10q10k10q10k.net

What changed in Life Time Group Holdings, Inc.'s 10-K — 2023 vs 2024

vs

Paragraph-level year-over-year comparison of Life Time Group Holdings, Inc.'s 2023 and 2024 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2024 report.

+349 added−383 removedSource: 10-K (2025-02-27) vs 10-K (2024-02-28)

Top changes in Life Time Group Holdings, Inc.'s 2024 10-K

349 paragraphs added · 383 removed · 298 edited across 8 sections

Item 1. Business

Business — how the company describes what it does

67 edited+15 added−24 removed31 unchanged
Biggest changeSignature multi-center access memberships provide the benefits of a standard membership along with certain products, services or spaces that would otherwise be accessible only upon payment of additional dues or fees, such as small group training and court time for certain racquet sports at certain centers.
Biggest changeWe do not count junior memberships as incremental in our membership count since they are already part of our base membership; • signature memberships that are base memberships plus access to certain products, services or spaces that would otherwise be accessible only upon payment of additional dues or fees such as small group training and court time for certain racquet sports at certain centers; • qualified base memberships that can be purchase d at a reduced rate through partnerships with third party administrators including certain medical insurance providers and which may have limited hours; and • digital on-hold memberships for members who do not currently wish to access our centers, but still want to maintain certain member benefits, including the right to convert back to a Center membership without paying an enrollment fee.
Depending on the size and location of a center, we offer expansive fitness floors with top-of-the-line equipment, spacious locker rooms, group fitness studios, indoor and outdoor pools and bistros, indoor and outdoor tennis courts, pickleball courts, basketball courts, LifeSpa, LifeCafe and our childcare and Kids Academy learning spaces.
Depending on the size and location of a center, we offer expansive fitness floors with top-of-the-line equipment, spacious locker rooms, group fitness studios and spaces, indoor and outdoor pools and bistros, indoor and outdoor tennis courts, indoor and outdoor pickleball courts, basketball courts, LifeSpa, LifeCafe and our childcare and Kids Academy learning spaces.
Our team members are dedicated to providing the best programs and experiences in the best facilities, and we know this happens by hiring and inspiring the best people. By consistently delivering extraordinary experiences, we have built a highly trusted, premium lifestyle brand that embraces all aspects of healthy living, healthy aging and healthy entertainment.
Our team members are dedicated to providing the best programs and experiences in the best facilities, and we know this happens by hiring and inspiring the best people. By consistently delivering extraordinary experiences, we have built a highly trusted, premium lifestyle and leisure brand that embraces all aspects of healthy living, healthy aging and healthy entertainment.
We file a substantial number of our trademarks and service marks with the United States Patent and Trademark Office, including for Life Time and many of our branded studio classes and service offerings.
We file a substantial number of our trademarks and service marks with the United States Patent and Trademark Office, including for Life Time and many of our branded studio classes, service offerings and products.
Governmental Laws and Regulations Our operations and business practices are subject to laws and regulations at federal, state, provincial and local levels, including consumer protection laws, health and safety regulations, licensing requirements related to our training, cafe and bistro, spa, aquatics, child care and ancillary health and fitness-related products and services, environmental laws and regulations, including those related to the handling, use, investigation, remediation and storage of hazardous materials, the emission, release and discharge of hazardous materials into the environment, the health and safety of our employees and the disclosure of our environmental initiatives, fair housing laws, accessibility laws, regulations and laws related to the collection, use and security of personal information about our members, guests and other third parties, and wage and hour and other labor and employment laws.
Governmental Laws and Regulations Our operations and business practices are subject to laws and regulations at federal, state, provincial and local levels, including consumer protection laws, health and safety regulations, licensing requirements and regulations related to our training, cafe and bistro, spa, aquatics, child care and ancillary health and fitness-related products and services, environmental laws and regulations, including those related to the handling, use, investigation, remediation and storage of hazardous materials, the emission, release and discharge of hazardous materials into the environment, the health and safety of our employees and the disclosure of our environmental initiatives, fair housing laws, accessibility laws, regulations and laws related to the collection, 11 Table of Contents use and security of personal information about our members, guests and other third parties, and wage and hour and other labor and employment laws.
Examples include LIFE TIME®, , EXPERIENCE LIFE®, DPT DYNAMIC PERSONAL TRAINING, ARORA, MIORA, LIFECAFE®, LIFESPA®, LIFE TIME HEALTHY WAY OF LIFE®, LIFE TIME WORK® and LIFE TIME LIVING®.
Examples include LIFE TIME®, , EXPERIENCE LIFE®, DPT DYNAMIC PERSONAL TRAINING, ARORA, MIORA, LIFECAFE®, LTH, , LIFESPA®, LIFE TIME HEALTHY WAY OF LIFE®, LIFE TIME WORK® and LIFE TIME LIVING®.
We believe inclusion is at the heart of our team members’ and members’ sense of belonging, and so our diversity, equity and inclusion (“DEI”) efforts are focused on making Life Time “A Place for Everyone.” To help create “A Place for Everyone” at Life Time, we created the Life Time Inclusion Council, which is comprised of a small group of core team members, along with a larger group of ambassadors representing each of our club locations and many corporate divisions.
We believe inclusion is at the heart of our team members’ and members’ sense of belonging, and so our efforts are focused on making Life Time “A Place for Everyone.” To help create “A Place for Everyone” at Life Time, we created the Life Time Inclusion Council, which is comprised of a small group of core team members, along with a larger group of ambassadors representing each of our club locations and many corporate divisions.
Our inclusion council works through committees to identify and incubate areas for enhancing DEI within our organization. Among other initiatives, Life Time has supported mentoring, coaching, engagement forums and inclusive leadership feedback and learning.
Our inclusion council works through committees to identify and incubate areas for enhancing diversity and inclusion within our organization. Among other initiatives, Life Time has supported mentoring, coaching, engagement forums and inclusive leadership feedback and learning.
The system allows us to streamline the collection of membership dues electronically, thereby offering additional convenience for our members while at the same time reducing our corporate overhead and accounts receivable. In addition, we use a customer relationship management system to enhance our marketing campaigns and management oversight regarding daily sales and marketing activities.
The system allows us to streamline the collection of membership dues electronically, thereby offering additional convenience for our members while at the same time reducing our corporate overhead and accounts receivable. In addition, we use a customer relationship 10 Table of Contents management system to enhance our marketing campaigns and management oversight regarding daily sales and marketing activities.
We have built this reputation and robust brand equity through our continuous focus on delivering high-quality experiences through our omni-channel physical and digital ecosystem that includes more than 170 centers—distinctive, resort-like athletic country club destinations—across 31 states in the United States and one province in Canada.
We have built our reputation and robust brand equity through our continuous focus on delivering high-quality experiences through our omni-channel physical and digital ecosystem that includes more than 175 centers—distinctive, resort-like athletic country club destinations—across 31 states in the United States and one province in Canada.
Available Information We file annual, quarterly and special reports and other information with the SEC. Our filings with the SEC are available to the public on the SEC’s website at http://www.sec.gov. Those filings are also available to the public free of charge on, or accessible through, our investor relations website at www.ir.lifetime.life under the “Filings” tab.
Available Information We file annual, quarterly and special reports and other information with the SEC. Our filings with the SEC are available to the public on the SEC’s website at http://www.sec.gov. Those filings are also available to the public free of charge on, or accessible through, our investor relations website at www.ir.lifetime.life under the “SEC Filings” tab.
We therefore recruit, hire and certify those whom we believe are the best professionals in the industry to empower, educate and entertain our members. In addition, to enhance our member experiences and drive consistency in our hospitality and services, we have a strong focus on team member culture, training and certification.
We therefore recruit, hire and certify those whom we believe are the best professionals in the industry to empower, educate and entertain our members. In addition, to enhance our member experiences and drive consistency in our hospitality and services, we have a strong focus on team member culture, training and certification. We value a welcoming and inclusive culture.
Competition We consider the following groups to be the primary participants in the health, fitness and wellness industry: • health center operators, including, but not limited to, Equinox Holdings, Inc., The Bay Club Company, Invited (formerly ClubCorp), LA Fitness International, LLC and 24 Hour Fitness Worldwide, Inc.; • the YMCA and similar non-profit organizations or community centers; • physical fitness and recreational facilities established by local governments, hospitals and businesses; • local salons, cafes and businesses offering similar ancillary services; • small fitness clubs and studios and other boutique fitness offerings, including Anytime Fitness, Snap Fitness, Planet Fitness, Orange Theory, Barre3, StretchLab and others; • racquet, tennis, pickleball and other athletic centers; • rental unit and condominium amenity centers; • country clubs; • digital fitness and health services, including online or other technology-based personal training and fitness and nutrition coaching; • the home-use fitness equipment industry; 11 Table of Contents • athletic event operators and related suppliers; and • providers of wellness and other health and wellness-orientated products and services.
Competition We consider the following groups to be the primary participants in the health, fitness and wellness industry: • health center operators, including, but not limited to, Equinox Holdings, Inc., The Bay Club Company, Invited (formerly ClubCorp), LA Fitness International, LLC and 24 Hour Fitness Worldwide, Inc.; • the YMCA and similar non-profit organizations or community centers; • physical fitness and recreational facilities established by local governments, hospitals and businesses; • local salons, cafes and businesses offering similar ancillary services; • small fitness clubs and studios and other boutique fitness offerings, including Anytime Fitness, Snap Fitness, Planet Fitness, Orange Theory, Barre3, StretchLab and others; • racquet, tennis, pickleball and other athletic centers; • rental unit and condominium amenity centers; • country clubs; • digital fitness and health services, including online or other technology-based personal training and fitness and nutrition coaching; • the home-use fitness equipment industry; • athletic event operators and related suppliers; • providers of office co-working spaces and luxury apartments; and • providers of wellness and other health and wellness-orientated products and services.
We continue to build on that foundation by executing several strategies and initiatives to grow our business, further engage our members, optimize our memberships and increase revenue per center membership. We are elevating our member experiences through new and improved in-center service offerings and omni-channel offerings.
We continue to build on that foundation by executing several strategies and initiatives to grow and expand our business, further engage our members, optimize our memberships and member experience, and increase revenue per center membership. We are elevating our member experiences through new and improved in-center service offerings, omni-channel offerings and wellness products.
Revenue ($ in millions) Our Engaged Members The power of our lifestyle brand, attractive member demographics, breadth of amenities and services and high utilization of our centers allow us to build deeply meaningful connections with our members, which are difficult for others in our industry to replicate fully.
Revenue ($ in millions) 5 Table of Contents Our Engaged Members The power of our lifestyle brand, attractive member demographics, breadth and desirability of amenities and services and high utilization of our centers allow us to build deeply meaningful connections with our members, which are difficult for others in our industry to replicate fully.
Life Time was founded by Mr. Akradi in 1992 to help people achieve their health, fitness and wellness goals by delivering entertaining, educational and innovative experiences with uncompromising quality and unparalleled service. Since our founding, we have believed that creating and sustaining a trusted community requires a high level of passion and commitment from our team.
Akradi in 1992 to help people achieve their health, fitness and wellness goals by delivering entertaining, educational and innovative experiences with uncompromising quality and unparalleled service. Since our founding, we have believed that creating and sustaining a trusted community requires a high level of passion and commitment from our team.
Expanded Omni-Channel Offerings We believe the importance of health, fitness and wellness coupled with the structural shift of consumer preferences toward experiential and proactive health and wellness spending creates new opportunities for us to leverage our “Healthy Way of Life” lifestyle brand.
Continue to Expand Our Omni-Channel Offerings We believe the importance of health, fitness and wellness coupled with the structural shift of consumer preferences toward experiential and proactive health and wellness spending creates new opportunities for us to leverage our “Healthy Way of Life” lifestyle and leisure brand.
In 2010, we further focused on helping children reach their full potential by collaborating with school food leaders to help them serve wholesome, nourishing, minimally processed food in schools across the United States. In 2022, we complemented these efforts with a focus on improving exercise and healthy movement in our nation’s youth.
In 2010, we further focused on helping children reach their full potential by collaborating with school food leaders to help them serve wholesome, nourishing, minimally processed food in schools across the United States. In 2022, we complemented these efforts with a focus on increasing physical activity and healthy movement in our nation’s youth.
Additionally, our gender mix is balanced and approximately 46% of our members are under 35 years of age and approximately 79% are under 55 years of age. Our Growth Strategies and Member Experience Initiatives We have built a strong foundation with an engaged membership base in pursuit of a healthy way of living.
Additionally, our gender mix is balanced and approximately 44% are under 35 years of age and approximately 78% are under 55 years of age. Our Growth Strategies and Member Experience Initiatives We have built a strong foundation with an engaged membership base in pursuit of a healthy way of living.
Team members also receive ongoing 10 Table of Contents mentoring and continuing education, and we require an annual re-certification before any team member is permitted to work or to advance to other positions within our Company. Our personal trainers, registered dietitians, massage therapists and cosmetologists are required to maintain a professional license or one of their industry’s top certifications.
Team members may also engage in ongoing mentoring and continuing education. We require an annual re-certification before any team member is permitted to work or to advance to other positions within our Company. Our personal trainers, registered dietitians, massage therapists and cosmetologists are required to maintain a professional license or one of their industry’s top certifications.
The table below displays this wide assortment: 6 Table of Contents Amenities Services Activities and Events Indoor and Outdoor Pools Group Fitness Studios Cycle Studios Yoga & Pilates Studios Indoor and Outdoor Tennis Courts Pickleball Courts LifeCafe with Poolside Service Bar and Lounge Free Weight and Resistance Equipment Cardiovascular Equipment Steam Room and Sauna Racquetball and Squash Spaces Locker Rooms Child Center and Kids Academy Basketball/Volleyball Courts Dynamic Personal Training Dynamic Stretch Small Group Training ARORA MIORA Weight Loss Coaching Nutrition Coaching LifeSpa and Medi-spa Physical Therapy and Chiropractic Assessments and Lab Testing Sport Specific Coaching Endurance Coaching Swim Lessons and Team Coaching Towel and Locker Service Athletic Leagues and Tournaments Kids’ Birthday Parties Summer and Vacation Camps for Kids Sports Training Camps Athletic Events Social Events Outdoor Group Runs Outdoor Group Cycle Rides Swim Meets Charity Events During 2023, we also organized approximately 27,800 events and served as a social and community hub for our members.
The table below displays this wide assortment of physical and digital experiences: Amenities Services Activities, Products and Events Indoor and Outdoor Pools Group Fitness Studios Cycle Studios Yoga & Pilates Studios Indoor and Outdoor Tennis Courts Indoor and Outdoor Pickleball Courts LifeCafe with Poolside Service Bar and Lounge Free Weight and Resistance Equipment Cardiovascular Equipment Steam Room and Sauna Racquetball and Squash Spaces Locker Rooms Child Center and Kids Academy Basketball/Volleyball Courts Dynamic Personal Training Dynamic Stretch Small Group Training ARORA MIORA Weight Loss Coaching Nutrition Coaching LifeSpa and Medi-spa Physical Therapy and Chiropractic Assessments and Lab Testing Sport Specific Coaching Endurance Coaching Swim Lessons and Team Coaching Towel and Locker Service Experience Life Athletic Leagues and Tournaments Kids’ Birthday Parties Summer and Vacation Camps for Kids Sports Training Camps Athletic Events Social Events Outdoor Group Runs Outdoor Group Cycle Rides Swim Meets Charity Events Nutritional Supplements Apparel During 2024, we also organized approximately 44,100 events and served as a social and community hub for our members.
As of December 31, 2023, we had 14 Life Time Work and four Life Time Living locations open and operating. Our Life Time Living offering is generating interest from new property developers and presenting opportunities for new center development that were not previously available to us .
As of December 31, 2024, we had 15 Life Time Work and four Life Time Living locations open and operating. Our Life Time Living offering is generating interest from new property developers and presenting opportunities for new center development and deal terms that were not previously available to us .
We believe this recurring revenue stream, the strength of our brand and the effective execution of our operating strategy have driven our long-term track record of growth. Except in 2020 due to the impact of COVID-19, we have grown our revenue each year since 2000 and we had our highest ever amount of revenue in 2023, as shown below.
We believe this recurring revenue stream, the strength of our brand and the effective execution of our operating strategy have driven our long-term track record of growth. Except in 2020 due to the impact of COVID-19, we have grown our revenue each year since 2000 and, in 2024, we recognized the highest revenue in our history, as shown below.
Our acquisitions can be single assets or portfolios of assets. We take a disciplined approach to sourcing, acquiring and integrating high quality assets and/or locations and complementary businesses that can help us continue to expand into new geographic areas, acquire key talent and offer new services and experiences.
We take a disciplined approach to sourcing, acquiring and integrating high quality assets and/or locations and complementary businesses that can help us continue to expand into new geographic areas, acquire key talent and offer new services and experiences.
Life Time Work members also have the ability to receive access to all of our resort-like athletic country club destinations across the United States and Canada. Additionally, our Life Time Living locations offer luxury wellness-oriented residences, also in close proximity to one of our athletic country clubs.
Life Time Work members also have the ability to receive access to all of our resort-like athletic country club destinations across the United States and Canada. Additionally, our Life Time Living locations, which are also an asset-light model, offer luxury wellness-oriented residences, also in close proximity to our athletic country clubs.
Our culture of care encourages our team members to exemplify HWOL in their personal and professional lives. We believe in supporting our team members throughout their journey from casting, onboarding, training, certification, career-path planning and employee resource or affinity groups. We also offer numerous supportive programs, including education, training and surveys.
Our culture of care encourages our team members to exemplify HWOL in their personal and professional lives. We believe in supporting our team members throughout their journey from casting, onboarding, training, certification, career-path planning and employee resource or affinity groups.
As of December 31, 2023, we employed over 37,000 Life Time team members, including over 28,000 part-time employees and over 9,800 certified fitness professionals, ranging from personal trainers to studio performers. On average, our centers are generally staffed with approximately 200 to 240 full-time and part-time employees depending on center activity levels.
As of December 31, 2024, we employed over 42,000 Life Time team members, including over 33,000 part-time employees and over 10,800 certified fitness professionals, ranging from personal trainers to studio performers. On average, our centers are generally staffed with approximately 210 to 260 full-time and part-time employees depending on center activity levels.
We have something for every generation, from young children attending our swim lessons, parent-child dances, pool parties and Kids Academy classes, teenagers engaged in our sports and agility training, adults engaged in our Dynamic Personal Training and small group training and more senior adults engaged in our ARORA community, to members of all ages participating in pickleball, our iconic athletic events and a variety of our other in-center activities.
We offer something for every generation, from young children attending our swim lessons and Kids Academy classes, teenagers and adults engaged in our state-of-the-art fitness equipment, Dynamic Personal Training and small group training and more senior adults engaged in our ARORA community, to members of all ages participating in pickleball, our iconic athletic events and a variety of our other in-center activities.
This internal expertise has also helped us control the cost and pace of capital expenditures, including in determining when to begin construction on a new location after we have purchased the land as we balance the timing of our growth with any inflationary, labor or supply pressures. 8 Table of Contents We have acquired, and expect to continue to acquire, centers as well as events and services that complement our offerings.
This internal expertise has also helped us control the cost and pace of capital expenditures, including in determining when to begin construction on a new location after we have purchased the land as we balance the timing of our growth with any inflationary, labor or supply pressures.
Our Recurring Revenue Model Membership dues create a recurring and relatively predictable revenue stream that has proven to be resilient for over 30 years and across economic cycles. Membership dues and enrollment fees provide our largest source of revenue, representing over 70% of our total Center revenue.
Our Highly Predictable Subscription-Based Revenue Model Our subscription-based membership model creates highly predictable and recurring revenue that has proven to be resilient for over 30 years and across economic cycles. Membership dues and enrollment fees comprise our largest source of revenue, representing over 70% of our total Center revenue.
We seek to leverage this halo effect of our brand, as well as long-term relationships with landlords and property developers, to achieve favorable lease or development agreements and increased construction reimbursements to support our asset-light expansion.
We seek to leverage this halo effect of our brand, as well as long-term relationships with landlords and property developers, to achieve favorable lease or development agreements and increased construction reimbursements to support our asset-light expansion. We opened eight, 11 and 10 new centers in 2024, 2023 and 2022, respectively.
We value diversity, equity and inclusion and strive to create a welcoming and inclusive culture. Our focus on engagement among team members attracts and fosters our multi-generational member base. By building a strong team, Life Time has continued to grow and consistently deliver exceptional experiences and strong financial results.
Our focus on engagement among team members attracts and fosters our multi-generational member base. By building a strong team, Life Time has continued to grow and consistently deliver exceptional experiences and strong financial results.
We believe our average revenue per center membership will continue to grow as our new centers ramp to expected performance, we open new centers in desirable locations across the country and we continue to execute on our strategic initiatives discussed above. Our new centers on average have taken three to four years to ramp to expected performance.
We believe our average revenue per center membership will continue to grow as we open new centers in desirable locations across the country, new members join at higher membership dues rates, our new centers ramp to expected performance and we continue to execute on our strategic initiatives discussed above.
This strategy has also allowed us to grow the number of centers in a more cost-effective manner and to enter attractive urban and coastal markets with premium centers where the price of real estate had historically been a deterrent to entry.
Since 2015, we have expanded our center base using an asset-light strategy that has also allowed us to grow the number of centers in a more cost-effective manner and to enter attractive urban and coastal markets with premium centers, where the price of real estate had historically been a deterrent to entry.
We believe pickleball is driving both new memberships and member engagement. • Dynamic Personal Training. During 2023, we averaged 160,000 dynamic personal training sessions per month, resulting in a 26% increase in total sessions over the last two years. We also launched Dynamic Stretch in the third quarter of 2023.
We believe pickleball is driving both new memberships and member engagement. • Dynamic Personal Training. During 2024, we averaged over 180,000 Dynamic Personal Training sessions per month, an 18% increase in total sessions compared to 2023. We also launched Dynamic Stretch in the third quarter of 2023. • Small Group Training.
Since 2010, the Life Time Foundation has positively impacted over 6.3 million children across the country in these areas. In 2023, we expanded the mission of the Life Time Foundation to promote a healthy 12 Table of Contents planet including forestation and environmental conservation efforts. The Healthy Planet program supported over 100,000 acres of land conservation in 2023.
Since 2010, the Life Time Foundation has given over $10 million and positively impacted millions of children across the country in these areas. In 2023, we expanded the mission of the Life Time Foundation to promote a healthy planet including forestation and environmental conservation efforts. The Healthy Planet program supported planting over 230,000 trees across the United States in 2024.
Our member engagement is driven by the vast array of amenities, services and activities that enable an entire family to grow and develop, regardless of where they are in their health and wellness journey.
Our member engagement is driven by the vast array of amenities, services, products and activities that enable an entire family to grow and develop, regardless of where they are in their health and wellness journey. We support our existing and prospective members through a concierge service model that keeps our members’ interests first.
We currently report our Digital memberships within our Digital On-hold membership totals. 5 Table of Contents As we continue to invest in our technology, including the Life Time app and artificial intelligence, we believe our members will be able to further utilize and benefit from our “Healthy Way of Life” ecosystem.
Users of our free digital app are not included in our membership count. As we continue to invest in our technology, including the Life Time app and artificial intelligence, we believe our members and users of our digital app will be able to further utilize and benefit from our “Healthy Way of Life” ecosystem.
Inclusion at Life Time At Life Time, we are committed to inspiring healthy, happy lives for everyone in our communities. We aspire to create healthy environments and workspaces that recognize, empower and celebrate the unique talents, backgrounds and perspectives of individuals so team members feel welcomed, respected, supported and valued.
We aspire to create healthy environments and workspaces that recognize, empower and celebrate the unique talents, backgrounds and perspectives of individuals so team members feel welcomed, respected, supported and valued.
As of December 31, 2023, our members had a median household income of $145,000, 80% owned a home and approximately 58% of our members are part of a couples or family membership, and these members typically engage more fully within our centers. Approximately 59% of our members had at least a college education.
As of December 31, 2024, our members had a median household income of $158,000, which is 1.4 times the median income in the respective trade areas, 73% owned a home, approximately 58% are part of a couples or family membership and these members typically engage more fully within our centers, and approximately 56% had at least a college education.
Offerings for team members include online training and virtual mental resiliency coaching. We are not a party to a collective bargaining agreement with any of our employees.
Offerings for team members include online training and virtual mental resiliency coaching. We are not a party to a collective bargaining agreement with any of our employees. We believe we have created a positive environment where our employees can thrive while delivering an uncompromising member experience, and we believe relations with our employees are good.
Since 2015, we have introduced more strategic and flexible center formats that can be modified to accommodate various settings, including ground-up suburban builds, mall or retail locations, vertical residential and urban locations.
We believe we have significant whitespace opportunity for our premium athletic country clubs across the United States and Canada, as well as internationally. Since 2015, we have introduced more strategic and flexible asset-light center formats that can be modified to accommodate various settings, including ground-up suburban builds, mall or retail locations, vertical residential and urban locations.
This dynamic process is based upon demographic, psychographic and competitive criteria generated from profiles of our most successful centers, and we continue to refine these criteria based upon the performance of our centers. We believe that the presence of a Life Time center benefits landlords and property developers and the value of the underlying property and surrounding neighborhoods.
This dynamic process is based upon demographic, psychographic and competitive criteria generated from profiles of our most successful centers, and we continue to refine these criteria based upon 7 Table of Contents the performance of our centers.
This asset-light strategy is expected to help us achieve our objective to be cash flow positive after all capital expenditures starting in the second quarter of 2024 while maintaining a robust pipeline of new centers.
Our asset-light strategy helped us achieve our objective to be free cash flow positive starting in the second quarter of 2024 and we expect to remain free cash flow positive on an annual basis while maintaining a robust pipeline of new centers.
The performance of our centers has improved significantly as our centers have ramped back from the adverse impacts of COVID-19. 9 Table of Contents Human Capital Our unwavering commitment to excellence and a “Healthy Way of Life” culture is driven by our passionate team members and strong leadership team that includes Bahram Akradi, our founder, Chairman and Chief Executive Officer.
Human Capital Our unwavering commitment to excellence and a “Healthy Way of Life” culture is driven by our passionate team members and strong leadership team that includes Bahram Akradi, our founder, Chairman and Chief Executive Officer. Life Time was founded by Mr.
The value our members place on our community is reflected in the continued strength and growth of our average revenue per center membership, center usage and the visits per membership to our athletic country clubs. Our average revenue per center membership increased to $2,810 in 2023 compared to $2,528 and $2,098 in 2022 and 2021, respectively.
Our members are highly engaged and draw inspiration from the experiences and community we have created. The value our members place on our community is reflected in the continued strength and growth of our average revenue per center membership, center usage and the visits per membership to our athletic country clubs.
Expand and Elevate In-Center Service Offerings We continue to evolve our premium lifestyle brand in ways that elevate and broaden our member experiences and allow our members to integrate health, fitness and wellness into their lives with greater ease and frequency.
We are also expanding the number of our centers in an asset-light model that targets higher income members, higher average annual revenue per center membership and higher returns on invested capital. 6 Table of Contents Expand and Elevate In-Center Service Offerings We continue to evolve our premium lifestyle brand in ways that elevate and broaden our member experiences and allow our members to integrate health, fitness and wellness into their lives with greater ease and frequency.
We also benefit from our in-house architecture, design and construction expertise that allows us to create operationally efficient centers and a consistent feel across our centers.
Approximately 68% of our centers are now leased, including approximately 87% of our new centers opened since 2015, versus a predominantly owned real estate strategy prior to 2015. We also benefit from our in-house architecture, design and construction expertise that allows us to create operationally efficient centers and a consistent feel across our centers.
We expect to leverage our brand reputation and deep understanding of the member experience to add a growing portfolio of products and services to our omni-channel platform. We continue to invest in our technology, including in the Life Time app and artificial intelligence, which we believe will enable our members to further utilize our “Healthy Way of Life” ecosystem.
We continue to invest in our digital capabilities, including in the Life Time integrated digital app and artificial intelligence, which we believe will enable our members to further utilize our “Healthy Way of Life” ecosystem.
Our optimized pricing for a Center membership is determined center-by-center based on a variety of factors, including geography, market presence, demographic nature, population density, competition, initial investment in the center and available services and amenities. ◦ Our standard multi-center access memberships include general access to our centers, including the locker rooms (with locker and towel service), fitness floor, child center and other benefits such as the Life Time app. ◦ In 2021, we launched our signature membership.
Our optimized pricing for a Center membership is determined center-by-center based on a variety of factors, including geography, market presence, demographic nature, population density, competition, initial investment in the center and available services and amenities.
Our new center expansion initiatives are focused on strategic locations in increasingly affluent markets with higher income members that will generate higher average dues, higher in-center revenue per membership and higher revenue per square foot. We believe we have significant whitespace opportunity for our premium athletic country clubs across the United States and Canada, as well as internationally.
Expand National Footprint in Affluent Metropolitan Statistical Areas Our new center expansion initiatives are focused on strategic locations in increasingly affluent markets with higher income members that will generate higher average dues, higher in-center revenue per membership and higher revenue per square foot.
Who We Are Life Time, the “Healthy Way of Life Company,” is a leading lifestyle brand offering premium health, fitness and wellness experiences to a community of nearly 1.5 million individual members, who together comprise nearly 815,000 memberships, as of December 31, 2023.
Life Time Group Holdings, Inc. completed its initial public offering (“IPO”) in October 2021 and its common stock trades on the New York Stock Exchange (“NYSE”) under the symbol “LTH.” Who We Are Life Time, the “Healthy Way of Life Company,” is a premier lifestyle and leisure brand offering premium health, fitness and wellness experiences to a community of more than 1.5 million individual members, who together comprise more than 866,000 memberships, as of December 31, 2024.
We believe that the pricing actions we have taken to better reflect our premier brand and offering has resulted in higher revenue and better member experiences. We expect to continually refine our strategy to strike the right balance between the number of members at any given center with the membership dues for that center.
We believe that the pricing actions we have taken to better reflect our premier brand and the value our members receive has resulted in higher revenue and better member experiences.
We also continue to expand our “Healthy Way of Life” ecosystem in response to the desire of our members to holistically integrate health and wellness into every aspect of their daily lives.
In addition, we are improving our e-commerce presence that includes the purchase of a wide variety of equipment, wearables, apparel, beauty products and nutritional supplements, including our newly branded LTH nutritional products. 8 Table of Contents We also continue to expand our “Healthy Way of Life” ecosystem in response to the desire of our members to holistically integrate health and wellness into every aspect of their daily lives.
We also have Life Time Digital memberships for direct-to-consumer memberships that do not provide access to our centers and do not convert back to a Center membership. Life Time Digital features include live streaming fitness classes, remote goal-based personal training, nutrition and weight loss support, and curated award-winning health, fitness and wellness content.
Life Time Digital features include live streaming fitness classes, remote goal-based personal training, nutrition and weight loss support, and curated award-winning health, fitness and wellness content. We currently report our Life Time Digital memberships within our digital on-hold membership totals. Our digital offering is available to consumers at no charge through our Life Time digital app.
We offer base memberships that provide general access (with some amenities excluded) to a selected home center and all centers with the same or lower base monthly dues rate.
Our footprint of athletic country clubs as of December 31, 2024: 4 Table of Contents Our Membership Offering We offer a variety of convenient month-to-month memberships with no long-term contracts, including: • base memberships that provide general access (with some amenities excluded) to a selected home center and all centers with the same or lower base monthly dues rate, with the option for a junior membership as an add-on.
Asset-light, Flexible Real Estate Strategy We are expanding the number of our centers using an asset-light model that targets acquisitions of existing facilities at below market value that we are able to open more quickly, taking over leases with tenant improvement contributions from landlords, adapting existing retail or office space with tenant improvement contributions, and through ground-up suburban builds with sale-leaseback proceeds.
Our growth strategy is flexible and we can capitalize on a variety of opportunities including (i) within existing facilities that we can acquire at below market value and open more quickly; (ii) by entering into or taking over leases with tenant improvement contributions from landlords; (iii) by adapting existing retail or office space with tenant improvement contributions; and (iv) through ground-up suburban builds leveraging sale-leaseback proceeds as a mechanism to recycle capital and reduce our overall net invested capital.
Digital On-hold Memberships . We offer Digital On-hold memberships for members who do not currently wish to access our centers, but still want to maintain certain member benefits, including our Life Time Digital membership and the right to convert back to a Center membership without paying an enrollment fee. The majority of our Digital On-hold memberships cost $15 per month.
The majority of our digital on-hold memberships cost $15 per month. We also have Life Time Digital memberships for direct-to-consumer memberships that do not provide access to our centers and do not convert back to a Center membership. Our digital membership is accessible through our Life Time integrated digital app.
Since our founding over 30 years ago, we have sought to continuously innovate ways for our members to lead healthy and happy lives by offering them the best places, programs and performers. We believe that consumers equate our brand with the uncompromising quality, luxury and “Healthy Way of Life” experiences that Life Time offers.
We believe that consumers equate our brand with the uncompromising quality, luxury and “Healthy Way of Life” experiences that Life Time offers.
Our premium service offerings are delivered by over 37,000 Life Time team members, including over 9,800 certified fitness professionals, ranging from personal trainers to studio performers. Our footprint of athletic country clubs as of December 31, 2023: 4 Table of Contents Coming out of the COVID-19 pandemic, we believe that we have built an even healthier and stronger business.
Our premium service offerings are delivered by over 42,000 Life Time team members, including over 10,800 certified fitness professionals, ranging from personal trainers to studio performers. We have a model and scale that would be difficult to replicate.
We have grown our average revenue per center membership to $2,810 in 2023, up from $2,098 in 2021 and $2,528 in 2022.
We expect to continually refine our strategy to strike the right balance between the number of members at any given center with the membership dues for that center. We have grown our average revenue per center membership to $3,160 in 2024, up from $2,810 in 2023 and $2,528 in 2022.
Our ARORA community is focused on members aged 55 years and older. We averaged over 7,000 classes per month in 2023 and saw a 344% increase in unique participants over the last two years. We believe we have opportunities to further grow our offerings to this community as the U.S. population continues to age.
We averaged over 9,000 classes per month in 2024, a 34% increase in total sessions compared to 2023. We believe we have opportunities to further grow our offerings to this community as the U.S. population continues to age. • MIORA. Our new MIORA health optimization and longevity services include comprehensive assessments, proprietary therapies, supplements and recovery and rejuvenation tools.
The following strategic initiatives, which we began to invest more into in 2022, are driving signific ant increases in unique participants or total sessions in these areas: • Pickleball. We now have over 500 permanent pickleball courts. Over the last two years, we saw an 841% increase in unique participants in pickleball.
Over the past few years, we have increased our investment in the following strategic initiatives, which are driving member engagement and signific ant increases in unique participants or total sessions in these areas: • Pickleball. We now have over 700 dedicated pickleball courts and we had approximately 5.2 million participations during 2024.
Approximately a decade ago and coming out of the great recession, we began to shift our model by delivering the highest quality member experiences. Coming out of the COVID-19 pandemic, we continued to elevate and expand our member experiences with a focus on our engaged members while optimizing membership levels and increasing membership dues in our centers.
Optimize Revenue per Center Membership We expect to continue to elevate and expand our member experiences with a continued focus on increasing member engagement, while optimizing membership levels and membership dues in our centers.
We believe this service can increase our member engagement and drive incremental revenue. • Small Group Training. During 2023, we averaged 30,000 small group training sessions per month and experienced a 277% increase in unique participants over the last two years. Our small group training includes Alpha, GTX and Ultra Fit. • ARORA.
During 2024, we averaged over 39,000 small group training sessions per month, a 25% increase in total sessions compared to 2023, while also increasing total participation and average participants per session. Our small group training includes Alpha, GTX and Ultra Fit. • ARORA. Our ARORA community is focused on members aged 55 years and older.
Expand National Footprint in Affluent Metropolitan Statistical Areas Our diversified portfolio of over 170 resort-like athletic country club destinations are primarily located in affluent markets across 31 states and one Canadian province.
We are targeting opening 10 to 12 new locations on average per year going forward. Flexible Asset-light Real Estate Model We have a diversified portfolio of 179 resort-like athletic country club destinations that are primarily located in affluent markets across 31 states and one Canadian province.
As of December 31, 2023, we had 27 centers open for less than three years. We believe the combined dynamic of our ramping new centers plus the capital expenditures already invested in our centers under construction creates a strong tailwind for the continued growth of our revenue.
Our new centers on average have taken three to four years to ramp to expected performance. As of December 31, 2024, we had 29 centers open for less than three years and 12 new centers under construction, with significant growth capital expenditures already invested into these new centers that have yet to open.
Removed
Life Time Group Holdings, Inc. completed its initial public offering (“IPO”) in October 2021 and its common stock trades on the New York Stock Exchange (“NYSE”) under the symbol “LTH.” For more information on the IPO, see Note 1, Nature of Business and Basis of Presentation—Initial Public Offering, to our consolidated financial statements included in Part II, Item 8 of this Annual Report.
Added
We are a leading innovator in the industry having successfully created a leisure model that incorporates the country club wellness lifestyle within a fitness and active living community. We have earned the trust of our members for over 30 years to make their lives healthier and happier by offering them the best places, programs and performers.
Removed
Our brand loyalty and track record of providing differentiated experiences to our members has fueled our strong, long-term financial performance. Our luxurious athletic country clubs total approximately 17 million square feet in the aggregate. Our centers are located in affluent suburban and urban locations and include ground-up suburban builds, mall or retail locations, vertical residential and urban locations.
Added
Our continuous commitment to members has resulted in strong brand loyalty and fueled our strong, long-term financial performance. Our centers serve communities in both suburban and urban markets across North America.
Removed
Our initial focus on center recovery produced strong results in member engagement and increasing memberships, visits and Center revenue. We were then able to focus on expanding margins by optimizing our average revenue per center membership and significantly improving the efficiency of our club operations and corporate office.
Added
Our premium real estate portfolio of owned and leased athletic country clubs spans over 17 million of indoor square feet and approximately seven million of outdoor square feet.
Removed
We have also benefited from the greater flow through of our increased revenue and from new members joining at higher membership dues rates. In 2023, we achieved a 3.4% net income margin and a 24.2% Adjusted EBITDA margin, both of which exceeded the 1.6% net income margin and 23.0% Adjusted EBITDA margin in 2019 before the pandemic.
Added
The junior membership add-on for children 13 years old and younger currently costs $20-$100 per month.
Removed
Our Membership Offering We define a membership in two ways: Center memberships and Digital On-hold memberships. As of December 31, 2023, we had 814,936 total memberships, comprised of 763,216 Center memberships and 51,720 Digital On-hold memberships. Center Memberships. A center membership provides general access to one or more of our centers.
Added
Coming out of the pandemic, we made a strategic shift to a more robust subscription offering and, as a result, our membership dues and enrollment fees now represent over 72% of our total Center revenue for the year ended December 31, 2024.
Removed
We offer a variety of convenient month-to-month Center memberships with no long-term contracts. Each Center membership is defined as one or more adults, plus any children under the age of 14. • Base Memberships.
Added
Our average revenue per center membership increased to $3,160 in 2024 compared to $2,810 and $2,528 in 2023 and 2022, respectively. Total visits to our clubs were over 114 million in 2024 as compared to 103 million and 86 million in 2023 and 2022, respectively. Average visits per membership to our centers remained strong at 143 for 2024.
Removed
As a result, some revenue that was historically reported as in-center revenue is now reported as membership dues revenue. Certain of our centers are accessible only with a signature membership. • Junior Memberships.

