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ClubCorp Reports Sixth Consecutive Year of Record Results, and Announces Acquisition of North Hills Country Club

  • Fiscal 2016 revenue was $1.1 billion, up 3.4%, net income increased $13.6 million to $4.0 million, and adjusted EBITDA was $247.7 million, up 6.2%
  • Fourth quarter revenue was $345.3 million, up 4.1%, net income increased $11.7 million to $5.4 million, and adjusted EBITDA was $83.3 million, up 4.7%
  • ClubCorp acquires North Hills Country Club in Glenside, Pennsylvania

DALLAS, Feb. 22, 2017 (GLOBE NEWSWIRE) -- ClubCorp - The World Leader in Private Clubs® (NYSE:MYCC) - announces financial results for its fiscal-year 2016 fourth quarter ended December 27, 2016. The fourth quarter of fiscal 2016 and fiscal 2015 consisted of 16 weeks. Fiscal 2016 and fiscal 2015 consisted of 52 weeks. All comparisons are year-over-year.

ClubCorp Holdings, Inc.


A photo accompanying this announcement is available at http://www.globenewswire.com/NewsRoom/AttachmentNg/2ad53ca4-1698-40d8-a2f9-e2b2eb77f882

Fourth Quarter Results:

  • Revenue increased $13.6 million to $345.3 million, up 4.1%.
  • Net Income increased $11.7 million to $5.4 million.
  • Adjusted EBITDA(1) increased $3.8 million to $83.3 million, up 4.7%, driven by increased revenue and effectively managing and controlling variable operating expenses.
  • Same Store Combined Clubs(2) revenue increased $6.7 million to $321.4 million, up 2.1%, driven by increases in all three major revenue streams, dues up 2.4%, food & beverage up 3.2% and golf operations up 0.3%.
  • Same-store Combined Clubs Adjusted EBITDA increased $2.1 million to $98.0 million, up 2.2%, due to increased revenue, and favorable variable payroll and payroll related expenses as a percentage of revenue. Same-store Adjusted EBITDA margin was 30.5%.
  • New or Acquired Clubs.(2) New clubs opened or acquired in 2015 and 2016 contributed revenue of $17.2 million and adjusted EBITDA of $3.3 million.

Full Year 2016 Results:

  • Revenue increased $35.6 million to $1.1 billion, up 3.4%.
  • Net Income improved to $4.0 million, an increase of $13.6 million.
  • Adjusted EBITDA(1) increased $14.4 million to $247.7 million, up 6.2%, driven by higher revenue and improved margin performance across both same-store and new and recently acquired clubs.
  • Same Store Clubs revenue increased $18.8 million to $1.0 billion, up 1.9%, driven by increases in dues up 3.1% and food & beverage up 2.4%, and offset by golf operations down (0.7)%.
  • Same-store adjusted EBITDA grew $12.6 million to $294.6 million, up 4.5%, due to increased revenue and favorable variable payroll expenses and improved operating expenses as a percentage of revenue. Same-store Adjusted EBITDA margin increased 80 bps to 28.9%.
  • New or Acquired Clubs.(2) New clubs opened or acquired in 2015 and 2016 contributed revenue of $51.3 million and adjusted EBITDA of $7.6 million.

2016 Fourth Quarter and Full Year Summary:
(Unaudited financial information)

Fourth quarter ended Year ended
(In thousands, except for percentages and membership data)December
27,
2016
(16 weeks)
December
29,
2015
(16 weeks)
%
Change
December
27,
2016
(52 weeks)
December
29,
2015
(52 weeks)
%
Change
Total Revenue$345,301 $331,688 4.1% $1,088,480 $1,052,867 3.4%
Net income (loss)$5,406 $(6,259) 186.4% $4,025 $(9,573) 142.0%
Golf and Country Clubs Adjusted EBITDA$84,413 $81,189 4.0% $260,595 $245,696 6.1%
Business, Sports and Alumni Clubs Adjusted EBITDA$16,882 $17,004 (0.7)% $41,592 $39,712 4.7%
Corporate expenses and other operations (3)$(17,957) $(18,615) 3.5% $(54,499) $(52,090) (4.6)%
Adjusted EBITDA (1)$83,338 $79,578 4.7% $247,688 $233,318 6.2%
Total memberships, excluding managed club memberships 174,348 171,283 1.8%

