What changed in this filing

/stocks — the workspaceLOADING

Item 8. Financial Statements and Supplementary Data

2025-02-27 compared with 2024-02-28 · 410 added, 420 removed, 1196 unchanged (41% of the section changed)

16 unchanged sentences

Projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Our management, including our Chief Executive Officer and Interim Chief Financial Officer, assessed the effectiveness of our internal control over financial reporting as of December 31, 2023, utilizing criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in Internal Control—2013 Integrated Framework.

Our management, including our Chief Executive Officer and Chief Financial Officer, assessed the effectiveness of our internal control over financial reporting as of December 31, 2024, utilizing criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in Internal Control—2013 Integrated Framework.

Based on our assessment, our management concluded that, as of December 31, 2024, our internal control over financial reporting was effective based on those criteria.

49 unchanged sentences

Critical Audit Matter Description

As described in Note 9 to the Company’s consolidated financial statements, the Company entered into and consummated sale-leaseback transactions involving three properties with unrelated third parties during the year ended December 31, 2023.

As described in Notes 2, 9 and 13 to the Company’s consolidated financial statements, the Company entered into and consummated sale-leaseback transactions involving five properties with unrelated third parties and one with a related party during the year ended December 31, 2024.

The Company determined that the transactions qualified as sale-leaseback transactions in accordance with Accounting Standards Codification (“ASC”) Topic 842, Leases .

We identified management’s evaluation of whether the sale-leaseback transactions transferred control, was recognized timely, and at fair value, as a critical audit matter.

We identified management’s evaluation of whether the sale-leaseback transactions transferred control, were recognized timely, and at fair value, as a critical audit matter.

Management applies judgment in assessing relevant lease terms, provisions, and other conditions, including repurchase rights, included in the Company’s sale and lease agreements to determine whether or not the control of the real estate property has transferred from the Company, the timing of the transaction, and the determination of fair value.

5 unchanged sentences

• Assessed management’s application of ASC Topic 842 and evaluated relevant lease terms, provisions and other conditions included in the Company’s sale-leaseback agreements to assess the appropriateness of the conclusion that a transfer of control has occurred.

• Evaluated whether the Company appropriately accounted for the sale by recognizing the transaction price for the sale of the property at the time control is transferred to the third party, derecognizing the carrying amount of the asset, and accounting for the lease in accordance with ASC Topic 842.

• Utilized professionals with specialized skills and knowledge in valuation to assist with assessing whether the fair value of the property was appropriately recorded for the sale-leaseback.

• Evaluated whether the Company appropriately accounted for the sale by recognizing the transaction price for the sale at the time control is transferred, derecognizing the carrying amount of the asset, and accounting for the lease in accordance with ASC 842.

• Utilized professionals with specialized skills and knowledge in valuation to assist, for certain transactions, with assessing whether the overall transaction was at fair value.

• Recalculated the operating lease right-of-use asset and liability based on the terms of the agreement and calculated incremental borrowing rate.

10 unchanged sentences

$ 10,879 $ 11,161

Restricted cash and cash equivalents 16,999 18,805

Accounts receivable, net

80 unchanged sentences

2,263,512 1,991,383 1,711,938

Income (loss) from operations

Income from operations

357,483 225,210 110,619

2 unchanged sentences

( 148,095 ) ( 130,797 ) ( 113,537 )

Equity in earnings (loss) of affiliates

Equity in (loss) earnings of affiliates

( 620 ) 377 300

32 unchanged sentences

Common Stock Additional

Capital Stockholder

Receivable Retained

(Accumulated Deficit) Accumulated

Capital Accumulated Deficit Accumulated

Comprehensive

3 unchanged sentences

Net loss — — — ( 1,793 ) — ( 1,793 )

Other comprehensive income — — — — — 214 214

Share-based compensation — — 334,339 — — — 334,339

Settlement of accrued compensation liabilities through the issuance of share-based compensation awards — — 3,843 — — — 3,843

Issuance of common stock in connection with the IPO and over-allotment exercise, net of offering costs 40,582 406 700,961 — — — 701,367

Issuance of common stock in connection with Series A Preferred Stock conversion 6,687 67 149,518 — — — 149,585

Issuance of restricted stock in connection with restricted Series A Preferred Stock conversion 595 6 ( 6 ) — — — —

Cancellation of stockholder note receivable — — ( 15,000 ) 15,000 — — —

Balance at December 31, 2021

193,060 1,931 2,743,560 — ( 651,083 ) ( 3,016 ) 2,091,392

Net loss — — — — ( 1,793 ) — ( 1,793 )

Other comprehensive loss — — — — ( 6,206 ) ( 6,206 )

15 unchanged sentences

196,671 1,967 2,835,883 ( 576,813 ) ( 6,925 ) 2,254,112

Net income — — — 156,240 — 156,240

Other comprehensive loss — — — — ( 5,872 ) ( 5,872 )

Share-based compensation — — 36,685 — — 36,685

Stock option exercises 2,220 22 25,911 — — 25,933

Issuance of common stock in connection with the Offering (Note 10), net of issuance costs 6,000 60 123,904 — — 123,964

Issuance of common shares in connection with the vesting of restricted stock units 966 9 ( 1,597 ) — — ( 1,588 )

Issuances of common stock in connection with the employee stock purchase plan 191 2 2,816 — — 2,818

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

Balance at December 31, 2024

207,495 $ 2,075 $ 3,041,645 $ ( 420,573 ) $ ( 12,797 ) $ 2,610,350

See notes to consolidated financial statements.

8 unchanged sentences

$ 156,240 $ 76,063 $ ( 1,793 )

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

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

Depreciation and amortization

8 unchanged sentences

11,018 14,466 2,062

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

(Gain) loss on disposal of property and equipment, net

( 6,794 ) 14,089 ( 99,974 )

Loss on debt extinguishment 13,839 — —

Write-off of debt discounts and issuance costs — — 28,568

Amortization of debt discounts and issuance costs

3 unchanged sentences

2,514 ( 2,562 ) ( 1,719 )

Net cash provided by (used in) operating activities

Net cash provided by operating activities

575,117 463,004 200,969

6 unchanged sentences

207,421 121,831 351,850

Proceeds from the sale of land

15,577 4,169 —

8,793 ( 551 ) ( 4,214 )

Net cash used in investing activities

9 unchanged sentences

( 1,305,000 ) ( 1,306,000 ) ( 785,000 )

Purchase of U.S.

government obligations for the satisfaction and discharge of debt ( 1,424,467 ) — —

Repayments of finance lease liabilities

7 unchanged sentences

( 1,916 ) ( 381 ) ( 1,300 )

Net cash provided by financing activities

Net cash (used in) provided by financing activities

( 284,385 ) 115,552 36,798

Effect of exchange rate on cash and cash equivalents

Effect of exchange rate on cash and cash equivalents and restricted cash and cash equivalents

( 76 ) 61 ( 353 )

Increase (decrease) in cash and cash equivalents

(Decrease) increase in cash and cash equivalents and restricted cash and cash equivalents

( 2,088 ) 4,457 ( 6,128 )

Cash and cash equivalents – beginning of period

Cash and cash equivalents and restricted cash and cash equivalents – beginning of period

29,966 25,509 31,637

Cash and cash equivalents – end of period

Cash and cash equivalents and restricted cash and cash equivalents – end of period

$ 27,878 $ 29,966 $ 25,509

14 unchanged sentences

As of December 31, 2024, we operated 179 centers in 31 states and one Canadian province.

Life Time Group Holdings, Inc.

completed its initial public offering (“IPO”) in October 2021 and its common stock trades on the New York Stock Exchange (“NYSE”) under the symbol “LTH.”

COVID-19 Impact

1 unchanged sentence

We re-opened our first center on May 8, 2020 and continued to re-open our centers as state and local governmental authorities permitted.

Initial Public Offering

On October 12, 2021, Life Time Group Holdings, Inc.

consummated its initial public offering (“IPO”) of 39.0 million shares of its common stock at a public offering price of $ 18.00 per share, resulting in total gross proceeds of $ 702.0 million, which was r educed by underwriting discounts and other offering and issuance expenses of $ 28.0 million, of which approximately $ 0.3 million was recognized during 2022, for net proceeds of $ 674.0 million.

The shares of the Company’s common stock began trading on the New York Stock Exchange (the “NYSE”) under the symbol “LTH” on October 7, 2021.

A registration statement on Form S-1 relating to the offering of these securities was declared effective by the Securities and Exchange Commission (the “SEC”) on October 6, 2021.

Upon consummation of the IPO, the 5.4 million shares of Series A Preferred Stock (as defined in Note 10, Stockholders’ Equity) then outstanding automatically converted into approximately 6.7 million shares of common stock of Life Time Group Holdings, Inc.

Also upon consummation of the IPO, the 0.5 million shares of restricted Series A Preferred Stock then outstanding converted into approximately 0.6 million restricted shares of common stock of Life Time Group Holdings, Inc.

For more information regarding the Series A Preferred Stock, see Note 10, Stockholders’ Equity.

On October 13, 2021, we used a portion of the $ 674.0 million of net proceeds we received in connection with the IPO to pay down $ 575.7 million (including a $ 5.7 million prepayment penalty) of our Term Loan Facility (as defined in Note 8, Debt).

For more information regarding our Term Loan Facility, see Note 8, Debt.

On November 1, 2021, Life Time Group Holdings, Inc.

consummated the sale of nearly 1.6 million additional shares of its common stock at the IPO price of $ 18.00 per share pursuant to the partial exercise by the underwriters of their over-allotment option, resulting in total gross proceeds of approximately $ 28.4 million, which was reduced by underwriting discounts and other offering expenses of $ 1.3 million , for net proceeds of $ 27.1 million.

We used these net proceeds, as well as the remaining portion of the net proceeds we received in connection with the IPO after the partial pay down of our Term Loan Facility, for general corporate purposes.

Basis of Presentation

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We apply this method of accounting to our investments when we have the ability to exercise significant influence over the operating and financial policies of the investee.

Our share of the investee’s earnings (losses) associated with our investments in unconsolidated subsidiaries is included in Equity in earnings (loss) of affiliates in our consolidated statements of operations.

Our share of the investee’s earnings (losses) associated with our investments in unconsolidated subsidiaries is included in Equity in (loss) earnings of affiliates in our consolidated statements of operations.

S ee “Other Assets” within Note 2 below for additional information regarding our investments in unconsolidated subsidiaries.

LIFE TIME GROUP HOLDINGS, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Table amounts in thousands except per share data)

Summary of Significant Accounting Policies

Segment Reporting

Operating segments are defined as components of an entity for which separate financial information is available and that is regularly reviewed by the Chief Operating Decision Maker (“CODM”) in deciding how to allocate resources to an individual segment and in assessing performance.

The Company’s CODM is our Founder, Chairman and CEO .

Our CODM assesses financial performance and allocates resources based on the consolidated financial results at the total entity level.

Accordingly, we have determined that we have one operating segment and one reportable segment.

We have one operating segment and one reportable segment.

Our segment derives revenues from customers by providing premium health, fitness and wellness experiences and products at our athletic country club destinations and via our comprehensive digital platform and portfolio of iconic athletic events – all with the objective of inspiring healthier, happier lives.

We manage our business activities on a consolidated basis.

The Company’s chief operating decision maker (“CODM”) is the Chief Executive Officer (“CEO”).

The CODM assesses performance for the segment and allocates resources based on consolidated net income.

The measure of segment assets is reported on the balance sheet as total consolidated assets.

Our CODM does not review segment assets at a different asset level and is regularly provided with only the consolidated expenses as noted on the face of the consolidated statements of operations.

Use of Estimates in the Preparation of Financial Statements

4 unchanged sentences

These revisions can affect our consolidated operating results.

LIFE TIME GROUP HOLDINGS, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Table amounts in thousands except per share data)

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.

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 adopted the accounting guidance for this Annual Report on Form 10-K for the year ended December 31, 2024.

This updated standard did not have a material impact on our financial statement disclosures.

New Accounting Pronouncements Not Yet Adopted

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 this 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.

In November 2024, the FASB issued guidance that requires public entities to disclose the amounts of purchases of inventory, employee compensation, depreciation, intangible asset amortization and depletion, as applicable, included in each relevant expense caption presented in its income statement.

We expect to adopt this accounting guidance for our Annual Report on Form 10-K for the year ended December 31, 2027.

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

Revenue Recognition

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We estimate breakage based on historical redemption patterns.

Generally, we receive a one-time enrollment fee at the time a member joins.

The enrollment fees are generally nonrefundable after seven days.

We may receive a one-time enrollment fee at the time a member joins.

The enrollment fees are generally non-refundable after seven days .

Enrollment fees and related direct expenses are deferred and recognized on a straight-line basis over an estimated average membership life, which is based on historical membership experience.

If the direct expenses related to the enrollment fees exceed the enrollment fees for any center in a month, the amount of direct expenses in excess of the enrollment fees are expensed in the current period instead of deferred over the estimated average membership life.

