity expects to be entitled in exchange for transferring promised goods or services to a customer, is to be allocated to each performance obligation in the contract based on relative standalone selling prices and recognized as revenue when or as the performance obligation is satisfied.

We earn revenue from our three programs, SilverSneakers® senior fitness, Prime® Fitness and WholeHealth Living^TM.  We provide the SilverSneakers senior fitness program to members of Medicare Advantage and Medicare Supplement plans through our contracts with such plans.  We offer Prime Fitness, a fitness facility access program, through contracts with employers, commercial health plans, and other sponsoring organizations that allow their members to individually purchase the program.  We sell our WholeHealth Living program primarily to health plans.

The significant majority of our customer contracts contain one performance obligation - to stand ready to provide access to our network of fitness locations and fitness programming - which is satisfied over time as services are rendered each month over the contract term.  There are generally no performance obligations that are unsatisfied at the end of a particular month.  There was no material revenue recognized during the three and six months ended June 30, 2018 from performance obligations satisfied in a prior period.

Our fees are variable month to month and are generally billed per member per month (“PMPM”), or billed based on a combination of PMPM and member visits to a network location.  We bill PMPM fees by multiplying the contractually negotiated PMPM rate by the number of members eligible for or receiving our services during the month.  We bill for member visits approximately one month in arrears once actual member visits are known.  Payments from customers are typically due within 30 days of invoice date.  When material, we capitalize costs to obtain contracts with customers and amortize them over the expected recovery period. 

Our customer contracts include variable consideration, which is allocated to each distinct month over the contract term based on eligible members and/or member visits each month.  The allocated consideration corresponds directly with the value to our customers of our services completed for the month.  Under the majority of our contracts, we recognize revenue each month using the practical expedient available under ASC 606-10-55-18, which provides that revenue is recognized in the amount for which we have the right to invoice. 

Although we evaluate our financial performance and make resource allocation decisions based upon the results of our single operating and reportable segment, we believe the following information depicts how our revenues and cash flows are affected by economic factors.  For the three and six months ended June 30, 2018, revenue from our SilverSneakers program, which is predominantly contracted with Medicare Advantage and Medicare Supplement plans, comprised approximately 81% of our consolidated revenues, while revenue from our Prime Fitness and WholeHealth Living programs comprised approximately 16% and 3% of our consolidated revenues, respectively.

Sales and usage-based taxes are excluded from revenues.

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Discontinued Operations

6 Months Ended

Jun. 30, 2018

Discontinued Operations And Disposal Groups [Abstract]

Discontinued Operations

4. Discontinued Operations

On July 27, 2016, we entered into a Membership Interest Purchase Agreement (the “Purchase Agreement”) with Sharecare and Healthways SC, LLC, a newly formed Delaware limited liability company and wholly owned subsidiary of the Company, pursuant to which Sharecare acquired the TPHS business, which closed effective July 31, 2016 (“Closing”).

At Closing, Sharecare delivered to the Company an Adjustable Convertible Equity Right (the “ACER”) with an initial face value of $30.0 million.  The ACER was convertible into shares of common stock of Sharecare on July 31, 2018 at an initial conversion price of $249.87 per share, subject to customary adjustment for stock splits, stock dividends and other reorganizations of Sharecare.  

The Purchase Agreement provided for post-closing adjustments based on, among other things, any successful claims for indemnification by Sharecare (which may result in a reduction in the face amount of the ACER, unless the Company elects, in its sole discretion, to satisfy any such successful claims with cash payments), none of which such claims had been made as of June 30, 2018.

As of each of December 31, 2017 and June 30, 2018, we have recorded the $39.8 million face value of the ACER at an estimated carrying value of $10.8 million, which is classified as an equity receivable included in other assets. 

The following table presents financial results of the TPHS business included in “loss from discontinued operations” for the three and six months ended June 30, 2018 and 2017.

	Three Months Ended June 30,						Six Months Ended June 30,
(In thousands)	2018			2017			2018			2017
Revenues	$	—		$	—		$	—		$	—
Cost of services		30			38			30			258
Selling, general & administrative expenses		48			20			48			157
Distribution from joint venture		—			98			—			98
Pretax income (loss) on discontinued operations	$	(78	)	$	40		$	(78	)	$	(317	)
Pretax loss on release of cumulative translation    adjustment (1)		—			(3,044	)		—			(3,044	)
Pretax income (loss) on sale of TPHS business (2)		1,304			(134	)		1,304			(444	)
Total pretax income (loss) on discontinued    operations	$	1,226		$	(3,138	)	$	1,226		$	(3,805	)
Income tax expense		325			535			325			88
Income (loss) from discontinued operations, net of    income tax	$	901		$	(3,673	)	$	901		$	(3,893	)

(1) During the second quarter of 2017, we substantially liquidated foreign entities that were part of our TPHS business, resulting in a release of the cumulative translation adjustment of $3.0 million into loss from discontinued operations.

(2) Includes $1.4 million received during the three months ended June 30, 2018 from a release of escrow funds related to the sale of MeYou Health, LLC in June 2016.

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Share-Based Compensation

6 Months Ended

Jun. 30, 2018

Disclosure Of Compensation Related Costs Sharebased Payments [Abstract]

Share-Based Compensation

5. Share-Based Compensation

We currently havethree types of share-based awardsoutstandingto our employees and directors:stock options, restrictedstock units,andmarketstock units. We believethatourshare-basedawards alignthe interests of our employees anddirectors withthoseofourstockholders.

We recognize share-based compensation expense for the market stock units if the requisite service period is rendered, even if the market condition is never satisfied. For the three and six months ended June 30, 2018, we recognized share-based compensation costs of $1.8 million and $3.3 million, respectively.  For the three and six months ended June 30, 2017, we recognized share-based compensation costs of $1.9 million and $3.4 million, respectively.  We account for forfeitures as they occur.  

A summary of our stock options as of June 30, 2018 and the changes during the six months ended June 30, 2018 is presented below:

Options	Shares (In thousands)			Weighted Average Exercise Price Per Share		Weighted Average Remaining Contractual Term		Aggregate Intrinsic Value (In thousands)
Outstanding at January 1, 2018		507		$	12.98
Granted		70			38.68
Exercised		(97	)		11.70
Forfeited		—			—
Expired		—			—
Outstanding at June 30, 2018		480		$	16.98		4.5	$	8,988
Exercisable at June 30, 2018		410		$	13.28		3.6	$	8,979

The weighted-average grant-date fair value of options granted during the three months ended June 30, 2018 was $20.60.

The followingtableshows a summary ofour restricted stock units as of June 30, 2018,aswellas activity during the six months ended June 30, 2018:

	Restricted Stock and Restricted Stock Units
	Shares (In thousands)			Weighted- Average Grant Date Fair Value
Nonvested at January 1, 2018		572		$	17.60
Granted		66			38.56
Vested		(165	)		18.27
Forfeited		(21	)		23.04
Nonvested at June 30, 2018		452		$	20.17

The followingtableshows a summary ofourmarket stock unitsas of June 30, 2018, as wellas activity during the six months ended June 30, 2018:

	Market Stock Units
	Shares (In thousands)			Weighted- Average Grant Date Fair Value
Nonvested at January 1, 2018		373		$	9.01
Granted		—			—
Vested		(6	)		6.48
Forfeited		(29	)		17.44
Nonvested at June 30, 2018		338		$	8.32

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Income Taxes

6 Months Ended

Jun. 30, 2018

Income Tax Disclosure [Abstract]

Income Taxes

6. Income Taxes

For the three and six months ended June 30, 2018, we had an effective income tax rate from continuing operations of 25.3% and 25.2%, respectively.  For the three and six months ended June 30, 2017, we had an effective income tax rate from continuing operations of 35.7% and 36.7%, respectively.  The lower effective income tax rate in 2018 is primarily a result of the Tax Cuts and Jobs Act of 2017 (the “Tax Act”).

At June 30, 2018, we had approximately $47.0 million of federal loss carryforwards, approximately $101.7 million of state loss carryforwards, and approximately $4.6 million of foreign tax credits.

We file income tax returns in the U.S. Federal jurisdiction and in various state and foreign jurisdictions.  Tax years remaining subject to examination in the U.S. Federal jurisdiction include 2014 to present.