Quotes:

  • Eric Affeldt, chief executive officer: “We are incredibly proud of what we accomplished in 2016. The success of our O.N.E. offering, reinventions and acquisitions embody the core competencies that are at the essence of who we are as a company… a successful membership business and a growing network of private lifestyle clubs that cater to our members' needs and wants. As a result, ClubCorp has produced six consecutive years of record revenue and adjusted EBITDA growth. Since 2010, revenue and adjusted EBITDA have grown 8.0% and 8.9%, respectively, compounded annually. To celebrate our 60th anniversary, we will be launching some exciting new product offerings that will expand our addressable market reaching even more prospective members.”
  • Mark Burnett, president and chief operating officer: “We capped off the year with a strong finish in the fourth quarter, as Q4 revenue increased 4.1%, and adjusted EBITDA grew 4.7%. For the full-year, we achieved solid same-store revenue growth in two of our three major revenue streams, namely dues and food & beverage revenue. Despite a decline in full-year same-store golf ops revenue, we experienced positive year-over-year growth in the fourth quarter. We also reached record full-year adjusted EBITDA margins in both segments, and anticipate margins at recently acquired clubs to continue to improve. We completed 16 major reinvention projects in 2016, and we look forward to another year of continued growth from these investments in 2017.”
  • Curt McClellan, chief financial officer: “We are pleased with our full-year and fourth quarter performance. In particular, we delivered meaningful solid year-over-year gains at both our reinvented and recently acquired clubs. Reinventions and acquisitions are key components of our growth strategy, and investments in these areas will continue. We are excited to have recently added two new clubs our portfolio--Eagle's Nest Country Club in Maryland and North Hills Country Club in Pennsylvania--both highlighting our commitment to growth via acquisition. Additionally, in 2017, we anticipate investing approximately $40 million on reinvention and expansion projects, including approximately $26 million at same-store clubs and approximately $14 million to reinvent recently acquired clubs. We continue to balance growth capital with cash distributions to shareholders and lenders. In 2016, we paid $34 million in dividends, repurchased $2.3 million in stock and voluntarily paid down $24 million towards our senior secured term loans. We have now lowered our total leverage ratio from 4.5x to 4.2x.”

Segment Highlights:
Golf and country clubs (GCC):

  • Fourth quarter, GCC revenue was up $12.2 million to $271.7 million, up 4.7%.
  • Fourth quarter, GCC adjusted EBITDA increased $3.2 million to $84.4 million, up 4.0%, and GCC adjusted EBITDA margin declined 20 basis points to 31.1%.
  • Fourth quarter, GCC same-store revenue increased $6.2 million, up 2.5%. Dues revenue was up 2.8%, food & beverage revenue increased 5.1% and golf operations revenue increased 0.3%.
  • Fourth quarter, GCC same-store adjusted EBITDA increased $2.3 million, up 2.9%, due largely to favorable operating expenses and improved variable payroll and payroll related expenses as a percentage of revenue.
  • Fourth quarter, GCC same-store adjusted EBITDA margin improved 20 basis points to 31.9%.
  • Clubs acquired in 2015 and 2016 contributed fourth quarter, GCC revenue of $17.1 million and GCC adjusted EBITDA of $3.3 million.
  • Full-year 2016, GCC revenue was $879.1 million, up 4.5%.
  • Full-year 2016, GCC adjusted EBITDA was $260.6 million, up 6.1%, and GCC adjusted EBITDA margin increased 40 basis points to 29.6%.

