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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)
58
Fair Value Measurements on a Nonrecurring Basis
Assets and liabilities that are measured at fair value on a nonrecurring basis relate primarily to our tangible fixed
assets, goodwill and intangible assets, which are remeasured when the derived fair value is below carrying value on
our consolidated balance sheets. For these assets, we do not periodically adjust carrying value to fair value except in
the event of impairment. If we determine that impairment has occurred, the carrying value of the asset would be
reduced to fair value and the difference would be recorded as a loss within operating income in our consolidated
statements of operations.
We had no remeasurements of such assets or liabilities to fair value during the years ended December 31, 2013 or
2012.
Financial Assets and Liabilities Not Measured at Fair Value
The carrying amounts related to cash and cash equivalents (Level 1), 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. For variable rate loans that re-price frequently,
fair values are based on carrying values. The fair value of fixed rate loans is estimated based on the discounted cash
flows of the loans using current market rates, which are estimated based on recent financing transactions (Level 3).
The fair value estimates presented are based on information available to us as of December 31, 2013. 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, 2013
Carrying
Value Estimated
Fair Value
Fixed-rate debt $ 487,556 $ 488,441
Obligations under capital leases 14,965 15,150
Floating-rate debt 346,077 346,077
Total $ 848,598 $ 849,668
Comprehensive Income — Comprehensive income (loss) reflects the change in equity of a business enterprise
during a period from transactions and other events and circumstances from nonowner sources. For us, the difference
between net income as reported on the consolidated statements of operations and comprehensive income is a loss of
$5.6 million. This difference is related to the interest rate swap contract and foreign currency translation due to
expenditures for initial construction costs for the construction and operations of one open center and one center
under construction, in Toronto, Canada, our first international locations. For more information on the swap contract,
see Note 4.