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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q 
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 2021
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from ___________to ______________
Commission file number: 001-37534
PLANET FITNESS, INC.
(Exact Name of Registrant as Specified in Its Charter)
Delaware 38-3942097
(State or Other Jurisdiction of Incorporation or Organization) (I.R.S. Employer Identification No.)
4 Liberty Lane West, Hampton, NH 03842
(Address of Principal Executive Offices and Zip Code)
(603) 750-0001
(Registrant’s Telephone Number, Including Area Code)
Securities registered pursuant to Section 12(b) of the Act: 
Title of each classTrading Symbol(s)Name of each exchange on which registered
Class A common stock, $0.0001 Par ValuePLNTNew York Stock Exchange
Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes       No  
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).    Yes       No  
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer   Accelerated filer 
    
Non-accelerated filer   Smaller reporting company 
       
Emerging growth company     
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. 
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act).    Yes      No  
As of April 30, 2021 there were 83,222,428 shares of the Registrant’s Class A Common Stock, par value $0.0001 per share, outstanding and 3,363,075 shares of the Registrant’s Class B Common Stock, par value $0.0001 per share, outstanding.



PLANET FITNESS, INC.
TABLE OF CONTENTS
  
    Page
   
   
  
  
  
  
   
  
  
  
  
  
  
  
   
2


Cautionary Note Regarding Forward-Looking Statements
This Quarterly Report on Form 10-Q, as well as information included in oral statements or other written statements made or to be made by us, contain statements that constitute “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are neither historical facts nor assurances of future performance. Instead, they are based on our current beliefs, expectations and assumptions regarding the future of our business, future plans and strategies, and other future conditions. Forward-looking statements can be identified by words such as “anticipate,” “believe,” “envision,” “estimate,” “expect,” “intend,” “may,” “plan,” “predict,” “project,” “target,” “potential,” “will,” “would,” “could,” “should,” “continue,” “ongoing,” “contemplate” and other similar expressions, although not all forward-looking statements contain these identifying words. Examples of forward-looking statements include, among others, statements we make regarding:
future financial position;
business strategy;
budgets, projected costs and plans;
future industry growth;
financing sources;
potential return of capital initiatives;
the impact of litigation, government inquiries and investigations;
the impact of the novel coronavirus disease (“COVID-19”) and actions taken in response; and
all other statements regarding our intent, plans, beliefs or expectations or those of our directors or officers.
We may not actually achieve the plans, intentions or expectations disclosed in our forward-looking statements, and you should not place undue reliance on our forward-looking statements. Actual results or events could differ materially from the plans, intentions and expectations disclosed in the forward-looking statements we make. Important factors that could cause actual results and events to differ materially from those indicated in the forward-looking statements include, among others, risks and uncertainties associated with the following:
•    our business and results of operations have been and are expected to continue to be materially impacted by the ongoing COVID-19 pandemic, and could be impacted by similar events in the future;
•    our success depends substantially on the value of our brand, which could be materially and adversely affected by the high level of competition in the health and fitness industry, our ability to anticipate and satisfy consumer preferences, shifting views of health and fitness and our ability to obtain and retain high-profile strategic partnership arrangements;
•    our and our franchisees’ stores may be unable to attract and retain members, which would materially and adversely affect our business, results of operations and financial condition;
•    our intellectual property rights, including trademarks, trade names, copyrights and trade dress, may be infringed, misappropriated or challenged by others;
•    we and our franchisees rely heavily on information systems, including the use of email marketing and social media, and any material failure, interruption or weakness may prevent us from effectively operating our business, damage our reputation or subject us to potential fines or other penalties;
•    if we fail to properly maintain the confidentiality and integrity of our data, including member credit card, debit card, bank account information and other personally identifiable information, our reputation and business could be materially and adversely affected;
•    the occurrence of cyber incidents, or a deficiency in cybersecurity, could negatively impact our business by causing a disruption to our operations, a compromise or corruption of confidential information, and/or damage to our employee and business relationships and reputation, all of which could harm our brand and our business;
•    if we fail to successfully implement our growth strategy, which includes new store development by existing and new franchisees, our ability to increase our revenues and operating profits could be adversely affected;
•    our planned growth and changes in the industry could place strains on our management, employees, information systems and internal controls, which may adversely impact our business;
•    if we cannot retain our key employees and hire additional highly qualified employees, we may not be able to successfully manage our businesses and pursue our strategic objectives;
•    economic, political and other risks associated with our international operations could adversely affect our profitability and international growth prospect;
•    our financial results are affected by the operating and financial results of, our relationships with and actions taken by our franchisees;
•    we are subject to a variety of additional risks associated with our franchisees, such as potential franchisee bankruptcies, franchisee changes in control, franchisee turnover rising costs related to construction of new stores and maintenance of existing stores, which could adversely affect the attractiveness of our franchise model, and in turn our business, results of operations and financial condition;
3


