Lifetime Fitness 2010 Annual Report Download - page 61

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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We determined the fair value of the swap contract outstanding at December 31, 2009 based upon current fair values
as quoted by recognized dealers. As prescribed by the guidance, we recognize the fair value of the swap liability as a
Level 2 valuation.
Use of Estimates — The preparation of financial statements in conformity with accounting principles generally
accepted in the United States of America requires management to make estimates and assumptions that affect the
reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the reporting period. Ultimate results could
differ from those estimates. In recording transactions and balances resulting from business operations, we use
estimates based on the best information available. We use estimates for such items as depreciable lives, probability
of meeting certain performance targets and tax provisions. We also use estimates for calculating the amortization
period for deferred enrollment fee revenue and associated direct costs, which are based on the historical estimated
average membership life. We revise the recorded estimates when better information is available, facts change or we
can determine actual amounts. These revisions can affect operating results.
Supplemental Cash Flow Information — Decreases (increases) in operating assets and increases (decreases) in
operating liabilities are as follows:
For the Year Ended December 31,
2010 2009 2008
Accounts receivable............................................................................... ($1,773) $ 1,762 ($ 1,747)
Income tax receivable ............................................................................ (9,916) – 5,917
Center operating supplies and inventories ............................................. (2,637) 11 (308)
Prepaid expenses and other current assets ............................................. 729 1,126 5,028
Deferred membership origination costs ................................................. 7,015 5,093 (3,515)
Other assets............................................................................................ – (1,564) –
Accounts payable .................................................................................. 4,703 349 (5,364)
Accrued expenses .................................................................................. 5,082 2,167 (315)
Deferred revenue ................................................................................... (8,504) (4,025) (2,190)
Deferred rent liability ............................................................................ 3,139 1,123 2,399
Other liabilities ...................................................................................... 955 (16,993) 13,638
Changes in operating assets and liabilities ............................................ ($1,207) ($10,951) $13,543
Our capital expenditures were as follows:
For the Year Ended December 31,
2010 2009 2008
Purchases of property and equipment .................................................... $131,671 $146,632 $463,337
Non-cash property and equipment purchases financed through
capital lease obligations ...................................................................... – 31 9,910
Non-cash property purchases in construction accounts payable ............ 14,327 (53,789) 3,963
Non-cash share-based compensation capitalized to projects under
development ....................................................................................... 319 385 641
Total capital expenditures ...................................................................... $146,317 $ 93,259 $477,851
We made cash payments for income taxes for each of the three years ended December 31, 2010, 2009 and 2008 of
$56.1 million, $41.3 million and $19.9 million, respectively.