LIFE TIME GROUP HOLDINGS, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Table amounts in thousands except per share data)

Other Revenue

4 unchanged sentences

Other revenue also includes revenue generated from our digital memberships and our Life Time Work and Life Time Living locations.

LIFE TIME GROUP HOLDINGS, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Table amounts in thousands except per share data)

For more information regarding revenue, see Note 6, Revenue.

1 unchanged sentence

We classify all unrestricted cash accounts and highly liquid debt instruments purchased with original maturities of three months or less as cash and cash equivalents.

Restricted cash of $ 18.8 million and $ 0.3 million, which is used as collateral for our self-insured workers’ compensation and general liabilities claims under our captive insurance policy, was included in cash and cash equivalents at December 31, 2023 and 2022, respectively.

Restricted Cash and Cash Equivalents

Restricted cash is used for our self-insured workers’ compensation and general liabilities claims under our captive insurance policy.

Accounts Receivable

9 unchanged sentences

Accelerated depreciation methods are used for tax reporting purposes.

Site development capitalization commences when acquisition of a particular property is deemed probable by management.

Should a specific project be subsequently deemed not viable for construction, any capitalized costs related to that project are charged to operations at the time of that determination.

Upon completion of a project, the site development costs are classified as property and depreciated over the useful life of the asset.

Site development capitalization commences when acquisition or development of a particular property is deemed probable by management.

Should a specific project be subsequently deemed not viable, any capitalized costs related to that project are recognized as an impairment charge at the time of that determination.

Upon completion of a project, site development costs are classified as property and depreciated over the useful life of the asset.

We capitalize interest during the construction period of our centers and this capitalized interest is included in the cost of the building.

7 unchanged sentences

For information on acquisitions during the year ended December 31, 2023 that we accounted for as business combinations , see Note 5, Goodwill and Intangibles.

When an acquisition does not meet the definition of a business combination because either:

(i) substantially all of the fair value of the gross assets acquired is concentrated in a single identifiable asset, or group of similar identified assets, or (ii) the acquired entity does not have an input and a substantive process that together significantly contribute to the ability to create outputs, we account for the acquisition as an asset acquisition.

In an asset acquisition, goodwill is not recognized, but rather, any excess purchase consideration over the fair value of the net assets acquired is allocated on a relative fair value basis to the identifiable net assets as of the acquisition date and any direct acquisition-related transaction costs are capitalized as part of the purchase

LIFE TIME GROUP HOLDINGS, INC.

2 unchanged sentences

(Table amounts in thousands except per share data)

When an acquisition does not meet the definition of a business combination because either:

For information on the acquisition during the year ended December 31, 2023 that we accounted for as an asset acquisition, see Note 8, Debt.

For information on the acquisition during the year ended December 31, 2021 that we accounted for as an asset acquisition, see Note 5, Goodwill and Intangibles.

consideration.

For information on the acquisitions that we completed during the years ended December 31, 2024 and 2023 that we accounted for as asset acquisitions, see Note 4, Property and Equipment.

Impairment of Long-Lived Assets

4 unchanged sentences

If an impairment has occurred, the amount of impairment recognized is determined by estimating the fair value of these assets and recording a loss if the carrying value is greater than the fair value.

As it relates to our site development projects, we test the carrying value of capitalized development costs associated with a particular project for impairment when we determine that all or a portion of the development project is no longer deemed viable for construction.

We generally recognize an impairment charge associated with a site development project or a portion of a site development project that we decide to abandon in an amount equal to the related development costs that we previously capitalized.

During 2023, 2022, and 2021, we recognized impairment charges associated with all or a portion of certain site development projects that we decided to abandon.

We generally recognize an impairment charge associated with a site development project or a portion of a site development project that we deem not viable in an amount equal to the related development costs that we previously capitalized.

During 2024, 2023, and 2022, we recognized impairment charges associated with all or a portion of certain site development projects that we deemed not viable.

During 2023, we also recognized an impairment charge of $ 5.3 million related to the sale of an outparcel of land.

2 unchanged sentences

Our policy is to test goodwill for impairment on October 1 of each year.

If fair value of a reporting unit is less than its carrying value, we reduce the carrying value accordingly and record a corresponding impairment loss.

If the fair value of a reporting unit is less than its carrying value, we reduce the carrying value accordingly and record a corresponding impairment loss.

We have two reporting units:

Centers and Corporate Businesses.

At December 31, 2023 and 2022, out of the total goodwill balance of $ 1,235.4 million and $ 1,233.2 million recognized on our consolidated balance sheets, respectively, $ 1,233.1 million and $ 1,230.9 million, respectively, has been allocated to our Centers reporting unit.

At both December 31, 2023 and 2022, $ 2.3 million has been allocated to our Corporate Businesses reporting unit.

At December 31, 2023, the estimated fair value of our reporting units are in excess of their carrying value.

At both December 31, 2024 and 2023, the total goodwill balance recognized on our consolidated balance sheets was $ 1,235.4 million, of which $ 1,233.1 million has been allocated to our Centers reporting unit and $ 2.3 million has been allocated to our Corporate Businesses reporting unit.

At December 31, 2024, the estimated fair value of our reporting units were in excess of their carrying value.

Based upon our review and analysis, no goodwill impairments were deemed to have occurred during the years ended December 31, 2024, 2023, and 2022.

5 unchanged sentences

Our lease agreements do not contain any material residual value guarantees.

Lease cost associated with operating leases and short-term leases is recognized on a straight-line basis from the date we take possession of the property through the end of the lease term.

With the exception of leases containing a purchase option that we are reasonably certain to exercise, finance lease right-of-use assets are amortized on a straight-line basis over the shorter of the estimated useful life of the underlying assets or the lease term.

Finance lease right-of-use assets associated with leases that do contain a purchase option that we are reasonably certain to exercise are amortized on a straight-line basis over the estimated useful life of the underlying assets.

Interest associated with finance lease liabilities is recognized using the effective interest rate method.

Variable lease payments not recognized in the measurement of operating and finance lease liabilities are expensed as

LIFE TIME GROUP HOLDINGS, INC.

2 unchanged sentences

(Table amounts in thousands except per share data)

Lease cost associated with operating leases and short-term leases is recognized on a straight-line basis from the date we take possession of the property through the end of the lease term.

Finance lease right-of-use assets are amortized on a straight-line basis over the shorter of the estimated useful life of the underlying assets or the lease term.

Interest associated with finance lease liabilities is recognized using the effective interest rate method.

Variable lease payments not recognized in the measurement of operating and finance lease liabilities are expensed as incurred.

For more information regarding lease cost included in our consolidated statements of operations for the years ended December 31, 2024, 2023 and 2022, see Note 9, Leases.

21 unchanged sentences

The financing obligation is amortized using the effective interest method, and interest is calculated using the same incremental borrowing rate as that used for purposes of measuring the related operating lease liability.

LIFE TIME GROUP HOLDINGS, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Table amounts in thousands except per share data)

We account for sale-leaseback arrangements with related parties at their contractually stated terms.

3 unchanged sentences

While determining fair value requires a variety of input assumptions and judgment, we believe our estimates of fair value are reasonable.

LIFE TIME GROUP HOLDINGS, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Table amounts in thousands except per share data)

For more information regarding sale-leaseback transactions that were consummated during the years ended December 31, 2024, 2023 and 2022, see Note 9, Leases.

9 unchanged sentences

Intangible Assets

Intangible assets at December 31, 2023 and 2022 include trade names, customer relationships and a facility license associated with an outdoor enthusiast and bicycling event .

Intangible assets at December 31, 2024 and 2023 include a trade name and a facility license.

Intangible assets at December 31, 2023 also include customer relationships .

For more information on intangible assets, see Note 5, Goodwill and Intangibles.

11 unchanged sentences

Other assets at December 31, 2024 and 2023 primarily consists of ou r executive nonqualified plan assets, o ur investments in unconsolidated subsidiaries, rent deposits and unamortized debt issuance costs associated with the revolving portion of our senior secured credit facility.

LIFE TIME GROUP HOLDINGS, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Table amounts in thousands except per share data)

Investments in Unconsolidated Subsidiaries

7 unchanged sentences

We currently account for our investment in D-M Holdings using the equity method of accounting.

LIFE TIME GROUP HOLDINGS, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Table amounts in thousands except per share data)

In addition to our investments in Bloomingdale LLC and D-M Holdings, we also have investments in various other unconsolidated subsidiaries.

14 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.

8 unchanged sentences

(1) Excludes unamortized debt discounts and issuance costs.

LIFE TIME GROUP HOLDINGS, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Table amounts in thousands except per share data)

The f air value of our debt is based on the amount of future cash flows discounted using rates we would currently be able to realize for similar instruments of comparable maturity.

6 unchanged sentences

For information regarding impairment charges associated with our long-lived assets that we recognized during each of the periods presented, see the Impairment of Long-Lived Assets section within this footnote.

LIFE TIME GROUP HOLDINGS, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Table amounts in thousands except per share data)

Marketing Expenses

17 unchanged sentences

In making such determination, we consider all available positive and negative evidence, including scheduled reversals of deferred tax liabilities, projected future taxable income, tax planning strategies and recent financial operations.

In the event we were to determine that we would be able to realize our deferred income tax assets in the future in excess of their net recorded amount, we would make an adjustment to the valuation allowance, which would reduce the provision for income taxes.

In the event we were to determine that we would be able to realize our deferred income tax assets in the future in excess of their net recorded amount, we would decrease the valuation allowance, which would reduce the provision for income taxes.

Our income tax returns are periodically audited by U.S.

4 unchanged sentences

We recognize a tax position when it is more likely than not that the position will be sustained upon examination, including resolutions of any related appeals or litigation processes, based on the technical merits.

We adjust our liability for unrecognized tax benefits in the period in which an uncertain tax position is effectively settled, that statute of limitations expires for the

LIFE TIME GROUP HOLDINGS, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Table amounts in thousands except per share data)

relevant taxing authority to examine the tax position or when more information becomes available.

We adjust our liability for unrecognized tax benefits in the period in which an uncertain tax position is effectively settled, that statute of limitations expires for the relevant taxing authority to examine the tax position or when more information becomes available.

Our liability for unrecognized tax benefits, including penalties and interest, is included in Other liabilities on our consolidated balance sheets.

5 unchanged sentences

W e estimate the fair value of stock options to purchase shares of the Company’s common stock using the Black-Scholes option pricing model.

LIFE TIME GROUP HOLDINGS, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Table amounts in thousands except per share data)

This pricing model requires management to make assumptions and to apply judgment to determine the fair value of equity awards.

These assumptions and judgments include the expected term of stock options, expected stock price volatility and future stock option exercise behaviors.

Share-based compensation expense related to restricted stock units is recorded based on the market value of our common stock on the date of grant.

Share-based compensation expense related to restricted stock units and performance stock units is recorded based on the market value of our common stock on the date of grant.

We account for share-based payment awards that represent a fixed dollar amount that, if payable, will be settled in a variable number of shares of the Company’s common stock as liability-classified awards.

11 unchanged sentences

The changes in accumulated other comprehensive income (loss) during the years ended December 31, 2024, 2023 and 2022 is related to foreign currency translation adjustments associated with our Canadian operations.

Reclassification

A reclassification has been made on our December 31, 2023 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.

Supplemental Balance Sheet and Cash Flow Information

4 unchanged sentences

Construction contract receivables

Prepaid insurance

Prepaid commissions 6,476 5,059

Prepaid rent 3,927 514

Prepaid software licenses and maintenance 5,199 5,481

Prepaid payroll 11,883 —

12,611 10,424

37 unchanged sentences

2024 2023 2022

Net cash paid for (received from) income taxes, net of refunds received (taxes paid)

Net cash paid for income taxes, net of refunds received

$ 18,182 $ 14,051 $ 10,640

4 unchanged sentences

Non-cash activities:

Issuance of Series A Preferred Stock (as defined in Note 10, Stockholders’ Equity) in connection with the extinguishment of a related party secured loan — — 108,591

Conversion of Series A Preferred Stock to common stock — — 149,585

government obligations deposited with a trustee in connection with the satisfaction and discharge of the 5.750 % Senior Secured Notes and 8.000 % Senior Unsecured Notes (as defined in Note 8, Debt)

1,424,467 — —

Principal and related accrued and unpaid interest obligations derecognized in connection with the satisfaction and discharge of the 5.750 % Senior Secured Notes and 8.000 % Senior Unsecured Notes (as defined in Note 8, Debt)

1,420,115 — —

Settlement of accrued compensation liabilities through the issuance of common stock 18,058 — —

Issuances of common stock in connection with a business acquisition — 1,472 —

Acquisition of property and equipment through the assumption of a mortgage — 10,600 —

See Note 9, Leases, for supplemental cash flow information associated with our lease arrangements for the years ended December 31, 2023, 2022 and 2021.

LIFE TIME GROUP HOLDINGS, INC.

