Lifetime Fitness 2013 Annual Report Download - page 41

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35
Year Ended December 31, 2013 Compared to Year Ended December 31, 2012
Total revenue. Total revenue increased $79.0 million, or 7.0%, to $1,205.9 million for the year ended December 31,
2013 from $1,126.9 million for the year ended December 31, 2012.
Total center revenue grew $65.1 million, or 6.0%, to $1,156.3 million for the year ended December 31, 2013, from
$1,091.2 million for the year ended December 31, 2012. Of the $65.1 million increase in total center revenue,
• 60.3% was from membership dues, which increased $39.3 million, or 5.4%, due to higher average dues and
increased memberships, primarily at centers open less than 37 months. Our number of Access memberships
decreased 0.6% to 678,619 at December 31, 2013 from 682,621 at December 31, 2012 primarily due to our
strategy to emphasize dues growth through price optimization.
• 41.9% was from in-center revenue, which increased $27.3 million, or 7.8%, primarily as a result of a $15.4
million increase in personal training revenue, a $6.6 million increase in sales of our spa and café products
and services and a $4.7 million increase in our member activities revenue. Average in-center revenue per
Access membership increased from $507 for the year ended December 31, 2012 to $545 for the year ended
December 31, 2013.
• (2.2)% 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 2010, the estimated average
membership life has been 33 months. Enrollment fees decreased $1.4 million for the year ended
December 31, 2013 to $13.9 million. The revenue recognized from enrollment fees was lower in 2013 as
compared to 2012 primarily caused by membership sales promotions.
Other revenue increased $13.9 million, or 38.8%, to $49.6 million for the year ended December 31, 2013. This
increase was primarily due to a $12.1 million increase in athletic events and related businesses revenue.
Center operations expenses. Center operations expenses totaled $696.2 million, or 60.2% of total center revenue (or
57.7% of total revenue), for the year ended December 31, 2013, compared to $655.9 million, or 60.1% of total
center revenue (or 58.2% of total revenue), for the year ended December 31, 2012. This $40.3 million increase
primarily consisted of an increase of $24.7 million in additional payroll-related costs to support increased
memberships and in-center revenue growth at our centers. Center operations expenses decreased as a percent of total
revenue due primarily to leverage provided by dues growth.
Advertising and marketing expenses. Advertising and marketing expenses were $42.7 million, or 3.6% of total
revenue, for the year ended December 31, 2013, compared to $39.9 million, or 3.5% of total revenue, for the year
ended December 31, 2012. These expenses increased primarily due to increased marketing activity to drive
memberships and in-center businesses.
General and administrative expenses. General and administrative expenses were $59.0 million, or 4.9% of total
revenue, for the year ended December 31, 2013, compared to $55.7 million, or 5.0% of total revenue, for the year
ended December 31, 2012. This increase of $3.3 million is primarily related to information technology initiatives to
support our continued growth.
Other operating expenses. Other operating expenses were $64.4 million for the year ended December 31, 2013,
compared to $52.2 million for the year ended December 31, 2012. This increase is primarily due to growth in
infrastructure and operating costs to support the $13.9 million, or 38.8%, increase in other revenue.
Depreciation and amortization. Depreciation and amortization was $119.0 million for the year ended December 31,
2013, compared to $115.0 million for the year ended December 31, 2012. This increase was primarily due to the
depreciation on the three new facilities opened during 2013.
Interest expense, net. Interest expense, net of interest income, was $25.7 million for the year ended December 31,
2013, compared to $25.5 million for the year ended December 31, 2012.
Provision for income taxes. The provision for income taxes was $78.7 million for the year ended December 31,
2013, compared to $72.7 million for the year ended December 31, 2012. This $6.0 million increase was due to an