… 26 more changes not shown on this page.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

107 edited+15 added−16 removed96 unchanged
Biggest changeOur ability to comply with these covenants may be affected by circumstances and events beyond our control, such as prevailing economic conditions, pandemics or epidemics and changes in regulations, and there is no assurance that we will be able to comply with such covenants. 19 Table of Contents Specifically, our level of indebtedness and lease obligations, and the restrictions imposed thereby, could have material consequences, including: • making it more difficult for us to satisfy our obligations with respect to our indebtedness and lease obligations, and if we fail to comply with these requirements, an event of default could result; • limiting our ability to obtain or guarantee additional indebtedness or make certain investments, which could impact our ability to fund or execute on future working capital, capital expenditures, our growth strategy or other general corporate requirements or business opportunities; • requiring a substantial portion of our cash flows to be dedicated to debt service and lease obligations, thereby reducing the amount of cash flows available for working capital, capital expenditures, our growth strategy and other general corporate purposes or business opportunities, and restricting our ability to pay dividends or make distributions on our capital stock; • limiting our ability to incur liens, to sell assets, to consolidate, merge, sell or otherwise dispose of all or substantially all of our assets or to enter into transactions with our affiliates; • increasing our vulnerability to general adverse economic and industry conditions; • limiting our flexibility in planning for and reacting to changes in the industry in which we compete and to changing business and economic conditions; • placing us at a disadvantage compared to other, less leveraged competitors; and • increasing our cost of borrowing or limiting our ability to refinance indebtedness.
Biggest changeSpecifically, our indebtedness and lease obligations, and the restrictions imposed thereby, could have material consequences, including: • limiting our ability to obtain or guarantee additional indebtedness or make certain investments, which could impact our ability to fund or execute on future working capital, capital expenditures, our growth strategy or other general corporate requirements or business opportunities; • requiring a substantial portion of our cash flows to be dedicated to debt service and lease obligations, thereby reducing the amount of cash flows available for working capital, capital expenditures, our growth strategy and other general corporate purposes or business opportunities, and restricting our ability to pay dividends or make distributions on our capital stock; • limiting our ability to incur liens, to sell assets, to consolidate, merge, sell or otherwise dispose of all or substantially all of our assets or to enter into transactions with our affiliates; • increasing our vulnerability to general adverse economic and industry conditions; • limiting our flexibility in planning for and reacting to changes in the industry in which we compete and to changing business and economic conditions; • placing us at a disadvantage compared to other, less leveraged competitors; and • increasing our cost of borrowing or limiting our ability to refinance indebtedness.
Risks Relating to Our Brand Our business depends on the quality and reputation of our brand, and any deterioration in the quality or reputation of our brand or the health, fitness and wellness industry could materially adversely affect our market share, business, results of operations and financial condition. Our brand and our reputation are among our most important assets.
Risks Relating to Our Brand Our business depends on the quality and reputation of our brand, and any deterioration in the quality or reputation of our brand or in the health, fitness and wellness industry could materially adversely affect our market share, business, results of operations and financial condition. Our brand and reputation are among our most important assets.
Technology is a key component of our business model and we regard it as crucial to our success moving forward. We increasingly use electronic and digital means to interact with our members, provide services and products to our members and collect, maintain and store individually identifiable information.
Technology is a key component of our business model and we regard it as crucial to our success moving forward. We increasingly use electronic and digital means to interact with our members, provide services and products and collect, maintain and store individually identifiable information.
We offer directly or through third parties a variety of health, fitness and wellness-related products and services, such as nutritional and weight loss products, blood screenings and other fitness assessments, anti-aging and longevity services, health and fitness content and services, chiropractic services and medi-spa services.
We offer directly or through third parties a variety of health, fitness and wellness-related products and services, such as nutritional and weight loss products, blood screenings and other assessments, anti-aging and longevity services, health, fitness and wellness content and services, chiropractic services and medi-spa services.
Risks Relating to Ownership of Our Common Stock Our share price may change significantly, and stockholders may not be able to resell our common stock at or above the price per share paid or at all. The trading price of our common stock has experienced volatility.
Risks Relating to Ownership of Our Common Stock Our share price has and may change significantly, and stockholders may not be able to resell our common stock at or above the price per share paid or at all. The trading price of our common stock has experienced volatility.
These provisions include: • establishing a classified board of directors such that not all members of the board are elected at one time; 25 Table of Contents • allowing the total number of directors to be determined exclusively (subject to the rights of holders of any series of preferred stock to elect additional directors) by resolution of our board of directors and granting to our board the sole power (subject to the rights of holders of any series of preferred stock or rights granted pursuant to the Stockholders Agreement) to fill any vacancy on the board; • limiting the ability of stockholders to remove directors without cause; • authorizing the issuance of “blank check” preferred stock by our board of directors, without further stockholder approval, to thwart a takeover attempt; • prohibiting stockholder action by written consent (and, thus, requiring that all stockholder actions be taken at a meeting of our stockholders), if the Voting Group collectively ceases to own, or no longer has the right to direct the vote of, at least 50% of the voting power of our common stock; • eliminating the ability of stockholders to call a special meeting of stockholders, except for LGP and TPG, so long as the Voting Group collectively owns, or has the right to direct the vote of, at least 50% of the voting power of our common stock; • establishing advance notice requirements for nominations for election to the board of directors or for proposing matters that can be acted upon at annual stockholder meetings; • requiring the approval of the holders of at least two-thirds of the voting power of all outstanding stock entitled to vote thereon, voting together as a single class, to amend or repeal our amended and restated certificate of incorporation or amended and restated bylaws if the Voting Group collectively ceases to own, or no longer has the right to direct the vote of, at least 50% of the voting power of our common stock; and • electing not to be governed by Section 203 of the DGCL.
These provisions include: • establishing a classified board of directors such that not all members of the board are elected at one time; • allowing the total number of directors to be determined exclusively (subject to the rights of holders of any series of preferred stock to elect additional directors) by resolution of our board of directors and granting to our board the sole power (subject to the rights of holders of any series of preferred stock or rights granted pursuant to the Stockholders Agreement) to fill any vacancy on the board; • limiting the ability of stockholders to remove directors without cause; 24 Table of Contents • authorizing the issuance of “blank check” preferred stock by our board of directors, without further stockholder approval, to thwart a takeover attempt; • prohibiting stockholder action by written consent (and, thus, requiring that all stockholder actions be taken at a meeting of our stockholders), if the Voting Group collectively ceases to own, or no longer has the right to direct the vote of, at least 50% of the voting power of our common stock; • eliminating the ability of stockholders to call a special meeting of stockholders, except for LGP and TPG, so long as the Voting Group collectively owns, or has the right to direct the vote of, at least 50% of the voting power of our common stock; • establishing advance notice requirements for nominations for election to the board of directors or for proposing matters that can be acted upon at annual stockholder meetings; • requiring the approval of the holders of at least two-thirds of the voting power of all outstanding stock entitled to vote thereon, voting together as a single class, to amend or repeal our amended and restated certificate of incorporation or amended and restated bylaws if the Voting Group collectively ceases to own, or no longer has the right to direct the vote of, at least 50% of the voting power of our common stock; and • electing not to be governed by Section 203 of the DGCL.
The occurrence of any one of these events could have a material adverse effect on our business, financial condition, results of operations and ability to grow our business or satisfy our obligations. Rates under our senior secured credit facility are variable, which could result in increased debt service obligations and decreased net income and cash flows.
The occurrence of any one of these events could have a material adverse effect on our business, financial condition, results of operations and ability to grow our business or satisfy our obligations. Rates under our senior secured credit facility are variable, which has and could result in increased debt service obligations and decreased net income and cash flows.
We could also face claims for economic or other damages by members, guests or employees, including consumer protection, wage and hour, health center contract, or other statutory or common law claims arising from our business operations. Such claims may be uninsured or the proceeds of our insurance coverages for such claims may be insufficient to cover our losses fully.
We could also face claims for economic or other damages by members, guests, customers or employees, including consumer protection, wage and hour, health center contract, or other statutory or common law claims arising from our business operations. Such claims may be uninsured or the proceeds of our insurance coverages for such claims may be insufficient to cover our losses fully.
In the event our lenders or holders of our secured or unsecured notes accelerate the repayment of our borrowings, we and our subsidiaries may not have sufficient assets to repay that indebtedness. Similarly, a number of our leases, including those pursuant to the sale-leaseback transactions, may be terminated in the event of a breach and certain other circumstances.
In the event our lenders or holders of our secured notes accelerate the repayment of our borrowings, we and our subsidiaries may not have sufficient assets to repay that indebtedness. Similarly, a number of our leases, including those pursuant to sale-leaseback transactions, may be terminated in the event of a breach and certain other circumstances.
We could also face claims in connection with the construction and remodel of our centers and other facilities, as well as claims related to environmental matters or remediation. While we carry insurance generally applicable to such claims, we face exposure for losses within any self-insured retention or for uninsured damages.
We could also face claims in connection with the development, construction and remodel of our centers and other facilities, as well as claims related to environmental matters or remediation. While we carry insurance generally applicable to such claims, we face exposure for losses within any self-insured retention or for uninsured damages.
Any disruption to our suppliers’ operations, or any inability by us to identify and enter into agreements with alternative suppliers on a timely basis and on acceptable terms, could impact our supply chain and our ability to service our centers and elevate our brand.
Any disruption to our suppliers’ operations, or any inability by us to identify and enter into agreements with alternative suppliers on a timely basis and on acceptable terms, could impact our supply chain and our ability to service our centers and elevate and expand our brand.
Changes in the scope of our operations, including expansion to new products or new geographies, could also increase the amount and type of taxes to which we are subject, and could increase our effective tax rate.
Changes in the scope of our operations, including expansion to new products or new geographies, could also increase the amount and type of taxes and tariffs to which we are subject, and could increase our effective tax rate.
These factors include: • obtaining acceptable financing including executing sale-leaseback transactions to fund construction of new sites and negotiating tenant improvement contributions from developers and landlords; • obtaining entitlements, permits and licenses necessary to complete construction of the new center on schedule and to operate the center; • negotiating the terms of the acquisition or lease of new centers; • securing access to and the costs of labor and materials necessary to develop and construct or remodel our centers; • delays or cost increases due to material shortages, labor issues, design changes, weather conditions, acts of God, pandemics or epidemics, discovery of contaminants, accidents, deaths or injunctions; 16 Table of Contents • recruiting, training and retaining qualified employees; and • general economic conditions.
These factors include: 15 Table of Contents • obtaining acceptable financing including executing sale-leaseback transactions to fund construction of new sites and negotiating tenant improvement contributions from developers and landlords; • obtaining entitlements, permits and licenses necessary to complete construction of the new center on schedule and to operate the center; • negotiating the terms of the acquisition or lease of new centers; • securing access to centers and the costs of labor and materials necessary to develop and construct or remodel our centers; • delays or cost increases due to inflation, material shortages, labor issues, design changes, weather conditions, acts of God, pandemics or epidemics, discovery of contaminants, accidents, deaths or injunctions; • recruiting, training and retaining qualified employees; and • general economic conditions.
Our business took time to recover from that pandemic, similar to how our new centers take several years to mature to expected performance, and the recovery varied by center.
Our business took time to recover from that pandemic, similar to how our new centers take several years to mature to expected performance, and the recovery varied by center and geography.
These or similar agreements, legislation or changes in regulations could disrupt our operations, reduce our profitability or interfere with the ability of our management to focus on executing our business and operating strategies. 21 Table of Contents Risks Relating to Legal Compliance and Risk Management We are subject to extensive governmental laws and regulations, and changes in these laws and regulations could have a negative effect on our results of operations and financial condition.
These or similar agreements, legislation or changes in regulations could disrupt our operations, reduce our profitability or interfere with the ability of our management to focus on executing our business and operating strategies. 20 Table of Contents Risks Relating to Legal Compliance and Risk Management We are subject to extensive governmental laws and regulations, and changes in these laws and regulations could have a negative effect on our results of operations and financial condition.
Under these rules, a “controlled company” may elect not to comply with certain corporate governance requirements, including: • the requirement that a majority of our board of directors consist of “independent directors” as defined under the rules of the NYSE; 24 Table of Contents • the requirement that we have a compensation committee that is composed entirely of directors who meet the NYSE independence standards for compensation committee members with a written charter addressing the committee’s purpose and responsibilities; • the requirement that our director nominations be made, or recommended to our full board of directors, by our independent directors or by a nominations committee that consists entirely of independent directors and that we adopt a written charter or board resolution addressing the nominations process; and • the requirement for an annual performance evaluation of the nominating and corporate governance and compensation committees.
Under these rules, a “controlled company” may elect not to comply with certain corporate governance requirements, including: • the requirement that a majority of our board of directors consist of “independent directors” as defined under the rules of the NYSE; • the requirement that we have a compensation committee that is composed entirely of directors who meet the NYSE independence standards for compensation committee members with a written charter addressing the committee’s purpose and responsibilities; • the requirement that our director nominations be made, or recommended to our full board of directors, by our independent directors or by a nominations committee that consists entirely of independent directors and that we adopt a written charter or board resolution addressing the nominations process; and • the requirement for an annual performance evaluation of the nominating and corporate governance and compensation committees.
Changes in market interest rates may influence our financing costs, returns on financial investments and the valuation of derivative contracts and could reduce our earnings and cash flows. 20 Table of Contents We may not be able to generate sufficient cash to service all of our indebtedness and lease obligations and may be forced to take other actions to satisfy our obligations, which may not be successful.
Changes in market interest rates may influence our financing costs, returns on financial investments and the valuation of derivative contracts and could reduce our earnings and cash flows. 19 Table of Contents We may not be able to generate sufficient cash to service all of our indebtedness and lease obligations and may be forced to take other actions to satisfy our obligations, which may not be successful.
Holder has owned, actually or constructively, more than 5% of our common stock at any time 26 Table of Contents during the shorter of the five-year period ending on the date of the sale or other taxable disposition or the Non-U.S. Holder’s holding period in such stock. Item 1B. UNRESOLVED STAFF COMMENTS None.
Holder has owned, actually or constructively, more than 5% of our common stock at any time during the shorter of the five-year period ending on the date of the sale or other taxable disposition or the Non-U.S. Holder’s holding period in such stock. 25 Table of Contents Item 1B. UNRESOLVED STAFF COMMENTS None.
We may be unable to successfully acquire or invest in suitable businesses or, if we do acquire or invest in them, that may disrupt our business, we may be unable to successfully integrate the businesses into our existing business or the acquired assets may be subject to impairment, any of which may have an adverse effect on our results of operations and financial condition.
We may be unable to successfully acquire or invest in suitable businesses or, if we do acquire or invest in them, they may disrupt our existing business, we may be unable to successfully integrate the businesses into our existing business or the acquired assets may be subject to impairment, any of which may have an adverse effect on our results of operations and financial condition.
Our plans for current and future expansion and development, including an increase in the number of our centers, development of existing and new businesses and memberships, expansion of our “Healthy Way of Life” ecosystem and acquisitions of other businesses, as well as changes in the industry, may place significant demands on our administrative, operational, financial, technological and other resources.
Our plans for expansion and development, including an increase in the number of our centers, development of existing and new businesses and memberships, expansion of our “Healthy Way of Life” ecosystem and acquisitions of other businesses, as well as changes in the industry, may place significant demands on our administrative, operational, financial, technological and other resources.
Our growth and success will depend, in part, on our ability to continue to elevate and broaden our member experiences, including through developing our omni-channel ecosystem, licensing leading technologies, systems and use rights, enhancing our existing platforms and services and creating new platforms and services.
Our growth and success will depend, in part, on our ability to continue to elevate and broaden our member experiences and product and services offerings, including through developing our omni-channel ecosystem, licensing leading technologies, systems and use rights, enhancing our existing platforms and services and creating new platforms and services.
Similarly, since as a lessee we do not completely control the land and improvements underlying our operations, we may not be able to take certain actions that we desire or the lessors under our leases could take certain actions to disrupt our rights in the centers we lease.
Similarly, since as a lessee we do not completely control the land and improvements underlying our operations, we may not be able to take certain actions that we desire or the lessors could take certain actions to disrupt our rights in the centers we lease.
Despite the security measures we have in place and our continuous assessment and improvements, our systems, and those of our third-party service providers, may be vulnerable to security breaches, acts of cyber terrorism, demands for ransom, vandalism or theft, computer viruses, misplaced or lost data, programming and/or human errors or other similar events.
Despite the security measures we have in place and our continuous assessment and improvements, our systems, and those of our third-party service providers, may be vulnerable to security breaches, acts of cyber terrorism, malicious attacks, misinformation, demands for ransom, vandalism or theft, computer viruses, misplaced or lost data, programming and/or human errors or other similar events.
Negative commentary about us or calls for collective action against us, such as boycotts, may be posted on social media platforms or similar devices at any time to a broad audience and may harm our brand, reputation or business without affording us an opportunity for redress or correction in a timely manner or at all.
Negative commentary about us or calls for collective action against us, such as boycotts, may be posted on social media platforms or similar at any time to a broad audience, which may harm our brand, reputation or business without affording us an opportunity for redress or correction in a timely manner or at all.
Because such attacks are increasing in sophistication (including from the use of artificial intelligence) and frequently change in nature, we and our third-party service providers may be unable to anticipate these attacks or implement adequate preventative measures, and any compromise of our systems, or those of our third-party providers, may not be discovered and remediated promptly.
Because such attacks and other events are increasing in sophistication (including from the use of artificial intelligence) and frequently change in nature, we and our third-party service providers may be unable to anticipate such events or implement adequate preventative measures, and any compromise of our systems, or those of our third-party providers, may not be discovered and remediated promptly.
Our ability to make scheduled payments on our indebtedness and lease obligations, to refinance our debt obligations or to negotiate favorable terms on new or expiring leases depends on our financial condition and operating performance, which could be subject to prevailing economic and competitive conditions and to certain financial, business, market, legislative, regulatory, environmental and other factors beyond our control.
Our ability to make scheduled payments on our indebtedness and lease obligations, to refinance our debt obligations before maturity or to negotiate favorable terms on new or expiring leases depends on our financial condition and operating performance, and could be subject to prevailing economic and competitive conditions and to certain financial, business, market, legislative, regulatory, environmental and other factors beyond our control.
All of our members are able to cancel their membership at any time upon providing advance notice. We must therefore continually engage existing members and attract new members in order to maintain our membership and in-center service levels and earn the membership dues and service fees that we charge our members.
All of our members are able to cancel their membership at any time upon providing advance notice. We must therefore continually engage existing members and attract new members in order to maintain our membership and in-center service levels 12 Table of Contents and earn the membership dues and service fees that we charge our members.
Any failure to integrate an acquired business or center into our existing business could have an adverse effect on our existing business, results of operations and financial condition. Additionally, as we have acquired other businesses, we have recorded assets, liabilities and intangible assets at fair value at the time of acquisition.
Any failure to integrate an acquired business or center into our existing business could have an adverse effect on our existing business, results of operations and financial condition. 16 Table of Contents Additionally, as we have acquired other businesses, we have recorded assets, liabilities and intangible assets at fair value at the time of acquisition.
Furthermore, there is no assurance that any rights we have under indemnification provisions and/or insurance policies will be 22 Table of Contents sufficient to cover any losses that might result from such claims. Any publicity surrounding such claims may negatively impact the value of our brand.
Furthermore, there is no assurance that any rights we have under indemnification provisions and/or insurance policies will be sufficient to cover any losses that might result from such claims. Any publicity surrounding such claims may negatively impact the value of our brand.
They also may impose further 18 Table of Contents restrictions on our collection, disclosure and use of information that is housed in one or more of our databases.
They also may impose further 17 Table of Contents restrictions on our collection, disclosure and use of information that is housed in one or more of our databases.
In the future, we may enter into interest rate swaps that involve the exchange of floating for fixed rate interest payments in order to reduce interest rate volatility or risk.
In the future, we may enter into interest rate swaps or hedging agreements that involve the exchange of floating for fixed rate interest payments in order to reduce interest rate volatility or risk.
Any of these results could have a negative impact on our revenue growth rate, profits, cash flow and return on invested capital. Our focus for new centers continues to include wealthier demographic locations, including in urban and coastal markets and at ground-up suburban builds, mall or retail locations, vertical residential and urban locations.
Any of these results could have a negative impact on our revenue growth rate, profits, cash flow and return on invested capital. Our focus for new centers continues to include wealthier demographic and coastal locations for ground-up suburban builds, mall or retail locations, vertical residential and urban locations.
We must also respond to member demands, technological advances and emerging industry standards and practices on a cost-effective and timely basis. The adoption of new technologies or market practices (including artificial intelligence) may require us to devote significant additional resources to improve and adapt our services.
We must also respond to member demands, technological advances and emerging industry standards and practices on a cost-effective and timely basis. The adoption of new technologies or market practices (including artificial intelligence) requires us to devote significant resources to improve and adapt our services.
If we are unable to leverage our brand and what we bring to these markets and locations, we may be required to pay relatively higher costs for land or lease payments. We could also have increased construction costs and higher development costs to offer more luxurious amenities and features within the new centers.
If we are unable to leverage our brand and what we bring to these markets and locations, we may be required to pay relatively higher costs for land or lease payments. Our construction and development costs are higher to offer more luxurious amenities and features within the new centers.
The indentures governing our secured and unsecured notes and the credit agreement governing our senior secured credit facility contain a number of covenants imposing significant restrictions on our business, including we are required to comply with a first lien net leverage ratio covenant under the revolving portion of our senior secured credit facility.
The credit agreement governing our senior secured credit facility and the indenture governing our secured notes contain a number of covenants imposing restrictions on our business, including we are required to comply with a first lien net leverage ratio covenant under the revolving portion of our senior secured credit facility.
