Form: 10-Q

Quarterly report pursuant to Section 13 or 15(d)

August 1, 2024

Documents

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Table of Contents

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(Mark One)
 ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 2024
OR
☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from                 to 
Commission File Number: 001-40887
Life Time Group Holdings, Inc.
(Exact name of registrant as specified in its charter)
Delaware 47-3481985
(State or other jurisdiction of
incorporation or organization)		 (I.R.S. Employer
Identification No.)
2902 Corporate Place
Chanhassen, Minnesota 55317
(952) 947-0000
(Address of principal executive offices, including zip code; Registrant’s telephone number, including area code)
(Former name, former address and former fiscal year, if changed since last report)
Securities registered pursuant to Section 12(b) of the Act:
Title of Each Class Trading Symbol Name of Each Exchange on Which Registered
Common stock, par value $0.01 per share LTH The New York Stock Exchange
Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes ☒     No
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).    Yes ☒      No
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer ☒ Accelerated filer ☐ Non-accelerated filer ☐
Smaller reporting company ☐ Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐    No ☒ 
As of July 30, 2024, the registrant had 199,389,627 shares of common stock outstanding, par value $0.01 per share.

Table of Contents
TABLE OF CONTENTS
Page
2
Table of Contents
PART I — FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
LIFE TIME GROUP HOLDINGS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, except per share data)
(Unaudited)
June 30,
2024		 December 31,
2023
ASSETS
Current assets:
Cash and cash equivalents $ 34,527  $ 11,161 
Restricted cash and cash equivalents 14,831  18,805
Accounts receivable, net 25,204  23,903 
Center operating supplies and inventories 54,539  52,803 
Prepaid expenses and other current assets 58,825  57,751 
Income tax receivable 8,153  10,101 
Total current assets 196,079  174,524 
Property and equipment, net 3,146,740  3,171,616 
Goodwill 1,235,359  1,235,359 
Operating lease right-of-use assets 2,297,649  2,202,601 
Intangible assets, net 172,196  172,127 
Other assets 76,230  75,914 
Total assets $ 7,124,253  $ 7,032,141 
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable $ 78,172  $ 81,252 
Construction accounts payable 53,070  108,730 
Deferred revenue 51,864  49,299 
Accrued expenses and other current liabilities 183,625  185,305 
Current maturities of debt 12,755  73,848 
Current maturities of operating lease liabilities 62,090  58,764 
Total current liabilities 441,576  557,198 
Long-term debt, net of current portion 1,830,241  1,859,027 
Operating lease liabilities, net of current portion 2,374,522  2,268,863 
Deferred income taxes, net 68,440  56,066 
Other liabilities 41,977  36,875 
Total liabilities 4,756,756  4,778,029 
Commitments and contingencies (Note 9)
Stockholders’ equity:
Common stock, $0.01 par value per share; 500,000 shares authorized; 199,052 and 196,671 shares issued and outstanding, respectively.
 1,990  1,967 
Additional paid-in capital 2,873,839  2,835,883 
Accumulated deficit (499,091) (576,813)
Accumulated other comprehensive loss (9,241) (6,925)
Total stockholders’ equity 2,367,497  2,254,112 
Total liabilities and stockholders’ equity $ 7,124,253  $ 7,032,141 
See notes to unaudited condensed consolidated financial statements.
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LIFE TIME GROUP HOLDINGS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
(Unaudited)
Three Months Ended
June 30,		 Six Months Ended
June 30,
2024 2023 2024 2023
Revenue:
Center revenue $ 645,007  $ 542,125  $ 1,225,492 $ 1,039,877
Other revenue 22,754  19,606  38,986 32,705
Total revenue 667,761  561,731  1,264,478 1,072,582
Operating expenses:
Center operations 355,510  302,603  677,410 576,712
Rent 74,947  67,434  147,229 133,971
General, administrative and marketing 53,246  52,840  102,099 95,337
Depreciation and amortization 69,714  58,252  135,617 116,449
Other operating expense 9,588  28,194  25,310 30,321
Total operating expenses 563,005  509,323  1,087,665 952,790
Income from operations 104,756  52,408  176,813 119,792
Other (expense) income:
Interest expense, net of interest income (37,669) (31,979) (75,072) (63,174)
Equity in (loss) earnings of affiliates (464) 88  (287) 231
Total other expense (38,133) (31,891) (75,359) (62,943)
Income before income taxes 66,623  20,517  101,454 56,849
Provision for income taxes 13,818  3,513  23,732 12,385
Net income $ 52,805  $ 17,004  $ 77,722 $ 44,464
Income per common share:
Basic $ 0.27  $ 0.09  $ 0.39 $ 0.23
Diluted $ 0.26  $ 0.08  $ 0.38 $ 0.22
Weighted-average common shares outstanding:
Basic 198,903  195,476  198,200 195,026
Diluted 206,044  204,821  204,851 203,872

See notes to unaudited condensed consolidated financial statements.
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Table of Contents
LIFE TIME GROUP HOLDINGS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(In thousands)
(Unaudited)
Three Months Ended
June 30,		 Six Months Ended
June 30,
2024 2023 2024 2023
Net income $ 52,805  $ 17,004  $ 77,722 $ 44,464
Foreign currency translation adjustments, net of tax of $0
 (649) 1,894  (2,316) 1,962
Comprehensive income $ 52,156  $ 18,898  $ 75,406 $ 46,426

See notes to unaudited condensed consolidated financial statements.
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Table of Contents
LIFE TIME GROUP HOLDINGS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY
(In thousands)
(Unaudited)
Common Stock Additional Paid-In
Capital		 Accumulated Deficit Accumulated Other Comprehensive Loss Total
Equity
Shares Amount
Balance at March 31, 2024 198,791  $ 1,988  $ 2,861,359  $ (551,896) $ (8,592) $ 2,302,859 
Net income —  —  —  52,805  —  52,805 
Other comprehensive loss —  —  —  —  (649) (649)
Share-based compensation —  —  10,120  —  —  10,120 
Stock option exercises 98  1  1,005  —  —  1,006 
Issuances of common stock in connection with the vesting of restricted stock units 60  —  (106) —  —  (106)
Issuances of common stock in connection with the employee stock purchase plan 103  1  1,461  —  —  1,462 
Balance at June 30, 2024 199,052  $ 1,990  $ 2,873,839  $ (499,091) $ (9,241) $ 2,367,497 
Common Stock Additional Paid-In
Capital		 Accumulated Deficit Accumulated Other Comprehensive Loss Total
Equity
Shares Amount
Balance at December 31, 2023 196,671  $ 1,967  $ 2,835,883  $ (576,813) $ (6,925) $ 2,254,112 
Net income —  —  —  77,722  —  77,722 
Other comprehensive loss —  —  —  —  (2,316) (2,316)
Share-based compensation —  —  17,951  —  —  17,951 
Stock option exercises 145  1  1,489  —  —  1,490 
Issuances of common stock in connection with the vesting of restricted stock units 686  6  (988) —  —  (982)
Issuances of common stock in connection with the employee stock purchase plan 103  1  1,461  —  —  1,462 
Settlement of accrued compensation liabilities through the issuance of common stock 1,447  15  18,043  —  —  18,058 
Balance at June 30, 2024 199,052  $ 1,990  $ 2,873,839  $ (499,091) $ (9,241) $ 2,367,497 
Common Stock Additional Paid-In
Capital		 Accumulated Deficit Accumulated Other Comprehensive Loss Total
Equity
Shares Amount
Balance at March 31, 2023 194,998  $ 1,950  $ 2,794,657  $ (625,416) $ (9,154) $ 2,162,037 
Net income —  —  —  17,004  —  17,004 
Other comprehensive income —  —  —  —  1,894  1,894 
Share-based compensation —  —  8,515  —  —  8,515 
Stock option exercises 883  9  9,811  —  —  9,820 
Issuances of common stock in connection with the vesting of restricted stock units 27  —  (8) —  —  (8)
Issuances of common stock in connection with the employee stock purchase plan 123  1  1,449  —  —  1,450 
Balance at June 30, 2023 196,031  $ 1,960  $ 2,814,424  $ (608,412) $ (7,260) $ 2,200,712 
Common Stock Additional Paid-In
Capital		 Accumulated Deficit Accumulated Other Comprehensive Loss Total
Equity
Shares Amount
Balance at December 31, 2022 194,271  $ 1,943  $ 2,784,416  $ (652,876) $ (9,222) $ 2,124,261 
Net income —  —  —  44,464  —  44,464 
Other comprehensive income —  —  —  —  1,962  1,962 
Share-based compensation —  —  13,937  —  —  13,937 
Stock option exercises 1,210  12  13,264  —  —  13,276 
Issuances of common stock in connection with the vesting of restricted stock units 337  3  (113) —  —  (110)
Issuances of common stock in connection with the employee stock purchase plan 123  1  1,449  —  —  1,450 
Issuances of common stock in connection with business acquisitions 90  1  1,471  —  —  1,472 
Balance at June 30, 2023 196,031  $ 1,960  $ 2,814,424  $ (608,412) $ (7,260) $ 2,200,712 

