Lifetime Fitness 2006 Annual Report Download - page 56

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LIFE TIME FITNESS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(In thousands, except share and per share data)
50
of Bloomingdale LLC, which is comprised of six members, two from each of the three members of the joint venture.
The management agreement expires in December 2039 unless it terminates earlier pursuant to its terms. We do not
receive a management fee in connection with our duties under the management agreement, but do receive an
overhead cost recovery charge equal to the lesser of (i) the lowest rate charged to any of our other centers, or (ii)
9.0% of the net revenue of the Bloomingdale LLC center, provided, however, that in no event would Bloomingdale
LLC be charged overhead cost recovery at a rate in excess of the ratio of our total overhead expense to its total net
center revenue. Overhead cost recovery charges to Bloomingdale LLC were $940, $1,017 and $1,044 for the years
ended December 31, 2006, 2005 and 2004, respectively.
Bloomingdale LLC issued indebtedness in June 2000 in a taxable bond financing that is secured by a letter of credit
in an amount not to exceed $14,700. All of the members separately guaranteed one-third of these obligations to the
bank for the letter of credit and pledged their membership interest to the bank as security for the guarantee.
Pursuant to the terms of the Operating Agreement, beginning in March 2002 and continuing throughout the term of
such agreement, the members are entitled to receive monthly cash distributions from Bloomingdale LLC. The
amount of this monthly distribution is, and will continue to be throughout the term of the agreement, $56 per
member. In the event that Bloomingdale LLC does not generate sufficient cash flow through its own operations to
make the required monthly distributions, we are obligated to make such payments to each of the other two members.
To date, Bloomingdale LLC has generated cash flows sufficient to make all such payments. Each of the three
members had the right to receive distributions from Bloomingdale LLC in the amounts of $669, $669 and $872 in
2006, 2005 and 2004, respectively.