What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2024-05-07 compared with 2023-10-31 · 92 added, 172 removed, 288 unchanged (48% of the section changed)

4 unchanged sentences

(In thousands, except per share data)

September 30,

2024 December 31,

1 unchanged sentence

Cash and cash equivalents $ 18,598 $ 11,161

Restricted cash and cash equivalents 18,126 18,805

Accounts receivable, net 22,854 23,903

39 unchanged sentences

Three Months Ended

September 30, Nine Months Ended

September 30,

2023 2022 2023 2022

Center revenue $ 580,485 $ 497,752

6 unchanged sentences

Depreciation and amortization 65,903 58,197

Other operating expense (income) 34,516 ( 31,358 ) 64,837 ( 56,605 )

Other operating expense 15,722 2,127

Total operating expenses 524,660 443,467

2 unchanged sentences

Interest expense, net of interest income ( 37,403 ) ( 31,195 )

Equity in earnings of affiliate 56 95 287 129

Equity in earnings of affiliates 177 143

Total other expense ( 37,226 ) ( 31,052 )

Income (loss) before income taxes 13,730 28,133 70,579 ( 18,975 )

Provision for (benefit from) income taxes 5,815 3,401 18,200 ( 3,456 )

Net income (loss) $ 7,915 $ 24,732 $ 52,379 $ ( 15,519 )

Income (loss) per common share:

Income before income taxes 34,831 36,332

Provision for income taxes 9,914 8,872

Net income $ 24,917 $ 27,460

Income per common share:

Basic $ 0.13 $ 0.14

6 unchanged sentences

AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(In thousands)

Three Months Ended

September 30, Nine Months Ended

September 30,

2023 2022 2023 2022

Net income (loss) $ 7,915 $ 24,732 $ 52,379 $ ( 15,519 )

Net income $ 24,917 $ 27,460

Foreign currency translation adjustments, net of tax of $ 0

( 2,265 ) ( 6,015 ) ( 303 ) ( 7,339 )

Comprehensive income (loss) $ 5,650 $ 18,717 $ 52,076 $ ( 22,858 )

Comprehensive income $ 23,250 $ 27,528

See notes to unaudited condensed consolidated financial statements.

6 unchanged sentences

Shares Amount

Balance at June 30, 2023 196,031 $ 1,960 $ 2,814,424 $ ( 608,412 ) $ ( 7,260 ) $ 2,200,712

Net income — — — 7,915 — 7,915

Other comprehensive loss — — — — ( 2,265 ) ( 2,265 )

Share-based compensation — — 8,906 — — 8,906

Stock option exercises 152 2 1,619 — — 1,621

Balance at September 30, 2023 196,183 $ 1,962 $ 2,824,949 $ ( 600,497 ) $ ( 9,525 ) $ 2,216,889

Common Stock Additional Paid-In

Capital Accumulated Deficit Accumulated Other Comprehensive Loss Total

Shares Amount

Balance at December 31, 2023 196,671 $ 1,967 $ 2,835,883 $ ( 576,813 ) $ ( 6,925 ) $ 2,254,112

4 unchanged sentences

Issuances of common stock in connection with the vesting of restricted stock units 627 6 ( 882 ) — — ( 876 )

Issuances of common stock in connection with the employee stock purchase plan 123 1 1,449 — — 1,450

Issuances of common stock in connection with business acquisitions 90 1 1,471 — — 1,472

Balance at September 30, 2023 196,183 $ 1,962 $ 2,824,949 $ ( 600,497 ) $ ( 9,525 ) $ 2,216,889

Common Stock Additional Paid-In

Capital Accumulated Deficit Accumulated Other Comprehensive Loss Total

Shares Amount

Balance at June 30, 2022 193,796 $ 1,938 $ 2,772,393 $ ( 691,334 ) $ ( 4,340 ) $ 2,078,657

Net income — — — 24,732 — 24,732

Other comprehensive loss — — — — ( 6,015 ) ( 6,015 )

Share-based compensation — — 5,803 — — 5,803

Stock option exercises 195 2 1,994 — — 1,996

Balance at September 30, 2022 193,991 $ 1,940 $ 2,780,190 $ ( 666,602 ) $ ( 10,355 ) $ 2,105,173

