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Photo by Jackal Pan/VCG via Getty Images

Axios has spoken to WeWork president and COO Artie Minson about "community adjusted EBITDA," a controversial new financial metric that appeared in his company's first-ever bond offering (which yesterday was upsized from $500 million to $700 million).

Bottom line: WeWork's intention is to best quantify its unit economics, as it continues to prepare for an IPO.

The introduction of community adjusted EBITDA generated much snickering on finance Twitter, thanks to this WSJ description:

"It subtracted not only interest, taxes, depreciation and amortization, but also basic expenses like marketing, general and administrative, and development and design costs."

Axios has since learned that the metric includes costs and expenses specific to existing WeWork facilities. More:

  • Community adjusted EBITDA includes all tenant fees, rent expense, staffing expense, facilities management expense, etc. for active WeWork buildings.
  • The exclusions are company-wide expenditures, which do not get pro rated. Much of that relates to growth efforts, although not all of it (executive salaries, for example).
  • One comp, and its not perfect, could be how Shake Shack reports "shack-level operating profit margins."
  • So yes it's still kind of silly, but less silly than it at first appears. And obviously the ratings agencies and bond markets didn't seem put off.

Below is additional WeWork financial data from the bond offering documents:

  • Revenue more than doubled between 2016 and 2017, from $436 million to $886 million. Nearly 93% of revenue is tied to membership.
  • Net loss increased by 117.2% to $933 million. The largest expense increase was general/admin (+294%), followed by sales and marketing (+230%).
  • $2.02 billion in cash at the end of 2017.

Go deeper

Tech scrambles to derail inauguration threats

Illustration: Sarah Grillo/Axios

Tech companies are sharing more information with law enforcement in a frantic effort to prevent violence around the inauguration, after the government was caught flat-footed by the Capitol siege.

Between the lines: Tech knows it will be held accountable for any further violence that turns out to have been planned online if it doesn't act to stop it.

Dave Lawler, author of World
1 hour ago - World

Uganda's election: Museveni declared winner, Wine claims fraud

Wine rejected the official results of the election. Photo: Sumy Sadruni/AFP via Getty

Yoweri Museveni was declared the winner of a sixth presidential term on Saturday, with official results giving him 59% to 35% for Bobi Wine, the singer-turned-opposition leader.

Why it matters: This announcement was predictable, as the election was neither free nor fair and Museveni had no intention of surrendering power after 35 years. But Wine — who posed a strong challenged to Museveni, particularly in urban areas, and was beaten and arrested during the campaign — has said he will present evidence of fraud. The big question is whether he will mobilize mass resistance in the streets.

Off the Rails

Episode 1: A premeditated lie lit the fire

Photo illustration: Sarah Grillo/Axios. Photo: Chip Somodevilla/Getty Images

Beginning on election night 2020 and continuing through his final days in office, Donald Trump unraveled and dragged America with him, to the point that his followers sacked the U.S. Capitol with two weeks left in his term. Axios takes you inside the collapse of a president with a special series.

Episode 1: Trump’s refusal to believe the election results was premeditated. He had heard about the “red mirage” — the likelihood that early vote counts would tip more Republican than the final tallies — and he decided to exploit it.

"Jared, you call the Murdochs! Jason, you call Sammon and Hemmer!”

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