Attached files
| file | filename |
|---|---|
| 8-K - FORM 8K - CNL LIFESTYLE PROPERTIES INC | d778803d8k.htm |
| EX-99.1 - PRESS RELEASE - CNL LIFESTYLE PROPERTIES INC | d778803dex991.htm |
 CNL
Lifestyle Properties, Inc. CNL Lifestyle Properties, Inc.
Owning
Owning
America’s
America’s
Lifestyle
Lifestyle
®
®
Third Quarter 2014 Update
Third Quarter 2014 Update
November 14, 2014
November 14, 2014
Exhibit 99.2 |
 2
Forward Looking Statements
Certain statements in this document may constitute forward-looking statements within the meaning
of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”) and
of Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). CNL Lifestyle Properties, Inc. (herein
also referred to as the “Company”) intends that all such forward-looking statements be
covered by the safe-harbor provisions for forward-looking statements of Section 27A of
the Securities Act and Section 21E of the Exchange Act, as applicable.
All statements, other than statements that relate solely to historical facts, including, among others,
statements regarding the Company’s future financial position, business strategy, projected
levels of growth, projected costs and projected financing needs, are forward-looking statements. Those statements
include statements regarding the intent, belief or current expectations of the management team, as
well as the assumptions on which such statements are based, and generally are identified by the
use of words such as “may,” “will,” “seeks,” “anticipates,” “believes,” “estimates,” “expects,” “plans,” “intends,”
“should,” “continues,” “pro forma” or similar expressions.
Forward-looking statements are not guarantees of future performance and actual results may differ
materially from those contemplated by such forward-looking statements due to a variety of risks,
uncertainties and other factors, including but not limited to, the factors detailed in our
Annual Report on Form 10-K for the year ended December 31, 2013, and other documents filed from time to time with the Securities
and Exchange Commission.
Many of these factors are beyond the Company’s ability to control or predict. Such factors
include, but are not limited to: changes in general economic conditions in the U.S. or globally
(including financial market fluctuations); risks associated with our investment strategy; risks associated with the real estate
markets in which the Company invests; risks of doing business internationally and global expansion,
including unfamiliarity with new markets and currency risks; risks associated with the use of
debt to finance the Company’s business activities, including refinancing and interest rate risk and the Company’s failure
to comply with its debt covenants; the Company’s failure to obtain, renew or extend necessary
financing or to access the debt or equity markets; competition for properties and/or tenants in
the markets in which the Company engages in business; the impact of current and future environmental, zoning and other
governmental regulations affecting the Company’s properties; the Company’s ability to make
necessary improvements to properties on a timely or cost- efficient basis; risks related to
development projects or acquired property value-add conversions, if applicable (including construction delays, cost overruns,
the Company’s inability to obtain necessary permits and/or public opposition to these
activities); defaults on or non-renewal of leases by tenants; failure to lease properties
at all or on favorable terms; unknown liabilities in connection with acquired properties or liabilities caused by property managers or operators;
the Company’s failure to successfully manage growth or integrate acquired properties and
operations; material adverse actions or omissions by any joint venture partners; increases in
operating costs and other expense items and costs, uninsured losses or losses in excess of the Company’s insurance coverage;
the impact of outstanding or potential litigation; risks associated with the Company’s tax
structuring; the Company’s failure to qualify and maintain its status as a real estate
investment trust and the Company’s ability to protect its intellectual property and the value of its brand. Management believes these forward-
looking statements are reasonable; however, such statements are necessarily dependent on assumptions,
data or methods that may be incorrect or imprecise and the Company may not be able to realize
them. Investors are cautioned not to place undue reliance on any forward-looking statements which are based
on current expectations. All written and oral forward-looking statements attributable to the
Company or persons acting on its behalf are qualified in their entirety by these cautionary
statements. Further, forward-looking statements speak only as of the date they are made and the Company undertakes no
obligation to update or revise forward-looking statements to reflect changed assumptions, the
occurrence of unanticipated events or changes to future operating results over time unless
otherwise required by law.
