0001869198-22-000069.txt : 20221109 0001869198-22-000069.hdr.sgml : 20221109 20221109161730 ACCESSION NUMBER: 0001869198-22-000069 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 76 CONFORMED PERIOD OF REPORT: 20220930 FILED AS OF DATE: 20221109 DATE AS OF CHANGE: 20221109 FILER: COMPANY DATA: COMPANY CONFORMED NAME: Life Time Group Holdings, Inc. CENTRAL INDEX KEY: 0001869198 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-MEMBERSHIP SPORTS & RECREATION CLUBS [7997] IRS NUMBER: 473481985 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-40887 FILM NUMBER: 221372873 BUSINESS ADDRESS: STREET 1: 2902 CORPORATE PLACE CITY: CHANHASSEN STATE: MN ZIP: 55317 BUSINESS PHONE: (952) 947-0000 MAIL ADDRESS: STREET 1: 2902 CORPORATE PLACE CITY: CHANHASSEN STATE: MN ZIP: 55317 10-Q 1 lth-20220930.htm 10-Q lth-20220930
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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 September 30, 2022
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)
Delaware47-3481985
(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 ClassTrading SymbolName of Each Exchange on Which Registered
Common stock, par value $0.01 per shareLTHThe 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 filerNon-accelerated filer
Smaller reporting companyEmerging 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 November 7, 2022, the registrant had 194,188,729 shares of common stock outstanding, par value $0.01 per share.


TABLE OF CONTENTS
2

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)
September 30,
2022
December 31,
2021
ASSETS
Current assets:
Cash and cash equivalents$107,069 $31,637 
Accounts receivable, net12,281 6,464 
Center operating supplies and inventories44,084 41,007 
Prepaid expenses and other current assets44,829 48,883 
Income tax receivable 3,533 
Total current assets208,263 131,524 
Property and equipment, net2,772,385 2,791,464 
Goodwill1,233,176 1,233,176 
Operating lease right-of-use assets2,148,828 1,864,528 
Intangible assets, net173,492 174,241 
Other assets65,403 61,742 
Total assets$6,601,547 $6,256,675 
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable$72,951 $71,308 
Construction accounts payable118,671 83,311 
Deferred revenue32,296 33,871 
Accrued expenses and other current liabilities167,457 147,920 
Current maturities of debt15,046 23,527 
Current maturities of operating lease liabilities50,746 46,315 
Total current liabilities457,167 406,252 
Long-term debt, net of current portion1,775,248 1,775,719 
Operating lease liabilities, net of current portion2,206,753 1,909,883 
Deferred income taxes43,941 55,213 
Other liabilities13,265 18,216 
Total liabilities4,496,374 4,165,283 
Commitments and contingencies (Note 11)
Stockholders’ equity:
Common stock, $0.01 par value per share; 500,000 shares authorized; 193,991 and 193,060 shares issued and outstanding, respectively.
1,940 1,931 
Additional paid-in capital2,780,190 2,743,560 
Accumulated deficit(666,602)(651,083)
Accumulated other comprehensive loss(10,355)(3,016)
Total stockholders’ equity2,105,173 2,091,392 
Total liabilities and stockholders’ equity$6,601,547 $6,256,675 

See notes to unaudited condensed consolidated financial statements.
3

LIFE TIME GROUP HOLDINGS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
(Unaudited)
Three Months Ended
September 30,
Nine Months Ended
September 30,
2022202120222021
Revenue:
Center revenue$479,995 $372,000 $1,307,498$933,690
Other revenue16,386 13,040 42,40423,835
Total revenue496,381 385,040 1,349,902957,525
Operating expenses:
Center operations295,253 231,996 814,383625,322
Rent63,213 52,513 179,166154,552
General, administrative and marketing57,139 45,304 175,650126,896
Depreciation and amortization56,400 57,977 171,680177,005
Other operating (income) expense(31,358)14,796 (56,605)30,660
Total operating expenses440,647 402,586 1,284,2741,114,435
Income (loss) from operations55,734 (17,546)65,628(156,910)
Other (expense) income:
Interest expense, net of interest income(27,696)(39,849)(84,732)(176,144)
Equity in earnings (loss) of affiliate95 (28)129(412)
Total other expense(27,601)(39,877)(84,603)(176,556)
Income (loss) before income taxes28,133 (57,423)(18,975)(333,466)
Provision for (benefit from) income taxes3,401 (11,981)(3,456)(58,867)
Net income (loss)$24,732 $(45,442)$(15,519)$(274,599)
Income (loss) per common share:
Basic$0.13 $(0.36)$(0.08)$(2.00)
Diluted$0.12 $(0.36)$(0.08)$(2.00)
Weighted-average common shares outstanding:
Basic193,918 145,196 193,364145,196
Diluted198,381 145,196 193,364145,196