Business, sports and alumni clubs (BSA):

  • Fourth quarter, BSA revenue was up $0.5 million to $66.9 million, up 0.8% driven by increases in dues revenue and food & beverage revenue.
  • Fourth quarter, BSA adjusted EBITDA declined $0.1 million to $16.9 million, down 0.7% largely due to an increase in cost of sales and an increase in variable payroll expenses as a percentage of revenue.
  • Fourth quarter, BSA adjusted EBITDA margin decreased 40 basis points to 25.2%.
  • Full-year 2016, BSA revenue was $193.4 million, up 1.3%.
  • Full-year 2016, BSA adjusted EBITDA was $41.6 million, up 4.7%, and BSA adjusted EBITDA margin improved 70 basis points to 21.5%.

Other Data:

  • O.N.E. and Other Upgrades. As of December 27, 2016, approximately 54% of memberships were enrolled in O.N.E. or similar upgrade programs, as compared to approximately 50% of memberships that were enrolled in similar upgrade programs as of December 29, 2015. As of December 27, 2016, the Company offered O.N.E. at 153 clubs.
  • Reinvention. For 2017, the Company expects ROI expansion capital to be approximately $40 million. Of this amount, ClubCorp plans to invest approximately $26 million on same-store clubs and approximately $14 million on recently acquired clubs, including the two clubs acquired in 2017.
  • Acquisitions. In February, ClubCorp acquired two clubs: Eagle's Nest Country Club in Phoenix, Maryland (part of the greater Baltimore MSA), and North Hills Country Club in Glenside, Pennsylvania. In fiscal year 2016, ClubCorp acquired three clubs: Heritage Golf and Country Club in Hilliard, Ohio; Santa Rosa Country Club in Santa Rosa, California; and Marsh Creek Country Club in St. Augustine, Florida. In addition, ClubCorp entered a management agreement to operate the Country Club of Columbus in Columbus, Georgia. As of December 27, 2016, ClubCorp owned or operated 159 golf and country clubs representing approximately 200 18-hole equivalents, of which nine are managed clubs. Additionally, the Company owned or operated 47 business, sports and alumni clubs, of which three are managed clubs.
  • Membership. Membership totals exclude membership count from managed clubs. As of December 27, 2016, total memberships increased 3,065 to 174,348, up 1.8%, over memberships at December 29, 2015. Total golf and country club memberships increased 3.9%, while total business, sports and alumni club memberships declined 2.6%.
  • Capital Structure. At the end of the fourth quarter, the Company had $84.6 million in cash and cash equivalents and total liquidity of approximately $230 million. Additionally, the Company voluntarily paid $24 million towards its senior secured term loans. ClubCorp's total leverage ratio was 4.2x at the end of fiscal 2016, down from 4.5x at the end of fiscal 2015.

Company Outlook:
The following guidance is based on current management expectations. All financial guidance amounts are estimates and subject to change, including as a result of matters discussed under the “Forward-Looking Statements” cautionary language which follows, and the Company undertakes no duty to update its guidance. For fiscal year 2017, the Company anticipates revenue in the range of $1,095 to $1,135 million, and adjusted EBITDA in the range of $255 to $265 million.

About ClubCorp Holdings:
Since its founding in 1957, Dallas-based ClubCorp has operated with the central purpose of Building Relationships and Enriching Lives®. ClubCorp is a leading owner-operator of private golf and country clubs and private business clubs in North America. ClubCorp owns or operates a portfolio of over 200 golf and country clubs, business clubs, sports clubs, and alumni clubs in 27 states, the District of Columbia and two foreign countries that serve over 430,000 members, with approximately 20,000 peak-season employees. ClubCorp Holdings, Inc. is a publicly traded company on the New York Stock Exchange (NYSE:MYCC). ClubCorp properties include: Firestone Country Club (Akron, Ohio); Mission Hills Country Club (Rancho Mirage, California); The Woodlands Country Club (The Woodlands, Texas); Capital Club Beijing; and Metropolitan Club Chicago. You can find ClubCorp on Facebook at facebook.com/clubcorp and on Twitter at @ClubCorp.

