Lifetime Fitness 2006 Annual Report Download - page 42

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36
Item 7A. Quantitative and Qualitative Disclosures About Market Risk.
We invest our excess cash in highly liquid short-term investments. These investments are not held for trading or
other speculative purposes. Changes in interest rates affect the investment income we earn on our cash and cash
equivalents and, therefore, impact our consolidated cash flows and consolidated results of operations. As of
December 31, 2006, our floating rate indebtedness was approximately $245.0 million. If long-term floating interest
rates were to have increased by 100 basis points during the year ended December 31, 2006, our interest costs would
have increased by approximately $1.4 million. If short-term interest rates were to have increased by 100 basis points
during the year ended December 31, 2006, our interest income from cash equivalents would have increased by less
than $0.1 million. These amounts are determined by considering the impact of the hypothetical interest rates on our
floating rate indebtedness and cash equivalents balances at December 31, 2006.