Condensed consolidated balance sheets (Unaudited) (Parenthetical) - USD ($) $ in Thousands |
Jun. 30, 2019 |
Dec. 31, 2018 |
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Accounts receivable, allowance for bad debts | $ 54 | $ 84 |
Accumulated depreciation | $ 64,839 | $ 53,086 |
Class A Common Stock | ||
Common stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized | 300,000,000 | 300,000,000 |
Common stock, shares issued | 83,995,000 | 83,584,000 |
Common stock, shares outstanding | 83,995,000 | 83,584,000 |
Class B Common Stock | ||
Common stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized | 100,000,000 | 100,000,000 |
Common stock, shares issued | 8,582,000 | 9,448,000 |
Common stock, shares outstanding | 8,582,000 | 9,448,000 |
Condensed consolidated statements of operations (Unaudited) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
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Jun. 30, 2019 |
Jun. 30, 2018 |
Jun. 30, 2019 |
Jun. 30, 2018 |
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Revenue: | ||||
Revenue | $ 181,661 | $ 140,550 | $ 330,478 | $ 261,882 |
Operating costs and expenses: | ||||
Cost of revenue | 54,391 | 36,744 | 88,877 | 63,244 |
Store operations | 20,163 | 18,047 | 41,068 | 36,403 |
Selling, general and administrative | 18,864 | 17,210 | 37,018 | 34,831 |
Depreciation and amortization | 10,577 | 8,619 | 20,484 | 17,084 |
Other (gain) loss | (122) | (39) | 246 | 971 |
Total operating costs and expenses | 116,395 | 91,739 | 212,027 | 174,153 |
Income from operations | 65,266 | 48,811 | 118,451 | 87,729 |
Other expense, net: | ||||
Interest income | 1,979 | 418 | 3,777 | 455 |
Interest expense | (14,636) | (9,046) | (29,385) | (17,816) |
Other expense | (1,444) | (502) | (4,762) | (310) |
Total other expense, net | (14,101) | (9,130) | (30,370) | (17,671) |
Income before income taxes | 51,165 | 39,681 | 88,081 | 70,058 |
Provision for income taxes | 11,338 | 9,263 | 16,615 | 16,146 |
Net income | 39,827 | 30,418 | 71,466 | 53,912 |
Less net income attributable to non-controlling interests | 4,983 | 4,544 | 9,213 | 8,157 |
Net income attributable to Planet Fitness, Inc. | $ 34,844 | $ 25,874 | $ 62,253 | $ 45,755 |
Class A Common Stock | ||||
Net income per share of Class A common stock: | ||||
Basic (in dollars per share) | $ 0.41 | $ 0.30 | $ 0.74 | $ 0.52 |
Diluted (in dollars per share) | $ 0.41 | $ 0.29 | $ 0.74 | $ 0.52 |
Weighted-average shares of Class A common stock outstanding: | ||||
Basic (in shares) | 84,142,975 | 87,693,377 | 83,975,192 | 87,564,596 |
Diluted (in shares) | 84,835,183 | 88,105,331 | 84,638,650 | 87,931,469 |
Franchise | ||||
Revenue: | ||||
Revenue | $ 58,225 | $ 45,417 | $ 111,181 | $ 87,579 |
Commission income | ||||
Revenue: | ||||
Revenue | 1,065 | 1,575 | 2,059 | 3,563 |
National advertising fund | ||||
Revenue: | ||||
Revenue | 12,522 | 11,158 | 24,334 | 21,620 |
Operating costs and expenses: | ||||
Cost of revenue | 12,522 | 11,158 | 24,334 | 21,620 |
Corporate-owned stores | ||||
Revenue: | ||||
Revenue | 39,695 | 34,252 | 77,739 | 66,959 |
Equipment | ||||
Revenue: | ||||
Revenue | $ 70,154 | $ 48,148 | $ 115,165 | $ 82,161 |
Condensed consolidated statements of comprehensive income (loss) (Unaudited) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
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Jun. 30, 2019 |
Jun. 30, 2018 |
Jun. 30, 2019 |
Jun. 30, 2018 |
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Statement of Comprehensive Income [Abstract] | ||||
Net income including non-controlling interests | $ 39,827 | $ 30,418 | $ 71,466 | $ 53,912 |
Other comprehensive income (loss), net: | ||||
Unrealized gain on interest rate caps, net of tax | 0 | 17 | 0 | 383 |
Foreign currency translation adjustments | 103 | (34) | 157 | (63) |
Total other comprehensive income, net | 103 | (17) | 157 | 320 |
Total comprehensive income including non-controlling interests | 39,930 | 30,401 | 71,623 | 54,232 |
Less: total comprehensive income attributable to non-controlling interests | 4,983 | 4,543 | 9,213 | 8,214 |
Total comprehensive income attributable to Planet Fitness, Inc. | $ 34,947 | $ 25,858 | $ 62,410 | $ 46,018 |
Business Organization |
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Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||||||||||||
Business Organization | Business Organization Planet Fitness, Inc. (the “Company”), through its subsidiaries, is a franchisor and operator of fitness centers, with more than 14.0 million members and 1,859 owned and franchised locations (referred to as stores) in 50 states, the District of Columbia, Puerto Rico, Canada, the Dominican Republic, Panama and Mexico as of June 30, 2019. The Company serves as the reporting entity for its various subsidiaries that operate three distinct lines of business:
The Company was formed as a Delaware corporation on March 16, 2015 for the purpose of facilitating an initial public offering (the “IPO”), which was completed on August 11, 2015 and related transactions in order to carry on the business of Pla-Fit Holdings, LLC and its subsidiaries (“Pla-Fit Holdings”). As of August 5, 2015, in connection with the recapitalization transactions that occurred prior to the IPO, the Company became the sole managing member and holder of 100% of the voting power of Pla-Fit Holdings. Pla-Fit Holdings owns 100% of Planet Intermediate, LLC, which has no operations but is the 100% owner of Planet Fitness Holdings, LLC, a franchisor and operator of fitness centers. With respect to the Company, Pla-Fit Holdings and Planet Intermediate, LLC, each entity owns nothing other than the respective entity below it in the corporate structure and each entity has no other material operations. The Company is a holding company whose principal asset is a controlling equity interest in Pla-Fit Holdings. As the sole managing member of Pla-Fit Holdings, the Company operates and controls all of the business and affairs of Pla-Fit Holdings, and through Pla-Fit Holdings, conducts its business. As a result, the Company consolidates Pla-Fit Holdings’ financial results and reports a non-controlling interest related to the portion of limited liability company units of Pla-Fit Holdings (“Holdings Units”) not owned by the Company. Unless otherwise specified, “the Company” refers to both Planet Fitness, Inc. and Pla-Fit Holdings throughout the remainder of these notes. As of June 30, 2019, Planet Fitness, Inc. held 100.0% of the voting interest and 90.7% of the economic interest of Pla-Fit Holdings and the holders of Holdings Units of Pla-Fit Holdings (the “Continuing LLC Owners”) held the remaining 9.3% economic interest in Pla-Fit Holdings.
