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Life Time, the “Healthy Way of Life Company,” is a leading lifestyle brand offering premium health, fitness and wellness experiences to a community of nearly 1.4 million individual members, who together comprise more than 776,000 memberships, as of December 31, 2022.
−Removed: Since our founding nearly 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.
−Removed: We deliver high-quality experiences through our omni-channel physical and digital ecosystem that includes more than 150 centers—distinctive, resort-like athletic destinations—across 29 states in the United States and one province in Canada.
+Added: 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.
+Added: We deliver high-quality experiences through our omni-channel physical and digital ecosystem that includes more than 160 centers—distinctive, resort-like athletic country club destinations—across 29 states in the United States and one province in Canada.
Our track record of providing differentiated experiences to our members has fueled our strong, long-term financial performance.
+Added: In 2022, we generated $1,823 million of revenue, a net loss of $2 million and $282 million in Adjusted EBITDA.
In 2021, a year in which we experienced an initial recovery from the impacts of COVID-19, we generated $1,318 million of revenue, a net loss of $579 million and $80 million in Adjusted EBITDA.
−Removed: In 2020, which was significantly impacted by the COVID-19 pandemic, we generated $948 million of revenue, a net loss of $360 million and $(63) million in Adjusted EBITDA.
−Removed: In 2019, prior to
−Removed: Table of Content s
−Removed: the COVID-19 pandemic, we generated $1,900 million of revenue, net income of $30 million and $438 million in Adjusted EBITDA.
−Removed: Our luxurious athletic centers, which are located in both affluent suburban and urban locations, total more than 15 million square feet in the aggregate.
−Removed: As of December 31, 2021, we had 12 new centers under construction and we believe we have significant opportunities to continue expanding our portfolio of premium centers with 10 or more planned new centers annually for the foreseeable future in increasingly affluent markets.
−Removed: We offer expansive fitness floors with top-of-the-line equipment, spacious locker rooms, group fitness studios, indoor and outdoor pools and bistros, indoor and outdoor tennis courts, basketball courts, LifeSpa, LifeCafe and our childcare and Kids Academy learning spaces.
−Removed: Our premium service offering is delivered by approximately 30,000 Life Time team members, including over 7,800 certified fitness professionals, ranging from personal trainers to studio performers.
−Removed: As we continue to emerge from the COVID-19 pandemic and grow our business with more team members and more centers, we may be impacted by broader market conditions such as inflation and pressure on labor costs and labor availability.
−Removed: Our members are highly engaged and draw inspiration from the experiences and community we have created, as demonstrated by the 69 million visits to our centers in 2021, 48 million visits to our centers in 2020 despite the COVID-19 pandemic and 92 million visits to our centers in 2019.
−Removed: 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 recurring membership dues and in-center revenues for 20 consecutive years, prior to the impact of the COVID-19 pandemic.
−Removed: As of December 31, 2021, 2020 and 2019, our recurring membership dues represented 68%, 67% and 63%, respectively, of our total revenue, while our in-center revenue, consisting of Life Time Training, LifeCafe, LifeSpa, Life Time Swim and Life Time Kids, among other services, represented 29%, 29% and 34%, respectively, of our total revenue.
−Removed: Between 2015 and 2019, we grew our average revenue per center membership from $1,883 to $2,172, a testament to the significant value that our members place on engaging with Life Time.
−Removed: While average revenue per center membership fell to $1,317 in 2020, we saw a strong rebound in 2021, with $2,098 in average revenue per center membership.
−Removed: As we have delivered and continued to enhance premium experiences for our members, we have strategically increased our membership dues across most of our new and existing centers in 2021.
+Added: In 2020, which was significantly impacted due to the closure of our clubs by governmental authorities during the COVID-19 pandemic, we generated $948 million of revenue, a net loss of $360 million and $(63) million in Adjusted EBITDA.
+Added: Our luxurious athletic country clubs, which are located in both affluent suburban and urban locations, total approximately 16 million square feet in the aggregate.
+Added: As of December 31, 2022 , we had 12 new centers under construction, and we believe we have significant opportunities to continue expanding our portfolio of premium centers with 18 to 20 new centers over the next two years in increasingly affluent markets.
+Added: We offer expansive fitness floors with top-of-the-line equipment, spacious locker rooms, group fitness studios, indoor and outdoor pools and bistros, indoor and outdoor tennis courts, pickleball courts, basketball courts, LifeSpa, LifeCafe and our childcare and Kids Academy learning spaces.
+Added: Our premium service offerings are delivered by over 34,000 Life Time team members, including over 8,800 certified fitness professionals, ranging from personal trainers to studio performers.
+Added: Our members are highly engaged and draw inspiration from the experiences and community we have created, as demonstrated by the 86 million visits to our centers in 2022, 69 million visits to our centers in 2021 and 48 million visits to our centers in 2020 despite the COVID-19 pandemic.
+Added: 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 enabled us to consistently grow our annual membership dues and in-center revenues for 20 consecutive years, prior to the impact of the COVID-19 pandemic, and now again as we emerge from the pandemic.
+Added: We have been focused on returning to consistent annual growth in our membership dues and in-center revenue.
+Added: For the years ended December 31, 2022, 2021 and 2020, our recurring membership dues and enrollment fees represented 71%, 71% and 70%, respectively, of our total Center revenue, while our in-center revenue, consisting of Dynamic Personal Training, LifeCafe, LifeSpa, Life Time Swim and Life Time Kids, among other services,
+Added: represented 29%, 29% and 30%, respectively, of our total Center revenue.
+Added: Our average revenue per center membership increased to $2,528 for the year ended December 31, 2022 as compared to $2,098 for the year ended December 31, 2021 and $1,317 for the year ended December 31, 2020, which demonstrates the significant value that our members place on engaging with Life Time.
+Added: As we continued to enhance and broaden the premium experiences for our members, we have strategically increased our membership dues across most of our new and existing centers, particularly for our new member join rates.
We believe we can continually refine our pricing as we deliver exceptional experiences and find the optimal balance among the number of memberships per center, the member experience and maximizing our return for each center.
−Removed: We expect average revenue per center membership to continue to increase as we acquire new members and open new centers in increasingly affluent markets, which will allow us to generate additional revenue even if total memberships are slower to return due to the continued impacts of COVID-19.
+Added: We expect average revenue per center membership to continue to increase compared to prior year as we add new members and open new centers in increasingly affluent markets.
+Added: We also expect our revenue to grow as our mature centers continue to ramp in their performance after the adverse effects from the COVID-19 pandemic.
+Added: With the strong recovery of our membership dues revenue, we have also been able to focus on margin expansion.
+Added: We have begun to see margin improvements and believe we have opportunities to continue to expand margins in 2023.
+Added: We believe we can capture these opportunities as we benefit from higher dues revenue and as we continue to optimize the roll-out of our strategic initiatives and improve the efficiency of our club operations and corporate office.
We offer a variety of convenient month-to-month memberships with no long-term contracts.
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Center memberships and Digital On-hold memberships.
−Removed: A Center membership is defined as one or more adults 14 years of age or older, plus any juniors under the age of 14.
−Removed: Our base memberships provide individuals general access (with some amenities excluded) to a selected home center and all centers with the same or a lower base monthly dues rate.
−Removed: Our optimized pricing for a Center membership is determined center-by-center based on a variety of factors, including geography, market presence, demographic nature, population density, initial investment in the center and available services and amenities.
+Added: A Center membership is defined as one or more adults, plus any juniors under the age of 14.
+Added: Our base memberships provide individuals general access (with some amenities excluded) to a selected home center and all centers with the same or lower base monthly dues rate.
+Added: Our optimized pricing for a Center membership is determined center-by-center based on a variety of factors, including geography, market presence, demographic nature, population density, competition, initial investment in the center and available services and amenities.
+Added: Among our base memberships, our standard multi-center access memberships include general access to our centers, including the locker rooms (with locker and towel service), fitness floor, any child center and other benefits such as the Life Time app.
+Added: Our signature multi-center access memberships provide the benefits of a standard membership along with certain products, services or spaces that would otherwise be accessible only upon payment of additional dues or fees, such as small group training and court time for certain racquet sports at certain centers.
+Added: Certain of our centers are accessible only with a signature membership.
Digital On-hold memberships do not provide access to our centers and are for those members who want to maintain certain member benefits including our Life Time Digital membership and the right to convert to Center membership without paying enrollment fees.
−Removed: We continue to evolve our premium lifestyle brand in ways that elevate our member experiences and allow our members to more easily and regularly integrate health, fitness and wellness into their lives.
−Removed: We are introducing new types of Center memberships and communities, including our signature membership that includes unlimited small group training and priority registrations, and our new ARORA community focused on members aged 55 years and older.
−Removed: We are also enhancing our digital platform to deliver a true omni-channel experience for our members.
+Added: We have implemented several strategic initiatives as we continue to evolve our premium lifestyle brand in ways that elevate and broaden our member experiences and allow our members to integrate health, fitness and wellness into their lives with greater ease and frequency.
+Added: We believe these initiatives are driving significant increases in center usage and higher memberships.
+Added: These strategic initiatives include pickleball, Dynamic Personal Training, 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.
+Added: We also continue to enhance our digital platform to deliver a true omni-channel experience for our members.
Our Life Time Digital offering delivers live streaming fitness classes, remote goal-based personal training, nutrition and weight loss support and curated award-winning health, fitness and wellness content.
−Removed: Through an agreement with Apple ® , we also provide Apple Fitness+ to our members, which gives our members expanded content and wellness data monitoring on the go.
In addition, our members are able to purchase a wide variety of equipment, wearables, apparel, beauty products and nutritional supplements via our digital health store.
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These investments may impact our short-term results of operations and cash flows as our investments in our business may be made more quickly than we see the returns on our investments.
−Removed: Table of Content s
−Removed: We are also expanding our ecosystem in response to our members’ desire to more holistically integrate health and wellness into every aspect of their daily lives.
+Added: 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.