Stockholders may also not be able to resell our common stock at or above the price per share paid due to a number of factors, such as those listed in other portions of this “Risk Factors” section and the following: • results of operations that vary from the expectations of securities analysts and investors; • if securities analysts do not publish research or reports about our business, or if they downgrade our common stock or our industry; • results of operations that vary from those of our competitors; • changes in expectations as to our future financial performance and growth, including financial estimates and investment recommendations by securities analysts and investors; 23 Table of Contents • investor perceptions of the investment opportunity associated with our common stock relative to other investment alternatives; • the public’s response to press releases or other public announcements by us or third parties, including our filings with the SEC; • guidance, if any, that we provide to the public, any changes in this guidance or our failure to meet this guidance; and • changes in accounting principles.
Stockholders may have difficulty selling their shares of our common stock or may not be able to resell our common stock at or above the price per share paid due to a number of factors, such as the amount of liquidity in the market for our shares, those listed in other portions of this “Risk Factors” section and the following: • results of operations that vary from the expectations of securities analysts and investors or from our competitors; • if securities analysts do not publish research or reports about our business, or if they downgrade our common stock or our industry; • changes in expectations as to our future financial performance and growth, including financial estimates and investment recommendations by securities analysts and investors; 22 Table of Contents • investor perceptions of the investment opportunity associated with our common stock relative to other investment alternatives; • the public’s response to press releases or other public announcements by us or third parties, including our filings with the SEC; • guidance, if any, that we provide to the public, any changes in this guidance or our failure to meet this guidance; and • changes in accounting principles.
Compliance with evolving and fragmenting privacy and security laws, requirements and regulations may result in cost increases due to necessary systems changes, new limitations or constraints on our business models and the development of new administrative processes.
Compliance with evolving and fragmenting privacy and security laws, requirements and regulations results in time and cost increases due to necessary systems changes, new limitations or constraints on our business models and the development of new administrative processes.
We could be subject to claims related to the construction or operation of our facilities and the use or condition of our premises, facilities, equipment, services, activities or products, which could have a negative effect on our results of operations and financial condition.
We could be subject to claims related to the development, construction or operation of our facilities and the use, condition or content of our premises, facilities, equipment, mobile application, services, activities or products, which could have a negative effect on our results of operations and financial condition.
Additionally, how active and liquid the trading market on the NYSE for our common stock is or may become may be impacted by the fact that certain of our existing stockholders who were stockholders before the IPO, who we refer to as the “Voting Group,” collectively held as of February 26, 2024, approximately 74.7% of the voting power of our common stock.
Additionally, how active and liquid the trading market on the NYSE for our common stock is or may become may be impacted by the fact that certain of our existing stockholders who were stockholders before the IPO, who we refer to as the “Voting Group,” collectively held as of December 31, 2024, approximately 62.7% of the voting power of our common stock.
Elevating our member experiences requires investment in our team members, programs, products, services and centers. These investments may impact our short-term results of operations and cash flows as our investments in our business may be made more quickly than we see the returns on our investments.
Elevating our member experiences to meet and exceed their expectations requires investment in our team members, programs, products, services and centers. These investments may impact our short-term results of operations and cash flows as our investments in our business may be made more quickly than we see the returns on our investments.
There is no assurance that there will be no claims against us related to these services and products, including regarding the ingredients in, manufacture of or results of using our nutritional products, our provision of other health, fitness and wellness-related services or our relationships with third parties.
There is no assurance that there will be no claims against us or such third parties related to these products and services, including regarding the ingredients in, manufacture 21 Table of Contents of or results of using our nutritional products, our provision of other health, fitness and wellness-related services or content or our relationships with third parties.
Use of our premises, facilities, equipment, services, activities or products pose potential health or safety risks to members and guests. Claims may be asserted against us for loss, injury or death suffered by someone (including a minor child) using our premises, facilities, equipment, services, activities or products.
Use of our premises, facilities, equipment, mobile application, services, activities or products poses potential health or safety risks to members, guests and customers. Claims may be asserted against us for loss, injury or death suffered by someone (including a minor child) using our premises, facilities, equipment, mobile application, services, activities or products.
There are numerous factors that could lead to a decline in membership or in-center service levels or that could prevent us from increasing our memberships and optimizing our revenue per center membership, any of which could adversely impact our business, results of operations and financial condition.
There are numerous factors that could prevent us from increasing, or cause a decline in, our memberships and in-center business or that could prevent us from optimizing our revenue per center membership, any of which could adversely impact our business, results of operations and financial condition.
While our existing operations have been implemented in a manner we believe is in compliance with current prevailing laws, one or more taxing jurisdictions could seek to impose incremental or new taxes on us.
While our existing operations have been implemented in a manner we believe is in compliance with current prevailing laws, one or more taxing jurisdictions could seek to impose, and certain jurisdictions are actively considering, incremental or new taxes on us.
Severe weather, natural disasters, shifting climate patterns, hostilities, gun violence, social unrest or terrorist activities (or expectations about them) can adversely affect our members, consumer spending and confidence levels, supply availability and costs, as well as the local operations in impacted markets, all of which could have an adverse effect on our results of operations and financial condition.
Severe weather, natural disasters and shifting climate patterns, including fires, hurricanes and more extreme temperatures, hostilities, gun violence including active threats, social unrest or terrorist activities (or expectations about them) can adversely affect our members, consumer spending and confidence levels, supply availability and costs, as well as the local operations in impacted markets, all of which could have an adverse effect on our results of operations and financial condition.
As of December 31, 2023, we had total consolidated indebtedness outstanding of approximately $1,948 million, as detailed in Note 8—Debt, to our consolidated financial statements included in Part II, Item 8 of this Annual Report. For the year ended December 31, 2023, our interest expense, net of interest income was $131 million.
As of December 31, 2024, we had total consolidated indebtedness outstanding of approximately $1,556 million, as detailed in Note 8—Debt, to our consolidated financial statements included in Part II, Item 8 of this Annual Report. For the year ended December 31, 2024, our interest expense, net of interest income was $148 million.
As interest rates increase, our debt service obligations on the variable rate indebtedness increases even though the amount borrowed remains the same, and our net income and cash flows, including cash available for servicing our indebtedness, correspondingly decreases.
If interest rates increase, as they have in the past, our debt service obligations on the variable rate indebtedness increases even though the amount borrowed remains the same, and our net income and cash flows, including cash available for servicing our indebtedness, correspondingly decreases.
Our operations are subject to various United States and foreign national, federal, state, provincial and local laws and regulations, including but not limited to the following: • consumer protection laws related to the advertising, marketing and sale of our products and services; • statutes that regulate the sale and terms of our membership contracts; • health or safety regulations related to various center operations, such as our Dynamic Personal Training, MIORA, LifeCafe, LifeSpa, Life Time Swim and Life Time Kids; • regulation or licensing of ancillary health, fitness and wellness-related products and services; • licensing or other regulation of our service providers, such as cosmetologists, massage therapists and registered dietitians; • environmental and workplace safety laws and regulations; • laws and regulations on fair housing and accessibility; • laws and regulations governing privacy and security of information; and • wage and hour or other employment related laws and regulations.
Our operations and business practices are subject to various United States and foreign national, federal, state, provincial and local laws and regulations, including but not limited to the following: • consumer protection laws related to the advertising, marketing and sale of our products and services, including laws regulating recurring services; • statutes that regulate the sale and terms of our membership contracts; • health or safety regulations related to various center operations, whether operated directly or as a business associate to third parties, such as our Dynamic Personal Training, MIORA, LifeCafe, LifeSpa and medi-spa, Life Time Swim and Life Time Kids; • regulation or licensing of ancillary health, fitness and wellness-related products and services; • licensing or other regulation of our service providers, such as cosmetologists, massage therapists and registered dietitians; • environmental and workplace safety laws and regulations; • laws and regulations on fair housing and accessibility; • laws and regulations governing privacy and security of information; and • wage and hour or other employment related laws and regulations.
However, we may not maintain interest rate swaps with respect to any of our variable rate indebtedness, and any swaps we enter into may not fully or effectively mitigate our interest rate risk.
However, we may not maintain interest rate swaps or hedge agreements with respect to any of our variable rate indebtedness, and any such transaction we enter into may not fully or effectively mitigate our interest rate risk.
Risks Relating to Our Human Capital If we cannot retain our key employees, hire additional highly qualified employees and optimize our support structure, we may not be able to successfully manage our businesses, achieve our growth targets and pursue our strategic objectives. We may also continue to face increased labor costs that could reduce our profitability.
Risks Relating to Our Human Capital If we cannot retain our key employees and hire additional qualified employees, we may not be able to successfully lead and run our businesses, achieve our growth targets and pursue our strategic objectives. We may also continue to face increased labor costs that could reduce our profitability.
Restricted securities may be sold in the public market only if they are registered under the Securities Act or are sold pursuant to an exemption from registration such as Rule 144. The Voting Group has certain registration rights under the Stockholders Agreement.
Restricted securities may be sold in the public market only if they are registered under the Securities Act or are sold pursuant to an exemption from registration such as Rule 144. The Voting Group has certain registration rights under the amended and restated stockholders agreement with the Company (the “Stockholders Agreement”).
In order to remain competitive and to expand our business, we have acquired or invested in, and expect to continue to acquire or invest in, complementary businesses and centers. We may not be able to find suitable acquisition candidates or joint venture partners in the future.
To remain competitive and expand our business, we acquire and invest in complementary businesses and centers. We may not be able to find suitable acquisition candidates or joint venture partners in the future.
The macroeconomic environment in which we operate can adversely impact our business, results of operations and prospects, including with respect to inflation, interest rates, labor and supply chain issues, as well as a potential economic recession .
The macroeconomic environment in which we operate can adversely impact our business, results of operations and prospects, including with respect to inflation, interest rates, taxes or tariffs, labor and supply chain issues, and economic recession .
We have also experienced escalating construction costs more generally due to inflation. Higher gross invested capital and higher occupancy costs at these centers would require increases in the value of sale-leaseback transactions or higher operating profits per center to produce our targeted rate of return.
We have also experienced escalating construction costs more generally due to inflation. Higher gross invested capital and higher occupancy costs at these centers require increases in the value of sale-leaseback transactions or higher operating profits per center to produce our targeted rate of return. Our center operating margins may also be lower while the new centers build membership base.
If we are unable to cost-effectively identify and acquire or lease sites for new centers, our revenue growth rate, profits, cash flow and return on invested capital may be negatively impacted.
If we are unable to cost-effectively identify and acquire or lease sites for new centers, or if our analysis of the suitability of a site is incorrect, our revenue growth rate, profits, cash flow and return on invested capital may be negatively impacted.
Additionally, a breach of any of the restrictive covenants could result in an event of default under the applicable indebtedness. Such a default may allow the creditors to accelerate the related indebtedness and may result in the acceleration of any other indebtedness that is subject to an applicable cross-acceleration or cross-default provision.
Such a default may allow the creditors to accelerate the related indebtedness and may result in the acceleration of any other indebtedness that is subject to an applicable cross-acceleration or cross-default provision.
We may not be able to maintain insurance, including general liability and property insurance, on acceptable terms or maintain a level of insurance that would provide adequate coverage against potential third-party liability, health and safety and other claims.
We may not be able to maintain insurance, including general liability and property insurance, on acceptable terms or maintain a level of insurance that would provide adequate coverage, including against potential third-party liability, health and safety issues, property loss caused by severe or frequent extreme weather or otherwise and other claims.
The Voting Group includes investment funds affiliated with Leonard Green & Partners, L.P. and its affiliates (“LGP”) and TPG Inc. and its affiliates (“TPG”), which collectively held approximately 51.8% of the voting power of our common stock as of February 26, 2024.
The Voting Group includes investment funds affiliated with Leonard Green & Partners, L.P. and its affiliates (“LGP”) and TPG Inc. and its affiliates (“TPG”), which collectively held approximately 42.5% of our common stock as of December 31, 2024.
If we issue new debt securities, the debt holders would have rights senior to common stockholders to make claims on our assets, and the terms of any debt could further restrict our operations, including our ability to pay dividends on our common stock.
Additional financing may not be available on favorable terms, or at all. If we issue new debt securities, the debt holders would have rights senior to common stockholders to make claims on our assets, and the terms of any debt could further restrict our operations, including our ability to pay dividends on our common stock.
These broad market and industry fluctuations may materially adversely affect the market price of our common stock, regardless of our actual operating performance. In addition, price volatility may be greater if the public float and trading volume of our common stock remain low. In the past, following periods of market volatility, stockholders of companies have instituted securities class action litigation.
These broad market and industry fluctuations may materially adversely affect the market price of our common stock, regardless of our actual operating performance. In the past, following periods of market volatility, stockholders of companies have instituted securities class action litigation.
Additionally, while we have been a company focused on environmental, social and governance (“ESG”) matters from our formation, as we continue to develop and execute on our ESG initiatives, we could incur additional costs or risks that adversely impact our business.
Additionally, while we have been a company focused on environmental, social and governance (“ESG”) matters from our formation, as we continue to develop and execute on our ESG initiatives, we could incur additional costs or risks that adversely impact our business. Our business could be adversely affected by competition in the competitive health, fitness and wellness industry.
We use an integrated and proprietary member management system to manage the flow of member information within each of our centers and between centers and our corporate office.
We use an integrated and proprietary member management system to manage the flow of member information within each of our centers and between centers and our corporate office. We also continue to invest in our mobile application and systems.
Assuming no prepayments of the Term Loan Facility and that the Revolving Credit Facility is fully drawn (and to the extent that SOFR is in excess of the floor rate applicable to the Term Loan Facility), each one percentage point change in interest rates would result in an approximately $7.9 million change in annual interest expense on the indebtedness under the Credit Facilities.
Assuming no prepayments of the Term Loan Facility and that the Revolving Credit Facility is fully drawn, each one percentage point change in interest rates would result in an approximately $16.5 million change in annual interest expense on the indebtedness under the Credit Facilities.
Certain competitors may have advantages over us including greater name recognition and/or resources, and non-profit and government organizations may be able to obtain land and construct centers at a lower cost and collect membership fees without paying taxes, thereby allowing them to charge lower prices.
Certain competitors have advantages over us, including greater name recognition and/or resources, and non-profit and government organizations may be able to obtain land and construct centers at a lower cost and collect membership fees without paying taxes, thereby allowing them to charge lower prices. Additionally, consolidation in the health, fitness and wellness industry could result in increased competition among participants.
Our center profitability may decline as we open new centers. We are executing on a strategy to grow our business by expanding the number of our centers in an asset-light manner as detailed in “Item 1—Business—Our Growth Strategies and Member Experience Initiatives” of this Annual Report.
We are executing on a strategy to grow our business in an asset-light manner as detailed in “Item 1—Business—Our Growth Strategies and Member Experience Initiatives” of this Annual Report. One key focus area is expanding the number of our centers in an asset-light manner.
Any issuance of additional securities in connection with investments or acquisitions may result in additional dilution to our stockholders and the securities issued may have rights that are senior to our common stock.
Any issuance of additional securities in connection with investments or acquisitions may result in additional dilution to our stockholders and the securities issued may have rights that are senior to our common stock. We are controlled by certain of our stockholders, whose interests may not be aligned with yours.
Any operation of our centers that does not meet expectations, any adverse incidents, including any involving the potential safety of our members, guests or employees, physical or sexual abuse or other harm to a child at any of our children play areas, or any negative events or publicity regarding us, our competitors or the health, fitness and wellness industry, may damage our brand and our reputation, cause a loss of consumer confidence in Life Time and our industry and could have an adverse effect on our market share, business, results of operations and financial condition. 14 Table of Contents Use of social media platforms, and email, text messaging, phone and social media marketing, may adversely impact our reputation, business, results of operations, and financial condition or subject us to fines or other penalties.
Any operation of our centers or omni-channel ecosystem that does not meet expectations, any adverse incidents, including involving the safety of our members, guests or employees, physical or sexual abuse, or harm to a child at any of our children areas, or any negative events or publicity regarding us, our competitors or the health, fitness and wellness industry, may damage our brand and reputation, cause a loss of consumer confidence in Life Time and our industry and have an adverse effect on our market share, business, results of operations and financial condition.
If our investment in new centers is higher than 13 Table of Contents we had planned, if the capitalization rates on our sale-leaseback transactions are higher than historical levels or if our investment takes longer to execute due to any number of reasons, we may need to outperform our operational plan to achieve our targeted return.
Higher investment in new centers than we had originally planned, coupled with capitalization rates on our sale-leaseback transactions that are higher than historical levels or investment that takes longer to execute due to any number of reasons, requires us to outperform our operational plan to achieve our targeted return.
Competitors compete with us to attract members in our markets and digitally. Competitors may also attempt to copy all or portions of our business model or services, which could erode our market share and brand recognition or impair our business and results of operations.
We compete with numerous industry participants as detailed in “Item 1—Business—Competition” of this Annual Report. Competitors compete with us to attract members in our markets and digitally. Competitors also attempt to copy all or portions of our business model or services, which could erode our market share and brand recognition or impair our business and results of operations.
As of December 31, 2023, we had 165 leased properties, including 129 center leases (of which 11 are ground leases) and centers under construction. For the year ended December 31, 2023, our rent expense was approximately $275 million.
As of December 31, 2024, we had 166 leased properties, including 122 center leases and 11 ground leases and 12 centers under construction. For the year ended December 31, 2024, our rent expense was approximately $305 million.
We may not be able to effect any such alternative measures on commercially reasonable terms or at all and, even if successful, those alternative actions may not allow us to meet our operating needs or our scheduled debt service obligations. Our ability to raise capital in the future may be limited, which could impact our operations and ability to grow.
We may not be able to effect any such alternative measures on commercially reasonable terms or at all and, even if successful, those alternative actions may not allow us to meet our operating and growth needs or our scheduled debt service and lease obligations.
The severity and impact of center closures and center damage or destruction, and the cost to operate our centers, could increase as the climate and social environment changes, including with respect to our water usage and the cost to cool our facilities.
The severity and impact of center closures and center damage or destruction, and the cost to operate our centers, could increase as the climate, geopolitical and social environment changes, including with respect to our water usage in environments where water may be scarce or costly and the cost to cool our facilities in environments that experience higher temperatures.
Additionally, as we grow the number of our centers in an asset-light manner, we must engage and negotiate with numerous third parties, including landlords, developers, sellers, contractors and governmental authorities. Their timeline and ability to move forward may differ from ours.
Additionally, we must engage and negotiate with numerous third parties, including landlords, developers, sellers, contractors and governmental authorities. Their timeline and ability to move forward may differ from ours.
Risks Relating to Our Capital Structure and Lease Obligations Our level of indebtedness and lease obligations, and the restrictive covenants in the documents governing such indebtedness and lease obligations, could adversely affect our financial condition and prevent us from growing our business, taking certain actions or responding to changes in the economy or our industry.
Risks Relating to Our Capital Structure and Lease Obligations Our indebtedness and lease obligations, and the restrictive covenants in the documents governing such indebtedness and lease obligations, could adversely affect our financial condition and impact our ability to grow our business, take certain actions or respond to changes in the economy or our industry.
If we were involved in securities litigation, it could have a substantial cost and divert resources and the attention of executive management from our business regardless of the outcome of such litigation. We are controlled by certain of our stockholders, whose interests may not be aligned with yours.
If we were involved in securities litigation, it could have a substantial cost and divert resources and the attention of executive management from our business regardless of the outcome of such litigation.
Additionally, if our analysis of the suitability of a site is incorrect or if we do not adapt to or anticipate all of the challenges relating to the expansion of our operations, including the more diverse locations, sizes and types of buildings, remodels and timelines in new markets and spaces, we may not be able to expand profitably or recover our capital investment in developing and building or remodeling the new center on the timeline or at the rate we expected.
Additionally, if we do not adapt to or anticipate the challenges relating to expanding our operations, including more diverse locations, sizes and types of buildings, executing remodels and determining timelines in new markets and spaces, we may not be able to expand profitably at our targeted returns on invested capital and on the timeline or at the rate we expected.
Attempts by labor organizations to organize groups of our employees or changes in labor laws could disrupt our operations or increase our labor costs. Although none of our employees are currently covered under collective bargaining agreements, we may become subject to collective bargaining agreements, similar agreements or regulations enforced by governmental entities in the future.
Although none of our employees are currently covered under collective bargaining agreements, we may become subject to collective bargaining agreements, similar agreements or regulations enforced by governmental entities in the future. Changes in the federal regulatory scheme could make it easier for unions to organize groups of our employees.
Our annual debt service obligation for 2024 is expected to be approximately $146.4 million for interest and $73.8 million primarily for mortgage principal payments. Despite our level of indebtedness, we and our subsidiaries may still incur substantially more debt, including secured debt.
Our annual debt service obligation for 2025 is expected to be approximately $103 million for interest and $23 million primarily for term loan and mortgage principal payments. We and our subsidiaries may still incur substantially more debt, including secured debt.
Further, there is no assurance that competitors or other businesses will not infringe on our trademarks or other intellectual property rights or that we will not have disputes with third parties to enforce our intellectual property rights, protect our trademarks, determine the validity and scope of the proprietary rights of others or defend ourselves from claims of infringement, invalidity, misappropriation or unenforceability.
Furthermore, if any third party were to successfully seek cancellation of our trademark registrations, we may be prevented from using such marks throughout the United States or internationally. 14 Table of Contents Further, there is no assurance that competitors or other businesses will not infringe on our intellectual property rights or that we will not have disputes with third parties to enforce our intellectual property rights, protect our trademarks, determine the validity and scope of the proprietary rights of others or defend ourselves from claims of infringement, invalidity, misappropriation or unenforceability.
As of December 31, 2023, we had U.S. federal and state net operating loss carryforwards of approximat ely $329.1 million ($69.1 million tax effected) and $196.9 million ($11.0 million tax effected), respectively, and disallowed interest expense carryforwards under Section 163(j) of the Internal Revenue Code of 1986, as amended (the “Code”), of approximately $229.6 million ($57.8 million tax effected).
As of December 31, 2024, we had U.S. federal and state net operating loss carryforwards of approximat ely $170.7 million ($35.9 million tax effected) and $155.5 million ($8.8 million tax effected), respectively, and disallowed interest expense carryforwards under Section 163(j) of the Internal Revenue Code of 1986, as amended (the “Code”), of approximately $264.2 million ($66.3 million tax effected).

