CNL LIFESTYLE PROPERTIES, INC. (OTCMKTS:CLLY) Files An 8-K Other Events
Item8.01
| Other Events. |
As previously reported in a Current Report on Form 8-K filed on April6, 2017, CNL
Life>
On April11, 2017,
the Companys board of directors (the Board) authorized an interim
distribution to the stockholders of record of the Company as of
March31, 2017 of the Share Consideration, based on a ratio of
2.7219 shares of EPR common stock for each 100 shares of Company
common stock, and cash in the amount of $0.10 per share of
Company common stock (the Interim Distribution). The Board
anticipates that the Interim Distribution will occur on or around
April20, 2017.
| Item9.01 | Financial Statements and Exhibits. |
| (b) | Pro forma financial information. |
The following
unaudited pro forma consolidated balance sheet of the Company at
December31, 2016 illustrates the estimated effects of the Sale
described in Item 8.01 above as if the Sale had occurred on such
date and the unaudited pro forma consolidated statement of
operations for the year ended December31, 2016 (the Pro Forma
Period), which include certain pro forma adjustments illustrating
the effects of the Sale as if it had occurred prior to the first
day of the Pro Forma Period.
The unaudited pro
forma consolidated financial information below is presented for
informational purposes only, does not purport to be indicative of
the Companys financial results as if the Sale had occurred on the
date indicated or been in effect during the Pro Forma Period, and
should be read in conjunction with the Companys financial
statements as filed with the Securities and Exchange Commission
on Form 10-K for the year ended December31, 2016.
2
CNL LIFE>
UNAUDITED PRO
FORMA CONSOLIDATED BALANCE SHEET
DECEMBER31,
2016
(in thousands
except per share data)
| Historical December31, 2016 | ProForma Adjustments | Pro Forma December31, 2016 | ||||||||||
| ASSETS | ||||||||||||
|
Real estate investment properties, net (including $55,941 |
$ | 678,041 | $ | (678,041 | )(a) | $ | ||||||
|
Cash |
56,816 | 176,464 | (a) | |||||||||
| (147,077 | )(b) | 86,203 | ||||||||||
|
Investment in securities |
647,400 | (a) | 647,400 | |||||||||
|
Deferred rent and lease incentives |
32,931 | (32,931 | )(a) | |||||||||
|
Restricted cash |
23,701 | (15,440 | )(a) | 8,261 | ||||||||
|
Other assets |
15,363 | (5,053 | )(a) | |||||||||
| (286 | )(b) | 10,024 | ||||||||||
|
Accounts and other receivables, net |
19,690 | 19,690 | ||||||||||
|
Intangibles, net |
15,880 | (15,880 | )(a) | |||||||||
|
Total Assets |
$ | 842,422 | $ | (70,844 | ) | $ | 771,578 | |||||
| LIABILITIES AND STOCKHOLDERS EQUITY | ||||||||||||
|
Mortgages and other notes payable (including $18,628 |
$ | 146,251 | $ | (146,587 | )(b) | |||||||
| (b) | $ | |||||||||||
|
Other liabilities |
24,352 | (7,712 | )(a) | |||||||||
| (416 | )(b) | 16,224 | ||||||||||
|
Accounts payable and accrued expenses |
12,591 | (1,728 | )(a) | |||||||||
| (360 | )(b) | 10,503 | ||||||||||
|
Income tax liabilities |
8,424 | 8,424 | ||||||||||
|
Due to affiliates |
||||||||||||
|
Total Liabilities |
192,093 | (156,467 | ) | 35,626 | ||||||||
|
Commitments and contingencies |
||||||||||||
|
Stockholders equity: |
||||||||||||
|
Preferred stock, $.01 par value per share 200million shares |
||||||||||||
|
Excess shares, $.01 par value per share 120million shares |
||||||||||||
|
Common stock, $.01 par value per share |
||||||||||||
|
One billion shares authorized; 349,084 shares issued and |
3,252 | 3,252 | ||||||||||
|
Capital in excess of par value |
2,863,833 | 2,863,833 | ||||||||||
|
Accumulated deficit |
(298,288 | ) | 78,711 | (a) | ||||||||
| (416 | )(b) | |||||||||||
| (336 | )(b) | (220,329 | ) | |||||||||
|
Accumulated distributions |
(1,910,445 | ) | (1,910,445 | ) | ||||||||
|
Accumulated other comprehensive loss |
(8,023 | ) | 7,248 | (a) | ||||||||
| (b) | (359 | ) | ||||||||||
|
Total Stockholders Equity |
650,329 | 85,623 | 735,952 | |||||||||
|
Total Liabilities and Stockholders Equity |
$ | 842,422 | $ | (70,844 | ) | $ | 771,578 | |||||
See accompanying
notes to unaudited pro forma consolidated financial
statements.
