Lifetime Fitness 2010 Annual Report Download - page 60

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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)
54
The basic and diluted earnings per share calculations are shown below:
For the Year Ended December 31,
2010 2009 2008
Net income .................................................................................................... $80,692 $72,384 $71,821
Weighted average number of common shares outstanding – basic ............... 39,809 39,297 39,002
Effect of dilutive stock options ................................................................. 156 69 164
Effect of dilutive restricted stock awards ................................................. 420 504 176
Weighted average number of common shares outstanding – diluted ....... 40,385 39,870 39,342
Basic earnings per common share ................................................................. $ 2.03 $ 1.84 $ 1.84
Diluted earnings per common share .............................................................. $ 2.00 $ 1.82 $ 1.83
The number of total common shares outstanding at December 31, 2010 was 41,924,985.
Dividends — We have not declared or paid any cash dividends on our common stock in the past. As discussed in
Note 4, the terms of our revolving credit facility and certain debt financing agreements prohibit us from paying
dividends without the consent of the lenders.
Fair Value of Financial Instruments — The carrying amounts related to cash and cash equivalents, accounts
receivable, income tax receivable, accounts payable and accrued liabilities approximate fair value due to the
relatively short maturities of such instruments. The fair value of our long-term debt and capital leases are estimated
based on estimated current rates for debt with similar terms, credit worthiness and the same remaining maturities.
The fair value estimates presented are based on information available to us as of December 31, 2010. These fair
value estimates have not been comprehensively revalued for purposes of these consolidated financial statements
since that date, and current estimates of fair values may differ significantly.
The following table presents the carrying value and the estimated fair value of long-term debt:
December 31, 2010
Carrying
Value
Estimated
Fair Value
Fixed-rate debt ............................................................................................... $207,306 $186,780
Obligations under capital leases .................................................................... 17,647 17,628
Floating-rate debt .......................................................................................... 387,591 380,582
Total .............................................................................................................. $612,544 $584,990
Fair Value Measurements — The accounting guidance established a framework for measuring fair value and
expanded disclosures about fair value measurements. The guidance applies to all assets and liabilities that are
measured and reported on a fair value basis. This enables the reader of the financial statements to assess the inputs
used to develop those measurements by establishing a hierarchy for ranking the quality and reliability of the
information used to determine fair values. The guidance requires that each asset and liability carried at fair value be
classified into one of the following categories:
Level 1: Quoted market prices in active markets for identical assets or liabilities.
Level 2: Observable market based inputs or unobservable inputs that are corroborated by market data.
Level 3: Unobservable inputs that are not corroborated by market data.