… 58 more changes not shown on this page.

Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

2 edited+0 added−0 removed21 unchanged
Biggest changeOur ERM Committee is comprised of Company leaders and meets at least quarterly to consider, among other matters, the effectiveness of the risk monitoring and mitigating and the expected frequency, severity and trend of our credible risks including cybersecurity.
Biggest changeOur ERM Committee is comprised of Company leaders who meet to consider, among other matters, the effectiveness of the risk monitoring and mitigating and the expected frequency, severity and trend of our credible risks including cybersecurity.
While we experience cybersecurity threats during the normal course of business, no risks from cybersecurity threats, including as a result of any previous cybersecurity incidents, have materially affected us and we do not believe are reasonably likely to materially affect us, including with respect to our business strategy, results of operations and financial condition. 27 Table of Contents Governance Our Board of Directors oversees risk management of our business and accomplishes this oversight primarily through the Audit Committee.
While we experience cybersecurity threats during the normal course of business, no risks from cybersecurity threats, including as a result of any previous cybersecurity incidents, have materially affected us and we do not believe are reasonably likely to materially affect us, including with respect to our business strategy, results of operations and financial condition. 26 Table of Contents Governance Our Board of Directors oversees risk management of our business and accomplishes this oversight primarily through the Audit Committee.

Item 2. Properties

Properties — owned and leased real estate

8 edited+0 added−0 removed1 unchanged
Biggest changeOur corporate headquarters, located in Chanhassen, Minnesota next to our Chanhassen center, is comprised of two 105,000 square foot, free-standing, three-story buildings that we own. 28 Table of Contents The table below contains information about our centers as of December 31, 2023: Number of Owned Centers Number of Leased Centers Total Number of Centers Aggregate Square Feet United States: Alabama 0 1 1 104,336 Arizona 2 5 7 681,917 California 3 4 7 622,477 Colorado 3 3 6 642,716 Connecticut 0 1 1 53,198 Florida 1 3 4 361,958 Georgia 3 4 7 695,937 Illinois 6 7 13 1,450,388 Indiana 2 0 2 127,512 Iowa 0 1 1 110,378 Kansas 1 1 2 222,712 Maryland 1 3 4 351,878 Massachusetts 0 6 6 688,938 Michigan 2 5 7 686,407 Minnesota 13 9 22 1,964,328 Missouri 0 2 2 238,287 Nebraska 0 1 1 116,409 Nevada 1 1 2 258,062 New Jersey 1 5 6 677,195 New York 2 9 11 734,242 North Carolina 1 3 4 378,804 Ohio 1 5 6 515,011 Oklahoma 0 2 2 232,206 Oregon 1 0 1 133,526 Pennsylvania 0 3 3 324,509 Tennessee 0 2 2 236,129 Texas 10 19 29 2,941,783 Utah 0 1 1 109,800 Virginia 1 5 6 601,008 Washington 0 1 1 34,385 Wisconsin 0 1 1 126,423 Canada: Ontario 3 0 3 397,853 Total Centers 58 113 171 16,820,712 In a few of our centers, we sublease space to third parties.
Biggest changeOur corporate headquarters, located in Chanhassen, Minnesota next to our Chanhassen center, is comprised of two 105,000 square foot, free-standing, three-story buildings that we own. 27 Table of Contents The table below contains information about our centers as of December 31, 2024: Number of Owned Centers Number of Leased Centers Total Number of Centers Aggregate Indoor Square Feet United States: Alabama 0 1 1 104,336 Arizona 1 6 7 681,917 California 3 4 7 622,477 Colorado 3 4 7 748,654 Connecticut 0 1 1 53,198 Florida 1 4 5 399,958 Georgia 3 5 8 760,887 Illinois 6 7 13 1,450,388 Indiana 2 0 2 127,512 Iowa 0 1 1 110,378 Kansas 1 1 2 222,712 Maryland 1 3 4 397,256 Massachusetts 0 6 6 688,938 Michigan 2 5 7 686,407 Minnesota 13 10 23 2,108,989 Missouri 0 2 2 238,287 Nebraska 0 1 1 116,409 Nevada 1 1 2 258,062 New Jersey 2 5 7 804,190 New York 2 10 12 808,693 North Carolina 1 3 4 378,804 Ohio 1 5 6 515,011 Oklahoma 0 2 2 232,206 Oregon 1 0 1 133,526 Pennsylvania 0 3 3 324,509 Tennessee 0 2 2 236,129 Texas 9 22 31 3,153,409 Utah 0 1 1 109,800 Virginia 1 5 6 601,008 Washington 0 1 1 34,385 Wisconsin 0 1 1 126,423 Canada: Ontario 3 0 3 397,853 Total Centers 57 122 179 17,632,711 In a few of our centers, we sublease space to third parties.
Depending on the size and location, they offer expansive fitness floors, spacious locker rooms, group fitness studios, indoor and outdoor pools and bistros, indoor and outdoor tennis courts, pickleball courts, basketball courts, LifeSpa personal care services, LifeCafe healthy restaurants and child care and Kids Academy learning spaces.
Depending on the size and location, they offer expansive fitness floors with top-of-the-line equipment, spacious locker rooms, group fitness studios and spaces, indoor and outdoor pools and bistros, indoor and outdoor tennis courts, indoor and outdoor pickleball courts, basketball courts, LifeSpa personal care services, LifeCafe healthy restaurants and child care and Kids Academy learning spaces.
Excluding renewal options, the terms of our leased centers, including ground leases, expire at various dates from October 2024 through December 2054. Including renewal options, only nine of our 113 leases expire in the next 15 years. The majority of our leases have renewal options and a few grant us the right to purchase the property.
Excluding renewal options, the terms of our leased centers, including ground leases, expire at various dates from August 2025 through December 2054. Including renewal options, only nine of our 122 leases expire in the next 15 years. The majority of our leases have renewal options and a few grant us the right to purchase the property.
Item 2. PROPERTIES We operate distinctive, resort-like athletic country club destinations in both affluent suburban and urban locations centered around major metropolitan areas in the United States and Canada. As of December 31, 2023, we operated 171 centers in 31 states and one Canadian province, 58 of which were owned (including ground leases) and 113 of which were leased.
Item 2. PROPERTIES We operate distinctive, resort-like athletic country club destinations in both affluent suburban and urban locations centered around major metropolitan areas in the United States and Canada. As of December 31, 2024, we operated 179 centers in 31 states and one Canadian province, 57 of which were owned (including ground leases) and 122 of which were leased.
In addition to the centers listed in the table above, as of December 31, 2023, we had seven new centers under construction, with $241 million of growth capital expenditures already invested into these new centers that have yet to open. We also operate six facilities that we classify as satellite locations.
In addition to the centers listed in the table above, as of December 31, 2024, we had 12 new centers under construction, with significant growth capital expenditures already invested into these new centers that have yet to open. We also operate seven facilities that we classify as satellite locations.
Of our 58 owned properties, 24 are pledged as collateral under our Credit Facilities as well as our secured notes, and 13 are pledged as collateral under our mortgage notes.
Of our 57 owned properties, 24 are pledged as collateral under our Credit Facilities as well as our secured notes, and eight are pledged as collateral under our mortgage notes.
These include tennis-only facilities that we own in Oakdale, Minnesota; Centennial, Colorado; and Plano, Texas; along with leased small centers in Austin, Texas; Battery Park, New York; and Hackensack, New Jersey. 29 Table of Contents Other Property Data : December 31, 2023 2022 2021 (Number of centers) Center age: Open 1 to 12 months 11 10 6 Open 13 to 37 months 17 12 13 Open 37+ months 143 139 132 Total centers 171 161 151 Center ownership: Own 33 32 33 Own/ground lease 11 11 11 Own/mortgaged outside of Credit Facilities 13 13 18 Joint venture 1 1 1 Leased 113 104 88 Total centers 171 161 151
These include tennis-only facilities that we own in Oakdale, Minnesota; Centennial, Colorado; and Plano, Texas; a pickleball-only facility that we own in Chanhassen, Minnesota; along with leased small centers in Austin, Texas; Battery Park, New York; and Hackensack, New Jersey. 28 Table of Contents Other Property Data : December 31, 2024 2023 2022 (Number of centers) Center age: Open 1 to 12 months 8 11 10 Open 13 to 37 months 21 17 12 Open 37+ months 150 143 139 Total centers 179 171 161 Center ownership: Own 37 33 32 Own/ground lease 11 11 11 Own/mortgaged outside of Credit Facilities 8 13 13 Joint venture 1 1 1 Leased 122 113 104 Total centers 179 171 161
During 2023, we opened 11 new centers. Our luxurio us athletic country clubs total approximately 17 million square feet in the aggregate and measure approximately 98,000 square feet on average.
During 2024, we opened eight new centers. Our luxurio us athletic country clubs total over 17 million of indoor square feet and approximately seven million of outdoor square feet in the aggregate and measure approximately 99,000 square feet on average.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

4 edited+1 added−1 removed2 unchanged
Biggest changeOther Legal Proceedings —We are also engaged in other proceedings incidental to the normal course of business. Due to their nature, such legal proceedings involve inherent uncertainties, including but not limited to, court rulings, negotiations between affected parties and governmental intervention.
Biggest changeDue to their nature, such legal proceedings involve inherent uncertainties, including but not limited to, court rulings, negotiations between affected parties and governmental intervention. We will establish reserves for matters that are probable and estimable in amounts we believe are adequate to cover reasonable adverse judgments.
Zurich American Insurance Company — On August 19, 2020, Life Time, Inc., several of its subsidiaries and a joint venture entity, Bloomingdale Life Time Fitness LLC (collectively, the “Life Time Parties”), filed a complaint against Zurich American Insurance Company (“Zurich”) in the Fourth Judicial District of the State of Minnesota, County of Hennepin (Case No. 27-CV-20-10599) (the “Action”), seeking declaratory relief and damages under a property/business interruption insurance policy with respect to Zurich’s failure to provide certain coverage to the Life Time Parties related to the closure or suspension by governmental authorities of their business activities due to the spread or threat of the spread of COVID-19.
Zurich American Insurance Company — On August 19, 2020, Life Time, Inc., several of its subsidiaries and a joint venture entity, Bloomingdale Life Time Fitness LLC (collectively, the “Life Time Parties”), filed a complaint against Zurich American Insurance Company (“Zurich”) in the Fourth Judicial District of the State of Minnesota, County of Hennepin (Case No. 27-CV-20-10599) (the “Action”), seeking declaratory relief and damages with respect to Zurich’s failure under a property/business interruption insurance policy to provide certain coverage to the Life Time Parties related to the closure or suspension by governmental authorities of their business activities due to the spread or threat of the spread of COVID-19.
Such matters are subject to many uncertainties, and the outcomes of individual matters are not predictable with assurance. Item 4. MINE SAFETY DISCLOSURES Not applicable. PART II
Such matters are subject to many uncertainties, and the outcomes of individual matters are not predictable with assurance.
On March 15, 2021, certain of the Life Time Parties filed a First Amended Complaint in the Action adding claims against Zurich under a Builders’ Risk policy related to the suspension of multiple construction projects. The Action is subject to many uncertainties, and the outcome of the matter is not predictable with any assurance.
On March 15, 2021, certain of the Life Time Parties filed a First Amended Complaint in the Action adding claims against Zurich under a Builders’ Risk policy related to the suspension of multiple construction projects. The Court granted Zurich’s dispositive motions on July 25, 2024, dismissing the Life Time Parties’ claims with prejudice, and entered judgment on July 26, 2024.
Removed
We will establish reserves for matters that are probable and estimable in amounts we believe are adequate to cover reasonable adverse judgments.
Added
The Life Time Parties have appealed from that judgment to the Minnesota Court of Appeals. The Action is subject to many uncertainties, and the outcome of the matter is not predictable with any assurance. Other Legal Proceedings —We are also engaged in other proceedings incidental to the normal course of business.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