•    we and our franchisees could be subject to claims related to health and safety risks to members that arise while at both our corporate-owned and franchise stores;
•    our business is subject to various laws and regulations including, among others, those governing indoor tanning, electronic funds transfer, ACH, credit card, debit card and digital payment options, and changes in such laws and regulations, failure to comply with existing or future laws and regulations or failure to adjust to consumer sentiment regarding these matters, could harm our reputation and adversely affect our business;
•    we are subject to risks associated with leasing property subject to long-term non-cancelable leases;
•    if we and our franchisees are unable to identify and secure suitable sites for new franchise stores, our revenue growth rate and profits may be negatively impacted;
•    opening new stores in close proximity may negatively impact our existing stores’ revenues and profitability;
•    our franchisees may incur rising costs related to construction of new stores and maintenance of existing stores, which could adversely affect the attractiveness of our franchise model, and in turn our business, results of operations and financial condition;
•    our dependence on a limited number of suppliers for equipment and certain products and services could result in disruptions to our business and could adversely affect our revenues and gross profit; and
the other factors identified under the heading “Risk Factors” in our annual report on Form 10-K for the fiscal year ended December 31, 2020 filed with the Securities and Exchange Commission.
The forward-looking statements in this Quarterly Report on Form 10-Q represent our views as of the date of this Report. We undertake no obligation to publicly update any forward-looking statements whether as a result of new information, future developments or otherwise.
4

Table of Contents
PART I-FINANCIAL INFORMATION
1. Financial Statements
Planet Fitness, Inc. and subsidiaries
Condensed consolidated balance sheets
(Unaudited)
(Amounts in thousands, except per share amounts) 
 March 31,December 31,
 20212020
Assets  
Current assets:  
Cash and cash equivalents
$445,606 $439,478 
Restricted cash
58,327 76,322 
Accounts receivable, net of allowance for bad debts of $6 and $7 at March 31, 2021 and December 31, 2020, respectively
7,024 16,447 
Inventory
468 473 
Deferred expenses – national advertising fund
13,721  
Prepaid expenses
12,804 11,881 
Other receivables
13,053 16,754 
Income tax receivables5,191 5,461 
Total current assets556,194 566,816 
Property and equipment, net of accumulated depreciation of $117,871 and $107,720 at March 31, 2021 and December 31, 2020, respectively
161,731 160,677 
Investments25,000  
Right-of-use assets, net161,574 164,252 
Intangible assets, net212,916 217,075 
Goodwill227,821 227,821 
Deferred income taxes517,867 511,200 
Other assets, net1,881 1,896 
Total assets$1,864,984 $1,849,737 
Liabilities and stockholders’ deficit
Current liabilities:
Current maturities of long-term debt
$17,500 $17,500 
Accounts payable
14,561 19,388 
Accrued expenses
25,145 22,042 
Equipment deposits
174 795 
Deferred revenue, current
35,909 26,691 
Other current liabilities
21,900 25,479 
Total current liabilities115,189 111,895 
Long-term debt, net of current maturities1,673,622 1,676,426 
Borrowings under Variable Funding Notes75,000 75,000 
Lease liabilities, net of current portion166,350 167,910 
Deferred revenue, net of current portion32,203 32,587 
Deferred tax liabilities821 881 
Payable pursuant to tax benefit arrangements, net of current portion496,143 488,200 
Other liabilities2,334 2,511 
Total noncurrent liabilities2,446,473 2,443,515 
Commitments and contingencies (Note 12)
Stockholders’ equity (deficit):
Class A common stock, $.0001 par value - 300,000 authorized, 83,202 and 82,821 shares issued and outstanding as of March 31, 2021 and December 31, 2020, respectively
8 8 
Class B common stock, $.0001 par value - 100,000 authorized, 3,363 and 3,722 shares issued and outstanding as of March 31, 2021 and December 31, 2020, respectively
1 1 
Accumulated other comprehensive income38 27 
Additional paid in capital
48,275 45,673 
Accumulated deficit
(745,997)(751,578)
Total stockholders’ deficit attributable to Planet Fitness Inc.(697,675)(705,869)
Non-controlling interests
997 196 
Total stockholders’ deficit(696,678)(705,673)
Total liabilities and stockholders’ deficit$1,864,984 $1,849,737 
 See accompanying notes to condensed consolidated financial statements
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Table of Contents
Planet Fitness, Inc. and subsidiaries
Condensed consolidated statements of operations
(Unaudited)
(Amounts in thousands, except per share amounts)
 
