What changed in this filing

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Item 1. Financial Statements

2024-10-28 compared with 2024-08-01 · 149 added, 93 removed, 364 unchanged (40% of the section changed)

4 unchanged sentences

(In thousands, except per share data)

September 30,

2024 December 31,

43 unchanged sentences

Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

2024 2023 2024 2023

29 unchanged sentences

Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

2024 2023 2024 2023

11 unchanged sentences

Shares Amount

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

Balance at June 30, 2024 199,052 $ 1,990 $ 2,873,839 $ ( 499,091 ) $ ( 9,241 ) $ 2,367,497

Net income — — — 41,355 — 41,355

Other comprehensive loss — — — — ( 649 ) ( 649 )

Other comprehensive income — — — — 1,266 1,266

Share-based compensation — — 9,265 — — 9,265

Stock option exercises 1,547 16 18,042 — — 18,058

Issuance of common stock in connection with the Offering (Note 7), net of issuance costs 6,000 60 124,297 — — 124,357

Issuances of common stock in connection with the vesting of restricted stock units 14 — 2 — — 2

Issuances of common stock in connection with the employee stock purchase plan 103 1 1,461 — — 1,462

Balance at June 30, 2024 199,052 $ 1,990 $ 2,873,839 $ ( 499,091 ) $ ( 9,241 ) $ 2,367,497

Balance at September 30, 2024 206,613 $ 2,066 $ 3,025,445 $ ( 457,736 ) $ ( 7,975 ) $ 2,561,800

Common Stock Additional Paid-In

6 unchanged sentences

Stock option exercises 1,691 17 19,531 — — 19,548

Issuance of common stock in connection with the Offering (Note 7), net of issuance costs 6,000 60 124,297 — — 124,357

Issuances of common stock in connection with the vesting of restricted stock units 701 6 ( 986 ) — — ( 980 )

1 unchanged sentence

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

Balance at June 30, 2024 199,052 $ 1,990 $ 2,873,839 $ ( 499,091 ) $ ( 9,241 ) $ 2,367,497

Balance at September 30, 2024 206,613 $ 2,066 $ 3,025,445 $ ( 457,736 ) $ ( 7,975 ) $ 2,561,800

Common Stock Additional Paid-In

1 unchanged sentence

Shares Amount

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

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 income — — — — 1,894 1,894

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

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

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

Issuances of common stock in connection with the vesting of restricted stock units 27 — ( 8 ) — — ( 8 )

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

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

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

Common Stock Additional Paid-In

3 unchanged sentences

Net income — — — 52,379 — 52,379

Other comprehensive income — — — — 1,962 1,962

Other comprehensive loss — — — — ( 303 ) ( 303 )

Share-based compensation — — 22,842 — — 22,842

3 unchanged sentences

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

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

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

See notes to unaudited condensed consolidated financial statements.

3 unchanged sentences

(In thousands)

Six Months Ended

Nine Months Ended

September 30,

Cash flows from operating activities:

7 unchanged sentences

(Gain) loss on disposal of property and equipment, net ( 6,548 ) 13,742

Write-off of debt discounts and issuance costs 3,510 —

Amortization of debt discounts and issuance costs 5,891 5,862

16 unchanged sentences

Payments of debt discounts and issuance costs ( 1,873 ) ( 2,550 )

Proceeds from the issuance of common stock, net of issuance costs 124,357 —

Proceeds from stock option exercises 19,548 14,897

3 unchanged sentences

Effect of exchange rates on cash and cash equivalents and restricted cash and cash equivalents ( 38 ) 30

Increase in cash and cash equivalents and restricted cash and cash equivalents 19,392 5,349

Increase (decrease) in cash and cash equivalents and restricted cash and cash equivalents 107,087 ( 68 )

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

14 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 June 30, 2024, we operated 175 centers in 31 states and one Canadian province.

As of September 30, 2024, we operated 177 centers in 31 states and one Canadian province.

Basis of Presentation

12 unchanged sentences

Summary of Significant Accounting Policies

New Accounting Pronouncements Not Yet Adopted

In November 2023, the Financial Accounting Standards Board (“FASB”) issued guidance to expand annual and interim disclosure requirements for reportable segments, primarily through additional disclosures on segment expenses.

We expect to adopt the accounting guidance for our Annual Report on Form 10-K for the year ended December 31, 2024.

We do not anticipate the updated standard will have a material impact on our financial statement disclosures.

In December 2023, the FASB issued guidance to enhance transparency of income tax disclosures.