−Removed: Life Time Work members also receive access to all of our resort-like athletic destinations across the United States and Canada.
−Removed: A dditionally, we opened our first Life Time Living location in 2021, another asset-light extension of our “Healthy Way of Life” ecosystem, which offers luxury wellness-oriented residences.
+Added: Life Time Work members also generally receive access to all of our resort-like athletic destinations across the United States and Canada.
+Added: At December 31, 2022, 11 Life Time Work locations were open and operating.
+Added: A dditionally, we have opened our first two Life Time Living locations, which offer luxury wellness-oriented residences in close proximity to one of our athletic country clubs.
+Added: Our Life Time Living offering is generating interest from new property developers and presenting opportunities for new center development that we had not previously had.
As we expand our footprint with new centers and nearby work and living spaces, as well as strengthen our digital capabilities, we expect to continue to grow our omni-channel platform to support the “Healthy Way of Life” journey of our members.
+Added: We have continued to actively monitor the macroeconomic environment and its impact on our business, including with respect to inflation, interest rates, labor and supply chain issues, as well as a potential economic recession .
+Added: The inflation rate continued to be elevated in 2022, which had an impact on our expenses in several areas, including wages, construction costs and other operating expenses.
+Added: These inflationary impacts have resulted in pressure on our margin performance and an increase in our capital expenditures.
+Added: The rising interest rate environment has also increased the cost of our Term Loan Facility and Revolving Credit Facility and may result in increased cap rates on future sale-leaseback transactions.
+Added: We anticipate fiscal year 2023 will continue to be a dynamic macroeconomic environment, including elevated levels of inflation and interest rates.
+Added: We remain focused on providing exceptional experiences to our members, while also focusing on center efficiencies and expense control given our recovery of a significant portion of our center memberships and membership dues.
Components of Our Results of Operations
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Center revenue consists of membership dues, enrollment fees and revenue generated within a center, which we refer to as in-center revenue.
−Removed: In-center revenue includes fees for personal training, aquatics and kids programming and other member services, as well as sales of products at our cafés, and sales of products and services offered at our spas and tennis programs.
+Added: In-center revenue includes fees for Dynamic Personal Training, aquatics and kids programming and other member services, as well as sales of products at our cafés, and sales of products and services offered at our spas and tennis and pickleball programs.
Other revenue
Other revenue includes revenue generated from our businesses outside our centers, which are primarily media, athletic events and related services.
−Removed: Our media revenue includes our magazine, Experience Life ® , our athletic events revenue includes endurance activities such as running, cycling and triathlons, and our related services revenue includes revenue from our race registration and timing businesses.
−Removed: Other revenue also includes revenue generated from our Life Time Work locations.
+Added: Our media revenue includes our magazine, Experience Life ® , our athletic events revenue includes endurance activities such as running and cycling, and our related services revenue includes revenue from our race registration and timing businesses.
+Added: Other revenue also includes revenue generated from our Life Time Work and Life Time Living locations.
Center operations expenses
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• Indirect support costs related to the operation of our centers, including payroll-related expenses associated with our regional center management structure and in-center business support.
−Removed: Table of Content s
−Removed: Depreciation and Amortization
+Added: Depreciation and amortization expense
Consists of depreciation and amortization for our depreciable long-live assets, including assets related to our owned centers.
−Removed: Other operating expenses
+Added: Other operating (income) expenses
Consists primarily of expenses related to our other revenue, which is generated from our businesses outside of our centers.
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Interest expense, net of interest income consists primarily of cash interest expense on borrowings and non-cash interest expense which includes the amortization of debt issuance costs, partially offset by interest earned.
−Removed: Equity in (loss) earnings of affiliate
+Added: Equity in earnings (loss) of affiliates
Includes investments in unconsolidated subsidiaries which we account for using the equity method of accounting.
−Removed: (Benefit from) provision for income taxes
−Removed: The (benefit from) provision for income taxes consists of an estimate for U.S.
+Added: Benefit from income taxes
+Added: The benefit from income taxes consists of an estimate for U.S.
federal, state and foreign income taxes based on enacted rates, as adjusted for allowable credits, deductions, uncertain tax positions, changes in deferred tax assets and liabilities and changes in the tax law.
−Removed: Net (loss) income
−Removed: Net (loss) income consists of our total revenue, less our total operating expenses, and then adjusted for other (expense) income and (benefit from) provision for income taxes, as set forth on our consolidated statements of operations.
+Added: Net loss consists of our total revenue, less our total operating expenses, and then adjusted for other (income) expenses and benefit from income taxes, as set forth on our consolidated statements of operations.
Non-GAAP Financial Measures
−Removed: This discussion and analysis includes certain financial measures that are not presented in accordance with the generally accepted accounting principles in the United States (“GAAP”), including Adjusted EBITDA and free cash flow before growth capital expenditures and ratios related thereto.
+Added: 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 EBITDA and free cash flow before growth capital expenditures 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.
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Adjusted EBITDA
−Removed: We define Adjusted EBITDA as net (loss) income before interest expense, net, (benefit from) provision for income taxes and depreciation and amortization, excluding the impact of share-based compensation expense, loss (gain) on sale-leaseback transactions, capital transaction costs, legal settlements, asset impairment, severance and other items that are not indicative of our ongoing operations, including incremental costs related to COVID-19.
+Added: We define Adjusted EBITDA as net income (loss) before interest expense, net, provision for (benefit from) income taxes and depreciation and amortization, excluding the impact of share-based compensation expense, (gain) loss on sale-leaseback transactions, capital transaction costs, legal settlements, asset impairment, severance and other items that are not indicative of our ongoing operations, including incremental costs related to COVID-19.
Management uses Adjusted EBITDA to evaluate the Company’s performance.
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We also use Adjusted EBITDA or variations thereof to establish short-term incentive compensation for management.
−Removed: Table of Content s
Free Cash Flow Before Growth Capital Expenditures
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Adjusted EBITDA and free cash flow before growth capital expenditures should be considered in addition to, and not as a substitute for or superior to, financial measures calculated in accordance with GAAP.
−Removed: These are not measurements of our financial performance under GAAP and should not be considered as alternatives to net (loss) income or any other performance measures derived in accordance with GAAP or as an alternative to net cash provided by (used in) operating activities as a measure of our liquidity and may not be comparable to other similarly titled measures of other businesses.
+Added: These are not measurements of our financial performance under GAAP and should not be considered as alternatives to net income (loss) or any other performance measures derived in accordance with GAAP or as an alternative to net cash provided by (used in) operating activities as a measure of our liquidity and may not be comparable to other similarly titled measures of other businesses.
Adjusted EBITDA and free cash flow before growth capital expenditures 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.
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We prepare and analyze various non-GAAP performance metrics and key performance indicators to assess the performance of our business and allocate resources.
−Removed: We analyze these key performance indicators to assess the performance of our business and allocated 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.
−Removed: Table of Content s
Set forth below are certain GAAP and non-GAAP measurements and key performance indicators for the years ended December 31, 2022, 2021 and 2020.
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GAAP and Non-GAAP Financial Measures
−Removed: Net (loss) income $ (579,369) $ (360,192) $ 30,049
−Removed: Net (loss) income margin (5)
+Added: Net loss $ (1,793) $ (579,369) $ (360,192)
+Added: Net loss margin (5)
(0.1) % (44.0) % (38.0) %
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Non-cash rent expense (properties under development) (8)
−Removed: Net cash (used in) provided by operating activities
10,797 12,643 12,625
+Added: Net cash provided by (used in) operating activities
+Added: 200,969 (20,029) (95,981)
Free cash flow before growth capital expenditures (9)
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We include a center, for comparable center sales 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.
−Removed: Table of Content s
−Removed: (3) Net new center openings is the number of centers that opened for the first time to members during the period, less any centers that closed during the period.
+Added: (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.
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These figures are approximations.
−Removed: (5) Net (loss) income margin is calculated as net (loss) income divided by total revenue.
+Added: (5) Net loss margin is calculated as net loss divided by total revenue.
(6) We present Adjusted EBITDA as a supplemental measure of our performance.
−Removed: We define Adjusted EBITDA as net (loss) income before interest expense, net, (benefit from) provision for income taxes and depreciation and amortization, excluding the impact of share-based compensation expense, loss (gain) on sale-leaseback transactions, capital transaction costs, legal settlements, asset impairment, severance and other items that are not indicative of our ongoing operations, including incremental costs related to COVID-19.
+Added: We define Adjusted EBITDA as net income (loss) before interest expense, net, provision for (benefit from) income taxes and depreciation and amortization, excluding the impact of share-based compensation expense, (gain) loss on sale-leaseback transactions, capital transaction costs, legal settlements, asset impairment, severance and other items that are not indicative of our ongoing operations, including incremental costs related to COVID-19.
Adjusted EBITDA margin is calculated as Adjusted EBITDA divided by total revenue.
−Removed: The following table provides a reconciliation of net (loss) income, the most directly comparable GAAP measure, to Adjusted EBITDA:
+Added: The following table provides a reconciliation of net loss, the most directly comparable GAAP measure, to Adjusted EBITDA:
Year Ended December 31,
($ in thousands) 2022 2021 2020
−Removed: Net (loss) income $ (579,369) $ (360,192) $ 30,049
+Added: Net loss $ (1,793) $ (579,369) $ (360,192)
Interest expense, net of interest income (a)
113,537 224,516 128,394
−Removed: (Benefit from) provision for income taxes (140,344) (127,538) 10,080
+Added: Benefit from income taxes (825) (140,344) (127,538)
Depreciation and amortization 228,883 235,124 247,693
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37,291 334,339 —
−Removed: COVID-19 related (credits) expenses (c)
+Added: COVID-19 related expenses (credits) (c)
3,056 (1,589) 49,183
−Removed: Loss (gain) on sale-leaseback transactions (d)
+Added: (Gain) loss on sale-leaseback transactions (d)
(97,632) 2,380 (7,235)
Capital transaction costs (e)
−Removed: 2,904 96 6,297
−Removed: Legal (recoveries) settlements (f)
−Removed: (44) 345 8,359
+Added: Legal settlements (f)
Asset impairments (g)
(1,048) 2,382 (1,187)
−Removed: 2,382 (1,187) (397)
Adjusted EBITDA $ 281,724 $ 80,299 $ (62,966)
−Removed: (a) During the year ended December 31, 2021, we incurred a non-cash expense of $41.0 million related to the extinguishment of our related party secured loan and $28.6 million related to write-off discounts and debt issuance costs of our prior term loan facility, our previous senior unsecured notes and our related party secured loan.
