(ORLANDO, Fla.) May 20, 2013 – CNL Lifestyle Properties, Inc., a real estate investment trust (“we,” “our” or “us”), today announced our operating results for the first quarter ended March 31, 2013. As of May 3, 2013, we owned a portfolio of 177 lifestyle properties, 71 of which are wholly-owned and run by operators under long-term, triple-net leases with a weighted average straight-line lease rate of 8.6 percent, 55 of which are managed by independent operators, one of which is held for development and 50 of which are owned through unconsolidated joint venture arrangements. Of our joint venture investments, 14 are leased and 36 are managed by independent operators. Diversification by asset class based on initial purchase price is 33 percent senior housing, 19 percent ski and mountain lifestyle, 15 percent golf, 13 percent attractions, 5 percent marinas and 15 percent in additional lifestyle properties, including lodging.
Financial Highlights
The following table presents selected comparable financial data through March 31, 2013 (in millions except ratios and per share data):
|
|
Quarter ended | |
|
|
March 31, | |
|
|
2013 | 2012 |
| Total revenues |
$ 106.4 |
$ 89.2 |
| Total expenses |
110.6 |
98.4 |
| Net loss |
(23.3) |
(24.7) |
| Net loss per share |
(0.07) |
(0.08) |
| FFO |
18.9 |
16.0 |
| FFO per share |
0.06 |
0.05 |
| MFFO |
19.1 |
9.9 |
| MFFO per share |
0.06 |
0.03 |
| Adjusted EBITDA |
42.8 |
24.7 |
| Cash flow from operating activities |
48.6 |
22.2 |
|
|
|
|
| As of March 31, 2013: |
|
|
| Total assets |
|
$ 2,939.4 |
| Total debt |
|
1,161.9 |
| Leverage ratio * |
|
39.5% |
|
|
|
|
| * 46.1% including our share of unconsolidated assets and debts | ||
See detailed financial information and full reconciliation of Funds from Operations (“FFO”), Modified Funds from Operations (“MFFO”) and Adjusted Earnings before Interest, Taxes, Depreciation and Amortization (“Adjusted EBITDA”), which are non Generally Accepted Accounting Principle (“GAAP”) measures, below.
Total revenues increased $17.2 million or 19.3 percent and expenses increased $12.1 million or 12.3 percent for the quarter ended March 31, 2013, as compared to the same period in 2012. Net loss was $23.3 million for the quarter ended March 31, 2013 as compared to net loss of $24.7 million for the comparable period in 2012. FFO and MFFO per share were both $0.06 for the quarter ended March 31, 2013, as compared to $0.05 and $0.03 for quarter ended March 31, 2012, respectively.
The decrease in net loss of $1.4 million and the increase in FFO of $2.9 million was primarily attributable to (i) an increase in rental income from leased properties and net operating income from managed properties related to properties acquired after the first quarter of 2012, (ii) an increase in “same-store” rental income from leased properties and net operating income from managed properties primarily relating to our ski and mountain lifestyle properties and additional lifestyle properties, which includes the Omni Mount Washington Resort, as a result of a strong 2012/2013 ski season and (iii) a reduction in bad debt expense. These decreases to net loss and increases to FFO were partially offset by, (i) a reduction in rental income related to the five golf properties that were transitioned from leased to managed structures during the third quarter of 2012, (ii) a decrease in equity in earnings from unconsolidated entities and (iii) an increase in interest expense and loan cost amortization, asset management fees and ground lease and permit fees.
The increase in MFFO of $9.2 million, or 92.9 percent and $0.03 per share, were principally due to an increase in rental income from leased properties (excluding straight-line adjustments for rental income) and net operating income from managed properties related to properties acquired after the first quarter of 2012 and an increase in “same-store” leased properties and net operating income from managed properties primarily relating to our ski and mountain lifestyle properties and additional lifestyle properties, which includes the Omni Mount Washington Resort, as result of a strong 2012/2013 ski season and rental payments from certain golf properties where payments were waived during the first quarter of 2012 as a result of a lease amendment. The increases were partially offset by a reduction in rental payments related to five golf properties that were transitioned from leased to managed structure during the third quarter of 2012 and an increase in interest expense and loan cost amortization, assets management fees and ground lease and permit fees.
The increase in adjusted EBITDA of $18.1 million, or 73.3 percent, for the three months ended March 31, 2013 was primarily attributable to (i) an increase in rental income from leased properties (excluding straight-line adjustments for rental income) and net operating income from managed properties related to properties acquired after the first quarter of 2012, (ii) an increase in “same-store” rental income from leased properties and net operating income from managed properties primarily relating to our ski and mountain lifestyle properties and additional lifestyle properties, which includes the Omni Mount Washington Resort, as a result of a strong 2012/2013 ski season and rental payments from certain golf properties where their payments were waived during the first quarter of 2012 as a result of a lease amendment, (iii) an increase in cash distribution from our unconsolidated entities and (iv) a decrease in bad debt expense, offset in part by an increase in asset management fees and ground lease and permit fees.