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Debt

6 Months Ended

Jun. 30, 2018

Debt Disclosure [Abstract]

Debt

7. Debt

The Company's debt, net of unamortized deferred loan costs, consistedof the following at June 30, 2018 and December 31, 2017:

(In thousands)	June 30, 2018			December 31, 2017
Cash Convertible Notes, net of unamortized    discount	$	150,000		$	145,861
Capital lease obligations and other		7			549
		150,007			146,410
Less: deferred loan costs		—			(451	)
		150,007			145,959
Less: current portion		(150,007	)		(145,959	)
	$	—		$	—

Credit Facility

On June 8, 2012, we entered into the Fifth Amended and Restated Revolving Credit and Term Loan Agreement (as amended, the “Prior Credit Agreement”).  The Prior Credit Agreement provided us with a $125 million revolving credit facility that included a swingline sub facility of $20 million and a $75 million sub facility for letters of credit.  The Prior Credit Agreement also provided a $200 million term loan facility and an uncommitted incremental accordion facility of $100 million.  Borrowings under the Prior Credit Agreement generally bore interest at variable rates based on a margin or spread in excess of either (1) the one-month, two-month, three-month or six-month rate (or with the approval of affected lenders, nine-month or twelve-month rate) for Eurodollar deposits (“LIBOR”), which may not be less than zero), or (2) the greatest of (a) the SunTrust Bank prime lending rate, (b) the federal funds rate plus 0.50% and (c) one-month LIBOR plus 1.00% (the “Base Rate”), as selected by the Company.  The LIBOR margin varied between 1.75% and 3.00%, and the Base Rate margin varied between 0.75% and 2.00%, depending on our leverage ratio.  The Prior Credit Agreement also provided for an annual fee ranging between 0.30% and 0.50% of the unused commitments under the revolving credit facility. 

On April 21, 2017, we entered into a new Revolving Credit and Term Loan Agreement (the “Credit Agreement”) with a group of lenders, which replaced the Prior Credit Agreement.  The Credit Agreement provides us with (1) a $100 million revolving credit facility that includes a $25 million sublimit for swingline loans and a $75 million sublimit for letters of credit, (2) a $70 million term loan A facility, (3) a $150 million delayed draw term loan facility, and (4) an uncommitted incremental accordion facility of $100 million.

We used the proceeds of the term loan A and cash on hand to repay all of the outstanding indebtedness under the Prior Credit Agreement and to pay transaction costs and expenses.  Proceeds of revolving loans and delayed draw term loans may be used to repay outstanding indebtedness (including amounts payable upon or in respect of any conversion of the Cash Convertible Notes discussed below and the repayment of any revolving loans borrowed for such purposes), to finance working capital needs, to finance acquisitions, to finance the repurchase of our common stock, to finance capital expenditures and for other general corporate purposes of the Company and its subsidiaries.  As further detailed below under “1.50% Cash Convertible Senior Notes Due 2018”, on July 2, 2018, we borrowed $100.0 million under the delayed draw term loan, which was used to repay the principal amount of the Cash Convertible Notes.  No additional amounts may be borrowed under the delayed draw term after July 2, 2018.

We are required to repay any outstanding revolving loans in full on April 21, 2022.  The term loan A was repaid in full during 2017 and may not be re-borrowed.  We are required to repay the delayed draw term loan in quarterly principal installments calculated as follows: (1) for each of the first six quarters following the time of borrowing (beginning with the fourth quarter of 2018 and ending with the first quarter of 2020), 1.250% of the aggregate principal amount of the delayed draw term loan funded as of the last day of the immediately preceding quarter; and (2) for each of the remaining quarters prior to maturity on April 21, 2022, 1.875% of the aggregate principal amount of the delayed draw term loan funded as of the last day of the immediately preceding quarter.  At maturity on April 21, 2022, the entire unpaid principal balance of the delayed draw term loan is due and payable. As of June 30, 2018, we had not borrowed any amounts under the delayed draw term loan, and availability under the revolving credit facility totaled $93.7 million.   

Borrowings under the Credit Agreement generally bear interest at variable rates based on a margin or spread in excess of either (1) one-month, two-month, three-month or six-month LIBOR (or with the approval of affected lenders, 12-month LIBOR), which may not be less than zero, or (2) the greatest of (a) the SunTrust Bank prime lending rate, (b) the federal funds rate plus 0.50%, and (c) one-month LIBOR plus 1.00% (the “Base Rate”), as selected by the Company.  The LIBOR margin varies between 1.50% and 2.75%, and the Base Rate margin varies between 0.50% and 1.75%, depending on our net leverage ratio.  The Credit Agreement also provides for annual commitment fees ranging between 0.20% and 0.50% of the unused commitments under the revolving credit facility and the delayed draw term loan facility and annual letter of credit fees on the daily outstanding availability under outstanding letters of credit at the applicable LIBOR margin.  Extensions of credit under the Credit Agreement are secured by guarantees from all of the Company’s active material domestic subsidiaries and by security interests in substantially all of the Company’s and such subsidiaries’ assets.

The Credit Agreement contains financial covenants that require us to maintain, as defined, (1) specified maximum ratios or levels of funded debt to EBITDA and (2) specified minimum ratios or levels of fixed charge coverage. The Credit Agreement also contains various other affirmative and negative covenants that are typical for financings of this type.  Among other things, they limit repurchases of our common stock and the amount of dividends that we can pay to holders of our common stock.

1.50% Cash Convertible Senior Notes Due 2018

On July 16, 2013, we completed the issuance of $150.0 million aggregate principal amount of cash convertible senior notes due July 2018 (the “Cash Convertible Notes”), which bore interest at a rate of 1.50% per year, payable semiannually in arrears on January 1 and July 1 of each year, beginning on January 1, 2014. The Cash Convertible Notes matured on July 2, 2018.  All of the holders elected to convert their Cash Convertible Notes for settlement on July 2, 2018, and none of the Cash Convertible Notes were repurchased or converted into cash prior to such date.  We classified the Cash Convertible Notes, net of the unamortized discount, and related deferred loan costs as a current liability at June 30, 2018 and at December 31, 2017.

The cash conversion feature of the Cash Convertible Notes was a derivative liability (the “Cash Conversion Derivative”) that required bifurcation from the Cash Convertible Notes in accordance with FASB ASC Topic 815, “Derivatives and Hedging” (“ASC Topic 815”), and was carried at fair value.  Due to the classification of the Cash Convertible Notes as a current liability at June 30, 2018 and December 31, 2017, the Cash Conversion Derivative was recorded in current liabilities at June 30, 2018 and December 31, 2017.  The fair value of the Cash Conversion Derivative at the time of issuance of the Cash Convertible Notes was $36.8 million, which was recorded as a debt discount for purposes of accounting for the debt component of the Cash Convertible Notes.

The debt discount was amortized over the term of the Cash Convertible Notes using the effective interest method.  For the three and six months ended June 30, 2018, we recorded $2.1 million and $4.1 million, respectively, of interest expense related to the amortization of the debt discount based upon an effective interest rate of 5.7%.  For the three and six months ended June 30, 2017, we recorded $2.0 million and $3.9 million, respectively, of interest expense related to the amortization of the debt discount based upon an effective interest rate of 5.7%.  We also recognized interest expense of $0.6 million and $1.1 million for each of the three and six months ended June 30, 2018 and 2017, respectively, related to the contractual interest rate of 1.50% per year. The net carrying amount of the Cash Convertible Notes at June 30, 2018 and December 31, 2017 was $150.0 million and $145.9 million, respectively, net of the unamortized discount of $0 and $4.1 million, respectively.

In connection with the issuance of the Cash Convertible Notes, we entered into privately negotiated convertible note hedge transactions (the “Cash Convertible Notes Hedges”), which were cash-settled and were intended to reduce our exposure to potential cash payments that we would be required to make if holders elected to convert the Cash Convertible Notes at a time when our stock price exceeded the conversion price. The initial cost of the Cash Convertible Notes Hedges was $36.8 million. Due to the classification of the Cash Convertible Notes as a current liability at June 30, 2018 and December 31, 2017, the Cash Convertible Notes Hedges were classified in current assets at June 30, 2018 and December 31, 2017.  The Cash Convertible Notes Hedges were recorded as a derivative asset under ASC Topic 815 and were carried at fair value.  See Note 9 for additional information regarding the Cash Convertible Notes Hedges and the Cash Conversion Derivative and their fair values.

On July 2, 2018, we repaid the $150.0 million aggregate principal amount of the Cash Convertible Notes using a combination of available cash and proceeds from borrowings under the delayed draw term loan facility of $100.0 million.  In addition, on July 2, 2018 we settled the Cash Conversion Derivative of $141.2 million, which was fully funded by payments made by the counterparties for the settlement of the Cash Convertible Notes Hedges.  Subsequent to July 2, 2018, the Credit Agreement provides capacity to borrow under a $100 million revolving credit facility that includes a $25 million sublimit for swingline loans and a $75 million sublimit for letters of credit.