2 unchanged sentences

(Table amounts in thousands except per share data)

See Note 8, Debt, for more information on the satisfaction and discharge of our 5.750 % Senior Secured Notes and the 8.000 % Senior Unsecured Notes for the year ended December 31, 2024.

See Note 9, Leases, for supplemental cash flow information associated with our lease arrangements for the years ended December 31, 2024, 2023 and 2022.

Property and Equipment

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Depreciation expense, which is included in Depreciation and amortization in our consolidated statements of operations, for the years ended December 31, 2024, 2023 and 2022 was $ 272.7 million, $ 242.0 million and $ 226.0 million, respectively.

Asset Acquisitions

During the year ended December 31, 2024, we acquired two health club facilities for a total purchase price of $ 21.9 million, all of which was paid in cash.

The entire $ 21.9 million purchase price was allocated to property and equipment, and is included in Capital expenditures in our consolidated statements of cash flows.

During the year ended December 31, 2023, we acquired a health club facility for a total purchase price of $ 15.8 million.

As part of this acquisition, we paid cash of $ 4.0 million and assumed an existing mortgage note and related accrued interest liability of $ 10.6 million and $ 1.2 million, respectively.

The mortgage note matured in June 2024, and was included in current maturities of long-term debt on our consolidated balance sheet as of December 31, 2023.

The entire $ 15.8 million purchase price was allocated to property and equipment, and is included in Capital expenditures in our consolidated statements of cash flows.

LIFE TIME GROUP HOLDINGS, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Table amounts in thousands except per share data)

Goodwill and Intangibles

The goodwill balance was $ 1,235.4 million at December 31, 2023, an increase of $ 2.2 million as compared to $ 1,233.2 million at December 31, 2022.

During the year ended December 31, 2023, we acquired businesses for a total purchase price of approximately $ 2.1 million.

The goodwill balance was $ 1,235.4 million at both December 31, 2024 and December 31, 2023.

During the year ended December 31, 2023, we acquired a business that was accounted for as a business combination for a total purchase price of approximately $ 2.1 million.

Of this amount, approximately $ 2.2 million was allocated to goodwill, approximately $ 0.1 million was allocated to property and equipment and approximately $ 0.2 million was allocated to liabilities assumed.

The consideration for these acquisitions consisted of $ 0.6 million of cash and approximately 0.9 million shares of our common stock with an estimated fair value of approximately $ 1.5 million as of the acquisition dates.

We accounted for each of these acquisitions as a business combination.

The financial results associated with these acquisitions have been included in our consolidated financial statements since the acquisition dates.

The consideration for this acquisition consisted of $ 0.6 million of cash and approximately 0.9 million shares of our common stock with an estimated fair value of approximately $ 1.5 million as of the acquisition date.

The financial results associated with this acquisition has been included in our consolidated financial statements since the acquisition date.

Intangible assets consisted of the following:

7 unchanged sentences

$ 175,450 $ ( 3,807 ) $ 171,643

LIFE TIME GROUP HOLDINGS, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Table amounts in thousands except per share data)

December 31, 2023

6 unchanged sentences

$ 178,502 $ ( 6,375 ) $ 172,127

Other intangible assets at both December 31, 2023 and 2022 include a facility license as well as customer relationships associated with our race registration and timing businesses.

During the year ended December 31, 2021, we acquired a facility license associated with an outdoor enthusiast and bicycling event for approximately $ 10.2 million, of which approximately $ 1.1 million was included in Accrued expenses and other current liabilities on our consolidated balance sheets as of December 31, 2022 and which was subsequently paid in February 2023.

This license expires in April 2031.

This acquisition was accounted for as an asset acquisition.

The facility license costs are being amortized on a straight-line basis over its estimated useful life of 9.8 years.

Other intangible assets at both December 31, 2024 and 2023 includes a facility license associated with our race registration and timing businesses.

Amortization expense associated with intangible assets for the years ended December 31, 2024, 2023 and 2022 was $ 1.1 million, $ 1.4 million and $ 1.5 million, respecti vely.

1 unchanged sentence

As of December 31, 2024, the expected remaining amortization associated with intangible assets for the next five years was as follows:

LIFE TIME GROUP HOLDINGS, INC.

AND SUBSIDIARIES

NOTES TO 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.

13 unchanged sentences

$ 2,620,995 $ 2,216,593 $ 1,822,557

LIFE TIME GROUP HOLDINGS, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Table amounts in thousands except per share data)

The timing associated with the revenue we recognized during the years ended December 31, 2024, 2023, and 2022 is as follows:

16 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 center services offerings, as well as our media and athletic events.

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

Contract liabilities at December 31, 2024 and 2023 were $ 58.4 million and $ 49.9 million, respectively.

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

Deferred revenue at December 31, 2023 and 2022 was $ 49.3 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 December 31, 2024 and 2023 was $ 58.3 million and $ 49.3 million, respectively, and consists primarily of prepaid Dynamic Personal Training, media and athletic events, enrollment fees, membership dues and other in-center services offerings.

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

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

LIFE TIME GROUP HOLDINGS, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Table amounts in thousands except per share data)

The provision for (benefit from) income taxes is comprised of:

5 unchanged sentences

17,158 6,649 5,314

Total current tax expense (benefit)

Total current tax expense

23,071 4,150 13,023

3 unchanged sentences

( 40 ) ( 11,491 ) ( 8,632 )

( 5,967 ) 727 80

Total deferred tax expense (benefit)

1 unchanged sentence

Non-current benefit

— ( 288 ) ( 184 )

Provision for (benefit from) income taxes

$ 52,528 $ 18,727 $ ( 825 )

LIFE TIME GROUP HOLDINGS, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Table amounts in thousands except per share data)

The amount of deferred tax expense (benefit) differs from the change in the year-end deferred tax balances due to the tax effect of other comprehensive income, additional paid-in capital items or change in foreign currency exchange rates.

On March 27, 2020, Congress enacted the CARES Act to provide certain relief as a result of the COVID-19 pandemic.

The CARES Act, among other things, includes provisions relating to refundable payroll tax credits for employee retention, deferment of the employer’s portion of social security tax payments, net operating loss carrybacks, alternative minimum tax credit refunds, modifications to the net interest deduction limitations and technical corrections to tax depreciation methods for qualified improvement property.

An income tax benefit of $ 13.4 million was recognized as a result of the favorable federal tax rate differential from the net operating loss carrybacks under the CARES Act.

The favorable federal tax rate differential is due to net operating losses generated in tax years with a federal tax rate of 21% whereas the losses were carried back to tax years with a federal tax rate of 35% .

The Inflation Reduction Act of 2022 (the “IRA”) was signed into law on August 16, 2022.

The IRA includes numerous tax provisions, clean-energy related tax incentives and more funding for IRS enforcement and other initiatives.

New corporate taxes, including a 15% corporate alternative minimum tax (“CAMT”) and a 1% excise tax on stock repurchases by certain publicly traded corporations, were introduced in the IRA.

The 15% CAMT is applied on the adjusted financial statement income of applicable corporations and is effective for taxable years beginning after December 31, 20 22.

The new CAMT provision does not currently impact our consolidated financial statements, as it is not currently applicable to us and we do not expect it to be applicable to us in the foreseeable future.

The 1% excise tax is imposed on repurchases of st ock by certain publicly traded corporations beginning after December 31, 2022.

The amount of repurchases subject to the excise tax is reduced by the value of new stock issued to the public or employees during the year.

The reconciliation between our effective tax rate on income before income taxes and the statutory tax rate is as follows:

9 unchanged sentences

1,688 2,060 50

Loss on debt extinguishment

Change in valuation allowance

12 unchanged sentences

$ 640,039 $ 607,331

Accrued equity compensation

Share-based compensation

69,082 76,422

29 unchanged sentences

Unrecognized tax benefits were not significant in any of the periods presented.

No unrecognized tax benefits were recorded in any of the periods presented.

We are subject to taxation in the U.S., Canada and various states.

14 unchanged sentences

(Table amounts in thousands except per share data)

As of December 31, 2023 , we had a business interest carryforward of approximately $ 229.6 million ($ 57.8 million tax effected) that can be carried forward indefinitely.

As of December 31, 2022, we had a business interest carryforward of approximately $ 143.4 million ($ 35.3 million tax effected) that can be carried forward indefinitely.

As of December 31, 2024 and 2023 , we had a business interest carryforward of approximately $ 264.2 million ($ 66.3 million tax effected) and $ 229.6 million ($ 57.8 million tax effected), respectively, that can be carried forward indefinitely.

We considered all available positive and negative evidence, including scheduled reversals of deferred tax liabilities, projected future taxable income, tax planning strategies and recent financial operations to determine the extent to which we believe net deferred tax assets will more likely than not be realized.

Based on this assessment, as of December 31, 2023, a valuation allowance of $ 0.4 million has been recorded to reduce the deferred tax asset associated with the state net operating loss carryforwards and other deferred tax assets.

As of December 31, 2023, a valuation allowance of approximately $ 8.1 million has been recorded to reduce the deferred tax asset associated with the Canadian net operating loss carryforward and other deferred tax assets.

As of December 31, 2023, we had a foreign tax credit carryforward of approximately $ 1.1 million that can be used to offset future U.S.

federal tax liabilities on foreign-sourced income.

We project that our foreign sourced income will not be sufficient to fully utilize the credit carryforward.

As a result, a valuation allowance of $ 1.1 million has been recorded as of December 31, 2023 to reduce the deferred tax asset associated with the foreign tax credit carryforward.

Based on this assessment, as of December 31, 2024, a valuation allowance of $ 0.4 million has been recorded to reduce the deferred tax asset associated with certain state net operating loss carryforwards.

As of December 31, 2023 , a valuation allowance of $ 0.4 million was recorded to reduce the deferred tax asset associated with the state net operating loss carryforwards and other deferred tax assets.

9 unchanged sentences

Debt consisted of the following:

Term Loan Facility (1)

$ 310,000 $ 273,625

Revolving Credit Facility, maturing December 2026 90,000 20,000

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

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

Construction Loan, maturing February 2026 28,000 21,330

New Term Loan Facility, maturing November 2031 $ 1,000,000 $ —

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

Revolving Credit Facility, maturing September 2029 10,000 —

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

6.000 % Senior Secured Notes, maturing November 2031

5.750 % Senior Secured Notes, satisfied and discharged November 2024

8.000 % Senior Unsecured Notes, satisfied and discharged November 2024

Construction Loan, retired August 2024

Mortgage Notes, various maturities 41,865 115,502

10 unchanged sentences

$ 1,513,157 $ 1,859,027

(1) See “—Term Loan Facility” below.

LIFE TIME GROUP HOLDINGS, INC.

2 unchanged sentences

(Table amounts in thousands except per share data)

Refinancing Transactions

Senior Secured Credit Facility

In June 2015, Life Time, Inc.

and certain of our other wholly-owned subsidiaries entered into a senior secured credit facility with a group of lenders led by Deutsche Bank AG as the administrative agent.

On 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 facilities (the “Credit Agreement”).

Pursuant to such tenth amendment, 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 (the “Term Loan Facility”) that has a maturity date of January 15, 2026.

A portion of the net incremental cash proceeds we received under such tenth amendment was used to pay down the then existing balance on the revolving portion of our senior secured credit facilities (the “Revolving Credit Facility” and, together with the Term Loan Facility, the “Credit Facilities”).

We also converted the Credit Facilities under such tenth amendment from LIBOR to SOFR.

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

On December 6, 2023, Life Time, Inc.

and certain of our other wholly-owned subsidiaries entered into an eleventh amendment to the Credit Agreement which reduced the interest rate under the Term Loan Facility by 0.50 %.

and certain of our other wholly-owned subsidiaries entered into a senior secured credit facility (the “Credit Facilities”) with a group of lenders led by Deutsche Bank AG as the administrative agent.

During 2023 and 2024, we entered into the following amendments to the credit agreement governing our Credit Facilities (the “Credit Agreement”):

• Tenth amendment in May 2023 pursuant to which 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 (the “Former Term Loan Facility”) that had a maturity date of January 15, 2026.

We also converted the Credit Facilities from LIBOR to Term Secured Overnight Financing Rate (“SOFR”).

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

• Eleventh amendment in December 2023 pursuant to which we reduced the interest rate under the Former Term Loan Facility by 0.50 %.

Loans under such eleventh amendment were issued at par with no original issue discount.

The refinancing transactions during 2023 were accounted for as debt modifications.

Upon the exercise of an accordion feature and subject to certain conditions, borrowings under the Credit Facilities may be increased subject, in certain cases, to meeting a first lien net leverage ratio.

The Credit Facilities are secured by a first priority lien (on a pari-passu basis with the Secured Notes described below) on substantially all of our assets.

Term Loan Facility

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 % d ependi ng 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.

Before the IPO, our term loan facility had a principal balance of $ 850.0 million and amortized at 0.25 % quarterly, which required us to make three mandatory quarterly principal repayments of approximately $ 2.1 million during the year ended December 31, 2021.

