Question-and-Answer Session
Operator
(Operator instructions) We will take our first question from Sharon Zackfia with William Blair.
Sharon Zackfia – William Blair & Co.
I know what you guys have been through some cycles, maybe not like we are going through right now, but you have been through a lot of this before. I guess I am just curious as to how long, you think, will continue to see the year-over-year member losses? Is there some encouraging signs? Did you feel like once we elapse this year, there is a possibility for a member of growth again or is it going to have a pretty long tail?
Alex Alimanestianu
We are not guiding beyond the fourth quarter here, Sharon. So, it is hard. We do expect to end the year around 5% below where we started the year. As we said, we are seeing some encouraging signs on the new members’ signup front. We certainly improved our performance significantly in the third quarter versus the first two. So, we are encouraged by that. We were disappointed on the retention side. We did not retain at the level that we expected to. Now, we did close some clubs and that has an impact and we are expecting the fourth quarter to come to be relatively close to where we were in the fourth quarter last year. It is certainly a tougher recession than the one in 2001. That was a nine-month recession; this is a 20 plus months recession. Do not forget, we hit close to 54% attrition and right now we are trending about 45% on an annual basis. We certainly hope that we are at the high water mark on an OTM basis.
So that is the color I can give you. Dan, do you want to add anything to that?
Dan Gallagher
No, I think that is about color we can give Sharon. January is one of our biggest months and that will be a teller for 2010 after we have that under our belt. But, in the absence of data it is very hard to give any color going out beyond the fourth quarter.
Sharon Zackfia – William Blair & Co.
I guess maybe it has something different. I mean, obviously, New York is your biggest market. The DOW is better that it was earlier this year. I think most of the down sizing in Wall Street has happened hopefully. Are you starting to see any signs, what somebody called Armageddon last year, of an improvement in the New York market yet?
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