See notes to unaudited condensed consolidated financial statements.
4

LIFE TIME GROUP HOLDINGS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS
(In thousands)
(Unaudited)
Three Months Ended
September 30,
Nine Months Ended
September 30,
2022202120222021
Net income (loss)$24,732 $(45,442)$(15,519)$(274,599)
Foreign currency translation adjustments, net of tax of $0
(6,015)(2,404)(7,339)323
Comprehensive income (loss)$18,717 $(47,846)$(22,858)$(274,276)

See notes to unaudited condensed consolidated financial statements.
5

LIFE TIME GROUP HOLDINGS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY
(In thousands)
(Unaudited)
Common StockAdditional Paid-In
Capital
Accumulated DeficitAccumulated Other Comprehensive LossTotal
Equity
SharesAmount
Balance at June 30, 2022193,796 $1,938 $2,772,393 $(691,334)$(4,340)$2,078,657 
Net income— — — 24,732 — 24,732 
Other comprehensive loss— — — — (6,015)(6,015)
Share-based compensation— — 5,803 — — 5,803 
Stock option exercises195 2 1,994 — — 1,996 
Balance at September 30, 2022193,991 $1,940 $2,780,190 $(666,602)$(10,355)$2,105,173 

Common StockAdditional Paid-In
Capital
Accumulated DeficitAccumulated Other Comprehensive LossTotal
Equity
SharesAmount
Balance at December 31, 2021193,060 $1,931 $2,743,560 $(651,083)$(3,016)$2,091,392 
Net loss— — — (15,519)— (15,519)
Other comprehensive loss— — — — (7,339)(7,339)
Share-based compensation— — 33,214 — — 33,214 
Stock option exercises309 3 3,187 — — 3,190 
Equity issuance costs— — (270)— — (270)
Issuance of common shares in connection with the vesting of restricted stock units622 6 (6)— —  
Settlement of accrued compensation liabilities through the issuance of share-based compensation awards— — 505 — — 505 
Balance at September 30, 2022193,991 $1,940 $2,780,190 $(666,602)$(10,355)$2,105,173 

Common StockAdditional Paid-In
Capital
Stockholder Note
Receivable
Accumulated DeficitAccumulated Other Comprehensive LossTotal
Equity
SharesAmount
Balance at June 30, 2021145,196 $1,452 $1,564,591 $(15,000)$(300,871)$(503)$1,249,669 
Net loss— — — — (45,442)— (45,442)
Other comprehensive loss— — — — — (2,404)(2,404)
Share-based compensation— — 1,794 — — — 1,794 
Cancellation of stockholder note receivable— — (11,355)15,000 — — 3,645 
Dividends on preferred stock— — (6,126)— — — (6,126)
Balance at September 30, 2021145,196 $1,452 $1,548,904 $ $(346,313)$(2,907)$1,201,136 

Common StockAdditional Paid-In
Capital
Stockholder Note
Receivable
Accumulated DeficitAccumulated Other Comprehensive LossTotal
Equity
SharesAmount
Balance at December 31, 2020145,196 $1,452 $1,569,905 $(15,000)$(71,714)$(3,230)$1,481,413 
Net loss— — — — (274,599)— (274,599)
Other comprehensive income— — — — — 323 323 
Share-based compensation— — 2,924 — — — 2,924 
Settlement of accrued compensation liabilities through the issuance of share-based compensation awards— — 3,844 — — — 3,844 
Cancellation of stockholder note receivable— — (11,355)15,000 — — 3,645 
Dividends on preferred stock— — (16,414)— — — (16,414)
Balance at September 30, 2021145,196 $1,452 $1,548,904 $ $(346,313)$(2,907)$1,201,136 

See notes to unaudited condensed consolidated financial statements.
6

LIFE TIME GROUP HOLDINGS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
Nine Months Ended
September 30,
20222021
Cash flows from operating activities:
Net loss$(15,519)$(274,599)
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
Depreciation and amortization171,680 177,005 
Deferred income taxes(10,957)(63,467)
Share-based compensation33,214 6,959 
Non-cash rent expense27,304 11,546 
Impairment charges associated with long-lived assets153 2,455 
(Gain) loss on disposal of property and equipment, net(98,498)3,515 
Loss on debt extinguishment 40,993 
Write-off of discounts and debt issuance costs 18,325 
Amortization of debt discounts and issuance costs5,898 7,761 
Changes in operating assets and liabilities14,055 57,614 
Other(2,010)(3,429)
Net cash provided by (used in) operating activities125,320 (15,322)
Cash flows from investing activities:
Capital expenditures(409,946)(201,741)
Acquisitions, net of cash acquired (9,139)
Proceeds from sale-leaseback transactions373,451 73,981 
Other(985)(1,291)
Net cash used in investing activities(37,480)(138,190)
Cash flows from financing activities:
Proceeds from borrowings8,657 1,907,577 
Repayments of debt(21,993)(1,602,164)
Proceeds from revolving credit facility710,000 134,000 
Repayments of revolving credit facility(710,000)(228,000)
Repayments of finance lease liabilities(1,043)(1,133)
Increase in debt discounts and issuance costs(43)(45,151)
Proceeds from stock option exercises3,190  
Other(476) 
Net cash (used in) provided by financing activities(11,708)165,129 
Effect of exchange rates on cash and cash equivalents(700)15 
Increase in cash and cash equivalents75,432 11,632 
Cash and cash equivalents – beginning of period31,637 33,195 
Cash and cash equivalents – end of period$107,069 $44,827 