Settlement of accrued compensation liabilities through the issuance of common stock 1,447 15 18,043 — — 18,058

Balance at March 31, 2024 198,791 $ 1,988 $ 2,861,359 $ ( 551,896 ) $ ( 8,592 ) $ 2,302,859

Common Stock Additional Paid-In

2 unchanged sentences

Balance at December 31, 2022 194,271 $ 1,943 $ 2,784,416 $ ( 652,876 ) $ ( 9,222 ) $ 2,124,261

Net loss — — — ( 15,519 ) — ( 15,519 )

Other comprehensive loss — — — — ( 7,339 ) ( 7,339 )

Net income — — — 27,460 — 27,460

Other comprehensive income — — — — 68 68

Share-based compensation — — 5,422 — — 5,422

Stock option exercises 327 3 3,453 — — 3,456

Equity issuance costs — — ( 270 ) — — ( 270 )

Issuances of common stock in connection with the vesting of restricted stock units 310 3 ( 105 ) — — ( 102 )

Settlement of accrued compensation liabilities through the issuance of share-based compensation awards — — 505 — — 505

Balance at September 30, 2022 193,991 $ 1,940 $ 2,780,190 $ ( 666,602 ) $ ( 10,355 ) $ 2,105,173

Issuances of common stock in connection with business acquisitions 90 1 1,471 — — 1,472

Balance at March 31, 2023 194,998 $ 1,950 $ 2,794,657 $ ( 625,416 ) $ ( 9,154 ) $ 2,162,037

See notes to unaudited condensed consolidated financial statements.

3 unchanged sentences

(In thousands)

Nine Months Ended

September 30,

Three Months Ended

Cash flows from operating activities:

Net income (loss) $ 52,379 $ ( 15,519 )

Adjustments to reconcile net income (loss) to net cash provided by operating activities:

Net income $ 24,917 $ 27,460

Adjustments to reconcile net income to net cash provided by operating activities:

Depreciation and amortization 65,903 58,197

2 unchanged sentences

Non-cash rent expense 5,958 9,028

Impairment charges associated with long-lived assets 6,620 153

Loss (gain) on disposal of property and equipment, net 245 ( 6,693 )

14 unchanged sentences

Repayments of finance lease liabilities ( 193 ) ( 244 )

Proceeds from financing obligations 1,500 —

Payments of debt discounts and issuance costs ( 2,550 ) ( 43 )

Proceeds from stock option exercises 484 3,456

Proceeds from issuances of common stock in connection with the employee stock purchase plan 1,450 —

Other ( 1,199 ) ( 102 )

Net cash provided by (used in) financing activities 72,505 ( 11,708 )

Effect of exchange rates on cash and cash equivalents 30 ( 700 )

(Decrease) increase in cash and cash equivalents ( 68 ) 75,432

Cash and cash equivalents – beginning of period 25,509 31,637

Cash and cash equivalents – end of period $ 25,441 $ 107,069

Net cash provided by financing activities 74,975 72,325

Effect of exchange rates on cash and cash equivalents and restricted cash and cash equivalents ( 36 ) 6

Increase in cash and cash equivalents and restricted cash and cash equivalents 6,758 9,828

Cash and cash equivalents and restricted cash and cash equivalents – beginning of period 29,966 25,509

Cash and cash equivalents and restricted cash and cash equivalents – end of period $ 36,724 $ 35,337

See notes to unaudited condensed consolidated financial statements.

12 unchanged sentences

We design, build and operate our athletic country club destinations that are distinctive and large, multi-use sports and athletic, professional fitness, family recreation and spa centers in a resort-like environment.

As of September 30, 2023, we operated 170 centers in 31 states and one Canadian province.

As of March 31, 2024, we operated 172 centers in 31 states and one Canadian province.

Basis of Presentation

7 unchanged sentences

We have one operating segment and one reportable segment.

Reclassification

A reclassification has been made on our December 31, 2023 condensed consolidated balance sheet in order to conform to the current period presentation.

Specifically, our restricted cash and cash equivalents balance of $ 18.8 million at December 31, 2023 was reclassified out of Cash and cash equivalents and into a separate line item labeled Restricted cash and cash equivalents.

This reclassification had no impact on our previously reported statements of operations or cash flows.

