Lifetime Fitness 2013 Annual Report Download - page 45

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39
million on five of our facilities. We expect to use the proceeds from the amended revolving credit facility and
mortgage financings for general corporate purposes, future center expansion and to help fund other growth
initiatives.
Our business model operates with negative working capital primarily for two reasons. First, we carry minimal
accounts receivable due to our members' monthly membership dues paid by electronic draft. Second, we fund the
construction of our new centers under standard arrangements with our vendors that are paid with cash flows from
operations or the revolving credit facility.
Credit Rating. We have never had public debt. We have never requested or received a credit rating from Standard
and Poor’s Rating Services or Moody’s Investor Service.
The following table summarizes our capital structure.
December 31,
2013 2012
(In thousands)
Debt
Long-term debt $ 824,093 $ 691,867
Current maturities of long-term debt 24,505 12,603
Total debt 848,598 704,470
Shareholders’ Equity
Common stock 843 864
Additional paid-in capital 402,147 447,912
Retained earnings 750,654 628,942
Accumulated other comprehensive loss (5,615)(4,801)
Total shareholders’ equity 1,148,029 1,072,917
Total capitalization $ 1,996,627 $ 1,777,387
Operating Activities
As of December 31, 2013, we had total cash and cash equivalents of $8.3 million. We also had $337.4 million
available under the terms of our revolving credit facility as of December 31, 2013.
Net cash provided by operating activities was $258.4 million for 2013, compared to $255.7 million for 2012, driven
primarily by a $10.2 million, or 9.1%, improvement in net income and a $9.2 million increase in deferred income
taxes, partially offset by a $20.4 million change in operating assets caused primarily by a $14.1 million increase in
accounts payable.
Net cash provided by operating activities was $255.7 million for 2012, compared to $227.9 million for 2011, driven
primarily by an $18.9 million, or 20.4%, improvement in net income.
Investing Activities
Investing activities consist primarily of purchasing real property, constructing new centers, acquisitions and
purchasing new fitness equipment. In addition, we invest in capital expenditures to maintain and update our existing
centers. We finance the purchase of our property and equipment by cash payments or by financing through notes
payable or capital lease obligations.
Net cash used in investing activities was $359.8 million for 2013, compared to $251.4 million for 2012. The
increase of $108.4 million was primarily due to a $124.8 million increase in capital expenditures as a result of our
increasing center construction activity, partially offset by a decrease of $17.4 million in acquisitions.
Net cash used in investing activities was $251.4 million for 2012, compared to $232.9 million for 2011. The increase
of $18.5 million was primarily due to a $58.9 million increase in capital expenditures, partially offset by a decrease
of $39.7 million in acquisitions.