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Summary of Significant Accounting Policies |
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Accounting Policies [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Significant Accounting Policies | Summary of Significant Accounting Policies (a) Basis of presentation and consolidation The accompanying unaudited interim condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (U.S. GAAP) for interim financial information and pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”). Accordingly, these interim financial statements do not include all of the information and footnotes required by U.S. GAAP for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring adjustments) necessary for a fair presentation of the results of operations, financial position and cash flows for the periods presented have been reflected. All significant intercompany balances and transactions have been eliminated in consolidation. The condensed consolidated financial statements as of and for the three and six months ended June 30, 2019 and 2018 are unaudited. The condensed consolidated balance sheet as of December 31, 2018 has been derived from the audited financial statements at that date but does not include all of the disclosures required by U.S. GAAP. These interim condensed consolidated financial statements should be read in conjunction with the Company’s Annual Report on Form 10-K for the year ended December 31, 2018 (the “Annual Report”) filed with the SEC on March 1, 2019. Operating results for the interim periods are not necessarily indicative of the results that may be expected for the full year. As discussed in Note 1, Planet Fitness, Inc. consolidates Pla-Fit Holdings. The Company also consolidates entities in which it has a controlling financial interest, the usual condition of which is ownership of a majority voting interest. The Company also considers for consolidation certain interests where the controlling financial interest may be achieved through arrangements that do not involve voting interests. Such an entity, known as a variable interest entity (“VIE”), is required to be consolidated by its primary beneficiary. The primary beneficiary of a VIE is considered to possess the power to direct the activities of the VIE that most significantly impact its economic performance and has the obligation to absorb losses or the rights to receive benefits from the VIE that are significant to it. The principal entities in which the Company possesses a variable interest include franchise entities and certain other entities. The Company is not deemed to be the primary beneficiary for Planet Fitness franchise entities. Therefore, these entities are not consolidated. The results of the Company have been consolidated with Matthew Michael Realty LLC (“MMR”), PF Melville LLC (“PF Melville”), and Planet Fitness NAF, LLC (the “NAF”) based on the determination that the Company is the primary beneficiary with respect to these VIEs. MMR and PF Melville are real estate holding companies that derive a majority of their financial support from the Company through lease agreements for corporate stores. See Note 3 for further information related to the Company’s VIEs. The NAF is an advertising fund on behalf of which the Company collects 2% of gross monthly membership dues from franchisees, in accordance with the provisions of the franchise agreements, and uses the amounts received to support our national marketing campaigns, our social media platforms and the development of local advertising materials. (b) Use of estimates The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. Although these estimates are based on management’s knowledge of current events and actions it may undertake in the future, they may ultimately differ from actual results. Significant areas where estimates and judgments are relied upon by management in the preparation of the consolidated financial statements include revenue recognition, valuation of assets and liabilities in connection with acquisitions, valuation of equity-based compensation awards, the evaluation of the recoverability of goodwill and long-lived assets, including intangible assets, income taxes, including deferred tax assets and liabilities and reserves for unrecognized tax benefits, the liability for the Company’s tax benefit arrangements, and the value of the lease liability and related right-of-use asset recorded in accordance with ASC 842 (see Note 2(d) and 16). (c) Fair Value ASC 820, Fair Value Measurements and Disclosures, establishes a three-level valuation hierarchy for disclosure of fair value measurements. The valuation hierarchy is based upon the transparency of inputs to the valuation of an asset or liability as of the measurement date. Categorization within the valuation hierarchy is based upon the lowest level of input that is significant to the fair value measurement. The three levels are defined as follows: Level 1—Inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets. Level 2—Inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument. Level 3—Inputs to the valuation methodology are unobservable and significant to the fair value measurement. The carrying value and estimated fair value of long-term debt as of June 30, 2019 and December 31, 2018 were as follows:
(1) The estimated fair value of our long-term debt is estimated primarily based on current bid prices for our long-term debt. Judgment is required to develop these estimates. As such, the fair value of our long-term debt is classified within Level 2, as defined under U.S. GAAP. (d) Recent accounting pronouncements In February 2016, the FASB established Topic 842, Leases, by issuing ASU No. 2016-02, Leases, in February 2016. Topic 842 was subsequently amended by ASU No. 2018-01, Land Easement Practical Expedient for Transition to Topic 842; ASU No. 2018-10, Codification Improvements to Topic 842, Leases; and ASU No. 2018-11, Targeted Improvements. This guidance is intended to increase transparency and comparability among organizations by recognizing lease assets and lease liabilities on the balance sheet and disclosing key information about leasing arrangements. The new guidance requires lessees to recognize the assets and liabilities on the balance sheet for the rights and obligations created by leases with lease terms of more than 12 months, amends various other aspects of accounting for leases by lessees and lessors, and requires enhanced disclosures. Leases will be classified as finance or operating, with the classification affecting the pattern and classification of expense recognition within the income statement. The Company adopted the new standard on January 1, 2019 and used the effective date as our date of initial application. Consequently, financial information has not been updated and the disclosures required under the new standard are not provided for dates and periods before January 1, 2019. The new guidance also provides several practical expedients and policies that companies may elect upon transition. The Company has elected the package of practical expedients under which it did not reassess the classification of its existing leases, reevaluate whether any expired or existing contracts are or contain leases or reassess initial direct costs under the new guidance. The Company did not elect the practical expedient pertaining to land easements, as it is not applicable to its leases. Additionally, the Company elected to use the practical expedient that permits a reassessment of lease terms for existing leases using hindsight. The new standard also provides practical expedients for an entity’s ongoing accounting. The Company elected the short-term lease recognition exemption. This means, for those leases that qualify, the Company will not recognize right-of-use ("ROU") assets or lease liabilities, and this includes not recognizing ROU assets or lease liabilities for existing short-term leases of those assets in transition. The Company also elected the practical expedient to not separate lease and non-lease components. Upon transition to the new guidance on January 1, 2019, the Company recognized approximately $130,000 of operating lease liabilities. Additionally, the Company recorded ROU assets in a corresponding amount, net of amounts reclassified from other assets and liabilities, including deferred rent, tenant improvement allowances, and favorable lease assets, as specified by the new lease guidance. In connection with the election of the hindsight practical expedient related to reassessing lease terms for existing leases as of January 1, 2019, the Company recorded a cumulative transition adjustment of $1,713 through retained earnings, net of tax. The FASB issued ASU No. 2017-4, Intangibles–Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment, in January 2017. This guidance eliminates the requirement to calculate the implied fair value, essentially eliminating step two from the goodwill impairment test. The new standard requires goodwill impairment to be based upon the results of step one of the impairment test, which is defined as the excess of the carrying value of a reporting unit over its fair value. The impairment charge will be limited to the amount of goodwill allocated to that reporting unit. This guidance will be effective for fiscal years beginning after December 15, 2019, including interim periods within that year. This new guidance is not expected to have a material impact on the Company’s consolidated financial statements. The FASB issued ASU No. 2018-15, Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350-40): Customer's Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract, in August 2018. The guidance helps align the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software (and hosting arrangements that include an internal-use software license). This guidance will be effective for fiscal years beginning after December 15, 2019, including interim periods within that year, but allows for early adoption. The Company is currently evaluating the impact of this guidance on its consolidated financial statements.
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Variable Interest Entities |
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Variable Interest Entity, Consolidated, Carrying Amount, Assets and Liabilities, Net [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Variable Interest Entities | Variable Interest Entities The carrying values of VIEs included in the consolidated financial statements as of June 30, 2019 and December 31, 2018 are as follows:
The Company also has variable interests in certain franchisees mainly through the guarantee of lease agreements. The Company’s maximum obligation, as a result of its guarantees of leases, is approximately $10,443 and $732 as of June 30, 2019 and December 31, 2018, respectively. In 2019, in connection with a real estate partnership, the Company began guaranteeing certain leases of its franchisees up to a maximum period of ten years with earlier expiration dates possible if certain conditions are met. The amount of the Company’s maximum obligation represents a loss that the Company could incur from the variability in credit exposure without consideration of possible recoveries through insurance or other means. In addition, the amount bears no relation to the ultimate settlement anticipated to be incurred from the Company’s involvement with these entities, which is estimated at $0.
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Acquisitions |
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Business Combinations [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Acquisitions | Acquisitions Maine Acquisition On May 30, 2019, the Company purchased from one of its franchisees certain assets associated with four franchisee-owned stores in Maine for a cash payment of $14,801. The Company financed the purchase through cash on hand. The acquired stores are included in the Corporate-owned stores segment. The preliminary purchase consideration was allocated as follows:
The goodwill created through the purchase is attributable to the assumed future value of the cash flows from the stores acquired. The goodwill is amortizable and deductible for tax purposes over 15 years. The acquisition was not material to the results of operations of the Company. Certain estimated values for the Maine acquisition, including goodwill and intangible assets, are not yet finalized and are subject to revision as additional information becomes available and more detailed analyses are completed. Colorado Acquisition On August 10, 2018, the Company purchased from one of its franchisees certain assets associated with four franchisee-owned stores in Colorado for a cash payment of $17,249. As a result of the transaction, the Company incurred a loss on unfavorable reacquired franchise rights of $10, which has been reflected in other operating costs in the statement of operations. The loss incurred reduced the net purchase price to $17,239. The Company financed the purchase through cash on hand. The acquired stores are included in the Corporate-owned stores segment. The purchase consideration was allocated as follows:
The goodwill created through the purchase is attributable to the assumed future value of the cash flows from the stores acquired. The goodwill is amortizable and deductible for tax purposes over 15 years. The acquisition was not material to the results of operations of the Company. Long Island Acquisition On January 1, 2018, the Company purchased from one of its franchisees certain assets associated with six franchisee-owned stores in New York for a cash payment of $28,503. As a result of the transaction, the Company incurred a loss on unfavorable reacquired franchise rights of $350, which has been reflected in other operating costs in the statement of operations. The loss incurred reduced the net purchase price to $28,153. The Company financed the purchase through cash on hand. The acquired stores are included in the Corporate-owned stores segment. The purchase consideration was allocated as follows:
The goodwill created through the purchase is attributable to the assumed future value of the cash flows from the stores acquired. The goodwill is amortizable and deductible for tax purposes over 15 years. The acquisition was not material to the results of operations of the Company.
