Lifetime Fitness 2009 Annual Report Download - page 46

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Our total capital expenditures were as follows:
For the Year Ended December 31,
2009 2008 2007
(In thousands)
Purchases of property and equipment ........................................................ $146,632 $463,337 $415,822
Non-cash property and equipment financed through capital lease
obligations .............................................................................................. 31 9,910 1,445
Non-cash property financed through notes payable obligations ................ — — 95
Non-cash property purchases in construction accounts payable ................ (53,789) 3,963 10,218
Non-cash share-based compensation capitalized to projects under
development ........................................................................................... 385 641 744
Total capital expenditures .......................................................................... $93,259 $477,851 $428,324
The following schedule reflects 2009 capital expenditures by type of expenditure (in thousands):
For the Year Ended
December 31, 2009
New center land and construction ............................................................... $60,915
Initial remodels of acquired centers ............................................................. 2,091
Maintenance of existing facilities and centralized infrastructure ................ 30,253
Total capital expenditures ............................................................................ $93,259
At December 31, 2009 we had purchased the real property for all of the large format centers we plan to open in
2010, and we had purchased real property for three and entered into a ground lease for one of the large format
centers that we plan to open after 2010.
We expect our capital expenditures to be approximately $100 to $120 million in 2010, of which we expect to incur
approximately $70 to $80 million for new center construction and approximately $30 to $40 million for the updating
of existing centers and corporate infrastructure. We plan to fund these capital expenditures primarily with cash flow
from operations.
Financing Activities
During the year ended December, 31, 2009, we had the following changes to our capital structure.
Interest Rate Swap
On September 17, 2007, we entered into an interest rate swap contract with J.P. Morgan Chase Bank, N.A. that
effectively fixed the rates paid on a total of $125.0 million of variable rate borrowings from our revolving credit
facility at 4.825% plus the applicable spread (depending on cash flow leverage ratio) until October 2010. Effective
July 10, 2009, we revised the terms of the swap, reducing the fixed rate to 4.715% plus the applicable spread. All
other terms of the swap remained the same. The spread as of December 31, 2009 was 1.25%. The contract has been
designated a hedge against interest rate volatility. We currently apply this hedge to variable rate interest debt under
the U.S. Bank Facility. Changes in the fair market value of the swap contract are recorded in accumulated other
comprehensive income (loss). As of December 31, 2009, the $2.6 million net of tax, fair market value of the swap
contract was recorded as accumulated other comprehensive loss in the shareholder equity section and the $4.2
million gross fair market value of the swap contract was included in long-term debt. See footnote 4, “Long-Term
Debt” to our consolidated financial statements for more information.