Summary of Significant Accounting Policies

Recently Adopted Accounting Pronouncements

We adopted Accounting Standard Update (“ASU”) 2020-04, “Reference Rate Reform (Topic 848):

Facilitation of the Effects of Reference Rate Reform on Financial Reporting” during the second quarter of 2023.

ASU 2020-04 provides optional expedients and exceptions for applying GAAP to contract modifications, hedging relationships, and other transactions affected by reference rate reform if certain criteria are met, and provides companies with optional guidance to ease the potential accounting burden associated with transitioning away from reference rates that are expected to be discontinued.

In connection with the debt refinancing that we completed in May 2023, we transitioned from LIBOR to Term Secured Overnight Financing Rate (“SOFR”).

The adoption of this ASU did not have a material impact on our consolidated financial statements.

Fair Value Measurements

6 unchanged sentences

Unobservable inputs that are not corroborated by market data.

The carrying amounts related to cash and cash equivalents, accounts receivable, income tax receivable, accounts payable and accrued liabilities approximate fair value.

The carrying amounts related to cash and cash equivalents, restricted cash and cash equivalents, accounts receivable, income tax receivable, accounts payable and accrued liabilities approximate fair value.

Fair Value Measurements on a Recurring Basis.

We had no material remeasurements of such assets or liabilities to fair value during the three months ended March 31, 2024 and 2023.

LIFE TIME GROUP HOLDINGS, INC.

2 unchanged sentences

(Table amounts in thousands except per share data)

Fair Value Measurements on a Recurring Basis.

We had no material remeasurements of such assets or liabilities to fair value during the three and nine months ended September 30, 2023 and 2022.

Financial Assets and Liabilities.

At September 30, 2023 and December 31, 2022, the carrying value and fair value of our outstanding long-term debt was as follows:

September 30,

At March 31, 2024 and December 31, 2023, the carrying value and fair value of our outstanding long-term debt was as follows:

2024 December 31,

11 unchanged sentences

If we determine that impairment has occurred, the carrying value of the asset would be reduced to fair value and the difference would be recorded as a loss within operating income in our condensed consolidated statements of operations.

Except for an impairment charge of $ 5.3 million related to the sale of an outparcel of land that was recognized during the three months ended September 30, 2023 , we had no material remeasurements of such assets or liabilities to fair value during the three and nine months ended September 30, 2023 and 2022.

We had no material remeasurements of such assets or liabilities to fair value during the three months ended March 31, 2024 and 2023.

Supplemental Balance Sheet and Cash Flow Information

1 unchanged sentence

Prepaid expenses and other current assets consisted of the following:

September 30,

2024 December 31,

5 unchanged sentences

Prepaid expenses and other current assets $ 71,000 $ 57,751

LIFE TIME GROUP HOLDINGS, INC.

AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Table amounts in thousands except per share data)

Accrued Expenses and Other Current Liabilities

Accrued expenses and other current liabilities consisted of the following:

September 30,

2024 December 31,

2 unchanged sentences

Payroll liabilities 24,642 40,357

Utilities 6,154 7,285

Self-insurance accruals 25,194 24,869

2 unchanged sentences

Accrued expenses and other current liabilities $ 161,550 $ 185,305

LIFE TIME GROUP HOLDINGS, INC.

AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Table amounts in thousands except per share data)

Supplemental Cash Flow Information

(Increases) decreases in operating assets and increases (decreases) in operating liabilities are as follows:

Nine Months Ended

September 30,

Three Months Ended

Accounts receivable $ 732 $ ( 4,428 )

9 unchanged sentences

Additional supplemental cash flow information is as follows:

Nine Months Ended

September 30,

Three Months Ended

Net cash paid for income taxes, net of refunds received $ 1,546 $ 66

7 unchanged sentences

Right-of-use asset adjustments recognized as a result of the remeasurement of existing operating lease liabilities 187 18,869

Non-cash increase in operating lease right-of-use assets associated with below-market sale-leaseback transactions 5,900 10,090

Non-cash increase in financing obligations as a result of interest accretion 20 23

LIFE TIME GROUP HOLDINGS, INC.

AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Table amounts in thousands except per share data)

The goodwill balance was $ 1,235.4 million and $ 1,233.2 million at September 30, 2023 and December 31, 2022, respectively.