See notes to unaudited condensed consolidated financial statements.
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LIFE TIME GROUP HOLDINGS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
Six Months Ended
June 30,
2024 2023
Cash flows from operating activities:
Net income $ 77,722  $ 44,464 
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization 135,617  116,449 
Deferred income taxes 12,505  5,864 
Share-based compensation 18,698  22,171 
Non-cash rent expense 13,650  17,630 
Impairment charges associated with long-lived assets 1,420  1,280 
(Gain) loss on disposal of property and equipment, net (11,067) 904 
Amortization of debt discounts and issuance costs 4,006  3,919 
Changes in operating assets and liabilities 5,642  6,734 
Other 2,637  (3,124)
Net cash provided by operating activities 260,830  216,291 
Cash flows from investing activities:
Capital expenditures (301,107) (337,076)
Proceeds from sale-leaseback transactions 142,671  78,040 
Proceeds from the sale of land 6,328  — 
Other (2,173) (462)
Net cash used in investing activities (154,281) (259,498)
Cash flows from financing activities:
Proceeds from borrowings —  44,291 
Repayments of debt (67,647) (7,430)
Proceeds from revolving credit facility 670,000  620,000 
Repayments of revolving credit facility (695,000) (620,000)
Repayments of finance lease liabilities (403) (508)
Proceeds from financing obligations 4,300  — 
Payments of debt discounts and issuance costs —  (2,550)
Proceeds from stock option exercises 1,490  13,276 
Proceeds from issuances of common stock in connection with the employee stock purchase plan 1,462  1,450 
Other (1,304) (109)
Net cash (used in) provided by financing activities (87,102) 48,420 
Effect of exchange rates on cash and cash equivalents and restricted cash and cash equivalents (55) 136 
Increase in cash and cash equivalents and restricted cash and cash equivalents 19,392  5,349 
Cash and cash equivalents and restricted cash and cash equivalents – beginning of period 29,966  25,509 
Cash and cash equivalents and restricted cash and cash equivalents – end of period $ 49,358  $ 30,858 

