Lifetime Fitness 2010 Annual Report Download - page 46

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40
The following schedule reflects 2010 and 2009 capital expenditures by type of expenditure:
For the Year Ended December 31,
2010 2009
(In thousands)
New center land and construction ............................................................... $111,942 $60,915
Initial remodels of acquired centers ............................................................. 2,706 2,091
Maintenance of existing facilities and centralized infrastructure ................ 31,669 30,253
Total capital expenditures ............................................................................ $146,317 $93,259
At December 31, 2010 we had purchased the real property for two and entered into a ground lease for one of the
three large format centers we plan to open in 2011, and we had purchased real property for one and entered into a
ground lease for two of the large format centers that we plan to open after 2011.
We expect our capital expenditures to be approximately $150 to $175 million in 2011, of which we expect to incur
approximately $110 to $125 million for new center construction and approximately $40 to $50 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, 2010, we had the following changes to our capital structure.
Mortgage Notes Payable to Real Estate Investment Trust
On February 23, 2010, we prepaid three of the mortgage notes payable to Teachers Insurance and Annuity
Association of America (“TIAA”) at the par amount of $30.2 million. Concurrent with the prepayment, the
mortgages were released on three of our centers. Additionally, the loan documents with TIAA were amended
reducing the number of shares of our common stock our Chief Executive Officer must retain from 1.8 million to 1.0
million. As of the date of the prepayment, the obligations to TIAA under the remaining ten mortgage notes payable
remain due in July 2011. In March 2010, TIAA sold a portfolio of mortgages, including ours, to Starwood. As a
result of our intent and ability to refinance the Starwood notes payable with proceeds from our revolving credit
facility, the balance at December 31, 2010 is classified as long-term debt.
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 rate 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. On
October 10, 2010, our interest rate swap contract expired without renewal.
See footnote 4, “Long-Term Debt” to our consolidated financial statements for a description of all of our
outstanding financing arrangements.
Debt Covenants
We are in compliance in all material respects with all restrictive and financial covenants under our various credit
facilities as of December 31, 2010.