See notes to unaudited condensed consolidated financial statements.
7

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. Life Time Group Holdings, Inc. changed its name from LTF Holdings, Inc. effective on June 21, 2021. 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 September 30, 2022, we operated 156 centers in 29 states and one Canadian province.
COVID-19 Impact
In March 2020, the World Health Organization declared the outbreak of a novel coronavirus (“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. We re-opened our first center on May 8, 2020 and continued to re-open our centers as state and local governmental authorities permitted. With the exception of our three Canadian centers, which were temporarily closed during a portion of January 2022, all of our centers were open during the three and nine months ended September 30, 2022.
Initial Public Offering
On October 12, 2021, Life Time Group Holdings, Inc. consummated its initial public offering (“IPO”) of 39.0 million shares of its common stock at a public offering price of $18.00 per share, resulting in total gross proceeds of $702.0 million, which was reduced by underwriting discounts and other offering and issuance expenses of $28.0 million, of which approximately $0.3 million was recognized during 2022, for net proceeds of $674.0 million. The shares of the Company’s common stock began trading on The New York Stock Exchange (the “NYSE”) under the symbol “LTH” on October 7, 2021. A registration statement on Form S-1 relating to the offering of these securities was declared effective by the Securities and Exchange Commission (the “SEC”) on October 6, 2021.
On November 1, 2021, Life Time Group Holdings, Inc. consummated the sale of nearly 1.6 million additional shares of its common stock at the IPO price of $18.00 per share pursuant to the partial exercise by the underwriters of their over-allotment option, resulting in total gross proceeds of approximately $28.4 million, which was reduced by underwriting discounts and other offering expenses of $1.3 million, for net proceeds of $27.1 million. We used these net proceeds, as well as the remaining portion of the net proceeds we received in connection with the IPO after the $575.7 million (including a $5.7 million prepayment penalty) partial pay down of our Term Loan Facility (as defined in Note 6, Debt), for general corporate purposes.
Basis of Presentation
The unaudited condensed consolidated financial statements include the accounts of Life Time Group Holdings, Inc. and its wholly-owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation.
The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States (‘‘GAAP’’), which require 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. Actual 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 our consolidated operating results. All adjustments (consisting of normal recurring adjustments) considered necessary to fairly present our consolidated financial position, results of operations and cash flows for the periods have been included.
Certain information and footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted. A summary of our significant accounting policies is included in Note 2 to our annual consolidated financial statements.
8

LIFE TIME GROUP HOLDINGS, INC. AND SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Table amounts in thousands except per share data)
2. Summary of Significant Accounting Policies
Recently Adopted Accounting Pronouncements
In November 2021, the Financial Accounting Standards Board (the “FASB”) issued Accounting Standard Update (“ASU”) 2021-10, “Government Assistance (Topic 832): Disclosures by Business Entities about Government Assistance,” to increase the transparency of government assistance, including with respect to the disclosure of the types of assistance an entity receives, an entity’s method of accounting for government assistance and the effect of the assistance on an entity’s financial statements. The amendments are to be applied either (1) prospectively to all applicable transactions that are reflected in financial statements at the date of initial application and new transactions that are entered into after the date of initial application or (2) retrospectively to those transactions. We adopted this ASU as of January 1, 2022 and applied it prospectively. The adoption of this ASU did not have any impact on our financial position, results of operations or cash flows.
New Accounting Pronouncements Not Yet Adopted
In March 2020, the FASB issued ASU 2020-04, “Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting.” ASU 2020-04 provides optional expedients and exceptions for applying GAAP to contract modifications, hedging relationships, and other transactions affected by reference rate reform if certain criteria are met. In response to the concerns about structural risks of interbank offered rates (“IBORs”) and, particularly, the risk of cessation of the London Interbank Offered Rate (“LIBOR”), regulators in several jurisdictions around the world have undertaken reference rate reform initiatives to identify alternative reference rates that are more observable or transaction-based and less susceptible to manipulation. ASU 2020-04 provides companies with optional guidance to ease the potential accounting burden associated with transitioning away from reference rates that are expected to be discontinued. In January 2021, the FASB issued ASU 2021-01, “Reference Rate Reform (Topic 848): Scope,” which provides implementation guidance associated with ASU 2020-04 and clarifies certain optional expedients in Topic 848. The guidance in ASU 2020-04 is effective for all entities as of March 12, 2020 and may be applied through December 31, 2022. We are still evaluating the impact of ASU 2020-04, but we do not expect that the adoption of this ASU will have a material impact on our consolidated financial statements.
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, 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 nine months ended September 30, 2022 and 2021.
Financial Assets and Liabilities. At September 30, 2022, the fair value of our outstanding Term Loan Facility, Secured Notes and Unsecured Notes (each of which is defined in Note 6, Debt) was approximately $269.9 million, $839.2 million and $404.8 million, respectively. At December 31, 2021, the fair value of our outstanding Term Loan Facility, Secured Notes and Unsecured Notes was approximately $277.0 million, $957.4 million and $494.0 million, respectively. The carrying amount of our outstanding Mortgage Notes and Construction Loan (each of which is defined in Note 6, Debt) at September 30, 2022 and December 31, 2021 approximates fair value. 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 6, Debt.
9

