90-day game plan
How we define location contribution margin
1H 2019
(in millions)
$1,349
($707)
Excludes benefit of
TI amortization of
$69mm
($371)
Membership &
service
Cash lease
costs (1)
Other adjusted
revenue
2x Rev. Rent
Multiplier
($198)
$69
$142
Impact of non-
Benefit of
location
operating
expenses (2
$(2)
cash straight-line
lease cost
adjustment
non-cash
amortization
of lease
incentives (3)
Location
contribution
margin
% membership &
(52%)
(28%)
(15%)
5%
10%
service revenue:
Membership and service revenue
+ Monthly fees we collect from members
+ Incremental services revenue (IT, printing, etc.)
Building costs
Cash lease costs represent cash rent and tenancy
costs we pay landlords
Other adj. location opex (2)
• Costs for people that run the buildings (e.g.,
Community Team)
Costs to operate the buildings (e.g., utilities,
consumables, cleaning, member tech, repair and
maintenance expenses)
Regionalized overhead & centralized G&A
dedicated to buildings (e.g., billing, collections,
payables, purchasing)
Non-cash expenses, including the impact of straight-
line lease cost and benefit of lease incentive
amortization
Excludes corporate G&A, growth and new market
development, corporate sales & marketing and pre-
opening costs
Note: Represents Whole Co as of six months ended June 30, 2019
(1)
eso
(2)
Lease cost excluding adjustments for the impact of straight-lining of lease cost relating to lease holidays and lease escalation. Tenancy costs include real estate and related taxes and common area maintenance charges ("CAM") relating to our leased locations used for member community operations.
Other adjusted location expenses represents location operating expenses less cash lease and tenancy costs, adjusted to exclude adjustments for impact of straight-lining of lease and stock-based compensation.
(3) Benefit of non-cash amortization of lease incentives represents cash received for TI allowances and broker commissions
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