Basis of Presentation

6 Months Ended

Jun. 30, 2012

Basis of presentation [Abstract]

Basis of Presentation

1. Basis of Presentation

As of June 30, 2012, Town Sports International Holdings, Inc. (the “Company” or “TSI Holdings”), through its wholly-owned subsidiary, Town Sports International, LLC (“TSI, LLC”), operated 160 fitness clubs (“clubs”), comprised of 108 clubs in the New York metropolitan market under the “New York Sports Clubs” brand name, 25 clubs in the Boston market under the “Boston Sports Clubs” brand name, 18 clubs (two of which are partly-owned) in the Washington, D.C. market under the “Washington Sports Clubs” brand name, six clubs in the Philadelphia market under the “Philadelphia Sports Clubs” brand name and three clubs in Switzerland. The Company's operating segments are New York Sports Clubs, Boston Sports Clubs, Philadelphia Sports Clubs, Washington Sports Clubs and Swiss Sports Clubs. The Company has determined that its operating segments have similar economic characteristics and meet the criteria which permit them to be aggregated into one reportable segment.

The condensed consolidated financial statements included herein have been prepared by the Company pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”). The condensed consolidated financial statements should be read in conjunction with the Company's December 31, 2011 consolidated financial statements and notes thereto, included in the Company's Annual Report on Form 10-K for the year ended December 31, 2011. The year-end condensed balance sheet data included within this Form 10-Q was derived from audited financial statements, but does not include all disclosures required by accounting principles generally accepted in the United States of America (“US GAAP”). Certain information and footnote disclosures that are normally included in financial statements prepared in accordance with US GAAP have been condensed or omitted pursuant to SEC rules and regulations. The information reflects all adjustments which, in the opinion of management, are necessary for a fair presentation of the financial position and results of operations for the interim periods set forth herein. The results for the three and six months ended June 30, 2012 are not necessarily indicative of the results for the entire year ending December 31, 2012.

Balance Sheet Revisions

The Company has revised its March 31, 2012, December 31, 2011 and December 31, 2010 consolidated balance sheets to correct a classification error by reflecting a portion of deferred tax assets, from noncurrent to current assets.

	March 31, 2012						December 31, 2011						December 31, 2010
	As Previously						As Previously						As Previously
	Filed		As Revised		Difference		Filed		As Revised		Difference		Filed		As Revised		Difference
Current deferred tax assets, net	$	-	$	20,609	$	20,609	$	-	$	20,218	$	20,218	$	-	$	9,776	$	9,776
Total current assets	$	60,230	$	80,839	$	20,609	$	64,699	$	84,917	$	20,218	$	64,833	$	74,609	$	9,776
Noncurrent deferred tax assets, net	$	37,603	$	16,994	$	(20,609)	$	40,000	$	19,782	$	(20,218)	$	41,883	$	32,107	$	(9,776)
Total assets	$	433,285	$	433,285	$	-	$	449,542	$	449,542	$	-	$	464,166	$	464,166	$	-

These adjustments were not considered material individually or in the aggregate to previously issued financial statements. However, because of the significance of these adjustments, the Company revised the respective balance sheets. These revisions had no impact on the Company's total assets, results of operations or cash flows.

Change in Estimated Average Membership Life

Joining fees and related direct and incremental expenses of membership acquisition, which include sales commissions, bonuses and related taxes and benefits, which are direct and incremental costs related to the sale of new memberships, are currently deferred and recognized, on a straight-line basis, in operations over the estimated average membership life. Currently, the estimated average membership life of an unrestricted member has remained unchanged at 28 months since January 1, 2012.

The Company tracks the estimated average membership life of restricted members separately from unrestricted members. The restricted membership base currently includes student memberships introduced in April 2010, teacher memberships introduced in April 2011 and first responder memberships introduced as a one-time promotional offer in September 2011. The Company now believes the estimated average membership life of a restricted student member is 27 months using historical data from April 2010 through June 30, 2012. This represents an increase from 25 months as of January 1, 2012. If the estimated average membership life for restricted student members had remained at 25 months for the three months ended June 30, 2012, the impact would have been an increase in revenue and net income of approximately $99 and $50, respectively. The Company will continue to monitor attrition trends of students on a quarterly basis and adjust this estimated average membership life accordingly.