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Goodwill and Intangible Assets |
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Goodwill and Intangible Assets Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Goodwill and Intangible assets | Goodwill and Intangible Assets A summary of goodwill and intangible assets at June 30, 2019 and December 31, 2018 is as follows:
In connection with the adoption of ASC 842, as of January 1, 2019, the Company has derecognized the favorable leases intangible asset, and the favorable leases balance is now included in the ROU asset, net balance (Note 16). The Company determined that no impairment charges were required during any periods presented and the increase to goodwill was due to the acquisition of four franchisee-owned stores on May 30, 2019 (Note 4). Amortization expense related to the intangible assets totaled $4,019 and $4,012 for the three months ended June 30, 2019 and 2018, respectively and $8,025 and $8,025 for the six months ended June 30, 2019 and 2018, respectively. Included within total amortization expense for the three and six months ended June 30, 2018 is $92, and $183 related to amortization of favorable leases, respectively. Amortization of favorable leases is recorded within store operations as a component of rent expense in the consolidated statements of operations. The anticipated annual amortization expense related to intangible assets to be recognized in future years as of June 30, 2019 is as follows:
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Long-Term Debt |
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Long-Term Debt | Long-Term Debt Long-term debt as of June 30, 2019 and December 31, 2018 consists of the following:
Future annual principal payments of long-term debt as of June 30, 2019 are as follows:
On August 1, 2018, Planet Fitness Master Issuer LLC (the “Master Issuer”), a limited-purpose, bankruptcy remote, wholly-owned indirect subsidiary of Pla-Fit Holdings, LLC, entered into a base indenture and a related supplemental indenture (collectively, the “Indenture”) under which the Master Issuer may issue multiple series of notes. On the same date, the Master Issuer issued Series 2018-1 4.262% Fixed Rate Senior Secured Notes, Class A-2-I (the “Class A-2-I Notes”) with an initial principal amount of $575,000 and Series 2018-1 4.666% Fixed Rate Senior Secured Notes, Class A-2-II (the “Class A-2-II Notes” and, together with the Class A-2-I Notes, the “Class A-2 Notes”) with an initial principal amount of $625,000. In connection with the issuance of the Class A-2 Notes, the Master Issuer also entered into a revolving financing facility that allows for the issuance of up to $75,000 in Series 2018-1 Variable Funding Senior Notes, Class A-1 (the “Variable Funding Notes” and together with the Class A-2 Notes, the “Series 2018-1 Senior Notes”), and certain letters of credit, all of which was undrawn as of both June 30, 2019 and December 31, 2018. The Series 2018-1 Senior Notes were issued in a securitization transaction pursuant to which most of the Company’s domestic revenue-generating assets, consisting principally of franchise-related agreements, certain corporate-owned store assets, equipment supply agreements and intellectual property and license agreements for the use of intellectual property, were assigned to the Master Issuer and certain other limited-purpose, bankruptcy remote, wholly-owned indirect subsidiaries of the Company that act as guarantors of the Series 2018-1 Senior Notes and that have pledged substantially all of their assets to secure the Series 2018-1 Senior Notes. Interest and principal payments on the Class A-2 Notes are payable on a quarterly basis. The requirement to make such quarterly principal payments on the Class A-2 Notes is subject to certain financial conditions set forth in the Indenture. The legal final maturity date of the Class A-2 Notes is in September 2048, but it is anticipated that, unless earlier prepaid to the extent permitted under the Indenture, the Class A-2-I Notes will be repaid in September 2022 and the Class A-2-II Notes will be repaid in September 2025 (together, the "Anticipated Repayment Dates"). If the Master Issuer has not repaid or refinanced the Class A-2 Notes prior to the respective Anticipated Repayment Dates, additional interest will accrue pursuant to the Indenture. The Variable Funding Notes will accrue interest at a variable interest rate based on (i) the prime rate, (ii) overnight federal funds rates, (iii) the London interbank offered rate for U.S. Dollars, or (iv) with respect to advances made by conduit investors, the weighted average cost of, or related to, the issuance of commercial paper allocated to fund or maintain such advances, in each case plus any applicable margin and as specified in the Variable Funding Note agreement. There is a commitment fee on the unused portion of the Variable Funding Notes of 0.5% based on utilization. It is anticipated that the principal and interest on the Variable Funding Notes will be repaid in full on or prior to September 2023, subject to two additional one-year extensions. Following the anticipated repayment date (and any extensions thereof) additional interest will accrue on the Variable Funding Notes equal to 5.0% per year. In connection with the issuance of the Series 2018-1 Senior Notes, the Company incurred debt issuance costs of $27,133. The debt issuance costs are being amortized to “Interest expense” through the Anticipated Repayment Dates of the Class A-2 Notes utilizing the effective interest rate method. The Series 2018-1 Senior Notes are subject to covenants and restrictions customary for transactions of this type, including (i) that the Master Issuer maintains specified reserve accounts to be used to make required payments in respect of the Series 2018-1 Senior Notes, (ii) provisions relating to optional and mandatory prepayments and the related payment of specified amounts, including specified make-whole payments in the case of the Class A-2 Notes under certain circumstances, (iii) certain indemnification payments in the event, among other things, the assets pledged as collateral for the Series 2018-1 Senior Notes are in stated ways defective or ineffective, and (iv) covenants relating to recordkeeping, access to information and similar matters. The Series 2018-1 Senior Notes are also subject to customary rapid amortization events provided for in the Indenture, including events tied to failure to maintain stated debt service coverage ratios, certain manager termination events, an event of default, and the failure to repay or refinance the Class A-2 Notes on the applicable scheduled Anticipated Repayment Dates. The Series 2018-1 Senior Notes are also subject to certain customary events of default, including events relating to non-payment of required interest, principal, or other amounts due on or with respect to the Series 2018-1 Senior Notes, failure to comply with covenants within certain time frames, certain bankruptcy events, breaches of specified representations and warranties, failure of security interests to be effective, and certain judgments. In accordance with the Indenture, certain cash accounts have been established with the Indenture trustee (the "Trustee") for the benefit of the trustee and the noteholders, and are restricted in their use. The Company holds restricted cash which primarily represents cash collections held by the Trustee, interest, principal, and commitment fee reserves held by the Trustee related to the Company’s Series 2018-1 Senior Notes. As of June 30, 2019, the Company had restricted cash held by the Trustee of $30,576. Restricted cash has been combined with cash and cash equivalents when reconciling the beginning and end of period balances in the consolidated statements of cash flows. |
Derivative Instruments and Hedging Activities |
6 Months Ended |
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Jun. 30, 2019 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivative Instruments and Hedging Activities | Derivative Instruments and Hedging Activities Prior to the refinancing transactions described in Note 6, the Company used interest-rate-related derivative instruments to manage its exposure related to changes in interest rates on its variable-rate debt instruments. The Company does not enter into derivative instruments for any purpose other than cash flow hedging. The Company does not speculate using derivative instruments. In order to manage the market risk arising from the previously outstanding term loans, the Company entered into a series of interest rate caps. As of June 30, 2019, the Company had no interest rate cap agreements outstanding. In connection with the issuance of the Class A-2 Notes, the Company terminated the interest rate caps it had entered into in order to hedge interest expense on its previously outstanding term loans. The company had no amounts related to interest rate caps recorded within other assets in the condensed consolidated balance sheets as of June 30, 2019 and December 31, 2018. The Company recorded an increase to the value of its interest rate caps of $17, net of tax of $5, within other comprehensive income (loss) during the three months ended June 30, 2018, and $383, net of tax of $130, during the six months ended June 30, 2018.
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Related Party Transactions |
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Related Party Transactions [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Related Party Transactions | Related Party Transactions Amounts due from related parties of $412 as of June 30, 2019 recorded within other receivables on the condensed consolidated balance sheet relate to a potential indemnification reimbursement for an outstanding legal matter, see Note 12. Activity with entities considered to be related parties is summarized below:
Additionally, the Company had deferred area development agreement revenue from related parties of $299 and $779 as of June 30, 2019 and December 31, 2018, respectively. The Company had payables to related parties pursuant to tax benefit arrangements of $55,504 and $59,458, as of June 30, 2019 and December 31, 2018, respectively (see Note 11). The Company provides administrative services to Planet Fitness NAF, LLC (“NAF”) and charges NAF a fee for providing these services. The services provided include accounting services, information technology, data processing, product development, legal and administrative support, and other operating expenses, which amounted to $695 and $556 for the three months ended June 30, 2019 and 2018, respectively, and $1,369 and $1,196 for the six months ended June 30, 2019 and 2018, respectively.
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Stockholder's Equity |
6 Months Ended | ||||||||
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Jun. 30, 2019 | |||||||||
Equity [Abstract] | |||||||||
Stockholder's Equity | Stockholder’s Equity Pursuant to the exchange agreement between the Company and the Continuing LLC Owners, the Continuing LLC Owners (or certain permitted transferees thereof) have the right, from time to time and subject to the terms of the exchange agreement, to exchange their Holdings Units, along with a corresponding number of shares of Class B common stock, for shares of Class A common stock (or cash at the option of the Company) on a one-for-one basis, subject to customary conversion rate adjustments for stock splits, stock dividends, reclassifications and similar transactions. In connection with any exchange of Holdings Units for shares of Class A common stock by a Continuing LLC Owner, the number of Holdings Units held by the Company is correspondingly increased as it acquires the exchanged Holdings Units, and a corresponding number of shares of Class B common stock are canceled. During the six months ended June 30, 2019, certain existing holders of Holdings Units exercised their exchange rights and exchanged 865,810 Holdings Units for 865,810 newly-issued shares of Class A common stock. Simultaneously, and in connection with these exchanges, 865,810 shares of Class B common stock were surrendered by the holders of Holdings Units that exercised their exchange rights and canceled. Additionally, in connection with these exchanges, Planet Fitness, Inc. received 865,810 Holdings Units, increasing its total ownership interest in Pla-Fit Holdings. As a result of the above transactions, as of June 30, 2019:
Share repurchase program On August 3, 2018, our board of directors approved an increase to the total amount of the previously approved share repurchase program to $500,000. On November 13, 2018, the Company entered into a $300,000 accelerated share repurchase agreement (the “ASR Agreement”) with Citibank, N.A. (“the Bank”). Pursuant to the terms of the ASR Agreement, on November 14, 2018, the Company paid the Bank $300,000 upfront in cash and received 4,607,410 shares of the Company’s Class A common stock, which were retired, and the Company elected to record as a reduction to retained earnings of $240,000. Final settlement of the ASR Agreement occurred on April 30, 2019. At final settlement, the Bank delivered 524,124 additional shares of the Company’s Class A common stock, based on a weighted average cost per share of $58.46 over the term of the ASR agreement, which were retired. This had been evaluated as an unsettled forward contract indexed to our own stock, with $60,000 classified as a reduction to retained earnings at the original date of payment. The timing of the purchases and the amount of stock repurchased pursuant to its remaining share repurchase authorization is subject to the Company’s discretion and depends on market and business conditions, the Company’s general working capital needs, stock price, applicable legal requirements and other factors. Our ability to repurchase shares at any particular time is also subject to the terms of the indenture governing the Series 2018-1 Senior Notes. Purchases may be effected through one or more open market transactions, privately negotiated transactions, transactions structured through investment banking institutions, or a combination of the foregoing. Planet Fitness is not obligated under the program to acquire any particular amount of stock and can suspend or terminate the program at any time.