LIFE TIME GROUP HOLDINGS, INC. AND SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Table amounts in thousands except per share data)
Fair Value Measurements on a Nonrecurring Basis. Assets and liabilities that are measured at fair value on a nonrecurring basis primarily relate to our long-lived assets, goodwill and intangible 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.
During both the three and nine months ended September 30, 2022 and 2021, we determined that certain projects were no longer deemed viable for construction, and that the previously capitalized site development costs associated with these projects were impaired. Accordingly, as it relates to these long-lived assets, we recognized impairment charges of $0.2 million and $0.7 million for the three months ended September 30, 2022 and 2021, respectively, and $0.2 million and $2.5 million for the nine months ended September 30, 2022 and 2021, respectively. Fair value remeasurements are based on significant unobservable inputs (Level 3). Fixed asset fair values are primarily derived using a discounted cash flow (“DCF”) model to estimate the present value of net cash flows that the asset or asset group was expected to generate. The key inputs to the DCF model generally include our forecasts of net cash generated from revenue, expenses and other significant cash outflows, such as capital expenditures, as well as an appropriate discount rate.
3. Supplemental Balance Sheet and Cash Flow Information
Prepaid Expenses and Other Current Assets
Prepaid expenses and other current assets consisted of the following:
September 30,
2022
December 31,
2021
Property held for sale$4,988 $ 
Construction contract receivables8,106 14,949 
Deferred membership origination costs972 3,150 
Prepaid expenses30,763 30,784 
Prepaid expenses and other current assets$44,829 $48,883 
Accrued Expenses and Other Current Liabilities
Accrued expenses and other current liabilities consisted of the following:
September 30,
2022
December 31,
2021
Real estate taxes$39,170 $32,955 
Accrued interest31,846 35,006 
Payroll liabilities27,133 23,243 
Utilities9,945 7,022 
Self-insurance accruals20,303 18,921 
Corporate accruals32,772 24,741 
Current maturities of finance lease liabilities921 1,374 
Other5,367 4,658 
Accrued expenses and other current liabilities$167,457 $147,920 
10

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
Decreases (increases) in operating assets and increases (decreases) in operating liabilities are as follows:
Nine Months Ended
September 30,
20222021
Accounts receivable$(6,056)$(3,604)
Center operating supplies and inventories(3,140)(3,836)
Prepaid expenses and other current assets2,166 (3,243)
Income tax receivable3,533 4,372 
Other assets638 1,950 
Accounts payable2,069 17,709 
Accrued expenses and other current liabilities19,954 60,270 
Deferred revenue(1,467)(16,777)
Other liabilities(3,642)773 
Changes in operating assets and liabilities$14,055$57,614
Additional supplemental cash flow information is as follows:
Nine Months Ended
September 30,
20222021
Net cash paid for income taxes, net of refunds received $3,628 $221 
Cash payments for interest, net of capitalized interest82,607 82,228 
Capitalized interest11,228 2,476 
Non-cash activity:
Issuance of Series A Preferred Stock (as defined in Note 10, Income (Loss) Per Share) in connection with the extinguishment of a related party secured loan 108,591 
See Note 7, Leases, for supplemental cash flow information associated with our lease arrangements for the three and nine months ended September 30, 2022 and 2021.
4. Goodwill and Intangibles
The goodwill balance was $1,233.2 million at both September 30, 2022 and December 31, 2021.
Intangible assets consisted of the following:
September 30, 2022
GrossAccumulated AmortizationNet
Trade name$163,000 $— $163,000 
Other16,735 (6,243)10,492 
Total intangible assets$179,735 $(6,243)$173,492 
December 31, 2021
GrossAccumulated AmortizationNet
Trade name$163,000 $— $163,000 
Other16,327 (5,086)11,241 
Total intangible assets$179,327 $(5,086)$174,241 
Other intangible assets at September 30, 2022 and December 31, 2021 include a facility license as well as trade names and customer relationships associated with our race registration and timing businesses.
11