+Added: (a) During the year ended December 31, 2021, we incurred a non-cash expense of $41.0 million related to the extinguishment of our related party secured loan and $28.6 million related to the write-off of debt discounts and issuance costs of our prior term loan facility, our previous senior unsecured notes and our related party secured loan.
In June 2020, we closed on an approximate $101.5 million secured loan from an investor group comprised solely of our stockholders or their affiliates.
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Accordingly, we booked a $41.0 million loss upon conversion.
−Removed: (b) A significant portion of the share-based compensation expense that we recognized during the year ended December 31, 2021 is associated with stock options that were granted prior to 2021.
−Removed: As of the effective date of the IPO in October 2021, these stock options became fully vested, and they either became immediately exercisable or they will become exercisable no later than April 4, 2022, subject to continued service through such date.
−Removed: Accordingly, during the period from the effective date of the IPO through December 31, 2021 , we recognized share-based compensation expense associated with these stock options in an amount equal to the proportion of the total service period that has passed from the respective grant dates associated with each of these stock option awards through December 31, 2021.
−Removed: Because the vesting and exercisability of these stock options was contingent upon the occurrence of a change of control or an initial public offering, no share-based compensation expense associated with these stock options was recognized prior to the IPO.
−Removed: Table of Content s
−Removed: (c) Represents the incremental net (credits) expenses we recognized related to the COVID-19 pandemic.
−Removed: We adjust for these costs as they do not represent costs associated with our normal ongoing operations.
+Added: (b) Share-based compensation expense recognized during the year ended December 31, 2022 is associated with stock options, restricted stock, restricted stock units and our employee stock purchase plan (“ESPP”) that launched on December 1, 2022.
+Added: A significant portion of the share-based compensation expense that we recognized during the year ended December 31, 2021 is associated with stock options that were granted prior to 2021.
+Added: As of the effective date of the IPO in October 2021, these stock options became fully vested, and they became exercisable either immediately or on April 4, 2022, subject to continued service through such date.
+Added: Accordingly, during the period from the effective date of the IPO through April 4, 2022, we recognized share-based compensation expense associated with these stock options in an amount equal to the proportion of the total service period that passed from the respective grant dates associated with each of these stock option awards through April 4, 2022 .
+Added: Because the exercisability of these stock options was contingent upon the occurrence of a change of control or an initial public offering, no share-based compensation expense associated with these stock options was recognized prior to the IPO.
+Added: (c) Represents the incremental net expenses (credits) we recognized related to the COVID-19 pandemic.
+Added: We adjust for these costs (credits) as they do not represent costs (credits) associated with our normal ongoing operations.
We believe that adjusting for these costs provides a more accurate and consistent representation of our actual operating performance from period to period.
−Removed: The net credits we recognized during 2021 consist primarily of the recovery of certain qualifying expenses recovered under the CARES Act, partially offset by COVID-19 legal-related costs.
−Removed: For the year ended December 31, 2020, COVID-19 related expenses consisted of $27.0 million for project cost write-offs for sites no longer deemed viable as a result of the economic downturn caused by COVID-19, $12.0 million for the employee portion of health care coverage which is normally paid by employees but was paid by us during this period on behalf of our employees, and $10.2 million of emergency leave and non-working payroll, which includes subsequent recovery of certain expenses under the CARES Act, severance and charitable contributions made to support our employees who were directly impacted by COVID-19.
+Added: For the year ended December 31, 2022, COVID-19 related expenses primarily consisted of site development cost write-offs and l egal-related costs in pursuit of our claim against Zurich.
+Added: For more information regarding this claim, see Item 3, Legal Proceedings, in this Annual Report.
+Added: For the year ended December 31, 2021, COVID-19 related credits primarily consisted of the recovery of certain qualifying expenses under the CARES Act, partially offset by COVID-19 legal-related costs in pursuit of our claim against Zurich .
+Added: For the year ended December 31, 2020, COVID-19 related expenses consisted of $27.0 million for site development cost write-offs for sites no longer deemed viable as a result of the economic downturn caused by COVID-19, $12.0 million for the employee portion of health care coverage which is normally paid by employees but was paid by us during this period on behalf of our employees, and $10.2 million of emergency leave and non-working payroll, which includes subsequent recovery of certain expenses under the CARES Act, severance and charitable contributions made to support our employees who were directly impacted by COVID-19.
(d) We adjust for the impact of gains or losses on the sale-leaseback of our properties as they do not reflect costs associated with our ongoing operations.
−Removed: (e) Represents one-time costs related to capital transactions, including debt and equity offerings that are non-recurring in nature but excluding direct costs related to the IPO which were netted against the proceeds.
+Added: For details on the gain on sale-leaseback transactions that we recognized during the year ended December 31, 2022 , see “Sale-Leaseback Transactions” within Note 9, Leases, to our consolidated financial statements in Part II, Item 8 of this Annual Report.
+Added: (e) Represents one-time costs related to capital transactions, including debt and equity offerings that are non-recurring in nature but excluding direct costs related to the IPO which were netted against the proceeds of the IPO.
(f) We adjust for the impact of large class action and unusual legal settlements paid or recoveries received.
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(g) Represents non-cash asset impairments of our long-lived and intangible assets.
−Removed: (h) Includes costs associated with large corporate restructuring charges, executive level involuntary terminations and other transactions, which are unusual and non-recurring in nature.
−Removed: For the year ended December 31, 2021, other expenses consisted of $1.6 million of incremental expenses related to a winter storm resulting in historical freezing temperatures affecting our Texas region, and $0.8 million of executive level severance.
+Added: (h) Includes costs associated with severance and other transactions that are unusual and non-recurring in nature.
(7) Represents non-capital expenditures associated with opening new centers which are incurred prior to the commencement of a new center opening.
The number of centers under construction or development, the types of centers and our costs associated with any particular center opening can vary significantly from period to period.
−Removed: (8) Free cash flow before growth capital expenditures, a non-GAAP financial measure, is calculated as net cash (used in) provided by operating activities less center maintenance capital expenditures and corporate capital expenditures.
−Removed: The following table provides a reconciliation from net cash (used in) provided by operating activities to free cash flow before growth capital expenditures:
+Added: (8) Reflects the non-cash portion of our annual GAAP operating lease expense that is greater or less than the cash operating lease payments.
+Added: Non-cash rent expense for our open properties represents non-cash expense associated with properties that were operating at the end of each period presented.
+Added: Non-cash rent expense for our properties under development represents non-cash expense associated with properties that are still under development at the end of each period presented.
+Added: (9) Free cash flow before growth capital expenditures, a non-GAAP financial measure, is calculated as net cash provided by (used in) operating activities less center maintenance capital expenditures and corporate capital expenditures.
+Added: The following table provides a reconciliation from net cash provided by (used in) operating activities to free cash flow before growth capital expenditures:
Year Ended December 31,
($ in thousands) 2022 2021 2020
−Removed: Net cash (used in) provided by operating activities $ (20,029) $ (95,981) $ 358,718
+Added: Net cash provided by (used in) operating activities $ 200,969 $ (20,029) $ (95,981)
Center maintenance capital expenditures (98,111) (61,932) (32,111)
3 unchanged sentences
Impact of COVID-19 on our Business
−Removed: On March 11, 2020, the World Health Organization declared the outbreak of a novel coronavirus that causes COVID-19 a pandemic and recommended containment and mitigation measures worldwide.
−Removed: On March 13, 2020, the United States declared a National Public Health Emergency with respect to COVID-19.
−Removed: On March 16, 2020, in compliance with orders and advisories from federal, state and local governmental authorities regarding COVID-19, we closed all of our centers.
+Added: 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 Annual Report, including this “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” when we refer to “COVID-19,” 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.
−Removed: While our centers were closed, in consultation with an epidemiologist (MD/PhD) with a wide range of experience in clinical, occupational and environmental medicine, we developed processes and protocols for the operation of our centers in
−Removed: Table of Content s
−Removed: the COVID-19 environment.
−Removed: These protocols, which have varied at our centers across the United States and Canada, have included physical distancing, restricting certain equipment and amenities, occupancy limits, required appointments, touchless interactions, facial coverings, cleaning, sanitation, hygiene, air circulation and filtering, screening, contact tracing and educational awareness.
−Removed: We may take further actions as government authorities require or recommend, including implementing vaccine mandates or negative testing, or as we determine to be in the interests of our members, guests, team members, vendors and service providers, including in response to emerging variants of the COVID-19 virus, such as the Delta and Omicron variants.
−Removed: We continue to refine these processes and protocols as we operate in the evolving COVID-19 environment.
−Removed: With a focus on providing a healthy and clean environment for our members and team members, we began re-opening our centers in May 2020 and continued to re-open our centers as governmental authorities permitted.
−Removed: During the second half of 2020 and into 2021, we were able to re-open all of our centers;
−Removed: however, these re-openings were staggered and many of our centers were required to be closed again after re-opening for some period of time as a result of the COVID-19 pandemic and related restrictions.
−Removed: For instance, during the three months ended June 30, 2020, September 30, 2020 and December 31, 2020, 149, 43 and 31 of our centers, respectively, were closed for some period of time.
−Removed: The performance of our centers after we were able to re-open them has varied depending on various factors, including how early we were able to re-open them in 2020, whether we were required to close them again, their geographic location and applicable governmental restrictions.