|
 CNL
Lifestyle Properties, Inc. Portfolio of 107 lifestyle-oriented
properties and two loans as of
November 7, 2014
Diversified by asset type,
geography and operator
Iconic assets and industry-
leading operators
Summary REIT Information
GAAP Total Assets
$2.5 billion
Property Focus
Demographically Driven / Lifestyle-Oriented
Geographic
Diversification
34 states and 2 Canadian provinces
Established Assets
Conservative Capital Structure
Leasing and Preferred Return Structures
Diversified Portfolio
Exit Strategy
The Board of Directors is evaluating various
strategic alternatives to provide liquidity to
shareholders on or before December 31, 2015
Ski & Mountain
Attractions
Senior Housing
Marinas
Additional
•
24 properties
•
24 properties
•
38 properties
•
17 properties
•
4 properties
CNL Lifestyle Properties, Inc.
3 |
 Recent Highlights
On September 30
th
, 46 of our 48 golf properties were sold and we received net
sales proceeds after closing costs totaling approximately $197 million -
after
retiring existing golf debt, the proceeds were primarily used to
retire other debt
Jefferies LLC, a leading global investment banking and advisory firm, is currently
assisting in the evaluation of various strategic alternatives to
provide liquidity to
shareholders
Acquired five senior housing communities in Q3 2014 totaling $101 million
Invested over $8 million of owner capital into various portfolio
assets, including
the Splashtown expansion
Year to date through September 30, 2014, our “same-store”
attraction properties
experienced an 8.3% increase in revenue and a 16.0% increase in EBITDA
Received $83 million in proceeds from the repayment of two notes
receivable
that matured in September and used proceeds to retire debt
4 |
 Geographic Diversification
5 |
 The portfolio is broadly diversified across asset classes to
mitigate against seasonality and volatility
Sector Diversification
As of November 7, 2014
By Initial Purchase Price
6
30%
25%
26%
7%
12% |
 Sector Performance
7
Ski & Mountain
24 properties
Attractions
24 properties
Additional Lifestyle
4 properties
Senior Housing
38 properties
Marinas
17 properties
107 properties as of November 7, 2014
Source: CNL Lifestyle Properties, Inc. September 30, 2014, Form 10-Q
Past performance is not indicative of future returns.
-
Favorable weather
conditions drove
summer operations
(mountain biking and
aerial adventures) and
strong group and
conference business in
Q3 offset by higher
employee healthcare
costs.
-
Higher revenue and
EBITDA due to capital
improvements and
initiatives to drive
attendance. As a result,
the sector experienced
higher visitation, higher
season pass sales, and
higher in-park spending.
-
Both occupancy and
Revenue per Occupied
Unit were up over the last
year. Average occupancy
for the entire portfolio was
91.9% for the quarter
ended September 30,
2014, exceeding the
industry average of
90.5%. Higher average
resident rates offset by
higher resident care
expenses and R&M.
-
Revenue and EBITDA were
down slightly in Q3
compared to the prior year
due to property transitions
from leased to managed
structures. We expect
improved operating results in
the future after the initial
transition year.
-
Steady performance at
Dallas Market Center.
Refinancing existing debt
in October.
-
Includes two remaining
golf courses which we
expect to sell by the end
of 2014. |
 Same-Store Property Performance
8
Note: Includes results for comparable consolidated leased and managed properties
owned for the entirety of 2014 and 2013. Source: CNL Lifestyle
Properties, Inc. September 30, 2014, Form 10-Q # of
Properties
Revenue
EBITDA
TTM Rent
Coverage
Ski and Mountain Lifestyle
17
6.2%
-11.2%
1.35x
Attractions
21
8.4%
10.0%
2.25x
Senior Housing
20
2.3%
-8.6%
1.17x
Marinas
17
-1.9%
-10.8%
n/a
Total
75
6.7%
6.5%
1.45x
# of
Properties
Revenue
EBITDA
Ski and Mountain Lifestyle
17
-2.2%
-6.7%
Attractions
21
8.3%
16.0%
Senior Housing
20
3.0%
-5.6%
Marinas
17
-4.3%
-17.4%
Total
75
1.8%
0.6%
Three Months Ended September 30, 2014, Compared to Same Period 2013
Nine Months Ended September 30, 2014, Compared to Same Period 2013
Ski and mountain lifestyle - favorable weather conditions for summer operations which include
mountain biking and aerial adventures, as well as strong group and conference business at
various resorts but was offset with higher health care costs when compared to 2013.
