Lifetime Fitness 2013 Annual Report Download - page 72

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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)
66
December 31,
2013 2012
Land and buildings $ 15,467 $ 15,339
Equipment — 3,856
Gross property and equipment under capital lease 15,467 19,195
Less accumulated amortization 3,635 6,296
Net property and equipment under capital lease $ 11,832 $ 12,899
Future minimum lease payments and the present value of net minimum lease payments on capital leases at
December 31, 2013 are as follows:
2014 $ 11,460
2015 1,075
2016 1,057
2017 1,020
2018 1,020
Thereafter 2,424
Total future minimum lease payments 18,056
Less amounts representing interest 3,091
Present value of net minimum lease payments 14,965
Current portion 10,267
$ 4,698
5. Subsequent Event
Financing. In January 2014, a wholly owned subsidiary obtained a mortgage loan in the original principal amount of
$80.0 million from Well Fargo Bank, N.A. pursuant to a promissory note and related agreements dated January 28,
2014. The mortgage financing is secured by mortgages on five properties owned by the subsidiary and operated as
Life Time Fitness centers located in Orland Park, Illinois, Centreville, Virginia, South Austin, Texas, San Antonio,
Texas and Gilbert, Arizona. The mortgage financing matures in February 1, 2024. Interest on the amounts borrowed
under the mortgage financing referenced above is 5.06% per annum, with a constant monthly debt service payment
of $0.5 million. Our subsidiary LTF Real Estate CMBS II, LLC as landlord, and LTF Club Operations Company,
Inc., another wholly owned subsidiary as tenant, entered into a lease agreement dated January 28, 2014 with respect
to the properties. The initial term of the lease is for 15 years, but may be extended at the option of LTF Club
Operations Company, Inc. for five additional five-year terms. Our subsidiaries may not transfer any of the properties
except as permitted under the loan agreements. We guaranty the obligations of our subsidiary as tenant under the
lease.
As additional security for the subsidiary's obligations under the mortgage financing, the subsidiary granted a security
interest in certain personal property of the subsidiary, the rents and leases from the properties and and certain bank
accounts belonging to the subsidiary that the lender has required pursuant to the mortgage financing.
Acquisition. In January 2014, we acquired an athletic event operating company which operates a series of athletic
events around the country. This acquisition complements our existing portfolio of athletic events. The acquisition
price was less than one percent of our consolidated total assets at December 31, 2013. We are currently in the
process of finalizing the valuation of the assets acquired and liabilities assumed.