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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)
63
tenant of the six properties. Our subsidiaries may not terminate the lease or transfer their interests in the properties
except as permitted under the loan and lease agreements. We guarantee the obligations of LTF Real Estate Company,
Inc. as tenant under the lease. As of December 31, 2011, $71.9 million remained outstanding on the loan.
Other Mortgage Notes Financing
In January 2002, we financed one Minnesota center using an obligation bearing interest at a fixed rate of 6.42%
amortized over a 10 year period. This obligation was due in full January 2012. As security for the obligation, we
granted a mortgage on this center. In September 2011, we prepaid the mortgage note payable using our revolving
credit facility. Concurrent with the prepayment, the mortgage was released on the related center.
In August 2002, we financed one Minnesota center using an obligation bearing interest at a fixed rate of 6.39%
amortized over a 10 year period. This obligation was due in full October 2012. As security for the obligation, we
granted a mortgage on this center. In September 2011, we prepaid the mortgage note payable using our revolving
credit facility. Concurrent with the prepayment, the mortgage was released on the related center.
In November 2008, we financed one Minnesota center using an obligation bearing interest at a fixed rate of 6.54%
amortized over a 20 year period. This obligation is due in full November 2013. As security for the obligation, we
have granted a mortgage on this center. As of December 31, 2011, $5.3 million was outstanding.
In March 2009, we financed one Minnesota center using an obligation bearing interest at a fixed rate of 6.25%
amortized over a 15-year period. This obligation is due in full in March 2014. As security for the obligation, we have
granted a mortgage on this center. At December 31, 2011, $4.2 million was outstanding.
In May 2009, we financed one Minnesota center using an obligation bearing interest at a rate of 7.10%, to be reset in
May 2014 and May 2019 using the five-year LIBOR swap rate plus 4.50%, with a 6.00% floor, and amortized over a
20-year period. This obligation is due in full in May 2024. As security for the obligation, we have granted a
mortgage on this center. At December 31, 2011, $2.7 million was outstanding.
In November 2009, we financed one Minnesota center using an obligation bearing interest at a fixed rate of 6.95%
amortized over a 15-year period. This obligation is due in full in November 2014. As security for the obligation, we
have granted a mortgage on this center. At December 31, 2011, $9.4 million was outstanding.
Variable Rate Demand Notes
On July 13, 2008, a wholly owned subsidiary issued variable rate demand notes in the principal amount of $34.2
million, the proceeds of which were used to provide permanent financing for our corporate headquarters and our
Overland Park, Kansas center. The notes, which mature on July 1, 2033, bear interest at a variable rate that is
adjusted weekly. The interest rate at December 31, 2011 was 0.3%. The notes are backed by a letter of credit from
General Electric Capital Corporation (GECC), for which we will pay GECC an annual fee of 1.40% of the
maximum amount available under the letter of credit, as well as other drawing and reimbursement fees. In
connection with the letter of credit, which expires June 1, 2023, the borrower subsidiary entered into a
reimbursement agreement with GECC. Under the terms of the reimbursement agreement if the notes are purchased
with proceeds of a drawing under the letter of credit, and cannot thereafter be remarketed, GECC is obligated to hold
the notes and the indebtedness evidenced by those notes will be amortized over a period ending June 1, 2023. The
subsidiary’s obligations under the reimbursement agreement are secured by mortgages against the two
aforementioned properties. We guaranteed the subsidiary’s obligations under the leases that will fund any
reimbursement obligations. As of December 31, 2011, $32.9 million remained outstanding on the notes.