The $ 2.2 million change in goodwill for the nine months ended September 30, 2023 was related to business acquisitions during the nine months ended September 30, 2023.

There were no goodwill impairment charges recorded during the three and nine months ended September 30, 2023 and 2022.

Revenue associated with our membership dues, enrollment fees, and certain services from our in-center businesses is recognized over time as earned.

Revenue associated with products and services offered in our cafes and spas, as well as through e-commerce, is recognized at a point in time.

The following is a summary of revenue, by major revenue stream, that we recognized during the three and nine months ended September 30, 2023 and 2022:

The following is a summary of revenue, by major revenue stream, that we recognized during the three months ended March 31, 2024 and 2023:

Three Months Ended

September 30, Nine Months Ended

September 30,

2023 2022 2023 2022

Membership dues and enrollment fees $ 425,411 $ 357,488

3 unchanged sentences

Total revenue $ 596,717 $ 510,851

The timing associated with the revenue we recognized during the three months ended September 30, 2023 and 2022 is as follows:

Three Months Ended September 30, 2023 Three Months Ended September 30, 2022

Revenue Other

Revenue Total

Revenue Center

Revenue Other

Revenue Total

Goods and services transferred over time $ 502,003 $ 16,775 $ 518,778 $ 419,758 $ 16,386 $ 436,144

Goods and services transferred at a point in time 66,399 — 66,399 60,237 — 60,237

Total revenue $ 568,402 $ 16,775 $ 585,177 $ 479,995 $ 16,386 $ 496,381

The timing associated with the revenue we recognized during the nine months ended September 30, 2023 and 2022 is as follows:

Nine Months Ended September 30, 2023 Nine Months Ended September 30, 2022

LIFE TIME GROUP HOLDINGS, INC.

AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Table amounts in thousands except per share data)

The timing associated with the revenue we recognized during the three months ended March 31, 2024 and 2023 is as follows:

Three Months Ended March 31, 2024 Three Months Ended March 31, 2023

Revenue Other

8 unchanged sentences

Contract liabilities consist primarily of deferred revenue for fees collected in advance for membership dues, enrollment fees, Dynamic Personal Training and other center services offerings, as well as our media and athletic events.

Contract liabilities at September 30, 2023 and December 31, 2022 were $ 40.1 million and $ 38.9 million, respectively.

LIFE TIME GROUP HOLDINGS, INC.

AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Table amounts in thousands except per share data)

Contract liabilities at March 31, 2024 and December 31, 2023 were $ 53.6 million and $ 49.9 million, respectively.

Contract liabilities that will be recognized within one year are classified as deferred revenue in our condensed consolidated balance sheets.

Deferred revenue at September 30, 2023 and December 31, 2022 was $ 39.4 million and $ 36.9 million, respectively, and consists primarily of prepaid membership dues, enrollment fees, Dynamic Personal Training and other in-center services, as well as media and athletic events .

Deferred revenue at March 31, 2024 and December 31, 2023 was $ 53.2 million and $ 49.3 million, respectively, and consists primarily of prepaid membership dues, enrollment fees, Dynamic Personal Training and other in-center services, as well as media and athletic events .

Contract liabilities that will be recognized in a future period greater than one year are classified as a component of Other liabilities in our condensed consolidated balance sheets.

Long-term contract liabilities at September 30, 2023 and December 31, 2022 were $ 0.7 million and $ 2.0 million, respectively, and consist primarily of deferred enrollment fees.

Long-term contract liabilities at March 31, 2024 and December 31, 2023 were $ 0.4 million and $ 0.6 million, respectively, and consist primarily of deferred enrollment fees.

Debt consisted of the following:

September 30,

2024 December 31, 2023

Term Loan Facility (1)

$ 310,000 $ 273,625

Term Loan Facility, maturing January 2026 $ 310,000 $ 310,000

Revolving Credit Facility, maturing December 2026 220,000 90,000

Secured Notes, maturing January 2026 925,000 925,000

Unsecured Notes, maturing April 2026 475,000 475,000

5.75 % Senior Secured Notes, maturing January 2026

925,000 925,000

8.00 % Senior Unsecured Notes, maturing April 2026

475,000 475,000

Construction Loan, maturing February 2026 27,945 28,000

7 unchanged sentences

Long-term debt, less current maturities $ 1,987,180 $ 1,859,027

(1) See “—Refinancing Transaction” below.