In July 2013, we also sold separate privately negotiated warrants (the “Warrants”) initially relating, in the aggregate, to a notional number of shares of our common stock underlying the Cash Convertible Notes Hedges. The Warrants have an initial strike price of approximately $25.95 per share.  The Warrants will be net share settled by our issuing a number of shares of our common stock per Warrant with a value corresponding to the excess of the market price per share of our common stock (as measured on each warrant exercise date under the terms of the Warrants) over the applicable strike price of the Warrants. The Warrants meet the definition of derivatives under the guidance in ASC Topic 815; however, because these instruments have been determined to be indexed to our own stock and meet the criteria for equity classification under ASC Topic 815, the Warrants have been accounted for as an adjustment to our additional paid-in-capital.

When the market value per share of our common stock exceeds the strike price of the Warrants, the Warrants have a dilutive effect on net income per share, and the “treasury stock” method is used in calculating the dilutive effect on earnings per share.  See Note 11 for additional information on such dilutive effect.

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Commitments and Contingencies

6 Months Ended

Jun. 30, 2018

Commitments And Contingencies Disclosure [Abstract]

Commitments and Contingencies

8. Commitments and Contingencies

On November 6, 2017, United Healthcare issued a press release announcing expansion of its fitness benefits (“United Press Release”), and the market price of the Company's shares of common stock dropped on that same day. In connection with the United Press Release, two lawsuits have been filed against the Company as described below.  We intend to vigorously defend ourselves against both complaints.

Weiner and Denham Lawsuits

On November 20, 2017, Eric Weiner, claiming to be a stockholder of the Company, filed a complaint on behalf of stockholders who purchased the Company's common stock between February 24, 2017 and November 3, 2017 (“Weiner Lawsuit”).  The Weiner Lawsuit was filed as a class action in the U.S. District Court for the Middle District of Tennessee, naming the Company, the Company's chief executive officer, chief financial officer and chief accounting officer as defendants.  The complaint alleges that the defendants violated Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 (the “Exchange Act”) and Rule 10b-5 promulgated under the Exchange Act in making false and misleading statements and omissions related to the United Press Release.  The complaint seeks monetary damages on behalf of the purported class.  On April 3, 2018, the Court entered an order appointing the Oklahoma Firefighters Pension and Retirement System as lead plaintiff, designated counsel for the lead plaintiff, and established certain deadlines for the case.

On January 26, 2018, Charles Denham, claiming to be a stockholder of the Company, filed a purported shareholder derivative action, on behalf of the Company, in the U.S. District Court for the Middle District of Tennessee, naming the Company as a nominal defendant and the Company's chief executive officer, chief financial officer, chief accounting officer, current directors of the Company and a former director of the Company, as defendants.  The complaint asserts claims for breach of fiduciary duty, waste, and unjust enrichment, largely tracking allegations in the Weiner Lawsuit.  The complaint further alleges that certain defendants engaged in insider trading.  The plaintiff seeks monetary damages on behalf of the Company, certain corporate governance and internal procedural reforms, and other equitable relief.

Other

Additionally, from time to time, we are subject to contractual disputes, claims and legal proceedings that arise from time to time in the ordinary course of our business.  While we are unable to estimate a range of potential losses, we do not believe that any of the legal proceedings pending against us as of the date of this report, some of which are expected to be covered by insurance policies, will have a material adverse effect on our financial statements.  As these matters are subject to inherent uncertainties, our view of these matters may change in the future. We expense legal costs as incurred.

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Fair Value Measurements

6 Months Ended

Jun. 30, 2018

Fair Value Disclosures [Abstract]

Fair Value Measurements

9. Fair Value Measurements

We account for certain assets and liabilities at fair value. Fair value is defined as the price that would be received upon sale of an asset or paid upon transfer of a liability in an orderly transaction between market participants at the measurement date, assuming the transaction occurs in the principal or most advantageous market for that asset or liability.

Fair Value Hierarchy

The hierarchy below lists three levels of fair value based on the extent to which inputs used in measuring fair value are observable in the market. We categorize each of our fair value measurements in one of these three levels based on the lowest level input that is significant to the fair value measurement in its entirety. These levels are:

Level 1: Quoted prices in active markets for identical assets or liabilities;

Level 2: Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-based valuation techniques in which all significant assumptions are observable in the market or can be corroborated by observable market data for substantially the full term of the assets or liabilities; and

Level 3: Unobservable inputs that are supported by little or no market activity and typically reflect management's estimates of assumptions that market participants would use in pricing the asset or liability.

Assets andLiabilitiesMeasuredat Fair ValueonaRecurring Basis

Thefollowingtablepresents ourassetsandliabilities measuredat fairvalueonarecurringbasisat June 30, 2018 and December 31, 2017:

(In thousands)	June 30, 2018		December 31, 2017
Assets:
Cash Convertible Notes Hedges	$	141,246	$	134,079
Liabilities:
Cash Conversion Derivative	$	141,246	$	134,079

As described in Note 7, the Cash Convertible Notes Hedges and Cash Conversion Derivative were settled upon their maturity on July 2, 2018.  At June 30, 2018, the fair values of these instruments were measured using their actual values to be settled on July 2, 2018, which were considered Level 2 inputs.  At December 31, 2017, the fair values of the Cash Convertible Notes Hedges and the Cash Conversion Derivative were measured using Level 3 inputs because these instruments were not actively traded. They were valued using an option pricing model that used observable and unobservable market data for inputs, such as expected time to maturity of the derivative instruments, the risk-free interest rate, the expected volatility of our common stock, and other factors. The Cash Convertible Notes Hedges and the Cash Conversion Derivative were designed such that changes in their fair values would offset one another, with minimal impact to the consolidated statements of operations. Therefore, the sensitivity of changes in the unobservable inputs to the option pricing model for such instruments was mitigated.

The followingtable presents our financial instrumentsmeasuredat fair valueon arecurring basis using unobservableinputs (Level 3):

(In thousands)	Balance at December 31, 2017			Purchases of Level 3 Instruments		Settlements of Level 3 Instruments		Gains (Losses) Included in Earnings			Balance at June 30, 2018
Cash Convertible Notes Hedges	$	134,079		$	—	$	—	$	7,167		$	141,246
Cash Conversion Derivative		(134,079	)		—		—		(7,167	)		(141,246	)

The gains and losses includedinearnings noted above representthe change inthe fair valueof thesefinancialinstruments andwere recordedeach period in the consolidatedstatements ofoperations asselling,generalandadministrativeexpenses.

Fair Value of Other Financial Instruments

InadditiontotheCash ConvertibleNotesHedges and the CashConversionDerivative,theestimatedfairvaluesofwhicharedisclosedabove,theestimatedfair valueof eachclassof financialinstruments at June 30, 2018 was asfollows:

Cashandcashequivalents–Thecarryingamountof$67.0millionapproximatesfairvaluebecauseoftheshortmaturityof those instruments (less than three months).

Debt–TheestimatedfairvalueofoutstandingborrowingsundertheCreditAgreement,which includesarevolvingcreditfacilityandatermloanfacility (see Note 7), and theCashConvertibleNotesaredeterminedbasedonthefairvaluehierarchyasdiscussedabove.

Therevolvingcreditfacilityisnot activelytradedandthereforeisclassifiedas a Level2valuationbasedonthemarketforsimilarinstruments.Theestimatedfair valueisbasedontheaverageofthepricessetbytheissuingbankgivencurrentmarketconditionsandisnotnecessarilyindicative oftheamountwecouldrealizeinacurrentmarketexchange. There were no outstanding borrowings under the Credit Agreement at June 30, 2018.

Prior to their maturity on July 2, 2018, the Cash Convertible Notes were actively traded and therefore are classified as Level 1 valuations. The fair value at June 30, 2018 was $291.2 million, which is based on the actual settlement value of the Cash Convertible Notes on July 2, 2018, and the par value was $150.0 million. The carrying amount of the Cash Convertible Notes at June 30, 2018 was $150.0 million.

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Derivative Instruments and Hedging Activities

6 Months Ended

Jun. 30, 2018

Derivative Instruments And Hedging Activities Disclosure [Abstract]

Derivative Instruments and Hedging Activities

10. Derivative Instruments and Hedging Activities

We use derivative instruments to manage risks related to the Cash Convertible Notes, which matured and were repaid on July 2, 2018.  We account for derivatives in accordance with ASC Topic 815, which establishes accounting and reporting standards requiring that certain derivative instruments be recorded on the balance sheet as either an asset or liability measured at fair value. Additionally, changes in the derivative's fair value will be recognized currently in earnings unless specific hedge accounting criteria are met.  We do not execute transactions or hold derivative financial instruments for trading or other purposes.

