Lifetime Fitness 2009 Annual Report Download - page 40

Download and view the complete annual report

Please find page 40 of the 2009 Lifetime Fitness annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 92

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92

35
Results of Operations
The following table sets forth our consolidated statements of operations data as a percentage of total revenue for the
periods indicated:
For the Year Ended
December 31,
2009 2008 2007
REVENUE:
Membership dues ....................................................................................... 67.5% 66.1% 66.2%
Enrollment fees .......................................................................................... 3.1 3.4 3.8
In-center revenue........................................................................................ 27.8 28.4 27.8
Total center revenue ............................................................................... 98.4 97.9 97.8
Other revenue ............................................................................................. 1.6 2.1 2.2
Total revenue .......................................................................................... 100.0 100.0 100.0
OPERATING EXPENSES:
Center operations ....................................................................................... 60.5 59.1 57.5
Advertising and marketing ......................................................................... 3.2 4.1 3.8
General and administrative ........................................................................ 5.1 5.7 6.2
Other operating .......................................................................................... 2.6 2.5 2.5
Depreciation and amortization ................................................................... 10.8 9.5 9.0
Total operating expenses ........................................................................ 82.2 80.9 79.0
Income from operations .......................................................................... 17.8 19.1 21.0
OTHER INCOME (EXPENSE):
Interest expense, net ................................................................................... (3.7) (3.8) (3.9)
Equity in earnings of affiliate ..................................................................... 0.2 0.2 0.2
Total other income (expense) ................................................................. (3.5) (3.6) (3.7)
INCOME BEFORE INCOME TAXES ......................................................... 14.3 15.5 17.3
PROVISION FOR INCOME TAXES ........................................................... 5.7 6.2 6.9
NET INCOME............................................................................................... 8.6% 9.3% 10.4%
Year Ended December 31, 2009 Compared to Year Ended December 31, 2008
Total revenue. Total revenue increased $67.4 million, or 8.8%, to $837.0 million for the year ended December 31,
2009 from $769.6 million for the year ended December 31, 2008.
Total center revenue grew $69.9 million, or 9.3%, to $823.6 million for the year ended December 31, 2009, from
$753.7 million for the year ended December 31, 2008. Of the $69.9 million increase in total center revenue,
x79.7% was from membership dues, which increased $55.7 million, or 10.9%, due to increased memberships
at new centers and higher dues per membership. Our number of memberships increased 2.1% to 578,937 at
December 31, 2009 from 567,110 at December 31, 2008.
x20.9% was from in-center revenue, which increased $14.6 million primarily as a result of increased sales of
our LifeCafe products and services and personal training. Average in-center revenue per membership
decreased from $414 for the year ended December 31, 2008 to $400 for the year ended December 31, 2009.
We began to see slower in-center revenue growth in the second half of the 2008 through all of 2009 due to the
slower economy.
x(0.6%) was from enrollment fees, which are deferred until a center opens and recognized on a straight-line
basis over our estimated average membership life Since the fourth quarter of 2008, the estimated average
membership life has been 30 months. For the second and third quarters of 2008, it was 33 months, and for the
first quarter of 2008 and prior, it was 36 months. Enrollment fees decreased $0.4 million for the year ended