Conference Call:
The Company’s earnings presentation is available at ir.clubcorp.com. The Company will hold a conference call on Wednesday, February 22, 2017 at 9:00 a.m. CDT (10:00 a.m. EDT) to discuss its fourth quarter 2016 financial results. The conference call will be broadcast live and can be accessed via the Company's website at ir.clubcorp.com. To participate in the teleconference, please call in a few minutes before the start time: (877) 201-0168 for U.S. callers and (647) 788-4901 for international callers and reference the ClubCorp fourth quarter conference call (confirmation code 56353403) when prompted. For those unable to participate in the live call, a replay of the call will be available at ir.clubcorp.com.

Statement Regarding Non-GAAP Financial Measures
Adjusted EBITDA (“Adjusted EBITDA”) is a key financial measure used by our management to (1) internally measure our operating performance, (2) evaluate segment performance and allocate resources and support certain valuation analyses and (3) assess our ability to service our debt, incur additional debt, make acquisitions, pay dividends and make capital expenditures. We believe that Adjusted EBITDA is useful to investors and lenders as a performance measure because it adjusts our operating results to be reflective of our core, ongoing, operating performance. As such, Adjusted EBITDA provides relevant information about trends for the periods presented and adjusts for the impact of certain items on a consistent basis from period to period. We believe this measure allows investors and lenders to evaluate performance using the same metrics that management uses to evaluate performance and plan annual budgets. We also believe Adjusted EBITDA is useful as a liquidity measure because it demonstrates our ability to service our debt, incur additional debt, make acquisitions, pay dividends and make capital expenditures.

EBITDA is defined as net income before interest expense, income taxes, interest and investment income, and depreciation and amortization. Adjusted EBITDA is defined as EBITDA plus or minus impairments, gain or loss on disposition and acquisition of assets, losses from divested clubs, loss on extinguishment of debt, non-cash and other adjustments, equity-based compensation expense and a deferred revenue adjustment. The deferred revenue adjustment to revenues and Adjusted EBITDA within each segment represents estimated deferred revenue using current membership life estimates related to initiation payments that would have been recognized in the applicable period but for the application of purchase accounting. Adjusted EBITDA is based on the definition of Consolidated EBITDA as defined in the credit agreement governing our senior secured credit facilities and may not be comparable to similarly titled measures reported by other companies. The credit agreement governing our senior secured credit facilities and the indenture governing our senior notes contain certain covenants which are based upon specified financial ratios in reference to Adjusted EBITDA, after giving effect to the pro forma impact of acquisitions. Adjusted EBITDA as reported is identical to the computation of Consolidated EBITDA as defined in the credit agreement governing our senior secured credit facilities, except that for purposes of certain covenants in the credit agreement, a pro forma adjustment is made to Consolidated EBITDA in order to give effect to current period acquisitions as though they had been consummated on the first day of the four quarter period presented. The pro forma impact gives effect to all acquisitions in the fiscal year 2016 as though they had been consummated on the first day of fiscal year 2016.

Adjusted EBITDA is not determined in accordance with GAAP and should not be considered in isolation, more meaningful than or as a substitute for a measure of performance or liquidity prepared in accordance with GAAP and is not indicative of net income or loss or operating cash flows as determined under GAAP. Non-GAAP financial measures have limitations that should be considered before used as measures to evaluate the Company's financial performance or liquidity. Adjusted EBITDA, as presented, may not be comparable to similarly titled measures reported by other companies due to varying methods of calculation.

The financial statement tables that accompany this press release include a reconciliation of historical non-GAAP financial measures to the applicable and most comparable GAAP financial measures. The Company has not reconciled Adjusted EBITDA guidance included in this press release to the most directly comparable GAAP measure because this cannot be done without unreasonable effort due to the high variability, complexity and low visibility with respect to impairments and disposition of assets, income taxes and centralization and transformation costs which are excluded from Adjusted EBITDA. We expect the variability of these charges to have a potentially unpredictable, and potentially significant, impact on our future GAAP financial results.