On October 13, 2021, we used a portion of net proceeds we received in connection with the IPO to pay down $ 575.7 million (including a $ 5.7 million prepayment penalty) of our term loan facility.

As a result of the pay down, we are no longer required to make quarterly principal payments on the Term Loan Facility prior to its maturity.

• Twelfth amendment in June 2024 pursuant to which we replaced the Canadian Dollar Offered Rate (CDOR), which ceased at the end of June 2024, with the Canadian Overnight Repo Rate Average (CORRA).

We do not have any outstanding borrowings in Canadian dollars under our Revolving Credit Facility.

• Thirteenth amendment in September 2024 pursuant to which we, among other things, (i) increased the commitments under the Revolving Credit Facility to $ 650.0 million, (ii) reduced the floating interest rate per annum to, at our option, SOFR plus an applicable margin of 2.50 % or a base rate plus 1.50 %, and reduced the undrawn commitment fee rate from 50 basis points to 25 basis points, and (iii) extended the maturity of the revolving credit facility to September 20, 2029.

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

• Fourteenth amendment in November 2024 pursuant to which we incurred new term loans maturing in November 2031 in an aggregate principal amount of $ 1,000 million (the “New Term Loan Facility”).

The term loans under the New Term Loan Facility bear interest at a rate per annum of equal to SOFR plus an applicable margin of 2.50 % (subject to a certain ratings-based step-down).

6.000 % Senior Secured Notes

In connection with the New Term Loan Facility, in November 2024, Life Time, Inc.

completed the issuance of $ 500.0 million in aggregate principal amount of 6.000 % Senior Secured Notes due 2031 (the “ 6.000 % Senior Secured Notes”).

Satisfaction and Discharge of 5.750 % Senior Secured Notes and 8.000 % Senior Unsecured Notes

In November 2024, pursuant to the terms of the indentures governing the 5.750 % Senior Secured Notes and the 8.000 % Senior Unsecured Notes, Life Time, Inc.

issued a notice of full redemption and used a portion of the proceeds from the New Term Loan Facility and 6.000 % Senior Secured Notes to purchase $ 1,424.5 million of U.S.

government obligations, which were deposited with the trustee and were sufficient to fund the payment at par of (1) the $ 925.0 million outstanding principal amount and the accrued and unpaid interest associated with the 5.750 % Senior Secured Notes on the scheduled redemption date of January 15, 2025, and (2) the $ 475.0 million outstanding principal amount and the accrued and unpaid interest associated with the 8.000 % Senior Unsecured Notes on the scheduled redemption date of February 1, 2025.

The $ 1,424.5 million of cash we paid to purchase the U.S.

government obligations during the year ended December 31, 2024 is reported within financing activities in our consolidated statement of cash flows.

After the irrevocable deposit of such U.S.

government obligations with the trustee, our obligations under the indentures were satisfied and discharged and the transactions were accounted for as debt extinguishments.

Upon extinguishment of the 5.750 % Senior Secured Notes and the 8.000 % Senior Unsecured Notes , we derecognized (1) t he $ 1,424.5 million of U.S.

government obligations we deposited with the trustee, (2) the $ 1,420.1 million aggregate outstanding principal and related a ccrued and unpaid interest obligations associated with the notes, and (3) $ 6.7 million of unamortized debt discounts and issuance costs associated with the notes.

Accordingly, we recognized a loss of $ 11.1 million on the

LIFE TIME GROUP HOLDINGS, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Table amounts in thousands except per share data)

extinguishment of the 5.750 % Senior Secured Notes and the 8.000 % Senior Unsecured Notes during the year ended December 31, 2024, which is included in Interest expense, net of interest income in our consolidated statement of operations.

The non-cash financing activities associated with the $ 1,424.5 million of U.S.

government obligations we deposited with the trustee, as well as the $ 1,420.1 million aggregate principal and related accrued and unpaid interest obligations that we derecognized in connection with the satisfaction and discharge of the 5.750 % Senior Secured Notes and the 8.000 % Senior Unsecured Notes are disclosed as supplemental non-cash financing activities in Note 3, Supplemental Balance Sheet and Cash Flow Information.

Term Loan Facilities

We retired our Former Term Loan Facility in September 2024 when we paid the remaining aggregate principal amount of $ 200.0 million in connection with the thirteenth amendment to our Credit Agreement.

We had previously used a portion of the net proceeds we received from an equity offering (see Note 10, Stockholders’ Equity) in August 2024 to pay down an aggregate principal amount of $ 110.0 million.

Loans under the Former Term Loan Facility had 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 %.

Borrowings under the New Term Loan Facility bear interest at a rate per annum of equal to SOFR plus an applicable margin of 2.50 % (subject to a certain ratings-based step-down).

We are required to make quarterly principal payments of 0.25 % of the outstanding balance on the New Term Loan Facility.

Revolving Credit Facility

Our Revolving Credit Facility provides for a $ 475.0 million revolver and matures in December 2026, except that the maturity will be October 16, 2025 if we have at least $ 100.0 million remaining outstanding on the Secured Notes (as defined below) on such date and January 14, 2026 if we have at least $ 100.0 million remaining outstanding on the Unsecured Notes (as defined below) on such date.

At December 31, 2023, there were $ 90.0 million of outstanding borrowings on the Revolving Credit Facility and there were $ 32.9 million of outstanding letters of credit, resulting in total revolver availability of $ 352.1 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 %.

Our Revolving Credit Facility provides for a $ 650.0 million revolver and matures in September 2029.

At December 31, 2024, there were $ 10.0 million of outstanding borrowings on the Revolving Credit Facility and there were $ 31.2 million of outstanding letters of credit, resulting in total revolver availability of $ 608.8 million , which was available at intervals ranging from 30 to 180 days at interest rates of SOFR plus 2.50 % or base rate plus 1.50 % (subject to certain first lien leverage and ratings-based step-downs).

The weighted average interest rate and debt outstanding under the Revolving Credit Facility for the year ended December 31, 2024 wa s 9.13 % and $ 116.1 million, respectively.

The highest balance during the year was $ 285.0 million.

Secured Notes

On January 22, 2021, Life Time, Inc.

issued senior secured notes (the “Secured Notes”) in an aggregate principal amount of $ 925.0 million.

These notes mature in January 2026 and interest only payments are due semi-annually in arrears at 5.75 %.

Life Time, Inc.

has the option, which began on January 15, 2023, to call the Secured Notes, in whole or in part, on one or more occasions, subject to the payment of a redemption price that includes a call premium that varies depending on the year of redemption.

In addition, at any time prior to January 15, 2023, Life Time, Inc.

could have redeemed up to 40.00 % of the aggregate principal amount of the Secured Notes outstanding with the net proceeds of certain equity offerings by us at a redemption price equal to 105.75 % of the principal amount of the Secured Notes, plus accrued and unpaid interest, if any, to, but not including, the redemption date.

Life Time, Inc.

did not exercise this redemption right.

The Secured Notes and the related guarantees are our senior secured obligations and are secured on a first-priority basis by security interests on substantially all of our assets.

The Credit Facilities are secured by a first priority lien (on a pari-passu basis with the Secured Notes described below) on substantially all of our assets.

6.000 % Senior Secured Notes

On November 5, 2024, Life Time, Inc.

(the “Issuer”) completed the issuance of the 6.000 % Senior Secured Notes.

The terms of the 6.000 % Senior Secured Notes are governed by an indenture dated as of November 5, 2024 (the “Indenture”), among the Issuer, the guarantors party thereto and Wilmington Savings Fund Society, FSB, as trustee and notes collateral agent.

The 6.000 % Senior Secured Notes mature on November 15, 2031 and bear interest at a rate of 6.00 % per annum payable semi-annually in arrears on May 15 and November 15 of each year, commencing May 15, 2025.

The 6.000 % Senior Secured Notes are guaranteed on a senior secured basis by LTF Intermediate Holdings, Inc., the direct parent of the Issuer, and each of the Issuer’s existing and future wholly owned domestic restricted subsidiaries that guarantees its New Term Loan Facility, subject to certain exceptions.

LIFE TIME GROUP HOLDINGS, INC.

2 unchanged sentences

(Table amounts in thousands except per share data)

Unsecured Notes

At any time prior to November 15, 2027, we may redeem some or all of the 6.000 % Senior Secured Notes at a redemption price equal to 100 % of the principal amount of the 6.000 % Senior Secured Notes redeemed plus a “make-whole” premium plus accrued and unpaid interest, if any, to, but not including, the applicable redemption date, as described in the Indenture.

At any time prior to November 15, 2027, we may redeem up to 10 % of the original aggregate principal amount of the 6.000 % Senior Secured Notes during each calendar year at a redemption price equal to 103 % of the principal amount of the 6.000 % Senior Secured Notes redeemed, plus accrued and unpaid interest, if any, to, but not including, the redemption date;

provided that in any given calendar year, any amount not utilized pursuant to this provision may be carried forward to subsequent calendar years.

In addition, at any time and from time to time on or prior to November 15, 2027, we may choose to redeem up to 40.0 % of the aggregate principal amount of the 6.000 % Senior Secured Notes outstanding with the proceeds of certain equity offerings at a redemption price equal to 106 % of the principal amount plus accrued and unpaid interest, if any, to, but not including, the applicable redemption date, so long as the lesser of 50 % of the aggregate amount of the 6.000 % Senior Secured Notes then outstanding and $ 150 million remains outstanding immediately after such redemption.

Beginning on November 15, 2027, we may redeem some or all of the 6.000 % Senior Secured Notes at any time, and from time to time, at the redemption prices set forth in the Indenture, plus accrued and unpaid interest, if any, to, but not including, the applicable redemption date.

5.750 % Senior Secured Notes

On January 22, 2021, Life Time, Inc.

issued senior secured notes (the “ 5.750 % Senior Secured Notes”) in an aggregate principal amount of $ 925.0 million.

These notes were originally scheduled to mature in January 2026 and interest only payments were due semi-annually in arrears at 5.750 %.

As noted in the Satisfaction and Discharge of 5.750 % Senior Secured Notes and 8.000 % Senior Unsecured Notes section within this footnote, in November 2024, we issued a notice of full redemption and deposited a portion of the proceeds from the New Term Loan Facility and the 6.000 % Senior Secured Notes with the trustee of the 5.750 % Senior Secured Notes to satisfy and discharge them.

Following such satisfaction and discharge, the trustee used such proceeds to pay in full at 100 % of the principal amount, plus accrued and unpaid interest, the 5.750 % Senior Secured Notes in January 2025.

8.000 % Senior Unsecured Notes

On February 5, 2021, Life Time, Inc.

issued senior unsecured notes (the “Unsecured Notes”) in the original principal amount of $ 475.0 million.

The Unsecured Notes mature in April 2026 and interest only payments are due semi-annually in arrears at 8.00 %.

Life Time, Inc.

has the option, which began on February 1, 2023, to redeem the Unsecured Notes, in whole or in part, on one or more occasions, subject to the payment of a redemption price that includes a call premium that varies depending on the year of redemption.

In addition, at any time prior to February 1, 2023, Life Time, Inc.

could have redeemed up to 40.00 % of the aggregate principal amount of the Unsecured Notes outstanding with the net proceeds of certain equity offerings by us at a redemption price equal to 108.00 % of the principal amount of the Unsecured Notes, plus accrued and unpaid interest, if any, to, but not including, the redemption date.

Life Time, Inc.

did not exercise this redemption right.

The Unsecured Notes and the related guarantees are our general senior unsecured obligations and will rank equally in right of payment with all of our existing and future senior indebtedness without giving effect to collateral arrangements.

issued senior unsecured notes (the “ 8.000 % Senior Unsecured Notes”) in the original principal amount of $ 475.0 million.

The 8.000 % Senior Unsecured Notes were originally scheduled to mature in April 2026 and interest only p ayments were due semi-annually in arrears at 8.00 %.

As noted in the Satisfaction and Discharge of 5.750 % Senior Secured Notes and 8.000 % Senior Unsecured Notes section within this footnote, in November 2024, we issued a notice of full redemption and deposited a portion of the proceeds from the New Term Loan Facility and the 6.000 % Senior Secured Notes with the trustee of the 8.000 % Senior Unsecured Notes to satisfy and discharge them.

Following such satisfaction and discharge, the trustee used such proceeds to pay in full at 100% of the principal amount, plus accrued and unpaid interest, the 8.000 % Senior Unsecured Notes in February 2025.

Construction Loan

On January 22, 2021, we closed on a construction loan (the “Construction Loan”) providing up to $ 28.0 million to partially finance the construction of a Life Time Living location.

The Construction Loan has a maturity date of February 15, 2026 and is collateralized by the property.

Borrowings under the Construction Loan bear interest at a variable annual rate of no less than 4.80 %.

Interest only payments are due monthly beginning April 15, 2022 and continuing through February 15, 2024.