3
CNL LIFE>
UNAUDITED PRO
FORMA CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE YEAR ENDED
DECEMBER31, 2016
(in thousands
except per share data)
| Historical December31, 2016 | ProForma Adjustments(a) | Pro Forma December31, 2016 | ||||||||||
|
Revenues: |
||||||||||||
|
Rental income from operating leases |
$ | 139,365 | $ | (130,009 | ) | $ | 9,356 | |||||
|
Property operating revenues |
101,750 | (101,750 | ) | |||||||||
|
Total revenues |
241,115 | (231,759 | ) | 9,356 | ||||||||
|
Expenses: |
||||||||||||
|
Property operating expenses |
80,881 | (82,708 | ) | (1,827 | ) | |||||||
|
Asset management fees to advisor |
11,914 | (11,016 | )(b) | |||||||||
|
General and administrative |
15,098 | (817 | ) | 14,281 | ||||||||
|
Ground lease and permit fees |
11,316 | (11,316 | ) | |||||||||
|
Other operating expenses |
12,078 | (7,490 | ) | 4,588 | ||||||||
|
Bad debt expense |
1,854 | (1,854 | ) | |||||||||
|
Impairment provision |
8,142 | (8,142 | ) | |||||||||
|
Depreciation and amortization |
66,792 | (66,792 | ) | |||||||||
|
Total expenses |
208,075 | (190,135 | ) | 17,940 | ||||||||
|
Operating income |
33,040 | (41,624 | ) | (8,584 | ) | |||||||
|
Other income (expense): |
||||||||||||
|
Interest and other income |
1,569 | (831 | ) | |||||||||
|
Interest expense and loan cost amortization |
(11,141 | ) | 10,560 | (c) | (581 | ) | ||||||
|
Loss on extinguishment of debt |
(25 | ) | ||||||||||
|
Equity in earnings of unconsolidated entities |
1,290 | 1,290 | ||||||||||
|
Gain on purchase of controlling interest in unconsolidated |
30,025 | 30,025 | ||||||||||
|
Total other expense |
21,718 | 9,754 | 31,472 | |||||||||
|
Income tax benefit |
1,354 | 1,354 | ||||||||||
|
Income from continuing operations |
$ | 56,112 | $ | (31,870 | ) | $ | 24,242 | |||||
|
Loss per share of common stock (basic and diluted) from |
$ | 0.17 | $ | 0.07 | ||||||||
|
Weighted average number of shares of common stock |
325,183 | 325,183 | ||||||||||
See accompanying
notes to unaudited pro forma consolidated financial
statements.
4
CNL LIFE>
NOTES TO UNAUDITED
PRO FORMA CONSOLIDATED FINANCIAL STATEMENTS
| 1. | Basis of Presentation |
The accompanying
unaudited pro forma consolidated balance sheet of the Company is
presented as if the disposition of 16 ski and mountain life>
The accompanying
unaudited pro forma consolidated financial statements have been
prepared in accordance with Article 11 of Regulation S-X and do
not include all of the information and note disclosures required
by generally accepted accounting principles of the United States
(GAAP). Pro forma financial information is intended to provide
information about the continuing impact of a transaction by
showing how a specific transaction or group of transactions might
have affected historical financial statements. Pro forma
financial information illustrates only the isolated and
objectively measurable (based on historically determined amounts)
effects of a particular transaction, and excludes effects based
on judgmental estimates of how historical management practices
and operating decisions may or may not have changed as a result
of the transaction. Therefore, pro forma financial information
does not include information about the possible or expected
impact of current actions taken by management in response to the
pro forma transaction, as if managements actions were carried out
in previous reporting periods.