 For the three months ended
March 31,
 20212020
Revenue:  
Franchise$52,180 $48,910 
Commission income272 390 
National advertising fund revenue11,609 9,229 
Corporate-owned stores37,877 40,516 
Equipment9,939 28,186 
Total revenue111,877 127,231 
Operating costs and expenses:
Cost of revenue7,985 21,846 
Store operations25,907 26,157 
Selling, general and administrative22,490 16,953 
National advertising fund expense12,753 15,205 
Depreciation and amortization15,474 12,792 
Other (gain) loss(2,138)11 
Total operating costs and expenses82,471 92,964 
Income from operations29,406 34,267 
Other expense, net:
Interest income217 1,927 
Interest expense(20,244)(20,240)
Other income (expense)165 (687)
Total other expense, net(19,862)(19,000)
Income before income taxes9,544 15,267 
Provision for income taxes3,354 4,884 
Net income6,190 10,383 
Less net income attributable to non-controlling interests609 1,776 
Net income attributable to Planet Fitness, Inc.$5,581 $8,607 
Net income per share of Class A common stock:
Basic$0.07 $0.11 
Diluted$0.07 $0.11 
Weighted-average shares of Class A common stock outstanding:
Basic83,084 79,098 
Diluted83,707 79,723 
 
See accompanying notes to condensed consolidated financial statements.
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Table of Contents
Planet Fitness, Inc. and subsidiaries
Condensed consolidated statements of comprehensive income
(Unaudited)
(Amounts in thousands)
 
 For the three months ended
March 31,
 20212020
Net income including non-controlling interests$6,190 $10,383 
Other comprehensive income (loss), net:
Foreign currency translation adjustments11 (609)
Total other comprehensive income (loss), net11 (609)
Total comprehensive income including non-controlling interests6,201 9,774 
Less: total comprehensive income attributable to non-controlling interests609 1,776 
Total comprehensive income attributable to Planet Fitness, Inc.$5,592 $7,998 
 
See accompanying notes to condensed consolidated financial statements.
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Table of Contents
Planet Fitness, Inc. and subsidiaries
Condensed consolidated statements of cash flows
(Unaudited)
(Amounts in thousands)
 For the three months ended March 31,
 20212020
Cash flows from operating activities:  
Net income$6,190 $10,383 
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization15,474 12,792 
Amortization of deferred financing costs1,571 1,587 
Amortization of asset retirement obligations(21)7 
Deferred tax expense2,737 4,126 
Gain on re-measurement of tax benefit arrangement(348)(502)
Provision for bad debts (33)
Equity-based compensation1,439 947 
Other11 993 
Changes in operating assets and liabilities, excluding effects of acquisitions:
Accounts receivable9,428 21,409 
Inventory6 (1,943)
Other assets and other current assets3,708 (250)
National advertising fund(13,721)(10,363)
Accounts payable and accrued expenses(7,677)6,381 
Other liabilities and other current liabilities(3,876)(249)
Income taxes295 (1,315)
Equipment deposits(621)2,386 
Deferred revenue8,802 25,992 
Leases and deferred rent126 774 
Net cash provided by operating activities23,523 73,122 
Cash flows from investing activities:
Additions to property and equipment(6,359)(9,110)
Proceeds from sale of property and equipment 135 
Investments(25,000) 
Net cash used in investing activities(31,359)(8,975)
Cash flows from financing activities:
Principal payments on capital lease obligations(53)(41)
Proceeds from borrowings under Variable Funding Notes 75,000 
Repayment of long-term debt(4,375)(4,375)
Proceeds from issuance of Class A common stock344 491 
Dividend equivalent payments (57)
Distributions to Continuing LLC Members (1,600)
Net cash (used in) provided by financing activities(4,084)69,418 
Effects of exchange rate changes on cash and cash equivalents53 (1,640)
Net (decrease) increase in cash, cash equivalents and restricted cash(11,867)131,925 
Cash, cash equivalents and restricted cash, beginning of period515,800 478,795 
Cash, cash equivalents and restricted cash, end of period$503,933 $610,720 
Supplemental cash flow information:
Net cash paid for income taxes$322 $2,071 
Cash paid for interest$18,794 $18,768 
Non-cash investing activities:
Non-cash additions to property and equipment$7,419 $2,319 
 See accompanying notes to condensed consolidated financial statements.
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Table of Contents
Planet Fitness, Inc. and subsidiaries
Condensed consolidated statements of changes in equity (deficit)
(Unaudited)
(Amounts in thousands) 
 Class A
common stock
Class B
common stock
Accumulated
other
comprehensive
(loss) income
Additional paid-
in capital
Accumulated
deficit
Non-controlling
interests
Total (deficit)
equity
 SharesAmountSharesAmount
Balance at December 31, 202082,821 $8 3,722 $1 $27 $45,673 $(751,578)$196 $(705,673)
Net income— — — — — — 5,581 609 6,190 
Equity-based compensation expense
— — — — — 1,439 — — 1,439 
Exchanges of Class B common stock
359 — (359)— — (415)— 415 — 
Exercise of stock options, vesting of restricted share units and ESPP share purchase
22 — — — — 414 — — 414 
Tax benefit arrangement liability and deferred taxes arising from exchanges of Class B common stock
— — — — — 1,164 — — 1,164 
Non-cash adjustments to VIEs
— — — — — — — (223)(223)
Other comprehensive income— — — — 11 — — — 11 
Balance at March 31, 202183,202 $8 3,363 $1 $38 $48,275 $(745,997)$997 $(696,678)
 
