Lifetime Fitness 2006 Annual Report Download - page 59

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LIFE TIME FITNESS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(In thousands, except share and per share data)
53
We are a party to capital equipment leases with third parties which include monthly rental payments of
approximately $639 as of December 31, 2006. Amortization recorded for these capital leased assets totaled $4,706
and $6,966 for the years ended December 31, 2006 and 2005, respectively. The following is a summary of property
and equipment recorded under capital leases:
December 31,
2006 2005
Land and buildings ........................................................................................ $ 6,622 $ 6,622
Equipment ..................................................................................................... 35,863 36,507
42,485 43,129
Less accumulated amortization .................................................................... 27,548 23,609
$14,937 $19,520
Future minimum lease payments and the present value of net minimum lease payments on capital leases at
December 31, 2006 are as follows:
2007.......................................................................................................................................... $6,392
2008.......................................................................................................................................... 2,171
2009.......................................................................................................................................... 880
2010.......................................................................................................................................... 880
2011.......................................................................................................................................... 937
Thereafter ................................................................................................................................. 9,520
20,780
Less amounts representing interest........................................................................................... 7,920
Present value of net minimum lease payments......................................................................... 12,860
Current portion ......................................................................................................................... 5,024
$7,836
5. Subsequent Event
On January 24, 2007, LTF CMBS I, LLC, a wholly owned subsidiary, obtained a commercial mortgage-backed loan
in the original principal amount of $105.0 million from Goldman Sachs Commercial Mortgage Capital, L.P.
pursuant to a loan agreement dated January 24, 2007. The mortgage financing is secured by six properties owned by
the subsidiary and operated as Life Time Fitness centers located in Tempe, Arizona, Commerce Township,
Michigan, and Garland, Flower Mound, Willowbrook and Sugar Land, Texas. The mortgage financing matures on
February 6, 2017.
Interest on the amounts borrowed under the mortgage financing is 6.03% per annum, with a constant monthly debt
service payment of $0.6 million. Our subsidiary LTF CMBS I, LLC, as landlord, and LTF Club Operations
Company, Inc., another wholly owned subsidiary of ours as tenant, entered into a lease agreement dated January 24,
2007 with respect to the properties. The initial term of the lease ends on February 5, 2022, but the lease term may be
extended at the option of LTF Club Operations Company, Inc. for two additional periods of five years each. Our
subsidiaries may not transfer any of the properties except as permitted under the loan agreement. We guarantee the
obligations of our subsidiary under the lease.
As additional security for LTF CMBS I, LLC’s obligations under the mortgage financing, the subsidiary granted a
security interest in all assets owned from time to time by the subsidiary including the properties which had a net