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Earnings Per Share |
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Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share | Earnings Per Share Basic earnings per share of Class A common stock is computed by dividing net income attributable to Planet Fitness, Inc. by the weighted-average number of shares of Class A common stock outstanding during the same period. Diluted earnings per share of Class A common stock is computed by dividing net income attributable to Planet Fitness, Inc. by the weighted-average number of shares of Class A common stock outstanding adjusted to give effect to potentially dilutive securities. Shares of the Company’s Class B common stock do not share in the earnings or losses attributable to Planet Fitness, Inc. and are therefore not participating securities. As such, separate presentation of basic and diluted earnings per share of Class B common stock under the two-class method has not been presented. Shares of the Company’s Class B common stock are, however, considered potentially dilutive shares of Class A common stock because shares of Class B common stock, together with the related Holdings Units, are exchangeable into shares of Class A common stock on a one-for-one basis. The following table sets forth reconciliations used to compute basic and diluted earnings per share of Class A common stock:
Weighted average shares of Class B common stock of 8,585,294 and 10,704,794 for the three months ended June 30, 2019 and 2018, respectively, and 8,910,315 and 10,828,471 for the six months ended June 30, 2019 and 2018, respectively, were evaluated under the if-converted method for potential dilutive effects and were not determined to be dilutive. Weighted average stock options outstanding of 72,984 and 164,341 for the three months ended June 30, 2019 and 2018, respectively, and 36,648 and 82,165 for the six months ended June 30, 2019 and 2018, respectively, were evaluated under the treasury stock method for potential dilutive effects and were determined to be anti-dilutive. Weighted average restricted stock units outstanding of 1,209 and 579 for the six months ended June 30, 2019 and 2018, respectively, were evaluated under the treasury stock method for potential dilutive effects and were determined to be anti-dilutive.
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Income Taxes |
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Jun. 30, 2019 | |||||||||||||||||||||||||||||||||||||||||
Income Tax Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||
Income Taxes | Income Taxes The Company is the sole managing member of Pla-Fit Holdings, which is treated as a partnership for U.S. federal and certain state and local income taxes. As a partnership, Pla-Fit Holdings is not subject to U.S. federal and certain state and local income taxes. Any taxable income or loss generated by Pla-Fit Holdings is passed through to and included in the taxable income or loss of its members, including the Company, on a pro-rata basis. Planet Fitness, Inc. is subject to U.S. federal income taxes, in addition to state and local income taxes with respect to our allocable share of any taxable income of Pla-Fit Holdings. The Company’s effective tax rate was 22.2% and 23.3% for the three months ended June 30, 2019 and 2018, respectively and 18.9% and 23.0% for the six months ended June 30, 2019 and 2018, respectively. The effective tax rate for the three months ended June 30, 2019 differed from the U.S. federal statutory rate of 21% primarily due to state and local taxes, partially offset by income attributable to non-controlling interest. The effective tax rate for the six months ended June 30, 2019 differed from the U.S. federal statutory rate of 21% primarily due to the recognition of a tax benefit from the remeasurement of the Company’s net deferred tax assets and income attributable to non-controlling interest, partially offset by state and local taxes. The Company was also subject to taxes in foreign jurisdictions. Undistributed earnings of foreign operations were not material for the three and six months ended June 30, 2019 and 2018. Net deferred tax assets of $423,773 and $412,538 as of June 30, 2019 and December 31, 2018, respectively, relate primarily to the tax effects of temporary differences in the book basis as compared to the tax basis of our investment in Pla-Fit Holdings as a result of the secondary offerings, other exchanges, recapitalization transactions and the IPO. As of June 30, 2019, the Company does not have any material net operating loss carryforwards. As of June 30, 2019 and December 31, 2018, the total liability related to uncertain tax positions was $430 and $300, respectively. The Company recognizes interest accrued and penalties, if applicable, related to unrecognized tax benefits in income tax expense. Interest and penalties for the three and six months ended June 30, 2019 and 2018 were not material. Tax benefit arrangements The Company’s acquisition of Holdings Units in connection with the IPO and future and certain past exchanges of Holdings Units for shares of the Company’s Class A common stock (or cash at the option of the Company) are expected to produce and have produced favorable tax attributes. In connection with the IPO, the Company entered into two tax receivable agreements. Under the first of those agreements, the Company generally is required to pay to certain existing and previous equity owners of Pla-Fit Holdings (the “TRA Holders”) 85% of the applicable tax savings, if any, in U.S. federal and state income tax that the Company is deemed to realize as a result of certain tax attributes of their Holdings Units sold to the Company (or exchanged in a taxable sale) and that are created as a result of (i) the exchanges of their Holdings Units for shares of Class A common stock and (ii) tax benefits attributable to payments made under the tax receivable agreement (including imputed interest). Under the second tax receivable agreement, the Company generally is required to pay to TSG AIV II-A L.P and TSG PF Co-Investors A L.P. (the "Direct TSG Investors") 85% of the amount of tax savings, if any, that the Company is deemed to realize as a result of the tax attributes of the Holdings Units held in respect of the Direct TSG Investors’ interest in the Company, which resulted from the Direct TSG Investors’ purchase of interests in Pla-Fit Holdings in 2012, and certain other tax benefits. Under both agreements, the Company generally retains the benefit of the remaining 15% of the applicable tax savings. During the six months ended June 30, 2019, 865,810 Holdings Units were exchanged by the TRA Holders for newly issued shares of Class A common stock, resulting in an increase in the tax basis of the net assets of Pla-Fit Holdings subject to the provisions of the tax receivable agreements. As a result of the change in Planet Fitness, Inc.’s ownership percentage of Pla-Fit Holdings that occurred in conjunction with the exchanges, we recorded a decrease to our net deferred tax assets of $639 during the six months ended June 30, 2019. As a result of these exchanges, during the six months ended June 30, 2019, we also recognized deferred tax assets in the amount of $20,040, and corresponding tax benefit arrangement liabilities of $17,016, representing approximately 85% of the tax benefits due to the TRA Holders. The offset to the entries recorded in connection with exchanges was to equity. As of June 30, 2019 and December 31, 2018, the Company had a liability of $433,605 and $429,233, respectively, related to its projected obligations under the tax benefit arrangements. Projected future payments under the tax benefit arrangements are as follows:
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Commitments and contingencies |
6 Months Ended |
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Jun. 30, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and contingencies | Commitments and contingencies From time to time, and in the ordinary course of business, the Company is subject to various claims, charges, and litigation, such as employment-related claims and slip and fall cases. On May 3, 2019, the Company and other defendants received a joint and several judgment against them in the amount of $6,185, inclusive of accrued interest, in a civil action brought by a former employee. As of June 30, 2019, the Company has estimated its obligation related to this matter to be approximately $1,237, which is included in other current liabilities on the condensed consolidated balance sheet. In connection with 2012 acquisition of Pla-Fit Holdings on November 8, 2012, the sellers are obligated to indemnify the Company related to this specific matter. The Company has therefore recorded an offsetting indemnification receivable of $1,237 in other receivables on the Company's condensed consolidated balance sheet, of which $412 is due from a related party. As of June 30, there is an additional $4,109 of potential incremental interest being sought by the plaintiff; however the Company does not currently believe the incremental interest is probable and therefore has not recorded such amount as of June 30, 2019. The Company is not currently aware of any other legal proceedings or claims that the Company believes will have, individually or in the aggregate, a material adverse effect on the Company’s financial position or result of operations.
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Segments |
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Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segments | Segments The Company has three reportable segments: (i) Franchise; (ii) Corporate-owned stores; and (iii) Equipment. The Company’s operations are organized and managed by type of products and services and segment information is reported accordingly. The Company’s chief operating decision maker (the “CODM”) is its Chief Executive Officer. The CODM reviews financial performance and allocates resources by reportable segment. There have been no operating segments aggregated to arrive at the Company’s reportable segments. The Franchise segment includes operations related to the Company’s franchising business in the United States, Puerto Rico, Canada, the Dominican Republic, Panama and Mexico, including revenues and expenses from the NAF beginning on January 1, 2018 (see Note 15). The Corporate-owned stores segment includes operations with respect to all Corporate-owned stores throughout the United States and Canada. The Equipment segment includes the sale of equipment to our United States franchisee-owned stores. The accounting policies of the reportable segments are the same as those described in Note 2. The Company evaluates the performance of its segments and allocates resources to them based on revenue and earnings before interest, taxes, depreciation, and amortization, referred to as Segment EBITDA. Revenues for all operating segments include only transactions with unaffiliated customers and include no intersegment revenues. The tables below summarize the financial information for the Company’s reportable segments for the three and six months ended June 30, 2019 and 2018. The “Corporate and other” category, as it relates to Segment EBITDA, primarily includes corporate overhead costs, such as payroll and related benefit costs and professional services which are not directly attributable to any individual segment.
Franchise segment revenue includes franchise revenue, NAF revenue, and commission income. Franchise revenue includes revenue generated from placement services of $5,071 and $3,079 for the three months ended June 30, 2019 and 2018, respectively, and $7,836 and $5,177 for the six months June 30, 2019 and 2018, respectively.
The following table reconciles total Segment EBITDA to income before taxes:
The following table summarizes the Company’s assets by reportable segment:
The table above includes $1,730 and $1,892 of long-lived assets located in the Company’s corporate-owned stores in Canada as of June 30, 2019 and December 31, 2018, respectively. All other assets are located in the U.S. The following table summarizes the Company’s goodwill by reportable segment:
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Corporate-Owned and Franchisee-Owned Stores |
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Franchisors [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Corporate-Owned and Franchisee-Owned Stores | Corporate-Owned and Franchisee-Owned Stores The following table shows changes in our corporate-owned and franchisee-owned stores for the three and six months ended June 30, 2019 and 2018:
(1) The term “debrand” refers to a franchisee-owned store whose right to use the Planet Fitness brand and marks has been terminated in accordance with the franchise agreement. We retain the right to prevent debranded stores from continuing to operate as fitness centers. The term “consolidated” refers to the combination of a franchisee’s store with another store located in close proximity with our prior approval. This often coincides with an enlargement, re-equipment and/or refurbishment of the remaining store.