LIFE TIME GROUP HOLDINGS, INC. AND SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Table amounts in thousands except per share data)
Amortization expense associated with intangible assets for the three months ended September 30, 2022 and 2021 was $0.3 million and $0.2 million, respectively, and was $1.2 million and $0.6 million for the nine months ended September 30, 2022 and 2021, respectively. Amortization expense associated with intangible assets is included in Depreciation and amortization in our condensed consolidated statements of operations.
There were no goodwill or intangible asset impairment charges recorded during the three and nine months ended September 30, 2022 and 2021.
5. 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 nine months ended September 30, 2022 and 2021:
Three Months Ended
September 30,
Nine Months Ended
September 30,
2022202120222021
Membership dues and enrollment fees$335,717 $261,033 $916,895$653,584
In-center revenue144,278 110,967 390,603280,106
Total center revenue479,995 372,000 1,307,498933,690
Other revenue16,386 13,040 42,40423,835
Total revenue$496,381 $385,040 $1,349,902$957,525
The timing associated with the revenue we recognized during the three months ended September 30, 2022 and 2021 is as follows:
Three Months Ended September 30, 2022Three Months Ended September 30, 2021
Center
Revenue
Other
Revenue
Total
Revenue
Center
Revenue
Other
Revenue
Total
Revenue
Goods and services transferred over time$419,758$16,386$436,144$324,350$13,040$337,390
Goods and services transferred at a point in time60,23760,23747,65047,650
Total revenue$479,995$16,386$496,381$372,000$13,040$385,040
The timing associated with the revenue we recognized during the nine months ended September 30, 2022 and 2021 is as follows:
Nine Months Ended September 30, 2022Nine Months Ended September 30, 2021
Center
Revenue
Other
Revenue
Total
Revenue
Center
Revenue
Other
Revenue
Total
Revenue
Goods and services transferred over time$1,137,643$42,404$1,180,047$813,425$23,835$837,260
Goods and services transferred at a point in time169,855169,855120,265120,265
Total revenue$1,307,498$42,404$1,349,902$933,690$23,835$957,525
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, personal training and other center services offerings, as well as our media and athletic events. Contract liabilities at September 30, 2022 and December 31, 2021 were $34.4 million and $35.9 million, respectively.
12

LIFE TIME GROUP HOLDINGS, INC. AND SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Table amounts in thousands except per share data)
Contract liabilities that will be recognized within one year are classified as deferred revenue in our condensed consolidated balance sheets. Deferred revenue at September 30, 2022 and December 31, 2021 was $32.3 million and $33.9 million, respectively, and consists primarily of prepaid membership dues, personal training and other in-center services, and enrollment fees. The $1.6 million decrease was primarily driven by deferred registrations received in prior periods for athletic events that took place in the current period.
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 September 30, 2022 and December 31, 2021 were $2.1 million and $2.0 million, respectively, and consist primarily of deferred enrollment fees.
6. Debt
Debt consisted of the following:
September 30,
2022
December 31, 2021
Term Loan Facility, maturing December 2024$273,625$273,625
Revolving Credit Facility, maturing December 2026
Secured Notes, maturing January 2026925,000925,000
Unsecured Notes, maturing April 2026475,000475,000
Mortgage Notes, various maturities123,579145,572
Construction Loan, maturing February 20268,657
Other debt4,1224,122
Fair value adjustment1,3271,818
Total debt1,811,3101,825,137
Less unamortized debt discounts and issuance costs(21,016)(25,891)
Total debt less unamortized debt discount and issuance costs1,790,2941,799,246
Less current maturities(15,046)(23,527)
Long-term debt, less current maturities$1,775,248$1,775,719
Senior Secured Credit Facility
In June 2015, Life Time, Inc. and certain of our other wholly-owned subsidiaries entered into a senior secured credit facility with a group of lenders led by Deutsche Bank AG as the administrative agent. On January 22, 2021, Life Time, Inc. and certain of our other wholly-owned subsidiaries entered into an eighth amendment to the credit agreement governing our senior secured credit agreement (the “Credit Agreement”). Pursuant to such eighth amendment to the Credit Agreement, Life Time, Inc. and such other subsidiaries, among other things, (i) entered into a new term loan facility (the “Term Loan Facility”) and incurred new term loans in an aggregate principal amount of $850.0 million and (ii) extended the maturity on the vast majority of commitments under the revolving portion of our senior secured credit facility (the “Revolving Credit Facility” and together with the Term Loan Facility, the “Credit Facilities”). On December 2, 2021, Life Time, Inc. and certain of our other wholly-owned subsidiaries entered into a ninth amendment to the Credit Agreement. Pursuant to such ninth amendment, Life Time, Inc. and such other subsidiaries increased the commitments under the Revolving Credit Facility to $475.0 million and extended the maturity of the Revolving Credit Facility to December 2, 2026, except that the maturity will be: (a) September 22, 2024 if we have not refinanced or amended the Term Loan Facility in a manner set forth in such amendment by such date; (b) October 16, 2025 if we have at least $100.0 million remaining outstanding on the senior secured notes (the “Secured Notes”) that mature in January 2026 on such date; and (c) January 14, 2026 if we have at least $100.0 million remaining outstanding on the senior unsecured notes (the “Unsecured Notes”) that mature in April 2026 on such date.
Upon the exercise of an accordion feature and subject to certain conditions, borrowings under the Credit Facilities may be increased subject, in certain cases, to meeting a first lien net leverage ratio. The Credit Facilities are secured by a first priority lien (on a pari-passu basis with the Secured Notes described below) on substantially all of our assets.
13