7 edited+0 added−2 removed4 unchanged
Biggest changeDividends We do not currently expect to pay any cash dividends on our common stock for the foreseeable future. Instead, we anticipate that all of our earnings in the foreseeable future will be used to support our operations, to finance the growth and development of our business and to pay down debt.
Biggest changeInstead, we anticipate that all of our earnings in the foreseeable future will be used to support our operations, to finance the growth and development of our business and to pay down debt.
Stock Performance Graph The following graph compares the change in total cumulative stockholder return on our common stock for the period from the close of trading on October 7, 2021, which was the first day our common stock began to trade publicly on the NYSE, to the end of fiscal 2023 relative to the performance of the S&P 500 Index, the S&P 400 Index and the Russell 2000 (Total Return) Index.
Stock Performance Graph The following graph compares the change in total cumulative stockholder return on our common stock for the period from the close of trading on October 7, 2021, which was the first day our common stock began to trade publicly on the NYSE, to the end of fiscal 2024 relative to the performance of the S&P 500 Index, the S&P 400 Index and the Russell 2000 (Total Return) Index.
The performance graph shall not be deemed “soliciting material” or considered to be “filed” with the SEC for purposes of Section 18 of the Exchange Act or otherwise subject to the liabilities under that Section, and shall not be deemed to be incorporated by reference into any of the Company’s filings under the Securities Act or the Exchange Act. 31 Table of Contents Item 6. [RESERVED]
The performance graph shall not be deemed “soliciting material” or considered to be “filed” with the SEC for purposes of Section 18 of the Exchange Act or otherwise subject to the liabilities under that Section, and shall not be deemed to be incorporated by reference into any of the Company’s filings under the Securities Act or the Exchange Act. 30 Table of Contents Item 6. [RESERVED]
Purchases of Equity Securities During the fourth quarter of the fiscal year ended December 31, 2023, we did not purchase any of our equity securities that are registered under Section 12(b) of the Exchange Act.
Purchases of Equity Securities During the fourth quarter of the fiscal year ended December 31, 2024, we did not purchase any of our equity securities that are registered under Section 12(b) of the Exchange Act.
The covenants in the indentures governing our secured and unsecured notes and the credit agreement governing our senior secured credit facility significantly restrict the ability of our subsidiaries to pay dividends or otherwise transfer assets to us.
The covenants in the credit agreement governing our senior secured credit facility and the indenture governing our secured notes restrict the ability of our subsidiaries to pay dividends or otherwise transfer assets to us.
The number of holders of record is based upon the actual number of holders registered at such date and does not include holders of shares in “street name” or persons, partnerships, associates, corporations or other entities identified in security position listing maintained by depositories.
The number of holders of record is based upon the actual number of holders registered at such date and does not include holders of shares in “street name” or persons, partnerships, associates, corporations or other entities identified in security position listing maintained by depositories. Dividends We do not currently expect to pay any cash dividends on our common stock.
Item 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Market Information Our common stock is listed on the NYSE under the symbol “LTH” and began trading on October 7, 2021. Prior to that date, there was no public market for our common stock.
Item 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Market Information Our common stock is listed on the NYSE under the symbol “LTH” and began trading on October 7, 2021. Holders A s of February 24, 2025, there wer e 21 hold ers o f record of our common stock.
Removed
Life Time Group Holdings, Inc. consummated its initial public offering (“IPO”) of 39.0 million shares of its common stock for total gross proceeds of $702.0 million on October 12, 2021.
Removed
Additionally, on November 1, 2021, Life Time Group Holdings, Inc. consummated the sale of nearly 1.6 million additional shares of its common stock pursuant to the partial exercise by the underwriters of their over-allotment option, resulting in total gross proceeds of approximately $28.4 million. 30 Table of Contents Holders A s of February 26, 2024, there were 26 holders o f record of our common stock.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