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Revenue recognition |
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Revenue from Contract with Customer [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Revenue recognition | Revenue recognition Contract Liabilities Contract liabilities consist of deferred revenue resulting from initial and renewal franchise fees and ADA fees paid by franchisees, as well as transfer fees, which are generally recognized on a straight-line basis over the term of the underlying franchise agreement. Also included are corporate-owned store enrollment fees, annual fees and monthly fees as well as deferred equipment rebates relating to our equipment business. We classify these contract liabilities as deferred revenue in our condensed consolidated balance sheets. The following table reflects the change in contract liabilities between December 31, 2018 and June 30, 2019.
The following table illustrates estimated revenues expected to be recognized in the future related to performance obligations that are unsatisfied (or partially unsatisfied) as of June 30, 2019. The Company has elected to exclude short term contracts, sales and usage based royalties and any other variable consideration recognized on an "as invoiced" basis.
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Leases |
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Leases [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Leases | Leases The Company leases space to operate corporate-owned stores, equipment, office, and warehouse space. Leases with an initial term of 12 months or less are not recorded on the balance sheet; we recognize lease expense for these leases on a straight-line basis over the lease term. For leases beginning in 2019 and later, we account for fixed lease and non-lease components together as a single, combined lease component. Variable lease costs, which may include common area maintenance, insurance, and taxes are not included in the lease liability and are expensed in the period incurred. Our corporate-owned store leases generally have remaining terms of one to ten years, and typically include one or more renewal options, with renewal terms that can generally extend the lease term from three to ten years or more. The exercise of lease renewal options is at our sole discretion. The Company includes options to renew in the expected term when they are reasonably certain to be exercised. The depreciable life of assets and leasehold improvements are limited by the expected lease term. Operating lease assets and liabilities are recognized at the lease commencement date. Operating lease liabilities represent the present value of lease payments not yet paid. Operating lease ROU assets represent our right to use an underlying asset and are based upon the operating lease liabilities adjusted for prepayments or accrued lease payments, initial direct costs and lease incentives. To determine the present value of lease payments not yet paid, we estimate incremental secured borrowing rates corresponding to the maturities of the leases based upon interpolated rates using our Class A-2 Notes. The Company has certain non-real estate leases that are accounted for as finance leases under ASC 842, which is similar to the accounting for capital leases under the previous standard. These leases are immaterial, and therefore the Company has not included them in them in the tables below, except for their location on the consolidated balance sheet. Our leases typically contain rent escalations over the lease term. We recognize expense for these leases on a straight-line basis over the lease term. Additionally, tenant incentives used to fund leasehold improvements are recognized when earned and reduce our ROU asset related to the lease. These tenant incentives are amortized as reduction of rent expense over the lease term. Our lease agreements do not contain any material residual value guarantees or material restrictive covenants. For periods prior to January 1, 2019, the Company recognized rent expense related to leases on a straight-line basis over the term of the lease. The difference between rent expense and rent paid, if any, as a result of escalation provisions and lease incentives, such as tenant improvements provided by lessors, was recorded as deferred rent in the Company’s consolidated balance sheets.
During the three and six months ended June 30, 2019, the components of lease cost were as follows:
The Company's costs related to short-term leases, those with a duration between one and twelve months, were immaterial. Supplemental disclosures of cash flow information related to leases were as follows:
As of June 30, 2019, maturities of lease liabilities were as follows:
As of June 30, 2019, operating lease payments exclude approximately $50,927 of legally binding minimum lease payments for leases signed but not yet commenced. As of December 31, 2018, under the previous accounting guidance for leases, approximate annual future commitments under noncancelable operating leases were as follows:
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Leases | Leases The Company leases space to operate corporate-owned stores, equipment, office, and warehouse space. Leases with an initial term of 12 months or less are not recorded on the balance sheet; we recognize lease expense for these leases on a straight-line basis over the lease term. For leases beginning in 2019 and later, we account for fixed lease and non-lease components together as a single, combined lease component. Variable lease costs, which may include common area maintenance, insurance, and taxes are not included in the lease liability and are expensed in the period incurred. Our corporate-owned store leases generally have remaining terms of one to ten years, and typically include one or more renewal options, with renewal terms that can generally extend the lease term from three to ten years or more. The exercise of lease renewal options is at our sole discretion. The Company includes options to renew in the expected term when they are reasonably certain to be exercised. The depreciable life of assets and leasehold improvements are limited by the expected lease term. Operating lease assets and liabilities are recognized at the lease commencement date. Operating lease liabilities represent the present value of lease payments not yet paid. Operating lease ROU assets represent our right to use an underlying asset and are based upon the operating lease liabilities adjusted for prepayments or accrued lease payments, initial direct costs and lease incentives. To determine the present value of lease payments not yet paid, we estimate incremental secured borrowing rates corresponding to the maturities of the leases based upon interpolated rates using our Class A-2 Notes. The Company has certain non-real estate leases that are accounted for as finance leases under ASC 842, which is similar to the accounting for capital leases under the previous standard. These leases are immaterial, and therefore the Company has not included them in them in the tables below, except for their location on the consolidated balance sheet. Our leases typically contain rent escalations over the lease term. We recognize expense for these leases on a straight-line basis over the lease term. Additionally, tenant incentives used to fund leasehold improvements are recognized when earned and reduce our ROU asset related to the lease. These tenant incentives are amortized as reduction of rent expense over the lease term. Our lease agreements do not contain any material residual value guarantees or material restrictive covenants. For periods prior to January 1, 2019, the Company recognized rent expense related to leases on a straight-line basis over the term of the lease. The difference between rent expense and rent paid, if any, as a result of escalation provisions and lease incentives, such as tenant improvements provided by lessors, was recorded as deferred rent in the Company’s consolidated balance sheets.
During the three and six months ended June 30, 2019, the components of lease cost were as follows:
The Company's costs related to short-term leases, those with a duration between one and twelve months, were immaterial. Supplemental disclosures of cash flow information related to leases were as follows:
As of June 30, 2019, maturities of lease liabilities were as follows:
As of June 30, 2019, operating lease payments exclude approximately $50,927 of legally binding minimum lease payments for leases signed but not yet commenced. As of December 31, 2018, under the previous accounting guidance for leases, approximate annual future commitments under noncancelable operating leases were as follows:
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Summary of significant accounting policies (Policies) |
6 Months Ended |
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Jun. 30, 2019 | |
Accounting Policies [Abstract] | |
Basis of presentation and consolidation | Basis of presentation and consolidation The accompanying unaudited interim condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (U.S. GAAP) for interim financial information and pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”). Accordingly, these interim financial statements do not include all of the information and footnotes required by U.S. GAAP for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring adjustments) necessary for a fair presentation of the results of operations, financial position and cash flows for the periods presented have been reflected. All significant intercompany balances and transactions have been eliminated in consolidation. The condensed consolidated financial statements as of and for the three and six months ended June 30, 2019 and 2018 are unaudited. The condensed consolidated balance sheet as of December 31, 2018 has been derived from the audited financial statements at that date but does not include all of the disclosures required by U.S. GAAP. These interim condensed consolidated financial statements should be read in conjunction with the Company’s Annual Report on Form 10-K for the year ended December 31, 2018 (the “Annual Report”) filed with the SEC on March 1, 2019. Operating results for the interim periods are not necessarily indicative of the results that may be expected for the full year. As discussed in Note 1, Planet Fitness, Inc. consolidates Pla-Fit Holdings. The Company also consolidates entities in which it has a controlling financial interest, the usual condition of which is ownership of a majority voting interest. The Company also considers for consolidation certain interests where the controlling financial interest may be achieved through arrangements that do not involve voting interests. Such an entity, known as a variable interest entity (“VIE”), is required to be consolidated by its primary beneficiary. The primary beneficiary of a VIE is considered to possess the power to direct the activities of the VIE that most significantly impact its economic performance and has the obligation to absorb losses or the rights to receive benefits from the VIE that are significant to it. The principal entities in which the Company possesses a variable interest include franchise entities and certain other entities. The Company is not deemed to be the primary beneficiary for Planet Fitness franchise entities. Therefore, these entities are not consolidated. The results of the Company have been consolidated with Matthew Michael Realty LLC (“MMR”), PF Melville LLC (“PF Melville”), and Planet Fitness NAF, LLC (the “NAF”) based on the determination that the Company is the primary beneficiary with respect to these VIEs. MMR and PF Melville are real estate holding companies that derive a majority of their financial support from the Company through lease agreements for corporate stores. See Note 3 for further information related to the Company’s VIEs. The NAF is an advertising fund on behalf of which the Company collects 2% of gross monthly membership dues from franchisees, in accordance with the provisions of the franchise agreements, and uses the amounts received to support our national marketing campaigns, our social media platforms and the development of local advertising materials.
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Use of estimates | Use of estimates The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. Although these estimates are based on management’s knowledge of current events and actions it may undertake in the future, they may ultimately differ from actual results. Significant areas where estimates and judgments are relied upon by management in the preparation of the consolidated financial statements include revenue recognition, valuation of assets and liabilities in connection with acquisitions, valuation of equity-based compensation awards, the evaluation of the recoverability of goodwill and long-lived assets, including intangible assets, income taxes, including deferred tax assets and liabilities and reserves for unrecognized tax benefits, the liability for the Company’s tax benefit arrangements, and the value of the lease liability and related right-of-use asset recorded in accordance with ASC 842 (see Note 2(d) and 16).
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Fair Value | Fair Value ASC 820, Fair Value Measurements and Disclosures, establishes a three-level valuation hierarchy for disclosure of fair value measurements. The valuation hierarchy is based upon the transparency of inputs to the valuation of an asset or liability as of the measurement date. Categorization within the valuation hierarchy is based upon the lowest level of input that is significant to the fair value measurement. The three levels are defined as follows: Level 1—Inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets. Level 2—Inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument. Level 3—Inputs to the valuation methodology are unobservable and significant to the fair value measurement.
