Top Investor Questions

• We target annual growth of 10–12% for revenue and Adjusted EBITDA. We expect Adjusted EBITDA growth to typically outpace revenue growth.
• We intend to maintain a strong balance sheet with net debt leverage at or below 2.0x.
• Our cash from operations, together with sale-leaseback transactions, are expected to generate durable and growing positive free cash flow.

See “Operating Metrics” below for definitions of these target measures.

• No. We are a national operator of large, premium athletic country clubs. Our clubs average nearly 100,000 square feet with a wide range of offerings serving the entire family and driving high member engagement.
• We are a premier lifestyle and leisure brand offering premium health, fitness and wellness experiences with memberships serving members from three months old to 90+ years. We deliver premium experiences through our distinctive, resort-like athletic country club destinations.
• 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 offer something for every generation, from young children attending our swim lessons and Kids Academy classes, teenagers and adults engaging in our state-of-the-art fitness equipment, Dynamic Personal Training and small group training and more senior adults engaging 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.

• Our memberships comprise one or more members depending upon whether it is a single, couple or family membership. For example, a family of four is reported as one membership, but has four members.
• We offer a variety of memberships at varying price points, including base memberships, signature memberships, qualified memberships and on-hold memberships.
• Average membership dues are affected by numerous factors, including number of members per membership, membership type, location, and membership tenure.

• Revenue growth is not necessarily proportionate to membership growth. Our revenue is driven by both the number of memberships and the revenue per membership, which varies significantly based on membership type, number of members, club market, and member engagement.
• Our revenue growth strategy remains focused on opening new clubs, increasing member engagement, optimizing memberships per club, and increasing revenue per membership.

• Following the COVID-19 pandemic, we accelerated the shift in our business strategy to being an even more premium provider of health, wellness and fitness experiences.
• Since then, we have shifted toward higher-engagement memberships, including couples and families, supporting higher revenue per membership and improved profitability.
• With our premium, high-use model, our clubs are typically reaching their desired utilization and revenue levels with fewer memberships.

• The average memberships per club will vary based on numerous factors, but on average, we expect that our new clubs will reach around 3,700 to 4,000 memberships (approximately 7,000 to 8,000+ individual members) at maturity.

• Qualified memberships are offered at a reduced dues rate through third-party programs, including certain medical insurance providers.
• These qualified medical memberships were an important part of our strategy following the COVID-19 pandemic.
• As member engagement increased and clubs reached their desired utilization levels, we began limiting the hours and locations for qualified medical memberships to protect the member experience while optimizing club-level economics.
• Our base and signature memberships deliver higher engagement, higher dues and greater in-center spend than qualified medical memberships.

• While total membership growth is important, we are focused on growing revenue and Adjusted EBITDA. Our revenue growth strategy is focused on opening new clubs, increasing member engagement, optimizing memberships per club, and increasing revenue per membership.

• First introduced on May 30, 2024 at our Investor and Analyst Day, our revenue growth algorithm targets annual revenue growth of 10–12%, composed of approximately 4% from new centers and approximately 6–8% from comparable center revenue (often referred to as same store sales). Our comparable center revenue includes ramping clubs as well as our mature clubs.

• Our membership pricing reflects the premium nature of the experiences that we deliver to our members.
• We determine membership pricing on a club-by-club basis, considering a variety of factors, including geography, market presence, demographic profiles, population density, competition, member engagement, initial investment in the club and available services and amenities.
• We continually refine our strategy to optimize center performance, including striking the right balance between the number of members at any given center with the membership dues for that center.
• As detailed above, our revenue growth algorithm targets sustainable growth of approximately 3% per year from pricing and mix impacts.

• We target average company-funded capital⁽¹⁾ of approximately $20–$30 million per leased club or per owned club that is sold and leased back. Owned clubs require more capital upfront for land and construction, but we often recover a significant portion of that investment through sale-leaseback transactions following opening.

• ⁽¹⁾ Company-funded capital is defined as total cash invested in a new club less any landlord contribution and net of any proceeds from sale-leasebacks and construction reimbursements.
• ⁽²⁾ Net of tenant improvement allowances.

• Actual investment can vary from club to club based on numerous factors, including geographical market, size and amenities.

• We target 30%+ annual cash-on-cash returns for leased clubs, which is calculated as center-level contribution margin⁽¹⁾ generated by the club in its fourth full year divided by company-funded capital⁽²⁾.
• We target mid-to-high-teens annual cash-on-cash returns for owned clubs that are not sold and leased back, which is calculated as center-level contribution margin⁽¹⁾ generated by the club in its fourth full year divided by company-funded capital⁽²⁾.

• ⁽¹⁾ Center-level contribution margin reflects center-level profitability and excludes depreciation, amortization, corporate overhead and shared costs.
• ⁽²⁾ Company-funded capital is defined as total cash invested in a new club less any landlord contribution and net of any proceeds from sale-leasebacks and construction reimbursements.

• On average, our clubs ramp to maturity over 37+ months after opening, which supports our predictable multi-year earnings growth.
• The table below summarizes the expected average progression of revenue and center-level contribution margin during the ramp period.

• ⁽¹⁾ Center-level contribution margin, excl. rent reflects center-level profitability and excludes depreciation, amortization, rent, corporate overhead and shared costs.

