Lifetime Fitness 2010 Annual Report Download - page 57

LIFE TIME FITNESS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Table amounts in thousands, except share and per share data)
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Other Assets — We record other assets at cost. Amortization of financing costs is computed over the periods of the
related debt financing. Other assets consist of the following:
December 31,
2010 2009
Financing costs, net .................................................................................................... $ 6,328 $ 8,535
Investment in unconsolidated affiliate (see Note 3) .................................................... 3,454 3,148
Intangible assets .......................................................................................................... 7,964 2,906
Land held for sale ....................................................................................................... 23,225 21,346
Executive nonqualified plan (see Note 10) ................................................................. 3,147 2,020
Other ........................................................................................................................... 4,079 4,425
Total other assets ........................................................................................................ $48,197 $42,380
Land held for sale consists of excess land purchased as part of our original center site acquisitions. All land held for
sale is currently being marketed for sale. If the excess land is currently under contract for sale, the cost is reflected as
current and listed within prepaid expenses and other current assets. We had $23.2 million and $21.3 million of land
held for sale, long-term, at December 31, 2010 and 2009, respectively. We had no land held for sale, short-term, at
December 31, 2010 and 2009.
Intangible assets are comprised principally of leasehold rights at our Highland Park, Minnesota office building, trade
names and curriculum-based intangible assets. In accordance with accounting guidance on intangible assets,
intangible assets determined to have an indefinite useful life, are not amortized but instead tested for impairment at
least annually.
We are required to test our intangible assets for impairment on an annual basis; we perform the test each September
30. We are also required to evaluate these assets for impairment between annual tests if an event occurs or
circumstances change that would more likely than not reduce the fair value of the intangible asset below its carrying
amount. An indicator of potential impairment that could impact our intangible asset values include, but is not limited
to, a significant loss of occupancy at our rental property located in Highland Park, Minnesota. We expect the facility
to continue to be used as a rental property with continuing lease renewals and/or replacements and there have been
no legal, regulatory or contractual provisions that would indicate that we could not renew the leases. Accordingly,
the leasehold rights, which include in-place lease value and tenant origination value, were originally determined to
have an indefinite life. However, during our quarter ended June 30, 2010, we determined it was appropriate to re-
evaluate our useful life given the recent challenging commercial real estate markets and the current economic
environment. Based upon our review, we determined our leasehold rights to have a finite life. Accordingly, we
amortize the remaining carrying value of this intangible asset prospectively over the remaining weighted average
lease term for in-place lease value and weighted average lease term plus expected renewal options for tenant
origination value. We performed an impairment analysis as of the date of our decision to change the useful life from
an indefinite life to a finite life and determined there to be no impairment.