Beginning March 15, 2024, based on the principal balance due as of February 15, 2024, monthly principal and interest installment payments will be due in an amount sufficient to fully amortize the principal balance at maturity.

At December 31, 2023 and 2022 , there were $ 28.0 million and $ 21.3 million, respectively, of outstanding borrowings on the Construction Loan.

The Construction Loan was originally scheduled to mature on February 15, 2026 and was collateralized by the property.

Borrowings under the Construction Loan bore interest at a variable annual rate of no less than 4.80 %.

Interest only payments were due monthly beginning April 15, 2022 and continuing through February 15, 2024.

Beginning March 15, 2024, based on the principal balance due as of February 15, 2024, monthly principal and interest installment payments were due in an amount sufficient to fully amortize the principal balance at maturity.

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

Certain of our subsidiaries have entered into mortgage facilities with various financial institutions (collectively, the “Mortgage Notes”), which are collateralized by certain of our related real estate and buildings, including one of our corporate headquarters properties.

The Mortgage Notes have varying maturity dates from February 2024 through August 2027 and carried a weighted average interest rate of 5.75 % and 5.12 % at December 31, 2023 and 2022, respectively.

The Mortgage Notes have varying maturity dates from September 2026 through August 2027 and carried a weighted average interest rate of 5.56 % and 5.75 % at December 31, 2024 and 2023, respectively.

Payments of principal and interest on each of the Mortgage Notes are payable monthly on the first business day of each month.

The Mortgage Notes contain customary affirmative covenants, including but not limited to, payment of property taxes, granting of lender access to inspect the properties, maintenance of the properties, providing financial statements, providing estoppel certificates and lender consent to leases.

The Mortgage Notes also contain various customary negative covenants, including, but not limited to, restrictions on transferring the property, change in control of the borrower and changing the borrower’s business or principal place of business.

As of December 31, 2023, we were either in compliance in all material respects with the covenants associated with the Mortgage Notes or the covenants were not applicable.

During the year ended December 31, 2023, we acquired a health club facility for a total purchase price of $ 15.8 million.

As part of this acquisition, we paid cash of $ 4.0 million and assumed an existing mortgage note and related accrued interest liability of $ 10.6 million and $ 1.2 million, respectively.

The mortgage note matures in June 2024, and is included in current maturities of long-term debt on our consolidated balance sheet as of December 31, 2023.

The entire $ 15.8 million purchase price was allocated to property and equipment.

During the year ended December 31, 2022, we closed on a sale-leaseback transaction that included certain properties that served as collateral for one of the Mortgage Notes.

Accordingly, we used a portion of the net cash proceeds we received from the sale-leaseback transaction to pay off in full the then outstanding principal balance of $ 4.6 million associated with this Mortgage Note.

For more information regarding the sale-leaseback transaction, see Note 9, Leases.

Extinguishment of a Related Party Secured Loan Through the Issuance of Series A Preferred Stock

On June 24, 2020, we closed on an approximate $ 101.5 million secured loan (the “Related Party Secured Loan”) from an investor group that was comprised solely of our stockholders or their affiliates.

During the year ended December 31, 2021, interest expense of approximately $ 0.7 million was recognized on this secured loan.

On January 11, 2021, Life Time Group Holdings, Inc.

and certain of its subsidiaries and the investor group associated with the Related Party Secured Loan (or their assignees) entered into a contribution agreement pursuant to which we converted the total amount of outstanding principal and accrued interest (up though and including January 22, 2021) under the Related Party

LIFE TIME GROUP HOLDINGS, INC.

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(Table amounts in thousands except per share data)

Secured Loan into Series A Preferred Stock (as defined in Note 10, Stockholders’ Equity).

Effective January 22, 2021, the total outstanding principal and accrued interest balance of approximately $ 108.6 million was conveyed by the investor group to us and we issued, on a dollar-for-dollar basis, to the investor group approximately 5.4 million shares of Series A Preferred Stock with an estimated fair value of $ 149.6 million.

Because the fair value of the Series A Preferred Stock that was issued exceeded the carrying value of the outstanding principal and accrued interest balance associated with the Related Party Secured Loan that was extinguished, we recognized a $ 41.0 million debt extinguishment loss, which is included in Interest expense, net of interest income in our consolidated statement of operations for the year ended December 31, 2021.

Upon the consummation of the IPO on October 12, 2021, the 5.4 million then outstanding shares of Series A Preferred Stock automatically converted into 6.7 million shares of the Company’s common stoc k.

For more information regarding the Series A Preferred Stock that was issued in connection with this transaction, see Note 10, Stockholders’ Equity.

During the year ended December 31, 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 year ended December 31, 2022, we closed on a sale-leaseback transaction that included certain properties that served as collateral for one of the Mortgage Notes.

For more information regarding the sale-leaseback transaction, see Note 9, Leases.

Debt Discounts and Issuance Costs

Unamortized debt discounts and issuance costs associated with the Term Loan Facility, Secured Notes, Unsecured Notes and Construction Loan of $ 15.3 million and $ 19.2 million are included in Long-term debt, net of current portion on our consolidated balance sheets at December 31, 2023 and 2022, respectively.

Unamortized debt discounts and issuance costs associated with the New Term Loan Facility and 6.000 % Senior Secured Notes of $ 19.9 million at December 31, 2024 and unamortized debt discounts and issuance costs associated with the Former Term Loan Facility, 5.750 % Senior Secured Notes, 8.000 % Senior Unsecured Notes and Construction Loan of $ 15.3 million at December 31, 2023 are included in Long-term debt, net of current portion on our consolidated balance sheets.

Unamortized revolver-related debt issuance costs of $ 3.6 million and $ 2.3 million are included in Other assets on our consolidated balance sheets at December 31, 2024 and 2023, respectively.

During the year ended December 31, 2021, in connection with the pay down of our Term Loan Facility, as well as the extinguishment of a prior term loan facility, certain secured and unsecured notes and a related party secured loan, we recognized $ 28.6 million of debt discount and issuance cost write-offs, which are included in Interest expense, net of interest income in our consolidated statement of operations.

During the year ended December 31, 2024, in connection with the pay down in full of each of our Former Term Loan Facility and Construction Loan, and the satisfaction and discharge of each of our 5.750 % Senior Secured Notes and 8.000 % Senior Unsecured Notes, we recognized $ 9.4 million of debt discounts and issuance cost write-offs, which are included in Interest expense, net of interest income in our 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 and Mortgages Notes.

We are required to comply with certain affirmative and restrictive covenants under our Credit Facilities, 6.000 % Senior Secured Notes and Mortgages 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).

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2025 $ 22,584

2026 1,839,890

Thereafter 1,452,494

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72,763 66,007 60,352 Center operations

Finance lease cost:

Finance lease and financing obligations cost:

Amortization of right-of-use assets

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Sale-Leaseback Transactions with Unrelated Third Parties

Duri ng the year ended December 31, 2023, we entered into and consummated sale-leaseback transactions with unrelated third parties.

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

Duri ng the year ended December 31, 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 $ 1.2 million, for net cash proceeds of $ 172.0 million.

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

Accordingly, the aggregate sales price associated with these arrangements was increased by $ 4.4 million, of which $ 5.9 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 $ 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.

Accordingly, the aggregate cash sales price associated with these arrangements was increased by $ 9.0 million, of which $ 13.3 million was associated with a property 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 properties in which the sales price was greater than the fair value of the properties sold, which was recognized as a reduction in 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 consolidated statement of cash flows.

During the year ended December 31, 2024, we recognized a net gain of $ 19.8 million on sale-leaseback transactions.

This gain is included in Other operating expense (income) in our consolidated statement of operations.

During the year ended December 31, 2023, we entered into and consummated sale-leaseback transactions with unrelated third parties.

Under these transactions, we sold three properties for gross proceeds of $ 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 a total of $ 4.4 million, of which $ 5.9 million was associated with a property 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 $ 1.5 million was associated with a property 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 consolidated statement of cash flows.

During the year ended December 31, 2023, we recognized a loss of $ 13.6 million on sale-leaseback transactions.

This loss is included in Other operating expense (income) in our consolidated statement of operations.

During the year ended December 31, 2022, we entered into and consummated sale-leaseback transactions with unrelated third parties.

Under these transactions, we sold nine properties for $ 375.0 million, which was reduced by transaction costs of $ 1.8 million, for net cash proceeds of $ 373.2 million.

The estimated fair value of the properties sold was $ 385.1 million.

Accordingly, the aggregate sales price associated with these arrangements was increased by a total of $ 10.1 million, which resulted in the recognition of a gain of $ 97.5 million on these transactions.

T his gain is included in Other operating expense (income) in our consolidated statement of operations for the year ended December 31, 2022.

Of the $ 10.1 million net sales price increase recognized in connection with these transactions, $ 31.5 million was associated with property sales 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 these properties and an increase in the related operating lease right-of-use assets, and $ 21.4 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 in the aggregate sales price associated with these properties and as financing obligations separate from the related operating lease liabilities.

For cash flow purposes, the $ 21.4 million of proceeds we received from these financing obligations during the year ended December 31, 2022 are reported within financing activities on our consolidated statement of cash flows.

T his loss is included in Other operating expense (income) in our consolidated statement of operations.

LIFE TIME GROUP HOLDINGS, INC.

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During the year ended December 31, 2022, we entered into and consummated sale-leaseback transactions with unrelated third parties.

Under these transactions, we sold two properties for $ 76.0 million, which was reduced by transaction costs of $ 2.0 million, for net cash proceeds of $ 74.0 million.

Under these transactions, we sold nine properties for gross proceeds of $ 375.0 million, which was reduced by transaction costs of $ 1.8 million, for net cash proceeds of $ 373.2 million.

The estimated fair value of the properties sold was $ 385.1 million.

Accordingly, the aggregate sales price associated with these arrangements was increased by a total of $ 9.5 million, which resulted in the recognition of a gain of $ 2.3 million on these transactions, which is included in Other operating expense (income) in our consolidated statement of operations for the year ended December 31, 2021.

This gain is included in Other operating expense (income) in our consolidated statement of operations for the year ended December 31, 2022.

Related Party Sale-Leaseback Transactions and Leases

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1,108 633 Accrued expenses and other current liabilities

Financing obligations

10 — Accrued expenses and other current liabilities

Operating leases

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(1) Finance lease right-of-use assets were reported net of accumulated amortization of $ 1.2 million and $ 0.8 million at December 31, 2024 and 2023, respectively.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Table amounts in thousands except per share data)

Remaining Lease Terms and Discount Rates

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Financing obligations 11.07 %

LIFE TIME GROUP HOLDINGS, INC.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Table amounts in thousands except per share data)

(1) The weighted-average remaining lease term associated with our operating and finance lease liabilities does not include all of the optional renewal periods available to us under our current lease arrangements.

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Operating cash flows from financing obligations

2,716 2,307 —

Financing cash flows from financing obligations 4 — —

Non-cash information:

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

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Table amounts in thousands except per share data)

Maturities of Operating Lease Liabilities, Finance Lease Liabilities and Financing Obligations

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Leases Not Yet Commenced

As of December 31, 2023 , we had entered into several leases associated with future centers and Life Time Work locations that were executed, but for which we did not yet have control of the underlying assets.

As of December 31, 2024 , we had entered into several leases associated with future centers that were executed, but for which we did not yet have control of the underlying assets.

Accordingly, as of December 31, 2024 , we did not recognize any right-of-use assets or lease liabilities associated with these leased locations on our consolidated balance sheet.

These arrangements contain undiscounted lease payments that are payable during the initial lease terms, which range from 20 to 25 years, totaling approximately $ 414.6 million.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Table amounts in thousands except per share data)

These arrangements contain undiscounted lease payments that are payable during the initial lease terms, which range from three to 25 years, totaling approximately $ 327.3 million.

Stockholders’ Equity

Common Stock Issued in Connection with the IPO and Over-Allotment Exercise

In connection with the IPO, including the partial exercise by the underwriters of their over-allotment option, we received total net proceeds of $ 701.1 million from the issuance of 40.6 million shares of the Company’s common stock.

For more information on these sales of the Company’s common stock, see Note 1, Nature of Business and Basis of Presentation.

Series A Preferred Stock and Restricted Series A Preferred Stock Award

Conversion of Series A Preferred Stock to Common Stock

On January 11, 2021, Life Time Group Holdings, Inc.

and certain of its subsidiaries and the investor group associated with our then existing related party secured loan (or their assignees) entered into an agreement to convert the total amount of outstanding principal and accrued interest (up though and including January 22, 2021) of approximately $ 108.6 million under the related party secured loan into 5.4 million shares of Series A convertible participating preferred stock (“Series A Preferred Stock”) of Life Time Group Holdings, Inc.

Upon the consummation of the IPO, the 5.4 million then outstanding shares of Series A Preferred Stock automatically converted into 6.7 million shares of the Company’s common stock.

