Lifetime Fitness 2007 Annual Report Download - page 35

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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,
2007 2006 2005
Revenue
Center revenue
Membership dues ................................................................................. 66.2% 66.4% 67.5%
Enrollment fees .................................................................................... 3.8 4.4 5.2
In-center revenue.................................................................................. 27.8 27.0 25.0
Total center revenue .................................................................................... 97.8 97.8 97.7
Other revenue.............................................................................................. 2.2 2.2 2.3
Total revenue........................................................................................ 100.0 100.0 100.0
Operating expenses
Center operations (including 0.4%, 0.4% and 0.0% related to share-
based compensation expense, respectively)............................................. 57.5 57.1 55.4
Advertising and marketing .......................................................................... 3.8 4.1 3.7
General and administrative (including 0.8%, 1.1% and 0.1% related to
share-based compensation expense, respectively) ................................... 6.2 7.4 7.0
Other operating............................................................................................ 2.5 2.5 3.3
Depreciation and amortization .................................................................... 9.0 9.3 9.9
Total operating expenses .................................................................... 79.0 80.4 79.3
Income from operations................................................................................. 21.0 19.6 20.7
Other income (expense)
Interest expense, net......................................................................................... (3.9) (3.4) (3.6)
Equity in earnings of affiliate........................................................................... 0.2 0.2 0.3
Total other income (expense).............................................................. (3.7) (3.2) (3.3)
Income before income taxes .......................................................................... 17.3 16.4 17.4
Provision for income taxes............................................................................... 6.9 6.5 6.8
Net income ...................................................................................................... 10.4% 9.9% 10.6%
Year Ended December 31, 2007 Compared to Year Ended December 31, 2006
Total revenue. Total revenue increased $143.9 million, or 28.1%, to $655.8 million for the year ended December 31,
2007 from $511.9 million for the year ended December 31, 2006.
Total center revenue grew $140.7 million, or 28.1%, to $641.1 million from $500.4 million, driven by a 6.1%
increase in comparable center revenue, opening of eight new centers and the assumption of operations of one leased
facility and the purchase of one existing facility in 2007 and the full-year contribution of 15 centers we opened or
assumed operations of in 2006. Of the $140.7 million increase in total center revenue,
x67.2% was from membership dues, which increased $94.5 million, or 27.8%, due to increased memberships
at new centers, junior membership programs and increased sales of value-added memberships. Our number of
memberships increased 12.5% to 499,092 at December 31, 2007 from 443,660 at December 31, 2006. Our
membership growth of 12.5% was down from a membership growth rate of 23.8% in 2006 primarily due to
our anniversary of the acquisition of seven leased centers in July 2006, our strategy to reduce memberships in
centers where memberships exceed our target capacity and the effects of a slower economy in the fourth
quarter.