Portfolio Performance
Although property-level operating results are not necessarily indicative of our consolidated results of operations for properties where we have long-term leases and report rental income and the cash flows we receive from our unconsolidated joint ventures, we believe that the property-level financial and operational performance reported to us by our tenants and operators is useful because it is representative of the changing health of our properties and trends in our portfolio. The following table summarizes the company’s “same-store” comparable consolidated properties that we have owned during the entirety of both periods presented and have included information for both leased and managed properties. Property-level financial and operational performance from our unconsolidated properties has been excluded because we do not believe it is as relevant and meaningful, particularly since we are entitled to cash distribution preferences where we receive a stated return on our investment each year ahead of our partners. We have not included performance data on acquisitions subsequent to January 1, 2012 because we did not own those properties during the entirety of both periods (in millions except coverage ratio):
| Quarter Ended March 31, |
|
TTM | ||||||||||||
| 2013 | 2012 | Increase/(Decrease) | Rent | |||||||||||
| Revenue | EBITDA * | Revenue | EBITDA * | Revenue | EBITDA |
|
Coverage * | |||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
| Ski and mountain lifestyle |
|
$ 235,084 |
|
$ 13,380 |
|
$ 199,934 |
|
$ 87,422 |
|
17.6% |
|
29.7% |
|
1.69x |
| Golf |
|
34,490 |
|
8,930 |
|
34,716 |
|
8,259 |
|
-0.7% |
|
8.1% |
|
1.41x |
| Attractions |
|
8,612 |
|
(11,302) |
|
7,395 |
|
(11,688) |
|
16.5% |
|
3.3% |
|
1.59x |
| Marinas |
|
6,046 |
|
2,140 |
|
5,958 |
|
1,899 |
|
1.5% |
|
12.7% |
|
0.89x |
| Additional lifestyle |
|
37,024 |
|
7,745 |
|
33,637 |
|
6,236 |
|
10.1% |
|
24.2% |
|
6.12x |
|
|
$ 321,256 | $ 120,893 | $ 281,640 | $ 92,128 |
14.1% |
|
31.2% |
|
1.55x | |||||
*As of March 31, 2013 on trailing 12-month (“TTM”) basis for properties subject to lease calculated as property-level EBITDA before recurring capital expenditures divided by base rent.
Overall, for the three months ended March 31, 2013, our tenants and managers reported to us an increase in revenue and property-level EBITDA of 14.1 percent and 31.2 percent, respectively, as compared to the same period in the prior year. The increase was primarily attributable to our ski and mountain lifestyle properties, additional lifestyle properties and attractions properties. Our ski and mountain lifestyle properties and our additional lifestyle properties, which include the Omni Mount Washington Resort, experienced a strong 2012/2013 ski season as a result of the return to a normal level of natural snowfall and favorable snowmaking conditions as compared to unprecedented low levels of natural snowfall for the same period in 2012. Our attractions properties experienced an increase in revenue due to price increases, and increases in visitations and in-park spending as compared to the same period in 2012. Our attractions properties are in their off-peak season during the first, second and fourth quarters due to the seasonal nature of their business and have improved in their EBITDA primarily due to cost controls. Our golf facilities experienced a slight decrease in rounds played as a direct result of the unusually warm weather conditions experienced during the winter of 2012 as compared to normal conditions in 2013; however, operator-driven efficiencies resulted in an 8.1% increase in EBITDA over the prior year.
When evaluating our senior housing properties’ performance, management reviews operating statistics of the underlying properties, including revenue per occupied unit (“RevPOU”) and occupancy levels. RevPOU, which is defined as total revenue divided by number of occupied units, is a widely used performance metric within the healthcare sector. This metric assists us in determining the ability of our operators to achieve market rental rates and to obtain revenues from providing healthcare related services. As of March 31, 2013, the managers for our 52 comparable properties reported to us an increase in occupancy of 3.0 percent as compared to the same period in 2012 and an increase in RevPOU of 2.9 percent for the three months ended March 31, 2013, as compared to the same period in 2012. The increases in occupancy and RevPOU were driven primarily due to strong demands and rate increases at the properties.
The following table presents same store unaudited property-level information of our senior housing properties as of March 31, 2013 and 2012 (in thousands):
|
|
Number | Quarter Ended March 31, | |||||
| of | 2013 | 2012 | Increase/(Decrease) | ||||
| Properties
|
Occupancy
|
RevPOU
|
Occupancy
|
RevPOU
|
Occupancy
|
RevPOU
|
|
| Senior housing | 52 | 90.5% | $ 6,343 | 87.9% | $ 6,167 | 3.0% | 2.9% |
Assets Held for Sale
As of March 31, 2013, the Company classified four consolidated properties and 49 unconsolidated properties as assets held for sale.