See notes to unaudited condensed consolidated financial statements.
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LIFE TIME GROUP HOLDINGS, INC. AND SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Table amounts in thousands except per share data)
454
1. Nature of Business and Basis of Presentation
Nature of Business
Life Time Group Holdings, Inc. (collectively with its direct and indirect subsidiaries, “Life Time,” “we,” “our,” or the “Company”) is a holding company incorporated in the state of Delaware. As a holding company, Life Time Group Holdings, Inc. does not have its own independent assets or business operations, and all of our assets and business operations are through Life Time, Inc. and its direct and indirect subsidiaries. We are primarily dedicated to providing premium health, fitness and wellness experiences at our athletic country club destinations and via our comprehensive digital platform and portfolio of iconic athletic events – all with the objective of inspiring healthier, happier lives. We design, build and operate our athletic country club destinations that are distinctive and large, multi-use sports and athletic, professional fitness, family recreation and spa centers in a resort-like environment. As of June 30, 2024, we operated 175 centers in 31 states and one Canadian province.
Basis of Presentation
The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial reporting and as required by rules and regulations of the Securities and Exchange Commission (the “SEC”). While these statements reflect normal recurring adjustments that are, in the opinion of management, necessary for a fair statement of the results of the interim period, they do not include all of the information and footnotes required by GAAP for complete financial statements. These unaudited condensed consolidated financial statements should be read in conjunction with our audited consolidated financial statements and the notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023 filed with the SEC.
The unaudited condensed consolidated financial statements have been prepared on the same basis as the audited consolidated financial statements. When preparing financial statements in conformity with GAAP, we are required to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. All intercompany balances and transactions have been eliminated in consolidation. We have one operating segment and one reportable segment.
Reclassification
A reclassification has been made on our December 31, 2023 condensed consolidated balance sheet in order to conform to the current period presentation. Specifically, our restricted cash and cash equivalents balance of $18.8 million at December 31, 2023 was reclassified out of Cash and cash equivalents and into a separate line item labeled Restricted cash and cash equivalents. This reclassification had no impact on our previously reported statements of operations or cash flows.
2. Summary of Significant Accounting Policies
Fair Value Measurements
The accounting guidance establishes a framework for measuring fair value and expanded disclosures about fair value measurements. The guidance applies to all assets and liabilities that are measured and reported on a fair value basis. This enables the reader of the financial statements to assess the inputs used to develop those measurements by establishing a hierarchy for ranking the quality and reliability of the information used to determine fair values. The guidance requires that each asset and liability carried at fair value be classified into one of the following categories:
Level 1: Quoted market prices in active markets for identical assets or liabilities.
Level 2: Observable market-based inputs or unobservable inputs that are corroborated by market data.
Level 3: Unobservable inputs that are not corroborated by market data.
The carrying amounts related to cash and cash equivalents, restricted cash and cash equivalents, accounts receivable, income tax receivable, accounts payable and accrued liabilities approximate fair value.
Fair Value Measurements on a Recurring Basis. We had no material remeasurements of such assets or liabilities to fair value during the three and six months ended June 30, 2024 and 2023.
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LIFE TIME GROUP HOLDINGS, INC. AND SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Table amounts in thousands except per share data)
Financial Assets and Liabilities. At June 30, 2024 and December 31, 2023, the carrying value and fair value of our outstanding long-term debt was as follows:
June 30,
2024		 December 31,
2023
Carrying Value Fair
Value		 Carrying Value Fair
Value
Long-term debt (1)
$ 1,854,657  $ 1,853,245  $ 1,948,145  $ 1,934,695 
(1) Excludes unamortized debt discounts and issuance costs.
The fair value of our debt is based on the amount of future cash flows discounted using rates we would currently be able to realize for similar instruments of comparable maturity. If our long-term debt were recorded at fair value, it would be classified as Level 2 in the fair value hierarchy. For more information regarding our debt, see Note 5, Debt.
Fair Value Measurements on a Nonrecurring Basis. Assets and liabilities that are measured at fair value on a nonrecurring basis primarily relate to our goodwill, intangible assets and other long-lived assets, which are remeasured when the derived fair value is below carrying value on our condensed consolidated balance sheets. For these assets, we do not periodically adjust carrying value to fair value except in the event of impairment. If we determine that impairment has occurred, the carrying value of the asset would be reduced to fair value and the difference would be recorded as a loss within operating income in our condensed consolidated statements of operations. We had no material remeasurements of such assets or liabilities to fair value during the three and six months ended June 30, 2024 and 2023.
3. Supplemental Balance Sheet and Cash Flow Information
Prepaid Expenses and Other Current Assets
Prepaid expenses and other current assets consisted of the following:
June 30,
2024		 December 31,
2023
Property held for sale $ 8,600  $ 8,600 
Construction contract receivables 18,392  25,280 
Prepaid insurance 5,680  2,393 
Prepaid commissions 5,683  5,059 
Prepaid software licenses and maintenance 6,729  5,481 
Other 13,741  10,938 
Prepaid expenses and other current assets $ 58,825  $ 57,751 
Accrued Expenses and Other Current Liabilities
Accrued expenses and other current liabilities consisted of the following:
June 30,
2024		 December 31,
2023
Real estate taxes $ 33,863  $ 32,165 
Accrued interest 40,469  38,723 
Payroll liabilities 31,614  40,357 
Self-insurance accruals 26,422  24,869 
Corporate accruals 31,016  33,066 
Other 20,241  16,125 
Accrued expenses and other current liabilities $ 183,625  $ 185,305 
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LIFE TIME GROUP HOLDINGS, INC. AND SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Table amounts in thousands except per share data)
Supplemental Cash Flow Information
(Increases) decreases in operating assets and increases (decreases) in operating liabilities are as follows:
Six Months Ended
June 30,
2024 2023
Accounts receivable $ (1,802) $ (6,610)
Center operating supplies and inventories (1,761) (2,476)
Prepaid expenses and other current assets (8,630) (2,510)
Income tax receivable 1,947  (5,921)
Other assets 10  131 
Accounts payable (2,875) 9,619 
Accrued expenses and other current liabilities 16,014  8,896 
Deferred revenue 2,259  4,664 
Other liabilities 480  941 
Changes in operating assets and liabilities $ 5,642 $ 6,734
Additional supplemental cash flow information is as follows:
Six Months Ended
June 30,
2024 2023
Net cash paid for income taxes, net of refunds received $ 9,235  $ 12,445 
Cash payments for interest, net of capitalized interest 69,984  57,380 
Capitalized interest 3,962  9,756 
Non-cash activity:
Issuances of common stock in connection with a business acquisition —  1,472 
Right-of-use assets obtained in exchange for initial lease liabilities:
Operating leases 128,486 58,419
Finance leases 705 605
Right-of-use asset adjustments recognized as a result of the remeasurement of existing operating lease liabilities 4,631 16,429
Non-cash increase in operating lease right-of-use assets associated with below-market sale-leaseback transactions — 5,900
Non-cash increase in financing obligations as a result of interest accretion 70 46
4. Revenue
Revenue associated with our membership dues, enrollment fees, and certain services from our in-center businesses is recognized over time as earned. Revenue associated with products and services offered in our cafes and spas, as well as through e-commerce, is recognized at a point in time. The following is a summary of revenue, by major revenue stream, that we recognized during the three and six months ended June 30, 2024 and 2023:
Three Months Ended
June 30,		 Six Months Ended
June 30,
2024 2023 2024 2023
Membership dues and enrollment fees $ 462,696  $ 387,115  $ 888,107 $ 744,603
In-center revenue 182,311  155,010  337,385 295,274
Total center revenue 645,007  542,125  1,225,492 1,039,877