−Removed: The performance of our centers was also impacted in 2021 as a result of the Delta variant and then again later in 2021 and into 2022 with the Omicron variant.
−Removed: We have experienced a slightly faster recovery in our membership dues revenue compared to our in-center revenue as our centers have re-opened.
+Added: 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 i n 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.
+Added: 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.
+Added: The performance of our centers has improved significantly as our centers have ramped back from the adverse impacts of COVID-19, but our improvement has varied depending on various factors, including how early we were able to re-open them, whether we were required to close them again, their geographic location and applicable governmental restrictions.
+Added: We have experienced a slightly faster recovery in our membership dues revenue compared to our in-center revenue.
We expect membership dues revenue to remain a higher percentage of our total revenue in the near term and return to more historical levels over time.
−Removed: While we are encouraged by the trends of increased vaccination rates, reduced COVID-19 infections and hospitalizations and reduced operating restrictions in many of the regions where our centers operate, we continue to operate under governmental restrictions at many of our centers and the full extent of the impact of COVID-19, including the Delta and Omicron variants, remains uncertain and is dependent on future developments that cannot be accurately predicted at this time.
−Removed: Considering this uncertainty, the extent of the impact of COVID-19 on our financial position, results of operations, liquidity and cash flows is uncertain at this time.
−Removed: As of December 31, 2021, all of our 151 centers were open.
−Removed: As of December 31, 2021, total memberships were 724,140, a decrease of 3.4% compared to 749,589 at December 31, 2020.
+Added: We continue to be encouraged by our improved business performance, the traction of our strategic initiatives and the diminishing negative impacts from COVID-19.
+Added: As of December 31, 2022, total memberships were 776,676, an increase of 7.3% compared to 724,140 at December 31, 2021.
Center memberships were 725,206, an increase of 11.7% compared to 649,373 at December 31, 2021.
Digital On-hold memberships were 51,470, a decrease of 31.2% compared to 74,767 at December 31, 2021.
−Removed: Prior to the COVID-19 pandemic, Center memberships and Digital On-hold memberships were 853,748 and 90,299, respectively, at December 31, 2019.
−Removed: We continue to monitor governmental orders regarding the operations of our centers, as well as our center operating processes and protocols.
−Removed: We expect we may need to continue to adjust such processes and protocols as facts and circumstances change, including as a result of variants of the COVID-19 virus, such as the Delta and Omicron variants.
−Removed: We also expect our centers and in-center businesses will continue to be impacted differently based upon considerations such as their geographic location, vaccination rates, impacts of variants, applicable government restrictions and guidance, and team member and member sentiment with respect to our center operating processes and protocols and working in and/or using our centers.
−Removed: For example, we have seen an increase in Center memberships and center utilization in various regions when government restrictions have been lifted.
−Removed: Given increasing demand for online engagement with consumers, we have increased our focus on delivering a digitized in-center experience through our omni-channel ecosystem.
−Removed: We continue to expand our Digital membership offering, bringing our “Healthy Way of Life” programs, services and content to consumers virtually.
−Removed: This omni-channel experience is designed to deliver health, fitness and wellness where, when and how members want it by offering online reservations registrations, virtual training, live streaming and on-demand classes, virtual events and more.
+Added: Center memberships and Digital On-hold memberships were 500,948 and 248,641, respectively, at December 31, 2020, a time in which our business was significantly impacted by COVID-19.
+Added: As 2022 progressed, we experienced a significant decrease in COVID-19-related restrictions on our operations.
+Added: While we are still utilizing certain of the processes we implemented to provide a healthy and clean environment for our members and team members, we are no longer subject to the stricter requirements such as face coverings, vaccine mandates or negative test results.
+Added: We will continue to monitor governmental orders regarding the operations of our centers, as well as our center operating processes and protocols.
Cash Flows and Liquidity
−Removed: In response to the impact of COVID-19 on our business, we took swift cash management actions to reduce our operating costs and preserve liquidity.
−Removed: These actions included:
−Removed: initially furloughing over 95% of our employees;
−Removed: undertaking two corporate restructuring events to right size overhead relative to the current business;
−Removed: initially suspending virtually all construction capital spending;
−Removed: negotiating rent reductions and deferrals with many of our landlords;
−Removed: evaluating the CARES Act and receiving the employee retention credit, the deferment of the employer’s portion of social security tax payments and the various income tax-related benefits;
−Removed: and completing sale-leaseback transactions associated with six properties.
−Removed: Table of Content s
−Removed: Although there is uncertainty related to the impact of COVID-19 on our financial position, results of operations, liquidity and cash flows, much of which is dependent on the length and severity of the pandemic and the related measures taken, we believe that the combination of our current cash position, our availability under the revolving portion of the Credit Facilities, the recent actions we have taken to refinance our debt and strengthen our balance sheet, as well as the actions we have taken to reduce our cash outflows, leave us well-positioned to manage our business through this pandemic.
−Removed: If our available liquidity were not sufficient to meet our operating and debt service obligations as they come due, we would need to pursue alternative arrangements through additional debt or equity financing to meet our cash requirements.
−Removed: There can be no assurance that any such financing would be available on commercially acceptable terms, or at all.
−Removed: There may be developments outside of our control requiring us to adjust our operating plan, including additional required center closures.
−Removed: As such, given the dynamic nature of our current operating environment, we cannot reasonably estimate the impacts of COVID-19 on our financial position, results of operations or cash flows in the future.
+Added: We believe that the combination of our current cash position, our availability under the revolving portion of the Credit Facilities, the actions we have taken with respect to our debt and equity and strengthening our balance sheet, as well as the actions we have taken to reduce our cash outflows, leave us well-positioned to manage and grow our business as we emerge from the adverse impacts of COVID-19.
Investment in Business
−Removed: As we recover from the impacts of the COVID-19 pandemic, we are investing in our business to elevate our member experiences and drive additional revenue per center membership, including introducing new types of memberships, providing concierge-type member services, expanding our omni-channel offerings and improving our in-center services and products.
+Added: We have continued to invest in our business to elevate and broaden our member experiences and drive additional revenue per center membership, including improving our in-center services and products, such as pickleball, Dynamic Personal Training, small group training and our ARORA community, introducing new types of memberships, providing concierge-type member services and expanding our omni-channel offerings.
Elevating our member experiences requires investment in our team members, programs, products, services and centers.
These investments may impact our short-term results of operations and cash flows as our investments in our business may be made more quickly than we achieve additional revenue per center membership.
+Added: While we remain focused on providing exceptional experiences to our members and growing our revenue, we are also focused on center efficiencies and expense control given our recovery of a significant portion of our center memberships and membership dues.
Impact of Our Asset-light, Flexible Real Estate Strategy on Rent Expense
3 unchanged sentences
The impact of these increases is dependent upon the timing of our centers under development and the center openings and terms of the leases for the new centers or sale-leaseback transactions.
+Added: Macroeconomic Trends
+Added: We have been actively monitoring the macroeconomic environment and its impact on our business, including with respect to inflation, interest rates, labor and supply chain issues, as well as a potential economic recession .
+Added: See “—Overview—Business” for additional information.
Share-Based Compensation
+Added: During the year ended December 31, 2022, we recognized share-based compensation expense associated with stock options, restricted stock, restricted stock units and our ESPP that launched on December 1, 2022, totaling approximately $37.3 million.
During the year ended December 31, 2021, we recognized share-based compensation expense associated with stock options, restricted Series A Preferred Stock, restricted stock and restricted stock units totaling approximately $334.3 million, a significant portion of which is associated with stock options that were granted prior to 2021.
−Removed: As of the effective date of the IPO, these stock options became fully vested, and they either became immediately exercisable or they will become exercisable no later than April 4, 2022, subject to continued service through such date.
−Removed: Accordingly, during the period from the effective date of the IPO through December 31, 2021 , we recognized share-based compensation expense associated with these stock options in an amount equal to the proportion of the total service period that has passed from the respective grant dates associated with each of these stock option awards through December 31, 2021.
−Removed: Because the vesting and exercisability of these stock options was contingent upon the occurrence of a change of control or an initial public offering, no share-based compensation expense associated with these stock options was recognized prior to the IPO.
+Added: As of the effective date of the IPO, these stock options became fully vested, and they became exercisable either immediately or on April 4, 2022, subject to continued service through such date.
+Added: Accordingly, during the period from the effective date of the IPO through April 4, 2022 , we recognized share-based compensation expense associated with these stock options in an amount equal to the proportion of the total service period that passed from the respective grant dates associated with each of these stock option awards through April 4, 2022 .
+Added: Because the exercisability of these stock options was contingent upon the occurrence of a change of control or an initial public offering, no share-based compensation expense associated with these stock options was recognized prior to the IPO.
For more information on our share-based compensation arrangements, see Note 10, Stockholders’ Equity, to our consolidated financial statements included in Part II, Item 8 of this Annual Report.
8 unchanged sentences
We assess the recoverability of goodwill and indefinite-lived intangible assets, such as our Life Time trade name, on an annual basis, or more often if circumstances warrant.
−Removed: We assess the recoverability of goodwill by estimating the fair value of the
−Removed: Table of Content s
−Removed: reporting unit to which the goodwill relates and comparing this fair value to the net book value of the reporting unit.
+Added: We assess the recoverability of goodwill by estimating the fair value of the reporting unit to which the goodwill relates and comparing this fair value to the net book value of the reporting unit.
We assess the recoverability of the Life Time trade name through the use of the relief from royalty valuation method.
15 unchanged sentences
Based upon our review and analysis, no material impairments of long-lived assets were deemed to have occurred during any of the periods presented.
−Removed: Table of Content s
+Added: Sale-Leaseback Arrangements
+Added: We assess each of our sale-leaseback arrangements to determine whether a sale has occurred under Accounting Standards Codification (“ASC”) Topic 606:
+Added: Revenue from Contracts with Customers (“ASC 606”), as well as assess whether the classification of the lease and/or the payment terms associated with the renewal options preclude sale accounting under ASC 842, Leases (“ASC 842”).