98 edited+19 added−41 removed48 unchanged
Biggest changeYear Ended December 31, 2023 2022 2021 ($ in thousands, except for Average Center revenue per center membership data) Membership Data Center memberships 763,216 725,206 649,373 Digital On-hold memberships 51,720 51,470 74,767 Total memberships 814,936 776,676 724,140 Revenue Data Membership dues and enrollment fees 72.3% 70.7% 70.5% In-center revenue 27.7% 29.3% 29.5% Total Center revenue 100.0% 100.0% 100.0% Membership dues and enrollment fees $ 1,557,289 $ 1,251,693 $ 907,111 In-center revenue 597,040 517,827 379,523 Total Center revenue $ 2,154,329 $ 1,769,520 $ 1,286,634 Average Center revenue per center membership (1) $ 2,810 $ 2,528 $ 2,098 Comparable center revenue (2) 15.3% 33.0% 35.3% Center Data Net new center openings (3) 10 10 2 Total centers (end of period) (3) 171 161 151 Total center square footage (end of period) (4) 16,800,000 16,000,000 15,000,000 GAAP and Non-GAAP Financial Measures Net income (loss) $ 76,063 $ (1,793) $ (579,369) Net income (loss) margin (5) 3.4 % (0.1) % (44.0) % Adjusted net income (loss) (6) $ 129,704 $ (41,569) $ (305,370) Adjusted net income (loss) margin (6) 5.9 % (2.3) % (23.2) % Adjusted EBITDA (7) $ 536,831 $ 281,724 $ 80,299 Adjusted EBITDA margin (7) 24.2 % 15.5 % 6.1 % Center operations expense $ 1,184,370 $ 1,068,208 $ 844,098 Pre-opening expenses (8) 7,280 12,399 7,021 Rent 275,122 245,226 209,823 Non-cash rent expense (open properties) (9) 33,626 27,737 9,959 Non-cash rent expense (properties under development) (9) 3,918 10,797 12,643 (1) We define Average Center revenue per center membership as Center revenue less Digital On-hold revenue, divided by the average number of Center memberships for the period, where the average number of Center memberships for the period is an average derived from dividing the sum of the total Center memberships outstanding at the beginning of the period and at the end of each month during the period by one plus the number of months in each period.
Biggest changeYear Ended December 31, 2024 2023 2022 ($ in thousands, except for Average Center revenue per center membership data) Membership Data Center memberships 812,062 763,216 725,206 Digital On-hold memberships 54,023 51,720 51,470 Total memberships 866,085 814,936 776,676 Revenue Data Membership dues and enrollment fees 72.8% 72.3% 70.7% In-center revenue 27.2% 27.7% 29.3% Total Center revenue 100.0% 100.0% 100.0% Membership dues and enrollment fees $ 1,853,963 $ 1,557,289 $ 1,251,693 In-center revenue 692,688 597,040 517,827 Total Center revenue $ 2,546,651 $ 2,154,329 $ 1,769,520 Average Center revenue per center membership (1) $ 3,160 $ 2,810 $ 2,528 Comparable center revenue (2) 12.2% 15.3% 33.0% Center Data Net new center openings (3) 8 10 10 Total centers (end of period) (3) 179 171 161 Total center square footage (end of period) (4) 17,600,000 16,800,000 16,000,000 GAAP and Non-GAAP Financial Measures Net income (loss) $ 156,240 $ 76,063 $ (1,793) Net income (loss) margin (5) 6.0 % 3.4 % (0.1) % Adjusted net income (loss) (6) $ 200,451 $ 129,704 $ (41,569) Adjusted net income (loss) margin (6) 7.6 % 5.9 % (2.3) % Adjusted EBITDA (7) $ 676,780 $ 536,831 $ 281,724 Adjusted EBITDA margin (7) 25.8 % 24.2 % 15.5 % Center operations expense $ 1,392,421 $ 1,184,370 $ 1,068,208 Pre-opening expenses (8) $ 6,003 $ 7,280 $ 12,399 Rent $ 304,945 $ 275,122 $ 245,226 Non-cash rent expense (open properties) (9) $ 31,034 $ 33,626 $ 27,737 Non-cash rent expense (properties under development) (9) $ 2,705 $ 3,918 $ 10,797 Net cash provided by operating activities $ 575,117 $ 463,004 $ 200,969 Free cash flow (10) $ 273,580 $ (108,989) $ (38,359) (1) We define Average Center revenue per center membership as Center revenue less Digital On-hold revenue, divided by the average number of Center memberships for the period, where the average number of Center memberships for the period is an average derived from dividing the sum of the total Center memberships outstanding at the beginning of the period and at the end of each month during the period by one plus the number of months in each period. 36 Table of Contents (2) We measure the results of our centers based on how long each center has been open as of the most recent measurement period.
Depending on the size and location of a center, we offer expansive fitness floors with top-of-the-line equipment, spacious locker rooms, group fitness studios, indoor and outdoor pools and bistros, indoor and outdoor tennis courts, pickleball courts, basketball courts, LifeSpa, LifeCafe and our childcare and Kids Academy learning spaces.
Depending on the size and location of a center, we offer expansive fitness floors with top-of-the-line equipment, spacious locker rooms, group fitness studios and spaces, indoor and outdoor pools and bistros, indoor and outdoor tennis courts, indoor and outdoor pickleball courts, basketball courts, LifeSpa, LifeCafe and our childcare and Kids Academy learning spaces.
Additionally, we benefit from our in-house architecture, design and construction expertise that allows us to create operationally efficient centers and control the cost and pace of capital expenditures, including in determining when to begin or delay construction on a new athletic country club.
Additionally, we benefit from our in-house architecture, design and construction expertise that allows us to create operationally efficient centers and control the pace of capital expenditures, including in determining when to begin or delay construction on a new athletic country club.
Liquidity and Capital Resources Liquidity Our principal liquidity needs include the acquisition and development of new centers, lease requirements and debt service, investments in our business and technology and expenditures necessary to maintain and update or enhance our centers and associated fitness equipment and member experiences.
Liquidity and Capital Resources Liquidity Our principal liquidity needs include the acquisition and development of new centers, lease requirements and debt service, investments in our business and technology and expenditures necessary to maintain and update or enhance our centers and associated equipment and member experiences.
Investing Activities Investing activities consist primarily of the acquisition and development of new centers, investments in our business and technology and expenditures necessary to maintain and update or enhance our centers and associated fitness equipment.
Investing Activities Investing activities consist primarily of the acquisition and development of new centers, expenditures necessary to maintain and update or enhance our centers and associated equipment and investments in our business and technology.
These are not measurements of our financial performance under GAAP and should not be considered as alternatives to any other performance measures derived in accordance with GAAP. 35 Table of Contents Set forth below are certain GAAP and non-GAAP measurements and key performance indicators for the years ended December 31, 2023, 2022 and 2021.
These are not measurements of our financial performance under GAAP and should not be considered as alternatives to any other performance measures derived in accordance with GAAP. 35 Table of Contents Set forth below are certain GAAP and non-GAAP measurements and key performance indicators for the years ended December 31, 2024, 2023 and 2022.
The increase in total capital expenditures for the year ended December 31, 2023 as compared to the year ended December 31, 2022 was primarily driven by new center construction activity and investment into our existing centers to modernize them as we executed our strategic initiatives.
The increase in total capital expenditures for the year ended December 31, 2023 as compared to the year ended December 31, 2022 was primarily driven by new center construction activity and investments into our existing centers to modernize them as we executed our strategic initiatives.
The impact of these increases is dependent upon the timing of our centers under development and the center openings, the timing of sale-leaseback transactions and terms of the leases for the new centers or sale-leaseback transactions. 39 Table of Contents Macroeconomic Trends We have been monitoring the macroeconomic environment and its impact on our business, including with respect to inflation, interest rates, labor and supply chain issues, as well as a potential economic recession .
The impact of these increases is dependent upon the timing of our centers under development and the center openings, the timing of sale-leaseback transactions and terms of the leases for the new centers or sale-leaseback transactions. 39 Table of Contents Macroeconomic Trends We have been monitoring the macroeconomic environment and its impact on our business, including with respect to inflation, interest rates and labor, as well as a potential economic recession .
We believe we have adequate amounts of cash to meet our requirements and plans for cash in the short-term and long-term and expect to satisfy our short-term and long-term obligations through a combination of cash on hand, funds generated from operations, sale-leaseback transactions, the borrowing capacity available under our Revolving Credit Facility and additional debt and equity financing as needed.
We believe we will generate adequate amounts of cash to meet our requirements and plans for cash in the short-term and long-term and expect to satisfy our short-term and long-term obligations through a combination of cash on hand, funds generated from operations, sale-leaseback transactions, the borrowing capacity available under our Revolving Credit Facility and additional debt and equity financing as needed.
Deferred Compensation Obligations Refer to Note 14, Executive Nonqualified Plan, to our consolidated financial statements included in Part II, Item 8 of this Annual Report for further detail of our deferred compensation plans. 45 Table of Contents Contracted Services Contracted services include agreements with third-party service providers for software licenses and support, and marketing services .
Deferred Compensation Obligations Refer to Note 14, Executive Nonqualified Plan, to our consolidated financial statements included in Part II, Item 8 of this Annual Report for further detail of our deferred compensation plans. Contracted Services Contracted services include agreements with third-party service providers for software licenses and support, and marketing services .
(c) We adjust for the impact of losses and gains on the sale-leaseback of our properties as they do not reflect costs associated with our ongoing operations.
(b) We adjust for the impact of gains and losses on the sale-leaseback of our properties as they do not reflect costs associated with our ongoing operations.
Furthermore, we compensate for the limitations described above by relying primarily on our GAAP results and using Adjusted net income (loss) and Adjusted EBITDA only for supplemental purposes. See our consolidated financial statements included elsewhere in this Annual Report for our GAAP results.
Furthermore, we compensate for the limitations described above by relying primarily on our GAAP results and using Adjusted net income (loss), Adjusted EBITDA and free cash flow only for supplemental purposes. See our consolidated financial statements included elsewhere in this Annual Report for our GAAP results.
Approximately 66% of our centers are now leased, including approximately 88% of our new centers opened since 2015, versus a predominantly owned real estate strategy prior to 2015. Rent expense, which includes both cash and non-cash rent expense, will continue to increase as we lease more centers and will therefore impact the comparability of our results of operations.
Approximately 68% of our centers are now leased, including approximately 87% of our new centers opened since 2015, versus a predominantly owned real estate strategy prior to 2015. Rent expense, which includes both cash and non-cash rent expense, will continue to increase as we lease more centers and will therefore impact the comparability of our results of operations.
Non-GAAP Financial Measures This discussion and analysis includes certain financial measures that are not presented in accordance with GAAP, including Adjusted net income (loss), Adjusted net income (loss) per common share and Adjusted EBITDA and ratios and calculations related thereto.
Non-GAAP Financial Measures This discussion and analysis includes certain financial measures that are not presented in accordance with GAAP, including Adjusted net income (loss), Adjusted net income (loss) per common share, Adjusted EBITDA, free cash flow and ratios and calculations related thereto.
Depreciation and amortization expense Depreciation and amortization expense consists of depreciation and amortization for our depreciable long-lived assets, including assets related to our owned centers. Other operating expense (income) Other operating expense (income) consists primarily of expenses (income) related to our other revenue, which is generated from our businesses outside of our centers.
Depreciation and amortization expense Depreciation and amortization expense consists of depreciation and amortization for our depreciable long-lived assets, including assets related to our owned centers. 33 Table of Contents Other operating expense (income) Other operating expense (income) consists primarily of expenses (income) related to our Other revenue, which is generated from our businesses outside of our centers.
For more information regarding the sale-leaseback transactions that were consummated during 2023, 2022 and 2021, see Note 9, Leases, to our consolidated financial statements in Part II, Item 8 of this Annual Report.
For more information regarding the sale-leaseback transactions that were consummated during 2024, as well as the sale-leaseback transactions that were consummated in 2023 and 2022, see Note 9, Leases, to our consolidated financial statements in Part II, Item 8 of this Annual Report.
Adjusted net income (loss) and Adjusted EBITDA have limitations as analytical tools, and you should not consider these measures in isolation or as a substitute for analysis of our operating results as reported under GAAP.
Adjusted net income (loss), Adjusted EBITDA and free cash flow have limitations as analytical tools, and you should not consider these measures in isolation or as a substitute for analysis of our operating results or cash flows as reported under GAAP.
Adjusted EBITDA We define Adjusted EBITDA as net income (loss) before interest expense, net, provision for (benefit from) income taxes and depreciation and amortization, excluding the impact of share-based compensation expense, (gain) loss on sale-leaseback transactions, capital transaction costs, legal settlements, asset impairment, severance and other items that are not indicative of our ongoing operations, including incremental costs related to COVID-19.
Adjusted EBITDA We define Adjusted EBITDA as net income (loss) before interest expense, net, provision for (benefit from) income taxes and depreciation and amortization, excluding the impact of share-based compensation expense as well as (gain) loss on sale-leaseback transactions, capital transaction costs, legal settlements, asset impairment, severance and other items that are not indicative of our ongoing operations.
We define Adjusted EBITDA as net income (loss) before interest expense, net, provision for (benefit from) income taxes and depreciation and amortization, excluding the impact of share-based compensation expense, (gain) loss on sale-leaseback transactions, capital transaction costs, legal settlements, asset impairment, severance and other items that are not indicative of our ongoing operations, including incremental costs related to COVID-19.
We define Adjusted EBITDA as net income (loss) before interest expense, net, provision for (benefit from) income taxes and depreciation and amortization, excluding the impact of share-based compensation expense as well as (gain) loss on sale-leaseback transactions, capital transaction costs, legal settlements, asset impairment, severance and other items that are not indicative of our ongoing operations.
Adjusted net income (loss) We define Adjusted net income (loss) as net income (loss) excluding the impact of share-based compensation expense, (gain) loss on sale-leaseback transactions, capital transaction costs, legal settlements, asset impairment, severance and other items that are not indicative of our ongoing operations, including incremental costs related to COVID-19, less the tax effect of these adjustments.
Adjusted net income (loss) We define Adjusted net income (loss) as net income (loss) excluding the impact of share-based compensation expense as well as (gain) loss on sale-leaseback transactions, capital transaction costs, legal settlements, asset impairment, severance and other items that are not indicative of our ongoing operations, less the tax effect of these adjustments.
We define Adjusted net income (loss) as net income (loss) excluding the impact of share-based compensation expense, (gain) loss on sale-leaseback transactions, capital transaction costs, legal settlements, asset impairment, severance and other items that are not indicative of our ongoing operations, including incremental costs related to COVID-19, less the tax effect of these adjustments.
We define Adjusted net income (loss) as net income (loss) excluding the impact of share-based compensation expense as well as (gain) loss on sale-leaseback transactions, capital transaction costs, legal settlements, asset impairment, severance and other items that are not indicative of our ongoing operations, less the tax effect of these adjustments.
Our total Center revenue increased to $2,154 million for the year ended December 31, 2023 as compared to $1,770 million for the year ended December 31, 2022 and $1,287 million for the year ended December 31, 2021.
Our total Center revenue increased to $2,547 million for the year ended December 31, 2024 as compared to $2,154 million for the year ended December 31, 2023 and $1,770 million for the year ended December 31, 2022.
These figures are approximations. (5) Net income (loss) margin is calculated as net income (loss) divided by total revenue. (6) We present Adjusted net income (loss) as a supplemental measure of our performance.
(5) Net income (loss) margin is calculated as net income (loss) divided by total revenue. (6) We present Adjusted net income (loss) as a supplemental measure of our performance.
Refer to Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations, in our Form 10-K for the year ended December 31, 2022 filed with the SEC on March 8, 2023, for discussion of the results of operations for the year ended December 31, 2022 compared to the year ended December 31, 2021.
Refer to Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations, in our Form 10-K for the year ended December 31, 2023 filed with the SEC on February 28, 2024, for discussion of the results of operations for the year ended December 31, 2023 compared to the year ended December 31, 2022.
See “—Overview—Macroeconomy” for additional information. Share-Based Compensation During the year ended December 31, 2023, we recognized share-based compensation expense associated with stock options, restricted stock units, our ESPP and liability classified awards related to our short-term incentive plan in 2023, totaling approximately $50.1 million.
See “—Overview—Macroeconomy” for additional information. Share-Based Compensation During the year ended December 31, 2024, we recognized share-based compensation expense associated with stock options, restricted stock units, performance stock units, our ESPP and liability-classified awards related to our 2024 short-term incentive plan, totaling approximately $51.0 million.
We deliver high-quality experiences through our omni-channel physical and digital ecosystem that includes more than 170 centers—distinctive, resort-like athletic country club destinations—across 31 states in the United States and one province in Canada. Our brand loyalty and track record of providing differentiated experiences to our members has fueled our strong, long-term financial performance.
We deliver high-quality experiences through our omni-channel physical and digital ecosystem that includes more than 175 centers—distinctive, resort-like athletic country club destinations—across 31 states in the United States and one province in Canada. Our continuous commitment to members has resulted in strong brand loyalty and fueled our strong, long-term financial performance.
Our premium service offerings are delivered by over 37,000 Life Time team members, including over 9,800 certified fitness professionals, ranging from personal trainers to studio performers. Our members are highly engaged and draw inspiration from the experiences and community we have created.
Our premium service offerings are delivered by over 42,000 Life Time team members, including over 10,800 certified fitness professionals, ranging from personal trainers to studio performers. 31 Table of Contents Our members are highly engaged and draw inspiration from the experiences and community we have created.
Our average revenue per center membership increased to $2,810 for the year ended December 31, 2023 as compared to $2,528 for the year ended December 31, 2022 and $2,098 for the year ended December 31, 2021.
Our average revenue per center membership increased to $3,160 for the year ended December 31, 2024 as compared to $2,810 for the year ended December 31, 2023 and $2,528 for the year ended December 31, 2022.
(4) Total center square footage (end of period) reflects the aggregate fitness square footage, which we use as a metric for evaluating the efficiencies of a center as of the end of the period. The square footage figures exclude areas used for tennis courts, outdoor swimming pools, outdoor play areas and stand-alone Work, Sport and Swim locations.
(4) Total center square footage (end of period) reflects the aggregate square footage excluding areas used for tennis courts, outdoor swimming pools, outdoor play areas and stand-alone Work, Sport and Swim locations. We use this metric for evaluating the efficiencies of a center as of the end of the period. These figures are approximations.
Overview Business and Strategy Life Time, the “Healthy Way of Life Company,” is a leading lifestyle brand offering premium health, fitness and wellness experiences to a community of nearly 1.5 million individual members, who together comprise nearly 815,000 memberships, as of December 31, 2023.
Overview Business and Strategy Life Time, the “Healthy Way of Life Company,” is a premier lifestyle and leisure brand offering premium health, fitness and wellness experiences to a community of more than 1.5 million individual members, who together comprise more than 866,000 memberships, as of December 31, 2024.
Net income (loss) . As a result of the factors described above, net income was $76.1 million for the year ended December 31, 2023 as compared to a net loss of $1.8 million for the year ended December 31, 2022 .
Net income . As a result of the factors described above, net income was $156.2 million for the year ended December 31, 2024 as compared to $76.1 million for the year ended December 31, 2023 .
Center operations expenses Center operations expenses consist of direct expenses related to the operation of our centers, such as salaries, commissions, payroll taxes, benefits, real estate taxes and other occupancy costs (excluding rent), utilities, repairs and maintenance, supplies and pre-opening expenses.
Other revenue also includes revenue generated from our Life Time Work and Life Time Living locations. Center operations expenses Center operations expenses consist of direct expenses related to the operation of our centers, such as salaries, commissions, payroll taxes, benefits, real estate taxes and other occupancy costs (excluding rent), utilities, repairs and maintenance, supplies and pre-opening expenses.
These are not measurements of our financial performance under GAAP and should not be considered as alternatives to net income (loss) or any other performance measures derived in accordance with GAAP and may not be comparable to other similarly titled measures of other businesses.
These are not measurements of our financial performance under GAAP and should not be considered as alternatives to net income (loss) or any other performance measures derived in accordance with GAAP or as an alternative to net cash provided by operating activities as a measure of our liquidity and may not be comparable to other similarly titled measures of other businesses.
The increase in provision for income taxes for the year ended December 31, 2023 as compared to the year ended December 31, 2022 was primarily driven by the increase in earnings before income taxes, partially offset by the decrease in valuation allowance associated with certain of our deferred tax assets.
Provision for income taxes . The $33.8 million increase in provision for income taxes for the year ended December 31, 2024 as compared to the year ended December 31, 2023 was primarily driven by an increase in earnings before taxes, offset by a reduction in valuation allowance associated with certain of our deferred tax assets.
Additionally, our enhanced digital platform is delivering a true omni-channel experience for our members, including live streaming fitness classes, remote goal-based personal training, nutrition and weight loss support and curated award-winning health, fitness and wellness content.
Additionally, our digital platform is delivering a true omni-channel experience through our integrated digital app that is now available at no cost, including live streaming fitness classes, remote goal-based personal training, nutrition and weight loss support and curated award-winning health, fitness and wellness content.
We expect to pay approximately $146.4 million of interest in the next 12 months and approximately $218.9 million of interest beyond 12 months.
We expect to pay approximately $102.8 million of interest in the next 12 months and approximately $588.4 million of interest beyond 12 months.
Of the $123.3 million in total proceeds we received from sale-leaseback transactions during the year ended December 31, 2023, $121.8 million and $1.5 million is reported within investing activities and financing activities, respectively, on our consolidated statement of cash flows.
Of the $211.7 million, $123.3 million and $373.2 million in total proceeds we received from sale-leaseback transactions during the years ended December 31, 2024, 2023 and 2022, respectively, $207.4 million, $121.8 million and $351.8 million were reported within investing activities and $4.3 million, $1.5 million and $21.4 million were reported within financing activities on our consolidated statement of cash flows during the years ended December 31, 2024, 2023 and 2022, respectively.
Our media revenue includes our magazine, Experience Life ® , our athletic events revenue includes endurance activities such as running and cycling, and our related services revenue includes revenue from our race registration and timing businesses. Other revenue also includes revenue generated from our Life Time Work and Life Time Living locations.
Other revenue Other revenue includes revenue generated from our businesses outside our centers, which are primarily media, athletic events and related services. Our media revenue includes our magazine, Experience Life ® , our athletic events revenue includes endurance activities such as running and cycling, and our related services revenue includes revenue from our race registration and timing businesses.
We use Adjusted net income (loss) and Adjusted EBITDA to supplement GAAP measures of performance in evaluating the effectiveness of our business strategies and to establish annual budgets and forecasts. We also use Adjusted EBITDA or variations thereof to establish short-term incentive compensation for management.
We use Adjusted net income (loss) and Adjusted EBITDA to supplement GAAP measures of performance in evaluating the effectiveness of our business strategies and to establish annual budgets and forecasts.
We expect to pay approximatel y $12.5 million for contracted services in the next 12 months and approximately $4.0 million beyond 12 months.
We expect to pay approximately $11.1 million for contracted services in the next 12 months and approximately $4.3 million beyond 12 months.
In addition, our members are able to purchase a wide variety of equipment, wearables, apparel, beauty products and nutritional supplements via our digital health store.
In addition, our LifeShop digital health store offers a wide variety of equipment, wearables, apparel, beauty products and nutritional supplements.
With respect to the $384.8 million increase in Center revenue for the year ended December 31, 2023 as compared to the year ended December 31, 2022: • 79.4% was from membership dues and enrollment fees, which increased $305.6 million for the year ended December 31, 2023 as compared to the year ended December 31, 2022.
With respect to the $392.3 million increase in Center revenue for the year ended December 31, 2024 as compared to the year ended December 31, 2023: • 75.6% was from membership dues and enrollment fees, which increased $296.7 million for the year ended December 31, 2024 as compared to the year ended December 31, 2023.
The following table sets forth our consolidated statements of cash flows data (amounts in thousands): Year Ended December 31, 2023 2022 2021 Net cash provided by (used in) operating activities $ 463,004 $ 200,969 $ (20,029) Net cash used in investing activities (574,160) (243,542) (269,919) Net cash provided by financing activities 115,552 36,798 288,399 Effect of exchange rate on cash and cash equivalents 61 (353) (9) Increase (decrease) in cash and cash equivalents $ 4,457 $ (6,128) $ (1,558) Operating Activities The $262.0 million increase in net cash provided by operating activities for the year December 31, 2023 as compared to the year ended December 31, 2022 was primarily the result of higher profitability.
The following table sets forth our consolidated statements of cash flows data (amounts in thousands): Year Ended December 31, 2024 2023 2022 Net cash provided by operating activities $ 575,117 $ 463,004 $ 200,969 Net cash used in investing activities (292,744) (574,160) (243,542) Net cash (used in) provided by financing activities (284,385) 115,552 36,798 Effect of exchange rate on cash and cash equivalents and restricted cash and cash equivalents (76) 61 (353) (Decrease) increase in cash and cash equivalents and restricted cash and cash equivalents $ (2,088) $ 4,457 $ (6,128) 44 Table of Contents Operating Activities The $112.1 million increase in net cash provided by operating activities for the year December 31, 2024 as compared to the year ended December 31, 2023 was primarily the result of increased business performance and profitability.