• Center-level contribution margin, excl. rent typically lags revenue due to upfront staffing and operating investments required to deliver the Life Time experience from opening day.

• Our business generates significant net cash from operating activities. We are able to supplement our cash from operating activities with sale-leaseback proceeds to fund our capital expenditures, including new club growth.
• We believe that we can generate positive free cash flow on an annual basis while also funding our growth each year.
• Sale-leasebacks allow us to recycle the capital we have invested into our real estate while maintaining balance sheet flexibility.
• We negotiate sale-leasebacks to be attractive based on both the sales price, which impacts our long-term returns, and on the lease economics, which impacts club-level profitability.

• While most of our owned properties are available for sale-leasebacks, we do not expect to sell all properties for two key reasons. First, many are older properties that have material built-in gains and selling them without offsetting losses would generate a significant tax obligation. Second, our owned properties provide asset coverage for our corporate debt, improving our credit quality and reducing the cost of debt.
• Because we expect to invest more in new club construction than we sell each year through sale-leasebacks, we expect to increase the value of our owned asset base over time.

• Capital expenditures for open clubs are classified as maintenance or modernization. As a premier lifestyle and leisure brand offering premium health, fitness and wellness experiences, we continually enhance our offerings and maintain our clubs in exceptional condition.
• Maintenance capital expenditures represent necessary capital investments to sustain operations of our existing centers, including items like plumbing and HVAC system repairs.
• Modernization consists of capital expenditures to update and enhance our existing centers, as well as technology investments and corporate infrastructure. For example, converting a basketball court into pickleball courts or creating spaces for our new small group training offerings. Modernization capex can vary based on a number of factors, including new offerings, member preferences and overall market and competitive conditions.

• We fund new clubs primarily through cash from operating activities, sale-leasebacks, and construction reimbursements or tenant improvement contributions. In addition, we have the flexibility to use our $650 million revolving credit facility and access the capital markets as needed.
• We expect to fund our growth while staying at or below a 2.0x net debt leverage ratio.

• Sale-leasebacks allow us to efficiently recycle invested capital, maintain control of the design and construction of our clubs, and reduce refinancing risk through long-dated leases.
• We work with more than a dozen real estate partners, providing us with diverse access to the sale-leaseback market.
• We regularly assess additional forms of financing to optimize our weighted average cost of capital.

• We prioritize profitable growth through new clubs and disciplined investment in existing clubs while maintaining ample liquidity and conservative leverage.
• We also intend to utilize our share repurchase authorization opportunistically while diligently managing our leverage ratio to stay at or below 2.0x. Our repurchase authorization reflects our confidence in the predictability of our business model and our ability to generate cash, invest in our future growth and drive shareholder value.
• Additionally, we maintain a $650 million revolving credit facility and proactively manage upcoming debt maturities, with balance sheet flexibility remaining a core priority.

• Higher member engagement leads to stronger retention and more revenue per membership. Members who use our clubs more often are more likely to remain members and to participate in incremental services such as personal training, spa, and café.

• We experience a relatively consistent seasonal pattern in our memberships. Net membership adds tend to be higher at the start of the year and the start of the summer, with seasonally higher attrition in the back half of the year as routines shift around back-to-school and the holidays.
• The timing of new club openings can affect period-to-period comparability. As new clubs ramp, their membership growth may not align with typical seasonal patterns.
• Operationally, we typically see higher in-center business activity in the second and third quarters of the year due to our outdoor pool season and kids' activities summer programming. Many of our outdoor pools have bistros and café operations and our kids programming drives higher utilization while kids are out of school. Our in-center businesses have lower margins than our membership dues, so this seasonal shift can also impact our margins in the second and third quarters of the year.

• We have a diversified portfolio of resort-like athletic country club destinations that are primarily located in affluent markets and vary in format and size. We refer to our portfolio as a collection of clubs, not a chain of clubs.
• We have prototype designs for building our clubs, which we continue to refine to improve the initial cost of construction and to deliver the best club experience based on the type of building, geographical location and square footage available to us on each project.
• Our average club size is nearly 100,000 square feet. We believe offering a variety of premium amenities and services to our members results in strong economics and competitive advantage.
• Over the last two decades, we have introduced more strategic formats that can be modified to accommodate various settings beyond ground-up suburban settings, including mall or retail locations, vertical residential, and mixed-use developments in both urban and suburban markets.

• Life Time Living is an asset-light branded multifamily residence model, offering luxury wellness-oriented residences in close proximity to our clubs.
• The concept generates interest from new property developers and provides opportunities for new club development and deal terms that were not previously available to us, while also requiring a limited capital contribution to the multifamily project. Life Time generally participates in the multifamily projects as a small, minority investor in a joint venture.
• Residents of Life Time Living properties receive membership access to our clubs.

• Life Time Work is an asset-light branded co-working model that offers premium workspaces in or near our clubs.
• Life Time Work members also have the ability to receive membership access to all of our clubs across the United States and Canada.

• MIORA (pronounced “mee-OR-ah”) was launched in 2025 and is our performance and longevity health offering, providing assessments, supplements, peptides and hormone therapy, recovery, and rejuvenation tools.
• We employ a friendly physician model and management services arrangement with independent and, where needed, licensed medical practitioners. Medical practitioners provide the medical services to MIORA clients while Life Time provides administrative support and is able to consolidate the financial results.