LIFETIME FITNESS

Longyan Yao (Maggie)Su ChenMeechai Taychapipranai (Bo) 26 APR 2012

Life Time Fitness operates multi-use sports and athletic, professional fitness, family recreation and spa centers in a resort-like environment in U.S. The fitness centers are located among the residential, business and shopping districts of the surrounding community.

GICS Code: 25301030 Leisure FacilitiesCurrent Price 44.9Market Cap 1.85B

PEG 1.01P/E 18.94

1 Year Implied growth in earning 32%

7-10 years Implied growth 5.20%

Source: Google Finance

Source: Google Finance

Obesity

Overweight

Source: Centers for Disease Control and Prevention, CDC

COST

Government:

190 Billion

Corporation:

45 Billion

Source: Merriman Curhan Ford, Fitness and Wellness Report

Currently two bills are before Congress, each encourage exercise and promote healthier lifestyles

pre-tax dollars is allowed to pay for physical fitness

tax deduction for employers on fitness membership fees

Personal Health Investment Today Act of 2011

Workforce Health Improvement Program Act of 2011

Source: Merriman Curhan Ford, Fitness and Wellness Report

65% of major U.S corporations provide employer-sponsored wellness program such as gym membership or discounts

Increased EmployeeMorale

ImprovedEmployeeHealth

Reduced Health Care Cost

Reducedaccidentson the job

56%

41%

27%

8% 8% 8%

Reduce Absence

IncreaseProductivity

66% of companies who provided wellness program also offered to spouses or dependents.

Source: IHRSA Success by Association

Health insurance company provide incentives to exercise, such as discount for gym membership, offer gym membership credit if policy holder exercise at certain level.

Source: Merriman Curhan Ford, Fitness and Wellness Report

Households with higher incomes are able to spend more on gym or fitness club

More people aware of the importance of exercise that will drive demand for fitness industry Source: IBIS World

1 hr 50 min Online

2 hr 40 min TV

1 hr 20 min Phone

5hr 50 min Media

4hr Sporting activities

Day

Week

• 1/3 American kids are overweight or obese

• No. 1 Health concern among American parentsSource: kids health Organization http://kidshealth.org/parent/positive/family/tv_affects_child.html

$#

Source: IHRSA Success by Association

Variety Workout DVD

Limit Equipment

Less motivation

Distraction

Group fitness classes

Multiple equipments

Motivated

Baby sitting program

Source: Google

Source: Google

Group Exerci

se

Personal

Training

Kid Club 24/7 SPA Pool

Nutrition

support

Racquetball &

Basketball

COMMUNI

TY

24 hour

fitnessYESYES YESYES NO YESYES NA YESYES YESYES NA NO

Bally Fitness YESYES YESYES NA NO NA YESYES YESYES NA YESYES

Town Sports YESYES YESYES BabysittiBabysitti

ngngNO YESYES YESYES NA YESYES NA

Curves YESYES YESYES NA NO NA NA YESYES No YESYES

Anytime

Fitness NA YESYES NA YESYES NA NA YESYES NA YESYES

LA Fitness YESYES YESYES BabysittiBabysitti

ngngSOMSOM

EEWATERSP

A YESYES YESYES YESYES NA

Life Life timetime YESYES YESYES YESYES YESYES YESYES YESYES YESYES YESYES YESYES

Source: each company website

Source: LTM Website

Source: LTM Website

Source: LTM Website

Source: LTM IR Page 6

Source: LTM IR Page 6

Source: Lifetime Investor Presentation page 5

Source: Lifetime Investor Presentation page 5

Source: Lifetime Investor Presentation page 5

Growing membership

base

Solid same store sales

metrics

Solid attrition

improvement

High member utilization

and customer

satisfaction

Strong revenue per membership

metric

Source: LTM 2012 10K

Source: LTM 2012 10K

Source: LTM 2012 10K

Source: LTM 2012 10K

Source: LTM 2012 10K

Source: LTM 2012 10K

Source: LTM 2012 10K

Source: LTM 2012 10K

Ability to access additional capital through credit facility

Failure to manage growth effectively Delay in new center openings Fail to pass the rising cost related to

constructions to customers New centers in existing location may

negatively impact operating margins Fail to maintain the reputation of our

brandSource: LTM 2012 10K

Source: Bloomberg UK – GOAL, Mexico – SPORTS, US – CLUB, Canada – ICE, Japan – Central Sports, Tosho, Megalos, Renaissance

Company P/E USA Market P/E

Canada Market P/E

Canada Company’s equivalent P/E

Source: Bloomberg UK – GOAL, Mexico – SPORTS, US – CLUB, Canada – ICE, Japan – Central Sports, Tosho, Megalos, Renaissance

Comparable companyUSA Company – CLUB

Canada Company – ICE

UK Company – GOAL

Mexico Company – SPORTS

EV/Revenue

1.15x

EV/EBIT

15.11x

P/E

19.7

Price per share 40.8

DCF Valuation $29.0 per share

Multiple Valuation $40.8 per share

Current Stock Price $44.9 per share