Other revenue 22,754  19,606  38,986 32,705
Total revenue $ 667,761  $ 561,731  $ 1,264,478 $ 1,072,582
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LIFE TIME GROUP HOLDINGS, INC. AND SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Table amounts in thousands except per share data)
The timing associated with the revenue we recognized during the three months ended June 30, 2024 and 2023 is as follows:
Three Months Ended June 30, 2024 Three Months Ended June 30, 2023
Center
Revenue		 Other
Revenue		 Total
Revenue		 Center
Revenue		 Other
Revenue		 Total
Revenue
Goods and services transferred over time $ 567,920 $ 22,754 $ 590,674 $ 476,332 $ 19,606 $ 495,938
Goods and services transferred at a point in time 77,087 — 77,087 65,793 — 65,793
Total revenue $ 645,007 $ 22,754 $ 667,761 $ 542,125 $ 19,606 $ 561,731
The timing associated with the revenue we recognized during the six months ended June 30, 2024 and 2023 is as follows:
Six Months Ended June 30, 2024 Six Months Ended June 30, 2023
Center
Revenue		 Other
Revenue		 Total
Revenue		 Center
Revenue		 Other
Revenue		 Total
Revenue
Goods and services transferred over time $ 1,084,753 $ 38,986 $ 1,123,739 $ 915,349 $ 32,705 $ 948,054
Goods and services transferred at a point in time 140,739 — 140,739 124,528 — 124,528
Total revenue $ 1,225,492 $ 38,986 $ 1,264,478 $ 1,039,877 $ 32,705 $ 1,072,582
Contract liabilities represent payments or consideration received in advance for goods or services that the Company has not yet transferred to the customer. Contract liabilities consist primarily of deferred revenue for fees collected in advance for membership dues, enrollment fees, Dynamic Personal Training and other in-center services offerings, as well as our media and athletic events. Contract liabilities at June 30, 2024 and December 31, 2023 were $52.1 million and $49.9 million, respectively.
Contract liabilities that will be recognized within one year are classified as deferred revenue in our condensed consolidated balance sheets. Deferred revenue at June 30, 2024 and December 31, 2023 was $51.9 million and $49.3 million, respectively, and consists primarily of prepaid membership dues, enrollment fees, Dynamic Personal Training and other in-center services, as well as media and athletic events.
Contract liabilities that will be recognized in a future period greater than one year are classified as a component of Other liabilities in our condensed consolidated balance sheets. Long-term contract liabilities at June 30, 2024 and December 31, 2023 were $0.2 million and $0.6 million, respectively, and consist primarily of deferred enrollment fees.
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LIFE TIME GROUP HOLDINGS, INC. AND SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Table amounts in thousands except per share data)
5. Debt
Debt consisted of the following:
June 30,
2024		 December 31, 2023
Term Loan Facility, maturing January 2026 $ 310,000 $ 310,000
Revolving Credit Facility, maturing December 2026 65,000 90,000
5.75% Senior Secured Notes, maturing January 2026
 925,000 925,000
8.00% Senior Unsecured Notes, maturing April 2026
 475,000 475,000
Construction Loan, maturing February 2026 27,973 28,000
Mortgage Notes, various maturities 47,882 115,502
Other debt 3,440 4,122
Fair value adjustment 362 521
Total debt 1,854,657 1,948,145
Less unamortized debt discounts and issuance costs (11,661) (15,270)
Total debt less unamortized debt discount and issuance costs 1,842,996 1,932,875
Less current maturities (12,755) (73,848)
Long-term debt, less current maturities $ 1,830,241 $ 1,859,027
Term Loan Facility
Loans under the Term Loan Facility bear interest at a floating rate per annum of, at our option, Term Secured Overnight Financing Rate (“SOFR”) plus an applicable credit adjustment spread ranging from 0.11448% to 0.42826% depending on the duration of borrowing plus the continued applicable margin of 4.00% or a base rate plus 3.00%. The applicable margins will increase to 4.25% and 3.25%, respectively, if our public corporate family ratings falls below B2 and B from Moody’s and S&P, respectively. We are not required to make principal payments on the Term Loan Facility prior to its maturity.
Revolving Credit Facility
At June 30, 2024, there were $65.0 million of outstanding borrowings under the $475.0 million Revolving Credit Facility and there were $30.9 million of outstanding letters of credit, resulting in total revolver availability of $379.1 million, which was available at intervals ranging from 30 to 180 days at interest rates of SOFR plus the applicable credit adjustment spread plus 3.50% or base rate plus 2.50%. During the three months ended June 30, 2024, we 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.
The weighted average interest rate and debt outstanding under the Revolving Credit Facility for the six months ended June 30, 2024 was 9.51% and $187.7 million, respectively. The highest balance during that same period was $285.0 million.
Mortgage Notes
During the six months ended June 30, 2024, we fully paid at maturity the principal balance and remaining accrued interest associated with two of our Mortgage Notes totaling $62.9 million.
Debt Covenants
We are required to comply with certain affirmative and restrictive covenants under our Credit Facilities, Secured Notes, Unsecured Notes, Construction Loan and Mortgage Notes. We are also required to comply with a first lien net leverage ratio covenant under the Revolving Credit Facility, which requires us to maintain a first lien net leverage ratio, if 30.00% or more of the Revolving Credit Facility commitments are outstanding shortly after the end of any fiscal quarter (excluding all cash collateralized undrawn letters of credit and other undrawn letters of credit up to $20.0 million).
As of June 30, 2024, we were either in compliance in all material respects with the covenants or the covenants were not applicable.
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LIFE TIME GROUP HOLDINGS, INC. AND SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Table amounts in thousands except per share data)
Future Maturities of Long-Term Debt
Aggregate annual future maturities of long-term debt, excluding unamortized discounts, issuance costs and fair value adjustments, at June 30, 2024 were as follows:
July 2024 through June 2025 $ 12,755
July 2025 through June 2026 1,750,386
July 2026 through June 2027 86,816
July 2027 through June 2028 1,495
July 2028 through June 2029 173
Thereafter 2,670
Total future maturities of long-term debt $ 1,854,295
6. Leases
Sale-Leaseback Transactions
During the six months ended June 30, 2024, we entered into and consummated sale-leaseback transactions with two unrelated third parties. Under these transactions, we sold four properties for gross proceeds of $147.9 million, which was reduced by transaction costs of $0.9 million, for net cash proceeds of $147.0 million. The estimated fair value of the properties sold was $143.6 million. Accordingly, the aggregate cash sales price associated with these arrangements was decreased by a $4.3 million aggregate off-market adjustment to $142.7 million. This aggregate off-market adjustment was recognized as financing obligations and the proceeds are reported within financing activities on our condensed consolidated statement of cash flows. During the six months ended June 30, 2024, we recognized a net gain of $7.5 million on the sale-leaseback transactions, which is included in Other operating expense in our condensed consolidated statement of operations.
Right-of-use assets and lease liabilities recognized in connection with these sale-leaseback transactions were $93.6 million and $92.8 million, respectively.
7. Stockholders’ Equity
Share-Based Compensation Expense
Share-based compensation expense for the three months ended June 30, 2024 was $11.1 million, of which $10.1 million and $1.0 million was associated with equity-classified awards and liability-classified awards, respectively. Share-based compensation expense for the six months ended June 30, 2024 was $18.7 million, of which $18.0 million and $0.7 million was associated with equity-classified awards and liability-classified awards, respectively.
Share-based compensation expense for the three months ended June 30, 2023 was $16.5 million, of which $8.5 million and $8.0 million was associated with equity-classified awards and liability-classified awards, respectively. Share-based compensation expense for the six months ended June 30, 2023 was $22.2 million, of which $13.9 million and $8.3 million was associated with equity-classified awards and liability-classified awards, respectively.
Restricted Stock Units
During the six months ended June 30, 2024, the Company granted approximately 1.6 million restricted stock unit awards under the 2021 Incentive Award Plan, of which approximately 1.1 million were time-based vesting awards and approximately 0.5 million were performance-based vesting awards granted to our executives in connection with our short-term incentive compensation program. We determine the grant date fair value of restricted stock unit awards by multiplying the number of restricted stock unit awards by the closing trading price of our common stock on the grant date.