Refinancing Transaction

On May 9, 2023, Life Time, Inc.

and certain of our other wholly-owned subsidiaries entered into a tenth amendment to the credit agreement governing our senior secured credit agreement (the “Amended Credit Agreement”).

Pursuant to the Amended Credit Agreement, we refinanced our $ 273.6 million Term Loan Facility that had a maturity date in December 2024 to our $ 310.0 million Term Loan Facility that has a maturity date of January 15, 2026.

A portion of the net incremental cash proceeds we received under the Amended Credit Agreement was used to pay down the then existing balance on our Revolving Credit Facility.

We also converted the facilities under the Amended Credit Agreement from LIBOR to SOFR.

Loans under the Term Loan Facility bear interest at a floating rate per annum of, at our option, SOFR plus an applicable credit adjustment spread ranging from 0.11448 % to 0.42826 % dependi ng on the duration of borrowing plus the continued applicable margin of 4.75 % or a base rate plus 3.75 %.

The applicable margins will decrease to 4.50 % and 3.50 %, respectively, upon our achievement of public corporate family ratings of B2 and B from Moody’s and S&P, respectively.

Loans under the Term Loan Facility were issued with original issue discount of 0.50 %.

This refinancing transaction was accounted for as a debt modification.

Revolving Credit Facility

At September 30, 2023, there were $ 45.0 million of outstanding borrowings under the Revolving Credit Facility and there were $ 32.6 million of outstanding letters of credit, resulting in total revolver availability of $ 397.4 million, which was available at intervals ranging from 30 to 180 days at interest rates of SOFR plus the applicable credit adjustment spread plus 3.50 % or base rate plus 2.50 %.

The weighted average interest rate and debt outstanding under the Revolving Credit Facility for the nine months ended September 30, 2023 was 8.54 % and $ 59.5 million, respectively.

The highest balance during that same period was $ 120.0 million.

Term Loan Facility

Loans under the Term Loan Facility bear interest at a floating rate per annum of, at our option, Term Secured Overnight Financing Rate (“SOFR”) plus an applicable credit adjustment spread ranging from 0.11448 % to 0.42826 % depending on the duration of borrowing plus the continued applicable margin of 4.00 % or a base rate plus 3.00 %.

The applicable margins will increase to 4.25 % and 3.25 %, respectively, if our public corporate family ratings falls below B2 and B from Moody’s and S&P, respectively.

We are not required to make principal payments on the Term Loan Facility prior to its maturity.

LIFE TIME GROUP HOLDINGS, INC.

2 unchanged sentences

(Table amounts in thousands except per share data)

Revolving Credit Facility

At March 31, 2024, there were $ 220.0 million of outstanding borrowings under the $ 475.0 million Revolving Credit Facility and there were $ 30.9 million of outstanding letters of credit, resulting in total revolver availability of $ 224.1 million, which was available at intervals ranging from 30 to 180 days at interest rates of SOFR plus the applicable credit adjustment spread plus 3.50 % or base rate plus 2.50 %.

The weighted average interest rate and debt outstanding under the Revolving Credit Facility for the three months ended March 31, 2024 was 9.26 % and $ 183.6 million, respectively.

The highest balance during that same period was $ 285.0 million.

Mortgage Notes

In February 2024, we fully paid at maturity the principal balance and remaining accrued interest associated with one of our Mortgage Notes totaling $ 51.0 million.

Debt Covenants

We are required to comply with certain affirmative and restrictive covenants under our Credit Facilities, Secured Notes, Unsecured Notes and Mortgage Notes.

We are required to comply with certain affirmative and restrictive covenants under our Credit Facilities, Secured Notes, Unsecured Notes, Construction Loan and Mortgage Notes.

We are also required to comply with a first lien net leverage ratio covenant under the Revolving Credit Facility, which requires us to maintain a first lien net leverage ratio, if 30.00 % or more of the Revolving Credit Facility commitments are outstanding shortly after the end of any fiscal quarter (excluding all cash collateralized undrawn letters of credit and other undrawn letters of credit up to $ 20.0 million).

As of September 30, 2023, we were either in compliance in all material respects with the covenants or the covenants were not applicable.