This unaudited pro
forma consolidated financial information is presented for
informational purposes only and does not purport to be indicative
of the Companys financial results or financial position as if the
transaction reflected herein had occurred, or been in effect
during the Pro Forma Period. In addition, this unaudited pro
forma consolidated financial information should not be viewed as
indicative of the Companys expected financial results for future
periods.
| 2. | Pro Forma Transaction |
On November2,
2016, the Company entered into a definitive agreement (the Sale
Agreement) with EPR Properties (EPR) and Ski Resort Holdings LLC,
unaffiliated third parties, for the sale of the Companys entire
portfolio of ski and mountain life>
On April6, 2017,
the Company completed the sale of the 36 properties.
5
CNL LIFE>
NOTES TO UNAUDITED
PRO FORMA CONSOLIDATED FINANCIAL STATEMENTS
| 3. |
Adjustments to Unaudited Pro Forma Consolidated Balance Sheet |
The adjustments to
the unaudited pro forma consolidated balance sheet represent
adjustments needed to the Companys historical balance sheet as if
the disposition of the Sale occurred as of December31,
2016.
| (a) |
These adjustments reflect the net sales consideration received from the Sale and elimination of the related account balances as if the Sale had been consummated as of December31, 2016. Accumulated deficit has been reduced to reflect the receipt of net cash proceeds and removal of assets and liabilities related to the Sale, including the assumption of capital lease obligations, insurance liabilities, security deposits, and other miscellaneous liabilities as follows: |
|
Sales price |
$ | 830,000 | ||
|
Sales price adjustments |
(842 | ) | ||
|
Closing and transaction costs |
(5,294 | ) | ||
|
Net sales proceeds(1) |
823,864 | |||
|
Assets less liabilities assumed |
(737,905 | ) | ||
|
Reclassification of cumulative foreign currency translation |
(7,248 | ) | ||
|
Gain on sale |
$ | 78,711 | ||
FOOTNOTE:
| (1) |
Net sales proceeds of $176.5million were received in cash. The remaining net sales proceeds of $647.4million were received in common shares of beneficial interest in EPR. |
| (b) |
These adjustments reflect the use of a portion of the net sales proceeds received from the Sale to (i)pay down existing indebtedness and interest, (ii)to terminate a related cash flow hedge, and (iii)to eliminate unamortized loan costs related to the existing indebtedness. |
|
Mortgages and other notes payable, excluding unamortized |
$ | 146,587 | ||
|
Prepaid interest |
(286 | ) | ||
|
Accrued interest payable |
||||
|
Termination of cash flow hedge |
||||
|
Cash used to pay indebtedness |
$ | 147,077 | ||
These adjustments
reflect the impact from the repayment of indebtedness.
|
Reclassification of cumulative loss on termination of cash |
$ | (416 | ) | |
|
Write off of unamortized loan costs |
(336 | ) | ||
|
Accumulated deficit |
$ | (752 | ) | |
6
CNL LIFE>
NOTES TO UNAUDITED
PRO FORMA CONSOLIDATED FINANCIAL STATEMENTS
| 4. |
Adjustments to Unaudited Pro Forma Consolidated Statement of Operations |
The adjustments to
the unaudited pro forma consolidated statement of operations
represent adjustments needed to the Companys historical results
to remove the historical operating results of the completed sale
of the 36 properties as if it had occurred on the first day of
the Pro Forma Period presented.