DerivativeInstrumentsNotDesignatedas HedgingInstruments

TheCash ConversionDerivative and CashConvertibleNotesHedges were settled on July 2, 2018 in conjunction with the maturity of the Cash Convertible Notes.  They did not qualify for hedge accounting treatment underU.S. GAAP and were measured at fair value, with gains and losses recognized immediatelyintheconsolidatedstatementsofoperations. Thesederivative instruments not designated as hedging instruments didnot havea material impacton our consolidatedstatements ofcomprehensive income for the three and six months ended June 30, 2018and 2017.

The CashConversion Derivative was accounted for as a derivativeliability and carried at fair value. In order to offset the risk associatedwith the Cash ConversionDerivative, we entered intoCashConvertible Notes Hedges, which were cash-settled and were intended to reduce our exposure to potential cash payments that we would be required tomake if holders elected to convertthe Cash Convertible Notes at a timewhen our stock price exceeds theconversion price. The CashConvertible Notes Hedges were accounted for as a derivative asset and carried at fair value.

The gains and losses resulting from a change in fair values of the Cash Conversion Derivative and the Cash Convertible Notes Hedges are reported in the consolidated statements of comprehensive income (loss).

(In thousands)	For the Three Months Ended						For the Six Months Ended
	June 30, 2018			June 30, 2017			June 30, 2018			June 30, 2017			Statements of Operations Classification
Cash Convertible Notes Hedges:
Net unrealized gain (loss)	$	(15,897	)	$	78,431		$	7,167		$	112,515		Selling, general and    administrative expenses
Cash Conversion Derivative:
Net unrealized (loss) gain	$	15,897		$	(78,431	)	$	(7,167	)	$	(112,515	)	Selling, general and    administrative expenses

Financial Instruments

Theestimated grossfair values of derivativeinstrumentsat June 30, 2018 and December 31, 2017 wereas follows:

(In thousands)	June 30, 2018		December 31, 2017
Assets:
Derivatives not designated as hedging instruments:
Cash Convertible Notes Hedges	$	141,246	$	134,079
Liabilities:
Derivatives not designated as hedging instruments:
Cash conversion derivative	$	141,246	$	134,079

See Note 9 for more information on fair value measurements.

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Earnings (Loss) Per Share

6 Months Ended

Jun. 30, 2018

Earnings Per Share [Abstract]

Earnings (Loss) Per Share

11. Earnings (Loss) Per Share

Thefollowingisareconciliationofthenumeratoranddenominatorofbasicanddilutedearnings(loss)pershareforthe three and six months ended June 30, 2018and 2017:

(In thousands except per share data)	ThreeMonths Ended June 30,					Six Months Ended June 30,
	2018		2017			2018		2017
Numerator:
Income from continuing operations    - numerator for earnings per share	$	22,683	$	17,240		$	44,019	$	32,720
Income (loss) from discontinued operations    - numerator for earnings (loss) per share		901		(3,673	)		901		(3,893	)
Net income - numerator for earnings (loss) per share	$	23,584	$	13,567		$	44,920	$	28,827
Denominator:
Shares used for basic income (loss) per share		39,899		39,246			39,841		39,158
Effect of dilutive stock options and    restricted stock units outstanding:
Non-qualified stock options		277		481			295		462
Restricted stock units		332		602			368		606
Market stock units		489		312			511		303
Warrants related to Cash Convertible Notes		2,287		1,728			2,422		927
Shares used for diluted income (loss) per share		43,284		42,369			43,437		41,456
Earnings (loss) per share - basic:
Continuing operations	$	0.57	$	0.44		$	1.10	$	0.84
Discontinued operations	$	0.02	$	(0.09	)	$	0.02	$	(0.10	)
Net income (loss)	$	0.59	$	0.35		$	1.13	$	0.74
Earnings (loss) per share - diluted:
Continuing operations	$	0.52	$	0.41		$	1.01	$	0.79
Discontinued operations	$	0.02	$	(0.09	)	$	0.02	$	(0.09	)
Net income (loss)	$	0.54	$	0.32		$	1.03	$	0.70
Dilutive securities outstanding not included in the    computation of earnings (loss) per share    because their effect is anti-dilutive:
Non-qualified stock options		59		—			29		8
Restricted stock units		42		3			28		10

(1) Figures may not add due to rounding.

Market stock units outstanding are considered contingently issuable shares, and certain of these stock units were excluded from the calculations of diluted earnings per share for all periods presented as the performance criteria had not been met as of the end of the reporting periods.

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Accumulated OCI

6 Months Ended

Jun. 30, 2018

Accumulated Other Comprehensive Income Loss Net Of Tax [Abstract]

Accumulated OCI

12. Accumulated OCI

There were no changes in accumulated other comprehensive income (loss) (“OCI”) for the six months ended June 30, 2018.  The following tables summarize the changes in accumulated OCI, net of tax, for the six months ended June 30, 2017:

(In thousands)	Foreign Currency Translation Adjustments
Accumulated OCI, net of tax, as of January 1, 2017	$	(4,502	)
Other comprehensive income before reclassifications, net of tax of $225		1,458
Amounts reclassified from accumulated OCI, net of tax of $0		3,044
Accumulated OCI, net of tax, as of June 30, 2017	$	—

There were no reclassifications out of accumulated OCI for the six months ended June 30, 2018 and 2017.

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Basis of Presentation (Policies)

6 Months Ended

Jun. 30, 2018

Organization Consolidation And Presentation Of Financial Statements [Abstract]

Basis of Presentation

Our financial statements and accompanying notes are prepared in accordance with generally accepted accounting principles in the United States (“U.S. GAAP”).  In our opinion, the accompanying consolidated financial statements of Tivity Health, Inc. and its wholly-owned subsidiaries (collectively, “Tivity Health,” the “Company,” or such terms as “we,” "us,” or “our”) reflect all adjustments, consisting only of normal recurring adjustments, necessary for a fair statement.

Our results from continuing operations do not include the results of the total population health services (“TPHS”) business, which we sold to Sharecare, Inc. (“Sharecare”) effective July 31, 2016.  Results of operations for the TPHS business have been classified as discontinued operations for all periods presented in the accompanying consolidated financial statements.  See Note 4 for further information.

We have omitted certain financial information that is normally included in financial statements prepared in accordance with U.S. GAAP but that is not required for interim reporting purposes.  You should read the accompanying consolidated financial statements in conjunction with the financial statements and notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2017.

Recent Relevant Accounting Standards

On January 1, 2018, we adopted Accounting Standards Codification (“ASC”) Topic 606, “Revenue from Contracts with Customers” (“ASC Topic 606”) using the modified retrospective method, pursuant to which we applied ASC Topic 606 to (i) all new contracts entered into after January 1, 2018 and (ii) contracts that were not completed as of January 1, 2018.  In accordance with this approach, our results for periods prior to January 1, 2018 were not revised and continue to be reported in accordance with our historical accounting under ASC Topic 605, “Revenue Recognition.”  For contracts that were modified prior to January 1, 2018, we have not retrospectively restated the contract for those modifications in accordance with the contract modification guidance in ASC 606-10-25-12 and ASC 606-10-25-13 but instead, using the practical expedient available under ASC 606-10-65-1(f)(4), have reflected the aggregate effect of all modifications when identifying the satisfied and unsatisfied performance obligations, determining the transaction price, and allocating the transaction price.

The cumulative impact of our adoption of ASC Topic 606 was not material to record as of January 1, 2018, and there was no material impact on our consolidated income statement, balance sheet, or cash flows for the quarter ended March 31, 2018.  For example, we do not have any material contract assets or contract liabilities as defined under ASC Topic 606.  In addition, the incremental costs of obtaining a contract with a customer (for example, sales commissions) that would have been recognized as an asset on January 1, 2018 were not material to record.  See Note 3 for a further discussion of revenue recognition.

On January 1, 2018, we adopted Accounting Standards Update (“ASU”) No. 2016-15, “Statement of Cash Flows” (Topic 230) (“ASU 2016-15”).  ASU 2016-15 addresses how certain cash receipts and cash payments are presented and classified in the statement of cash flows and is to be applied using a retrospective approach.  The adoption of this standard did not have a material impact on our consolidated financial statements and related disclosures and did not result in a reclassification to items in prior periods.

