Lifetime Fitness 2009 Annual Report Download - page 73

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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)
68
The following table presents revenue for the years ended December 31, 2009, 2008 and 2007:
For the Year Ended December 31,
2009 2008 2007
Membership dues .......................................................................
.
$ 564,605 $508,927 $434,138
Enrollment fees ..........................................................................
.
26,138 26,570 24,741
Personal training ........................................................................
.
111,342 106,802 88,278
Other in-center ...........................................................................
.
121,492 111,396 93,937
Other ..........................................................................................
.
13,424 15,926 14,692
Total revenue .............................................................................
.
$837,001 $769,621 $655,786
10. Commitments and Contingencies
Lease Commitments — We lease certain property under operating leases, which require us to pay maintenance,
insurance and other expenses in addition to annual rentals. The minimum annual payments under all noncancelable
operating leases at December 31, 2009 are as follows:
2010 .................................................................................................................................................. $ 40,278
2011 .................................................................................................................................................. 40,422
2012 .................................................................................................................................................. 39,529
2013 .................................................................................................................................................. 38,801
2014 .................................................................................................................................................. 39,661
Thereafter ......................................................................................................................................... 571,292
Total minimum annual payments under all noncancelable operating leases .................................... $769,983
Rent expense under operating leases was $40.2 million, $27.4 million and $19.4 million for the years ended
December 31, 2009, 2008 and 2007, respectively. Certain lease agreements call for escalating lease payments over
the term of the lease, which result in a deferred rent liability due to recognizing the expense on the straight-line basis
over the life of the lease.
Sale-Leaseback Transactions -- In 2003, we financed two of our Michigan centers pursuant to the terms of a sale-
leaseback transaction that qualified as an operating lease. Pursuant to the terms of the lease, we agreed to lease the
centers for a period of 20 years. At December 31, 2009, the future minimum lease payments due under the lease
amounted to $71.9 million.
On August 21, 2008, we, along with a wholly owned subsidiary, entered into a Purchase and Sale Agreement (the
“Purchase Agreement”) with Senior Housing Properties Trust (“Senior Housing”) providing for the sale of certain
properties to Senior Housing in a sale-leaseback transaction. The properties are located in Alpharetta, Georgia,
Allen, Texas, Omaha, Nebraska and Romeoville, Illinois (the “Properties”), and were sold to Senior Housing for
$100.0 million. Pursuant to the terms of a Lease Agreement (the “Lease”) between our subsidiary and SNH LTF
Properties LLC (“SNH”), the subsidiary will lease the Properties from SNH. The lease has a total term of 50 years,
including an initial term of 20 years and six consecutive renewal terms of five years each. Renewal options may
only be exercised for all the Properties combined, and must be exercised no less than 12 months before the lease
term ends. The initial rent will be approximately $9.1 million per year, increased after every fifth year during the
initial term and the first two renewal options, if exercised, by an amount equal to 10% of the rent paid in the
calendar year immediately before the effective date of the rent increase. During the last four renewal terms, rent will
be the greater of (i) 110% of the rent paid in the calendar month immediately before the renewal term commences or
(ii) fair market rent, as mutually agreed by the parties or determined by a mutually agreed upon independent third