 Class A
common stock
Class B
common stock
Accumulated
other
comprehensive
(loss) income
Additional paid-
in capital
Accumulated
deficit
Non-controlling
interests
Total (deficit)
equity
 SharesAmountSharesAmount
Balance at December 31, 201978,525 $8 8,562 $1 $303 $29,820 $(736,587)$(1,299)$(707,754)
Net income
— — — — — — 8,607 1,776 10,383 
Equity-based compensation expense
— — — — — 947 — — 947 
Exchanges of Class B common stock
2,061 — (2,061)— — (956)— 956 — 
Exercise of stock options, vesting of restricted share units and ESPP share purchase
9 — — — — 459 — — 459 
Repurchase and retirement of Class A common stock
(667)— — — — — — — — 
Tax benefit arrangement liability and deferred taxes arising from exchanges of Class B common stock
— — — — — 6,190 — — 6,190 
Non-cash adjustments to VIEs
— — — — — — — (219)(219)
Distributions paid to members of Pla-Fit Holdings
— — — — — — — (1,600)(1,600)
Forfeiture of dividend equivalents— — — — — — 34 — 34 
Other comprehensive income
— — — — (609)— — — (609)
Balance at March 31, 202079,928 $8 6,501 $1 $(306)$36,460 $(727,946)$(386)$(692,169)


See accompanying notes to condensed consolidated financial statements.
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Table of Contents
Planet Fitness, Inc. and subsidiaries
Notes to Condensed Consolidated financial statements
(Unaudited)
(Amounts in thousands, except share and per share amounts)


(1) Business Organization
Planet Fitness, Inc. (the “Company”), through its subsidiaries, is a franchisor and operator of fitness centers, with more than 14.1 million members and 2,146 owned and franchised locations (referred to as stores) in 50 states, the District of Columbia, Puerto Rico, Canada, Panama, Mexico and Australia as of March 31, 2021.
In March 2020, the Company proactively closed all of its stores system wide in response to the novel coronavirus disease (“COVID-19”) pandemic in order to promote the health and safety of its members, team members and their communities. As of March 31, 2021, 2,110 stores had reopened, of which 2,009 were franchisee-owned stores and 101 were corporate-owned stores.
The Company serves as the reporting entity for its various subsidiaries that operate three distinct lines of business:
Licensing and selling franchises under the Planet Fitness trade name.
Owning and operating fitness centers under the Planet Fitness trade name.
Selling fitness-related equipment to franchisee-owned stores.
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 through its subsidiaries. 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 March 31, 2021, Planet Fitness, Inc. held 100.0% of the voting interest and 96.1% 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 3.9% economic interest in Pla-Fit Holdings.

(2) 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 months ended March 31, 2021 and 2020 are unaudited. The condensed consolidated balance sheet as of December 31, 2020 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, 2020 (the “Annual Report”) filed with the SEC on March 1, 2021. Operating results for the interim periods are not necessarily indicative of the results that may be expected for the full year.
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Table of Contents
Planet Fitness, Inc. and subsidiaries
Notes to Condensed Consolidated financial statements
(Unaudited)
(Amounts in thousands, except share and per share amounts)

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 typically collects 2% of gross monthly membership dues annually from franchisees, in accordance with the provisions of the franchise agreements, and uses the amounts received to support our national marketing campaigns, its 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 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 6).
(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.
 