As of March 31, 2024, we were either in compliance in all material respects with the covenants or the covenants were not applicable.

Future Maturities of Long-Term Debt

Aggregate annual future maturities of long-term debt, excluding unamortized discounts, issuance costs and fair value adjustments, at September 30, 2023 were as follows:

October 2023 through September 2024 $ 64,033

October 2024 through September 2025 12,515

October 2025 through September 2026 1,751,209

October 2026 through September 2027 64,877

October 2027 through September 2028 165

Aggregate annual future maturities of long-term debt, excluding unamortized discounts, issuance costs and fair value adjustments, at March 31, 2024 were as follows:

April 2024 through March 2025 $ 23,261

April 2025 through March 2026 1,275,530

April 2026 through March 2027 705,747

April 2027 through March 2028 15,799

April 2028 through March 2029 181

Thereafter 2,989

Total future maturities of long-term debt $ 2,023,507

Sale-Leaseback Transactions

During the nine months ended September 30, 2023, we entered into and consummated sale-leaseback transactions with unrelated third parties.

Under these transactions, we sold three properties with a combined net book value of $ 141.1 million for $ 124.0 million, which was reduced by transaction costs of $ 0.7 million, for net cash proceeds of $ 123.3 million.

The estimated fair value of the property sold was $ 128.4 million.

Accordingly, the aggregate sales price associated with these arrangements was increased by $ 4.4 million, which resulted in the recognition of a loss of $ 13.4 million on these transactions.

This loss is inclu ded in Other operating expense (income) in o ur condensed consolidated statement of operations.

Of the $ 4.4 million aggregate net sales price increase recognized in connection with these transactions, $ 5.9 million was associated with a property sale in which the sales price was less than the fair value of the properties sold, which was recognized as an increase in the aggregate sales price associated with this property and an increase in the related operating lease right-of-use asset, and $ 1.5 million was associated with a property sale in which the sales price was greater than the fair value of the property sold, which was recognized as a reduction in the aggregate sales price associated with this property and as a financing obligation separate from the related operating lease liability.

For cash flow purposes, the $ 1.5 million of proceeds we received from this financing obligation are reported within financing activities on our condensed consolidated statement of cash flows.

Right-of-use assets and lease liabilities recognized in connection with these sale-leaseback transactions were $ 74.0 million and $ 67.3 million, respectively.

Stockholders’ Equity

Share-Based Compensation Expense

For the three and nine months ended September 30, 2023, total share-based compensation expense was $ 14.9 million and $ 37.0 million, respectively.

Of this amount, $ 8.9 million and $ 22.8 million, respectively, was associated with equity-classified awards and $ 6.0 million and $ 14.2 million, respectively, was associated with liability-classified awards.

For the three and nine months ended September 30, 2022, total share-based compensation expense was $ 5.8 million and $ 33.2 million, respectively, all of which was associated with equity-classified awards.

The liability-classified awards granted during the nine months ended September 30, 2023 were performance-based and relate to our short-term incentive compensation program.

In the event specified performance metrics are met, these awards will be settled through the issuance of fully-vested shares of the Company’s common stock at such time of determination in

Share-based compensation expense for the three months ended March 31, 2024 and 2023 was $ 7.6 million and $ 5.6 million, respectively.

Restricted Stock Units

During the three months ended March 31, 2024 , the Company granted approximately 1.6 million restricted stock unit awards under the 2021 Incentive Award Plan, of which approximately 1.1 million were time-based vesting awards that vest in three to four ratable annual installments, and approximately 0.5 million were performance-based vesting awards granted to our executives in connection with our short-term incentive compensation program.

We determine the grant date fair value of restricted stock unit awards by multiplying the number of restricted stock unit awards by the closing trading price of our common stock on the grant date.

LIFE TIME GROUP HOLDINGS, INC.

2 unchanged sentences

(Table amounts in thousands except per share data)

Because the incentive compensation associated with these awards represents a fixed dollar amount that, if payable, will be settled in a variable number of shares of the Company’s common stock, we are currently accounting for these awards as liability-classified awards.

Accordingly, the offset to the $ 14.2 million of share-based compensation expense we have recognized in connection with these awards during the nine months ended September 30, 2023 is included in Accrued expenses and other current liabilities on our September 30, 2023 condensed consolidated balance sheet.