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LIFE TIME GROUP HOLDINGS, INC. AND SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Table amounts in thousands except per share data)
Performance Stock Units
During the six months ended June 30, 2024, the Company granted approximately 0.5 million three-year performance stock unit awards under the 2021 Incentive Award Plan, all of which were granted to our executives in connection with our long-term incentive compensation program. Approximately 0.3 million of the performance stock unit awards are based on our Adjusted EBITDA with performance determined each year for one-third of such award but the entire award does not vest until the end of the three-year period and approximately 0.2 million of the performance stock unit awards are based on our leverage ratio at the end of each year with one-third vesting each year dependent on achieving the leverage ratio target for such year. We determine the grant date fair value of performance stock unit awards by multiplying the number of performance stock unit awards by the closing trading price of our common stock on the grant date.
Other Share-Based Payment Awards
In the event specified performance metrics are met under our 2024 incentive compensation program for team members who are not executive officers, awards thereunder will be paid out in cash or through the issuance of fully-vested shares of the Company’s common stock or a combination thereof at the time of such performance determination in 2025. As of June 30, 2024, we expect that these awards will be settled in a combination of cash and shares of the Company’s common stock. Because the portion of incentive compensation that we currently expect to pay through the issuance of shares of the Company’s common stock represents a fixed dollar that, if payable, will be settled in a variable number of shares of the Company’s common stock, we are currently accounting for this portion of these awards as liability-classified share-based payment awards. Accordingly, the offset to the share-based compensation expense we have recognized in connection with these awards during the six months ended June 30, 2024 is included in Accrued expenses and other current liabilities on our June 30, 2024 condensed consolidated balance sheet.
In February 2024, our Board of Directors determined that our 2023 performance exceeded the maximum performance metric under our 2023 short-term incentive program and issued corresponding shares of common stock to our employees. As a result, the $18.1 million liability we had recognized in connection with liability-classified share-based payment awards, which was included in Accrued expenses and other current liabilities on our December 31, 2023 condensed consolidated balance sheet, was reclassified out of Accrued expenses and other current liabilities and into Common stock and Additional paid-in capital on our condensed consolidated balance sheet during the six months ended June 30, 2024.
8. Income Per Share
For the three and six months ended June 30, 2024 and 2023, our potentially dilutive securities included stock options, restricted stock units and shares to be issued under our employee stock purchase plan.
The following table sets forth the calculation of basic and diluted income per share for the three and six months ended June 30, 2024 and 2023:
Three Months Ended
June 30,		 Six Months Ended
June 30,
2024 2023 2024 2023
Net income $ 52,805 $ 17,004 $ 77,722 $ 44,464
Weighted-average common shares outstanding – basic 198,903 195,476 198,200 195,026
Dilutive effect of stock-based compensation awards 7,141 9,345 6,651 8,846
Weighted-average common shares outstanding – diluted 206,044 204,821 204,851 203,872
Income per common share – basic $ 0.27 $ 0.09 $ 0.39 $ 0.23
Income per common share – diluted $ 0.26 $ 0.08 $ 0.38 $ 0.22
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LIFE TIME GROUP HOLDINGS, INC. AND SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Table amounts in thousands except per share data)
The following is a summary of potential shares of common stock that were antidilutive and excluded from the weighted average share computations for the three and six months ended June 30, 2024 and 2023:
Three Months Ended
June 30,		 Six Months Ended
June 30,
2024 2023 2024 2023
Stock options 5,843 5,370 5,843 6,310
Restricted stock units 382 766 382 824
Potential common shares excluded from the weighted average share calculations 6,225 6,136 6,225 7,134
9. Commitments and Contingencies
Life Time, Inc. et al. v. 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. 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 Life Time’s claims with prejudice, and entered judgment on July 26, 2024. Life Time intends to appeal from that judgment, in whole or in part, 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
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. We establish reserves for matters that are probable and estimable in amounts we believe are adequate to cover reasonable adverse judgments. Based upon the information available to us and discussions with legal counsel, it is our opinion that the outcome of the various legal actions and claims that are incidental to our business will not have a material adverse impact on our consolidated financial position, results of operations or cash flows. Such matters are subject to many uncertainties, and the outcomes of individual matters are not predictable with assurance.
10. Subsequent Events
On July 29, 2024, the Company entered into an agreement for the sale-leaseback of one property for gross proceeds of $25.0 million. The closing on this property is expected to be completed early in the fourth quarter 2024.
In preparing the accompanying condensed consolidated financial statements, we have evaluated the period from June 30, 2024 through the date the condensed consolidated financial statements were issued for material subsequent events. There have been no other events or transactions during this time which would have a material effect on the condensed consolidated financial statements and therefore would require recognition or disclosure.
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ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Forward-Looking Statements
Certain statements in this discussion and analysis are forward-looking statements within the meaning of federal securities regulations. Forward-looking statements in this discussion and analysis include, but are not limited to, our plans, strategies and prospects, both business and financial, including our financial outlook and cash flow, possible or assumed future actions, opportunities for growth and margin expansion, improvements to our balance sheet and leverage, capital expenditures, consumer demand, industry and economic trends, business strategies, events or results of operations. Generally, forward-looking statements are not based on historical facts but instead represent only our current beliefs and assumptions regarding future events. All forward-looking statements are, by nature, subject to risks, uncertainties and other factors. This discussion and analysis does not purport to identify factors that could cause actual results to differ materially from those expressed or implied in forward-looking statements. You should understand that forward-looking statements are not guarantees of performance or results and are preliminary in nature. We may not actually achieve the plans, intentions or expectations disclosed in our forward-looking statements. Statements preceded by, followed by or that otherwise include the words “believes,” “assumes,” “expects,” “anticipates,” “intends,” “continues,” “projects,” “predicts,” “estimates,” “plans,” “potential,” “may increase,” “may result,” “will result,” “may fluctuate,” and similar expressions or future or conditional verbs such as “will,” “should,” “would,” “foreseeable,” “may,” and “could” as well as the negative version of these words or similar terms and phrases are generally forward-looking in nature and not historical facts. In addition, any statements or information that refer to expectations, beliefs, plans, projections, objectives, performance or other characterizations of future events or circumstances, including any underlying assumptions, are forward-looking.
The forward-looking statements contained in this discussion and analysis are based on management’s current beliefs and assumptions and are not guarantees of future performance. The forward-looking statements are subject to various risks, uncertainties, assumptions or changes in circumstances that are difficult to predict or quantify. Actual results may differ materially from these expectations due to numerous factors, many of which are beyond our control, including risks relating to our business operations and competitive and economic environment, risks relating to our brand, risks relating to the growth of our business, risks relating to our technological operations, risks relating to our capital structure and lease obligations, risks relating to our human capital, risks relating to legal compliance and risk management and risks relating to ownership of our common stock and the other important factors discussed under the caption “Risk Factors” in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023 filed with the Securities and Exchange Commission (the “SEC”) and as such risk factors may be updated from time to time in our periodic filings with the SEC that are accessible on the SEC’s website at www.sec.gov. Since it is not possible to foresee all such factors, these factors should not be considered as complete or exhaustive. Consequently, we caution investors not to place undue reliance on any forward-looking statements, as no forward-looking statement can be guaranteed, and actual results may vary materially. Additionally, our forward-looking statements do not reflect the potential impact of any future acquisitions, mergers, dispositions, joint ventures, investments or other strategic transactions we may make.
All forward-looking statements attributable to us or persons acting on our behalf are expressly qualified in their entirety by the foregoing cautionary statements. Forward-looking statements speak only as of the date of this report. We do not undertake any obligation to update or revise, or to publicly announce any update or revision to, any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.
Overview
Business and Strategy
Life Time, the “Healthy Way of Life Company,” is a leading 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 878,000 memberships, as of June 30, 2024. 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 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.
Our luxurious athletic country clubs total approximately 17 million square feet in the aggregate. Our centers are located in affluent suburban and urban locations. 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 premium service offerings are delivered by over 45,000 Life Time team members, including over 10,500 certified fitness professionals, ranging from personal trainers to studio performers.
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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 to our athletic country clubs. Our average revenue per center membership increased to $1,541 for the six months ended June 30, 2024 as compared to $1,369 for the six months ended June 30, 2023. Total visits to our clubs were 57 million for the six months ended June 30, 2024 as compared to 52 million for the six months ended June 30, 2023, and average visits per membership remained strong at 72 average visits per membership to our centers for the six months ended June 30, 2024. We believe that no other company in the United States delivers the same quality and breadth of health, fitness and wellness experiences that we deliver, which has enabled us to consistently grow our annual membership dues and in-center revenue.
Our total Center revenue increased to $1,225.5 million for the six months ended June 30, 2024 as compared to $1,039.9 million for the six months ended June 30, 2023. We believe it will continue to grow as we open new centers in desirable locations across the country, our new centers ramp to expected performance 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. As of June 30, 2024, we had 27 centers open for less than three years and eight new centers under construction, with significant growth capital expenditures already invested into these new centers that have yet to open. 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. We believe we have significant opportunities to continue expanding our portfolio of premium centers in an asset-light manner and we are targeting eight to 12 new locations on average per year. We believe the combined dynamic of our ramping new centers that are open and operating, new members joining at higher membership dues rates plus the capital expenditures already invested in our centers under construction creates a strong tailwind for the continued growth of our total Center revenue.
