Lifetime Fitness 2007 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
The following table presents revenue for the years ended December 31, 2007, 2006 and 2005:
For the Year Ended December 31,
2007 2006 2005
Membership dues.......................................................................
.
$ 434,138 $ 339,623 $ 262,989
Enrollment fees ..........................................................................
.
24,741 22,438 20,341
Personal training ........................................................................
.
88,278 65,191 45,272
Other in-center ...........................................................................
.
93,937 73,141 52,438
Other ..........................................................................................
.
14,692 11,504 9,076
Total revenue .............................................................................
.
$ 655,786 $ 511,897 $ 390,116
10. Commitments and Contingencies
Lease Commitments — We lease certain property under operating leases, which require us to pay maintenance,
insurance and other expenses in addition to annual rentals. The minimum annual payments under all noncancelable
operating leases at December 31, 2007 are as follows:
2008........................................................................................................................
.
$ 17,336
2009........................................................................................................................
.
18,679
2010........................................................................................................................
.
18,710
2011........................................................................................................................
.
18,578
2012........................................................................................................................
.
19,429
Thereafter ...............................................................................................................
.
278,266
$ 370,998
Rent expense under operating leases was $19.4 million, $13.7 million and $10.2 million for the years ended
December 31, 2007, 2006 and 2005, respectively. Certain lease agreements call for escalating lease payments over
the term of the lease, which result in a deferred rent liability due to recognizing the expense on the straight-line basis
over the life of the lease.
In October 2003, we financed two of our Michigan centers pursuant to the terms of a sale-leaseback transaction that
qualified as an operating lease. Pursuant to the terms of the lease, we agreed to lease the centers for a period of 20
years. At December 31, 2007, the future minimum lease payments due under the lease amounted to $80.9 million.
Purchase Commitments — We contract in advance for land purchases and construction services and materials,
among other things. The purchase commitments were $156.4 million, $164.5 million and $82.7 million at December
31, 2007, 2006, and 2005, respectively.
Litigation — We are engaged in legal proceedings incidental to the normal course of business. Due to their nature,
such legal proceedings involve inherent uncertainties, including but not limited to, court rulings, negotiations
between affected parties and governmental intervention. We have established reserves for matters that are probable
and estimable in amounts we believe are adequate to cover reasonable adverse judgments not covered by insurance.
Based upon the information available to us and discussions with legal counsel, it is our opinion that the outcome of
the various legal actions and claims that are incidental to the our business will not have a material adverse impact on
the consolidated financial position, results of operations or cash flows; however, such matters are subject to many
uncertainties, and the outcome of individual matters are not predictable with assurance.