The following table provides a reconciliation of net income (loss) and income (loss) per common share, the most directly comparable GAAP measures, to Adjusted net income (loss) and Adjusted net income (loss) per common share: Year Ended December 31, ($ in thousands) 2023 2022 2021 Net income (loss) $ 76,063 $ (1,793) $ (579,369) Share-based compensation expense (a) 50,144 37,291 334,339 COVID-19 related expenses (b) 470 3,056 (1,589) Loss (gain) on sale-leaseback transactions (c) 13,624 (97,632) 2,380 Capital transaction costs (d) — 255 2,904 Asset impairments (e) 6,620 — — Other (f) (4,011) (1,048) 2,338 Taxes (g) (13,206) 18,302 (66,373) Adjusted net income (loss) $ 129,704 $ (41,569) $ (305,370) Income (loss) per common share: Basic $ 0.39 $ (0.01) $ (3.73) Diluted $ 0.37 $ (0.01) $ (3.73) Adjusted income (loss) per common share: Basic $ 0.66 $ (0.21) $ (1.96) Diluted $ 0.64 $ (0.21) $ (1.96) Weighted-average common shares outstanding: Basic 195,671 193,570 155,470 Diluted 204,005 193,570 155,470 (a) Share-based compensation expense recognized during the year ended December 31, 2023 is associated with stock options, restricted stock units, our employee stock purchase plan (“ESPP”) that launched on December 1, 2022 and liability classified awards related to our short-term incentive plan in 2023.
The following table provides a reconciliation of net income (loss) and income (loss) per common share, the most directly comparable GAAP measures, to Adjusted net income (loss) and Adjusted net income (loss) per common share: Year Ended December 31, ($ in thousands) 2024 2023 2022 Net income (loss) $ 156,240 $ 76,063 $ (1,793) Share-based compensation expense (a) 51,034 50,144 37,291 (Gain) loss on sale-leaseback transactions (b) (2,618) 13,624 (97,632) Capital transaction costs (c) — — 255 Legal settlements (d) 1,250 — — Asset impairments (e) — 6,620 — Other (f) 9,409 (3,541) 2,008 Taxes (g) (14,864) (13,206) 18,302 Adjusted net income (loss) $ 200,451 $ 129,704 $ (41,569) Income (loss) per common share: Basic $ 0.77 $ 0.39 $ (0.01) Diluted $ 0.74 $ 0.37 $ (0.01) Adjusted income (loss) per common share: Basic $ 0.99 $ 0.66 $ (0.21) Diluted $ 0.95 $ 0.64 $ (0.21) Weighted-average common shares outstanding: Basic 201,640 195,671 193,570 Diluted 211,164 204,005 193,570 (a) Share-based compensation expense recognized during the year ended December 31, 2024 was associated with stock options, restricted stock units, performance stock units, our employee stock purchase plan (“ESPP”) that launched on December 1, 2022, and liability-classified awards related to our 2024 short-term incentive plan.
(f) Includes benefits and costs associated with transactions that are unusual and non-recurring in nature. (g) Represents the estimated tax effect of the total adjustments made to arrive at Adjusted net income (loss) using the effective income tax rates for the respective periods. (7) We present Adjusted EBITDA as a supplemental measure of our performance.
(g) Represents the estimated tax effect of the total adjustments made to arrive at Adjusted net income (loss) using the effective income tax rates for the respective periods. (7) We present Adjusted EBITDA as a supplemental measure of our performance.
We are continuing to invest in our digital capabilities, including our integrated digital app and artificial intelligence, in order to strengthen our relationships with our members and more comprehensively address their health, fitness and wellness needs so that they can remain engaged and connected with Life Time at any time or place.
We are continuing to invest in our digital capabilities, including artificial intelligence, to strengthen our relationships with our members, reach more people looking for a Healthy Way of Life and more comprehensively address their health, fitness and wellness needs so that they can engage and connect with Life Time at any time or place.
The $26.4 million decrease in net cash used in investing activities for the year December 31, 2022 as compared to the year ended December 31, 2021 was primarily driven by a $277.9 million increase in the amount of proceeds that we received from sale-leaseback transactions during the year ended December 31, 2022 as compared to the year ended December 31, 2021, partially offset by a $262.3 million increase in capital expenditures for the year ended December 31, 2022 as compared to the year ended December 31, 2021.
The $330.6 million increase in net cash used in investing activities for the year December 31, 2023 as compared to the year ended December 31, 2022 was primarily driven by a $230.0 million decrease in the amount of proceeds that we received from sale-leaseback transactions during the year ended December 31, 2023 as compared to the year ended December 31, 2022, and a $106.8 million increase in capital expenditures for the year ended December 31, 2023 as compared to the year ended December 31, 2022.
The $394.0 million increase in Total revenue for the year ended December 31, 2023 as compared to the year ended December 31, 2022 was due to continued strong growth in membership dues and in-center revenue, including continuing to realize the benefits of pricing actions already completed, membership growth in our new and ramping centers, the continued re-ramp of our centers and higher member utilization of our in-center offerings.
The $404.4 million increase in Total revenue for the year ended December 31, 2024 as compared to the year ended December 31, 2023 was due to continued strong growth in membership dues and in-center revenue, including higher average dues as a result of pricing actions already completed and higher rack rates at newer centers, membership growth in our new and ramping centers and higher member utilization of our in-center offerings.
Depreciation and amortization expenses increased $15.5 million for the year ended December 31, 2023 as compared to the year ended December 31, 2022 primarily due to new center openings. Other operating expense (income) .
Depreciation and amortization expenses . The $30.3 million increase in Depreciation and amortization expenses for the year ended December 31, 2024 as compared to the year ended December 31, 2023 was primarily due to new center openings. Other operating expense .
We have primarily satisfied our historical liquidity needs with cash flow from operations, drawing on the Revolving Credit Facility, construction reimbursements and through sale-leaseback transactions. Our top priorities remain improving our balance sheet, reducing leverage and having positive cash flow from operations after all capital expenditures.
We have primarily satisfied our historical liquidity needs with cash flow from operations, drawing on the Revolving Credit Facility, construction reimbursements and through sale-leaseback transactions. We made significant progress in 2024 towards our priorities of improving our balance sheet, reducing leverage and generating positive free cash flow.
Equity in earnings (loss) of affiliates Equity in earnings (loss) of affiliates includes investments in unconsolidated subsidiaries, which we account for using the equity method of accounting. 34 Table of Contents Provision for (benefit from) income taxes The provision for (benefit from) income taxes consists of an estimate for U.S. federal, state and foreign income taxes based on enacted rates, as adjusted for allowable credits, deductions, uncertain tax positions, changes in deferred tax assets and liabilities and changes in the tax law.
Provision for (benefit from) income taxes The provision for (benefit from) income taxes consists of an estimate for U.S. federal, state and foreign income taxes based on enacted rates, as adjusted for allowable credits, deductions, uncertain tax positions, changes in deferred tax assets and liabilities and changes in the tax law.
While determining fair value requires a variety of input assumptions and judgment, we believe our estimates of fair value are reasonable. 41 Table of Contents Results of Operations Year Ended December 31, 2023 Compared to Year Ended December 31, 2022 The following table sets forth our consolidated statements of operations data (amounts in thousands) and data as a percentage of total revenue for the periods indicated: Year Ended December 31, As a Percentage of Total Revenue 2023 2022 2023 2022 Revenue: Center revenue $ 2,154,329 $ 1,769,520 97.2 % 97.1 % Other revenue 62,264 53,037 2.8 % 2.9 % Total revenue 2,216,593 1,822,557 100.0 % 100.0 % Operating expenses: Center operations 1,184,370 1,068,208 53.4 % 58.6 % Rent 275,122 245,226 12.4 % 13.4 % General, administrative and marketing 201,131 213,976 9.1 % 11.7 % Depreciation and amortization 244,397 228,883 11.0 % 12.6 % Other operating expense (income) 86,363 (44,355) 3.9 % (2.4) % Total operating expenses 1,991,383 1,711,938 89.8 % 93.9 % Income from operations 225,210 110,619 10.2 % 6.1 % Other (expense) income: Interest expense, net of interest income (130,797) (113,537) (5.9) % (6.2) % Equity in earnings of affiliates 377 300 — % — % Total other expense (130,420) (113,237) (5.9) % (6.2) % Income (loss) before income taxes 94,790 (2,618) 4.3 % (0.1) % Provision for (benefit from) income taxes 18,727 (825) 0.9 % — % Net income (loss) $ 76,063 $ (1,793) 3.4 % (0.1) % Total revenue .
While determining fair value requires a variety of input assumptions and judgment, we believe our estimates of fair value are reasonable. 41 Table of Contents Results of Operations Year Ended December 31, 2024 Compared to Year Ended December 31, 2023 The following table sets forth our consolidated statements of operations data (amounts in thousands) and data as a percentage of total revenue for the periods indicated: Year Ended December 31, As a Percentage of Total Revenue 2024 2023 2024 2023 Revenue: Center revenue $ 2,546,651 $ 2,154,329 97.2 % 97.2 % Other revenue 74,344 62,264 2.8 % 2.8 % Total revenue 2,620,995 2,216,593 100.0 % 100.0 % Operating expenses: Center operations 1,392,421 1,184,370 53.1 % 53.4 % Rent 304,945 275,122 11.6 % 12.4 % General, administrative and marketing 221,047 201,131 8.4 % 9.1 % Depreciation and amortization 274,681 244,397 10.5 % 11.0 % Other operating expense 70,418 86,363 2.7 % 3.9 % Total operating expenses 2,263,512 1,991,383 86.3 % 89.8 % Income from operations 357,483 225,210 13.7 % 10.2 % Other (expense) income: Interest expense, net of interest income (148,095) (130,797) (5.7) % (5.9) % Equity in (loss) earnings of affiliates (620) 377 — % — % Total other expense (148,715) (130,420) (5.7) % (5.9) % Income before income taxes 208,768 94,790 8.0 % 4.3 % Provision for income taxes 52,528 18,727 2.0 % 0.9 % Net income $ 156,240 $ 76,063 6.0 % 3.4 % Total revenue .
Components of Our Results of Operations Total revenue Total revenue consists of center revenue and other revenue (each defined below). Center revenue Center revenue consists of membership dues, enrollment fees and revenue generated within a center, which we refer to as in-center revenue.
Center revenue Center revenue consists of membership dues, enrollment fees and revenue generated within a center, which we refer to as in-center revenue.
In-center revenue includes fees for Dynamic Personal Training, aquatics and kids programming and other member services, as well as sales of products at our cafés, and sales of products and services offered at our spas and tennis and pickleball programs. 33 Table of Contents Other revenue Other revenue includes revenue generated from our businesses outside our centers, which are primarily media, athletic events and related services.
In-center revenue includes fees for Dynamic Personal Training, aquatics and kids programming and other member services, as well as sales of products at our cafés, and sales of products and services offered at our spas and tennis and pickleball programs.
The following table provides a reconciliation of net income (loss), the most directly comparable GAAP measure, to Adjusted EBITDA: Year Ended December 31, ($ in thousands) 2023 2022 2021 Net income (loss) $ 76,063 $ (1,793) $ (579,369) Interest expense, net of interest income 130,797 113,537 224,516 Provision for (benefit from) income taxes 18,727 (825) (140,344) Depreciation and amortization 244,397 228,883 235,124 Share-based compensation expense (a) 50,144 37,291 334,339 COVID-19 related expenses (credits) (b) 470 3,056 (1,589) Loss (gain) on sale-leaseback transactions (c) 13,624 (97,632) 2,380 Capital transaction costs (d) — 255 2,904 Asset impairments (e) 6,620 — — Other (f) (4,011) (1,048) 2,338 Adjusted EBITDA $ 536,831 $ 281,724 $ 80,299 (a) – (f) See the corresponding footnotes to the table in footnote 6 immediately above.
The following table provides a reconciliation of net income (loss), the most directly comparable GAAP measure, to Adjusted EBITDA: Year Ended December 31, ($ in thousands) 2024 2023 2022 Net income (loss) $ 156,240 $ 76,063 $ (1,793) Interest expense, net of interest income (f) 148,095 130,797 113,537 Provision for (benefit from) income taxes 52,528 18,727 (825) Depreciation and amortization 274,681 244,397 228,883 Share-based compensation expense (a) 51,034 50,144 37,291 (Gain) loss on sale-leaseback transactions (b) (2,618) 13,624 (97,632) Capital transaction costs (c) — — 255 Legal settlements (d) 1,250 — — Asset impairments (e) — 6,620 — Other (g) (4,430) (3,541) 2,008 Adjusted EBITDA $ 676,780 $ 536,831 $ 281,724 (a) – (e) See the corresponding footnotes to the table in footnote 6 immediately above.
A long-lived asset group may include property and equipment, finite-lived intangible assets and/or operating lease right-of-use assets. We consider a history of consistent and significant operating losses, or the inability to recover net book value over the remaining useful life, to be our primary indicators of potential impairment.
We consider a history of consistent and significant operating losses, or the inability to recover net book value over the remaining useful life, to be our primary indicators of potential impairment.
As of December 31, 2023, there were $90.0 million of outstanding borrowings under our Revolving Credit Facility and there were $32.9 million of outstanding letters of credit, resulting in total availability under our Revolving Credit Facility of $352.1 million.
As of December 31, 2024, there were $10.0 million of outstanding borrowings under our Revolving Credit Facility and there were $31.2 million of outstanding letters of credit, resulting in total availability under our Revolving Credit Facility of $608.8 million.
The effective tax rate applied to our pre-tax income for the year ended December 31, 2023 was slightly lower than our statutory rate of 21% and reflects a decrease in the valuation allowance associated with certain of our deferred tax assets, partially offset by the tax deficiencies associated with the share-based payment awards and increase in state income tax provisions.
The effective tax rate applied to our pre-tax income for the year ended December 31, 2024 was higher than our statutory federal rate of 21% and reflects an increase due to deductibility limitations associated with executive compensation and state income tax provisions, partially offset by a reduction in valuation allowance associated with certain of our deferred tax assets.
Sale-Leaseback Arrangements We assess each of our sale-leaseback arrangements to determine whether a sale has occurred under Accounting Standards Codification (“ASC”) Topic 606: Revenue from Contracts with Customers (“ASC 606”), as well as assess whether the classification of the lease and/or the payment terms associated with the renewal options preclude sale accounting under ASC 842, Leases (“ASC 842”).
We recognized impairment charges of $11.0 million, $14.5 million and $2.1 million associated with long-lived assets during the years ended December 31, 2024, 2023 and 2022, respectively. 40 Table of Contents Sale-Leaseback Arrangements We assess each of our sale-leaseback arrangements to determine whether a sale has occurred under Accounting Standards Codification (“ASC”) Topic 606: Revenue from Contracts with Customers (“ASC 606”), as well as assess whether the classification of the lease and/or the payment terms associated with the renewal options preclude sale accounting under ASC 842, Leases (“ASC 842”).
As of December 31, 2023, we had 27 centers open for less than three years. We are also expanding the number of our centers using an asset-light model that targets increasingly affluent markets with higher income members, higher average annual revenue per center membership and higher returns on invested capital.
We are expanding the number of our centers using an asset-light model that targets increasingly affluent markets with higher income members, higher average revenue per center membership and higher returns on invested capital. As we open these new centers in more affluent markets, our average revenue per center membership should naturally increase.
In 2018, we launched Life Time Work, an asset-light branded co-working model that offers premium work spaces in close proximity to our centers and integrates ergonomic furnishings and promotes a healthy working environment. Life Time Work members also have the ability to receive access to all of our resort-like athletic country club destinations across the United States and Canada.
In 2018, we launched Life Time Work, an asset-light branded co-working model that offers premium work spaces in close proximity to our athletic country clubs and integrates ergonomic furnishings and promotes a healthy working environment.
Our Life Time Living offering is generating interest from new property developers and presenting opportunities for new center development that were not previously available to us.
As of December 31, 2024, we had 15 Life Time Work and four Life Time Living locations open and operating. Our Life Time Living offering is generating interest from new property developers and presenting opportunities for new center development and deal terms that were not previously available to us.
During the year ended December 31, 2022, we recognized share-based compensation expense associated with stock options, restricted stock, restricted stock units and our ESPP, totaling approximately $37.3 million.
During the year ended December 31, 2023, we recognized share-based compensation expense associated with stock options, restricted stock units, our ESPP and liability-classified awards related to our 2023 short-term incentive plan, totaling approximately $50.1 million.
The $130.8 million change was primarily attributable to the recognition of a $13.6 million loss on sale-leaseback transactions during the year ended December 31, 2023 as compared to the recognition of a $97.5 million gain on sale-leaseback transactions during the year ended December 31, 2022, the recognition of $9.1 million of property development cost write-offs during the year ended December 31, 2023 as compared to the recognition of $2.1 million of property development cost write-offs during the year ended December 31, 2022, a $5.6 million loss associated with the sale of an outparcel of land during the year ended December 31, 2023, of which $5.3 million was recognized as an impairment charge, and increased costs in support of increased business activity for the year ended December 31, 2023 as compared to the year ended December 31, 2022 .
The $15.9 million decrease in Other operating expense for the year ended December 31, 2024 as compared to the year ended December 31, 2023 was primarily due to the recognition of a $5.0 million gain on sales of outparcels of land, a $2.6 million gain on sale-leaseback transactions and the recognition of $11.0 millio n of impairment charges associated with property development cost write-offs during the year ended December 31, 2024 as compared to the recognition of a $5.6 million loss on the sale of an outparcel of land, of which $5.3 million was recognized as an impairment charge, a $13.6 million loss on sale-leaseback transactions, the recognition of $9.1 million of impairment charges associated with property development cost write-offs during the year ended December 31, 2023, partially offset by a $4.9 million gain on the sale of two triathlon events during the year ended December 31, 2023 and increased costs to support other revenue growth during the year ended December 31, 2024 .
Our luxurious athletic country clubs total approximately 17 million square feet in the aggregate. Our centers are located in affluent suburban and urban locations and include ground-up suburban builds, mall or retail locations, vertical residential and urban locations.
Our luxurious athletic country clubs total over 17 million of indoor square feet and approximately seven million of outdoor square feet in the aggregate. Our centers are located in affluent suburban and urban locations.
For details on the loss and gain on sale-leaseback transactions that we recognized during the years ended December 31, 2023 , 2022 and 2021, see “Sale-Leaseback Transactions” within Note 9, Leases, to our consolidated financial statements in Part II, Item 8 of this Annual Report.
For details on the gain and loss on sale-leaseback transactions that we recognized during the years ended December 31, 2024 , 2023 and 2022, see “Sale-Leaseback Transactions” within Note 9, Leases, to our consolidated financial statements in Part II, Item 8 of this Annual Report. 37 Table of Contents (c) Represents costs related to capital transactions, including debt and equity offerings that are non-recurring in nature, but excluding direct costs related to the IPO which were netted against the proceeds of the IPO.
Total cash and cash equivalents, exclusive of restricted cash, at December 31, 2023 was $11.2 million, resulting in total cash and availability under our Revolving Credit Facility of $363.3 million.
Total cash and cash equivalents at December 31, 2024 was $10.9 million, resulting in total cash and availability under our Revolving Credit Facility of $619.7 million.
Macroeconomy We continue to monitor the macroeconomic environment and its impact on our business, including with respect to inflation, interest rates, labor and supply chain issues, as well as a potential economic recession .
Our omni-channel platform continues to grow as we expand our footprint with new centers and nearby work and living spaces, as well as strengthen our digital capabilities. Macroeconomy We continue to monitor the macroeconomic environment and its impact on our business, including with respect to inflation, interest rates and labor, as well as a potential economic recession .
We include a center, for comparable center revenue purposes, beginning on the first day of the 13th full calendar month of the center’s operation, in order to assess the center’s growth rate after one year of operation. 36 Table of Contents (3) Net new center openings is calculated as the number of centers that opened for the first time to members during the period, less any centers that closed during the period.
We include a center, for comparable center revenue purposes, beginning on the first day of the 13th full calendar month of the center’s operation, in order to assess the center’s growth rate after one year of operation.
Capital Expenditures Our primary capital expenditure requirements include growth capital expenditures, which include new center land and construction, growth initiatives and major remodels of existing centers, as well as maintenance capital expenditures to keep our centers operational and meeting our standards.
Capital Expenditures Our primary capital expenditure requirements include growth capital expenditures, which include new center land and construction, initial major remodels of acquired centers, major remodels of existing centers that expand existing square footage, asset acquisitions including the purchase of previously leased centers and other growth initiatives, maintenance capital expenditures to keep our centers operational and meeting our standards, and capital expenditures for the modernization of existing centers and technology.
We believe it will continue to grow as our new centers ramp to expected performance, we open new centers in desirable locations across the country and we continue to execute on our strategic initiatives discussed below. Our new centers on average have taken three to four years to ramp to expected performance.
We believe it will continue to grow as we open new centers in desirable locations across the country, new members join at higher membership dues rates, our new centers ramp to expected performance, we benefit from capital expenditures already invested in our centers under construction and we continue to execute on our strategic initiatives discussed below.
Financing Activities The $78.8 million increase in net cash provided by financing activities for the year ended December 31, 2023 as compared to the year ended December 31, 2022 was primarily driven by net incremental proceeds we received from borrowings under our Term Loan Facility, Revolving Credit Facility and our construction loan and proceeds from stock option exercises during the year ended December 31, 2023.
Financing Activities The $399.9 million increase in net cash used in financing activities for the year ended December 31, 2024 as compared to the year ended December 31, 2023 was primarily driven by the purchase of U.S. government obligations in connection with the satisfaction and discharge of debt, the payoff of our former Term Loan Facility and Construction Loan, lower net borrowings under our Revolving Credit Facility and payments of our mortgage notes, partially offset by the proceeds from our new Term Loan Facility, 6.000% Senior Secured Notes and equity offering during the year ended December 31, 2024. 45 Table of Contents The $78.8 million increase in net cash provided by financing activities for the year ended December 31, 2023 as compared to the year ended December 31, 2022 was primarily driven by net incremental proceeds we received from borrowings under our former Term Loan Facility, Revolving Credit Facility and our construction loan and proceeds from stock option exercises during the year ended December 31, 2023.
Non-cash rent expense for our open properties represents non-cash expense associated with properties that were operating at the end of each period presented. Non-cash rent expense for our properties under development represents non-cash expense associated with properties that are still under development at the end of each period presented.
(9) Reflects the non-cash portion of our annual GAAP operating lease expense that is greater or less than the cash operating lease payments. Non-cash rent expense for our open properties represents non-cash expense associated with properties that were operating at the end of each period presented.
(8) Represents non-capital expenditures associated with opening new centers that are incurred prior to the commencement of a new center opening.
(8) Represents non-capital expenditures associated with opening new centers that are incurred prior to the commencement of a new center opening. The number of centers under construction or development, the types of centers and our costs associated with any particular center opening can vary significantly from period to period.
For more information on our share-based compensation arrangements, see Note 10, Stockholders’ Equity, to our consolidated financial statements included in Part II, Item 8 of this Annual Report.
During the year ended December 31, 2022, we recognized share-based compensation expense associated with stock options, restricted stock, restricted stock units and our ESPP totaling approximately $37.3 million. For more information on our share-based compensation arrangements, see Note 10, Stockholders’ Equity, to our consolidated financial statements included in Part II, Item 8 of this Annual Report.
During 2021, we refinanced a significant portion of our outstanding debt and we completed sale-leaseback transactions associated with two 43 Table of Contents properties. For information regarding the debt refinancing transactions, see Note 8, Debt, to our consolidated financial statements in Part II, Item 8 of this Annual Report.
For information regarding the debt refinancing transactions, see Note 8, Debt, to our consolidated financial statements in Part II, Item 8 of this Annual Report.
Adjusted net income (loss) and Adjusted EBITDA should be considered in addition to, and not as a substitute for or superior to, financial measures calculated in accordance with GAAP.
Additionally, we believe free cash flow is frequently used by analysts, investors and other interested parties in the evaluation of companies in our industry. Adjusted net income (loss), Adjusted EBITDA and free cash flow should be considered in addition to, and not as a substitute for or superior to, financial measures calculated in accordance with GAAP.
The $221.0 million increase in net cash provided by operating activities for the year December 31, 2022 as compared to the year ended December 31, 2021 was primarily the result of higher profitability, before the impact of non-cash share-based compensation expense, due to the recovery from the impact of COVID-19 on our business.
The $262.0 million increase in net cash provided by operating activities for the year December 31, 2023 as compared to the year ended December 31, 2022 was primarily the result of increased business performance and profitability.
We finance the purchase of our property, centers and equipment through operating cash flows, proceeds from sale-leaseback transactions, construction reimbursements and draws on our Revolving Credit Facility. 44 Table of Contents The $330.6 million increase in net cash used in investing activities for the year December 31, 2023 as compared to the year ended December 31, 2022 was primarily driven by a $230.0 million decrease in the amount of proceeds that we received from sale-leaseback transactions during the year ended December 31, 2023 as compared to the year ended December 31, 2022 and a $102.7 million increase in capital expenditures for the year ended December 31, 2023 as compared to the year ended December 31, 2022.
The $281.4 million decrease in net cash used in investing activities for the year December 31, 2024 as compared to the year ended December 31, 2023 was primarily driven by a $173.5 million decrease in capital expenditures, a $85.6 million increase in proceeds that we received from sale-leaseback transactions, and a $11.4 million increase in proceeds from the sale of land during the year ended December 31, 2024 as compared to the year ended December 31, 2023.
This increase was recognized across all of our primary in-center businesses and reflects the higher utilization of our offerings by our members during the year ended December 31, 2023 as compared to the year ended December 31, 2022.
This increase was recognized across all of our primary in-center businesses and reflects the higher utilization of our offerings by our members, particularly Dynamic Personal Training, during the year ended December 31, 2024 as compared to the year ended December 31, 2023. 42 Table of Contents The $12.1 million increase in Other revenue for the year ended December 31, 2024 as compared to the year ended December 31, 2023 was primarily driven by the improved performance of our Life Time Work locations, media and events business and Life Time Living locations.