For more information regarding the related party secured loan that was extinguished, including the loss that we recognized upon its extinguishment, see Note 8, Debt.

Equity Offering

On August 14, 2024, we consummated a registered offering, issuance and sale of 6.0 million shares of our common stock by the Company (the “Primary Shares”) and a registered offering and sale of 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 $ 6.5 million, for net proceeds of $ 124.0 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 Former Term Loan Facility on August 19, 2024 (see Note 8, Debt).

Restricted Common Stock

Conversion of Restricted Series A Preferred Stock Award to Restricted Common Stock

During the second quarter of 2021, in lieu of the vast majority of cash compensation for our CEO for 2021, the Company granted an award of 0.5 million shares of restricted Series A Preferred Stock to our CEO.

The total grant date fair value of this award was approximately $ 13.8 million.

Prior to the granting of this equity award, we had recognized an accrued compensation liability of approximately $ 1.6 million associated with the portion of our CEO’s 2021 compensation that had been earned as of the grant date.

The settlement of this accrued compensation liability through issuance of the restricted Series A Preferred Stock award was recognized as a decrease in Accrued expenses and other current liabilities and an increase in Additional paid-in capital on our consolidated balance sheet.

During the second quarter of 2021, in lieu of the vast majority of cash compensation for our CEO for 2021, the Company granted an award of 0.5 million shares of restricted Series A convertible participating preferred stock (“Series A Preferred Stock”) to our CEO.

Upon the consummation of the IPO, the 0.5 million then-outstanding shares of restricted Series A Preferred Stock automatically converted into 0.6 million shares of the Company’s restricted common stock, which then vested in April 2022.

Fair Value of Series A Preferred Stock and Restricted Series A Preferred Stock Award

The fair value of the Series A Preferred Stock and the restricted Series A Preferred Stock award was estimated using an as-converted value plus risky put option model.

The put option value was estimated using the Black-Scholes option pricing model.

Primary assumptions used in determining the estimated issuance date fair value of the Series A Preferred Stock included:

the estimated equity value associated with the then outstanding common stock of Life Time Group Holdings, Inc., a strike price of $ 20.00 per share, PIK dividend yield rate of 15.0 %, expected term of 1.0 year, volatility rate of 65.00 % and a risk-free rate of 0.08 %.

Share-Based Compensation Expense Associated with Restricted Series A Preferred Stock Award and Restricted Common Stock

Restricted Series A Preferred Stock Award

Prior to the conversion of the restricted Series A Preferred Stock award to shares of the Company’s restricted common stock on October 12, 2021, as noted above in “—Conversion of Restricted Series A Preferred Stock Award to Restricted Common Stock,” we recognized $ 2.9 million of share-based compensation expense associated with the restricted Series A Preferred Stock award, all of which is included in General, administrative and marketing in our consolidated statement of operations for the year ended December 31, 2021 .

Share-Based Compensation Expense Associated with Restricted Common Stock

Share-based compensation expense associated with the shares of restricted common stock that were issued upon the automatic conversion of the Series A Preferred Stock award for the year ended December 31, 2022 was $ 5.0 million, all of which is included in General, administrative and marketing in our consolidated statement of operations.

These restricted common stock shares fully vested as of April 4, 2022 , and there is no unrecognized share-based compensation expense related to these shares.

The fair value of the restricted common stock shares that vested during the year ended December 31, 2022 was approximately $ 8.9 million , which represents the fair value of the underlying shares measured as of the vesting date.

LIFE TIME GROUP HOLDINGS, INC.

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Restricted Common Stock

Share-based compensation expense associated with the shares of restricted common stock that were issued upon the automatic conversion of the restricted Series A Preferred Stock award for the year ended December 31, 2022 was $ 5.0 million, all of which is included in General, administrative and marketing in our consolidated statement of operations.

During the period from October 12, 2021 through December 31, 2021 , we recognized $ 4.3 million of share-based compensation expense associated with the restricted common stock award, which is included in General, administrative and marketing in our consolidated statements of operations.

These restricted common stock shares fully vested as of April 4, 2022 , and there is no unrecognized share-based compensation expense related to these shares.

No restricted common stock shares vested during the years ended December 31, 2021 .

Equity Incentive Plans

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provided, however, no more than 14.5 million shares may be issued upon the exercise of incentive stock options.

Our board of directors determined that no additional shares would become available under the 2021 Equity Plan as of January 1, 2023 pursuant to the evergreen feature described in part (ii) of the immediately preceding sentence.

Our board of directors determined that no additional shares would become available under the 2021 Equity Plan as of January 1, 2024 and January 1, 2023 pursuant to the evergreen feature described in part (ii) of the immediately preceding sentence.

Effective January 1, 2022, the number of shares of our common stock available for issuance under the 2021 Equity Plan increased by approximately 7.7 million shares pursuant to such evergreen feature.

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The aggregate number of shares of our common stock that has initially been reserved for issuance under the ESPP is equal to (i) approximately 2.9 million shares of our common stock, and (ii) an annual increase on the first day of each year beginning in 2022 and ending in and including 2031, equal to the lesser of (A) 1 % of the aggregate number of shares of our common stock outstanding on the final day of the immediately preceding calendar year and (B) such smaller number of our shares of common stock as determined by our board of directors;

provided that in no event will more than 29.0 million shares of our common stock be available for issuance under the Section 423

LIFE TIME GROUP HOLDINGS, INC.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Table amounts in thousands except per share data)

component of the ESPP.

Our board of directors determined that no additional shares would become available under the ESPP as of January 1, 2023 and January 1, 2022 pursuant to the evergreen feature described in part (ii) of the immediately preceding sentence.

provided that in no event will more than 29.0 million shares of our common stock be available for issuance under the Section 423 component of the ESPP.

Our board of directors determined that no additional shares would become available under the ESPP as of January 1, 2024, January 1, 2023 and January 1, 2022 pursuant to the evergreen feature described in part (ii) of the immediately preceding sentence.

Our board of directors or the compensation committee will have authority to interpret the terms of the ESPP and determine eligibility of participants.

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The purchase option expires at the end of the applicable offering period and will be exercised on each purchase date during such offering period to the extent of the payroll deductions accumulated during the offering period.

We have consecutive offering periods of approximately six months in length commencing on each June 1 and December 1 during the term of the ESPP.

We have consecutive offering periods of approximately six months in length commencing on each June 1

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(Table amounts in thousands except per share data)

and December 1 during the term of the ESPP.

The purchase price for a share of our common stock is 90 % of the fair market value of a share on the enrollment date for such offering period or on the purchase date, whichever is lower, and subject to adjustment by our board of directors or compensation committee.

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Participation ends automatically upon a participant’s termination of employment.

During the year ended December 31, 2023, 0.3 million shares were issued under the ESPP.

We recognized $ 1.2 million and $ 0.1 million of share-based compensation expense for the discount received by participants during the years ended December 31, 2023 and 2022 , respectively, all of which is included in General, administrative and marketing in our consolidated statements of operations.

During the year ended December 31, 2024 and 2023 , 0.2 million and 0.3 million shares, respectively, were issued under the ESPP.

We recognized $ 0.7 million, $ 1.2 million and $ 0.1 million of share-based compensation expense for the discount received by participants during the years ended December 31, 2024, 2023 and 2022 , respectively, all of which is included in General, administrative and marketing in our consolidated statements of operations.

As of December 31, 2024, unrecognized share-based compensation expense was approximately $ 0.3 million, which is expected to be recognized over a weighted average remaining period of 0.4 years.

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Options Granted

The Company did no t grant any stock option awards during the year ended December 31, 2024.

During the years ended December 31, 2023 and 2022, the Company granted approximately 1.4 million and 1.1 million stock option awards, respectively, under the 2021 Equity Plan.

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The exercise price associated with each of these awards was not less than the fair market value per share of our common stock at the time of grant.

During the year ended December 31, 2021, the Company granted approximately 3.8 million stock option awards, of which approximately 3.2 million were granted under the 2015 Equity Plan and approximately 0.6 million were granted under the 2021 Equity Plan.

These options have a 10-year contractual term from the date of grant.

The exercise prices and terms of these awards were determined and approved by our board of directors or a committee thereof.

The exercise price associated with each

LIFE TIME GROUP HOLDINGS, INC.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Table amounts in thousands except per share data)

of these awards was not less than the fair market value per share of our common stock, as determined by our board of directors or a committee thereof, at the time of grant.

Of the 3.8 million total stock options granted during the year ended December 31, 2021, approximately 3.3 million were time-based vesting options and approximately 0.5 million were performance-based vesting options.

The time-based options vest in four ratable annual installments on each of the first four anniversaries of the grant date, subject to continuous employment or service from the grant date through the applicable vesting date unless otherwise agreed with the award recipient.

All of the performance-based options vested upon the attainment of certain targets for the twelve-month period that commenced on January 1, 2021 and ended on December 31, 2021.

Both the time-based and performance-based options beca me exercisable (but not vested) o n April 4, 2022, which was the first date following the expiration of the 180-day lock-up period applicable to the optionee related to the IPO.

Intrinsic Value and Income Tax Benefits Associated with Option Exercises

The total intrinsic value of stock options exercised during the years ended December 31, 2023 and 2022 was approximately $ 12.2 million and $ 1.5 million, respectively.

In connection with these stock option exercises, we recognized an aggregate income tax benefit of approximately $ 2.2 million and $ 0.3 million during the years ended December 31, 2023 and 2022, respectively .

No stock options were exercised during the year ended December 31, 2021 .

The total intrinsic value of stock options exercised during the years ended December 31, 2024, 2023 and 2022 was approximately $ 25.0 million, $ 12.2 million and $ 1.5 million, respectively.

In connection with these stock option exercises, we recognized an aggregate income tax benefit of approximately $ 1.9 million, $ 2.2 million and $ 0.3 million during the years ended December 31, 2024, 2023 and 2022 , respectively .

Fair Value of Stock Option Awards Granted

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The following weighted average assumptions were used in determining the fair value of stock options granted:

LIFE TIME GROUP HOLDINGS, INC.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Table amounts in thousands except per share data)

Year Ended December 31,

2023 2022 2021

Dividend yield

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Share-based compensation expense associated with stock options for the year ended December 31, 2022 was $ 19.8 million, of which $ 1.4 million, $ 17.8 million and $ 0.5 million is included in Center operations, General, administrative and marketing and Other operating expense (income), respectively, in our consolidated statement of operations.

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.

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.

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

LIFE TIME GROUP HOLDINGS, INC.

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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.

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.

As of December 31, 2024, unrecognized share-based compensation expense related to stock options was approximately $ 9.6 million, which is expected to be recognized over a weighted average remaining period of 1.8 years .

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Restricted Stock Units Granted

During the year ended December 31, 2023, the Company granted approximately 1.1 million restricted stock unit awards under the 2021 Equity Plan, of which approximately 0.4 million were time-based vesting awards, approximately 0.4 million were time-based vesting awards with a performance qualifier and approximately 0.3 million were performance-based vesting awards granted to our executives in connection with our short-term incentive compensation program.

Of the 1.1 million restricted stock unit awards that were granted during the year ended December 31, 2023, a pproximately 0.8 million vest in four ratable annual installments (subject to meeting a performance qualifier for approximately 0.4 million of such awards), approximately 0.3 million vest based on meeting certain performance metrics under our short-term incentive compensation plan with any performance above the target metric resulting in the issuance of additional fully-vested shares of our common stock as detailed under “—Other Share-Based Payment Awards” below and less than 0.1 million vest in two ratable annual installments, in each case subject to continuous employment or service from the grant date through the applicable vesting date unless otherwise agreed with the award recipient.

During the year ended December 31, 2024, the Company granted approximately 1.9 million restricted stock unit awards under the 2021 Equity Plan, of which approximately 1.2 million were time-based vesting awards that vest in three ratable annual installments, approximately 0.5 million were performance-based vesting awards granted to our executives in connection with our short-term incentive compensation program and less than 0.2 million vest in ratable annual installments ranging from one to four years , in each case subject to continuous employment or service from the grant date through the applicable vesting date unless otherwise agreed with the award recipient .

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.

During the year ended December 31, 2022 , the Company granted approximatel y 1.7 million restricted stock unit awards under the 2021 Equity Plan, of which approximately 1.4 million were time-based vesting awards and approximately 0.3 million were time-based vesting awards with a performance qualifier.

Of the 1.7 million restricted stock unit awards that were granted during the year ended December 31, 2022 , a pproximately 1.6 million vest in four ratable annual installments (subject to meeting a performance qualifier for approximately 0.3 million of such awards), approximately 0.1 million vest in two ratable annual installments and less than 0.1 million vest in approximately one annual installment, in each case subject to continuous employment or service from the grant date through the applicable vesting date unless otherwise agreed with the award recipient.

The majority of the awards that vest in two ratable annual installments were granted to certain executives and non-executives as part of their incentive compensation for 2021, which had been recognized as an accrued compensation liability at December 31, 2021.