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Planet Fitness, Inc. and subsidiaries
Notes to Condensed Consolidated financial statements
(Unaudited)
(Amounts in thousands, except share and per share amounts)

The carrying value and estimated fair value of certain assets and liabilities as of March 31, 2021 and December 31, 2020 were as follows:
March 31, 2021December 31, 2020
Carrying value
Estimated fair value(1)
Carrying value
Estimated fair value(1)
Assets
Investments - held-to-maturity(1)
$25,000 $25,000 $ $ 
Liabilities
Long-term debt(2)
$1,713,125 $1,714,779 $1,717,500 $1,699,749 
Variable Funding Notes(2)
$75,000 $75,000 $75,000 $75,000 
(1) The estimated fair value of the security is determined using unobservable inputs including assumptions by the investee's management including quantitative information such as valuations in recently completed or proposed financings. These inputs are classified as Level 3.
(2) The Company’s Variable Funding Notes are a variable rate loan and the fair value of this loan approximates book value based on the borrowing rates currently available for variable rate loans obtained from third party lending institutions. The estimated fair value of our fixed rate 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) Investments
At March 31, 2021, we held preferred shares in certain privately held entities, accounted for under ASC Topic 320, Investments—Debt Securities, which are included in Investments in our condensed consolidated balance sheets. As of March 31, 2021, our investments consist of held-to-maturity preferred shares that we have the positive intent and ability to hold to maturity, and which are measured at amortized cost. We review our held-to-maturity securities for estimated credit losses under ASC Topic 326, Credit Impairment, noting we did not recognize significant credit losses and the ending allowance for credit losses was immaterial.
The amortized cost of our held-to-maturity debt security investments was $25,000 and $0 at March 31, 2021 and December 31, 2020, respectively. There were no unrealized gains or losses for our held-to-maturity debt security investments as of March 31, 2021.
As of March 31, 2021, all of the Company’s held-to-maturity debt security investments had a contractual maturity in 2026.
(e) Recent accounting pronouncements
The FASB issued ASU No. 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes, in December 2019. The amendments in this Update simplify the accounting for income taxes by removing certain exceptions to the general principles in Topic 740. The amendments also improve consistent application of and simplify GAAP for other areas of Topic 740 by clarifying and amending existing guidance. This guidance is effective for fiscal years beginning after December 15, 2020. The Company adopted the standard beginning January 1, 2021 with no material impact to its financial statements.
(3) Variable Interest Entities
The carrying values of VIEs included in the consolidated financial statements as of March 31, 2021 and December 31, 2020 are as follows: 
 March 31, 2021December 31, 2020
 AssetsLiabilitiesAssetsLiabilities
PF Melville$2,483 $ $2,523 $ 
MMR2,072  2,099  
Total$4,555 $ $4,622 $ 
 
The Company also has variable interests in certain franchisees mainly through the guarantee of lease agreements up to a maximum period of ten years with earlier expiration dates possible if certain conditions are met. The Company’s maximum obligation, as a result of its guarantees of leases, is approximately $7,349 and $7,842 as of March 31, 2021 and December 31, 2020, respectively.
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Table of Contents
Planet Fitness, Inc. and subsidiaries
Notes to Condensed Consolidated financial statements
(Unaudited)
(Amounts in thousands, except share and per share amounts)

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 estimated fair value of the guarantees, which is not material.
(4) Goodwill and Intangible Assets
A summary of goodwill and intangible assets at March 31, 2021 and December 31, 2020 is as follows: 
March 31, 2021Weighted
average
amortization
period (years)
Gross
carrying
amount
Accumulated
amortization
Net carrying
Amount
Customer relationships11.0$174,033 $(128,105)$45,928 
Reacquired franchise rights8.037,660 (17,272)20,388 
 211,693 (145,377)66,316 
Indefinite-lived intangible:
Trade and brand namesN/A146,600 — 146,600 
Total intangible assets$358,293 $(145,377)$212,916 
Goodwill$227,821 $ $227,821 
 
