— Total revenues increased 11.7 percent quarter-over-quarter to $180.3 million —
(ORLANDO, Fla.) Nov. 14, 2014 — CNL Lifestyle Properties, Inc., a real estate investment trust (“we,” “our” or “us”), today announced its operating results for the quarter ended Sept. 30, 2014.
Third Quarter 2014
- Total revenues increased $18.9 million, or 11.7 percent, as compared to the third quarter of 2013.
- Total expenses increased $6.6 million, or 5.3 percent, as compared to the third quarter of 2013.
- Net income decreased $47.7 million, or 60.9 percent, as compared to the third quarter of 2013 primarily due to the gain from sale of our interests in three unconsolidated joint ventures that occurred in July 2013.
- Funds from Operations (“FFO”) decreased $1.4 million, or 2.1 percent. FFO per share remained constant, as compared to the third quarter of 2013 of $0.20 per share.
- Modified Funds from Operations (“MFFO”) and MFFO per share increased $14.6 million, or 22.5 percent and $0.04 per share, respectively, as compared to the third quarter of 2013.
- Adjusted Earnings before Interest, Taxes, Depreciation and Amortization (“Adjusted EBITDA”) increased $19.8 million, or 28.0 percent, as compared to the third quarter of 2013.
Nine Months Ended Sept. 30, 2014
- Total revenues increased $38.3 million, or 10.4 percent, as compared to the nine months ended Sept. 30, 2013.
- Total expenses decreased $24.8 million, or 6.5 percent, as compared to the nine months ended Sept. 30, 2013.
- Net income increased $2.0 million to $1.8 million from a net loss of $0.2 million during the nine months ended Sept. 30, 2013.
- FFO and FFO per share increased $5.7 million or 5.1 percent and $0.01 per share, respectively, as compared to the nine months ended Sept. 30, 2013.
- MFFO and MFFO per share increased $20.8 million or 18.9 percent and $0.05 per share, respectively, as compared to the nine months ended Sept. 30, 2013.
- Adjusted EBITDA increased $17.1 million or 12.0 percent as compared to the nine months ended Sept. 30, 2013.
The decrease in FFO and FFO per share for the quarter ended Sept. 30, 2014, is primarily due to net loss on extinguishment of debt from loans paid off with the proceeds from the sale of our golf portfolio and an increase in interest expense from new borrowings obtained in connection with the acquisition of senior housing properties offset by additional rental income from recently acquired leased properties and “same-store” growth in net operating income from our managed properties. The increase in FFO and FFO per share for the nine months ended Sept. 30, 2014, is primarily due to increase in rental income from recently acquired leased properties and “same-store” growth in net operating income from our managed properties offset by the net loss on extinguishment of debt and higher interest expense.
Similarly, the increase in MFFO and MFFO per share for the quarter and nine months ended Sept. 30, 2014, is primarily due to increase in rent payments from leased properties (rental revenue excluding straight-line adjustments for GAAP) from recently acquired properties as well as growth in “same-store” net operating income from our managed properties. The increases were partially offset by higher interest expense due to additional borrowings made after Sept. 30, 2013.
The increase in Adjusted EBITDA for the quarter and nine months ended Sept. 30, 2014, is primarily due to the same attributions described above in MFFO and MFFO per share. The increase in Adjusted EBITDA for the nine months ended Sept. 30, 2014, also includes the reduction in cash distributions received from our unconsolidated joint ventures due to the sale of our interests in three unconsolidated senior housing joint ventures in July 2013.
