Revenue recognition (Tables)

12 Months Ended

Dec. 31, 2018

Revenue from Contract with Customer [Abstract]

Schedule of Contract Liabilities

The following table reflects the change in contract liabilities between the date of adoption (January 1, 2018) and December 31, 2018,

	Contract liabilities
Balance at January 1, 2018	$	40,000
Revenue recognized that was included in the contract liability at the beginning of the year	(20,439		)
Increase, excluding amounts recognized as revenue during the period	30,301
Balance at December 31, 2018	$	49,862

Remaining Performance Obligation

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.

Contract liabilities to be recognized in:	Amount
2019	$	23,606
2020	2,797
2021	2,432
2022	2,345
2023	2,261
Thereafter	16,421
Total	$	49,862

Schedule of Deferred Revenue

The summary set forth below represents the balances in deferred revenue as of December 31, 2018 and 2017:

	December 31, 2018		December 31, 2017
Prepaid membership fees	$	6,085	$	5,198
Enrollment fees	1,104		1,014
Equipment discount	3,855		2,567
Annual membership fees	10,142		8,113
Area development and franchise fees	28,676		10,631
Total deferred revenue	49,862		27,523
Long-term portion of deferred revenue	26,374		8,440
Current portion of deferred revenue	$	23,488	$	19,083

Impact of ASC 606

The following tables reflect the impact of adoption of ASC 606 on our consolidated statements of operations for the year ended December 31, 2018, cash flows from operating activities for the year ended December 31, 2018 and our condensed consolidated balance sheet as of December 31, 2018 and the amounts as if the Previous Standards were in effect (“Amounts Under Previous Standards”):

	As reported for the year ended December 31, 2018			Total adjustments			Amounts under Previous Standards
Revenue:
Franchise	$	175,314		$	5,666		$	180,980
Commission income	6,632			—			6,632
National advertising fund revenue	42,194			(42,194		)	—
Corporate-owned stores	138,599			—			138,599
Equipment	210,159			—			210,159
Total revenue	572,898			(36,528		)	536,370
Operating costs and expenses:
Cost of revenue	162,646			—			162,646
Store operations	75,005			—			75,005
Selling, general and administrative	72,446			—			72,446
National advertising fund expense	42,619			(42,619		)	—
Depreciation and amortization	35,260			—			35,260
Other loss (gain)	878			—			878
Total operating costs and expenses	388,854			(42,619		)	346,235
Income from operations	184,044			6,091			190,135
Other expense, net:
Interest income	4,681			—			4,681
Interest expense	(50,746		)	—			(50,746		)
Other (expense) income	(6,175		)	—			(6,175		)
Total other expense, net	(52,240		)	—			(52,240		)
Income before income taxes	131,804			6,091			137,895
Provision for income taxes	28,642			1,437			30,079
Net income	103,162			4,654			107,816
Less net income attributable to non-controlling interests	15,141			642			15,783
Net income attributable to Planet Fitness, Inc.	$	88,021		$	4,012		$	92,033
Net income per share of Class A common stock:
Basic	$	1.01					$	1.06
Diluted	$	1.00					$	1.05

Consolidated Statement of Cash Flows

	As reported December 31, 2018			Total adjustments			Amounts under Previous Standards
Cash flows from operating activities:
Net income	$	103,162		$	4,654		$	107,816
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	35,260			—			35,260
Amortization of deferred financing costs	3,400			—			3,400
Amortization of favorable leases and asset retirement obligations	375			—			375
Amortization of interest rate caps	1,170			—			1,170
Deferred tax expense	23,933			—			23,933
Loss (gain) on re-measurement of tax benefit arrangement	4,765			—			4,765
Provision for bad debts	19			—			19
Gain on disposal of property and equipment	462			—			462
Loss on extinguishment of debt	4,570			—			4,570
Third party debt refinancing expense	—			—			—
Loss on reacquired franchise rights	360			—			360
Equity-based compensation	5,479			—			5,479
Changes in operating assets and liabilities:	—						—
Accounts receivable	(1,923		)	—			(1,923		)
Due from related parties	3,598			—			3,598
Inventory	(2,430		)	—			(2,430		)
Other assets and other current assets	5,778			—			5,778
National advertising fund	—			(425		)	(425		)
Accounts payable and accrued expenses	14,506			—			14,506
Other liabilities and other current liabilities	(2,835		)	—			(2,835		)
Income taxes	194			1,437			1,631
Payments pursuant to tax benefit arrangements	(30,493		)	—			(30,493		)
Equipment deposits	1,410			—			1,410
Deferred revenue	9,640			$	(5,666	)	3,974
Deferred rent	3,999			—			3,999
Net cash provided by operating activities	$	184,399		$	—		$	184,399

