1. L IFE T IME F ITNESS, I NC Equity Investment Presentation 1 Richie Hartz Ha Da Jang Diana Yang April 30, 2013 Kaushik Andra Heziyou Xu Diana Yang Iris Yijin Zhang

2. A GENDA 2 I NTRODUCTION C OMPANY I NDUSTRY V ALUATION Introduction Company Overview Stock Performance Industry Overview Financial Analysis Valuation Recommendation

3. C OMPANY P ROFILE The Healthy Way of Life Company Designs, develops and operates sports and athletic, professional fitness, family recreation and spa centers Helps clients achieve total health objective, athletic aspirations by doing what they love Types of memberships: individual, couple, family First center opened in 1992 Headquarters: Chanhassen, Minnesota Ticker: LTM Market Cap: $1.89 Billion Employees: 20,000 Number of centers: 105 (as of Feb 28, 2013) 3 I NTRODUCTION C OMPANY I NDUSTRY V ALUATION Source: LTM 2012 Annual Report Item 1 P1-2

4. C OMPANY H ISTORY 4 I NTRODUCTION C OMPANY I NDUSTRY V ALUATION 1992: Life Time Fitness founded, first club opened in Minnesota 2001: Life Time formalized its Athletic Events division 2012: Acquired Racquect Club of the South (RSC) 2008-2011: Expanded to about 15 states 2000: Life Time expanded offering to include proprietary line of nutritional products and supplements 2004: Life Times completed its IPO with NYSE 1992200120082012200020042011 2011: Opened its first location in Ontario, Canada Source: LTM offical website http://www.lifetimefitness.com/aboutlifetime/company/index.cfm?strWebAction=fact_sheet; MarketLine Reporthttp://www.lifetimefitness.com/aboutlifetime/company/index.cfm?strWebAction=fact_sheet

5. 5 A REAS OF PROGRAM SERVICES SportsFitnessFamily Lifestyle Total Health 5 Source: LTM offical website http://www.lifetimefitness.com/aboutlifetime/company/index.cfm?strWebAction=fact_sheethttp://www.lifetimefitness.com/aboutlifetime/company/index.cfm?strWebAction=fact_sheet I NTRODUCTION C OMPANY I NDUSTRY V ALUATION

6. B USINESS C OMPETITIVE S TRENGTHS Most Life Time destinations operate 24/7 with certified professionals and professional equipments Comprehensive programs and services Different types of membership plans, variety of services with membership A value propostion and member-focused approach to encourage membership loyalty Centers situated in easily accessible areas and centrally located among residential, business and shopping districts 24/7, child center services, convenient spa and café Convenience for members 6 Source: LTM offical website http://www.lifetimefitness.com/aboutlifetime/company/index.cfm?strWebAction=fact_sheet; LTM 2012 Annual Report Item I P2-3http://www.lifetimefitness.com/aboutlifetime/company/index.cfm?strWebAction=fact_sheet I NTRODUCTION C OMPANY I NDUSTRY V ALUATION

7. Business Competitive Strengths – Cont’d Within first 3 years after openning a new center: ramp memberships and optimize memberhsip mix and pricing Once mature: maintain tight expense control Revenue growth: 11.2% ($1.1bn), EBITDA growth: 18.8% ($324.7mil) An established and profitable economic model Build or lease new centers Analyze drive patterns, demographics, cultural and competitive criteria Remodel centers by utilizing a wholy owned construction subsidiary Disciplined and sophiscated site selection and development process Committed and experienced senior management team 7 Source: LTM offical website http://www.lifetimefitness.com/aboutlifetime/company/index.cfm?strWebAction=fact_sheet; LTM 2012 Annual Report Item I P2-3http://www.lifetimefitness.com/aboutlifetime/company/index.cfm?strWebAction=fact_sheet I NTRODUCTION C OMPANY I NDUSTRY V ALUATION

8. R EVENUE D ECOMPOSITION 8 Source: LTM 2012 Annual Report I NTRODUCTION C OMPANY I NDUSTRY V ALUATION

9. G ROWTH S TRATEGY Build and acquire new centers 2012: opened 3 large format centers, acquired Racquet Club of the South 2013: open 3 large format centers Grow membership dues 83 of 105 centers have reached maturity Optimize dues through price increases and improving the mix of membership Increase products, programs and services revenue Increase sales of current in-center products and services Introduce new products & services 9 Source: LTM 2012 Annual Report Item 1 P3-4 I NTRODUCTION C OMPANY I NDUSTRY V ALUATION

10. SWOT A NALYSIS StrengthsWeaknesses Comprehensive programs & servicesConcentrated business operations Strong economic modelUnable to attract and retain members High value servicesSeasonality Robust financial performance ensures financial stability Reliance on credit facility and ability to access additional capital Reliance on acquisition to grow Subject to claims (construction, fitness-related) 10 OpportunitiesThreats Inorganic and organic expansion plans to boost top-line growth Intense competition Favorable outlook for the global leisure facilities Stringent regulations (advertising, sales, service providers) Potential litigation against intellectual property rights Source: LTM 2012 Annual Report Item 1A P19, Item 7 P38; MarketLine Report I NTRODUCTION C OMPANY I NDUSTRY V ALUATION

11. H ISTORICAL F INANCIALS 11 Source: Calculated based on LTM 2012 Annual Report Financial Statements I NTRODUCTION C OMPANY I NDUSTRY V ALUATION

