Lifetime Fitness 2009 Annual Report Download - page 21

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16
Available Information
Our corporate Web site is lifetimefitness.com. We make available through our Web site all reports and amendments
to those reports filed or furnished pursuant to Section 13(a) of the Securities and Exchange Act of 1934, as amended
(the “Exchange Act”), as soon as reasonably practicable after we electronically file such material with, or furnish it
to, the Securities and Exchange Commission (the “SEC”).
Item 1A. Risk Factors.
We may be unable to attract and retain members, which could have a negative effect on our business.
The success of our business depends on our ability to attract and retain members, and we cannot assure you that we
will be successful in our marketing efforts or that the membership levels at our centers will not materially decline,
especially at those centers that have been in operation for an extended period of time. All of our members can cancel
their membership at any time upon providing advance notice. In addition, we experience attrition and must
continually engage existing members and attract new members in order to maintain our membership levels and sales
from in-center services. There are numerous factors that could lead to a decline in membership levels or sales of in-
center services in mature centers or that could prevent us from increasing membership and in-center service revenue
at newer centers where membership is generally not yet at a targeted capacity, including changing desires and
behaviors of consumers, changes in discretionary spending trends and general economic conditions, market maturity
or saturation, a decline in our ability to deliver quality service at a competitive price, direct and indirect competition
in the areas where our centers are located and a decline in the public’s interest in health and fitness as well as social
fears such as terror or health threats which could reduce the desire to be in a concentrated public venue. In order to
increase membership levels, we may from time to time offer lower membership rates and enrollment fees. Any
decrease in our average dues, reduction in enrollment fees or higher membership acquisition costs may adversely
impact our operating margins.
Our debt levels may limit our ability to access additional funds under our existing credit facilities and limit our
flexibility in obtaining additional financing to pursue our growth strategy and other business opportunities.
As of December 31, 2009, we had total consolidated indebtedness of $660.3 million, of which $271.1 million was
floating rate debt, consisting principally of obligations under term notes that are secured by certain of our properties,
borrowings under our revolving credit facility that are secured by certain personal property and mortgage notes that
are secured by certain of our centers and obligations under capital leases.
Our level of indebtedness could have important consequences to us, including the following:
x our ability to obtain additional financing, if necessary, for capital expenditures, working capital, acquisitions
or other purposes may be impaired or such financing may not be available on favorable terms;
x we will need a substantial portion of our cash flow to pay the principal of, and interest on, our indebtedness,
including indebtedness that we may incur in the future;
x payments on our indebtedness will reduce the funds that would otherwise be available for our operations and
future business opportunities;
x a substantial decrease in our cash flows from operations or a substantial increase in our investment in new
centers could make it difficult for us to meet our debt service requirements and force us to modify our
operations;
x we may be more highly leveraged than our competitors, which may place us at a competitive disadvantage;
x our debt level may make us more vulnerable and less flexible than our competitors to a downturn in our
business or the economy in general; and
x some of our debt has a variable rate of interest, which increases our vulnerability to interest rate fluctuations.