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Recent accounting pronouncements | Recent accounting pronouncements In February 2016, the FASB established Topic 842, Leases, by issuing ASU No. 2016-02, Leases, in February 2016. Topic 842 was subsequently amended by ASU No. 2018-01, Land Easement Practical Expedient for Transition to Topic 842; ASU No. 2018-10, Codification Improvements to Topic 842, Leases; and ASU No. 2018-11, Targeted Improvements. This guidance is intended to increase transparency and comparability among organizations by recognizing lease assets and lease liabilities on the balance sheet and disclosing key information about leasing arrangements. The new guidance requires lessees to recognize the assets and liabilities on the balance sheet for the rights and obligations created by leases with lease terms of more than 12 months, amends various other aspects of accounting for leases by lessees and lessors, and requires enhanced disclosures. Leases will be classified as finance or operating, with the classification affecting the pattern and classification of expense recognition within the income statement. The Company adopted the new standard on January 1, 2019 and used the effective date as our date of initial application. Consequently, financial information has not been updated and the disclosures required under the new standard are not provided for dates and periods before January 1, 2019. The new guidance also provides several practical expedients and policies that companies may elect upon transition. The Company has elected the package of practical expedients under which it did not reassess the classification of its existing leases, reevaluate whether any expired or existing contracts are or contain leases or reassess initial direct costs under the new guidance. The Company did not elect the practical expedient pertaining to land easements, as it is not applicable to its leases. Additionally, the Company elected to use the practical expedient that permits a reassessment of lease terms for existing leases using hindsight. The new standard also provides practical expedients for an entity’s ongoing accounting. The Company elected the short-term lease recognition exemption. This means, for those leases that qualify, the Company will not recognize right-of-use ("ROU") assets or lease liabilities, and this includes not recognizing ROU assets or lease liabilities for existing short-term leases of those assets in transition. The Company also elected the practical expedient to not separate lease and non-lease components. Upon transition to the new guidance on January 1, 2019, the Company recognized approximately $130,000 of operating lease liabilities. Additionally, the Company recorded ROU assets in a corresponding amount, net of amounts reclassified from other assets and liabilities, including deferred rent, tenant improvement allowances, and favorable lease assets, as specified by the new lease guidance. In connection with the election of the hindsight practical expedient related to reassessing lease terms for existing leases as of January 1, 2019, the Company recorded a cumulative transition adjustment of $1,713 through retained earnings, net of tax. The FASB issued ASU No. 2017-4, Intangibles–Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment, in January 2017. This guidance eliminates the requirement to calculate the implied fair value, essentially eliminating step two from the goodwill impairment test. The new standard requires goodwill impairment to be based upon the results of step one of the impairment test, which is defined as the excess of the carrying value of a reporting unit over its fair value. The impairment charge will be limited to the amount of goodwill allocated to that reporting unit. This guidance will be effective for fiscal years beginning after December 15, 2019, including interim periods within that year. This new guidance is not expected to have a material impact on the Company’s consolidated financial statements. The FASB issued ASU No. 2018-15, Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350-40): Customer's Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract, in August 2018. The guidance helps align the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software (and hosting arrangements that include an internal-use software license). This guidance will be effective for fiscal years beginning after December 15, 2019, including interim periods within that year, but allows for early adoption. The Company is currently evaluating the impact of this guidance on its consolidated financial statements.
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Summary of Significant Accounting Policies (Tables) |
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Accounting Policies [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Company's Liabilities Measured at Fair Value | The carrying value and estimated fair value of long-term debt as of June 30, 2019 and December 31, 2018 were as follows:
(1) The estimated fair value of our long-term debt is estimated primarily based on current bid prices for our long-term debt. Judgment is required to develop these estimates. As such, the fair value of our long-term debt is classified within Level 2, as defined under U.S. GAAP.
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Variable Interest Entities (Tables) |
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Variable Interest Entity, Consolidated, Carrying Amount, Assets and Liabilities, Net [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Carrying Value of Variable Interest Entities of Consolidated Financial Statements | The carrying values of VIEs included in the consolidated financial statements as of June 30, 2019 and December 31, 2018 are as follows:
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Acquisitions (Tables) |
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Purchase Consideration Allocation | The preliminary purchase consideration was allocated as follows:
The purchase consideration was allocated as follows:
The purchase consideration was allocated as follows:
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Goodwill and Intangible Assets (Tables) |
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Goodwill and Intangible Assets Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Goodwill and Intangible Assets | A summary of goodwill and intangible assets at June 30, 2019 and December 31, 2018 is as follows:
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Summary of Amortization expenses | The anticipated annual amortization expense related to intangible assets to be recognized in future years as of June 30, 2019 is as follows:
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Long-Term Debt (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Long-Term Debt | Long-term debt as of June 30, 2019 and December 31, 2018 consists of the following:
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||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Future Annual Payments of Long-term Debt | Future annual principal payments of long-term debt as of June 30, 2019 are as follows:
|
Related party transactions (Tables) |
6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2019 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Related Party Transactions [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Related Party Transactions | Activity with entities considered to be related parties is summarized below:
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Earnings Per Share (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Reconciliation of Numerators and Denominators Used to Compute Basic and Diluted Earnings per Share | The following table sets forth reconciliations used to compute basic and diluted earnings per share of Class A common stock:
|
Income Taxes (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2019 | |||||||||||||||||||||||||||||||||||||||||
Income Tax Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||
Schedule of Future Payments Under Tax Benefit Arrangements | Projected future payments under the tax benefit arrangements are as follows:
|
Segments (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Financial Information for the Company's Reportable Segments |
The tables below summarize the financial information for the Company’s reportable segments for the three and six months ended June 30, 2019 and 2018. The “Corporate and other” category, as it relates to Segment EBITDA, primarily includes corporate overhead costs, such as payroll and related benefit costs and professional services which are not directly attributable to any individual segment.
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Reconciliation of Total Segment EBITDA to Income Before Taxes | The following table reconciles total Segment EBITDA to income before taxes:
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Summary of Company's Assets by Reportable Segment | The following table summarizes the Company’s assets by reportable segment:
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Summary of Company's Goodwill by Reportable Segment | The following table summarizes the Company’s goodwill by reportable segment:
|
Corporate-Owned and Franchisee-Owned Stores (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Franchisors [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Changes in Corporate-Owned and Franchisee-Owned Stores | The following table shows changes in our corporate-owned and franchisee-owned stores for the three and six months ended June 30, 2019 and 2018:
(1) The term “debrand” refers to a franchisee-owned store whose right to use the Planet Fitness brand and marks has been terminated in accordance with the franchise agreement. We retain the right to prevent debranded stores from continuing to operate as fitness centers. The term “consolidated” refers to the combination of a franchisee’s store with another store located in close proximity with our prior approval. This often coincides with an enlargement, re-equipment and/or refurbishment of the remaining store.
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Revenue recognition (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||
Revenue from Contract with Customer [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Contract Liabilities | The following table reflects the change in contract liabilities between December 31, 2018 and June 30, 2019.
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Remaining Performance Obligation | The following table illustrates estimated revenues expected to be recognized in the future related to performance obligations that are unsatisfied (or partially unsatisfied) as of June 30, 2019. The Company has elected to exclude short term contracts, sales and usage based royalties and any other variable consideration recognized on an "as invoiced" basis.