The updated guidance requires additional disclosures on income tax rate reconciliation and income taxes paid, among other things.

We expect to adopt the accounting guidance for our Annual Report on Form 10-K for the year ended December 31, 2025.

We are currently evaluating the impact that the updated standard will have on our financial statement disclosures.

Fair Value Measurements

3 unchanged sentences

The guidance requires that each asset and liability carried at fair value be classified into one of the following categories:

LIFE TIME GROUP HOLDINGS, INC.

AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Table amounts in thousands except per share data)

Quoted market prices in active markets for identical assets or liabilities.

3 unchanged sentences

Fair Value Measurements on a Recurring Basis.

We had no material remeasurements of such assets or liabilities to fair value during the three and six months ended June 30, 2024 and 2023.

LIFE TIME GROUP HOLDINGS, INC.

AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Table amounts in thousands except per share data)

We had no material remeasurements of such assets or liabilities to fair value during the three and nine months ended September 30, 2024 and 2023.

Financial Assets and Liabilities.

At June 30, 2024 and December 31, 2023, the carrying value and fair value of our outstanding long-term debt was as follows:

At September 30, 2024 and December 31, 2023, the carrying value and fair value of our outstanding long-term debt was as follows:

September 30,

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.

We had no material remeasurements of such assets or liabilities to fair value during the three and six months ended June 30, 2024 and 2023.

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

3 unchanged sentences

Prepaid commissions 6,057 5,059

Prepaid rent 3,752 514

Prepaid software licenses and maintenance 5,576 5,481

1 unchanged sentence

Prepaid expenses and other current assets $ 41,374 $ 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,

6 unchanged sentences

Accrued expenses and other current liabilities $ 196,290 $ 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:

Six Months Ended

Nine Months Ended

September 30,

Accounts receivable $ ( 3,175 ) $ ( 8,044 )

9 unchanged sentences

Additional supplemental cash flow information is as follows:

Six Months Ended

Nine Months Ended

September 30,

Net cash paid for income taxes, net of refunds received $ 13,413 $ 13,172

9 unchanged sentences

Non-cash increase in financing obligations as a result of interest accretion 89 83

LIFE TIME GROUP HOLDINGS, INC.

AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Table amounts in thousands except per share data)

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

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

The following is a summary of revenue, by major revenue stream, that we recognized during the three and six months ended June 30, 2024 and 2023:

The following is a summary of revenue, by major revenue stream, that we recognized during the three and nine months ended September 30, 2024 and 2023:

Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

2024 2023 2024 2023

4 unchanged sentences

Total revenue $ 693,234 $ 585,177 $ 1,957,712 $ 1,657,759

LIFE TIME GROUP HOLDINGS, INC.

AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Table amounts in thousands except per share data)

The timing associated with the revenue we recognized during the three months ended June 30, 2024 and 2023 is as follows:

Three Months Ended June 30, 2024 Three Months Ended June 30, 2023

The timing associated with the revenue we recognized during the three months ended September 30, 2024 and 2023 is as follows:

Three Months Ended September 30, 2024 Three Months Ended September 30, 2023

Revenue Other

6 unchanged sentences

Total revenue $ 674,775 $ 18,459 $ 693,234 $ 568,402 $ 16,775 $ 585,177

The timing associated with the revenue we recognized during the six months ended June 30, 2024 and 2023 is as follows:

Six Months Ended June 30, 2024 Six Months Ended June 30, 2023

The timing associated with the revenue we recognized during the nine months ended September 30, 2024 and 2023 is as follows:

Nine Months Ended September 30, 2024 Nine Months Ended September 30, 2023

Revenue Other

7 unchanged sentences

Contract liabilities represent payments or consideration received in advance for goods or services that the Company has not yet transferred to the customer.

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

Contract liabilities at June 30, 2024 and December 31, 2023 were $ 52.1 million and $ 49.9 million, respectively.

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

Contract liabilities at September 30, 2024 and December 31, 2023 were $ 48.9 million and $ 49.9 million, respectively.

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

Deferred revenue at June 30, 2024 and December 31, 2023 was $ 51.9 million and $ 49.3 million, respectively, and consists primarily of prepaid membership dues, enrollment fees, Dynamic Personal Training and other in-center services, as well as media and athletic events .

Deferred revenue at September 30, 2024 and December 31, 2023 was $ 48.8 million and $ 49.3 million, respectively, and consists primarily of prepaid Dynamic Personal Training, media and athletic events, enrollment fees, other in-center services and membership dues .