On January 1, 2018, we adopted ASU No. 2017-09, “Compensation-Stock Compensation (Topic 718): Scope of Modification Accounting” (“ASU 2017-09”), which clarifies when changes to the terms or conditions of a share-based payment award must be accounted for as modifications.  ASU 2017-09 is to be applied prospectively to awards modified on or after January 1, 2018.  The adoption of this standard did not have an impact on our consolidated financial statements and related disclosures.

In February 2016, the Financial Accounting Standards Board (“FASB”) issued ASU No. 2016-02, “Leases”(“ASU 2016-02”), which requires that lessees recognize assets and liabilities for leases with lease terms greater than twelve months in the statement of financial position, and is effective for us on January 1, 2019. ASU 2016-02 also requires improved disclosures to help users of financial statements better understand the amount, timing and uncertainty of cash flows arising from leases. The standard is required to be adopted using a modified retrospective transition method, which will require the cumulative effect of initially applying the standard to be recognized as an adjustment to beginning retained earnings as of January 1, 2019.  We are currently conducting analysis to quantify the adoption impact of the provisions of the new standard and evaluating our current leases. We believe we are following an appropriate timeline to allow for proper recognition, presentation and disclosure upon adoption effective January 1, 2019.

In January 2017, the FASB issued ASU No. 2017-04, “Intangibles - Goodwill and Other” (“ASU 2017-04”), which simplifies the subsequent measurement of goodwill by eliminating step two from the goodwill impairment test.  ASU 2017-04 is effective for annual and interim impairment tests in fiscal years beginning after December 15, 2019 and is required to be applied prospectively. Early adoption is allowed for annual goodwill impairment tests performed on testing dates after January 1, 2017. We do not anticipate that adopting this standard will have an impact on our consolidated financial statements and related disclosures.

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Discontinued Operations (Tables)

6 Months Ended

Jun. 30, 2018

Discontinued Operations And Disposal Groups [Abstract]

Financial Results Included in Losses from Discontinued Operations

The following table presents financial results of the TPHS business included in “loss from discontinued operations” for the three and six months ended June 30, 2018 and 2017.

	Three Months Ended June 30,						Six Months Ended June 30,
(In thousands)	2018			2017			2018			2017
Revenues	$	—		$	—		$	—		$	—
Cost of services		30			38			30			258
Selling, general & administrative expenses		48			20			48			157
Distribution from joint venture		—			98			—			98
Pretax income (loss) on discontinued operations	$	(78	)	$	40		$	(78	)	$	(317	)
Pretax loss on release of cumulative translation    adjustment (1)		—			(3,044	)		—			(3,044	)
Pretax income (loss) on sale of TPHS business (2)		1,304			(134	)		1,304			(444	)
Total pretax income (loss) on discontinued    operations	$	1,226		$	(3,138	)	$	1,226		$	(3,805	)
Income tax expense		325			535			325			88
Income (loss) from discontinued operations, net of    income tax	$	901		$	(3,673	)	$	901		$	(3,893	)

(1) During the second quarter of 2017, we substantially liquidated foreign entities that were part of our TPHS business, resulting in a release of the cumulative translation adjustment of $3.0 million into loss from discontinued operations.

(2) Includes $1.4 million received during the three months ended June 30, 2018 from a release of escrow funds related to the sale of MeYou Health, LLC in June 2016.

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Share-Based Compensation (Tables)

6 Months Ended

Jun. 30, 2018

Disclosure Of Compensation Related Costs Sharebased Payments [Abstract]

Summary of Stock Options

A summary of our stock options as of June 30, 2018 and the changes during the six months ended June 30, 2018 is presented below:

Options	Shares (In thousands)			Weighted Average Exercise Price Per Share		Weighted Average Remaining Contractual Term		Aggregate Intrinsic Value (In thousands)
Outstanding at January 1, 2018		507		$	12.98
Granted		70			38.68
Exercised		(97	)		11.70
Forfeited		—			—
Expired		—			—
Outstanding at June 30, 2018		480		$	16.98		4.5	$	8,988
Exercisable at June 30, 2018		410		$	13.28		3.6	$	8,979

Summary of Nonvested Shares

The followingtableshows a summary ofour restricted stock units as of June 30, 2018,aswellas activity during the six months ended June 30, 2018:

	Restricted Stock and Restricted Stock Units
	Shares (In thousands)			Weighted- Average Grant Date Fair Value
Nonvested at January 1, 2018		572		$	17.60
Granted		66			38.56
Vested		(165	)		18.27
Forfeited		(21	)		23.04
Nonvested at June 30, 2018		452		$	20.17

Summary of Market Stock Units

The followingtableshows a summary ofourmarket stock unitsas of June 30, 2018, as wellas activity during the six months ended June 30, 2018:

	Market Stock Units
	Shares (In thousands)			Weighted- Average Grant Date Fair Value
Nonvested at January 1, 2018		373		$	9.01
Granted		—			—
Vested		(6	)		6.48
Forfeited		(29	)		17.44
Nonvested at June 30, 2018		338		$	8.32

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Debt (Tables)

6 Months Ended

Jun. 30, 2018

Debt Disclosure [Abstract]

Summary of Debt, Net of Unamortized Deferred Loan Costs

The Company's debt, net of unamortized deferred loan costs, consistedof the following at June 30, 2018 and December 31, 2017:

(In thousands)	June 30, 2018			December 31, 2017
Cash Convertible Notes, net of unamortized    discount	$	150,000		$	145,861
Capital lease obligations and other		7			549
		150,007			146,410
Less: deferred loan costs		—			(451	)
		150,007			145,959
Less: current portion		(150,007	)		(145,959	)
	$	—		$	—

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Fair Value Measurements (Tables)

6 Months Ended

Jun. 30, 2018

Fair Value Disclosures [Abstract]

Assets and Liabilities Measured at Fair Value on a Recurring Basis

Thefollowingtablepresents ourassetsandliabilities measuredat fairvalueonarecurringbasisat June 30, 2018 and December 31, 2017:

(In thousands)	June 30, 2018		December 31, 2017
Assets:
Cash Convertible Notes Hedges	$	141,246	$	134,079
Liabilities:
Cash Conversion Derivative	$	141,246	$	134,079

Financial Instruments Measured at Fair Value on Recurring Basis Using Unobservable Inputs

The followingtable presents our financial instrumentsmeasuredat fair valueon arecurring basis using unobservableinputs (Level 3):

(In thousands)	Balance at December 31, 2017			Purchases of Level 3 Instruments		Settlements of Level 3 Instruments		Gains (Losses) Included in Earnings			Balance at June 30, 2018
Cash Convertible Notes Hedges	$	134,079		$	—	$	—	$	7,167		$	141,246
Cash Conversion Derivative		(134,079	)		—		—		(7,167	)		(141,246	)

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Derivative Instruments and Hedging Activities (Tables)

6 Months Ended

Jun. 30, 2018

Derivative Instruments And Hedging Activities Disclosure [Abstract]

Gains and Losses from Change in Fair Values of Derivatives

The gains and losses resulting from a change in fair values of the Cash Conversion Derivative and the Cash Convertible Notes Hedges are reported in the consolidated statements of comprehensive income (loss).

(In thousands)	For the Three Months Ended						For the Six Months Ended
	June 30, 2018			June 30, 2017			June 30, 2018			June 30, 2017			Statements of Operations Classification
Cash Convertible Notes Hedges:
Net unrealized gain (loss)	$	(15,897	)	$	78,431		$	7,167		$	112,515		Selling, general and    administrative expenses
Cash Conversion Derivative:
Net unrealized (loss) gain	$	15,897		$	(78,431	)	$	(7,167	)	$	(112,515	)	Selling, general and    administrative expenses

Estimated Gross Fair Values of Derivative Instruments

Theestimated grossfair values of derivativeinstrumentsat June 30, 2018 and December 31, 2017 wereas follows:

(In thousands)	June 30, 2018		December 31, 2017
Assets:
Derivatives not designated as hedging instruments:
Cash Convertible Notes Hedges	$	141,246	$	134,079
Liabilities:
Derivatives not designated as hedging instruments:
Cash conversion derivative	$	141,246	$	134,079

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Earnings (Loss) Per Share (Tables)

6 Months Ended

Jun. 30, 2018

Earnings Per Share [Abstract]

Reconciliation of the Numerator and Denominator of Basic and Diluted Earnings (Loss) Per Share

Thefollowingisareconciliationofthenumeratoranddenominatorofbasicanddilutedearnings(loss)pershareforthe three and six months ended June 30, 2018and 2017:

(In thousands except per share data)	ThreeMonths Ended June 30,					Six Months Ended June 30,
	2018		2017			2018		2017
Numerator:
Income from continuing operations    - numerator for earnings per share	$	22,683	$	17,240		$	44,019	$	32,720
Income (loss) from discontinued operations    - numerator for earnings (loss) per share		901		(3,673	)		901		(3,893	)
Net income - numerator for earnings (loss) per share	$	23,584	$	13,567		$	44,920	$	28,827
Denominator:
Shares used for basic income (loss) per share		39,899		39,246			39,841		39,158
Effect of dilutive stock options and    restricted stock units outstanding:
Non-qualified stock options		277		481			295		462
Restricted stock units		332		602			368		606
Market stock units		489		312			511		303
Warrants related to Cash Convertible Notes		2,287		1,728			2,422		927
Shares used for diluted income (loss) per share		43,284		42,369			43,437		41,456
Earnings (loss) per share - basic:
Continuing operations	$	0.57	$	0.44		$	1.10	$	0.84
Discontinued operations	$	0.02	$	(0.09	)	$	0.02	$	(0.10	)
Net income (loss)	$	0.59	$	0.35		$	1.13	$	0.74
Earnings (loss) per share - diluted:
Continuing operations	$	0.52	$	0.41		$	1.01	$	0.79
Discontinued operations	$	0.02	$	(0.09	)	$	0.02	$	(0.09	)
Net income (loss)	$	0.54	$	0.32		$	1.03	$	0.70
Dilutive securities outstanding not included in the    computation of earnings (loss) per share    because their effect is anti-dilutive:
Non-qualified stock options		59		—			29		8
Restricted stock units		42		3			28		10

(1) Figures may not add due to rounding.

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Accumulated OCI (Tables)

6 Months Ended

Jun. 30, 2018

Accumulated Other Comprehensive Income Loss Net Of Tax [Abstract]

Changes in Accumulated OCI, Net of Tax

The following tables summarize the changes in accumulated OCI, net of tax, for the six months ended June 30, 2017:

(In thousands)	Foreign Currency Translation Adjustments
Accumulated OCI, net of tax, as of January 1, 2017	$	(4,502	)
Other comprehensive income before reclassifications, net of tax of $225		1,458
Amounts reclassified from accumulated OCI, net of tax of $0		3,044
Accumulated OCI, net of tax, as of June 30, 2017	$	—

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Revenue Recognition - Additional Information (Details) $ in Thousands	3 Months Ended	6 Months Ended
	Jun. 30, 2018	Jun. 30, 2018 USD ($) Program Obligation
Disaggregation Of Revenue [Line Items]
Number of programs for revenue recognition | Program		3
Number of performance obligations | Obligation		1
Revenue recognized from performance obligations satisfied in prior period | $		$ 0
Period of billing in arrears once timing of services to customers is known		1 month
Number of days for customer to make payment after being invoiced		30 days
Sales Revenue, Net | Product Concentration Risk | SilverSneakers Program
Disaggregation Of Revenue [Line Items]
Percentage of consolidated revenue	81.00%	81.00%
Sales Revenue, Net | Product Concentration Risk | Prime Fitness Program
Disaggregation Of Revenue [Line Items]
Percentage of consolidated revenue	16.00%	16.00%
Sales Revenue, Net | Product Concentration Risk | WholeHealth Living Program
Disaggregation Of Revenue [Line Items]
Percentage of consolidated revenue	3.00%	3.00%

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Discontinued Operations - Additional Information (Details) - Sharecare - USD ($) $ / shares in Units, $ in Thousands	6 Months Ended
	Jun. 30, 2018	Dec. 31, 2017	Jul. 31, 2016
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Adjustable convertible equity right, face amount	$ 39,800	$ 39,800	$ 30,000
Payments of claims for indemnification	0
Carrying value of adjustable convertible equity right	$ 10,800	$ 10,800
Adjustable Convertible Equity Right
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Stock issued during period conversion of convertible securities, conversion price (in dollars per share)			$ 249.87

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Discontinued Operations - Financial Results Included in Losses from Discontinued Operations (Details) - USD ($) $ in Thousands		3 Months Ended		6 Months Ended
		Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017
Financial results included in losses from discontinued operations [Abstract]
Pretax loss on release of cumulative translation adjustment					$ (3,044)
Income (loss) from discontinued operations, net of income tax		$ 901	$ (3,673)	$ 901	(3,893)
TPHS Business | Discontinued Operations, Disposed of by Sale
Financial results included in losses from discontinued operations [Abstract]
Revenues		0	0	0	0
Cost of services		30	38	30	258
Selling, general & administrative expenses		48	20	48	157
Distribution from joint venture		0	98	0	98
Pretax income (loss) on discontinued operations		(78)	40	(78)	(317)
Pretax loss on release of cumulative translation adjustment	[1]	0	(3,044)	0	(3,044)
Pretax income (loss) on sale of TPHS business	[2]	1,304	(134)	1,304	(444)
Total pretax income (loss) on discontinued operations		1,226	(3,138)	1,226	(3,805)
Income tax expense		325	535	325	88
Income (loss) from discontinued operations, net of income tax		$ 901	$ (3,673)	$ 901	$ (3,893)

[1] During the second quarter of 2017, we substantially liquidated foreign entities that were part of our TPHS business, resulting in a release of the cumulative translation adjustment of $3.0 million into loss from discontinued operations.

[2] Includes $1.4 million received during the three months ended June 30, 2018 from a release of escrow funds related to the sale of MeYou Health, LLC in June 2016.

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Discontinued Operations - Financial Results Included in Losses from Discontinued Operations (Parenthetical) (Details) - USD ($) $ in Thousands		3 Months Ended		6 Months Ended
		Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Loss on release of cumulative translation adjustment					$ 3,044
Proceeds from release of escrow funds related to sale of MeYou Health				$ 1,416
TPHS Business | Discontinued Operations, Disposed of by Sale
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Loss on release of cumulative translation adjustment	[1]	$ 0	$ 3,044	$ 0	$ 3,044

[1] During the second quarter of 2017, we substantially liquidated foreign entities that were part of our TPHS business, resulting in a release of the cumulative translation adjustment of $3.0 million into loss from discontinued operations.

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Share-Based Compensation - Additional Information (Details) $ / shares in Units, $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2018 USD ($) $ / shares	Jun. 30, 2017 USD ($)	Jun. 30, 2018 USD ($) Type	Jun. 30, 2017 USD ($)
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract]
Types of share based awards | Type			3
Share-based compensation costs | $	$ 1.8	$ 1.9	$ 3.3	$ 3.4
Weighted-average grant-date fair value of options granted | $ / shares	$ 20.60

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Share-Based Compensation - Summary of Stock Options (Details) $ / shares in Units, shares in Thousands, $ in Thousands	6 Months Ended
	Jun. 30, 2018 USD ($) $ / shares shares
Shares [Roll Forward]
Outstanding, beginning of period (in shares) | shares	507
Granted (in shares) | shares	70
Exercised (in shares) | shares	(97)
Outstanding, end of period (in shares) | shares	480
Exercisable, end of period (in shares) | shares	410
Weighted-Average Exercise Price [Roll Forward]
Outstanding, beginning of period (in dollars per share) | $ / shares	$ 12.98
Granted (in dollars per share) | $ / shares	38.68
Exercised (in dollars per share) | $ / shares	11.70
Outstanding, end of period (in dollars per share) | $ / shares	16.98
Exercisable, end of period (in dollars per share) | $ / shares	$ 13.28
Weighted-Average Remaining Contractual Term [Abstract]
Outstanding	4 years 6 months
Exercisable	3 years 7 months 6 days
Aggregate Intrinsic Value [Abstract]
Outstanding, end of period | $	$ 8,988
Exercisable, end of period | $	$ 8,979

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Share-Based Compensation - Summary of Nonvested Shares (Details) - Restricted Stock and Restricted Stock Units (RSUs) shares in Thousands	6 Months Ended
	Jun. 30, 2018 $ / shares shares
Shares [Roll Forward]
Nonvested, beginning of period (in shares) | shares	572
Granted (in shares) | shares	66
Vested (in shares) | shares	(165)
Forfeited (in shares) | shares	(21)
Nonvested, end of period (in shares) | shares	452
Weighted-Average Grant Date Fair Value [Roll Forward]
Nonvested, beginning of period (in dollars per share) | $ / shares	$ 17.60
Granted (in dollars per share) | $ / shares	38.56
Vested (in dollars per share) | $ / shares	18.27
Forfeited (in dollars per share) | $ / shares	23.04
Nonvested, end of period (in dollars per share) | $ / shares	$ 20.17