+Added: These assessments involve a determination of whether or not control of the underlying property has been transferred to the buyer.
+Added: If we determine control of the underlying property has been transferred to the buyer, we account for the arrangement as a sale and leaseback transaction.
+Added: If we determine control of the underlying property has not been transferred to the buyer, we account for the arrangement as a financing transaction.
+Added: Since our adoption of ASC 842, we have accounted for each of our sale-leaseback arrangements as a sale and leaseback transaction.
+Added: For each sale-leaseback arrangement we have entered into with an unrelated third party since our adoption of ASC 842, the measurements associated with the gain or loss recognized on the sale and the lease-related right-of-use assets and liabilities have been adjusted for off-market terms.
+Added: These off-market adjustments are based on the difference between the sale price of the property and its fair value.
+Added: The determination of the fair value of the property related to our sale-leaseback arrangements requires subjectivity and estimates, including the use of multiple valuation techniques and uncertain inputs, such as market price per square foot and assumed capitalization rates or the replacement cost of the assets, where applicable.
+Added: Where real estate valuation expertise is required, we obtain independent third-party appraisals to determine the fair value of the underlying asset.
+Added: While determining fair value requires a variety of input assumptions and judgment, we believe our estimates of fair value are reasonable.
Results of Operations
18 unchanged sentences
228,883 235,124 12.6 % 17.9 %
−Removed: Other operating
+Added: Other operating (income) expenses
(44,355) 43,653 (2.4) % 3.3 %
1 unchanged sentence
1,711,938 1,813,241 93.9 % 137.6 %
−Removed: Loss from operations
+Added: Income (loss) from operations
110,619 (495,188) 6.1 % (37.6) %
2 unchanged sentences
(113,537) (224,516) (6.2) % (17.0) %
−Removed: Equity in loss of affiliate
+Added: Equity in earnings (loss) of affiliates
300 (9) — % — %
7 unchanged sentences
Total revenue .
−Removed: The $369.7 million increase in Total revenue for the year ended December 31, 2021 compared to the year ended December 31, 2020 primarily reflects the adverse economic impact that our center closures had on our business during the year ended December 31, 2020 and the timing of the subsequent reopening of our centers, as well as pricing initiatives we implemented at the majority of our centers during the year ended December 31, 2021, which have resulted in higher average Center membership dues being charged to new members during the year ended December 31, 2021 as compared to the year ended December 31, 2020.
−Removed: With respect to the $356.6 million increase in Center revenue for the year ended December 31, 2021 compared to the year ended December 31, 2020 :
+Added: The $504.5 million increase in Total revenue for the year ended December 31, 2022 as compared to the year ended December 31, 2021 primarily reflects the strong growth in our membership dues and in-center revenues, which was driven by our pricing strategy, continued center membership recovery and higher utilization of our in-center offerings by our members after the adverse impacts of COVID-19 and supported by strategic investments in our business, as well as the opening of 10 new centers during the year ended December 31, 2022.
+Added: With respect to the $482.9 million increase in Center revenue for the year ended December 31, 2022 as compared to the year ended December 31, 2021:
• 71.4% was from membership dues and enrollment fees, which increased $344.6 million for the year ended December 31, 2022 as compared to the year ended December 31, 2021.
−Removed: This increase reflects the adverse economic impact that our center closures, which resulted from COVID-19, had on our business during the year ended December 31, 2020 and the timing of the subsequent reopening of our centers, as we ll as pricing initiatives we implemented at the majority of our centers during the year ended December 31, 2021, which have resulted in higher average Center membership dues being charged to new members during the year ended December 31, 2021 as compared to the year ended December 31, 2020 ;
+Added: This increase reflects the improvement in our Center memberships, which increased to 725,206 as of December 31, 2022 from 649,373 as of December 31, 2021, and the strong growth in our membership dues for the reasons noted above for Total revenue;
• 28.6% was from in-center revenue, which increased $138.3 million as compared to the year ended December 31, 2021.
−Removed: This increase was recognized across all of our primary in-center businesses and reflects the adverse economic impact that our center closures, which resulted from COVID-19, had on our business during the year ended December 31, 2020 as well as the timing of the subsequent reopening of our centers.
−Removed: Table of Content s
−Removed: The $13.0 million increase in Other revenue for the year ended December 31, 2021 as compared to the year ended December 31, 2020 was primarily driven by our athletic events business, as we were able to produce several of our iconic events during the year ended December 31, 2021 as compared to the year ended December 31, 2020 when COVID-19 restrictions forced the cancellation of most of our events.
+Added: This increase was recognized across all of our primary in-center businesses and reflects the higher utilization of our services by our members as our operations continue to improve after the adverse impacts of COVID-19, which has been supported by our strategic investments in our business.
+Added: The $21.6 million increase in Other revenue for the year ended December 31, 2022 as compared to the year ended December 31, 2021 was primarily driven by our athletic events business, as we experienced a higher level of event participation during the year ended December 31, 2022 as compared to the year ended December 31, 2021 when COVID-19 had reduced our event participation rates.
+Added: Also, we were able to produce more of our iconic events during the year ended December 31, 2022 as compared to the year ended December 31, 2021 when COVID-19 restrictions forced the cancellation of certain of our events.
Center operations expenses .
−Removed: The $184.1 million increase in Center operations expenses for the year ended December 31, 2021 as compared to the year ended December 31, 2020 was primarily driven by increased staffing requirements resulting from the subsequent reopening of our centers and the addition of six new centers.
−Removed: Center operations expenses for the year ended December 31, 2021 also includes $12.9 million of share-based compensation expense, a significant portion of which is associated with stock options that were granted prior to 2021.
−Removed: For more information regarding share-based compensation expense that we recognized during the year ended December 31, 2021, s ee “—General, administrative and marketing expenses” below.
+Added: The $224.1 million increase in Center operations expenses for the year ended December 31, 2022 as compared to the year ended December 31, 2021 was primarily driven by increased staffing requirements resulting from increased usage of our centers and strategic investments in our business during the year ended December 31, 2022 as compared to the year ended December 31, 2021, the opening of 10 new centers during the year ended December 31, 2022, as well as higher labor and utility costs due to inflation during the year ended December 31, 2022 as compared to the year ended December 31, 2021.
Rent expense .
−Removed: The $23.5 million increase in Rent expense for the year ended December 31, 2021 as compared to the year ended December 31, 2020 was primarily driven by the sale leaseback of two centers occurring during the year ended December 31, 2021 , the sale leaseback of three centers that occurred during the fourth quarter of 2020, and our taking possession of nine properties during the year ended December 31, 2021 for future centers where we started incurring GAAP rent expense, most of which is non-cash.
+Added: The $35.4 million increase in Rent expense for the year ended December 31, 2022 as compared to the year ended December 31, 2021 was primarily driven by our taking possession of nine properties since June 30, 2021 for future centers where we started incurring GAAP rent expense, most of which is non-cash, and the sale-leaseback of nine centers during the year ended December 31, 2022.
General, administrative and marketing expenses.
−Removed: The $330.6 million increase in General, administrative and marketing expenses for the year ended December 31, 2021 as compared to the year ended December 31, 2020 was primarily driven by a $316.8 million increase in share-based compensation expense, a $16.4 million increase in general and administrative costs, primarily driven by the return of corporate team members who were furloughed during the year ended December 31, 2020 as well as other costs to support revenue growth, and a $5.7 million increase in marketing expenses , partially offset by a $9.9 million decrease in corporate COVID-19-related expenses.
−Removed: A significant portion of the share-based compensation expense that we recognized during the year ended December 31, 2021 is associated with stock options that were granted prior to 2021.
−Removed: As of the effective date of the IPO, these stock options became fully vested, and they either became immediately exercisable or they will become exercisable no later than April 4, 2022, subject to continued service through such date.
−Removed: Accordingly, during the period from the effective date of the IPO through December 31, 2021 , we recognized share-based compensation expense associated with these stock options in an amount equal to the proportion of the total implied service period that has passed from the respective grant dates associated with each of these stock option awards through December 31, 2021.
−Removed: Because the vesting and exercisability of these stock options was contingent upon the occurrence of a change of control or an initial public offering, no share-based compensation expense associated with these stock options was recognized prior to the IPO.
+Added: The $266.5 million decrease in General, administrative and marketing expenses for the year ended December 31, 2022 as compared to the year ended December 31, 2021 was primarily driven by a $283.3 million decrease in share-based compensation expense and a $6.2 million decrease in incentive compensation expense, partially offset by a $6.9 million increase in overhead costs that were primarily labor-related to enhance and broaden our member services and experiences, a $6.9 million increase in marketing and information technology expenses and a $2.3 million increase in public company-related expenses.
+Added: For the year ended December 31, 2022 , General, administrative and marketing expenses included approximately $33.5 million of share-based compensation expense as compared to approximately $316.8 million f or the year ended December 31, 2021.
+Added: A significant portion of the s hare-based compensation expense recognized during the year ended December 31, 2021 is associat ed with stock options that were granted prior to 2021.
+Added: As of the effective date of the IPO in October 2021, these stock options became fully vested, and they became exercisable either immediately or on April 4, 2022, subject to continued service through such date.
+Added: Accordingly, during the period from the effective date of the IPO through April 4, 2022, we recognized share-based compensation expense associated with these stock options in an amount equal to the proportion of the total service period that passed from the respective grant dates associated with each of these stock option awards through April 4, 2022.
Depreciation and amortization .
−Removed: The $12.6 million decrease in Depreciation and amortization for the year ended December 31, 2021 as compared to the year ended December 31, 2020 consists of $9.3 million and $3.3 million lower depreciation and amortization, respectively.
−Removed: The decrease in depreciation for the year ended December 31, 2021 as compared to the year ended December 31, 2020 was primarily driven by the timing of sale-leaseback transactions, as well as the reduction in the carrying value of certain fixed assets associated with some of our leased centers and some of our ancillary businesses that resulted from impairment charges that we recognized during the fourth quarter of 2020.