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

Long-term contract liabilities at June 30, 2024 and December 31, 2023 were $ 0.2 million and $ 0.6 million, respectively, and consist primarily of deferred enrollment fees.

Long-term contract liabilities at September 30, 2024 and December 31, 2023 were $ 0.1 million and $ 0.6 million, respectively, and consist primarily of deferred enrollment fees.

LIFE TIME GROUP HOLDINGS, INC.

3 unchanged sentences

Debt consisted of the following:

September 30,

2024 December 31, 2023

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

Revolving Credit Facility, maturing December 2026 65,000 90,000

Term Loan Facility, retired September 2024 $ — $ 310,000

Prior Revolving Credit Facility, retired September 2024 — 90,000

Revolving Credit Facility, maturing September 2029 210,000 —

5.75 % Senior Secured Notes, maturing January 2026

2 unchanged sentences

475,000 475,000

Construction Loan, maturing February 2026 27,973 28,000

Construction Loan, retired August 2024 — 28,000

Mortgage Notes, various maturities 44,890 115,502

3 unchanged sentences

Less unamortized debt discounts and issuance costs ( 6,462 ) ( 15,270 )

Total debt less unamortized debt discount and issuance costs 1,842,996 1,932,875

Total debt less unamortized debt discounts and issuance costs 1,652,191 1,932,875

Less current maturities ( 12,439 ) ( 73,848 )

Long-term debt, less current maturities $ 1,639,752 $ 1,859,027

Refinancing Transaction

On September 20, 2024, Life Time, Inc.

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

The Amended Credit Agreement provided for, among other things, (i) an increase in the commitments under the revolving credit facility to $ 650.0 million , (ii) a reduction in the floating interest rate per annum of, at our option, Term Secured Overnight Financing Rate (“SOFR”) plus an applicable margin of 2.50 % or a base rate plus 1.50 % , and a reduction in the undrawn commitment fee rate from 50 basis points to 25 basis points, and (iii) an extension of the maturity of the revolving credit facility to September 20, 2029, except that the maturity will be (a) October 16, 2025 if at least $ 100 million remains outstanding on the Senior Secured Notes on such date and (b) January 14, 2026 if at least $ 100 million remains outstanding on the Senior Unsecured Notes on such date.

The applicable margins will (i) decrease 25 basis points upon achieving a certain first lien net leverage ratio and/or (ii) decrease 25 basis points upon achieving public corporate family ratings of Ba3 or BB- from any two of Moody’s, S&P and Fitch, as provided in the Amended Credit Agreement.

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.

On August 19, 2024, we used a portion of the net proceeds we received from an equity offering to pay down an aggregate principal amount of $ 110.0 million of our Term Loan Facility.

For more information regarding our equity offering, see Note 7, Stockholders’ Equity.

On September 20, 2024, we paid the remaining aggregate principal amount of $ 200.0 million of our Term Loan Facility and no borrowings remained outstanding under our Term Loan Facility as of September 30, 2024 .

Before we paid off the Term Loan Facility in full on September 20, 2024, loans under the Term Loan Facility were at a floating interest rate per annum of, at our option, 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 %.

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

Revolving Credit Facility

At June 30, 2024, there were $ 65.0 million of outstanding borrowings under the $ 475.0 million Revolving Credit Facility and there were $ 30.9 million of outstanding letters of credit, resulting in total revolver availability of $ 379.1 million, which was available at intervals ranging from 30 to 180 days at interest rates of SOFR plus the applicable credit adjustment spread plus 3.50 % or base rate plus 2.50 %.

During the three months ended June 30, 2024, we amended the credit agreement governing the Revolving Credit Facility to replace the Canadian Dollar Offered Rate (CDOR), which ceased at the end of June 2024, with the Canadian Overnight Repo Rate Average (CORRA).

At September 30, 2024, there were $ 210.0 million of outstanding borrowings under the $ 650.0 million Revolving Credit Facility, as amended pursuant to the Amended Credit Agreement, and there were $ 31.2 million of outstanding letters of credit, resulting in total revolver availability of $ 408.8 million, which was available at intervals ranging from 30 to 180 days at interest rates of SOFR plus an applicable margin of 2.50 % or a base rate plus 1.50 % .

During the second quarter of 2024, we amended the credit agreement governing the Revolving Credit Facility to replace the Canadian Dollar Offered Rate (CDOR), which ceased at the end of June 2024, with the Canadian Overnight Repo Rate Average (CORRA).