We have also implemented several strategic initiatives that are driving revenue, engagement and memberships as we continue to elevate and broaden our member experiences and allow our members to integrate health, fitness and wellness into their lives with greater ease and frequency. These strategic initiatives include pickleball, Dynamic Personal Training, Dynamic Stretch, small group training such as Alpha, GTX and Ultra Fit, and our ARORA community focused on members aged 55 years and older, where we have experienced a significant increase in our unique participants or total sessions. We have also launched a pilot for our MIORA health optimization and longevity services and we have been executing on enhanced offerings within our LifeCafe, LifeShop and LifeSpa. 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. In addition, our LifeShop digital health store offers a wide variety of equipment, wearables, apparel, beauty products and nutritional supplements. 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.
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 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. Additionally, our Life Time Living locations offer luxury wellness-oriented residences, also in close proximity to one of our athletic country clubs. As of June 30, 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. 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. Inflation continues to remain elevated, which has impacted our expenses and capital expenditures in several areas, including wages, construction costs and other operating expenses, and thus pressured our margin performance. Despite this headwind, we have experienced growth in our revenue and margins. The rising interest rate environment has also increased the cost of our Term Loan Facility and Revolving Credit Facility and may result in increased capitalization rates and delays on future sale-leaseback transactions. We will continue to monitor the macroeconomic environment, but we believe that our business is resilient and has performed well historically during different economic cycles including during a recession.
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Non-GAAP Financial Measures
This discussion and analysis includes certain financial measures that are not presented in accordance with generally accepted accounting principles in the United States (“GAAP”), including Adjusted net income, Adjusted net income per common share, Adjusted EBITDA, free cash flow and ratios related thereto. These non-GAAP financial measures are not based on any comprehensive set of accounting rules or principles and should not be construed as an inference that our future results will be unaffected by unusual or non-recurring items. In addition, these non-GAAP financial measures should be read in conjunction with our financial statements prepared in accordance with GAAP. The reconciliations of the Company’s non-GAAP financial measures to the corresponding GAAP measures should be carefully evaluated.
Adjusted Net Income
We define Adjusted net income as net income 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.
Adjusted EBITDA
We define Adjusted EBITDA as net income before interest expense, net, provision for 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.
Management uses Adjusted net income and Adjusted EBITDA to evaluate the Company’s performance. We believe that Adjusted net income and Adjusted EBITDA are important metrics for management, investors and analysts as they remove the impact of items that we do not believe are indicative of our core operating performance and allows for consistent comparison of our operating results over time and relative to our peers. We use Adjusted net income 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.
Free Cash Flow
We define free cash flow as net cash provided by operating activities less capital expenditures, net of construction reimbursements, plus net proceeds from sale-leaseback transactions and land sales. We believe free cash flow assists investors and analysts in evaluating our liquidity and cash flows, including our ability to make principal payments on our indebtedness and to fund our capital expenditures and working capital requirements. Our management considers free cash flow to be a key indicator of our liquidity and we present this metric to our board of directors. Additionally, we believe free cash flow is frequently used by analysts, investors and other interested parties in the evaluation of companies in our industry. We also believe that investors, analysts and rating agencies consider free cash flow as a useful means of measuring our ability to make principal payments on our indebtedness and evaluating our liquidity, and management uses this measurement for one or more of these purposes.
Adjusted net income, 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. These are not measurements of our financial performance under GAAP and should not be considered as alternatives to net income 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. Adjusted net income, 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. Furthermore, we compensate for the limitations described above by relying primarily on our GAAP results and using Adjusted net income, Adjusted EBITDA and free cash flow only for supplemental purposes. See our condensed consolidated financial statements included elsewhere in this report for our GAAP results.
Non-GAAP Measurements and Key Performance Indicators
We prepare and analyze various non-GAAP performance metrics and key performance indicators to assess the performance of our business and allocate resources. For more information regarding our non-GAAP performance metrics, see “—Non-GAAP Financial Measures” above. 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.
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Set forth below are certain GAAP and non-GAAP measurements and key performance indicators for the three and six months ended June 30, 2024 and 2023. The following information has been presented consistently for all periods presented.
Three Months Ended Six Months Ended
June 30, June 30,
2024 2023 2024 2023
($ in thousands, except for Average Center revenue per center membership data)
Membership Data
Center memberships 832,636 790,238 832,636 790,238
Digital On-hold memberships 46,131 42,401 46,131 42,401
Total memberships 878,767 832,639 878,767 832,639
Revenue Data
Membership dues and enrollment fees 71.7% 71.4% 72.5% 71.6%
In-center revenue 28.3% 28.6% 27.5% 28.4%
Total Center revenue 100.0% 100.0% 100.0% 100.0%
Membership dues and enrollment fees $ 462,696 $ 387,115 $ 888,107 $ 744,603
In-center revenue 182,311 155,010 337,385 295,274
Total Center revenue $ 645,007 $ 542,125 $ 1,225,492 $ 1,039,877
Average Center revenue per center membership (1)
$ 794 $ 701 $ 1,541 $ 1,369
Comparable center revenue (2)
12.0% 15.5% 11.6% 19.7%
Center Data
Net new center openings (3)
3 — 4 3
Total centers (end of period) (3)
175 164 175 164
Total center square footage (end of period) (4)
17,200,000 16,200,000 17,200,000 16,200,000
GAAP and Non-GAAP Financial Measures
Net income $ 52,805 $ 17,004 $ 77,722 $ 44,464
Net income margin (5)
7.9  % 3.0  % 6.1  % 4.1  %
Adjusted net income (6)
$ 52,440 $ 37,965 $ 83,376 $ 59,848
Adjusted net income margin (6)
7.9  % 6.8  % 6.6  % 5.6  %
Adjusted EBITDA (7)
$ 173,545 $ 136,039 $ 319,523 $ 256,141
Adjusted EBITDA margin (7)
26.0  % 24.2  % 25.3  % 23.9  %
Center operations expense $ 355,510 $ 302,603 $ 677,410 $ 576,712
Pre-opening expenses (8)
$ 1,202 $ 2,984 $ 3,654 $ 4,669
Rent $ 74,947 $ 67,434 $ 147,229 $ 133,971
Non-cash rent expense (open properties) (9)
$ 5,965 $ 6,819 $ 10,645 $ 13,196
Non-cash rent expense (properties under development) (9)
$ 1,727 $ 1,784 $ 3,005 $ 4,434
Net cash provided by operating activities $ 170,423 $ 141,943 $ 260,830 $ 216,291
Free cash flow (10)
$ 175,116 $ 21,045 $ 108,722 $ (42,745)
(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.
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(2)    We measure the results of our centers based on how long each center has been open as of the most recent measurement 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.
(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. Total centers (end of period) is the number of centers operational as of the last day of the period. During the three months ended June 30, 2024, we opened three centers.
(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.
(5)    Net income margin is calculated as net income divided by total revenue.
(6)    We present Adjusted net income as a supplemental measure of our performance. We define Adjusted net income as net income 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.
Adjusted net income margin is calculated as Adjusted net income divided by total revenue.
The following table provides a reconciliation of net income and income per common share, the most directly comparable GAAP measures, to Adjusted net income and Adjusted net income per common share:
Three Months Ended Six Months Ended
June 30, June 30,
($ in thousands) 2024 2023 2024 2023
Net income $ 52,805  $ 17,004  $ 77,722  $ 44,464 
Share-based compensation expense (a)
11,071  16,549  18,698  22,171 
(Gain) loss on sale-leaseback transactions (b)
(7,558) 7,491  (7,522) 759 
Other (c)
(3,974) 1,251  (3,796) (3,261)
Taxes (d)
96  (4,330) (1,726) (4,285)
Adjusted net income $ 52,440  $ 37,965  $ 83,376  $ 59,848 
Income per common share:
Basic $ 0.27  $ 0.09  $ 0.39  $ 0.23 
Diluted $ 0.26  $ 0.08  $ 0.38  $ 0.22 
Adjusted income per common share:
Basic $ 0.26  $ 0.19  $ 0.42  $ 0.31 
Diluted $ 0.25  $ 0.19  $ 0.41  $ 0.29 
Weighted-average common shares outstanding:
Basic 198,903  195,476  198,200  195,026 
Diluted 206,044  204,821  204,851  203,872 
(a)    Share-based compensation expense recognized during the three and six months ended June 30, 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. Share-based compensation expense recognized during the three and six months ended June 30, 2023 was associated with stock options, restricted stock units, our ESPP and liability-classified awards related to our 2023 short-term incentive plan.
(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. For details on the gain on sale-leaseback transactions that we recognized during the six months ended June 30, 2024, see Note 6, Leases, to our condensed consolidated financial statements in this report.
(c)    Includes benefits and costs associated with transactions that are unusual and non-recurring in nature.
(d)    Represents the estimated tax effect of the total adjustments made to arrive at Adjusted net income using the effective income tax rates for the respective periods.
(7)    We present Adjusted EBITDA as a supplemental measure of our performance. We define Adjusted EBITDA as net income before interest expense, net, provision for 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 EBITDA margin is calculated as Adjusted EBITDA divided by total revenue.
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The following table provides a reconciliation of net income, the most directly comparable GAAP measure, to Adjusted EBITDA:
Three Months Ended Six Months Ended
June 30, June 30,
($ in thousands) 2024 2023 2024 2023
Net income $ 52,805  $ 17,004  $ 77,722  $ 44,464 
Interest expense, net of interest income 37,669  31,979  75,072  63,174 
Provision for income taxes 13,818  3,513  23,732  12,385 
Depreciation and amortization 69,714  58,252  135,617  116,449 
Share-based compensation expense (a)
11,071  16,549  18,698  22,171 
(Gain) loss on sale-leaseback transactions (b)
(7,558) 7,491  (7,522) 759 
Other (c)
(3,974) 1,251  (3,796) (3,261)
Adjusted EBITDA $ 173,545  $ 136,039  $ 319,523  $ 256,141 
(a) - (c)     See the corresponding footnotes to the table in footnote 6 immediately above.    
(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.
(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. 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.
(10)    Free cash flow, a non-GAAP financial measure, is calculated as net cash provided by operating activities less capital expenditures, net of construction reimbursements, plus net proceeds from sale-leaseback transactions and land sales.
The following table provides a reconciliation from net cash provided by operating activities to free cash flow:

Three Months Ended Six Months Ended
June 30, June 30,
($ in thousands) 2024 2023 2024 2023
Net cash provided by operating activities $ 170,423  $ 141,943  $ 260,830  $ 216,291 
Capital expenditures, net of construction reimbursements (144,306) (166,262) (301,107) (337,076)
Proceeds from sale-leaseback transactions 142,671  45,364  142,671  78,040 
Proceeds from land sales 6,328  —  6,328  — 
Free cash flow $ 175,116  $ 21,045  $ 108,722  $ (42,745)
Factors Affecting the Comparability of our Results of Operations
Impact of COVID-19 on our Business
Overview
In March 2020, the World Health Organization declared the outbreak of COVID-19 as a pandemic, the United States declared a National Public Health Emergency and we closed all of our centers based on orders and advisories from federal, state and local governmental authorities regarding COVID-19. Throughout this report, including this “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” when we refer to “COVID-19” or “the pandemic,” such as when we describe the “impact of COVID-19” on our operations, we mean the coronavirus-related orders issued by governmental authorities affecting our operations and/or the presence of coronavirus in our centers, including COVID-19 positive members or team members.
We re-opened our first center on May 8, 2020, and continued to re-open our centers as state and local governmental authorities permitted, subject to operating processes and protocols that we developed in consultation with an epidemiologist (MD/PhD) to provide a healthy and clean environment for our members and team members and to meet various governmental requirements and restrictions. Our centers were also impacted in 2021 as a result of the Delta variant and then again later in 2021 and into 2022 with the Omicron variant. The performance of our centers has improved significantly as our centers have ramped back from the adverse impacts of COVID-19.
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Leverage
We are focused on improving the ratio of our net debt to Adjusted EBITDA, or our leverage ratio. We define net debt as the current and long-term portion of our debt, excluding unamortized debt discounts and issuance costs and fair value adjustments, less cash and cash equivalents. Our leverage ratio was elevated due in part to the adverse impacts of COVID-19, which required us to incur additional debt and significantly reduced our Adjusted EBITDA. We have significantly improved our leverage ratio and believe that we can continue to improve our leverage ratio as our profitability improves and we continue to strengthen our balance sheet.
Impact of Our Asset-light, Flexible Real Estate Strategy on Rent Expense
Our asset-light, flexible real estate strategy has allowed us to expand our business by leveraging operating leases and sale-leaseback transactions, among other asset-light opportunities. Approximately 67% of our centers are now leased, including approximately 86% 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. 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.
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. See “—Overview—Macroeconomy” for additional information.
Share-Based Compensation
During the six months ended June 30, 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 $18.7 million. During the six months ended June 30, 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 $22.2 million.
Critical Accounting Policies and Estimates
The preparation of financial statements in conformity with GAAP requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Ultimate results could differ from those estimates. In recording transactions and balances resulting from business operations, we use estimates based on the best information available. We revise the recorded estimates when better information is available, facts change or we can determine actual amounts. These revisions can affect operating results.
Management has evaluated the development and selection of our critical accounting policies and estimates used in the preparation of the Company’s unaudited condensed consolidated financial statements and related notes and believes these policies to be reasonable and appropriate. Certain of these policies involve a higher degree of judgment or complexity and are most significant to reporting our results of operations and financial position, and are, therefore, discussed as critical. Our most significant estimates and assumptions that materially affect the Company’s unaudited condensed consolidated financial statements involve difficult, subjective or complex judgments, which management used while performing goodwill, indefinite-lived intangible and long-lived asset impairment analyses and sale-leaseback arrangements.
More information on all of our significant accounting policies can be found in Note 2, “Summary of Significant Accounting Policies” to our audited consolidated financial statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023 filed with the SEC. There have been no material changes to our critical accounting policies as compared to the critical accounting policies described in such Annual Report on Form 10-K.
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Results of Operations
Three Months Ended June 30, 2024 Compared to Three Months Ended June 30, 2023
The following table sets forth our condensed consolidated statements of operations data (amounts in thousands) and data as a percentage of total revenue for the three months ended June 30, 2024 and 2023:
Three Months Ended June 30,
As a Percentage of Total Revenue
2024 2023 2024 2023
Revenue:
Center revenue $ 645,007  $ 542,125  96.6  % 96.5  %
Other revenue 22,754  19,606  3.4  % 3.5  %
Total revenue 667,761  561,731  100.0  % 100.0  %
Operating expenses:
Center operations 355,510  302,603  53.2  % 53.9  %
Rent 74,947  67,434  11.2  % 12.0  %
General, administrative and marketing 53,246  52,840  8.0  % 9.4  %
Depreciation and amortization 69,714  58,252  10.4  % 10.4  %
Other operating expense 9,588  28,194  1.5  % 5.0  %
Total operating expenses 563,005  509,323  84.3  % 90.7  %
Income from operations 104,756  52,408  15.7  % 9.3  %
Other (expense) income:
Interest expense, net of interest income (37,669) (31,979) (5.6) % (5.7) %
Equity in (loss) earnings of affiliates (464) 88  (0.1) % —  %
Total other expense (38,133) (31,891) (5.7) % (5.7) %
Income before income taxes 66,623  20,517  10.0  % 3.6  %
Provision for income taxes 13,818  3,513  2.1  % 0.6  %
Net income $ 52,805  $ 17,004  7.9  % 3.0  %
Total revenue. The $106.0 million increase in Total revenue for the three months ended June 30, 2024 as compared to the three months ended June 30, 2023 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 and higher member utilization of our in-center offerings.
With respect to the $102.9 million increase in Center revenue for the three months ended June 30, 2024 as compared to the three months ended June 30, 2023:
•73.5% was from membership dues and enrollment fees, which increased $75.6 million for the three months ended June 30, 2024 as compared to the three months ended June 30, 2023. This increase reflects the improvement in our Center memberships, which increased to 832,636 as of June 30, 2024 from 790,238 as of June 30, 2023, as well as higher average monthly dues per Center membership during the three months ended June 30, 2024 as compared to the three months ended June 30, 2023; and
•26.5% was from in-center revenue, which increased $27.3 million for the three months ended June 30, 2024 as compared to the three months ended June 30, 2023. 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 three months ended June 30, 2024 as compared to the three months ended June 30, 2023.
The $3.1 million increase in Other revenue for the three months ended June 30, 2024 as compared to the three months ended June 30, 2023 was primarily driven by the improved performance of our Life Time Work locations and athletic events business.
Center operations expenses. The $52.9 million increase in Center operations expenses for the three months ended June 30, 2024 as compared to the three months ended June 30, 2023 was primarily due to increased operating costs related to our new and ramping centers as well as growth in memberships and in-center business revenue.
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Rent expense. The $7.5 million increase in Rent expense for the three months ended June 30, 2024 as compared to the three months ended June 30, 2023 was primarily driven by the timing of sale-leaseback transactions during both the current and prior year, the timing of taking possession of other leased properties, as well as the recognition of a higher level of contingent rent expense, which is generally determined based on a percentage of center-specific revenue and/or other center-specific financial metrics over contractually specified levels, during the three months ended June 30, 2024 as compared to the three months ended June 30, 2023.
General, administrative and marketing expenses. General, administrative and marketing expenses increased $0.4 million for the three months ended June 30, 2024 as compared to the three months ended June 30, 2023, primarily due to increases in cash incentive compensation expenses, information technology costs and center support overhead to enhance and broaden our member services and experiences, partially offset by lower share-based compensation expense.
Depreciation and amortization. Depreciation and amortization increased $11.5 million for the three months ended June 30, 2024 as compared to the three months ended June 30, 2023, primarily due to new center openings.
Other operating expense. Other operating expense decreased $18.6 million for the three months ended June 30, 2024 as compared to the three months ended June 30, 2023, primarily due to the recognition of a $7.6 million gain on sale-leaseback transactions and a $4.3 million gain on the sale of land during the three months ended June 30, 2024 as compared to the recognition of a $7.5 million loss on sale-leaseback transactions during the three months ended June 30, 2023.
Interest expense, net of interest income. The $5.7 million increase in Interest expense, net of interest income for the three months ended June 30, 2024 as compared to the three months ended June 30, 2023 was driven by a higher average level of outstanding borrowings and higher interest rates associated with our variable rate debt during the three months ended June 30, 2024 as compared to the three months ended June 30, 2023.
Provision for income taxes. The provision for income taxes was $13.8 million for the three months ended June 30, 2024 as compared to $3.5 million for the three months ended June 30, 2023. The effective tax rate was 20.7% and 17.1% for those same periods, respectively. The increase in provision for income taxes for the three months ended June 30, 2024 as compared to the three months ended June 30, 2023 was primarily driven by an increase in earnings before taxes and the tax deficiencies associated with share-based payment awards, partially offset by a reduction in the valuation allowance associated with certain of our deferred tax assets.
Net income. As a result of the factors described above, net income was $52.8 million for the three months ended June 30, 2024 as compared to $17.0 million for the three months ended June 30, 2023.
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Six Months Ended June 30, 2024 Compared to Six Months Ended June 30, 2023
The following table sets forth our condensed consolidated statements of operations data (amounts in thousands) and data as a percentage of total revenue for the six months ended June 30, 2024 and 2023:
Six Months Ended June 30,
As a Percentage of Total Revenue
2024 2023 2024 2023
Revenue:
Center revenue $ 1,225,492  $ 1,039,877  96.9  % 97.0  %
Other revenue 38,986  32,705  3.1  % 3.0  %
Total revenue 1,264,478  1,072,582  100.0  % 100.0  %
Operating expenses:
Center operations 677,410  576,712  53.6  % 53.8  %
Rent 147,229  133,971  11.6  % 12.5  %
General, administrative and marketing 102,099  95,337  8.1  % 8.9  %
Depreciation and amortization 135,617  116,449  10.7  % 10.8  %
Other operating expense 25,310  30,321  2.0  % 2.8  %
Total operating expenses 1,087,665  952,790  86.0  % 88.8  %
Income from operations 176,813  119,792  14.0  % 11.2  %
Other (expense) income:
Interest expense, net of interest income (75,072) (63,174) (6.0) % (5.9) %
Equity in (loss) earnings of affiliates (287) 231  —  % —  %
Total other expense (75,359) (62,943) (6.0) % (5.9) %
Income before income taxes 101,454  56,849  8.0  % 5.3  %
Provision for income taxes 23,732  12,385  1.9  % 1.2  %
Net income $ 77,722  $ 44,464  6.1  % 4.1  %
Total revenue. The $191.9 million increase in Total revenue for the six months ended June 30, 2024 as compared to the six months ended June 30, 2023 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 and higher member utilization of our in-center offerings.
With respect to the $185.6 million increase in Center revenue for the six months ended June 30, 2024 as compared to the six months ended June 30, 2023:
•77.3% was from membership dues and enrollment fees, which increased $143.5 million for the six months ended June 30, 2024 as compared to the six months ended June 30, 2023. This increase reflects the improvement in our Center memberships, which increased to 832,636 as of June 30, 2024 from 790,238 as of June 30, 2023, as well as higher average monthly dues per Center membership during the six months ended June 30, 2024 as compared to the six months ended June 30, 2023; and
•22.7% was from in-center revenue, which increased $42.1 million for the six months ended June 30, 2024 as compared to the six months ended June 30, 2023. 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 six months ended June 30, 2024 as compared to the six months ended June 30, 2023.