−Removed: Other operating expenses .
−Removed: The $19.9 million decrease in Other operating expenses for the year ended December 31, 2021 as compared to the year ended December 31, 2020 was primarily attributable to $30.3 million of project cost write-offs recognized during the year December 31, 2020 for sites that were no longer deemed viable for construction as a result of COVID-19, partially offset by approximately $6.0 million higher costs associated with our athletic events business during the year ended December 31, 2021 as compared to the year ended December 31, 2020 as well as a $4.6 million increase in share-based compensation expense .
−Removed: The increase in costs associated with our athletic events resulted from our ability to produce several of our iconic events during the year ended December 31, 2021 as compared to the year ended December 31, 2020 when COVID-19 restrictions forced the cancellation of most of our events.
−Removed: A significant portion of the share-based compensation expense is associated with stock options that were granted prior to 2021.
−Removed: For more information regarding share-based compensation expense that we recognized during the year ended December 31, 2021, s ee “—General, administrative and marketing expenses” above.
−Removed: Interest expense, net .
−Removed: The $96.1 million increase in Interest expense, net of interest income for the year ended December 31, 2021 as compared to the year ended December 31, 2020 was primarily driven by a $41.0 million non-cash expense recognized related to the conversion of our related party secured loan into Series A Preferred Stock, write-offs of debt issuance costs and original issuance discount costs associated with extinguished debt instrument totaling $28.6 million and $5.7 million prepayment penalty related to partial pay down of our Term Loan Facility .
−Removed: Additionally, the increase also reflects a relatively higher effective weighted average interest rate on an increased average level of outstanding borrowings during the year ended December 31, 2021 compared to the year ended December 31, 2020 .
−Removed: Table of Content s
+Added: The $6.2 million decrease in Depreciation and amortization for the year ended December 31, 2022 as compared to the year ended December 31, 2021 consisted of $6.3 million lower depreciation, driven by the timing of sale-leaseback transactions, partially offset by $0.1 million higher amortization, driven by a facility license associated with an outdoor enthusiast and bicycling event that we acquired during the third quarter of 2021.
+Added: Other operating (income) expenses .
+Added: Other operating income for the year ended December 31, 2022 was $44.4 million as compared to Other operating expenses of $43.7 million for the year ended December 31, 2021.
+Added: The $88.1 million change was primarily attributable to the recognition of a $97.5 million gain on sale-leaseback transactions associated with nine properties that were completed during the year ended December 31, 2022, partially offset by higher costs associated with our athletic events business, as we experienced a higher level of event participation and we were able to produce more of our iconic events during the year ended December 31, 2022 as compared to the year ended December 31, 2021.
+Added: Interest expense, net of interest income .
+Added: The $111.0 million decrease in Interest expense, net of interest income for the year ended December 31, 2022 as compared to the year ended December 31, 2021 was primarily driven by a $41.0 million non-cash expense that was recognized during the year ended December 31, 2021 in connection with the conversion of a related-party secured loan into Series A Preferred Stock, write-offs of debt issuance costs and original issuance discount costs totaling $28.6 million and a $5.7 million prepayment penalty related to the partial pay down of our Term Loan Facility, both of which were recognized during the year ended December 31, 2021 in connection with extinguished debt instruments, as well as a lower average level of outstanding borrowings during the year ended December 31, 2022 as compared to the year ended December 31, 2021.
Benefit from income taxes .
−Removed: The benefit from income taxes was $140.3 million for the year ended December 31, 2021 compared to $127.5 million for the year ended December 31, 2020 .
+Added: The benefit from income taxes was $0.8 million for the year ended December 31, 2022 as compared to $140.3 million for the year ended December 31, 2021 .
The effective tax rate was 31.5% and 19.5% for those same periods, respectively.
−Removed: The change in benefit from income taxes was primarily attributable to:
−Removed: (i) an increase in our loss before income taxes for the year ended December 31, 2021 as compared to the year ended December 31, 2020;
−Removed: (ii) a $41.0 million loss related to the extinguishment of our related party secured loan that we recognized for GAAP purposes during the year ended December 31, 2021 that is not recognized for tax purposes ;
−Removed: and (iii) the recognition during the year ended December 31, 2021 of an increase in the valuation allowance to reduce the deferred tax asset associated with our net operating losses.
−Removed: As a result of the factors described above, net loss increased by $219.2 million for the year ended December 31, 2021 as compared to the year ended December 31, 2020 .
+Added: The decrease in benefit from income taxes for the year ended December 31, 2022 as compared to the year ended December 31, 2021 was primarily driven by a decrease in our loss before income taxes, partially offset by a decrease in the valuation allowance associated with certain of our deferred tax assets.
+Added: As a result of the factors described above, net loss decreased by $577.6 million for the year ended December 31, 2022 as compared to the year ended December 31, 2021 .
Year Ended December 31, 2021 Compared to Year Ended December 31, 2020
21 unchanged sentences
1,813,241 1,307,528 137.6 % 137.8 %
−Removed: (Loss) income from operations
+Added: Loss from operations
(495,188) (359,149) (37.6) % (37.8) %
−Removed: Other income (expense):
+Added: Other expense:
Interest expense, net of interest income
(224,516) (128,394) (17.0) % (13.5) %
−Removed: Equity in (loss) earnings of affiliate
+Added: Equity in loss of affiliates
(9) (187) — % — %
1 unchanged sentence
(224,525) (128,581) (17.0) % (13.5) %
−Removed: (Loss) income before income taxes
−Removed: (487,730) 40,129 (51.3) % 2.1 %
−Removed: (Benefit from) provision for income taxes
−Removed: (127,538) 10,080 (13.3) % 0.5 %
−Removed: Net (loss) income
+Added: Loss before income taxes
(719,713) (487,730) (54.6) % (51.3) %
−Removed: Net income attributable to noncontrolling interest
+Added: Benefit from income taxes
(140,344) (127,538) (10.6) % (13.3) %
−Removed: Net (loss) income attributable to Life Time Group Holdings, Inc.
$ (579,369) $ (360,192) (44.0) % (38.0) %
Total revenue.
−Removed: The $952.0 million decrease in Total revenue for the year ended December 31, 2020 as compared to the year ended December 31, 2019 reflects the adverse economic impact that our center closures, which resulted from COVID-19, had on our business as well as the timing of the subsequent reopening of our centers.
−Removed: With respect to the $921.4 million decrease in Center revenue for the year ended December 31, 2020 as compared to the year ended December 31, 2019:
−Removed: • 60.5% was from membership dues and enrollment fees, which decreased $557.3 million for the year ended December 31, 2020 as compared to the year ended December 31, 2019 due to the adverse economic impact that our center closures, which resulted from COVID-19, had on our business as well as the timing of the subsequent reopening of our centers;
−Removed: Table of Content s
−Removed: • 39.5% was from in-center revenue, which decreased $364.1 million for the year ended December 31, 2020 as compared to the year ended December 31, 2019 due to a decline across all of our primary in-center businesses, as a result of our center closures, which resulted from COVID-19, as well as the timing of the subsequent reopening of our centers.
−Removed: The $30.6 million decrease in Other revenue for the year ended December 31, 2020 as compared to the year ended December 31, 2019 was primarily driven by athletic event cancellations caused by COVID-19, which had a negative impact on sales of media, race and timing-related technology, as well as event-related registration fees.
+Added: The $369.7 million increase in Total revenue for the year ended December 31, 2021 as compared to the year ended December 31, 2020 primarily reflects the adverse economic impact that our center closures had on our business during the year ended December 31, 2020, and the timing of the subsequent reopening of our centers, as well as pricing initiatives we implemented at the majority of our centers during the year ended December 31, 2021, which resulted in higher average Center membership dues being charged to new members during the year ended December 31, 2021 as compared to the year ended December 31, 2020.
+Added: With respect to the $356.6 million increase in Center revenue for the year ended December 31, 2021 as compared to the year ended December 31, 2020:
+Added: • 71.8% was from membership dues and enrollment fees, which increased $256.0 million for the year ended December 31, 2021 as compared to the year ended December 31, 2020.
+Added: This increase reflects the adverse economic impact that our center closures, which resulted from COVID-19, had on our business during the year ended December 31, 2020 and the timing of the subsequent reopening of our centers, as well as pricing initiatives we implemented at the majority of our centers during the year ended December 31, 2021, which resulted in higher average Center membership dues being charged to new members during the year ended December 31, 2021 as compared to the year ended December 31, 2020;
+Added: • 28.2% was from in-center revenue, which increased $100.6 million as compared to the year ended December 31, 2020.
+Added: This increase was recognized across all of our primary in-center businesses and reflects the adverse economic impact that our center closures, which resulted from COVID-19, had on our business during the year ended December 31, 2020 as well as the timing of the subsequent reopening of our centers.
+Added: The $13.0 million increase in Other revenue for the year ended December 31, 2021 as compared to the year ended December 31, 2020 was primarily driven by our athletic events business, as we were able to produce several of our iconic events during the year ended December 31, 2021 as compared to the year ended December 31, 2020 when COVID-19 restrictions forced the cancellation of most of our events.
Center operations expenses.
−Removed: The $381.1 million decrease in Center operations expenses for the year ended December 31, 2020 as compared to the year ended December 31, 2019 was primarily the result of $290.7 million in decreased labor costs, $38.8 million in decreased cost of goods sold, $23.2 million in reduced facility costs and $17.8 million in reduced credit card fees as a result of center closures and lower Center revenue, which resulted from COVID-19.
+Added: The $184.1 million increase in Center operations expenses for the year ended December 31, 2021 as compared to the year ended December 31, 2020 was primarily driven by increased staffing requirements resulting from the subsequent reopening of our centers and the addition of six new centers.
+Added: Center operations expenses for the year ended December 31, 2021 also includes $12.9 million of share-based compensation expense, a significant portion of which is associated with stock options that were granted prior to 2021.