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Share-Based Compensation - Summary of Market Stock Units (Details) - Market Stock Units shares in Thousands	6 Months Ended
	Jun. 30, 2018 $ / shares shares
Shares [Roll Forward]
Nonvested, beginning of period (in shares) | shares	373
Vested (in shares) | shares	(6)
Forfeited (in shares) | shares	(29)
Nonvested, end of period (in shares) | shares	338
Weighted-Average Grant Date Fair Value [Roll Forward]
Nonvested, beginning of period (in dollars per share) | $ / shares	$ 9.01
Vested (in dollars per share) | $ / shares	6.48
Forfeited (in dollars per share) | $ / shares	17.44
Nonvested, end of period (in dollars per share) | $ / shares	$ 8.32

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Income Taxes- Additional Information (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017
Operating Loss Carryforwards [Line Items]
Effective tax rate	25.30%	35.70%	25.20%	36.70%
Federal
Operating Loss Carryforwards [Line Items]
Operating loss carryforwards	$ 47.0		$ 47.0
State
Operating Loss Carryforwards [Line Items]
Operating loss carryforwards	101.7		101.7
Foreign
Operating Loss Carryforwards [Line Items]
Tax credits	$ 4.6		$ 4.6

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Debt - Summary of Debt, Net of Unamortized Deferred Loan Costs (Details) - USD ($) $ in Thousands	Jun. 30, 2018	Dec. 31, 2017
Debt Instrument [Line Items]
Debt, net of unamortized discount	$ 150,007	$ 146,410
Less: deferred loan costs		(451)
Total debt	150,007	145,959
Less: current portion	(150,007)	(145,959)
Cash Convertible Notes, Net of Unamortized Discount
Debt Instrument [Line Items]
Debt, net of unamortized discount	150,000	145,861
Capital Lease Obligations and Other
Debt Instrument [Line Items]
Debt, net of unamortized discount	$ 7	$ 549

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Debt - Credit Facility - Additional Information (Details) - USD ($)			6 Months Ended
	Apr. 21, 2017	Jun. 08, 2012	Jun. 30, 2018	Aug. 10, 2018	Jul. 02, 2018	Dec. 31, 2017	Jul. 16, 2013
Line of Credit Facility [Line Items]
Long term debt outstanding			$ 150,007,000			$ 145,959,000
1.50% Cash Convertible Senior Notes Due 2018
Line of Credit Facility [Line Items]
Debt instrument, face amount							$ 150,000,000
Maturity date			Jul. 02, 2018
Revolving Credit Facility
Line of Credit Facility [Line Items]
Total availability under the revolving credit facility			$ 93,700,000
Prior Credit Agreement | Revolving Credit Facility
Line of Credit Facility [Line Items]
Initiation date			Jun. 08, 2012
Maximum borrowing capacity		$ 125,000,000
Prior Credit Agreement | Revolving Credit Facility | Minimum
Line of Credit Facility [Line Items]
Unused commitment fee percentage		0.30%
Prior Credit Agreement | Revolving Credit Facility | Maximum
Line of Credit Facility [Line Items]
Unused commitment fee percentage		0.50%
Prior Credit Agreement | Revolving Credit Facility | LIBOR | Minimum
Line of Credit Facility [Line Items]
Variable rate basis		0.00%
Margin rate		1.75%
Prior Credit Agreement | Revolving Credit Facility | LIBOR | Maximum
Line of Credit Facility [Line Items]
Margin rate		3.00%
Prior Credit Agreement | Revolving Credit Facility | Federal Funds Rate
Line of Credit Facility [Line Items]
Basis spread on variable rate		0.50%
Prior Credit Agreement | Revolving Credit Facility | One-Month LIBOR
Line of Credit Facility [Line Items]
Basis spread on variable rate		1.00%
Prior Credit Agreement | Revolving Credit Facility | Base Rate | Minimum
Line of Credit Facility [Line Items]
Margin rate		0.75%
Prior Credit Agreement | Revolving Credit Facility | Base Rate | Maximum
Line of Credit Facility [Line Items]
Margin rate		2.00%
Prior Credit Agreement | Swingline Sub Facility
Line of Credit Facility [Line Items]
Maximum borrowing capacity		$ 20,000,000
Prior Credit Agreement | Letters of Credit Sub Facility
Line of Credit Facility [Line Items]
Maximum borrowing capacity		75,000,000
Prior Credit Agreement | Term Loan Facility A
Line of Credit Facility [Line Items]
Debt instrument, face amount		200,000,000
Prior Credit Agreement | Uncommitted Incremental Accordion Facility
Line of Credit Facility [Line Items]
Maximum borrowing capacity		$ 100,000,000
Credit Agreement
Line of Credit Facility [Line Items]
Initiation date			Apr. 21, 2017
Maturity date			Apr. 21, 2022
Credit Agreement | Minimum
Line of Credit Facility [Line Items]
Unused commitment fee percentage	0.20%
Credit Agreement | Maximum
Line of Credit Facility [Line Items]
Unused commitment fee percentage	0.50%
Credit Agreement | LIBOR | Minimum
Line of Credit Facility [Line Items]
Variable rate basis	0.00%
Margin rate	1.50%
Credit Agreement | LIBOR | Maximum
Line of Credit Facility [Line Items]
Margin rate	2.75%
Credit Agreement | One-Month LIBOR
Line of Credit Facility [Line Items]
Basis spread on variable rate	1.00%
Credit Agreement | Base Rate | Minimum
Line of Credit Facility [Line Items]
Margin rate	0.50%
Credit Agreement | Base Rate | Maximum
Line of Credit Facility [Line Items]
Margin rate	1.75%
Credit Agreement | Federal Funds Rate
Line of Credit Facility [Line Items]
Basis spread on variable rate	0.50%
Credit Agreement | Revolving Credit Facility
Line of Credit Facility [Line Items]
Maximum borrowing capacity	$ 100,000,000
Credit Agreement | Revolving Credit Facility | Subsequent Event
Line of Credit Facility [Line Items]
Maximum borrowing capacity				$ 100,000,000
Credit Agreement | Swingline Sub Facility
Line of Credit Facility [Line Items]
Maximum borrowing capacity	25,000,000
Credit Agreement | Swingline Sub Facility | Subsequent Event
Line of Credit Facility [Line Items]
Maximum borrowing capacity				25,000,000
Credit Agreement | Letters of Credit Sub Facility
Line of Credit Facility [Line Items]
Maximum borrowing capacity	75,000,000
Credit Agreement | Letters of Credit Sub Facility | Subsequent Event
Line of Credit Facility [Line Items]
Maximum borrowing capacity				$ 75,000,000
Credit Agreement | Term Loan Facility A
Line of Credit Facility [Line Items]
Debt instrument, face amount	70,000,000
Credit Agreement | Uncommitted Incremental Accordion Facility
Line of Credit Facility [Line Items]
Maximum borrowing capacity	100,000,000
Credit Agreement | Delayed Draw Term Loan Facility
Line of Credit Facility [Line Items]
Debt instrument, face amount	$ 150,000,000
Long term debt outstanding			$ 0
Credit Agreement | Delayed Draw Term Loan Facility | First 12 Quarters Following the Closing
Line of Credit Facility [Line Items]
Periodic principal payment as percentage of aggregate principal amount	1.25%
Credit Agreement | Delayed Draw Term Loan Facility | Remaining Quarters Prior to Maturity
Line of Credit Facility [Line Items]
Periodic principal payment as percentage of aggregate principal amount	1.875%
Credit Agreement | Delayed Draw Term Loan Facility | Subsequent Event | 1.50% Cash Convertible Senior Notes Due 2018
Line of Credit Facility [Line Items]
Long term debt outstanding					$ 100,000,000