|
Leases (Tables) |
6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2019 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Leases [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Balance Sheet Classification of Lease Assets and Liabilities |
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Components of Lease Cost | During the three and six months ended June 30, 2019, the components of lease cost were as follows:
Supplemental disclosures of cash flow information related to leases were as follows:
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Schedule of Supplemental Disclosures of Cash Flow Information Related to Leases | During the three and six months ended June 30, 2019, the components of lease cost were as follows:
Supplemental disclosures of cash flow information related to leases were as follows:
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Maturities of Operating Lease Liabilities | As of June 30, 2019, maturities of lease liabilities were as follows:
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Previous Accounting Guidance For Future Commitments Under Noncancelable Operating Leases | As of December 31, 2018, under the previous accounting guidance for leases, approximate annual future commitments under noncancelable operating leases were as follows:
|
Summary of Significant Accounting Policies - Additional Information (Details) - USD ($) $ in Thousands |
6 Months Ended | ||
---|---|---|---|
Jan. 01, 2019 |
Jun. 30, 2019 |
Jun. 30, 2018 |
|
Significant Accounting Policies [Line Items] | |||
Present value of lease liabilities | $ 127,324 | ||
Cumulative transition adjustment | $ (1,713) | $ (9,192) | |
Planet Fitness NAF, LLC | |||
Significant Accounting Policies [Line Items] | |||
Percentage of franchise membership billing revenue | 2.00% | ||
ASU 2016-02 | |||
Significant Accounting Policies [Line Items] | |||
Present value of lease liabilities | $ 130,000 | ||
Cumulative transition adjustment | $ 1,713 |
Summary of Significant Accounting Policies - Summary of Company's Assets and Liabilities Measured at Fair Value on Recurring Basis (Detail) - USD ($) $ in Thousands |
Jun. 30, 2019 |
Dec. 31, 2018 |
---|---|---|
Carrying value | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Long-term debt | $ 1,191,000 | $ 1,197,000 |
Estimated fair value | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Long-term debt | $ 1,237,779 | $ 1,188,985 |
Variable Interest Entities - Carrying Value of Variable Interest Entities of Consolidated Financial Statements (Detail) - USD ($) $ in Thousands |
Jun. 30, 2019 |
Dec. 31, 2018 |
---|---|---|
Variable Interest Entity [Line Items] | ||
Assets | $ 5,022 | $ 8,350 |
Liabilities | 0 | 0 |
PF Melville | ||
Variable Interest Entity [Line Items] | ||
Assets | 2,762 | 4,787 |
Liabilities | 0 | 0 |
MMR | ||
Variable Interest Entity [Line Items] | ||
Assets | 2,260 | 3,563 |
Liabilities | $ 0 | $ 0 |
Variable Interest Entities - Additional Information (Detail) - USD ($) |
6 Months Ended | |
---|---|---|
Jun. 30, 2019 |
Dec. 31, 2018 |
|
Variable Interest Entity, Consolidated, Carrying Amount, Assets and Liabilities, Net [Abstract] | ||
Maximum obligation of guarantees of leases and debt | $ 10,443,000 | $ 732,000 |
Franchisee lease term, maximum | 10 years | |
Maximum loss exposure Involvement of estimated value | $ 0 |
Acquisitions - Narrative (Details) $ in Thousands |
May 30, 2019
USD ($)
store
|
Aug. 10, 2018
USD ($)
store
|
Jan. 01, 2018
USD ($)
store
|
Jun. 30, 2019
store
|
Mar. 31, 2019
store
|
Dec. 31, 2018
store
|
Jun. 30, 2018
store
|
Mar. 31, 2018
store
|
Dec. 31, 2017
store
|
---|---|---|---|---|---|---|---|---|---|
Business Acquisition [Line Items] | |||||||||
Number of owned and franchised locations | store | 1,859 | 1,806 | 1,742 | 1,608 | 1,565 | 1,518 | |||
Maine Acquisition | |||||||||
Business Acquisition [Line Items] | |||||||||
Number of owned and franchised locations | store | 4 | ||||||||
Acquisition, gross cash payments | $ 14,801 | ||||||||
Colorado Acquisition | |||||||||
Business Acquisition [Line Items] | |||||||||
Number of owned and franchised locations | store | 4 | ||||||||
Acquisition, gross cash payments | $ 17,249 | ||||||||
Loss on reacquired franchise rights | 10 | ||||||||
Consideration transferred | $ 17,239 | ||||||||
Long Island Acquisition | |||||||||
Business Acquisition [Line Items] | |||||||||
Number of owned and franchised locations | store | 6 | ||||||||
Acquisition, gross cash payments | $ 28,503 | ||||||||
Loss on reacquired franchise rights | 350 | ||||||||
Consideration transferred | $ 28,153 |
Goodwill and Intangible Assets - Additional Information (Detail) |
3 Months Ended | 6 Months Ended | 12 Months Ended | ||||||
---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2019
USD ($)
store
|
Jun. 30, 2018
USD ($)
store
|
Mar. 31, 2018
USD ($)
store
|
Jun. 30, 2019
USD ($)
store
|
Jun. 30, 2018
USD ($)
store
|
Dec. 31, 2018
USD ($)
store
|
May 30, 2019
store
|
Mar. 31, 2019
store
|
Dec. 31, 2017
store
|
|
Goodwill And Intangible Assets [Line Items] | |||||||||
Impairment charges | $ 0 | $ 0 | |||||||
Number of owned and franchised locations | store | 1,859 | 1,608 | 1,565 | 1,859 | 1,608 | 1,742 | 1,806 | 1,518 | |
Amortization of intangible assets | $ 4,019,000 | $ 4,012,000 | $ 8,025,000 | $ 8,025,000 | |||||
Favorable and Unfavorable Leases | |||||||||
Goodwill And Intangible Assets [Line Items] | |||||||||
Amortization of intangible assets | $ 92,000 | $ 183,000 | |||||||
Maine Acquisition | |||||||||
Goodwill And Intangible Assets [Line Items] | |||||||||
Number of owned and franchised locations | store | 4 |
Goodwill and Intangible Assets - Summary of Amortization expenses (Detail) - USD ($) $ in Thousands |
Jun. 30, 2019 |
Dec. 31, 2018 |
---|---|---|
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Remainder of 2019 | $ 8,320 | |
2020 | 14,968 | |
2021 | 15,053 | |
2022 | 15,280 | |
2023 | 15,185 | |
Thereafter | 16,319 | |
Net carrying Amount | $ 85,125 | $ 88,030 |
Long-Term Debt - Schedule of Long-Term Debt (Detail) - USD ($) $ in Thousands |
Jun. 30, 2019 |
Dec. 31, 2018 |
---|---|---|
Debt Instrument [Line Items] | ||
Total debt, excluding deferred financing costs | $ 1,191,000 | $ 1,197,000 |
Deferred financing costs, net of accumulated amortization | (22,208) | (24,873) |
Total debt | 1,168,792 | 1,172,127 |
Current portion of long-term debt and line of credit | 12,000 | 12,000 |
Long-term debt, net of current maturities | 1,156,792 | 1,160,127 |
Class A-2-I notes | Senior fixed-rate term notes | ||
Debt Instrument [Line Items] | ||
Total debt, excluding deferred financing costs | 570,688 | 573,563 |
Class A-2-II notes | Senior fixed-rate term notes | ||
Debt Instrument [Line Items] | ||
Total debt, excluding deferred financing costs | $ 620,312 | $ 623,437 |
Long-Term Debt - Schedule of Future Annual Payments of Long-term Debt (Detail) - USD ($) $ in Thousands |
Jun. 30, 2019 |
Dec. 31, 2018 |
---|---|---|
Debt Disclosure [Abstract] | ||
Remainder of 2019 | $ 6,000 | |
2020 | 12,000 | |
2021 | 12,000 | |
2022 | 562,563 | |
2023 | 6,250 | |
Thereafter | 592,187 | |
Total | $ 1,191,000 | $ 1,197,000 |
Derivative Instruments and Hedging Activities - Additional Information (Detail) - USD ($) |
3 Months Ended | 6 Months Ended | |||
---|---|---|---|---|---|
Jun. 30, 2019 |
Jun. 30, 2018 |
Jun. 30, 2019 |
Jun. 30, 2018 |
Dec. 31, 2018 |
|
Derivative Instruments and Hedging Activities Disclosures [Line Items] | |||||
Unrealized gain on interest rate caps, net of tax | $ 0 | $ 17,000 | $ 0 | $ 383,000 | |
Interest rate caps | |||||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | |||||
Interest rate caps | $ 0 | $ 0 | $ 0 | ||
Unrealized gain on interest rate caps, net of tax | 17,000 | 383,000 | |||
Unrealized gain on interest rate caps, tax | $ 5,000 | $ 130,000 |
Related Party Transactions - Additional Information (Detail) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | |||
---|---|---|---|---|---|
Jun. 30, 2019 |
Jun. 30, 2018 |
Jun. 30, 2019 |
Jun. 30, 2018 |
Dec. 31, 2018 |
|
Related Party Transaction [Line Items] | |||||
Liability payable under tax benefit obligations | $ 55,504 | $ 55,504 | $ 59,458 | ||
Administrative fees charged | 3,041 | $ 1,136 | 3,557 | $ 1,880 | |
Planet Fitness NAF, LLC | |||||
Related Party Transaction [Line Items] | |||||
Administrative fees charged | $ 556 | $ 1,196 | |||
Area Development Agreements | |||||
Related Party Transaction [Line Items] | |||||
Deferred area development revenue from related parties | 299 | 299 | $ 779 | ||
Administrative Service | Planet Fitness NAF, LLC | |||||
Related Party Transaction [Line Items] | |||||
Administrative fees charged | 695 | 1,369 | |||
Civil Action Brought By Former Employee | Pending Litigation | |||||
Related Party Transaction [Line Items] | |||||
Receivables due from related parties | $ 412 | $ 412 |
Related Party Transactions - Schedule of Related Party Transactions (Detail) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2019 |
Jun. 30, 2018 |
Jun. 30, 2019 |
Jun. 30, 2018 |
|
Related Party Transaction [Line Items] | ||||
Total revenue from related parties | $ 3,041 | $ 1,136 | $ 3,557 | $ 1,880 |
Franchise revenue | ||||
Related Party Transaction [Line Items] | ||||