+Added: For more information regarding share-based compensation expense that we recognized during the year ended December 31, 2021, see “ —General, administrative and marketing expenses” below.
Rent expense .
−Removed: The $20.3 million increase in Rent expense for the year ended December 31, 2020 as compared to the year ended December 31, 2019 was primarily driven by the sale-leaseback transactions that were consummated during 2020, as well as the timing of other property leases that commenced during 2020 and the prior year.
+Added: The $23.5 million increase in Rent expense for the year ended December 31, 2021 as compared to the year ended December 31, 2020 was primarily driven by the sale-leaseback of two centers occurring during the year ended December 31, 2021, the sale-leaseback of three centers that occurred during the fourth quarter of 2020, and our taking possession of nine properties during the year ended December 31, 2021 for future centers where we started incurring GAAP rent expense, most of which is non-cash.
General, administrative and marketing expenses.
−Removed: The $77.8 million decrease in General, administrative and marketing expenses for the year ended December 31, 2020 as compared to the year ended December 31, 2019 was primarily driven by a reduction of expenses of $26.9 million, which was primarily the result of lower salaries and wages associated with our furloughed employees, as well as corporate headcount reduction actions that we took during 2020, and a reduction in our advertising and marketing spend of approximately $22.7 million as a result of our continued efforts to control expenses in light of COVID-19.
−Removed: In addition, in 2019, we incurred $23.0 million of additional share-based compensation as part of a voluntary stock option purchase offer, as well as $5.2 million of costs related to the sale of newly issued common stock to a minority investor group.
+Added: The $330.6 million increase in General, administrative and marketing expenses for the year ended December 31, 2021 as compared to the year ended December 31, 2020 was primarily driven by a $316.8 million increase in share-based compensation expense, a $16.4 million increase in general and administrative costs, primarily driven by the return of corporate team members who were furloughed during the year ended December 31, 2020 as well as other costs to support revenue growth, and a $5.7 million increase in marketing expenses, partially offset by a $9.9 million decrease in corporate COVID-19 related expenses.
+Added: A significant portion of the share-based compensation expense that we recognized during the year ended December 31, 2021 was associated with stock options that were granted prior to 2021.
+Added: As of the effective date of the IPO in October 2021, these stock options became fully vested, and they became exercisable either immediately or on April 4, 2022, subject to continued service through such date.
+Added: Accordingly, during the period from the effective date of the IPO through December 31, 2021, we recognized share-based compensation expense associated with these stock options in an amount equal to the proportion of the total implied service period that passed from the respective grant dates associated with each of these stock option awards through December 31, 2021.
+Added: Because the exercisability of these stock options was contingent upon the occurrence of a change of control or an initial public offering, no share-based compensation expense associated with these stock options was recognized prior to the IPO.
Depreciation and amortization.
−Removed: The $27.2 million increase in Depreciation and amortization for the year ended December 31, 2020 as compared to the year ended December 31, 2019 consists of $31.4 million higher depreciation, partially offset by $4.2 million lower amortization.
+Added: The $12.6 million decrease in Depreciation and amortization for the year ended December 31, 2021 as compared to the year ended December 31, 2020 consists of $9.3 million and $3.3 million lower depreciation and amortization, respectively.
+Added: The decrease in depreciation for the year ended December 31, 2021 as compared to the year ended December 31, 2020 was primarily driven by the timing of sale-leaseback transactions, as well as the reduction in the carrying value of certain fixed assets associated with some of our leased centers and some of our ancillary businesses that resulted from impairment charges that we recognized during the fourth quarter of 2020.
Other operating expenses.
−Removed: The $13.2 million decrease in Other operating expenses for the year ended December 31, 2020 as compared to the year ended December 31, 2019 was primarily attributable to the decline in sales of race and timing-related technology, as well as the decline in media sales, which was driven by the cancellation of athletic events as a result of COVID-19.
−Removed: Interest expense, net.
−Removed: The $0.6 million decrease in Interest expense, net for the year ended December 31, 2020 as compared to the year ended December 31, 2019 reflects the decrease in the LIBOR during the year ended December 31, 2020 as compared to the year ended December 31, 2019, partially offset by interest associated with new borrowings under a secured loan with related parties during 2020 and a relatively lower level of capitalized interest on lower construction spending during the year ended December 31, 2020 as compared to the year ended December 31, 2019.
−Removed: (Benefit from) provision for income taxes.
−Removed: The benefit from income taxes was $127.5 million for the year ended December 31, 2020 as compared to the $10.1 million provision for income taxes for the year ended December 31, 2019.
−Removed: The benefit from income taxes for the year ended December 31, 2020 was primarily driven by the loss before income taxes.
−Removed: The effective tax rate was 26.1% and 25.1% for the year ended December 31, 2020 and 2019, respectively.
−Removed: The change in effective tax rate for the year ended December 31, 2020 as compared to the year ended December 31, 2019 reflects an increase in the overall effective state rate during the year ended December 31, 2020 .
−Removed: Net (loss) income.
−Removed: As a result of the factors described above, net loss was $360.2 million for the year ended December 31, 2020 , compared to net income of $30.0 million for the year ended December 31, 2019.
−Removed: Net income attributable to noncontrolling interest .
−Removed: Net income attributable to noncontrolling interest, which represents the stated dividends associated with the underlying preferred shares of Massage Retreat & Spa, Inc.
−Removed: (“MR&S”), was $0.0 million and less than $0.1 million for the years ended December 31, 2020 and 2019, respectively.
−Removed: Table of Content s
+Added: The $19.9 million decrease in Other operating expenses for the year ended December 31, 2021 as compared to the year ended December 31, 2020 was primarily attributable to $30.3 million of project cost write-offs recognized during the year December 31, 2020 for sites that were no longer deemed viable for construction as a result of COVID-19, partially offset by approximately $6.0 million higher costs associated with our athletic events business during the year ended December 31, 2021 as compared to the year ended December 31, 2020 as well as a $4.6 million increase in share-based compensation expense .
+Added: The increase in costs associated with our athletic events resulted from our ability to produce several of our iconic events during the year ended December 31, 2021 as compared to the year ended December 31, 2020 when COVID-19 restrictions forced the cancellation of most of our events.
+Added: A significant portion of the share-based compensation expense is associated with stock options that were granted prior to 2021.
+Added: For more information regarding share-based compensation expense that we recognized during the year ended December 31, 2021, s ee “—General, administrative and marketing expenses” above.
+Added: Interest expense, net of interest income.
+Added: The $96.1 million increase in Interest expense, net of interest income for the year ended December 31, 2021 as compared to the year ended December 31, 2020 was primarily driven by a $41.0 million non-cash expense recognized related to the conversion of our related party secured loan into Series A Preferred Stock, write-offs of debt issuance costs and original issuance discount costs associated with extinguished debt instruments totaling $28.6 million and a $5.7 million p repayment penalty related to partial pay down of our Term Loan Facility .
+Added: Additionally, the increase also reflects a
+Added: relatively higher effective weighted average interest rate on an increased average level of outstanding borrowings during the year ended December 31, 2021 as compared to the year ended December 31, 2020.
+Added: Benefit from income taxes.
+Added: The benefit from income taxes was $140.3 million for the year ended December 31, 2021 as compared to $127.5 million for the year ended December 31, 2020.
+Added: The effective tax rate was 19.5% and 26.1% for those same periods, respectively.
+Added: The change in benefit from income taxes was primarily attributable to:
+Added: (i) an increase in our loss before income taxes for the year ended December 31, 2021 as compared to the year ended December 31, 2020;
+Added: (ii) a $41.0 million loss related to the extinguishment of our related party secured loan that we recognized for GAAP purposes during the year ended December 31, 2021 that was not recognized for tax purposes ;
+Added: and (iii) the recognition during the year ended December 31, 2021 of an increase in the valuation allowance to reduce the deferred tax asset associated with our net operating losses.
+Added: As a result of the factors described above, net loss increased by $219.2 million for the year ended December 31, 2021 as compared to the year ended December 31, 2020.
Liquidity and Capital Resources
−Removed: Our principal liquidity needs include the development of new centers, debt service and lease requirements, investments in technology and expenditures necessary to maintain and update our centers and associated fitness equipment and member experiences.
−Removed: We have primarily satisfied our historical liquidity needs with cash flow from operations, drawing on the revolving portion of the Credit Facilities and through sale-leaseback transactions.
−Removed: We have taken significant actions to improve our liquidity and during 2021, we refinanced a significant portion of our outstanding debt.
−Removed: Specifically, we:
−Removed: (i) refinanced in full the outstanding balances associated with our then existing senior secured credit facility as well as our then existing senior unsecured notes;
−Removed: (ii) converted our related party secured loan into Series A Preferred Stock, which were automatically converted into our common stock in connection with the IPO;
−Removed: and (iii) increased the commitments under the revolving portion of our Credit Facilities to $475 million and extended their maturity.
−Removed: Additionally, we completed a sale-leaseback transaction associated with two properties.
−Removed: For information regarding the refinancing actions we took during 2021, see Note 8, Debt, to our consolidated financial statements in this Annual Report.
−Removed: For more information regarding the sale-leaseback transaction that was consummated during 2021, see Note 9, Leases, to our consolidated financial statements in this Annual Report.
−Removed: On October 12, 2021, we completed our IPO of 39.0 million shares of our common stock at a public offering price of $18.00 per share, resulting in total gross proceeds of $702.0 million before deducting the underwriting discounts and other offering expenses.
+Added: Our principal liquidity needs include the development of new centers, lease requirements and debt service, investments in our business and technology and expenditures necessary to maintain and update or enhance our centers and associated fitness equipment and member experiences.
+Added: We have primarily satisfied our historical liquidity needs with cash flow from operations, drawing on the Revolving Credit Facility and through sale-leaseback transactions.
+Added: We have taken significant actions to improve our liquidity.
+Added: During 2022, we completed sale-leaseback transactions associated with nine properties.
+Added: During 2021, we refinanced a significant portion of our outstanding debt and we completed a sale-leaseback transaction associated with two properties.