Sector down YTD due to warm winter temperatures and drought conditions at our California
properties. Attractions - increase in both revenue and EBITDA due to capital improvements made and
manager’s efforts to promote and drive attendance which resulted in an increase in season
pass sales and in-park spending. Year over year increase in visitation – 10.3%.
Senior housing - revenue increased due to higher average resident rates but was offset by higher
resident care expenses, repairs and maintenance expenses and other operating costs.
Marinas - transitioned from leased to managed structures during Q4 2013 and Q2 2014 resulting in
the incurrence of management fees reducing the operating margin on the properties. |
 Full
Year Financial Summary (in Millions) 9
Source: CNL Lifestyle Properties, Inc. 2013 Form 10-K and September 30, 2014,
Form 10-Q The Company believes that its presentation of historical
non-GAAP financial measures provides useful supplementary information to and facilitates additional analysis by investors. These historical
non-GAAP financial measures are in addition to, not a substitute for, or
superior to, measures of financial performance prepared in accordance with U.S. Generally Accepted Accounting Principles.
See reconciliation to GAAP net income (loss) contained in the Appendix.
Past performance is not indicative of future returns.
Trailing 12 month 2014 FFO, MFFO and Adjusted EBITDA were
higher primarily due to:
An increase in rents from properties acquired after Q3 2013 and
increases in “same-store”
rents and NOI from managed properties
Reduced asset management fees due to the sale of 42 senior
housing properties held in three unconsolidated joint ventures and a
reduction in fees charged by our Advisor, effective April 1, 2014, as
well as a reduction in bad debt expense
Partially offset by an increase in interest expense from additional
borrowings, a loan loss provision and a reduction in income
contribution from the sale of 42 senior housing properties held in
three unconsolidated joint ventures
Adjusted EBITDA
FFO
MFFO |
 Credit Metrics
(1) Calculated as adjusted EBITDA divided by interest
expense (2) Net debt is total debt less cash
(3) Debt includes line of credit
10
Source: CNL Lifestyle Properties, Inc. 2013 Form 10-K and September 30, 2014,
Form 10-Q The Company believes that its presentation of historical
non-GAAP financial measures provides useful supplementary information to and facilitates additional analysis by investors. These historical
non-GAAP financial measures are in addition to, not a substitute for, or
superior to, measures of financial performance prepared in accordance with U.S. Generally Accepted Accounting Principles.
See reconciliation to GAAP net income (loss) contained in the Appendix.
Past performance is not indicative of future returns.
Consolidated
Leverage Including Share
Year
Leverage
of Unconsolidated Entities
2011
32.0%
43.3%
2012
38.7%
45.3%
2013
44.6%
48.1%
Sept 2014
44.5%
47.8%
Interest Coverage (1)
Net Debt / Adjusted EBITDA (2)
Year
Coverage
2011
5.5x
2012
6.3x
2013
6.1x
Sep-14
4.2x
Year
Coverage
2011
2.4x
2012
2.5x
2013
2.6x
TTM Sept 2014
2.6x
Debt / GAAP Total Assets (3) |
 Key
Credit Information 11
Weighted average interest rate is 5.65% (5.91% without JV debt)
71% fixed rate debt, 2% hedged and 27% variable rate debt
Note:
Chart
as
of
September
30,
2014.
2014
maturities
are
expected
to
be
refinanced
or
retired
with
proceeds
from
asset
sales.