12. 2013 Q1 R EPORT 12 Source: Calculated based on LTM 2013 Quarterly Report Financial Statements I NTRODUCTION C OMPANY I NDUSTRY V ALUATION (Quarter ended in March 31) 2013 Q12012 Q1 Total Revenue$290.7 million (8.3% growth)$268.4 million Net Income (Profit margin)$28.1 million (9.67%)$25.7 million (9.58%) EBITDA (% of sales)$82.0 million (28.2%)$75.7 million (28.2%) CapEx (% of sales)$59.1 million (20.3%)$38.5 million (14.3%) Rent Expenses$9.7 million$9.6 million Operating Expenses/Sales82% Return on Sales (EBIT/Sales)18% Interest Coverage8.557.70 Basic EPS0.680.62 Debt$698.9 million$704.4 million BV Equity$1085.7 million$1072.9 million BV D/E63.5%65.7%

13. K EY F INANCIAL R ATIOS 13 Source: Calculated based on LTM 2012 Annual Report Financial Statements I NTRODUCTION C OMPANY I NDUSTRY V ALUATION

14. S TOCK P ERFORMANCE 14 Source: Yahoo Finance

15. I NDUSTRY O VERVIEW Primary Industry: Fitness – Secondary industry: Leisure Facilities, Health and Fitness clubs Major products and services offered by industry – Tennis centers, gyms and fitness centers, ice and roller rinks, dance centers, swimming pools, weight-loss supplements No major players in this Industry – No players hold a market share larger than 5.0% Industry Structure Highlights – Capital Structure- medium – Revenue volatility- low – Regulation level- light 15 I NTRODUCTION C OMPANY I NDUSTRY V ALUATION Source: IBISWorld

16. U.S. O VERWEIGHT AND O BESITY D ISTRIBUTION 16 I NTRODUCTION C OMPANY I NDUSTRY V ALUATION Concerns over obesity will continue to drive fitness industry

17. P REVALENCE OF O BESITY IN U.S. 17 I NTRODUCTION C OMPANY I NDUSTRY V ALUATION Source: CDC

18. I NDUSTRY O UTLOOK Increasing awareness of healthy lifestyle and stabilization of U.S economy will keep industry in a growth phase – Revenue for the industry expected to rise at an average annual rate of 2.9% to $29.9 billion in 2018 Large and growing health and wellness industry – Retiring baby boomer generation will create strong opportunities for gyms and fitness clubs – Younger than 17-market presents opportunity as childhood obesity concerns continue Slow expansion of existing establishments – Most major markets already heavily saturated – Establishments only expected to increase at an average rate of 1.1%, primarily coming from expansions of large-scale gyms Continued support from government – Reduction of Healthcare costs 18 I NTRODUCTION C OMPANY I NDUSTRY V ALUATION Source: IBISWorld

19. PORTER’S FIVE FORCES 19 I NTRODUCTION C OMPANY I NDUSTRY V ALUATION Threat of New Entrants: Low Large capital investment on property, equipment, and acquisitions Threat of Substitute Products: High Traditional methods of exercise and self-instruction through online materials and alternative weight loss programs Bargaining Power of Buyers: Moderate Variety of membership packages to choose from; Attractive price and program mix to grow membership dues Bargaining Power of Sellers: Moderate Property and professional equipment Intensity of Competition: High Concentrated business operations; Other centers, clubs, profit/non-profit organizations Source: LTM 2012 Annual Report Item 1 P12, Item 1A P16

20. M ACROECONOMIC O UTLOOK Key External Drivers – Participation in sports, per capita disposable income, number of adults aged 20-64 Stabilization of U.S economy and modest employment growth Minimal exposure to events in Europe Impact of Healthcare regulation and reform Fed will continue easy-money policies 20 I NTRODUCTION C OMPANY I NDUSTRY V ALUATION Source: IBISWorld

21. Valuation — Trading Comparables 21 I NTRODUCTION C OMPANY I NDUSTRY V ALUATION Source: CapIQ

22. Valuation — WACC Analysis 22 I NTRODUCTION C OMPANY I NDUSTRY V ALUATION Source: Bloomberg

23. Discounted Cash Flow Analysis— Fair Value 23 DCF implies that stock is trading around its fair value Fair Value Calculation I NTRODUCTION C OMPANY I NDUSTRY V ALUATION

24. V ALUATION S UMMARY 52-Week High: $52.43 52-Week Low: $39.10 24 52-Week Range DCF Trading LTM EBITDA $52.43 $39.10 $62.90 $28.46 $57.47 $41.91 2.0%-4.0% Perpetuity growth rate 8.2%-9.7% WACC Mid-Year Convention 7.0x – 9.5x LTM EBITDA of $324mm Lifetime is currently trading at its fair value Current Price $46.19 I NTRODUCTION C OMPANY I NDUSTRY V ALUATION

25. R ISKS & D ECISION D RIVERS (1)GICS Diversification (2)Sharp drop in stock price (3)Leader in U.S. Market Final Thoughts Why We Chose Lifetime I NTRODUCTION C OMPANY I NDUSTRY V ALUATION (1)Low intrinsic Value (2)Fragmented Industry (3)Reliance on discretionary income of consumers (4)Limited growth opportunities in domestic market

26. R ECOMMENDATION Watch List I NTRODUCTION C OMPANY I NDUSTRY V ALUATION

27. Questions? Life Time Fitness 27

28. Valuation — DCF ANALYSIS 28 I NTRODUCTION C OMPANY I NDUSTRY V ALUATION Source: LTM 2012 10-K