Lifetime Fitness 2013 Annual Report Download - page 82

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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)
76
and were reviewed and approved by a majority of our independent and disinterested directors. To assist our board of
directors in evaluating this transaction, a third-party expert was retained at the time of transaction to review the
terms of the lease. The third-party expert determined that the terms of the lease were at market rates.
11. Executive Nonqualified Plan
During fiscal 2006, we implemented the Executive Nonqualified Excess Plan of Life Time Fitness, a non-qualified
deferred compensation plan. This plan was established for the benefit of our highly compensated employees, which
our plan defines as our employees whose projected compensation for the upcoming plan year would meet or exceed
the IRS limit for determining highly compensated employees. This unfunded, non-qualified deferred compensation
plan allows participants the ability to defer and grow income for retirement and significant expenses in addition to
contributions made to our 401(k) Plan.
All highly compensated employees eligible to participate in the Executive Nonqualified Excess Plan of Life Time
Fitness, including but not limited to our executives, may elect to defer up to 50% of their annual base salary and/or
annual bonus earnings to be paid in any coming year. The investment choices available to participants under the
non-qualified deferred compensation plan are of the same type and risk categories as those offered under our 401(k)
Plan and may be modified or changed by the participant or us at any time. Distributions can be paid out as in-service
payments or at retirement. Retirement benefits can be paid out as a lump sum or in annual installments over a term
of up to 10 years. We made matching contributions to this plan during fiscal 2013. Any contributions to this plan
vest to each participant according to their years of service with us. At December 31, 2013, $5.7 million had been
deferred and is being held on behalf of the employees. This amount is reflected as an other long-term liability on the
balance sheet.
12. Quarterly Financial Data (Unaudited)
The following is a condensed summary of actual quarterly results of operations:
2013 2012
1st
Quarter 2nd
Quarter 3rd
Quarter 4th
Quarter 1st
Quarter 2nd
Quarter 3rd
Quarter 4th
Quarter
Total revenue $290,747 $308,108 $316,011 $291,038 $268,447 $288,304 $294,873 $275,323
Gross profit (1) 111,779 118,866 116,058 113,392 103,325 112,388 112,449 107,158
Income from
operations 52,374 60,726 62,856 48,668 48,322 56,583 59,408 43,915
Net income 28,101 33,187 34,386 26,038 25,672 30,292 32,144 23,430
Earnings per
share (2):
Basic (3) $ 0.68 $ 0.80 $ 0.83 $ 0.64 $ 0.62 $ 0.73 $ 0.77 $ 0.57
Diluted (3) $ 0.67 $ 0.80 $ 0.83 $ 0.63 $ 0.62 $ 0.73 $ 0.77 $ 0.56
(1) We define gross profit as total center revenue less center operations expenses.
(2) See Note 2 for discussion on the computation of earnings per share.
(3) The basic and diluted earnings per share by quarter include the impact of rounding within each quarter.