Leases

The Company leases office, warehouse and multi-recreational facilities and certain equipment under non-cancelable operating leases. In addition to base rent, the facility leases generally provide for additional rent based on operating results, increases in real estate taxes and other costs. Certain leases provide for additional rent based upon defined formulas of revenue, cash flow or operating results of the respective facilities. Under the provisions of certain of these leases, the Company is required to maintain irrevocable letters of credit, which amounted to $1,136 as of December 31, 2016.

The leases expire at various times through October 31, 2031 and certain leases may be extended at the Company’s option. Escalation terms on these leases generally include fixed rent escalations, escalations based on an inflation index such as the consumer price index, and fair market value adjustments. In the next five years, or the period from January 1, 2017 through December 31, 2021, the Company has leases for 23 club locations that are due to expire without any renewal options, three of which are due to expire in 2017, and 48 club locations that are due to expire with renewal options.

Future minimum rental payments under non-cancelable operating leases are shown in the chart below.



	Minimum Annual Rental
Year Ending December 31,
2017	$	89,846
2018	84,749
2019	77,588
2020	71,202
2021	60,592
Aggregate thereafter	181,302

Rent expense for the years ended December 31, 2016, 2015 and 2014 was $124,952, $124,920 and $124,816, respectively. Such amounts include non-base rent items of $25,384, $24,767 and $24,340, respectively. Including the effect of deferred lease liabilities, rent expense was $124,333, $123,872 and $124,449 for the years ended December 31, 2016, 2015 and 2014.

The Company, as landlord, leases space to third party tenants under non-cancelable operating leases and licenses. In addition to base rent, certain leases provide for additional rent based on increases in real estate taxes, indexation, utilities and defined amounts based on the operating results of the lessee. The sub-leases expire at various times through December 31, 2022. Future minimum rentals receivable under non-cancelable leases are shown in the chart below.



	Minimum Annual Rental
Year Ending December 31,
2017	$	2,032
2018	1,154
2019	865
2020	755
2021	532
Aggregate thereafter	99

Rental income, including non-cash rental income, for the years ended December 31, 2016, 2015 and 2014 was $2,338, $4,669 and $4,791, respectively. For the years ended December 31, 2016 and 2015, such amounts included no additional rental charges above the base rent. For the year ended December 31, 2014, rental income included additional rental charges above the base rent of $229. The Company previously owned the building at the 86th Street club location which housed a rental tenant that generated rental income of approximately $1,926 and $2,000 for the years ended December 31, 2015 and 2014. Refer to Note 8 - Sale of Building for further details.