The following table presents selected comparable financial data through Sept. 30, 2014:
| SUMMARY FINANCIAL RESULTS | ||||||
| (Millions except ratios and per share data) | ||||||
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Quarter ended |
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Nine Months Ended |
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Sept. 30, |
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Sept. 30, |
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2014 | 2013 | 2014 | 2013 |
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| Total revenues |
$ 180.3 |
$ 161.4 |
|
$ 406.1 |
$ 367.8 |
|
| Total expenses |
132.1 |
125.4 |
|
354.2 |
379.0 |
|
| Operating Income (loss) |
48.2 |
36.0 |
|
51.9 |
(11.2) |
|
| Net income (loss) |
30.6 |
78.3 |
|
1.8 |
(0.2) |
|
| Net income per share |
0.09 |
0.25 |
|
0.01 |
0.00 |
|
| FFO |
64.1 |
65.5 |
|
116.1 |
110.5 |
|
| FFO per share |
0.20 |
0.20 |
|
0.36 |
0.35 |
|
| MFFO |
79.5 |
64.9 |
|
130.6 |
109.8 |
|
| MFFO per share |
0.24 |
0.20 |
|
0.40 |
0.35 |
|
| Adjusted EBITDA |
90.5 |
70.7 |
|
159.5 |
142.4 |
|
| Cash flows from operating activities |
|
|
|
132.8 |
133.0 |
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| As of Sept. 30, 2014: |
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| Total assets |
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$ 2,534.9 |
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| Total debt |
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1,127.3 |
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| Leverage ratio |
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44.5% |
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| * 47.8% including our share of unconsolidated assets and debts |
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See detailed financial information and full reconciliation of FFO, MFFO and Adjusted EBITDA, which are Non-Generally Accepted Accounting Principles (“Non-GAAP”) measures, on the following pages.
Portfolio Highlights
The following tables summarize the Company’s “same-store” revenue and EBITDA for comparable consolidated properties that we have owned during the entirety of both periods presented, and includes information for both leased and managed properties (other than for rent coverage, which includes all leased properties):
| Number | Quarter Ended Sept. 30, | TTM | ||||||||||||
| of | 2014 | 2013 | Increase/(Decrease) | Rent | ||||||||||
| Properties | Revenue (1) | EBITDA (1) | Revenue (1) | EBITDA (1) | Revenue | EBITDA | Coverage (2) | |||||||
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| Ski and mountain lifestyle |
17 |
|
$ 51,132 |
|
$ (6,560) |
|
$ 48,132 |
|
$ (5,900) |
|
6.2% |
|
-11.2% |
1.35x |
| Attractions |
21 |
|
132,288 |
|
64,414 |
|
122,050 |
|
58,578 |
|
8.4% |
|
10.0% |
2.25x |
| Senior housing |
20 |
|
17,876 |
|
5,281 |
|
17,470 |
|
5,780 |
|
2.3% |
|
-8.6% |
1.17x |
| Marinas |
17 |
|
12,073 |
|
4,475 |
|
12,305 |
|
5,015 |
|
-1.9% |
|
-10.8% |
n/a |
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|
75 |
|
$ 213,369 |
|
$ 67,610 |
|
$ 199,957 |
|
$ 63,473 |
|
6.7% |
|
6.5% |
1.45x |
| Number | Nine Months Ended Sept. 30, | ||||||||||||
| of | 2014 | 2013 | Increase/(Decrease) | ||||||||||
| Properties | Revenue (1) | EBITDA (1) | Revenue (1) | EBITDA (1) | Revenue | EBITDA | |||||||
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| Ski and mountain lifestyle |
17 |
|
$ 331,994 |
|
$ 90,088 |
|
$ 339,291 |
|
$ 96,581 |
|
-2.2% |
|
-6.7% |
| Attractions |
21 |
|
235,517 |
|
75,265 |
|
217,397 |
|
64,871 |
|
8.3% |
|
16.0% |
| Senior housing |
20 |
|
52,829 |
|
15,979 |
|
51,269 |
|
16,929 |
|
3.0% |
|
-5.6% |
| Marinas |
17 |
|
26,574 |
|
8,543 |
|
27,780 |
|
10,342 |
|
-4.3% |
|
-17.4% |
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|
75 |
|
$ 646,914 |
|
$ 189,875 |
|
$ 635,737 |
|
$ 188,723 |
|
1.8% |
|
0.6% |
FOOTNOTES:
- Property operating results for tenants under leased arrangements are not included in our operating results. Property-level EBITDA above is disclosed before rent and capital reserve payments to us, as applicable.
- As of Sept. 30, 2014, on trailing 12-month (“TTM”) basis for properties subject to lease calculated as property-level EBITDA before recurring capital expenditures divided by base rent.
Third Quarter and Nine Months Ended Sept. 30, 2014
- Property-level revenue increased 6.7 percent and 1.8 percent, respectively, and property-level EBITDA increased 6.5 percent and 0.6 percent, respectively, as compared to the quarter and nine months ended Sept. 30, 2013.