LIFE TIME GROUP HOLDINGS, INC. AND SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Table amounts in thousands except per share data)
Term Loan Facility
The $850.0 million Term Loan Facility, which matures in December 2024, initially amortized at 0.25% quarterly, which required us to make three mandatory quarterly principal repayments of approximately $2.1 million during the year ended December 31, 2021. On October 13, 2021, we used a portion of net proceeds we received in connection with the IPO to pay down $575.7 million (including a $5.7 million prepayment penalty) of our Term Loan Facility. As a result of the pay down, we are no longer required to make quarterly principal payments on the Term Loan Facility prior to its maturity. At September 30, 2022, the Term Loan Facility loan balance was $273.6 million, with interest due at intervals ranging from 30 to 180 days at interest rates ranging from LIBOR plus 4.75% or base rate plus 3.75%, in either case subject to a 1.00% rate floor.
Revolving Credit Facility
Our Revolving Credit Facility provides for a $475.0 million revolver and matures in December 2026, or earlier as detailed above under “—Senior Secured Credit Facility.” At September 30, 2022, there were no outstanding borrowings on the Revolving Credit Facility and there were $31.7 million of outstanding letters of credit, resulting in total revolver availability of $443.3 million, which was available at intervals ranging from 30 to 180 days at interest rates ranging from LIBOR plus 4.25% or base rate plus 3.25%.
The weighted average interest rate and debt outstanding under the Revolving Credit Facility for the nine months ended September 30, 2022 was 4.97% and $43.1 million, respectively. The highest month-end balance during that same period was $100.0 million.
Secured Notes
On January 22, 2021, Life Time, Inc. issued the Secured Notes in an aggregate principal amount of $925.0 million. These notes mature in January 2026 and interest only payments are due semi-annually in arrears at 5.75%. Life Time, Inc. has the option to call the Secured Notes, in whole or in part, on one or more occasions, beginning on January 15, 2023, subject to the payment of a redemption price that includes a call premium that varies depending on the year of redemption. In addition, at any time prior to January 15, 2023, Life Time, Inc. may redeem up to 40.00% of the aggregate principal amount of the Secured Notes outstanding with the net proceeds of certain equity offerings by us at a redemption price equal to 105.75% of the principal amount of the Secured Notes, plus accrued and unpaid interest, if any, to, but not including, the redemption date. The Secured Notes and the related guarantees are our senior secured obligations and are secured on a first-priority basis by security interests on substantially all of our assets.
Unsecured Notes
On February 5, 2021, Life Time, Inc. issued the Unsecured Notes in the original principal amount of $475.0 million. The Unsecured Notes mature in April 2026 and interest only payments are due semi-annually in arrears at 8.00%. Life Time, Inc. has the option to redeem the Unsecured Notes, in whole or in part, on one or more occasions, beginning on February 1, 2023, subject to the payment of a redemption price that includes a call premium that varies depending on the year of redemption. In addition, at any time prior to February 1, 2023, Life Time, Inc. may redeem up to 40.00% of the aggregate principal amount of the Unsecured Notes outstanding with the net proceeds of certain equity offerings by us at a redemption price equal to 108.00% of the principal amount of the Unsecured Notes, plus accrued and unpaid interest, if any, to, but not including, the redemption date. The Unsecured Notes and the related guarantees are our general senior unsecured obligations and will rank equally in right of payment with all of our existing and future senior indebtedness without giving effect to collateral arrangements.
Mortgage Notes
Certain of our subsidiaries have entered into mortgage facilities with various financial institutions (collectively, the “Mortgage Notes”), which are collateralized by certain of our related real estate and buildings, including one of our corporate headquarters properties. The Mortgage Notes have varying maturity dates from February 2024 through August 2027 and carried a weighted average interest rate of 4.72% and 4.70% at September 30, 2022 and December 31, 2021, respectively. Payments of principal and interest on each of the Mortgage Notes are payable monthly on the first business day of each month. The Mortgage Notes contain customary affirmative covenants, including but not limited to, payment of property taxes, granting of lender access to inspect the properties, maintenance of the properties, providing financial statements, providing estoppel certificates and lender consent to leases. The Mortgage Notes also contain various customary negative covenants, including, but not limited to, restrictions on transferring the property, change in control of the borrower and changing the borrower’s business or principal place of business. As of September 30, 2022, we were
14