Special Note on Forward-Looking Statements
In addition to historical information, this press release contains statements relating to future results (including certain projections and business trends) that are “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, which are subject to the “safe harbor” created by those sections. These forward-looking statements can be identified by the fact that they do not relate strictly to current or historical facts and often include words such as “may”, “should”, “expect”, “intend”, “will”, “estimate”, “anticipate”, “believe”, “predict”, “potential” or “continue”, or the negatives of these terms or variations of them or similar terminology in this press release and any attachment to identify forward-looking statements. All statements, other than statements of historical facts included in this press release, including statements concerning plans, objectives, goals, beliefs, business strategies, future events, business conditions, results of operations, financial position and business outlook, earnings guidance, business trends and other information are forward-looking statements. The forward-looking statements are not historical facts, and are based upon current expectations, estimates and projections, and various assumptions, many of which, by their nature, are inherently uncertain and beyond management's control. All expectations, beliefs and projections are expressed in good faith and the Company believes there is a reasonable basis for them. However, there can be no assurance that management's expectations, beliefs and projections will result or be achieved and actual results may vary materially from what is expressed in or indicated by the forward-looking statements.

These forward-looking statements are subject to a number of risks and uncertainties that could cause actual results to differ materially from the forward-looking statements contained in this press release, including among others: various factors beyond management's control adversely affecting discretionary spending, membership count and facility usage and other risks, uncertainties and factors set forth in the sections entitled “Risk Factors” and “Cautionary Statement Regarding Forward-Looking Statements” in the Company's Annual Report on Form 10-K for the fiscal year ended December 29, 2015, which is on file with the Securities Exchange Commission (“SEC”), and in the Company's Annual Report on Form 10-K for the fiscal year ended December 27, 2016 expected to be filed with the SEC on February 27, 2017 .

Although the Company believes that these statements are based upon reasonable assumptions, it cannot guarantee future results and readers are cautioned not to place undue reliance on these forward-looking statements, which reflect management's opinions only as of the date of this press release. There can be no assurance that (i) the Company has correctly measured or identified all of the factors affecting its business or the extent of these factors' likely impact, (ii) the available information with respect to these factors on which such analysis is based is complete or accurate, (iii) such analysis is correct or (iv) the Company's strategy, which is based in part on this analysis, will be successful. Except as required by law, the Company undertakes no obligation to update or revise forward-looking statements to reflect new information or events or circumstances that occur after the date of this press release or to reflect the occurrence of unanticipated events or otherwise. Readers are advised to review the Company's filings with the SEC (which are available from the SEC's EDGAR database at www.sec.gov and via the Company's website at ir.clubcorp.com/SEC).

Statement Regarding Definitions and Financial Measures
The definitions and basis of presentation for financial measures used in this press release, including EBITDA, Adjusted EBITDA and same-store measures, are discussed more fully in the Company's Annual Report on Form 10-K for the fiscal year ended December 29, 2015, which is on file with the SEC, and the Company's Annual Report on Form 10-K for the fiscal year ended December 27, 2016 expected to be filed with the SEC on February 27, 2017. This press release should be read in conjunction with such Annual Reports.
______________________
Notes:

(1) Adjusted EBITDA is not calculated in accordance with accounting principles generally accepted in the U.S. (“GAAP”). See the “Statement Regarding Non-GAAP Financial Measures” section of this press release for the definition of Adjusted EBITDA and the reconciliation later in this press release to the most comparable financial measure calculated in accordance with GAAP.

(2) Clubs are considered same store once they have been fully operational for one fiscal year. Newly acquired or opened clubs, clubs added under management agreements and divested clubs are not classified as same store. Once a club has been divested, it is removed from the same store classification for all periods presented. New or Acquired Clubs include those clubs that the Company is currently operating as of December 27, 2016, that were opened, acquired or added under management agreements in the fiscal year ended December 27, 2016 and the fiscal year ended December 29, 2015 consisting of: Ravinia Green Country Club, Rolling Green Country Club, Bermuda Run Country Club, Brookfield Country Club, Firethorne Country Club, Temple Hills Country Club, Ford's Colony Country Club, Bernardo Heights Country Club, Santa Rosa Golf and Beach Club, Marsh Creek Country Club and Santa Rosa Golf and Country Club, Country Club of Columbus, Heritage Golf Club and West Lake Mansion at Meilu Legend Hotel.

