1.	BACKGROUND

Nature of the Business

Nutrisystem, Inc. (the "Company" or "Nutrisystem"), a provider of weight management products and services, offers nutritionally balanced weight loss programs designed for women, men, and seniors, as well as the Nutrisystem^® D^® program, specifically designed to help people with type 2 diabetes who want to lose weight and manage their diabetes. The Nutrisystem^® programs are based on 40 years of nutrition research and on the science of the low glycemic index. The Company's pre-packaged foods are sold directly to weight loss program participants primarily through the Internet and telephone (including the redemption of prepaid program cards), referred to as the direct channel, and through QVC, a television shopping network. Approximately 99%, 98% and 98% of revenues for the years ended December 31, 2011, 2010 and 2009, respectively, were generated in the United States.