We do no t have any outstanding borrowings in Canadian dollars under the Revolving Credit Facility.

The weighted average interest rate and debt outstanding under the Revolving Credit Facility for the six months ended June 30, 2024 was 9.51 % and $ 187.7 million , respectively.

LIFE TIME GROUP HOLDINGS, INC.

AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Table amounts in thousands except per share data)

The weighted average interest rate and debt outstanding under the Revolving Credit Facility for the nine months ended September 30, 2024 was 9.36 % and $ 140.6 million , respectively.

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

Construction Loan

On August 15, 2024, we fully paid the remaining principal balance and accrued interest associated with our Construction Loan totaling $ 28.2 million.

Mortgage Notes

During the six months ended June 30, 2024 , we fully paid at maturity the principal balance and remaining accrued interest associated with two of our Mortgage Notes totaling $ 62.9 million.

During the nine months ended September 30, 2024, we fully paid at maturity the principal balance and remaining accrued interest associated with two of our Mortgage Notes totaling $ 62.9 million.

Debt Discounts and Issuance Costs

During the three months ended September 30, 2024, in connection with the Refinancing Transaction, we incurred debt discounts and issuance costs totaling $ 1.9 million, which are included in Other assets on our condensed consolidated balance sheet at September 30, 2024.

During the three months ended September 30, 2024, in connection with the pay down in full of each of our Term Loan Facility and Construction Loan, we recognized $ 3.5 million of debt discounts and issuance cost write-offs, which are included in Interest expense, net of interest income in our condensed consolidated statement of operations.

Debt Covenants

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

We are required to comply with certain affirmative and restrictive covenants under our Credit Facilities, Secured Notes, Unsecured Notes 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 $ 90.0 million).

As of June 30, 2024, we were either in compliance in all material respects with the covenants or the covenants were not applicable.

As of September 30, 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, 2024 were as follows:

October 2024 through September 2025 $ 12,439

October 2025 through September 2026 1,413,007

October 2026 through September 2027 19,876

October 2027 through September 2028 157

October 2028 through September 2029 210,173

Thereafter 2,678

Total future maturities of long-term debt $ 1,658,330

LIFE TIME GROUP HOLDINGS, INC.

2 unchanged sentences

(Table amounts in thousands except per share data)

Future Maturities of Long-Term Debt

Aggregate annual future maturities of long-term debt, excluding unamortized discounts, issuance costs and fair value adjustments, at June 30, 2024 were as follows:

July 2024 through June 2025 $ 12,755

July 2025 through June 2026 1,750,386

July 2026 through June 2027 86,816

July 2027 through June 2028 1,495

July 2028 through June 2029 173

Thereafter 2,670

Total future maturities of long-term debt $ 1,854,295

Sale-Leaseback Transactions

During the six months ended June 30, 2024 , we entered into and consummated sale-leaseback transactions with two unrelated third parties.

Under these transactions, we sold four properties for gross proceeds of $ 147.9 million , which was reduced by transaction costs of $ 0.9 million , for net cash proceeds of $ 147.0 million .

Sale-Leaseback Transactions with Unrelated Third Parties

During the nine months ended September 30, 2024 , we entered into and consummated sale-leaseback transactions with three unrelated third parties.

Under these transactions, we sold five properties for gross proceeds of $ 173.2 million , which was reduced by transaction costs of $ 1.0 million , for net cash proceeds of $ 172.2 million .

The estimated fair value of the properties sold was $ 182.2 million .

Accordingly, the aggregate cash sales price associated with these arrangements was decreased by a $ 4.3 million aggregate off-market adjustment to $ 142.7 million .

This aggregate off-market adjustment was recognized as financing obligations and the proceeds are reported within financing activities on our condensed consolidated statement of cash flows.

During the six months ended June 30, 2024, we recognized a net gain of $ 7.5 million on the sale-leaseback transactions, which is inclu ded in Other operating expense in o ur condensed consolidated statement of operations.

Right-of-use assets and lease liabilities recognized in connection with these sale-leaseback transactions were $ 93.6 million and $ 92.8 million , respectively.

Accordingly, the aggregate cash sales price associated with these arrangements was increased by a $ 9.0 million aggregate off-market adjustment to $ 181.2 million.

O f the aggregate off-market adjustment, $ 13.3 million was associated with a property sale in which the sales price was less than the fair value of the property 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 $ 4.3 million was associated with property sales in which the sales price was greater than the fair value of the properties sold, which was recognized as a reduction to the aggregate sales price associated with these properties and as financing obligations separate from the related operating lease liabilities .