LIFE TIME GROUP HOLDINGS, INC. AND SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Table amounts in thousands except per share data)
either in compliance in all material respects with the covenants associated with the Mortgage Notes or the covenants were not applicable.
During the nine months ended September 30, 2022, we closed on a sale-leaseback transaction that included certain properties that served as collateral for one of the Mortgage Notes. Accordingly, we used a portion of the net cash proceeds we received from the sale-leaseback transaction to pay off in full the then outstanding principal balance of $4.6 million associated with this Mortgage Note. For more information regarding the sale-leaseback transactions that were consummated during the nine months ended September 30, 2022, see Note 7, Leases.
Construction Loan
On January 22, 2021, we closed on a construction loan (the “Construction Loan”) providing up to $28.0 million to partially finance the construction of a Life Time Living location. The Construction Loan has a maturity date of February 15, 2026 and is collateralized by the property. Borrowings under the Construction Loan bear interest at a variable annual rate of no less than 4.80%. Interest only payments are due monthly beginning April 15, 2022 and continuing through February 15, 2024. Beginning March 15, 2024, based on the principal balance due as of February 15, 2024, monthly principal and interest installment payments will be due in an amount sufficient to fully amortize the principal balance at maturity. At September 30, 2022, there were $8.7 million of outstanding borrowings on the Construction Loan. There were no outstanding borrowings as of December 31, 2021.
Debt Discounts and Issuance Costs
Unamortized debt discounts and issuance costs associated with the Term Loan Facility, Secured Notes, Unsecured Notes and Construction Loan of $21.0 million and $25.9 million are included in Long-term debt, net of current portion on our condensed consolidated balance sheets at September 30, 2022 and December 31, 2021, respectively.
Unamortized revolver-related debt issuance costs of $3.3 million and $4.0 million are included in Other assets on our condensed consolidated balance sheets at September 30, 2022 and December 31, 2021, respectively.
Debt Covenants
We are required to comply with certain affirmative and restrictive covenants under our Credit Facilities, Secured Notes and Unsecured 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). During the first three quarterly test periods of 2022, certain financial measures used in the calculation of the first lien net leverage ratio will be calculated on a pro forma basis by annualizing the respective financial measures recognized during those test periods.
As of September 30, 2022, we were either in compliance in all material respects with the covenants under the Credit Facilities, or the covenants were not applicable.
Future Maturities of Long-Term Debt
Aggregate annual future maturities of long-term debt, excluding unamortized discounts, issuance costs and fair value adjustments, at September 30, 2022 were as follows:
October 2022 through September 2023$15,046
October 2023 through September 202464,033
October 2024 through September 2025286,140
October 2025 through September 20261,421,714
October 2026 through September 202719,953
Thereafter3,097
Total future maturities of long-term debt$1,809,983
15

LIFE TIME GROUP HOLDINGS, INC. AND SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Table amounts in thousands except per share data)
7. Leases
Lease Cost
Lease cost included in our condensed consolidated statements of operations for the three months ended September 30, 2022 and 2021 consisted of the following:
Three Months Ended
September 30,
Classification in Condensed
Consolidated Statements of Operations
20222021
Lease cost:
Operating lease cost$60,761$50,987Rent
Short-term lease cost610281Rent
Variable lease cost1,8421,245Rent
Finance lease cost:
Amortization of right-of-use assets336380Depreciation and amortization
Interest on lease liabilities2242Interest expense, net of interest income
Total lease cost$63,571$52,935
Lease cost included in our condensed consolidated statements of operations for the nine months ended September 30, 2022 and 2021 consisted of the following:
Nine Months Ended
September 30,
Classification in Condensed
Consolidated Statements of Operations
20222021
Lease cost:
Operating lease cost$173,670$150,475Rent
Short-term lease cost1,485747Rent
Variable lease cost4,0113,330Rent
Finance lease cost:
Amortization of right-of-use assets1,0261,119Depreciation and amortization
Interest on lease liabilities79140Interest expense, net of interest income
Total lease cost$180,271$155,811
Operating and Finance Lease Right-of-Use Assets and Lease Liabilities
Operating and finance lease right-of-use assets and lease liabilities were as follows:
September 30, 2022December 31, 2021Classification on Condensed
Consolidated Balance Sheets
Lease right-of-use assets:
Operating leases$2,148,828$1,864,528Operating lease right-of-use assets
Finance leases (1)
1,1802,073Other assets
Total lease right-of-use assets$2,150,008$1,866,601
Lease liabilities:
Current
Operating leases$50,746$46,315Current maturities of operating lease liabilities
Finance leases9211,374Accrued expenses and other current liabilities
Non-Current
Operating leases2,206,7531,909,883Operating lease liabilities, net of current portion
Finance leases298757Other liabilities
Total lease liabilities$2,258,718$1,958,329
(1)     Finance lease right-of-use assets were reported net of accumulated amortization of $2.8 million and $2.4 million at September 30, 2022 and December 31, 2021, respectively.
16