(3) Consists of other business activities including ancillary revenues related to alliance arrangements, a portion of the revenue associated with upgrade offerings, reimbursements for certain costs of operations at managed clubs, corporate overhead expenses and shared services.

(Financial Tables Follow)

CLUBCORP HOLDINGS, INC.
SELECTED FINANCIAL DATA—GOLF AND COUNTRY CLUBS (GCC)
(In thousands, except for memberships and percentages)
(Unaudited financial information)
Fourth quarter ended Year ended
GCCDecember 27,
2016
(16 weeks)
December 29,
2015
(16 weeks)
%
Change (1)
December 27,
2016
(52 weeks)
December 29,
2015
(52 weeks)
%
Change (1)
Same Store Clubs (2)
Revenue
Dues$125,251 $121,853 2.8% $404,380 $391,207 3.4%
Food and Beverage60,940 58,001 5.1% 188,111 182,387 3.1%
Golf Operations52,185 52,017 0.3% 178,042 179,220 (0.7)%
Other16,174 16,500 (2.0)% 57,378 58,647 (2.2)%
Revenue$254,550 $248,371 2.5% $827,911 $811,461 2.0%
Club operating costs and expenses exclusive of depreciation$173,426 $169,516 2.3% $574,773 $569,153 1.0%
Adjusted EBITDA$81,124 $78,855 2.9% $253,138 $242,308 4.5%
Adjusted EBITDA Margin31.9% 31.7% 20 bps 30.6% 29.9% 70 bps
New or Acquired Clubs (2)
Revenue$17,125 $11,113 NM $51,174 $29,880 NM
Club operating costs and expenses exclusive of depreciation$13,836 $8,779 NM $43,717 $26,492 NM
Adjusted EBITDA$3,289 $2,334 NM $7,457 $3,388 NM
Total Golf and Country Clubs
Revenue$271,675 $259,484 4.7% $879,085 $841,341 4.5%
Club operating costs and expenses exclusive of depreciation$187,262 $178,295 5.0% $618,490 $595,645 3.8%
Adjusted EBITDA$84,413 $81,189 4.0% $260,595 $245,696 6.1%
Adjusted EBITDA Margin31.1% 31.3% (20) bps 29.6% 29.2% 40 bps
Total memberships, excluding managed club memberships 120,804 116,303 3.9%

____________________

(1) Percentage changes that are not meaningful are denoted by “NM.”

(2) Clubs are considered same store once they have been fully operational for one fiscal year. Newly acquired or opened clubs, clubs added under management agreements and divested clubs are not classified as same store. Once a club has been divested, it is removed from the same store classification for all periods presented. New or Acquired Clubs include those clubs that the Company is currently operating as of December 27, 2016, that were acquired, opened or added under management agreements during the fiscal year ended December 27, 2016 and the fiscal year ended December 29, 2015 consisting of: Ravinia Green Country Club, Rolling Green Country Club, Bermuda Run Country Club, Brookfield Country Club, Firethorne Country Club, Temple Hills Country Club, Ford's Colony Country Club, Bernardo Heights Country Club, Santa Rosa Golf and Beach Club, Marsh Creek Country Club, Santa Rosa Golf and Country Club, Country Club of Columbus and Heritage Golf Club.