DMC
JV
was refinanced in Q4 with a one year short term loan.
|
 Contact Information
12
For more information about
CNL Lifestyle Properties, please contact
CNL Client Services at 866-650-0650. |
 Appendix
13
Appendix |
 Reconciliation of FFO and MFFO to Net Income
(Loss)
14
Source: CNL Lifestyle Properties, Inc. September 30, 2014, Form 10-Q
The Company believes that its presentation of historical non-GAAP financial
measures provides useful supplementary information to and facilitates additional analysis by investors. These historical
non-GAAP financial measures are in addition to, not a substitute for, or
superior to, measures of financial performance prepared in accordance with U.S. Generally Accepted Accounting Principles.
2014
2013
2014
2013
Net income (loss)
30,623
$
78,293
$
1,765
$
(211)
$
Adjustments:
Depreciation and amortization:
Continuing operations
33,622
30,731
96,691
88,588
Discontinued operations
-
7,618
4,891
22,577
Impairment of real estate assets:
Continuing operations
-
2,740
-
45,191
Discontinued operations
-
-
4,464
-
Gain on sale of unconsolidated entities:
-
-
Continuing operations
-
(55,394)
-
(55,394)
Gain on sale of real estate investment:
Discontinued operations
(3,953)
(2)
(3,883)
(2,085)
Net effect of FFO adjustment from unconsolidated entities:
Continuing operations
3,819
1,484
12,208
11,820
Total funds from operations
64,111
65,470
116,136
110,486
Acquisition fees and expenses:
Continuing operations
509
1,009
2,513
1,922
Straight-line adjustments for leases and notes receivable:
Continuing operations
4,617
(1,633)
(1,547)
(2,675)
Discontinued operations
-
(291)
-
(827)
Loss from extinguishment of debt:
Continuing operations
1,682
-
2,282
-
Discontinued operations
8,293
-
8,028
-
Contingent purchase price consideration adjustment
Continuing operations
(665)
-
(665)
-
Amortization of above/below market intangible assets and liabilities
Continuing operations
89
(1)
113
(3)
Discontinued operations
-
350
359
1,033
Loan loss provision:
Continuing operations
750
-
3,270
-
Accretion of discounts/amortization of premiums:
Continuing operations
44
3
50
9
MFFO adjustments from unconsolidated entities:
Straight-line adjustment for leases and notes receivable:
Continuing operations
113
(29)
175
(175)
Amortization of above/below market intangible assets and
liabilities: Continuing operations
(41)
47
(116)
39
Modified funds from operations
79,502
$
64,925
$
130,598
$
109,809
$
Weighted average number of shares of common stock
325,707
319,507
324,194
317,960
outstanding (basic and diluted)
FFO per share (basic and diluted)
0.20
$
0.20
$
0.36
$
0.35
$
MFFO per share (basic and diluted)
0.24
$
0.20
$
0.40
$
0.35
$
Quarter Ended
September 30,
Nine Months Ended
September 30,
Past performance is not indicative of future returns.
1. This amount represents our share of the FFO or MFFO adjustments allowable under the NAREIT
or IPA definitions, respectively, multiplied by the percentage of income or loss recognized
under the HLBV method. 2. In evaluating
investments in real estate, management differentiates the costs to acquire the investment from
the operations derived from the investment. By adding back acquisition fees and expense
relating to business combinations, management believes MFFO provides useful supplemental
information of its operating performance and will also allow comparability between real estate
entities regardless of their level of acquisition activities. Acquisition fees and expenses
include payments to our advisor or third parties. Acquisition fees and expenses relating to business
combinations under GAAP are considered operating expenses and as expenses included in the
determination of net income (loss) and income (loss) from continuing operations, both of which
are performance measures under GAAP. All paid and accrued acquisition fees and expenses will
have negative effects on returns to investors, the potential for future distributions, and cash
flows generated by us, unless earnings from operations or net sales proceeds from the
disposition of properties are generated to cover the purchase price of the property. 3. Under GAAP, rental
receipts are allocated to periods using various methodologies. This may result in income
recognition that is significantly different than underlying contract terms. By adjusting for
these items (to reflect such payments from a GAAP accrual basis to a cash basis of disclosing
the rent and lease payments), MFFO provides useful supplemental information on the realized
economic impact of lease terms and debt investments, providing insight on the contractual cash
flows of such lease terms and debt investments, and aligns results with management’s analysis of
operating performance. 4. Loss from early
extinguishment of debt includes swap breakage fees, write-off of unamortized loan costs and
reclassification of loss on termination of cash flow hedges from other comprehensive income
(loss) into interest expense.