December 31, 2020Weighted
average
amortization
period (years)
Gross
carrying
amount
Accumulated
amortization
Net carrying
Amount
Customer relationships11.0$174,033 $(124,907)$49,126 
Reacquired franchise rights8.037,660 (16,311)21,349 
 211,693 (141,218)70,475 
Indefinite-lived intangible:
Trade and brand namesN/A146,600 — 146,600 
Total intangible assets $358,293 $(141,218)$217,075 
Goodwill $227,821 $ $227,821 
 The Company determined that no impairment charges were required during any periods presented.
Amortization expense related to the intangible assets totaled $4,159 and $4,223 for the three months ended March 31, 2021 and 2020, respectively. The anticipated annual amortization expense related to intangible assets to be recognized in future years as of March 31, 2021 is as follows:
 Amount
Remainder of 2021$12,477 
202216,728 
202316,558 
202414,067 
20253,066 
Thereafter3,420 
Total$66,316 
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Table of Contents
Planet Fitness, Inc. and subsidiaries
Notes to Condensed Consolidated financial statements
(Unaudited)
(Amounts in thousands, except share and per share amounts)

(5) Long-Term Debt
Long-term debt as of March 31, 2021 and December 31, 2020 consists of the following: 
 March 31, 2021December 31, 2020
2018-1 Class A-2-I notes$560,625 $562,063 
2018-1 Class A-2-II notes609,375 610,938 
2019-1 Class A-2 notes543,125 544,500 
Borrowings under Variable Funding Notes75,000 75,000 
Total debt, excluding deferred financing costs1,788,125 1,792,501 
Deferred financing costs, net of accumulated amortization(22,003)(23,575)
Total debt1,766,122 1,768,926 
Current portion of long-term debt17,500 17,500 
Long-term debt and borrowings under Variable Funding Notes, net of current portion$1,748,622 $1,751,426 
Future annual principal payments of long-term debt as of March 31, 2021 are as follows: 
 Amount
Remainder of 2021$13,124 
2022568,063 
202386,750 
202411,750 
2025591,438 
Thereafter517,000 
Total$1,788,125 
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 “2018 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 “2018 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 “2018 Class A-2-II Notes” and, together with the 2018 Class A-2-I Notes, the “2018 Notes”) with an initial principal amount of $625,000. In connection with the issuance of the 2018 Notes, the Master Issuer also entered into a revolving financing facility that allows for the incurrence of up to $75,000 in revolving loans and/or letters of credit under the Master Issuer’s Series 2018-1 Variable Funding Senior Notes, Class A-1 (the “Variable Funding Notes”). The Company fully drew down on the Variable Funding Notes on March 20, 2020. Outstanding amounts under the Variable Funding Notes bear interest at a variable rate, which is 2.20% as of March 31, 2021. On December 3, 2019 the Master Issuer issued Series 2019-1 3.858% Fixed Rate Senior Secured Notes, Class A-2 (the “2019 Notes” and, together with the 2018 Notes, the “Notes”) with an initial principal amount of $550,000. The 2019 Notes were issued under the 2018 Indenture and a related supplemental indenture dated December 3, 2019 (together, the “Indenture”). Together the Notes and Variable Funding Notes will be referred to as the “Securitized Senior Notes”.
The 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 Securitized Senior Notes and that have pledged substantially all of their assets to secure the Securitized Senior Notes.
Interest and principal payments on the Notes are payable on a quarterly basis. The requirement to make such quarterly principal payments on the Notes is subject to certain financial conditions set forth in the Indenture. The legal final maturity date of the 2018 Notes is in September 2048, but it is anticipated that, unless earlier prepaid to the extent permitted under the Indenture, the 2018 Class A-2-I Notes will be repaid in September 2022 and the 2018 Class A-2-II Notes will be repaid in September 2025. The legal final maturity date of the 2019 Notes is in December 2049, but it is anticipated that, unless earlier prepaid to the extent permitted under the Indenture, the 2019 Notes will be repaid in December 2029 (together, the “Anticipated Repayment
14

Table of Contents
Planet Fitness, Inc. and subsidiaries
Notes to Condensed Consolidated financial statements
(Unaudited)
(Amounts in thousands, except share and per share amounts)

Dates”). If the Master Issuer has not repaid or refinanced the Notes prior to the respective Anticipated Repayment Dates, additional interest will accrue pursuant to the Indenture.

As noted above, the Company borrowed the full $75,000 in Variable Funding Notes on March 20, 2020. The Variable Funding Notes accrue interest at a variable interest rate based on (i) the prime rate, (ii) overnight federal funds rates, (iii) the London interbank offered rate (or “LIBOR”) 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 Notes. As of March 31, 2021, the applicable borrowing rate is 2.20%. 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 extension options. Following the anticipated repayment date (and any extensions thereof) additional interest will accrue on the Variable Funding Notes equal to 5.0% per year. The Company does not anticipate the expected discontinuation of LIBOR to have a material impact on its financial statements.