The fair value of these restricted stock unit awards was approximately $ 0.6 million .

Accordingly, effective with the grant date associated with these restricted stock units, we recognized a $ 0.6 million decrease in Accrued expenses and other current liabilities and a $ 0.6 million increase in Additional paid-in capital on our consolidated balance sheets .

The weighted average grant date fair value associated with the approximately 1.7 million restricted stock unit awards granted during the year ended December 31, 2022 was $ 14.26 .

LIFE TIME GROUP HOLDINGS, INC.

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During the year ended December 31, 2021 , the Company granted approximately 1.9 million restricted stock unit awards, of which approximately 0.6 million were granted under the 2015 Equity Plan and approximately 1.3 million were granted under the 2021 Equity Plan.

Of the 0.6 million restricted stock unit awards granted under the 2015 Equity Plan during the year ended December 31, 2021 , approximately 0.5 million were granted to our CEO and approximately 0.1 million were granted to non-CEO executives and a director.

All of the 1.3 million restricted stock units granted under the 2021 Equity Plan during the year ended December 31, 2021 were granted to non-CEO holders.

During the year ended December 31, 2023 , the Company granted approximatel y 1.1 million restricted stock unit awards under the 2021 Equity Plan, of which approximately 0.4 million were time-based vesting awards, approximately 0.4 million were time-based vesting awards with a performance qualifier and approximately 0.3 million were performance-based vesting awards granted to our executives in connection with our short-term incentive compensation program.

Of the 1.1 million restricted stock unit awards that were granted during the year ended December 31, 2023 , a pproximately 0.8 million vest in four ratable annual installments (subject to meeting a performance qualifier for approximately 0.4 million of such awards, which performance qualifier was met), approximately 0.3 million vested based on meeting certain performance metrics under our short-term incentive compensation plan with performance above the target metric resulting in the issuance of additional fully-vested shares of our common stock as detailed under “—Other Share-Based Payment Awards” below and less than 0.1 million vest in two ratable annual installments, in each case subject to continuous employment or service from the grant date through the applicable vesting date unless otherwise agreed with the award recipient.

The weighted average grant date fair value associated with the approximately 1.1 million restricted stock unit awards granted during the year ended December 31, 2023 was $ 17.41 .

Restricted Stock Unit Awards Granted During the Year Ended December 31, 2021 under the 2015 Equity Plan

Beginning on March 15, 2020, our CEO decided to forego 100 % of his base salary for the remainder of 2020.

During the second quarter of 2021 , our compensation committee, in consultation with our CEO and our board of directors, established a new compensation program for our CEO.

Under the new program, in light of the foregone salary and bonuses in 2020, the compensation c ommittee determined to grant our CEO an equity award of approximately 0.5 million restricted stock units under the 2015 Equity Plan, 50 % of which was to vest on each anniversary of the grant date with 100 % full vesting on the date that is 180 days after the effective date associated with an underwritten IPO.

Accordingly, this award 100 % vested on April 4, 2022.

At December 31, 2020, we had recognized an accrued compensation liability of approximately $ 2.2 million associated with our CEO’s 2020 compensation.

For accounting purposes, the settlement of this $ 2.2 million accrued compensation liability through the issuance of the restricted stock units was recognized as a decrease in Accrued expenses and other current liabilities and an increase in Additional paid-in capital on our consolidated balance sheet.

Also during the second quarter of 2021 , our compensation committee granted approximately 0.1 million restricted stock units under the 2015 Equity Plan to certain of our non-CEO executives and a new director, 50 % of which vests on each anniversary of the grant date and, for the grants to our non-CEO executives, 100 % full vesting was to occur effective on the date that is 180 days after an initial underwritten public offering.

Accordingly, the portion of these awards that were granted to our non-CEO executives 100 % vested on April 4, 2022.

Restricted Stock Unit Awards Granted During the Year Ended December 31, 2021 under the 2021 Equity Plan

With respect to the restricted stock units totaling approximately 1.3 million that were granted under the 2021 Equity Plan during the year ended December 31, 2021, nearly all vest in four ratable annual installments on each of the first four anniversaries of the grant date, subject to continued service through the applicable vesting dates unless otherwise agreed with the award recipient.

Less than 0.1 million of these restricted stock units vested on April 4, 2022.

During the year ended December 31, 2022 , the Company granted approximately 1.7 million restricted stock unit awards under the 2021 Equity Plan, of which approximately 1.4 million were time-based vesting awards and approximately 0.3 million were time-based vesting awards with a performance qualifier.

Of the 1.7 million r estricted stock unit awards that were granted during the year ended December 31, 2022, approximately 1.6 million vest in four ratable annual installments (subject to meeting a performance qualifier for approximately 0.3 million of such awards, which performance qualifier was not met), approximately 0.1 million v est in two ratable annual installments and less than 0.1 million vest in approximately one annual installment, in each case subject to continuous employment or service from the grant date through the applicable vesting date unless otherwise agreed with the award recipient.

The fair value of these restricted stock unit awards was approximately $ 0.6 million.

The weighted average grant date fair value associated with the approximately 1.7 million restricted stock unit awards granted during the year ended December 31, 2022 was $ 14.26 .

Fair Value of Vested Restricted Stock Units

The total fair value of restricted stock units that vested during the years ended December 31, 2023 and 2022 was approximately $ 10.2 million and $ 12.2 million , respectively, which represents the aggregate of the fair value of the each of the underlying shares measured as of the vesting date.

No restricted sto ck units vested during the year ended December 31, 2021 .

The total fair value of restricted stock units that vested during the years ended December 31, 2024, 2023 and 2022 was approximately $ 17.9 million , $ 10.2 million and $ 12.2 million respectively, which represents the aggregate of the fair value of the each of the underlying shares measured as of the vesting date.

Share-Based Compensation Expense Assoc iated with Restricted Stock Units

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(Table amounts in thousands except per share data)

Performance Stock Units

Performance Stock Unit Activity

Activity associated with performance stock units during the year ended December 31, 2024 is as follows:

Performance Stock Units

Shares Weighted Average Grant Date Fair Value

Nonvested at December 31, 2023

Nonvested at December 31, 2024

Performance Stock Units Granted

During the year ended December 31, 2024, the Company granted approximately 0.5 million three-year performance stock unit awards under the 2021 Equity 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.

Share-Based Compensation Expense Assoc iated with Performance Stock Units

Share-based compensation expense associated with performance stock units for the year ended December 31, 2024 was $ 4.4 million, all of which is included in General, administrative and marketing in our consolidated statement of operations.

No share-based compensation expense associated with performance stock units was recognized during the years ended December 31, 2023 and 2022.

As of December 31, 2024, unrecognized share-based compensation expense related to performance stock units was approximately $ 9.0 million, which is expected to be recognized over a weighted average remaining period of 2.1 years .

Other Share-Based Payment Awards

During the year ended December 31, 2023, the Company adopted a short-term incentive program pursuant to which fully-vested shares of the Company’s common stock would be issued at or around the time of determining the Company’s performance under such program in early 2024 if the Company’s performance exceeded the target performance metric for executives and if the Company’s performance exceeded the threshold performance metric for non-executives.

We account for the potential issuance of these shares of common stock as share-based payment awards granted under the 2021 Equity Plan.

Share-based compensation expense associated with these awards for the year ended December 31, 2023 was $ 19.0 million, of which $ 17.1 million, and $ 1.9 million is included in General, administrative and marketing and Other operating expense (income), respectively, in our consolidated statement of operation.

2024 Short-Term Incentive Program

During the year ended December 31, 2024, the Company adopted a short-term incentive compensation program for team members who are not executive officers, pursuant to which fully-vested shares of the Company’s common stock would be issued at or around the time of determining the Company’s performance under such program in early 2025 if the Company’s performance exceeded the tranche one performance metric.

We account for the potential issuance of these shares of common stock as share-based payment awards granted under this program.

Share-based compensation expense associated with these awards for the year ended December 31, 2024 was $ 14.6 million, of which $ 0.1 million, $ 13.0 million, and $ 1.5 million is included in Center operations, General, administrative and marketing and Other operating expense (income), respectively, in our consolidated statement of operations.

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 $ 19.0 million of share-based compensation expense we have recognized in connection with these awards during the year ended December 31, 2023 is included in Accrued expenses and other current liabilities on our December 31, 2023 consolidated balance sheet.

Stockholder Note Receivable

On August 27, 2018, Life Time, Inc.

entered into a loan agreement with our CEO, who is also one of our stockholders, pursuant to which we loaned him $ 20.0 million.

As security for repayment of the loan, our CEO granted to Life Time, Inc.

a security interest in 5.0 million shares of our common stock which are held by our CEO.

The loan bore interest equal to the highest interest rate associated with the revolving portion of our senior secured credit facility or, if there were no outstanding revolving borrowings, the highest interest rate associated with outstanding borrowings under the term loans portion of our senior secured credit facility.

The loan was scheduled to mature at the earlier of August 2023 or upon the occurrence of certain events, including in connection with an initial public offering or a change of control, as well as the period immediately following the officer’s termination of employment.

On July 3, 2019, we amended the loan agreement to reflect our forgiveness of an aggregate principal amount of $ 5.0 million.

All other terms and conditions associated with the initial loan agreement remained unchanged.

The principal forgiveness was accounted for as an equity transaction, whereby the Stockholder note receivable and Additional paid-in capital balances recognized on our consolidated balance sheet were each reduced by $ 5.0 million.

The income tax benefit of approximately $ 1.3 million associated with the principal forgiveness was recognized as an increase in both Income tax receivable and Additional paid-in capital on our consolidated balance sheet.

In August 2021, we entered into an agreement pursuant to which the outstanding balance owed under the stockholder note receivable was cancelled.

The cancellation of the $ 15.0 million outstanding principal balance associated with the loan was accounted for as an equity transaction, and the Stockholder note receivable and Additional paid-in capital balances recognized on our consolidated balance sheet were each reduced by $ 15.0 million .

Income (Loss) Per Share

For the year ended December 31, 2023, o ur potentially dilutive securities included stock options, restricted stock units, shares to be issued under our ESPP and contingently issuable shares related to our short-term incentive compensation program.

For the year ended December 31, 2022, o ur potentially dilutive securities included stock options, restricted stock units and shares to be issued under our ESPP.

Due to the net loss that we recognized during the year ended December 31, 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 year ended December 31, 2022 .

For the year ended December 31, 2021, our potentially dilutive securities included stock options, restricted stock units and restricted stock.

Due to the net loss that we recognized during the year ended December 31, 2021, 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 year ended December 31, 2021.

Accordingly, the offset to the $ 14.6 million of share-based compensation expense we have recognized in connection with these awards during the year ended December 31, 2024 is included in Accrued expenses and other current liabilities on our consolidated balance sheet.

2023 Short-Term Incentive Program

During the year ended December 31, 2023, the Company adopted a short-term incentive compensation program pursuant to which fully-vested shares of the Company’s common stock would be issued at or around the time of determining the Company’s performance under such program in early 2024 if the Company’s performance exceeded the target performance

LIFE TIME GROUP HOLDINGS, INC.

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(Table amounts in thousands except per share data)

metric for executives and if the Company’s performance exceeded the threshold performance metric for non-executives.

We accounted for the potential issuance of these shares of common stock as share-based payment awards granted under this program.

Share-based compensation expense associated with these awards for the year ended December 31, 2024 was $( 0.2 ) million, of which $ 0.1 million and $( 0.3 ) million is included in General, administrative and marketing and Other operating expense (income), respectively, in our consolidated statement of operations.

Share-based compensation expense associated with these awards for the year ended December 31, 2023 was $ 19.0 million, of which $ 17.1 million and $ 1.9 million is included in General, administrative and marketing and Other operating expense (income), respectively, in our consolidated statement of operations.

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 accounted for these awards as liability-classified awards.

Accordingly, the offset to the $ 19.0 million of share-based compensation expense we recognized in connection with these awards during the year ended December 31, 2023 is included in Accrued expenses and other current liabilities on our consolidated balance sheet.

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

Effective as of the determination date, the $ 18.1 million then-outstanding liability we had recognized in connection with these share-based payment awards was reclassified out of Accrued expenses and other current liabilities and into Common stock and Additional paid-in capital on our consolidated balance sheet.

Income (Loss) Per Share

For the year ended December 31, 2024, o ur potentially dilutive securities included stock options, restricted stock units, performance stock units, shares to be issued under our ESPP and contingently issuable shares related to our short-term incentive compensation program.

For the year ended December 31, 2022, o ur potentially dilutive securities included stock options, restricted stock units and shares to be issued under our ESPP.

Due to the net loss that we recognized during the year ended December 31, 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 year ended December 31, 2022.

