Lifetime Fitness 2006 Annual Report Download - page 49

Download and view the complete annual report

Please find page 49 of the 2006 Lifetime Fitness annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 80

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80

LIFE TIME FITNESS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(In thousands, except share and per share data)
43
Property and equipment consist of the following:
Depreciable December 31,
Lives 2006 2005
Land...................................................................... $ 154,680 $ 118,686
Buildings............................................................... 3-40 years 630,565 460,382
Leasehold improvements ...................................... 1-20 years 34,695 32,997
Construction in progress ....................................... 82,589 47,084
902,529 659,149
Equipment:
Fitness............................................................... 5-7 years 59,559 49,428
Computer and telephone................................... 3-5 years 32,335 25,042
Capitalized software ......................................... 5 years 17,345 12,581
Decor and signage ............................................ 5 years 7,018 5,324
Audio/visual ..................................................... 3-5 years 11,349 7,923
Furniture and fixtures ....................................... 7 years 7,579 6,583
Other equipment ............................................... 3-7 years 33,965 28,586
169,150 135,467
Property and equipment, gross.............................. 1,071,679 794,616
Less accumulated depreciation......................... 169,557 133,245
Property and equipment, net ................................. $902,122 $661,371
At December 31, 2006, we had eight centers under construction: two in Ohio and one each in Colorado, Georgia,
Minnesota, Nebraska, North Carolina and Texas.
We have developed web-based systems to facilitate member enrollment and management. Costs related to these
projects have been capitalized in accordance with Statement of Position No. 98-1, Accounting for the Costs of
Computer Software Developed or Obtained for Internal Use.
Other equipment consists primarily of cafe, spa and playground equipment and laundry facilities.
Impairment of Long-lived Assets — The carrying value of long-lived assets is reviewed annually and whenever
events or changes in circumstances indicate that such carrying values may not be recoverable. We consider a history
of consistent and significant operating losses to be our primary indicator of potential impairment. Assets are grouped
and evaluated for impairment at the lowest level for which there are identifiable cash flows, which is generally at an
individual center level or the separate restaurant. The determination of whether impairment has occurred is based on
an estimate of undiscounted future cash flows directly related to that center or the restaurant, compared to the
carrying value of these assets. If an impairment has occurred, the amount of impairment recognized is determined by
estimating the fair value of these assets and recording a loss if the carrying value is greater than the fair value. Based
upon our review and analysis, no impairments were deemed to have occurred during 2006.