+Added: For information regarding the refinancing actions we took during 2021, see Note 8, Debt, to our consolidated financial statements in Part II, Item 8 of this Annual Report.
+Added: For more information regarding the sale-leaseback transactions that were consummated during 2022 and 2021, see Note 9, Leases, to our consolidated financial statements in Part II, Item 8 of this Annual Report.
+Added: We continue to explore potential sale-leaseback opportunities for a number of our properties.
+Added: Additionally, on October 12, 2021, we completed our IPO of 39.0 million shares of our common stock at a public offering price of $18.00 per share, resulting in total gross proceeds of $702.0 million before deducting the underwriting discounts and other offering expenses.
Additionally, on November 1, 2021, we consummated the sale of nearly 1.6 million additional shares of our 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 before deducting the underwriting discounts and commissions.
On October 13, 2021, we paid down $575.7 million (including a $5.7 million pre-payment penalty) of our Term Loan Facility with a portion of the net proceeds we received from the IPO.
−Removed: We intend to use the remaining net proceeds from the IPO, along with the additional net proceeds of approximately $27.1 million from the sale of the additional nearly 1.6 million shares of common stock, for general corporate purposes.
+Added: We used the remaining net proceeds from the IPO, along with the additional net proceeds of approximately $27.1 million from the sale of the additional nearly 1.6 million shares of common stock, for general corporate purposes.
+Added: We believe the steps we have taken to strengthen our balance sheet and to reduce our cash outflows leave us well-positioned to manage our business.
As the opportunity arises or as our business needs require, we may seek to raise capital through additional debt financing or through equity financing.
1 unchanged sentence
To date, we have not experienced difficulty accessing the credit and capital markets;
−Removed: however, volatility in these markets, particularly in light of the impacts of COVID-19 and the potential for rising interest rates, 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.
+Added: however, volatility in these markets, particularly in light of the rising interest rate environment and any continued impacts of COVID-19 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.
−Removed: As of December 31, 2021, there were no outstanding borrowings under our Revolving Credit Facility and there were $33.5 million of outstanding letters of credit, resulting in total availability under our Revolving Credit Facility, subject to a $100.0 million minimum liquidity requirement that ended on December 31, 2021, of $341.5 million.
−Removed: Total cash and cash equivalents at December 31, 2021 was $31.6 million, resulting in total cash and availability under our Revolving Credit Facility of $373.1 million.
+Added: As of December 31, 2022, there were $20.0 million of outstanding borrowings under our Revolving Credit Facility and there were $31.4 million of outstanding letters of credit, resulting in total availability under our Revolving Credit Facility of $423.6 million.
+Added: Total cash and cash equivalents, exclusive of restricted cash, at December 31, 2022 was $25.2 million, resulting in total cash and availability under our Revolving Credit Facility of $448.8 million.
The following table sets forth our consolidated statements of cash flows data (amounts in thousands):
−Removed: For the Year Ended December 31,
+Added: Year Ended December 31,
2022 2021 2020
−Removed: Net cash (used in) provided by operating activities
+Added: Net cash provided by (used in) operating activities
$ 200,969 $ (20,029) $ (95,981)
4 unchanged sentences
Effect of exchange rate on cash and cash equivalents
−Removed: (Decrease) increase in cash and cash equivalents
(353) (9) (55)
−Removed: Table of Content s
+Added: Decrease in cash and cash equivalents
+Added: $ (6,128) $ (1,558) $ (14,756)
Operating Activities
−Removed: The $76.0 million decrease in net cash used in operating activities for the year December 31, 2021 as compared to the year ended December 31, 2020 was primarily the result of higher profitability, before the impact of non-cash share-based compensation expense, due to the recovery from the impact of COVID-19 on our business during 2020.
−Removed: The $454.7 million increase in net cash used in operating activities for the year December 31, 2020 as compared to the year ended December 31, 2019 was primarily due to lower center profitability as a result of center closures, which reflects the adverse economic impact that COVID-19 has had on our business.
+Added: The $221.0 million increase in net cash provided by operating activities for the year December 31, 2022 as compared to the year ended December 31, 2021 was primarily the result of higher profitability, before the impact of non-cash share-based compensation expense, due to the recovery from the impact of COVID-19 on our business.
+Added: The $76.0 million decrease in net cash used in operating activities for the year December 31, 2021 as compared to the year ended December 31, 2020 was primarily the result of higher profitability, before the impact of non-cash share-based compensation expense, due to the recovery from the impact of COVID-19 on our business.
Investing Activities
2 unchanged sentences
We finance the purchase of our property and equipment through operating cash flows, proceeds from sale-leaseback transactions, construction reimbursements and draws on our Revolving Credit Facility.
−Removed: The $263.8 million increase in net cash used in investing activities for the year December 31, 2021 as compared to the year ended December 31, 2020 was primarily driven by a relatively higher level of new center construction activity and lower amount of proceeds we received from landlords for sale-leaseback transactions during the year ended December 31, 2021 as compared to the year ended December 31, 2020.
−Removed: Cash used in investing activities for the year ended December 31, 2021 also includes a $9.1 million payment we made in connection with the acquisition of the assets associated with an outdoor enthusiast and bicycling event.
−Removed: The $471.7 million decrease in net cash used in investing activities for the year December 31, 2020 as compared to the year ended December 31, 2019 was primarily driven by a relatively lower level of new center construction activity, as well as a relatively higher amount of proceeds that we received from sale-leaseback transactions during the year ended December 31, 2020 as compared to the year ended December 31, 2019.
−Removed: Additionally, we received $23.0 million of proceeds from the sale of land held for sale during the year ended December 31, 2020.
+Added: The $26.4 million decrease in net cash used in investing activities for the year December 31, 2022 as compared to the year ended December 31, 2021 was primarily driven by a higher amount of proceeds that we received from sale-leaseback transactions, partially offset by a higher level of new center construction activity during the year ended December 31, 2022 as compared to the year ended December 31, 2021.
+Added: The $263.8 million increase in net cash used in investing activities for the year December 31, 2021 as compared to the year ended December 31, 2020 was primarily driven by a relatively higher level of new center construction activity and lower amount of proceeds we received from sale-leaseback transactions during the year ended December 31, 2021 as compared to the year ended December 31, 2020.
+Added: Cash used in investing activities for the year ended December 31, 2021 also included a $9.1 million payment we made in connection with the acquisition of the assets associated with an outdoor enthusiast and bicycling event.
The following schedule reflects capital expenditures by type of expenditure (in thousands):
−Removed: For the Year Ended December 31,
+Added: Year Ended December 31,
2022 2021 2020
−Removed: Growth capital expenditures (new center land and construction, growth initiatives, major remodels of acquired centers and the purchase of previously leased centers), net of construction reimbursements
+Added: Growth capital expenditures, net of construction reimbursements (1)
$ 409,435 $ 205,308 $ 164,157
5 unchanged sentences
$ 591,178 $ 328,909 $ 265,617
−Removed: The $63.3 million increase in total capital expenditures for the year ended December 31, 2021 as compared to the year ended December 31, 2020 was primarily driven by higher growth capital expenditures for new centers and center maintenance capital expenditures due to the reopening of our centers after the COVID-19 pandemic and our desire to deliver the best places for our members as they return.
−Removed: The $358.4 million decrease in total capital expenditures for the year ended December 31, 2020 as compared to the year ended December 31, 2019 reflects actions we took during the year ended December 31, 2020 to reduce our cash outflows in light of the COVID-19 pandemic.
+Added: (1) Growth capital expenditures include new center land and construction, growth initiatives, major remodels of acquired centers and the purchase of previously leased centers.
+Added: The $262.3 million increase in total capital expenditures for the year ended December 31, 2022 as compared to the year ended December 31, 2021 was primarily driven by higher growth capital expenditures for new centers, continued investments in technology and corporate capital expenditures related to Life Time Work.
+Added: The $63.3 million increase in total capital expenditures for the year ended December 31, 2021 as compared to the year ended December 31, 2020 was primarily driven by higher growth capital expenditures for new centers and center maintenance capital expenditures due to the reopening of our centers after the COVID-19 pandemic and our desire to deliver the best places for our members as they returned.
Financing Activities
−Removed: The $201.0 million increase in net cash provided by financing activities for the year ended December 31, 2021 compared to the year ended December 31, 2020 was primarily driven by the $702 million of gross proceeds we received in connection with the IPO, offset by repayments of our Term Loan Facility and Revolving Credit Facility.
−Removed: The $45.9 million decrease in net cash provided by financing activities for the year ended December 31, 2020 as compared to the year ended December 31, 2019 was primarily driven by net repayments made on our then existing senior secured credit facility during the year ended December 31, 2020, partially offset by proceeds from new borrowings which we received during
−Removed: Table of Content s
−Removed: the year ended December 31, 2020.
−Removed: During the year ended December 31, 2020, we received approximately $101.5 million of proceeds associated with a secured loan from an investor group that is comprised solely of our stockholders or their affiliates, and $15.1 million of proceeds associated with a loan secured by a mortgage on one location.
+Added: The $251.6 million decrease in net cash provided by financing activities for the year ended December 31, 2022 as compared to the year ended December 31, 2021 was primarily driven by net proceeds we received from borrowings under our Term Loan Facility and our secured and unsecured notes during the year ended December 31, 2021.
+Added: The $201.0 million increase in net cash provided by financing activities for the year ended December 31, 2021 as compared to the year ended December 31, 2020 was primarily driven by the $702 million of gross proceeds we received in connection with the IPO, offset by repayments of our Term Loan Facility and Revolving Credit Facility.
Cash Requirements
14 unchanged sentences
As of December 31, 2022 , we had 12 centers under construction and $456 million of capital expenditures invested in future center development.
−Removed: We expect to satisfy our short-term and long-term obligations through a combination of cash on hand, funds generated from operations, sale-leaseback transactions and the borrowing capacity available under our Revolving Credit Facility.
+Added: We 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.
Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.