Lifetime Fitness 2007 Annual Report Download - page 51

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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)
45
Property and Equipment — Property, equipment and leasehold improvements are recorded at cost. Improvements
are capitalized, while repair and maintenance costs are charged to operations when incurred. The cost and
accumulated depreciation of property and equipment retired and other items disposed of are removed from the
related accounts, and any residual values are charged or credited to income.
Depreciation is computed primarily using the straight-line method over estimated useful lives of the assets.
Leasehold improvements are amortized using the straight-line method over the shorter of the lease term or the
estimated useful life of the improvement. Accelerated depreciation methods are used for tax reporting purposes.
Property and equipment consist of the following:
Depreciable December 31,
Lives 2007 2006
Land............................................................................. $ 219,347 $ 154,680
Buildings...................................................................... 3-40 years 869,365 630,565
Leasehold improvements ............................................. 1-20 years 36,253 34,695
Construction in progress .............................................. 137,335 82,589
1,262,300 902,529
Equipment:
Fitness...................................................................... 5-7 years 76,620 59,559
Computer and telephone.......................................... 3-5 years 35,792 32,335
Capitalized software ................................................ 5 years 21,884 17,345
Decor and signage ................................................... 5 years 8,962 7,018
Audio/visual ............................................................ 3-5 years 15,319 11,349
Furniture and fixtures .............................................. 7 years 9,300 7,579
Other equipment ...................................................... 3-7 years 48,135 33,965
216,012 169,150
Property and equipment, gross..................................... 1,478,312 1,071,679
Less accumulated depreciation................................ 219,041 169,557
Property and equipment, net ........................................ $1,259,271 $902,122
At December 31, 2007, we had eleven centers under construction: three in Texas, two in Georgia and one each in
Colorado, Illinois, Missouri, Maryland, New Jersey and Virginia. Construction in progress, including land purchased
for future development totaled $206.3 million at December 31, 2007 and $116.9 million at December 31, 2006.
Capitalized software is our internally developed Web-based systems to facilitate member enrollment and
management, as well as point of sale system enhancements. Costs related to these projects have been capitalized in
accordance with Statement of Position No. 98-1, Accounting for the Costs of Computer Software Developed or
Obtained for Internal Use.
Other equipment consists primarily of cafe, spa and playground and laundry equipment.