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Debt - Cash Convertible Notes - Additional Information (Details) - USD ($)			3 Months Ended		6 Months Ended
	Jul. 02, 2018	Jul. 16, 2013	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017	Aug. 10, 2018	Dec. 31, 2017	Apr. 21, 2017	Jul. 31, 2013
Debt Instrument [Line Items]
Interest expense related to amortization of debt discount					$ 4,140,000	$ 3,911,000
Debt, net of unamortized discount			$ 150,007,000		$ 150,007,000			$ 146,410,000
Subsequent Event | Delayed Draw Term Loan Facility
Debt Instrument [Line Items]
Proceeds from borrowings	$ 100,000,000
Credit Agreement
Debt Instrument [Line Items]
Maturity date					Apr. 21, 2022
Credit Agreement | Delayed Draw Term Loan Facility
Debt Instrument [Line Items]
Aggregate principal of convertible notes									$ 150,000,000
Credit Agreement | Revolving Credit Facility
Debt Instrument [Line Items]
Maximum borrowing capacity									100,000,000
Credit Agreement | Swingline Loans Sublimit
Debt Instrument [Line Items]
Maximum borrowing capacity									25,000,000
Credit Agreement | Letters of Credit Sublimit
Debt Instrument [Line Items]
Maximum borrowing capacity									$ 75,000,000
Credit Agreement | Subsequent Event | Revolving Credit Facility
Debt Instrument [Line Items]
Maximum borrowing capacity							$ 100,000,000
Credit Agreement | Subsequent Event | Swingline Loans Sublimit
Debt Instrument [Line Items]
Maximum borrowing capacity							25,000,000
Credit Agreement | Subsequent Event | Letters of Credit Sublimit
Debt Instrument [Line Items]
Maximum borrowing capacity							$ 75,000,000
1.50% Cash Convertible Senior Notes Due 2018
Debt Instrument [Line Items]
Aggregate principal of convertible notes		$ 150,000,000
Interest rate for notes		1.50%
Maturity date					Jul. 02, 2018
Fair value of cash conversion derivative		$ 36,800,000
Interest expense related to amortization of debt discount			2,100,000	$ 2,000,000	$ 4,100,000	3,900,000
Effective interest rate		5.70%
Interest expense			600,000	$ 600,000	1,100,000	$ 1,100,000
Debt, net of unamortized discount			150,000,000		150,000,000			145,900,000
Debt instrument, unamortized discount			$ 0		$ 0			$ 4,100,000
Warrants strike price (in dollars per share)										$ 25.95
1.50% Cash Convertible Senior Notes Due 2018 | Subsequent Event
Debt Instrument [Line Items]
Repayments of debt	150,000,000
Cash Conversion Derivative | Subsequent Event
Debt Instrument [Line Items]
Repayments of debt	$ 141,200,000

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Commitments and Contingencies - (Details)	Nov. 06, 2017 Lawsuit
Commitments And Contingencies Disclosure [Abstract]
Number of lawsuits filed	2

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Fair Value Measurements - Assets and Liabilities Measured at Fair Value on a Recurring Basis (Details) - Recurring - USD ($) $ in Thousands	Jun. 30, 2018	Dec. 31, 2017
Cash Convertible Notes Hedges
Assets:
Fair Value	$ 141,246	$ 134,079
Cash Conversion Derivative
Liabilities:
Fair Value	$ 141,246	$ 134,079

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Fair Value Measurements - Financial Instruments Measured at Fair Value on Recurring Basis Using Unobservable Inputs (Details) $ in Thousands	6 Months Ended
	Jun. 30, 2018 USD ($)
Cash Convertible Notes Hedges
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Balance at beginning of period	$ 134,079
Gains (Losses) Included in Earnings	7,167
Balance at end of period	141,246
Cash Conversion Derivative
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Balance at beginning of period	(134,079)
Gains (Losses) Included in Earnings	(7,167)
Balance at end of period	$ (141,246)

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Fair Value Measurements - Additional Information (Details) - USD ($) $ in Millions	6 Months Ended
	Jun. 30, 2018	Jul. 02, 2018
Credit Agreement
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Debt instrument	$ 0.0
Cash Convertible Notes
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Maturity date	Jul. 02, 2018
Cash Convertible Notes | Subsequent Event
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Aggregate principal of convertible notes		$ 150.0
Carrying Value
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Cash and cash equivalents	$ 67.0
Carrying Value | Cash Convertible Notes
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Debt instrument	150.0
Estimated Fair Value | Cash Convertible Notes
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Debt instrument	$ 291.2

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Derivative Instruments and Hedging Activities - Gains and Losses from Change in Fair Values of Derivatives (Details) - Selling, General and Administrative Expenses - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017
Cash Convertible Notes Hedges
Net unrealized gain (loss) on derivative instruments not designated as hedging instruments [Abstract]
Net unrealized gain (loss)	$ (15,897)	$ 78,431	$ 7,167	$ 112,515
Cash Conversion Derivative
Net unrealized gain (loss) on derivative instruments not designated as hedging instruments [Abstract]
Net unrealized gain (loss)	$ 15,897	$ (78,431)	$ (7,167)	$ (112,515)

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Derivative Instruments and Hedging Activities - Estimated Gross Fair Values of Derivative Instruments (Details) - Derivatives Not Designated as Hedging Instruments - USD ($) $ in Thousands	Jun. 30, 2018	Dec. 31, 2017
Cash Convertible Notes Hedges
Assets:
Derivative assets	$ 141,246	$ 134,079
Cash Conversion Derivative
Liabilities:
Derivative liabilities	$ 141,246	$ 134,079

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Earnings (Loss) Per Share - Reconciliation of the Numerator and Denominator of Basic and Diluted Earnings (Loss) Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017
Numerator [Abstract]
Income from continuing operations	$ 22,683	$ 17,240	$ 44,019	$ 32,720
Income (loss) from discontinued operations - numerator for earnings (loss) per share	901	(3,673)	901	(3,893)
Net income	$ 23,584	$ 13,567	$ 44,920	$ 28,827
Denominator [Abstract]
Shares used for basic income (loss) per share	39,899	39,246	39,841	39,158
Effect of dilutive stock options and restricted stock units outstanding [Abstract]
Shares used for diluted income (loss) per share	43,284	42,369	43,437	41,456
Earnings (loss) per share - basic [Abstract]
Continuing operations (in dollars per share)	$ 0.57	$ 0.44	$ 1.10	$ 0.84
Discontinued operations (in dollars per share)	0.02	(0.09)	0.02	(0.10)
Net income (loss)	0.59	0.35	1.13	0.74
Earnings (loss) per share - diluted [Abstract]
Continuing operations (in dollars per share)	0.52	0.41	1.01	0.79
Discontinued operations (in dollars per share)	0.02	(0.09)	0.02	(0.09)
Net income (loss)	$ 0.54	$ 0.32	$ 1.03	$ 0.70
Non-Qualified Stock Options
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Dilutive securities outstanding not included in the computation of earnings (loss) per share because their effect is anti-dilutive (in shares)	59		29	8
Restricted Stock and Restricted Stock Units (RSUs)
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Dilutive securities outstanding not included in the computation of earnings (loss) per share because their effect is anti-dilutive (in shares)	42	3	28	10
Non-Qualified Stock Options
Effect of dilutive stock options and restricted stock units outstanding [Abstract]
Effect of dilutive stock options and restricted stock units outstanding (in shares)	277	481	295	462
Restricted Stock and Restricted Stock Units (RSUs)
Effect of dilutive stock options and restricted stock units outstanding [Abstract]
Effect of dilutive stock options and restricted stock units outstanding (in shares)	332	602	368	606
Market Stock Units
Effect of dilutive stock options and restricted stock units outstanding [Abstract]
Effect of dilutive stock options and restricted stock units outstanding (in shares)	489	312	511	303
Warrants Related to Cash Convertible Notes
Effect of dilutive stock options and restricted stock units outstanding [Abstract]
Effect of dilutive stock options and restricted stock units outstanding (in shares)	2,287	1,728	2,422	927

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Accumulated OCI - Changes in Accumulated OCI, Net of Tax (Details) - Foreign Currency Translation Adjustments $ in Thousands	6 Months Ended
	Jun. 30, 2017 USD ($)
Accumulated Other Comprehensive Income Loss [Line Items]
Balance	$ (4,502)
Other comprehensive income before reclassifications, net of tax	1,458
Amounts reclassified from accumulated OCI, net of tax	$ 3,044

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Accumulated OCI - Changes in Accumulated OCI, Net of Tax (Parenthetical) (Details) - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017
Accumulated Other Comprehensive Income Loss [Line Items]
Amounts reclassified from accumulated OCI, tax	$ 0	$ 0
Foreign Currency Translation Adjustments
Accumulated Other Comprehensive Income Loss [Line Items]
Other comprehensive income before reclassifications, tax		225
Amounts reclassified from accumulated OCI, tax		$ 0

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Accumulated OCI - Additional Information (Details) - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017
Accumulated Other Comprehensive Income Loss Net Of Tax [Abstract]
Amounts reclassified from accumulated OCI, tax	$ 0	$ 0