Proceeds from the financing obligations are reported within financing activities on our condensed consolidated statement of cash flows.

During the nine months ended September 30, 2024 , we recognized a net gain of $ 19.8 million on sale-leaseback transactions with unrelated third parties, which is inclu ded in Other operating expense in o ur condensed consolidated statement of operations.

Right-of-use assets and lease liabilities recognized in connection with sale-leaseback transactions with unrelated third parties were $ 123.0 million and $ 108.5 million , respectively.

Sale-Leaseback Transaction with Related Parties

During the three months ended September 30, 2024 , we entered into and consummated a sale-leaseback transaction with an entity in which our chief executive officer and a member of our board of directors own a minority interest.

Under this transaction, we sold one property for gross proceeds of $ 40.0 million, which was reduced by transaction costs of $ 0.2 million, for net cash proceeds of $ 39.8 million.

The estimated fair value of the property sold was $ 40.3 million .

During the three months ended September 30, 2024, we recognized a loss of $ 17.2 million on this sale-leaseback transaction, which is included in Other operating expense in our condensed consolidated statement of operations.

The right-of-use asset and lease liability recognized in connection with this sale-leaseback transaction was $ 25.1 million and $ 24.9 million, respectively.

Stockholders’ Equity

Equity Offering

On August 14, 2024, we consummated the registered offering, issuance and sale of 6.0 million shares of our common stock by the Company (the “Primary Shares”) and 7.8 million shares of our common stock by certain of our stockholders (the “Secondary Shares”) at an offering price of $ 21.75 per share, less underwriting discounts and commissions (collectively, the “Offering”).

We received total gross proceeds from the Primary Shares of $ 130.5 million , which was reduced by underwriting discounts and commissions and other expenses of $ 6.1 million , for net proceeds of $ 124.4 million .

We did no t receive any proceeds from the sale of the Secondary Shares.

We used a portion of the net proceeds we received from the Offering to pay down $ 110.0 million of our Term Loan Facility on August 19, 2024.

For more information regarding our debt, see Note 5, Debt.

Share-Based Compensation Expense

Share-based compensation expense for the three months ended June 30, 2024 was $ 11.1 million, of which $ 10.1 million and $ 1.0 million was associated with equity-classified awards and liability-classified awards, respectively.

Share-based compensation expense for the six months ended June 30, 2024 was $ 18.7 million, of which $ 18.0 million and $ 0.7 million was associated with equity-classified awards and liability-classified awards, respectively.

Share-based compensation expense for the three months ended June 30, 2023 was $ 16.5 million, of which $ 8.5 million and $ 8.0 million was associated with equity-classified awards and liability-classified awards, respectively.

Share-based compensation expense for the six months ended June 30, 2023 was $ 22.2 million, of which $ 13.9 million and $ 8.3 million was associated with equity-classified awards and liability-classified awards, respectively.

Restricted Stock Units

During the six months ended June 30, 2024, the Company granted approximately 1.6 million restricted stock unit awards under the 2021 Incentive Award Plan, of which approximately 1.1 million were time-based vesting awards and approximately 0.5 million were performance-based vesting awards granted to our executives in connection with our short-term incentive compensation program.

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

Share-based compensation expense for the three months ended September 30, 2024 was $ 11.8 million, of which $ 9.3 million and $ 2.5 million was associated with equity-classified awards and liability-classified awards, respectively.

Share-based compensation expense for the nine months ended September 30, 2024 was $ 30.5 million, of which $ 27.2 million and $ 3.3 million was associated with equity-classified awards and liability-classified awards, respectively.

Share-based compensation expense for the three months ended September 30, 2023 was $ 14.9 million, of which $ 8.9 million and $ 6.0 million was associated with equity-classified awards and liability-classified awards, respectively.

Share-based compensation expense for the nine months ended September 30, 2023 was $ 37.0 million, of which $ 22.8 million and $ 14.2 million was associated with equity-classified awards and liability-classified awards, respectively.

LIFE TIME GROUP HOLDINGS, INC.

2 unchanged sentences

(Table amounts in thousands except per share data)

Restricted Stock Units

During the nine months ended September 30, 2024, the Company granted approximately 1.8 million restricted stock unit awards under the 2021 Incentive Award Plan, of which approximately 1.3 million were time-based vesting awards and approximately 0.5 million were performance-based vesting awards granted to our executives in connection with our short-term incentive compensation program.

