Lifetime Fitness 2012 Annual Report Download - page 70

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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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, 2012, $2.5 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, 2012, $9.0 million was outstanding.
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 in 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.
Variable Rate Demand Notes
In July 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 in July 2033, bear interest at a variable rate that is adjusted weekly.
The interest rate at December 31, 2012 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 in June 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 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, 2012,
$32.4 million remained outstanding on the notes.
Promissory Note Payable to Lender
In December 2007, we borrowed $8.5 million, evidenced by a promissory note that matures in January 2015, bears
fixed interest at 5.78% and is secured by an interest in certain personal property. As of December 31, 2012, $5.8
million was outstanding on this note.
Mortgage Notes Payable to Real Estate Investment Trust
In 2001 and 2002, we financed 13 of our centers with a real estate investment trust pursuant to the terms of
individual notes. On February 23, 2010, we prepaid three of the mortgage notes payable at the par amount of $30.2
million. Concurrent with the prepayment, the mortgages were released on three of our centers. On April 4, 2011, we
prepaid the remaining ten mortgage notes payable at the par amount of $69.5 million primarily using our revolving
credit facility. Concurrent with the prepayment, the mortgages were released on the remaining ten related centers.