Lifetime Fitness 2006 Annual Report Download - page 34

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28
Results of Operations
The following table sets forth our statement of operations data as a percentage of total revenues for the periods
indicated:
For the Year Ended
December 31,
2006 2005 2004
Revenue
Center revenue
Membership dues ........................................................................... 66.4% 67.5% 66.9%
Enrollment fees .............................................................................. 4.4 5.2 6.4
In-center revenue ............................................................................ 27.0 25.0 22.9
Total center revenue .............................................................................. 97.8 97.7 96.2
Other revenue ........................................................................................ 2.2 2.3 3.8
Total revenue .................................................................................. 100.0 100.0 100.0
Operating expenses
Center operations (including 0.4%, 0.0% and 0.0% related to share-
based compensation expense, respectively) ...........................................
57.1
55.4
52.8
Advertising and marketing ..................................................................... 4.1 3.7 3.9
General and administrative (including 1.1%, 0.1% and 0.0% related to
share-based compensation expense, respectively)..................................
7.4
7.0
6.9
Other operating ...................................................................................... 2.5 3.3 5.9
Depreciation and amortization .............................................................. 9.3 9.9 9.5
Total operating expenses ............................................................... 80.4 79.3 79.0
Income from operations............................................................................ 19.6 20.7 21.0
Other income (expense)
Interest expense, net ................................................................................... (3.4) (3.6) (5.6)
Equity in earnings of affiliate ..................................................................... 0.2 0.3 0.3
Total other income (expense).......................................................... (3.2) (3.3) (5.3)
Income before income taxes ................................................................... 16.4 17.4 15.7
Provision for income taxes ......................................................................... 6.5 6.8 6.4
Net income ................................................................................................. 9.9% 10.6% 9.3%
Year Ended December 31, 2006 Compared to Year Ended December 31, 2005
Total revenue. Total revenue increased $121.8 million, or 31.2%, to $511.9 million for the year ended December 31,
2006 from $390.1 million for the year ended December 31, 2005.
Total center revenue grew $119.4 million, or 31.3%, to $500.4 million from $381.0 million, driven by a 7.3%
increase in comparable center revenue, opening of eight new centers and the assumption of operations of seven
leased facilities in 2006 and the full-year contribution of seven centers opened in 2005. Of the $119.4 million
increase in total center revenue,
• 64.2% was from membership dues, which increased $76.7 million, due to increased memberships at new and
existing centers, the introduction of junior membership programs and increased sales of Sports and other
value-added memberships.
• 34.0% was from in-center revenue, which increased $40.6 million primarily as a result of our members’
increased use of our personal training, member activities, LifeCafe and LifeSpa products and services. As a
result of this in-center revenue growth and our focus on broadening our offerings to our members, average in-
center revenue per membership increased from $300 to $351 for the year ended December 31, 2006.
• 1.8% was from enrollment fees, which are deferred until a center opens and recognized on a straight-line
basis over 36 months. Enrollment fees increased $2.1 million for the year ended December 31, 2006 to $22.4
million. Our number of memberships increased 23.8% to 443,660 at December 31, 2006 from 358,384 at
December 31, 2005.