Lifetime Fitness 2009 Annual Report Download - page 65

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LIFE TIME FITNESS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Table amounts in thousands, except share and per share data)
60
In November 2009, we financed one Minnesota center using an obligation bearing interest at a fixed rate of 6.95%
amortized over a 15-year period. This obligation is due in full in November 2014. As security for the obligation, we
have granted a mortgage on this center. At December 31, 2009, $10.3 million was outstanding.
Variable Rate Demand Notes
On July 13, 2008, a wholly owned subsidiary issued variable rate demand notes in the principal amount of $34.2
million, the proceeds of which were used to provide permanent financing for our corporate headquarters and our
Overland Park, Kansas center. The notes, which mature on July 1, 2033, bear interest at a variable rate that is
adjusted weekly. The interest rate at December 31, 2009 was 0.30%. The notes are backed by a letter of credit from
General Electric Capital Corporation (GECC), for which we will pay GECC an annual fee of 1.40% of the
maximum amount available under the letter of credit, as well as other drawing and reimbursement fees. In
connection with the letter of credit, which expires June 1, 2023, the borrower subsidiary entered into a
reimbursement agreement with GECC. Under the terms of the reimbursement agreement if the notes are purchased
with proceeds of a drawing under the letter of credit, and cannot thereafter be remarketed, GECC is obligated to hold
the notes and the indebtedness evidenced by those notes will be amortized over a period ending June 1, 2023. The
subsidiary’s obligations under the reimbursement agreement are secured by mortgages against the two
aforementioned properties. We guaranteed the subsidiary’s obligations under the leases that will fund any
reimbursement obligations. As of December 31, 2009, $33.8 million remained outstanding on the notes.
Promissory Note Payable to Lender
In December 2007, we borrowed $8.5 million. The loan is evidenced by a promissory note that matures in January
2015, bears fixed interest at 5.78% and is secured by an interest in certain personal property. As of December 31,
2009, $7.5 million was outstanding on this note.
Aggregate annual future maturities of long-term debt (excluding capital leases) at December 31, 2009 are as follows:
2010 ........................................................................................................................................................ $15,654
2011 ........................................................................................................................................................ 102,788
2012 ........................................................................................................................................................ 364,908
2013 ........................................................................................................................................................ 9,962
2014 ........................................................................................................................................................ 15,757
Thereafter ............................................................................................................................................... 132,568
Total future maturities of long-term debt (excluding capital leases) ...................................................... $641,637
Capital Leases
In May 2001, we financed one of our Minnesota centers pursuant to the terms of a sale-leaseback transaction that
qualified as a capital lease. Pursuant to the terms of the lease, we agreed to lease the center for a period of 20 years.
At December 31, 2009, the present value of the future minimum lease payments due under the lease amounted to
$6.3 million.
In March 2007, we entered into a ground lease which runs through October 2048 for our Loudoun County, Virginia
center. Pursuant to the terms of the lease which qualifies as a capital lease, we have an option to purchase the land
by giving notice during the fifth or eleventh lease year. At December 31, 2009, the present value of the future
minimum lease payments due under the lease amounted to $9.8 million.