5. We recorded a loan loss provision on one of our mortgages and other notes receivable as a
result of uncertainty related to the collectability of the note receivable. 6. Management believes
that the elimination of the contingent purchase price consideration adjustment, which
represents the Yield Guarantee, included in interest and other income (expense) for GAAP
purposes is appropriate because the adjustment is a non-recurring, non-cash adjustment
that is not reflective of our ongoing operating performance and aligns results with management’s
analysis of operating performance. (1)
(2)
(3)
(4)
(6)
(5)
(1)
(3) |
 Reconciliation of Adjusted EBITDA to Net
Income (Loss)
15
Source: CNL Lifestyle Properties, Inc. September 30, 2014, Form 10-Q
The Company believes that its presentation of historical non-GAAP financial
measures provides useful supplementary information to and facilitates additional analysis by investors. These historical non-GAAP
financial measures are in addition to, not a substitute for, or superior to,
measures of financial performance prepared in accordance with U.S. Generally Accepted Accounting Principles.
Past performance is not indicative of future returns.
2014
2013
2014
2013
Net income (loss)
30,623
$
78,293
$
1,765
$
(211)
$
(Income) loss from discontinued operations
1,380
4,036
(1,188)
8,275
Interest and other income
(775)
13
(866)
(504)
Bargain purchase gain on acquisition of real estate
(4)
-
(2,653)
-
(2,653)
Interest expense and loan cost amortization
18,556
15,852
57,322
48,513
Equity in earnings of unconsolidated entities
(1)
(3,176)
(4,147)
(6,949)
(9,183)
Gain on sale of unconsolidated entities
(3)
-
(55,394)
-
(55,394)
Depreciation and amortization
33,622
30,731
96,691
88,587
Impairment provision
-
2,740
-
45,191
Loss from extinguishment of debt
1,620
-
1,816
-
Loan loss provision
750
-
3,270
-
Recovery on lease terminations
-
-
(741)
-
Straight-line adjustments for leases and notes receivables
(2)
4,617
(1,924)
(1,547)
(3,502)
Cash distributions from unconsolidated entities
(1)
3,321
3,177
9,896
23,290
Adjusted EBITDA
90,538
$
70,724
$
159,469
$
142,409
$
Quarter Ended
September 30,
Nine Months Ended
September 30,
1. Investments in our unconsolidated joint ventures are accounted for under the HLBV method of
accounting. Under this method, we recognize income or loss based on the change in liquidating proceeds we
would receive from a hypothetical liquidation of our investments based on depreciated book value. We
adjust EBITDA for equity in earnings (loss) of our unconsolidated entities because we believe this is not
reflective of the joint ventures’ operating performance or cash flows available for distributions
to us. We believe cash distributions from our unconsolidated entities, exclusive of any financing transactions, are
reflective of their operating performance and its impact to us and have been added back to adjusted
EBITDA above. For the quarter and nine months ended September 30, 2013, cash distributions from
unconsolidated entities excludes approximately $5.3 million in return of capital.
2. We believe that adjusting for straight-line adjustments for leased properties and
mortgages and other notes receivable is appropriate because they are non-cash adjustments and reflect the actual cash
receipts received by us from our tenants and borrowers.
3. In July 2013, we completed the sale of our interests in 42 senior housing properties held
through three unconsolidated joint ventures. See “Distributions from Unconsolidated Entities” above for additional
information.
4. In connection with an acquisition of an attraction property, we recorded a bargain purchase
gain as a result of the fair value of the net assets acquired exceeding the consideration transferred as discussed
above.. |