| (a) |
Except as described in (b)and (c) below, these amounts represent the elimination of the operations on the completed sale of the 36 properties from the historical amounts for the year ended December31, 2016 to give effect to the completed sale of these 36 properties as if the sales occurred on the first day of the Pro Forma Period presented. All of the 36 properties were classified as continuing operations in the historical operating results because the proposed dispositions of these 36 properties required stockholder approval which was obtained on March24, 2017. Therefore, these properties did not qualify as discontinued operations under ASU 2014-08. |
| (b) |
Amount includes the elimination of asset management fee expenses, calculated at 0.075% monthly on the invested asset value of the 36 properties for the year ended December31, 2016. These fees were historically paid by the Company to its advisor and would not have been incurred subsequent to the disposition of these assets. |
| (c) |
Amount represents the elimination of interest expense and loan cost amortization to reflect the use of net cash proceeds from the completed sale of the 36 properties to retire indebtedness that was collateralized by eight of the 36 properties as if the sale occurred on the first day of the Pro Forma Period presented. |
Cautionary
Note Regarding Forward-Looking Statements
Statements above
that are not statements of historical or current fact may
constitute forward-looking statements within the meaning of the
Federal Private Securities Litigation Reform Act of 1995. The
Company intends that such forward-looking statements be subject
to the safe harbor created by Section21E of the Securities
Exchange Act of 1934, as amended. Forward-looking statements are
statements that do not relate strictly to historical or current
facts, but reflect managements current understandings,
intentions, beliefs, plans, expectations, assumptions and/or
predictions regarding the future of the Companys business and its
performance, the economy, and other future conditions and
forecasts of future events, and circumstances. Forward-looking
statements are typically identified by words such as believes,
expects, anticipates, intends, estimates, plans, continues, pro
forma, may, will, seeks, should and could, and words and terms of
similar substance in connection with discussions of future
operating or financial performance, business strategy and
portfolios, projected growth prospects, cash flows, costs and
financing needs, legal proceedings, amount and timing of
anticipated future distributions, estimated per share net asset
value of the Companys common stock, and/or other matters. The
Companys forward-looking statements are not guarantees of future
performance. While the Companys management believes its
forward-looking statements are reasonable, such statements are
inherently susceptible to uncertainty and changes in
circumstances. As with any projection or forecast,
forward-looking statements are necessarily dependent on
assumptions, data and/or methods that may be incorrect or
imprecise, and may not be realized. The Companys forward-looking
statements are based on managements current expectations and a
variety of risks, uncertainties and other factors, many of which
are beyond the Companys ability to control or accurately predict.
Although the Company believes that the expectations reflected in
such forward-looking statements are based upon reasonable
assumptions, the Companys actual results could differ materially
from those set forth in the forward-looking statements due to a
variety of risks, uncertainties and other factors. Given these
uncertainties, the Company cautions you not to place undue
reliance on such statements.
For further
information regarding risks and uncertainties associated with the
Companys business, and important factors that could cause the
Companys actual results to vary materially from those expressed
or implied in its forward-looking statements, please refer to the
factors listed and described under Managements Discussion and
Analysis of Financial Condition and Results of Operations and the
Risk Factors sections of the Companys
7
documents filed
from time to time with the U.S. Securities and Exchange
Commission, including, but not limited to, the Companys quarterly
reports on Form 10-Q, and the Companys annual report on Form
10-K, copies of which may be obtained from the Companys website
at http://www.cnllife>
All written and
oral forward-looking statements attributable to the Company or
persons acting on its behalf are qualified in their entirety by
this cautionary note. Forward-looking statements speak only as of
the date on which they are made, and the Company undertakes no
obligation to, and expressly disclaims any obligation to,
publicly release the results of any revisions to its
forward-looking statements to reflect new information, changed
assumptions, the occurrence of unanticipated subsequent events or
circumstances, or changes to future operating results over time,
except as otherwise required by law.
8
About CNL LIFESTYLE PROPERTIES, INC. (OTCMKTS:CLLY)
CNL Lifestyle Properties, Inc. is a real estate investment trust. The Company invests in and owns a diversified portfolio of real estate primarily within the United States. The Company’s operating partnership is CLP Partners, LP, which conducts all of its operations and owns all of its assets. CNL Lifestyle Advisor Corporation (the Advisor) provides management, acquisition, disposition, advisory and administrative services to the Company. As of December 31, 2016, through various limited partnerships and limited liability companies, the Company had invested in 36 real estate investment properties. The Company’s properties include Brighton Ski Resort in Brighton, Utah; Crested Butte Mountain Resort in Mt. Crested Butte, Colorado; Gatlinburg Sky Lift in Gatlinburg, Tennessee; Jiminy Peak Mountain Resort in Hancock, Massachusetts; Loon Mountain Resort in Lincoln, New Hampshire; Mount Sunapee Mountain Resort in Newbury, New Hampshire, and Northstar-at-Tahoe Resort in Truckee, California. CNL LIFESTYLE PROPERTIES, INC. (OTCMKTS:CLLY) Recent Trading Information
CNL LIFESTYLE PROPERTIES, INC. (OTCMKTS:CLLY) closed its last trading session 00.00 at 1.65 with 1,360 shares trading hands.