CLUBCORP HOLDINGS, INC.
SELECTED FINANCIAL DATA—BUSINESS, SPORTS AND ALUMNI CLUBS (BSA)
(In thousands, except for memberships and percentages)
(Unaudited financial information)
Fourth quarter ended Year ended
BSADecember 27,
2016
(16 weeks)
December 29,
2015
(16 weeks)
%
Change (1)
December 27,
2016
(52 weeks)
December 29,
2015
(52 weeks)
%
Change (1)
Same Store Clubs (2)
Revenue
Dues$24,733 $24,686 0.2% $81,036 $79,732 1.6%
Food and Beverage38,399 38,213 0.5% 100,293 99,274 1.0%
Other3,747 3,494 7.2% 11,901 11,845 0.5%
Revenue$66,879 $66,393 0.7% $193,230 $190,851 1.2%
Club operating costs and expenses exclusive of depreciation$50,039 $49,398 1.3% $151,761 $151,125 0.4%
Adjusted EBITDA$16,840 $16,995 (0.9)% $41,469 $39,726 4.4%
Adjusted EBITDA Margin25.2% 25.6% (40) bps 21.5% 20.8% 70 bps
New or Acquired Clubs (2)
Revenue$59 $25 NM $160 $25 NM
Club operating costs and expenses exclusive of depreciation$17 $16 NM $37 $39 NM
Adjusted EBITDA$42 $9 NM $123 $(14) NM
Total Business, Sports and Alumni Clubs
Revenue$66,938 $66,418 0.8% $193,390 $190,876 1.3%
Club operating costs and expenses exclusive of depreciation$50,056 $49,414 1.3% $151,798 $151,164 0.4%
Adjusted EBITDA$16,882 $17,004 (0.7)% $41,592 $39,712 4.7%
Adjusted EBITDA Margin25.2% 25.6% (40) bps 21.5% 20.8% 70 bps
Total memberships, excluding managed club memberships 53,544 54,980 (2.6)%

______________________

(1) Percentage changes that are not meaningful are denoted by “NM.”

(2) Clubs are considered same store once they have been fully operational for one fiscal year. Newly acquired or opened clubs, clubs added under management agreements and divested clubs are not classified as same store. Once a club has been divested, it is removed from the same store classification for all periods presented. New or Acquired Clubs include those clubs that the Company is currently operating as of December 27, 2016, that were opened or added under management agreements during the fiscal year ended December 27, 2016 and the fiscal year ended December 29, 2015 consisting of West Lake Mansion at Meilu Legend Hotel.

