Lifetime Fitness 2010 Annual Report Download - page 67

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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)
61
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, 2010, the present value of the future minimum lease payments due under the lease amounted to
$6.1 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, 2010, the present value of the future
minimum lease payments due under the lease amounted to $9.7 million.
We have financed our purchase of some of our equipment through capital lease agreements with an agent and
lender, on behalf of itself and other lenders. The terms of such leases are typically 60 months and our interest rates
range from 5.5% to 7.5%. As security for the obligations owing under the capital lease agreements, we have granted
a security interest in the leased equipment to the lender or its assigns. At December 31, 2010, $1.9 million was
outstanding under these leases.
We are a party to capital equipment leases with third parties which include monthly rental payments of
approximately $0.3 million as of December 31, 2010. Amortization recorded for these capital leased assets totaled
$1.1 million and $1.0 million for the years ended December 31, 2010 and 2009, respectively. The following is a
summary of property and equipment recorded under capital leases:
December 31,
2010 2009
Land and buildings ........................................................................................................... $15,484 $15,484
Equipment ........................................................................................................................ 3,887 4,014
Gross property and equipment under capital lease ........................................................... 19,371 19,498
Less accumulated amortization ....................................................................................... 4,869 4,196
Net property and equipment under capital lease ............................................................... $14,502 $15,302
Future minimum lease payments and the present value of net minimum lease payments on capital leases at
December 31, 2010 are as follows:
2011 ........................................................................................................................................................ $ 2,501
2012 ........................................................................................................................................................ 2,551
2013 ........................................................................................................................................................ 1,910
2014 ........................................................................................................................................................ 11,405
2015 ........................................................................................................................................................ 1,020
Thereafter ............................................................................................................................................... 5,440
24,827
Less amounts representing interest ......................................................................................................... 7,180
Present value of net minimum lease payments ....................................................................................... 17,647
Current portion ....................................................................................................................................... 1,037
$16,610