- Our ski and mountain lifestyle properties experienced an increase in revenue for the third quarter of 2014 due to favorable weather conditions for summer operations which includes mountain biking and aerial adventures, as well as strong group and conference business at those resorts with facilities which operate during the non-winter months; but EBITDA decreased due to higher healthcare costs and a one-time tax credit received last year at one of our ski resorts. For the nine months ended Sept. 30, 2014, revenues at our ski and mountain lifestyle properties decreased primarily due to snow levels in the West (particularly in California) where snowfall was significantly below historical norms during much of the 2013/2014 ski season as a result of warm temperatures and drought conditions which caused these properties to experience poor operating results as compared to the 2012/2013 ski season. An El Niño weather pattern is forecasted for the 2014/2015 ski season, which typically results in more favorable precipitation levels for the Pacific West region.
- Capital improvements made and our manager’s efforts to promote and drive attendance at our attractions properties resulted in an increase in season pass sales and in-park spending as compared to prior year. In addition, visitation at our attractions properties increased by 10.3 percent year-over-year.
- Higher average rates paid by our residents at our senior housing properties resulted in an increase in revenue but EBITDA decreased due to higher resident care expenses, repairs and maintenance expenses, and other operating expenses.
- Our marinas were impacted by the transition of the properties to new managers (completed in April 2014) operated under a managed structure where we now incur management fees, which reduced the operating margin at the properties. Additionally, in December 2013, record-breaking cold temperatures and ice storms at one of our largest marinas caused damage to the docks and other floating structures, which resulted in temporary partial closure of this property, reducing the operating results. Over the long term, we believe our new managers will be able to achieve higher level of EBITDA at our marinas.
The following table presents same-store, unaudited property-level information of our senior housing properties as of and for the quarter and nine months ended Sept. 30, 2014 and 2013:
| Number |
|
Occupancy | |||||
| of |
|
As of Sept. 30, |
|
Increase/ | |||
| Properties | 2014 | 2013 | (Decrease) | ||||
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| Senior housing | 20 |
|
92.7% |
|
92.5% |
|
0.2% |
| RevPOU | ||||||||||||||
| Number | Quarter Ended | Nine Months Ended | ||||||||||||
| of | Sept. 30, | Increase/ | Sept. 30, | Increase/ | ||||||||||
| Properties | 2014 | 2013 | (Decrease) | 2014 | 2013 | (Decrease) | ||||||||
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| Senior housing | 20 |
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$ 3,958 | $ 3,821 | 3.6% | $ 3,892 | $ 3,781 | 2.9% | ||||||
The increase in revenue per occupied unit (“RevPOU”) of 3.6 percent and 2.9 percent for the quarter and nine months ended Sept. 30, 2014, respectively, as compared to the same periods in 2013 is due to strong unit demand and an increase in average rate paid by our residents.
Acquisition Activity
During the nine months ended Sept. 30, 2014, we acquired nine senior housing communities for an aggregate purchase price of $153.9 million.
Disposition
In connection with our evaluation of strategic alternatives to provide liquidity for our shareholders, during the quarter ended Sept. 30, 2014, we sold 46 of our 48 golf properties and received net sales proceeds of approximately $297.3 million. The remaining two golf properties are expected to be sold by the end of this year. The net sales proceeds were used to retire debt.
Distributions
For the nine months ended Sept. 30, 2014, we declared and paid distributions of $103.3 million ($0.3189 per share).
Distribution Reinvestments and Redemptions
In Sept. 2014, our board of directors approved the suspension of our distribution reinvestment plan and redemption plan effective as of Sept. 26, 2014. As a result of the suspension of the DRP, stockholders who were participants in the DRP received cash distributions instead of additional shares in the Company.
As a result of the suspension of the redemption plan, all redemption requests received prior to Sept. 26, 2014, which were not redeemed will be placed in the redemption queue. Any requests made after Sept. 26, 2014, will not be accepted or processed unless the redemption plan is reinstated by our Board, which is not expected at this time.
Supplemental Information
See our quarterly report on Form 10-Q for the quarter and nine months ended Sept. 30, 2014 on our website at www.CNLLifestyleREIT.com for additional information.
CNL LIFESTYLE PROPERTIES, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(in thousands, except per share data)