Total revenue from related parties | 717 | 813 | 1,233 | 1,557 |
Equipment revenue | ||||
Related Party Transaction [Line Items] | ||||
Total revenue from related parties | $ 2,324 | $ 323 | $ 2,324 | $ 323 |
Income Taxes - Additional information (Detail) $ in Thousands |
3 Months Ended | 6 Months Ended | |||
---|---|---|---|---|---|
Jun. 30, 2019
USD ($)
|
Jun. 30, 2018 |
Jun. 30, 2019
USD ($)
agreement
shares
|
Jun. 30, 2018 |
Dec. 31, 2018
USD ($)
|
|
Tax Credit Carryforward [Line Items] | |||||
Effective income tax rate | 22.20% | 23.30% | 18.90% | 23.00% | |
Net deferred tax assets | $ 423,773 | $ 423,773 | $ 412,538 | ||
Total liability related to uncertain tax positions | 430 | $ 430 | 300 | ||
Number of tax receivable agreements | agreement | 2 | ||||
Percentage of remaining tax savings | 15.00% | ||||
Tax benefit obligation | $ 433,605 | $ 433,605 | $ 429,233 | ||
TRA Holders | |||||
Tax Credit Carryforward [Line Items] | |||||
Applicable tax savings | 85.00% | 85.00% | |||
Decrease in deferred tax assets | $ 639 | ||||
Deferred tax asset | $ 20,040 | 20,040 | |||
Deferred tax liability | $ 17,016 | $ 17,016 | |||
Class A Common Stock | |||||
Tax Credit Carryforward [Line Items] | |||||
Number of shares exchanged | shares | 865,810 | ||||
Class A Common Stock | TRA Holders | |||||
Tax Credit Carryforward [Line Items] | |||||
Number of shares exchanged | shares | 865,810 |
Income Taxes - Schedule of Future Payments Under Tax Benefit Arrangements (Detail) - USD ($) $ in Thousands |
Jun. 30, 2019 |
Dec. 31, 2018 |
---|---|---|
Income Tax Disclosure [Abstract] | ||
Remainder of 2019 | $ 7,324 | |
2020 | 25,974 | |
2021 | 26,594 | |
2022 | 27,152 | |
2023 | 27,690 | |
Thereafter | 318,871 | |
Total | $ 433,605 | $ 429,233 |
Commitments and contingencies - Additional Information (Details) - Pending Litigation - Civil Action Brought By Former Employee - USD ($) $ in Thousands |
Jun. 30, 2019 |
May 03, 2019 |
---|---|---|
Loss Contingencies [Line Items] | ||
Damages sought | $ 4,109 | $ 6,185 |
Estimate of possible loss | 1,237 | |
Loss contingency, receivable | 1,237 | |
Receivables due from related parties | $ 412 |
Segments - Additional Information (Detail) |
3 Months Ended | 6 Months Ended | |||
---|---|---|---|---|---|
Jun. 30, 2019
USD ($)
|
Jun. 30, 2018
USD ($)
|
Jun. 30, 2019
USD ($)
segment
|
Jun. 30, 2018
USD ($)
|
Dec. 31, 2018
USD ($)
|
|
Segment Reporting Information [Line Items] | |||||
Number of reportable segments | segment | 3 | ||||
Number of operating segments | segment | 0 | ||||
Revenue | $ 181,661,000 | $ 140,550,000 | $ 330,478,000 | $ 261,882,000 | |
Franchise revenue | |||||
Segment Reporting Information [Line Items] | |||||
Revenue | 71,812,000 | 58,150,000 | 137,574,000 | 112,762,000 | |
Franchise revenue | Placement Services | |||||
Segment Reporting Information [Line Items] | |||||
Revenue | 5,071,000 | 3,079,000 | 7,836,000 | 5,177,000 | |
Corporate-owned Stores | |||||
Segment Reporting Information [Line Items] | |||||
Revenue | 39,695,000 | $ 34,252,000 | 77,739,000 | $ 66,959,000 | |
Corporate-owned Stores | Canada | |||||
Segment Reporting Information [Line Items] | |||||
Long-lived assets | $ 1,730,000 | 1,730,000 | $ 1,892,000 | ||
Intersegment Eliminations | |||||
Segment Reporting Information [Line Items] | |||||
Revenue | $ 0 |
Segments - Reconciliation of Total Segment EBITDA to Income Before Taxes (Detail) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2019 |
Jun. 30, 2018 |
Jun. 30, 2019 |
Jun. 30, 2018 |
|
Segment Reporting [Abstract] | ||||
Total Segment EBITDA | $ 74,399 | $ 56,928 | $ 134,173 | $ 104,503 |
Depreciation and amortization | 10,577 | 8,619 | 20,484 | 17,084 |
Other expense | (1,444) | (502) | (4,762) | (310) |
Income from operations | 65,266 | 48,811 | 118,451 | 87,729 |
Interest income | 1,979 | 418 | 3,777 | 455 |
Interest expense | (14,636) | (9,046) | (29,385) | (17,816) |
Income before income taxes | $ 51,165 | $ 39,681 | $ 88,081 | $ 70,058 |
Segments - Summary of Company's Assets by Reportable Segment (Detail) - USD ($) $ in Thousands |
Jun. 30, 2019 |
Dec. 31, 2018 |
---|---|---|
Segment Reporting, Asset Reconciling Item [Line Items] | ||
Total consolidated assets | $ 1,523,467 | $ 1,353,416 |
Operating Segments | Franchise revenue | ||
Segment Reporting, Asset Reconciling Item [Line Items] | ||
Total consolidated assets | 351,615 | 319,422 |
Operating Segments | Corporate-owned Stores | ||
Segment Reporting, Asset Reconciling Item [Line Items] | ||
Total consolidated assets | 370,212 | 243,221 |
Operating Segments | Equipment revenue | ||
Segment Reporting, Asset Reconciling Item [Line Items] | ||
Total consolidated assets | 185,284 | 210,462 |
Unallocated | ||
Segment Reporting, Asset Reconciling Item [Line Items] | ||
Total consolidated assets | $ 616,356 | $ 580,311 |
Segments - Summary of Company's Goodwill by Reportable Segment (Detail) - USD ($) $ in Thousands |
Jun. 30, 2019 |
Dec. 31, 2018 |
---|---|---|
Segment Reporting, Other Significant Reconciling Item [Line Items] | ||
Goodwill, net carrying amount | $ 206,752 | $ 199,513 |
Franchise revenue | ||
Segment Reporting, Other Significant Reconciling Item [Line Items] | ||
Goodwill, net carrying amount | 16,938 | 16,938 |
Corporate-owned Stores | ||
Segment Reporting, Other Significant Reconciling Item [Line Items] | ||
Goodwill, net carrying amount | 97,148 | 89,909 |
Equipment revenue | ||
Segment Reporting, Other Significant Reconciling Item [Line Items] | ||
Goodwill, net carrying amount | $ 92,666 | $ 92,666 |
Corporate-Owned and Franchisee-Owned Stores - Schedule of Changes in Corporate-owned and Franchisee-owned Stores (Detail) - store |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2019 |
Jun. 30, 2018 |
Jun. 30, 2019 |
Jun. 30, 2018 |
|
Number Of Stores [Roll Forward] | ||||
Stores operated at beginning of period | 1,806 | 1,565 | 1,742 | 1,518 |
New stores opened | 53 | 44 | 118 | 91 |
Stores acquired, debranded, sold or consolidated | 0 | (1) | (1) | (1) |
Stores operated at end of period | 1,859 | 1,608 | 1,859 | 1,608 |
Franchisee-Owned Stores | ||||
Number Of Stores [Roll Forward] | ||||
Stores operated at beginning of period | 1,730 | 1,497 | 1,666 | 1,456 |
New stores opened | 53 | 44 | 118 | 91 |
Stores acquired, debranded, sold or consolidated | (4) | (1) | (5) | (7) |
Stores operated at end of period | 1,779 | 1,540 | 1,779 | 1,540 |
Corporate-Owned Stores | ||||
Number Of Stores [Roll Forward] | ||||
Stores operated at beginning of period | 76 | 68 | 76 | 62 |
Stores acquired from franchisees | 4 | 0 | 4 | 6 |
Stores operated at end of period | 80 | 68 | 80 | 68 |
Revenue recognition - Schedule of Contract Liabilities (Details) $ in Thousands |
6 Months Ended |
---|---|
Jun. 30, 2019
USD ($)
| |
Contract liabilities | |
Beginning Balance | $ 49,862 |
Revenue recognized that was included in the contract liability at the beginning of the year | (18,868) |
Increase, excluding amounts recognized as revenue during the period | 25,730 |
Ending Balance | $ 56,724 |
Leases - Additional Information (Details) $ in Thousands |
6 Months Ended |
---|---|
Jun. 30, 2019
USD ($)
| |
Lessee, Lease, Description [Line Items] | |
Lease payments for leases signed but not yet commenced | $ 50,927 |
Minimum | |
Lessee, Lease, Description [Line Items] | |
Remaining lease term | 1 year |
Renewal term | 3 years |
Maximum | |
Lessee, Lease, Description [Line Items] | |
Remaining lease term | 10 years |
Renewal term | 10 years |
Leases - Balance Sheet Classification of Lease Assets and Liabilities (Details) $ in Thousands |
Jun. 30, 2019
USD ($)
|
---|---|
Leases [Abstract] | |
Operating lease assets | $ 115,390 |
Finance lease assets | 268 |
Total lease assets | 115,658 |
Current operating lease liabilities | 13,277 |
Noncurrent operating lease liabilities | 113,748 |
Noncurrent finance lease liabilities | 299 |
Total lease liabilities | $ 127,324 |
Weighted-average remaining lease term (years) - operating leases | 8 years 2 months 12 days |
Weighted-average discount rate - operating leases | 5.00% |
Leases Leases - Components of Lease Cost (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended |
---|---|---|
Jun. 30, 2019 |
Jun. 30, 2019 |
|
Leases [Abstract] | ||
Operating lease cost | $ 4,951 | $ 9,796 |
Variable lease cost | 2,033 | 3,973 |
Total lease cost | $ 6,984 | $ 13,769 |
Leases Leases - Supplemental Disclosures of Cash Flow Information (Details) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Jun. 30, 2019 |
Jun. 30, 2018 |
|
Leases [Abstract] | ||
Cash paid for lease liabilities | $ 4,718 | $ 9,365 |
Operating assets obtained in exchange for operating lease liabilities | $ 2,981 | $ 2,981 |
Leases Leases - Maturities of Lease Liabilities (Details) $ in Thousands |
Jun. 30, 2019
USD ($)
|
---|---|
Leases [Abstract] | |
Remainder of 2019 | $ 9,663 |
2020 | 19,676 |
2021 | 20,026 |
2022 | 19,722 |
2023 | 18,565 |
Thereafter | 68,811 |
Total lease payments | 156,463 |
Less: imputed interest | 29,139 |
Present value of lease liabilities | $ 127,324 |
Leases - Under previous guidance (Details) $ in Thousands |
Dec. 31, 2018
USD ($)
|
---|---|
Leases [Abstract] | |
2019 | $ 15,911 |
2020 | 15,219 |
2021 | 13,454 |
2022 | 12,561 |
2023 | 11,133 |
Thereafter | 45,324 |
Total | $ 113,602 |