Income (Loss) Per Share

For the three and nine months ended September 30, 2023 , o ur potentially dilutive securities included stock options, restricted stock units and shares to be issued under our ESPP.

For the three and nine months ended September 30, 2022 , o ur potentially diluti ve securities included stock options and restricted stock units.

Due to the net loss that we recognized during th e nine months ended September 30, 2022, the potentially dilutive shares of common stock associated with these equity-based securities were determined to be antidilutive and, therefore, are excluded from the computation of diluted loss per share for the nine months ended September 30, 2022.

The following table sets forth the calculation of basic and diluted income (loss) per share for the three and nine months ended September 30, 2023 and 2022:

Performance Stock Units

During the three months ended March 31, 2024 , the Company granted approximately 0.5 million three-year performance stock unit awards under the 2021 Incentive Award Plan, all of which were granted to our executives in connection with our long-term incentive compensation program.

Approximately 0.3 million of the performance stock unit awards are based on our Adjusted EBITDA with performance determined each year for one-third of such award but the entire award does not vest until the end of the three year period and approximately 0.2 million of the performance stock unit awards are based on our leverage ratio at the end of each year with one-third vesting each year dependent on achieving the leverage ratio target for such year.

We determine the grant date fair value of performance stock unit awards by multiplying the number of performance stock unit awards by the closing trading price of our common stock on the grant date.

Other Share-Based Payment Awards

Our Board of Directors determined in February 2024 that our 2023 performance exceeded the maximum performance metric under our short-term incentive program and issued corresponding shares of common stock to our employees.

As a result, the $ 18.1 million liability we had recognized in connection with these liability-classified share-based payment awards, which was included in Accrued expenses and other current liabilities on our December 31, 2023 condensed consolidated balance sheet, was reclassified out of Accrued expenses and other current liabilities and into Common stock and Additional paid-in capital on our condensed consolidated balance sheet during the three months ended March 31, 2024.

Income Per Share

For the three months ended March 31, 2024 and 2023 , o ur potentially dilutive securities included stock options, restricted stock units and shares to be issued under our employee stock purchase plan.

The following table sets forth the calculation of basic and diluted income per share for the three months ended March 31, 2024 and 2023:

Three Months Ended

September 30, Nine Months Ended

September 30,

2023 2022 2023 2022

Net income (loss) $ 7,915 $ 24,732 $ 52,379 $ ( 15,519 )

Net income $ 24,917 $ 27,460

Weighted-average common shares outstanding – basic 197,498 194,572

1 unchanged sentence

Weighted-average common shares outstanding – diluted 202,756 202,855

Income (loss) per common share – basic $ 0.04 $ 0.13 $ 0.27 $ ( 0.08 )

Income (loss) per common share – diluted $ 0.04 $ 0.12 $ 0.26 $ ( 0.08 )

The following is a summary of potential shares of common stock that were antidilutive and excluded from the weighted average share computations for the three and nine months ended September 30, 2023 and 2022:

Income per common share – basic $ 0.13 $ 0.14

Income per common share – diluted $ 0.12 $ 0.14

The following is a summary of potential shares of common stock that were antidilutive and excluded from the weighted average share computations for the three months ended March 31, 2024 and 2023:

Three Months Ended

September 30, Nine Months Ended

September 30,

2023 2022 2023 2022

Stock options 6,849 6,044

11 unchanged sentences

On March 15, 2021, certain of the Life Time Parties filed a First Amended Complaint in the Action adding claims against Zurich under a Builders’ Risk policy related to the suspension of multiple construction project s.

The parties are currently in discovery.

The Action is subject to many uncertainties, and the outcome of the matter is not predictable with any assurance.

5 unchanged sentences

Subsequent Events

In preparing the accompanying condensed consolidated financial statements, we have evaluated the period from September 30, 2023 through the date the condensed consolidated financial statements were issued for material subsequent events.

In preparing the accompanying condensed consolidated financial statements, we have evaluated the period from March 31, 2024 through the date the condensed consolidated financial statements were issued for material subsequent events.

There have been no such events or transactions during this time which would have a material effect on the condensed consolidated financial statements and therefore would require recognition or disclosure .

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.

What changed 10-Q

Item 1. Financial Statements