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

Performance Stock Units

During the six months ended June 30, 2024, the Company granted approximately 0.5 million three-year performance stock unit awards under the 2021 Incentive Award Plan, all of which were granted to our executives in connection with our long-term incentive compensation program.

During the nine months ended September 30, 2024, the Company granted approximately 0.5 million three-year performance stock unit awards under the 2021 Incentive Award Plan, all of which were granted to our executives in connection with our long-term incentive compensation program.

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

2 unchanged sentences

In the event specified performance metrics are met under our 2024 incentive compensation program for team members who are not executive officers, awards thereunder will be paid out in cash or through the issuance of fully-vested shares of the Company’s common stock or a combination thereof at the time of such performance determination in 2025.

As of June 30, 2024, we expect that these awards will be settled in a combination of cash and shares of the Company’s common stock.

As of September 30, 2024, we expect that these awards will be settled in a combination of cash and shares of the Company’s common stock.

Because the portion of incentive compensation that we currently expect to pay through the issuance of shares of the Company’s common stock represents a fixed dollar that, if payable, will be settled in a variable number of shares of the Company’s common stock, we are currently accounting for this portion of these awards as liability-classified share-based payment awards.

Accordingly, the offset to the share-based compensation expense we have recognized in connection with these awards during the six months ended June 30, 2024 is included in Accrued expenses and other current liabilities on our June 30, 2024 condensed consolidated balance sheet.

Accordingly, the offset to the share-based compensation expense we have recognized in connection with these awards during the nine months ended September 30, 2024 is included in Accrued expenses and other current liabilities on our September 30, 2024 condensed consolidated balance sheet.

In February 2024, our board of directors determined that our 2023 performance exceeded the maximum performance metric under our 2023 short-term incentive program and issued corresponding shares of common stock to our employees.

As a result, the $ 18.1 million liability we had recognized in connection with liability-classified share-based payment awards, which was included in Accrued expenses and other current liabilities on our December 31, 2023 condensed consolidated balance sheet, was reclassified out of Accrued expenses and other current liabilities and into Common stock and Additional paid-in capital on our condensed consolidated balance sheet during the six months ended June 30, 2024.

Income Per Share

For the three and six months ended June 30, 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 and six months ended June 30, 2024 and 2023:

For the three and nine months ended September 30, 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.

Our potentially dilutive securities for the three and nine months ended September 30, 2024 also included performance stock units.

The following table sets forth the calculation of basic and diluted income per share for the three and nine months ended September 30, 2024 and 2023:

Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

2024 2023 2024 2023

9 unchanged sentences

(Table amounts in thousands except per share data)

The following is a summary of potential shares of common stock that were antidilutive and excluded from the weighted average share computations for the three and six months ended June 30, 2024 and 2023:

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, 2024 and 2023:

Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

2024 2023 2024 2023

9 unchanged sentences

The Court granted Zurich’s dispositive motions on July 25, 2024, dismissing Life Time’s claims with prejudice, and entered judgment on July 26, 2024.

Life Time intends to appeal from that judgment, in whole or in part, to the Minnesota Court of Appeals.

Life Time has appealed from that judgment to the Minnesota Court of Appeals.

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

5 unchanged sentences

Subsequent Events

On July 29, 2024, the Company entered into an agreement for the sale-leaseback of one property for gross proceeds of $ 25.0 million.

The closing on this property is expected to be completed early in the fourth quarter 2024.

In preparing the accompanying condensed consolidated financial statements, we have evaluated the period from June 30, 2024 through the date the condensed consolidated financial statements were issued for material subsequent events.

On October 22, 2024, Life Time, Inc., an indirect subsidiary of Life Time Group Holdings, Inc., priced $ 500 million in aggregate principal amount of 6.000 % senior secured notes due 2031.

The offering is expected to close on November 5, 2024, subject to customary closing conditions.

Concurrently with the closing of the offering, we intend to amend the Amended Credit Agreement to, among other things, incur new term loans in an aggregate principal amount of $ 1,000 million that will mature in 2031 and bear interest at a rate per annum of SOFR plus an applicable margin of 2.50 % (subject to a certain ratings-based step-down).

We intend to use the net proceeds from the senior secured notes and new term loans and cash from our balance sheet to fund the satisfaction and discharge of the Senior Secured Notes due 2026 and Senior Unsecured Notes due 2026.

In preparing the accompanying condensed consolidated financial statements, we have evaluated the period from September 30, 2024 through the date the condensed consolidated financial statements were issued for material subsequent events.

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

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