In connection with the issuance of the 2018 Notes and 2019 Notes, the Company incurred debt issuance costs of $27,133 and $10,577, respectively. The debt issuance costs are being amortized to “Interest expense” through the Anticipated Repayment Dates of the Notes utilizing the effective interest rate method.
The Securitized 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 Securitized 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 Notes under certain circumstances, (iii) certain indemnification payments in the event, among other things, the assets pledged as collateral for the Securitized Senior Notes are in stated ways defective or ineffective, (iv) a cap on non-securitized indebtedness of $50,000 (provided that the Company may incur non-securitized indebtedness in excess of such amount, subject to the leverage ratio cap described below, under certain conditions, including if the relevant lenders execute a non-disturbance agreement that acknowledges the bankruptcy-remote status of the Master Issuer and its subsidiaries and of their respective assets), (v) a leverage ratio cap incurrence test on the Company of 7.0x (calculated without regard for any indebtedness subject to the $50,000 cap) and (vi) covenants relating to recordkeeping, access to information and similar matters.
Pursuant to a parent company support agreement, the Company has agreed to cause its subsidiary to perform each of its obligations (including any indemnity obligations) and duties under the Management Agreement and under the contribution agreements entered into in connection with the securitized financing facility, in each case as and when due. To the extent that such subsidiary has not performed any such obligation or duty within the prescribed time frame after such obligation or duty was required to be performed, the Company has agreed to either (i) perform such obligation or duty or (ii) cause such obligations or duties to be performed on the Company’s behalf.
The Securitized 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 Notes on the applicable scheduled Anticipated Repayment Dates. The Securitized 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 Securitized 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 Securitized Senior Notes. As of March 31, 2021, the Company had restricted cash held by the Trustee of $42,319. 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.
(6) 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
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Planet Fitness, Inc. and subsidiaries
Notes to Condensed Consolidated financial statements
(Unaudited)
(Amounts in thousands, except share and per share amounts)

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 ROU 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. 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.
LeasesClassificationMarch 31, 2021December 31, 2020
Assets
Operating lease ROU assetsRight of use asset, net$161,574 $164,252 
Finance lease assetsProperty and equipment, net of accumulated depreciation260 306 
Total lease assets$161,834 $164,558 
Liabilities
Current:
OperatingOther current liabilities$19,727 $19,544 
Noncurrent:
OperatingLease liabilities, net of current portion166,350 167,910 
FinancingOther liabilities277 327 
Total lease liabilities$186,354 $187,781 
Weighted-average remaining lease term (years) - operating leases8.58.7
Weighted-average discount rate - operating leases5.1 %5.1 %

During the three months ended March 31, 2021 and 2020, the components of lease cost were as follows:
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Planet Fitness, Inc. and subsidiaries
Notes to Condensed Consolidated financial statements
(Unaudited)
(Amounts in thousands, except share and per share amounts)

Three months ended March 31,
20212020
Operating lease cost$6,693 $6,392 
Variable lease cost2,374 2,372 
Total lease cost$9,067 $8,764 

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:
Three months ended March 31,
20212020
Cash paid for lease liabilities$6,577 $5,798 
Operating lease ROU assets obtained in exchange for operating lease liabilities$4,627 $ 

As of March 31, 2021, maturities of lease liabilities were as follows:
Amount
Remainder of 2021$21,349 
202228,981 
202328,555 
202427,180 
202526,565 
Thereafter99,399 
Total lease payments$232,029 
Less: imputed interest45,675 
Present value of lease liabilities$186,354 

As of March 31, 2021, operating lease payments exclude approximately $198 of legally binding minimum lease payments for leases signed but not yet commenced.
(7) Revenue recognition
Contract Liabilities
Contract liabilities consist primarily of deferred revenue resulting from initial and renewal franchise fees and area development agreement (“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, and NAF revenue billed in advance of satisfaction of the Company’s performance obligation. 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, 2020 and March 31, 2021.
Contract liabilities
Balance at December 31, 2020$59,278 
Revenue recognized that was included in the contract liability at the beginning of the year(13,473)
Increase, excluding amounts recognized as revenue during the period22,307 
Balance at March 31, 2021$68,112 
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Planet Fitness, Inc. and subsidiaries
Notes to Condensed Consolidated financial statements
(Unaudited)
(Amounts in thousands, except share and per share amounts)

