90-day game plan

Non-GAAP reconciliation: H1 '19 location gross profit (loss) from membership and service revenue and Location contribution margin for buildings at various enterprise membership percentages ($ in millions) Location gross profit (loss) from membership and service revenue calculated in accordance with GAAP: Membership and service revenue Cost of membership and service revenue: ≥50% Enterprise mature ≥50% SMB mature locations Non-Mature & Other (2) locations Total Consolidated - All locations $47 $438 $864 $1,349 Location operating expenses (exclusive of depreciation and amortization shown separately below) (32) (355) ($846) (1,233) Depreciation and amortization - relating to location operating expenses (5) (69) (156) (230) Total cost of membership and service revenue ($37) ($424) ($1,002) ($1,463) Location gross profit (loss) from membership and service revenue $9 $14 ($138) ($114) Location gross profit (loss) margin percentage 20% 3% (16%) (8%) Reconciliation of GAAP location gross profit (loss) from membership and service revenue to non-GAAP location contribution margin: Location gross profit (loss) from membership and service revenue $9 414 $14 ($138) ($114) Add: Depreciation and amortization - relating to location operating expenses 5 69 62 Stock-based compensation expense (as included in location operating expenses) (1) 26 1566 156 230 26 26 Location contribution margin $15 $83 $18 $142 Impact of non-cash GAAP straight-line lease cost (as included in location operating expenses) on location contribution margin (0) (18) 216 198 Location contribution margin percentage 32% 19% 10% Non-cash GAAP straight-line lease cost as a % of membership and service revenue 1% 4% 15% Benefit of non-cash amortization of lease incentives as a % of membership and service revenue (5%) (5%) (5%) (1) (2) Represents the non-cash expense of our equity compensation arrangements for employees whose payroll is included in location operating expense. Stock-based compensation expense is not allocated at the location level. The "Other" cohort relates to membership and service revenue related to management fees earned for providing services to unconsolidated locations in India and revenue, location operating expenses, and depreciation relating to locations that also serve as headquarters locations that are not included in the Company's cohort analysis, as performance of these locations is not representative of our open locations 32

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