Lifetime Fitness 2007 Annual Report Download - page 62
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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)
56
5. Subsequent Event
On January 24, 2008, we amended our credit facility with U.S. Bank National Association to increase the amount of
the accordion feature from $25.0 million to $200.0 million and increase the senior secured operating company
leverage ratio from not more than 2.50 to 1.00 to not more than 3.25 to 1.00. The amendment also allows for the
issuance of additional senior debt and sharing of related collateral with lenders other than the existing bank
syndicate.
6. Income Taxes
The provision for income taxes is comprised of:
December 31,
2007 2006 2005
Current tax expense............................................................. $33,358 $ 30,348 $ 23,443
Deferred tax expense................................................................... 8,297 3,165 3,315
Non-current tax expense...................................................... 3,565 — —
Income tax provision .......................................................... $45,220 $33,513 $26,758
The amount of deferred tax expense does not reconcile to the change in the deferred tax year end balances due to the
separate noncurrent tax liability created pursuant to the requirement of FIN 48 and the tax effect of Other
Comprehensive Income items.
The reconciliation between our effective tax rate on income from continuing operations and the statutory tax rate is
as follows:
December 31,
2007 2006 2005
Income tax provision at federal statutory rate ..................... $ 39,634 $ 29,428 $ 23,790
State and local income taxes, net of federal tax benefit....... 4,837 3,268 3,495
Other, net............................................................................. 749 817 (527)
Income tax provision ........................................................... $ 45,220 $ 33,513 $ 26,758
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:
December 31,
2007 2006
Property and equipment.................................................................................
.
$(32,274) $(43,088)
Partnership interest ........................................................................................
.
(8,967) —
Accrued rent expense ....................................................................................
.
2,618 5,612
Other comprehensive income ........................................................................
.
1,226 —
Costs related to deferred revenue ..................................................................
.
(3,280) (1,904)
Other, net.......................................................................................................
.
3,258 796
Net deferred tax liability................................................................................
.
$(37,419) $(38,584)