The $6.3 million increase in Other revenue for the six months ended June 30, 2024 as compared to the six months ended June 30, 2023 was primarily driven by the improved performance of our Life Time Work locations, media and events business and Life Time Living locations.
Center operations expenses. The $100.7 million increase in Center operations expenses for the six months ended June 30, 2024 as compared to the six months ended June 30, 2023 was primarily due to increased operating costs related to our new and ramping centers as well as growth in memberships and in-center business revenue.
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Rent expense. The $13.3 million increase in Rent expense for the six months ended June 30, 2024 as compared to the six months ended June 30, 2023 was primarily driven by the timing of sale-leaseback transactions during both the current and prior year, the timing of taking possession of other leased properties, as well as the recognition of a higher level of contingent rent expense, which is generally determined based on a percentage of center-specific revenue and/or other center-specific financial metrics over contractually specified levels, during the six months ended June 30, 2024 as compared to the six months ended June 30, 2023.
General, administrative and marketing expenses. General, administrative and marketing expenses increased $6.8 million for the six months ended June 30, 2024 as compared to the six months ended June 30, 2023, primarily due to increases in our cash-based incentive compensation and information technology costs, the timing of marketing expenses primarily related to our new club openings and center support overhead to enhance and broaden our member services and experiences, partially offset by lower share-based compensation expense.
Depreciation and amortization. Depreciation and amortization increased $19.2 million for the six months ended June 30, 2024 as compared to the six months ended June 30, 2023, primarily due to new center openings.
Other operating expense. Other operating expense decreased $5.0 million for the six months ended June 30, 2024 as compared to the six months ended June 30, 2023, primarily due to the recognition of a $7.5 million gain on sale-leaseback transactions and a $4.3 million gain on sale of land during the six months ended June 30, 2024 as compared to the recognition of a $0.8 million loss on sale-leaseback transactions during the six months ended June 30, 2023, partially offset by a $4.9 million gain on the sale of two triathlon events during the six months ended June 30, 2023 and increased costs to support other revenue growth.
Interest expense, net of interest income. The $11.9 million increase in Interest expense, net of interest income for the six months ended June 30, 2024 as compared to the six months ended June 30, 2023 was driven by a higher average level of outstanding borrowings and higher interest rates associated with our variable rate debt during the six months ended June 30, 2024 as compared to the six months ended June 30, 2023.
Provision for income taxes. The $11.3 million increase in provision for income taxes for the six months ended June 30, 2024 as compared to the six months ended June 30, 2023 was primarily driven by an increase in earnings before taxes and the tax deficiencies associated with share-based payment awards, partially offset by a reduction in the valuation allowance associated with certain of our deferred tax assets. The effective tax rate was 23.4% and 21.8% for those same periods, respectively. The effective tax rate applied to our pre-tax income for the six months ended June 30, 2024 is higher than our statutory 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.
Net income. As a result of the factors described above, net income was $77.7 million and $44.5 million for the six months ended June 30, 2024 and 2023, respectively.
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. 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 continue to include improving our balance sheet, reducing leverage and generating positive free cash flow. Our cash flow from operations continues to improve and we have taken significant actions to improve our liquidity. In May 2023, we refinanced our $273.6 million Term Loan Facility that had a maturity date in December 2024 to our $310.0 million Term Loan Facility that has a maturity date of January 15, 2026. In December 2023, we amended our Term Loan Facility to reduce the interest rate by 0.50%. During 2023, we completed sale-leaseback transactions associated with three properties and year-to-date 2024 we have completed sale-leaseback transactions for four properties. For more information regarding the sale-leaseback transactions that were consummated during the six months ended June 30, 2024, see Note 6, Leases, to our condensed consolidated financial statements included in this report. 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.
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As the opportunity arises or as our business needs require, we may seek to raise capital through additional debt or equity financing. There can be no assurance that any such financing would be available on commercially acceptable terms, or at all. Volatility in these markets, particularly in light of the higher interest rate environment, may increase costs associated with issuing debt instruments or affect our ability to access those markets, which could have an adverse impact on our ability to raise additional capital, to refinance existing debt and/or to react to changing economic and business conditions. In addition, it is possible that our ability to access the credit and capital markets could be limited at a time when we would like or need to do so.
As of June 30, 2024, there were $65.0 million of outstanding borrowings under our Revolving Credit Facility and there were $30.9 million of outstanding letters of credit, resulting in total availability under our $475.0 million Revolving Credit Facility of $379.1 million. Total cash and cash equivalents at June 30, 2024 was $34.5 million, resulting in total cash and availability under our Revolving Credit Facility of $413.6 million.
The following table sets forth our condensed consolidated statements of cash flows data (amounts in thousands):
Six Months Ended
June 30,
2024 2023
Net cash provided by operating activities $ 260,830  $ 216,291 
Net cash used in investing activities (154,281) (259,498)
Net cash (used in) provided by financing activities (87,102) 48,420 
Effect of exchange rates on cash and cash equivalents and restricted cash and cash equivalents (55) 136 
Increase in cash and cash equivalents and restricted cash and cash equivalents $ 19,392  $ 5,349 
Operating Activities
The $44.5 million increase in net cash provided by operating activities for the six months ended June 30, 2024 as compared to the six months ended June 30, 2023 was primarily the result of increased business performance and profitability.
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. 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.
The $105.2 million decrease in net cash used in investing activities for the six months ended June 30, 2024 as compared to the six months ended June 30, 2023 was primarily driven by a $64.6 million increase in the amount of proceeds that we received from sale-leaseback transactions, a $36.0 million decrease in capital expenditures and $6.3 million of proceeds from the sale of land during the six months ended June 30, 2024 as compared to the six months ended June 30, 2023.
The following table reflects capital expenditures by type of expenditure (in thousands):
Three Months Ended Six Months Ended
June 30, June 30,
2024 2023 2024 2023
Growth capital expenditures (1)
$ 108,560  $ 112,295  $ 213,469  $ 236,971 
Maintenance capital expenditures (2)
27,298  27,310  48,436  52,109 
Modernization and technology capital expenditures (3)
8,448  26,657  39,202  47,996 
Total capital expenditures $ 144,306  $ 166,262  $ 301,107  $ 337,076 
(1)    Consist of 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.
(2)    Consist of general maintenance of existing centers.
(3)    Consist of modernization of existing centers and technology.
The decrease in total capital expenditures for the six months ended June 30, 2024 as compared to the six months ended June 30, 2023 was primarily driven by less new center construction activity.
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Financing Activities
The $135.5 million decrease in net cash provided by financing activities for the six months ended June 30, 2024 as compared to the six months ended June 30, 2023 was primarily driven by net payments on borrowings under our Revolving Credit Facility, payments of mortgage notes and less proceeds from stock option exercises during the six months ended June 30, 2024.
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.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
We are exposed to market risks in the ordinary course of our business that include changes in interest rates and changes in foreign currency exchange rates. Information relating to quantitative and qualitative disclosures about these market risks is set forth below.
Interest rate risk
Our cash consists primarily of an interest-bearing account at a large United States bank with limited interest rate risk. At June 30, 2024, we held no investments in marketable securities.
In connection with the refinancing of our Term Loan Facility in May 2023, we converted the Term Loan Facility and the Revolving Credit Facility 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. At June 30, 2024, there were $65.0 million of outstanding borrowings under the Revolving Credit Facility and $30.9 million of outstanding letters of credit, resulting in total revolver availability of $379.1 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 borrowing plus 3.50% or base rate plus 2.50%. 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 June 30, 2024. During the three months ended June 30, 2024, we 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.
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.
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.
ITEM 4. CONTROLS AND PROCEDURES
Disclosure Controls and Procedures
Our management, with the participation of our Chief Executive Officer and Chief Financial Officer, has carried out an evaluation of the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) as of the end of the period covered by this Quarterly Report on Form 10-Q. Based upon that evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that, as of such date, our disclosure controls and procedures were effective at a reasonable assurance level.
Changes in Internal Control over Financial Reporting
There were no changes in our internal control over financial reporting identified in connection with the evaluation required by Rule 13a-15(d) and 15d-15(d) of the Exchange Act during the quarter covered by this report that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
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Part II — OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
From time to time, we are engaged in litigation or other proceedings incidental to the normal course of business, including investigations and claims regarding employment law including wage and hour and unfair labor practices; supplier, customer and service provider contract terms; products liability; and real estate. Other than as set forth in Note 9, Commitments and Contingencies, in Part I, Item 1 of this Quarterly Report on Form 10-Q, which is incorporated herein, there are no pending material legal proceedings to which we are a party or to which our property is subject.
ITEM 1A. RISK FACTORS
In addition to the other information set forth in this Quarterly Report on Form 10-Q, you should carefully consider the factors discussed under the caption “Risk Factors” in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023 filed with the SEC, which could materially affect our business, financial condition or future results. There have been no material changes from the risk factors previously disclosed in that Annual Report.
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
None.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None.
ITEM 4. MINE SAFETY DISCLOSURES
None.
ITEM 5. OTHER INFORMATION
During the three months ended June 30, 2024, no director or officer of the Company adopted, modified or terminated a “Rule 10b5-1 trading arrangement” or “non-Rule 10b5-1 trading arrangement,” as each term is defined in Item 408(a) of Regulation S-K.

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ITEM 6. EXHIBITS
All exhibits as set forth on the Exhibit Index.
Exhibit Index
Exhibit
Number
 Description of Exhibit Form File No. Exhibit Filing Date
31.1 Filed herewith
31.2 Filed herewith
32.1 Furnished herewith
32.2 Furnished herewith
101.INS
Inline XBRL Instance Document –– the Instance Document does not appear in the interactive data file because its XBRL tags are Embedded within the Inline XBRL Document.
Filed herewith
101.SCH
Inline XBRL Schema Document.
 Filed herewith
101.CAL
Inline XBRL Taxonomy Extension Calculation Linkbase Document.
 Filed herewith
101.DEF
Inline XBRL Taxonomy Extension Definition Linkbase Document.
 Filed herewith
101.LAB
Inline XBRL Taxonomy Extension Label Linkbase Document.
 Filed herewith
101.PRE
Inline XBRL Taxonomy Extension Presentation Linkbase Document.
 Filed herewith
104
Cover Page Interactive Data File –– the cover page interactive data file does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.
 Filed herewith

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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

Life Time Group Holdings, Inc.
Date: August 1, 2024
 By: /s/ Erik Weaver
Erik Weaver
Executive Vice President & Chief Financial Officer
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