Community adjusted EBITDA
Factual definition
Community adjusted EBITDA is a WeWork non-generally accepted accounting principles (GAAP) measure that, in the cited SEC disclosure, excludes growth-related expenses and general and administrative expenses from an already adjusted earnings measure.
Identify which rent costs the cited disclosure retains
In this disclosure, the metric retains contractual rent and amortization of lease incentives while adding back the adjustment for straight-line rent. It does not remove all costs of the space.
A positive result on this measure does not establish profitability for the whole company.
Source: WeWork SEC disclosure: non-GAAP measures and rent treatment.
See what excluding a cost changes
Separate hypothetical, not WeWork’s reported numbers: suppose an already adjusted earnings measure shows a US$100 million loss after deducting US$60 million of growth-related spending and US$80 million of general and administrative expenses. Assume those categories do not overlap.
Excluding both changes the displayed measure to positive US$40 million: −100 + 60 + 80. It does not make the US$140 million of excluded expenses disappear.
Ask which excluded activities the company must keep funding to operate and achieve its forecast, and read the full reconciliation back to reported results. The SEC’s non-GAAP guidance says that excluding normal recurring cash operating costs can make a performance measure misleading.
That general test is more useful than assuming every excluded expense is optional merely because the metric has a special name.
Where Community adjusted EBITDA fits
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