LIFE TIME GROUP HOLDINGS, INC. AND SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Table amounts in thousands except per share data)
Remaining Lease Terms and Discount Rates
The weighted-average remaining lease terms and discount rates associated with our operating and finance lease liabilities at September 30, 2022 were as follows:
September 30, 2022
Weighted-average remaining lease term (1)
Operating leases18.0 years
Finance leases1.4 years
Weighted-average discount rate
Operating leases8.23%
Finance leases6.06%
(1)    The weighted-average remaining lease term associated with our operating and finance lease liabilities does not include all of the optional renewal periods available to us under our current lease arrangements. Rather, the weighted-average remaining lease term only includes periods covered by an option to extend a lease if we are reasonably certain to exercise that option.
Sale-Leaseback Transactions
During the nine months ended September 30, 2022, we entered into and consummated sale-leaseback transactions involving nine properties with two unrelated third parties. Under these transactions, we sold nine properties with a combined net book value of $285.6 million for $375.0 million, which was reduced by transaction costs of $1.5 million, for net cash proceeds of $373.5 million. The estimated fair value of the properties sold was $385.1 million. Accordingly, the aggregate sales price associated with these arrangements was increased by $10.1 million, which resulted in the recognition of a gain of $98.0 million on these transactions. This gain is included in Other operating (income) expense in our condensed consolidated statements of operations.
Supplemental Cash Flow Information
Supplemental cash flow information associated with our operating and finance leases is as follows:
Nine Months Ended
September 30,
20222021
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases$146,366$137,942
Operating cash flows from finance leases79140
Financing cash flows from finance leases1,0431,133
Non-cash information:
Right-of-use assets obtained in exchange for initial lease liabilities:
Operating leases316,071194,021
Finance leases1421,150
Right-of-use asset adjustments recognized as a result of the remeasurement of existing lease liabilities:
Operating leases7,366(5,357)
Non-cash increase in operating lease right-of-use assets associated with below-market sale-leaseback transactions10,0909,500
17

LIFE TIME GROUP HOLDINGS, INC. AND SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Table amounts in thousands except per share data)
Maturities of Operating and Finance Lease Liabilities
The maturities associated with our operating and finance lease liabilities at September 30, 2022 are as follows:
Operating LeasesFinance LeasesTotal
October 2022 through September 2023$220,452$964$221,416
October 2023 through September 2024235,766262236,028
October 2024 through September 2025238,28743238,330
October 2025 through September 2026241,6902241,692
October 2026 through September 2027242,2751242,276
Thereafter3,316,8913,316,891
Total lease payments4,495,3611,2724,496,633
Less: Imputed interest2,237,862532,237,915
Present value of lease liabilities$2,257,499$1,219$2,258,718
8. Stockholders’ Equity
2021 Equity Incentive Plan
In connection with the IPO and effective October 6, 2021, we adopted the 2021 Incentive Award Plan (the “2021 Equity Plan”), under which we may grant cash and equity-based incentive awards to our employees, consultants and directors. The maximum number of shares of our common stock available for issuance under the 2021 Equity Plan is equal to the sum of (i) approximately 14.5 million shares of our common stock, (ii) an annual increase on the first day of each year beginning in 2022 and ending in and including 2031, equal to the lesser of (A) 4% of the outstanding shares of our common stock on the last day of the immediately preceding fiscal year and (B) such lesser amount as determined by our board of directors, and (iii) the approximately 1.0 million shares of our common stock that were available for issuance under the 2015 Equity Plan as of October 6, 2021. Effective January 1, 2022, the number of shares of our common stock available for issuance under the 2021 Equity Plan increased by approximately 7.7 million shares pursuant to the evergreen feature described in part (ii) of the immediately preceding sentence. Additionally, the number of shares of our common stock available for issuance under the 2021 Equity Plan may increase with respect to awards under the 2015 Equity Plan and any other prior equity incentive plans of the Company or its predecessor which are forfeited or lapse unexercised and which following the effective date of the 2021 Equity Plan are not issued under such prior plan; provided, however, no more than 14.5 million shares may be issued upon the exercise of incentive stock options. The share reserve formula under the 2021 Equity Plan is intended to provide us with the continuing ability to grant equity awards to eligible employees, directors and consultants for the ten-year term of the 2021 Equity Plan.
As of September 30, 2022, approximately 19.1 million shares were available for future awards to employees and other eligible participants under the 2021 Equity Plan.
2021 Employee Stock Purchase Plan
In connection with the IPO and effective October 6, 2021, we adopted the 2021 Employee Stock Purchase Plan (the “ESPP”). The ESPP is designed to allow our eligible employees to purchase shares of our common stock, at periodic intervals, with their accumulated payroll deductions. The ESPP consists of two components: an Internal Revenue Service (“IRS”) Code section 423 (“Section 423”) component, which is intended to qualify under Section 423 of the IRS Code and a non-Section 423 component, which need not qualify under Section 423 of the IRS Code. The aggregate number of shares of our common stock that has initially been reserved for issuance under the ESPP is equal to (i) approximately 2.9 million shares of our common stock, and (ii) an annual increase on the first day of each year beginning in 2022 and ending in and including 2031, equal to the lesser of (A) 1% of the aggregate number of shares of our common stock outstanding on the final day of the immediately preceding calendar year and (B) such smaller number of our shares of common stock as determined by our board of directors; provided that in no event will more than 29.0 million shares of our common stock be available for issuance under the Section 423 component of the ESPP. Our board of directors determined that no additional shares would become available under the ESPP as of January 1, 2022 pursuant to the evergreen feature descr