Lifetime Fitness 2010 Annual Report Download - page 68

LIFE TIME FITNESS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Table amounts in thousands, except share and per share data)
62
Debt Covenants
We were in compliance in all material respects with all restrictive and financial covenants under our various credit
facilities as of December 31, 2010.
5. Income Taxes
The provision for income taxes is comprised of:
For the Year Ended December 31,
2010 2009 2008
Current tax expense .............................................................................. $46,453 $41,721 $26,445
Deferred tax expense ..................................................................................... 7,099 23,316 14,833
Non-current tax expense ....................................................................... (104) (17,596) 5,946
Income tax provision ............................................................................ $53,448 $47,441 $47,224
The amount of deferred tax expense does not reconcile to the change in the deferred tax year end balances due to the
tax effect of other comprehensive income or additional paid-in capital items.
The reconciliation between our effective tax rate on income from continuing operations and the statutory tax rate is
as follows:
For the Year Ended December 31,
2010 2009 2008
Income tax provision at federal statutory rate ...................................... $46,949 $41,939 $41,666
State and local income taxes, net of federal tax benefit ........................ 5,978 5,414 5,236
Other, net .............................................................................................. 521 88 322
Income tax provision ............................................................................ $53,448 $47,441 $47,224
Deferred income taxes are the result of provisions of the tax laws that either require or permit certain items of
income or expense to be reported for tax purposes in different periods than they are reported for financial reporting.
The tax effect of temporary differences that gives rise to the deferred tax liability are as follows:
As of December 31,
2010 2009
Property and equipment ................................................................................................. ($93,978) ($81,112)
Partnership interest ........................................................................................................ (8,091) (8,334)
Accrued rent expense .................................................................................................... 12,538 11,592
Other comprehensive income ........................................................................................ – 1,581
Costs related to deferred revenue .................................................................................. (3,593) (5,411)
Other, net ....................................................................................................................... 6,913 5,155
Net deferred tax liability ................................................................................................ ($86,211) ($76,529)