… 78 more changes not shown on this page.

Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

5 edited+1 added−1 removed1 unchanged
Biggest changeAt December 31, 2023, there were $90.0 million of outstanding borrowings under the Revolving Credit Facility and $32.9 million of outstanding letters of credit, resulting in total revolver availability of $352.1 million , which was available at intervals ranging from 30 to 180 days at interest rates of SOFR plus an applicable credit adjustment spread ranging from 0.11448% to 0.42826% depending on the duration of borrowings plus 3.50% or base rate plus 2.50%.
Biggest changeAt December 31, 2024, there were $10.0 million of outstanding borrowings under the Revolving Credit Facility and $31.2 million of outstanding letters of credit, resulting in total revolver availability of $608.8 million, which was available following the amendment to our senior 46 Table of Contents secured credit agreement in September 2024 at intervals ranging from 30 to 180 days at interest rates of SOFR plus 2.50% or base rate plus 1.50% (subject to certain first lien leverage and ratings-based step-downs).
Foreign currency exchange risk We operate primarily in the United States with three centers operating in Canada. Given our limited operations outside of the United States, fluctuations due to changes in foreign currency exchange rates would not have a material impact on our business. 46 Table of Contents
Foreign currency exchange risk We operate primarily in the United States with three centers operating in Canada. Given our limited operations outside of the United States, fluctuations due to changes in foreign currency exchange rates would not have a material impact on our business. 47 Table of Contents
Assuming no prepayments of the Term Loan Facility and that the Revolving Credit Facility is fully drawn (and that SOFR is in excess of the floor rate applicable to the Term Loan Facility), each one percentage point change in interest rates would result in an approximately $7.9 million change in annual interest expense on the indebtedness under the Credit Facilities.
Assuming no prepayments of the Term Loan Facility and that the Revolving Credit Facility is fully drawn, each one percentage point change in interest rates would result in an approximately $16.5 million change in annual interest expense on the indebtedness under the Credit Facilities.
Interest rate risk Our cash consists primarily of an interest-bearing account at a large United States bank with limited interest rate risk. At December 31, 2023, we held no investments in marketable securities.
Interest rate risk Our cash consists primarily of an interest-bearing account at a large United States bank with limited interest rate risk. At December 31, 2024, we held no investments in marketable securities. We incur interest at variable rates under both our Term Loan Facility and Revolving Credit Facility.
In December 2023, we amended our Term Loan Facility to reduce the interest rate by 0.50%. Our Term Loan Facility variable rates are SOFR plus the applicable credit adjustment spread plus 4.00% or base rate plus 3.00% and had an outstanding balance of $310.0 million at December 31, 2023.
Following the amendment to our senior secured credit agreement in November 2024, our Term Loan Facility bears interest at a rate per annum of SOFR plus an applicable margin of 2.50% (subject to a certain ratings-based step-down) and had an outstanding balance of $1,000.0 million at December 31, 2024.
Removed
In connection with the refinancing of our Term Loan Facility in May 2023, we converted the facilities under the Amended Credit Agreement from LIBOR to Term Secured Overnight Financing Rate (“SOFR”). We incur interest at variable rates under both our Term Loan Facility and Revolving Credit Facility.
Added
During the year ended December 31, 2024, we also amended the credit agreement governing the Revolving Credit Facility to replace the Canadian Dollar Offered Rate (CDOR), which ceased at the end of June 2024, with the Canadian Overnight Repo Rate Average (CORRA). We do not have any outstanding borrowings in Canadian dollars under the Revolving Credit Facility.

Other LTH 10-K year-over-year comparisons