Consolidated Balance Sheet

	As reported December 31, 2018			Total adjustments			Amounts under Previous Standards
Assets
Current assets:
Cash and cash equivalents	$	289,431		$	—		$	289,431
Restricted cash	30,708			—			30,708
Accounts receivable, net	38,960			—			38,960
Due from related parties	—			—			—
Inventory	5,122			—			5,122
Restricted assets – national advertising fund	—			425			425
Prepaid expenses	4,947			—			4,947
Other receivables	12,548			—			12,548
Income tax receivable	6,824			(1,437		)	5,387
Total current assets	388,540			(1,012		)	387,528
Property and equipment, net	114,367			—			114,367
Intangible assets, net	234,330			—			234,330
Goodwill	199,513			—			199,513
Deferred income taxes	414,841			(3,285		)	411,556
Other assets, net	1,825			—			1,825
Total assets	$	1,353,416		$	(4,297	)	$	1,349,119
Liabilities and stockholders' equity (deficit)
Current liabilities:
Current maturities of long-term debt	$	12,000		$	—		$	12,000
Accounts payable	30,428			—			30,428
Accrued expenses	32,384			—			32,384
Equipment deposits	7,908			—			7,908
Restricted liabilities – national advertising fund	—			—			—
Deferred revenue, current	23,488			118			23,606
Payable pursuant to tax benefit arrangements, current	24,765			—			24,765
Other current liabilities	430			—			430
Total current liabilities	131,403			118			131,521
Long-term debt, net of current maturities	1,160,127			—			1,160,127
Deferred rent, net of current portion	10,083			—			10,083
Deferred revenue, net of current portion	26,374			(18,448		)	7,926
Deferred tax liabilities	2,303			—			2,303
Payable pursuant to tax benefit arrangements, net of current portion	404,468			—			404,468
Other liabilities	1,447			—			1,447
Total noncurrent liabilities	1,604,802			(18,448		)	1,586,354
Commitments and contingencies (note 11)
Stockholders' equity (deficit):
Class A common stock	9			—			9
Class B common stock	1			—			1
Accumulated other comprehensive income	94			—			94
Additional paid in capital	19,732			—			19,732
Accumulated deficit	(394,410		)	13,391			(381,019		)
Total stockholders' deficit attributable to Planet Fitness Inc.	(374,574		)	13,391			(361,183		)
Non-controlling interests	(8,215		)	642			(7,573		)
Total stockholders' deficit	(382,789		)	14,033			(368,756		)
Total liabilities and stockholders' deficit	$	1,353,416		$	(4,297	)	$	1,349,119

As a result of applying the modified retrospective method to transition to ASC 606, the following adjustments were made to the consolidated balance sheet as of January 1, 2018:

	As Reported December 31,			Total adjustments			Adjusted January 1,
	2017						2018
Assets
Current assets:
Cash and cash equivalents	$	113,080		$	—		$	113,080
Accounts receivable, net	37,272			—			37,272
Due from related parties	3,020			—			3,020
Inventory	2,692			—			2,692
Restricted assets – national advertising fund	499			—			499
Prepaid expenses	3,929			—			3,929
Other receivables	9,562			—			9,562
Other current assets	6,947			—			6,947
Total current assets	177,001			—			177,001
Property and equipment, net	83,327			—			83,327
Intangible assets, net	235,657			—			235,657
Goodwill	176,981			—			176,981
Deferred income taxes	407,782			3,285			411,067
Other assets, net	11,717			—			11,717
Total assets	$	1,092,465		$	3,285		$	1,095,750
Liabilities and stockholders' equity (deficit)
Current liabilities:
Current maturities of long-term debt	$	7,185		$	—		$	7,185
Accounts payable	28,648			—			28,648
Accrued expenses	18,590			—			18,590
Equipment deposits	6,498			—			6,498
Restricted liabilities – national advertising fund	490			—			490
Deferred revenue, current	19,083			(764		)	18,319
Payable pursuant to tax benefit arrangements, current	31,062			—			31,062
Other current liabilities	474			—			474
Total current liabilities	112,030			(764		)	111,266
Long-term debt, net of current maturities	696,576			—			696,576
Deferred rent, net of current portion	6,127			—			6,127
Deferred revenue, net of current portion	8,440			13,241			21,681
Deferred tax liabilities	1,629			—			1,629
Payable pursuant to tax benefit arrangements, net of current portion	400,298			—			400,298
Other liabilities	4,302			—			4,302
Total noncurrent liabilities	1,117,372			13,241			1,130,613
Stockholders' equity (deficit):
Class A common stock	9			—			9
Class B common stock	1			—			1
Accumulated other comprehensive loss	(648		)	—			(648		)
Additional paid in capital	12,118			—			12,118
Accumulated deficit	(130,966		)	(9,192		)	(140,158		)
Total stockholders' deficit attributable to Planet Fitness Inc.	(119,486		)	(9,192		)	(128,678		)
Non-controlling interests	(17,451		)	—			(17,451		)
Total stockholders' deficit	(136,937		)	(9,192		)	(146,129		)
Total liabilities and stockholders' deficit	$	1,092,465		$	3,285		$	1,095,750