The following table sets forth the calculation of basic and diluted income (loss) per share for the years ended December 31, 2024, 2023 and 2022:

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$ 0.74 $ 0.37 $ ( 0.01 )

LIFE TIME GROUP HOLDINGS, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Table amounts in thousands except per share data)

The following is a summary of potential shares of common stock that were excluded from the computation of diluted income (loss) per share for the years ended December 31, 2024, 2023 and 2022 :

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Restricted stock units — 193 2,486

Restricted stock — — 595

ESPP shares 84 — 137

Potential common shares excluded from diluted income (loss) per share 1,512 6,669 27,549

For more information regarding stock options, restricted stock units, restricted stock and ESPP shares, see Note 10, Stockholders’ Equity.

For more information regarding stock options, restricted stock units and ESPP shares, see Note 10, Stockholders’ Equity.

Commitments and Contingencies

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

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

The Life Time Parties have 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.

LIFE TIME GROUP HOLDINGS, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Table amounts in thousands except per share data)

We are also engaged in other proceedings incidental to the normal course of business.

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We offer a 401(k) savings and investment plan (the “401(k) Plan”) to substantially all full-time employees who are at least 21 years of age.

The cost associated with the Company’s discretionary contributions to the 401(k) Plan during the years ended December 31, 2023, 2022 and 2021 was not material.

The cost associated with the Company’s discretionary contributions to the 401(k) Plan during the years ended December 31, 2024, 2023 and 2022 was no t material.

LIFE TIME GROUP HOLDINGS, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Table amounts in thousands except per share data)

Letters of Credit and Posted Bonds

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Related Party Leases

We entered into and consummated a sale-leaseback transaction involving one property with a related party during the year ended December 31, 2024 .

We did not enter into any new related party leases, including related party sale-leaseback arrangements, during the years ended December 31, 2023 or 2022 .

Sale-Leaseback Transactions

During the year ended December 31, 2024, we entered into and consummated a sale-leaseback transaction involving one property with a third party in which our CEO 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 $ 0.3 million, for net cash proceeds of $ 39.7 million.

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

During the year ended December 31, 2024, we recognized a loss of $ 17.2 million on this sale-leaseback transaction, which is included in Other operating income (expense) in our 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.

During the year ended December 31, 2024, we paid rent associated with this lease of $ 0.8 million and rent expense associated with this lease was $ 1.2 million.

During the year ended December 31, 2020, we consummated a sale-leaseback transaction involving one property with a subsidiary of a limited liability company jointly owned by our CEO, a former executive of the Company, and another member of our board of directors, among other investors (“LTRE”).

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During the years ended December 31, 2024, 2023 and 2022, we paid rent associated with these leases of $ 6.6 million, $ 6.6 million and $ 6.1 million, respectively, and rent expense associated with these leases was $ 7.4 million, $ 7.4 million and $ 7.4 million, respectively.

LIFE TIME GROUP HOLDINGS, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Table amounts in thousands except per share data)

Other Property Leases

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On September 29, 2020, our CEO contributed his ownership of our center in Woodbury, Minnesota to LTRE.

Following this contribution, we terminated our existing lease with the entities owned by our CEO and entered into a new lease for the Woodbury center with subsidiaries of LTRE.

Following this contribution, we terminated our existing lease with the entities owned by our CEO and

LIFE TIME GROUP HOLDINGS, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Table amounts in thousands except per share data)

entered into a new lease for the Woodbury center with subsidiaries of LTRE.

We are currently accounting for the new Woodbury lease as an operating lease.

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In October 2003, we leased a center located within a shopping center that is owned by a general partnership in which our CEO has a 100 % interest.

During the year ended December 31, 2023, we amended this lease to reflect the expanded square footage that the Company is using at this location and make a corresponding adjustment to the rental payments.

During 2023, we amended this lease to reflect the expanded square footage that the Company is using at this location and make a corresponding adjustment to the rental payments.

During the years ended December 31, 2024 , 2023 and 2022, we paid rent associated with this lease of $ 1.0 million, $ 0.9 million and $ 0.9 million, respectively, and rent expense associated with this lease was $ 1.0 million, $ 0.9 million and $ 0.9 million, respectively.

Stockholder Note Receivable

For information on the stockholder note receivable, see Note 10, Stockholders’ Equity.

Related Party Secured Loan

For information on the secured loan from an investor group comprised of our stockholders or their affiliates, see Note 8, Debt.

Unsecured Notes Offering

An affiliate of one of our stockholders was one of the initial purchasers in Life Time, Inc.’s offering of the Unsecured Notes and received customary initial purchaser discounts and commissions.

Life Time, Inc.

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Bergmann paid for the costs associated with their respective trips during the time of joint ownership.

The daughter of our CEO currently serves as a senior director of real estate development for Life Time, Inc.

The daughter of our CEO currently serves as a vice president of real estate development for Life Time, Inc.

During the years ended December 31, 2024, 2023 and 2022, we paid total compensation of approximately $ 0.4 million, $ 0.2 million and $ 0.2 million, respectively, for her services.

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All highly compensated employees eligible to participate in the Executive Nonqualified Excess Plan of Life Time Fitness, including but not limited to our executives, may elect to defer up to 50 % of their annual base salary and/or annual bonus earnings to be paid in any coming year.

The investment choices available to participants under the non-qualified deferred compensation plan are of the same type and risk categories as those offered under our 401(k) Plan and may be modified or

LIFE TIME GROUP HOLDINGS, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Table amounts in thousands except per share data)

changed by the participant or us at any time.

Distributions can be paid out as in-service payments or at retirement.

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Subsequent Events

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

This balance is included in Current maturities of long-term debt on our consolidated balance sheet as of December 31, 2023.

See Note 8, Debt for additional information associated with our Mortgage Notes.

The Board of Directors determined in February 2024 that the Company’s 2023 performance exceeded the target performance metric for executive officers and the threshold performance metric for non-executives under the Company’s short-term incentive program and issued corresponding shares of common stock to the Company’s employees.

As a result, the $ 19.0 million liability we recognized in connection with these share-based payment awards that is included in Accrued expenses and other current liabilities on our December 31, 2023 consolidated balance sheet was reclassified out of Accrued expenses and other current liabilities and into Common stock and Additional paid-in capital on our consolidated balance sheet.

We have evaluated all subsequent events through the date of the consolidated financial statements were issued and determined that, other than with res pect to the mortgage payoff and reclassification of the share-based liability, th ere have been no other events or transactions which would have a material effect on the consolidated financial statements and therefore would require recognition or disclosure.

We have evaluated all subsequent events through the date of the consolidated financial statements were issued and determined that there have been no other events or transactions which would have a material effect on the consolidated financial statements and therefore would require recognition or disclosure.

LIFE TIME GROUP HOLDINGS, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Table amounts in thousands except per share data)

Condensed Financial Information of Registrant (Parent Company Only)

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Life Time, Inc.

is the borrower under our senior secured credit facility and the indentures governing our Secured Notes and our Unsecured Notes, the terms and conditions of which limit Life Time, Inc.’s ability to declare dividends or make any payment on equity to, directly or indirectly, fund a dividend or other distribution to Life Time Group Holdings, Inc.

is the borrower under our senior secured credit facility and the indenture governing our 6.000 % Senior Secured Notes, the terms and conditions of which limit Life Time, Inc.’s ability to declare dividends or make any payment on equity to, directly or indirectly, fund a dividend or other distribution to Life Time Group Holdings, Inc.

in connection with those borrowings.

Dividends, redemptions and other payments on equity (restricted payments) are limited to those permitted under the senior secured credit facility and the indentures governing our Secured Notes and Unsecured Notes.

Dividends, redemptions and other payments on equity (restricted payments) are limited to those permitted under the senior secured credit facility and the indenture governing our 6.000 % Senior Secured Notes.

Due to the aforementioned restrictions, substantially all of the net assets of our subsidiaries are restricted.

For information regarding our senior secured credit facility, Secured Notes and Unsecured Notes, see Note 8, Debt.

For information regarding our senior secured credit facility and 6.000 % Senior Secured Notes, see Note 8, Debt.

The following condensed financial statements have been presented on a “parent-only” basis.

Under a parent-only presentation, our investment in our subsidiaries is presented under the equity method of accounting.

During the year ended December 31, 2023, we recognized share-based compensation expense related to stock options, restricted stock units, our ESPP and liability classified awards related to our short-term incentive plan of $ 50.1 million, of which $ 2.6 million, $ 44.8 million and $ 2.7 million is included in Center operations, General, administrative and marketing and Other operating, respectively, in our parent-only condensed statement of operations.

During the year ended December 31, 2024, we recognized share-based compensation expense related to stock options, restricted stock units, performance stock units, our ESPP and liability-classified awards related to our 2024 short-term incentive compensation plan of $ 51.0 million, of which $ 3.4 million, $ 45.4 million and $ 2.2 million is included in Center operations, General, administrative and marketing and Other operating, respectively, in our parent-only condensed statement of operations.

During the year ended December 31, 2023, we recognized share-based compensation expense related to stock options, restricted stock units, our ESPP and liability-classified awards related to our 2023 short-term incentive compensation plan of $ 50.1 million, of which $ 2.6 million, $ 44.8 million and $ 2.7 million is included in Center operations, General, administrative and marketing and Other operating, respectively, in our parent-only condensed statement of operations.

During the year ended December 31, 2022, we recognized share-based compensation expense related to stock options, restricted stock, restricted stock units and our ESPP of $ 37.3 million, of which $ 2.8 million, $ 33.5 million and $ 0.9 million is included in Center operations, General, administrative and marketing and Other operating, respectively, in our parent-only condensed statement of operations.

During the year ended December 31, 2021, we recognized share-based compensation expense related to stock options, restricted stock and restricted stock units of $ 334.3 million, of which $ 12.9 million, $ 316.8 million and $ 4.6 million is included in Center operations, General, administrative and marketing and Other operating, respectively, in our parent-only condensed statement of operations.

Also during the year ended December 31, 2021 , we recognized a $ 41.0 million debt extinguishment loss related to the conversion of the Related Party Secured Loan to Series A Preferred Stock, which is included in Interest expense, net of interest income in our parent-only condensed statement of operations.

This debt extinguishment loss is not recognized for tax purposes.

A condensed statement of cash flows is not presented because Life Time Group Holdings, Inc.

has no cash, and, therefore, no material operating, investing, or financing cash flow activities for years ended December 31, 2023, 2022 and 2021.

The cash flow activities associated with the proceeds we received from the issuance of our common stock, stock options exercised and issuance of common stock in connection with the ESPP during the years ended December 31, 2024, 2023 and 2022 were non-cash transactions for Life Time Group Holdings, Inc., as the cash inflows and outflows associated with those transactions occurred at our subsidiary, Life Time, Inc.

and were accounted for as our equity contributions to Life Time, Inc.

For more information regarding these transactions, see Note 10, Stockholders’ Equity.

LIFE TIME GROUP HOLDINGS, INC.

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(Table amounts in thousands except per share data)

financing cash flow activities associated with the proceeds we received from the issuance of our common stock during the years ended December 31, 2023, 2022 and 2021, were non-cash transactions for Life Time Group Holdings, Inc., as the cash inflows and outflows associated with those transactions occurred at our subsidiary, Life Time, Inc.

and were accounted for as our equity contributions to Life Time, Inc.

For more information regarding these transactions, see Note 10, Stockholders’ Equity.

LIFE TIME GROUP HOLDINGS, INC.

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Total operating expenses 51,034 50,144 37,291

Loss from operations ( 50,144 ) ( 37,291 ) ( 334,339 )

Other expense:

Interest expense, net of interest income — — ( 40,993 )

Total other expense — — ( 40,993 )

Loss before income taxes ( 51,034 ) ( 50,144 ) ( 37,291 )

Benefit from income taxes ( 12,605 ) ( 12,335 ) ( 9,136 )

Net loss before equity in net loss of subsidiaries ( 37,809 ) ( 28,155 ) ( 293,753 )

Net income (loss) attributable to subsidiaries of Life Time Group Holdings, Inc.

Net loss before equity in net income of subsidiaries ( 38,429 ) ( 37,809 ) ( 28,155 )

Equity in net income of subsidiaries 194,669 113,872 26,362

Net income (loss) $ 156,240 $ 76,063 $ ( 1,793 )

LIFE TIME GROUP HOLDINGS, INC.

(PARENT COMPANY ONLY)

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

Year Ended December 31,

2024 2023 2022

Net income (loss) attributable to Life Time Group Holdings, Inc.

Cash flows from operating activities:

Net income (loss)

$ 156,240 $ 76,063 $ ( 1,793 )

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

Share-based compensation

51,034 50,144 37,291

Equity in net income of subsidiaries

( 194,669 ) ( 113,872 ) ( 26,362 )

Benefit from income taxes

( 12,605 ) ( 12,335 ) ( 9,136 )

Net cash provided by operating activities

Cash flows from investing activities

Cash flows from financing activities

Effect of exchange rate on cash and cash equivalents

Increase in cash and cash equivalents

Cash and cash equivalents – beginning of period

Cash and cash equivalents – end of period

CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL 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-K

Item 8. Financial Statements and Supplementary Data