Dispositions
On March 28, 2013, the Company sold one golf property for approximately $1.0 million. On April 30, 2013, the Company sold one of its additional lifestyle properties for approximately $8.5 million. As a result of the transactions, the Company recognized approximately $1.8 million in aggregate gain.
Distributions
For the quarter ended March 31, 2013, we declared and paid distributions of approximately $33.6 million ($0.1063 per share). Our Board of Directors will continue to evaluate the level of distributions going forward, which will be based on a variety of factors including current and expected future cash flows from our properties.
Redemptions
For the quarter ended March 31, 2013, we redeemed approximately $2.9 million (0.4 million shares).
CNL LIFESTYLE PROPERTIES, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(in thousands except per share data)
|
|
March 31, |
|
December 31, |
|
|
2013 | 2012 | |
|
|
|||
| ASSETS |
|
|
|
|
|
|
|
|
| Real estate investment properties, net (including $204,730 and $207,516 |
|
|
|
| related to consolidated variable interest entities, respectively) |
$ 2,156,013 |
|
$ 2,176,357 |
| Investments in unconsolidated entities |
274,877 |
|
287,339 |
| Mortgages and other notes receivable, net |
125,126 |
|
124,730 |
| Deferred rent and lease incentives |
108,259 |
|
109,507 |
| Cash |
105,014 |
|
73,224 |
| Other assets |
57,954 |
|
63,655 |
| Restricted cash |
49,753 |
|
40,316 |
| Intangibles, net |
33,572 |
|
35,457 |
| Accounts and other receivables, net |
18,298 |
|
21,700 |
| Assets held for sale |
10,525 |
|
5,743 |
|
|
|||
| Total Assets |
$ 2,939,391 |
|
$ 2,938,028 |
|
|
|||
| LIABILITIES AND STOCKHOLDERS’ EQUITY |
|
|
|
|
|
|
|
|
| Mortgages and other notes payable (including $79,498 and $80,481 related to |
|
|
|
| non-recourse debt of consolidated variable interest entities, respectively) |
$ 672,727 |
|
$ 649,002 |
| Senior notes, net of discount |
394,177 |
|
394,100 |
| Line of credit |
95,000 |
|
95,000 |
| Other liabilities |
67,085 |
|
40,064 |
| Accounts payable and accrued expenses |
43,430 |
|
47,445 |
| Due to affiliates |
1,323 |
|
986 |
|
|
|||
| Total Liabilities |
1,273,742 |
|
1,226,597 |
|
|
|
|
|
| Commitments and contingencies (Note 18) |
|
|
|
|
|
|
|
|
| Stockholders’ equity: |
|
|
|
| Preferred stock, $.01 par value per share 200 million shares authorized and unissued |
– |
|
– |
| Excess shares, $.01 par value per share 120 million shares authorized and unissued |
– |
|
– |
| Common stock, $.01 par value per share |
|
|
|
| One billion shares authorized; 339,184 and 337,213 shares issued and 317,942 and | |||
| 316,371 shares outstanding as of March 31, 2013 and December 31, 2012, |
|
|
|
| respectively. |
3,179 |
|
3,164 |
| Capital in excess of par value |
2,814,126 |
|
2,803,346 |
| Accumulated deficit |
(172,745) |
|
(149,446) |
| Accumulated distributions |
(971,583) |
|
(937,972) |
| Accumulated other comprehensive loss |
(7,328) |
|
(7,661) |
|
|
|||
| Total Stockholders’ Equity |
1,665,649 |
|
1,711,431 |
|
|
|||
| Total Liabilities and Stockholders’ Equity |
$ 2,939,391 |
|
$ 2,938,028 |
CNL LIFESTYLE PROPERTIES, INC.
AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
|
|
|
Quarter Ended |
||
|
|
|
March 31 |
||
|
|
|
2013 |
|
2012 |
| Revenues: |
|
|
|
|
| Rental income from operating leases |
|
$ 47,465 |
|
$ 46,089 |
| Property operating revenues |
|
55,552 |
|
40,011 |
| Interest income on mortgages and other notes receivable |
3,419 |
|
3,103 |
|
| Total revenues |
|
106,436 |
|
89,203 |
|
|
|
|
|
|
| Expenses: |
|
|
|
|
| Property operating expenses |
|
53,981 |
|
43,232 |
| Asset management fees to advisor |
|
9,213 |
|
8,682 |
| General and administrative |
|
4,316 |
|
4,537 |
| Ground lease and permit fees |
|
4,780 |
|
4,195 |
| Acquisition fees and costs |
|
367 |
|
1,130 |
| Other operating expenses |
|
1,682 |
|
2,485 |
| Bad debt expense |
|
108 |
|
2,074 |
###