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 March 31, 2021. 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
Remainder of 2021$34,044 
20224,718 
20233,637 
20243,377 
20253,025 
Thereafter19,311 
Total$68,112 
(8) Related Party Transactions
Activity with entities considered to be related parties is summarized below: 
 For the three months ended
March 31,
 20212020
Franchise revenue$553 $500 
Equipment revenue 93 
Total revenue from related parties$553 $593 
Additionally, the Company had deferred franchise agreement and area development agreement revenue from related parties of $173 and $182 as of March 31, 2021 and December 31, 2020, respectively.
The Company had payables to related parties pursuant to tax benefit arrangements of $74,347 and $71,416, as of March 31, 2021 and December 31, 2020, respectively (see Note 11).
The Company provides administrative services to the NAF and typically 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 $499 and $569 for the three months ended March 31, 2021 and 2020, respectively.
In the three months ended March 31, 2021 and 2020, the Company incurred approximately $0 and $49, respectively, which is included within selling, general and administrative expense on the consolidated statements of operations, for corporate travel to a third-party company which is affiliated with our Chief Executive Officer.
In May 2020, the Company provided a short-term loan of approximately $8,950 to its third party payment processor related to amounts drafted by franchisee-owned stores in March that were not collected as part of the typical monthly process as a result of the impact of COVID-19. The third party payment processor has begun its repayment of this loan and the Company expects repayment will occur over several months. As of March 31, 2021, approximately $1,797 of the loan balance is outstanding and is included within other receivables on the balance sheet.
(9) Stockholders’ 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 three months ended March 31, 2021, certain existing holders of Holdings Units exercised their exchange rights and exchanged 358,979 Holdings Units for 358,979 newly-issued shares of Class A common stock. Simultaneously, and in
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Planet Fitness, Inc. and subsidiaries
Notes to Condensed Consolidated financial statements
(Unaudited)
(Amounts in thousands, except share and per share amounts)

connection with these exchanges, 358,979 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 358,979 Holdings Units, increasing its total ownership interest in Pla-Fit Holdings.
As a result of the above transactions, as of March 31, 2021:
Holders of our Class A common stock owned 83,202,252 shares of our Class A common stock, representing 96.1% of the voting power in the Company and, through the Company, 83,202,252 Holdings Units representing 96.1% of the economic interest in Pla-Fit Holdings; and
the Continuing LLC Owners collectively owned 3,363,075 Holdings Units, representing 3.9% of the economic interest in Pla-Fit Holdings, and 3,363,075 shares of our Class B common stock, representing 3.9% of the voting power in the Company.
Share repurchase program
2019 share repurchase program
On November 5, 2019, our board of directors approved a share repurchase program of up to $500,000.
On December 4, 2019, the Company entered into a $300,000 accelerated share repurchase agreement (the “2019 ASR Agreement”) with JPMorgan Chase Bank, N.A. (“JPMC”). Pursuant to the terms of the 2019 ASR Agreement, on December 5, 2019, the Company paid JPMC $300,000 upfront in cash and received 3,289,924 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 March 2, 2020. At final settlement, JPMC delivered 666,961 additional shares of the Company’s Class A common stock, based on a weighted average cost per share of $75.82 over the term of the 2019 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.
On March 18, 2020, the Company announced the suspension of its 2019 share repurchase program. If the 2019 share repurchase program is reinstated, the timing of purchases and amount of stock repurchased will be subject to the Company’s discretion and will depend 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 Securitized 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. The Company may reinstate or terminate the program at any time.
Preferred stock
The Company had 50,000,000 shares of preferred stock authorized and none issued or outstanding for the three months ended March 31, 2021 and 2020.
(10) 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.
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Planet Fitness, Inc. and subsidiaries
Notes to Condensed Consolidated financial statements
(Unaudited)
(Amounts in thousands, except share and per share amounts)

The following table sets forth reconciliations used to compute basic and diluted earnings per share of Class A common stock:  
 Three months ended
March 31,
 20212020
Numerator  
Net income$6,190 $10,383 
Less: net income attributable to non-controlling interests609 1,776 
Net income attributable to Planet Fitness, Inc.$5,581 $8,607 
Denominator
Weighted-average shares of Class A common stock outstanding - basic83,084,096 79,098,468 
Effect of dilutive securities:
Stock options563,928 574,286 
Restricted stock units59,190 50,614 
Weighted-average shares of Class A common stock outstanding - diluted83,707,214 79,723,368 
Earnings per share of Class A common stock - basic$0.07 $0.11 
Earnings per share of Class A common stock - diluted