Lifetime Fitness 2009 Annual Report Download - page 48

Download and view the complete annual report

Please find page 48 of the 2009 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 92

  • 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
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92

43
Contractual Obligations
The following is a summary of our contractual obligations as of December 31, 2009:
Payments due by period
Total 2010 2011 2012 2013 2014
After
2014
(In thousands)
Long-term debt obligations,
excluding capital lease
obligations ............................
.
$641,637 $15,654 $102,788 $364,908 $9,962 $15,757 $132,568
Capital lease obligations ..........
.
18,709 1,062 1,037 1,180 617 10,220 4,593
Interest (1) ...............................
.
93,974 28,351 20,565 11,737 9,036 8,181 16,104
Operating lease obligations ......
.
769,984 40,278 40,422 39,529 38,802 39,661 571,292
Purchase obligations (2) ..........
.
44,616 38,714 3,599 1,090 714 499 –
Other long-term liabilities (3) ..
.
1,599 – – – – – 1,599
Total contractual obligations ...
.
$1,570,519 $124,059 $168,411 $418,444 $59,131 $74,318 $726,156
(1) Interest expense obligations were calculated holding floating rate debt balances and interest rates constant at
December 31, 2009 rates. This includes the impact of our interest rate swap.
(2) Purchase obligations consist primarily of our contracts with construction subcontractors for the completion of the
five large format centers under construction as of December 31, 2009, three of which we plan to open in 2010,
as well as contracts for the purchase of land.
(3) In addition to the other long-term liabilities presented in the table above, approximately $1.4 million of
unrecognized tax benefits, including interest and penalties, have been recorded as liabilities in accordance with
applicable accounting guidance, and we are uncertain as to if or when such amounts may be settled.
Recent Accounting Pronouncements
In June 2009, the Financial Accounting Standards Board (“FASB”) issued guidance which establishes the FASB
Accounting Standards Codification as the source of authoritative accounting principles recognized by the FASB to
be applied by non-governmental entities in the preparation of financial statements in conformity with Generally
Accepted Accounting Principles (“GAAP”) in the United States. It became effective for our interim reporting period
ended September 30, 2009.
Item 7A. Quantitative and Qualitative Disclosures About Market Risk.
We invest our excess cash in highly liquid short-term investments. These investments are not held for trading or
other speculative purposes. Changes in interest rates affect the investment income we earn on our cash and cash
equivalents and, therefore, impact our consolidated cash flows and consolidated results of operations. As of
December 31, 2009, our net floating rate indebtedness was approximately $271.1 million. If long-term floating
interest rates were to have increased by 100 basis points during the year ended December 31, 2009, our interest costs
would have increased by approximately $2.9 million. If short-term interest rates were to have increased by 100 basis
points during the year ended December 31, 2009, our interest income from cash equivalents would have increased
by less than $0.1 million. These amounts are determined by considering the impact of the hypothetical interest rates
on our floating rate indebtedness and cash equivalents balances at December 31, 2009.