Lifetime Fitness 2009 Annual Report Download - page 72

LIFE TIME FITNESS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Table amounts in thousands, except share and per share data)
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The options granted generally vest over a period of four to five years from the date of grant. The following table
summarizes information concerning options outstanding and exercisable as of December 31, 2009:
Range of Exercise Prices
Number
Outstanding
Weighted Average
Remaining
Contractual Life
(Years)
Weighted
Average
Exercise
Price
Number
Exercisable
Weighted
Average
Exercise
Price
$8.00 to $12.00 ..................... 147,825 3.1 $10.12 147,825 $10.12
$18.50 to $21.25 ................... 232,151 4.5 18.55 232,151 18.55
$25.47 to $27.25 ................... 297,250 5.2 25.64 297,250 25.64
$31.40 to $50.85 ................... 133,352 6.0 38.70
118,737 37.73
$8.00 to $50.85 ..................... 810,578 4.8 $22.93
795,963 $22.49
Our net cash proceeds from the exercise of stock options were $2.5 million and $3.0 million for the years ended
December 31, 2009 and 2008, respectively. The actual income tax benefit realized from stock option exercises was
$0.5 million and $0.1 million, respectively, for those same periods. In accordance with the related accounting
guidance, the excess tax benefits from the exercise of stock options are presented as cash flows from financing
activities.
Employee Stock Purchase Plan and Related Share Repurchase Plan
Our employee stock purchase program (“ESPP”) provides for the sale of up to 1,500,000 share of our common stock
to our employees at discounted purchase prices. The cost per share under this plan is currently 90% of the fair
market value of our common stock on the last day of the purchase period, as defined. The first purchase period
during 2009 under the ESPP began January 1, 2009 and ended June 30, 2009. The second purchase period began
July 1, 2009 and ended December 31, 2009. Compensation expense under the ESPP, which was $0.1 million for
2009, is based on the discount of 10% at the end of the purchase period. $0.8 million was withheld from employees for
the purpose of purchasing shares under the ESPP. There were 1,375,388 shares of common stock available for purchase
under the ESPP as of December 31, 2009.
In June 2006, our Board of Directors authorized the repurchase of up to 500,000 shares of our common stock from time to
time in the open market or otherwise for the primary purpose of offsetting the dilutive effect of shares pursuant to our
Employee Stock Purchase Plan. During 2009, we repurchased 67,268 shares for approximately $1.0 million. As of
December 31, 2009, there were 375,388 remaining shares authorized to be repurchased for this purpose. The shares
repurchased to date have been purchased in the open market and, upon repurchase, became authorized, but unissued shares
of our common stock.
9. Operating Segments
Our operations are conducted mainly through our distinctive and large, multi-use sports and athletic, professional
fitness, family recreation and spa centers in a resort-like environment. We aggregate the activities of our centers and
other ancillary products and services into one reportable segment as none of the centers or other ancillary products
or services meet the quantitative thresholds for separate disclosure under the applicable accounting. Each of the
centers has similar expected economic characteristics, service and product offerings and customers. Each of the
other ancillary products and services either directly or indirectly, through advertising or branding, compliment the
operations of the centers. Our chief operating decision maker uses EBITDA as the primary measure of operating
segment performance.