CLUBCORP HOLDINGS, INC.
RECONCILIATION OF NON-GAAP MEASURES TO CLOSEST GAAP MEASURES
(In thousands)
(Unaudited financial information)
Fourth quarter ended Year ended
December 27, December 29, December 27, December 29,
2016 2015 2016 2015
(16 weeks) (16 weeks) (52 weeks) (52 weeks)
Net income (loss)$5,406 $(6,259) $4,025 $(9,573)
Interest expense 26,658 22,085 87,188 70,672
Income tax expense 1,224 1,816 1,348 1,629
Interest and investment income (194) (1,701) (608) (5,517)
Depreciation and amortization 33,462 32,328 107,200 103,944
EBITDA$66,556 $48,269 $199,153 $161,155
Impairments and disposition of assets (1) 7,950 9,123 16,974 24,546
Loss from divested clubs (2) 209 64 751 25
Loss on extinguishment of debt (3) 2,599 2,599
Non-cash adjustments (4) 362 619 255 2,008
Acquisition related costs (5) 310 1,268 1,409 4,965
Capital structure costs (6) 790 8,196 1,840 10,047
Centralization and transformation costs (7) 2,679 3,705 9,806 8,495
Other adjustments (8) 845 2,308 5,076 7,397
Equity-based compensation expense (9) 2,128 1,460 7,005 4,970
Deferred revenue adjustment (10) 1,509 1,967 5,419 7,111
Adjusted EBITDA$83,338 $79,578 $247,688 $233,318
Fourth quarter ended Year ended
December 27, December 29, December 27, December 29,
2016 2015 2016 2015
(16 weeks) (16 weeks) (52 weeks) (52 weeks)
Net cash provided by operating activities$59,783 $53,656 $157,654 $152,270
Interest expense 26,658 22,085 87,188 70,672
Income tax expense 1,224 1,816 1,348 1,629
Interest and investment income (194) (1,701) (608) (5,517)
Loss from divested clubs (2) 209 64 751 25
Loss on extinguishment of debt (3) 2,599 2,599
Non-cash adjustments (4) 362 619 255 2,008
Acquisition related costs (5) 310 1,268 1,409 4,965
Capital structure costs (6) 790 8,196 1,840 10,047
Centralization and transformation costs (7) 2,679 3,705 9,806 8,495
Other adjustments (8) 845 2,308 5,076 7,397
Deferred revenue adjustment (10) 1,509 1,967 5,419 7,111
Certain adjustments to reconcile net income (loss) to operating cash flows (11) (10,837) (17,004) (22,450) (28,383)
Adjusted EBITDA$83,338 $79,578 $247,688 $233,318
Fourth quarter ended Year ended
December 27, December 29, December 27, December 29,
2016 2015 2016 2015
(16 weeks) (16 weeks) (52 weeks) (52 weeks)
Golf and Country Clubs Adjusted EBITDA$84,413 $81,189 $260,595 $245,696
Business, Sports and Alumni Clubs Adjusted EBITDA 16,882 17,004 41,592 39,712
Interest expense (26,658) (22,085) (87,188) (70,672)
Interest and investment income 194 1,701 608 5,517
Depreciation and amortization (33,462) (32,328) (107,200) (103,944)
Impairments and disposition of assets (1) (7,950) (9,123) (16,974) (24,546)
Loss from divested clubs (2) (209) (64) (751) (25)
Loss on extinguishment of debt (3) (2,599) (2,599)
Non-cash adjustments (4) (362) (619) (255) (2,008)
Acquisition related costs (5) (310) (1,268) (1,409) (4,965)
Capital structure costs (6) (790) (8,196) (1,840) (10,047)
Centralization and transformation costs (7) (2,679) (3,705) (9,806) (8,495)
Other adjustments (8) (845) (2,308) (5,076) (7,397)
Equity-based compensation expense (9) (2,128) (1,460) (7,005) (4,970)
Deferred revenue adjustment (10) (1,509) (1,967) (5,419) (7,111)
Corporate expenses and other operations (12) (17,957) (18,615) (54,499) (52,090)
Income (loss) before income taxes$6,630 $(4,443) $5,373 $(7,944)

______________________

The following footnotes relate to the three preceding tables.

(1) Includes non-cash impairment charges related to property and equipment and intangible assets and loss on disposals of assets (including property and equipment disposed of in connection with renovations).

(2) Net loss from divested clubs that do not qualify as discontinued operations in accordance with GAAP.

(3) Includes loss on extinguishment of debt calculated in accordance with GAAP.

(4) Includes non-cash items related to purchase accounting associated with the acquisition of ClubCorp, Inc. (“CCI”) in 2006 by affiliates of KSL Capital Partners, LLC (“KSL”).

(5) Represents legal and professional fees related to the acquisition of clubs.

(6) Represents legal and professional fees related to our capital structure, including debt issuance and amendment costs and equity offering costs.

(7) Includes fees and expenses associated with initial compliance with Section 404(b) of the Sarbanes-Oxley Act, which were primarily incurred in fiscal year 2015 and the twelve weeks ended March 22, 2016, and related centralization and transformation of administrative processes, finance processes and related IT systems.

(8) Represents adjustments permitted by the credit agreement governing the Secured Credit Facilities including cash distributions from equity method investments less equity in earnings recognized for said investments, income or loss attributable to non-controlling equity interests and expenses paid to an affiliate of KSL.

(9) Includes equity-based compensation expense, calculated in accordance with GAAP, related to awards held by certain employees, executives and directors.

(10) Represents estimated deferred revenue, calculated using current membership life estimates, related to initiation payments that would have been recognized in the applicable period but for the application of purchase accounting in connection with the acquisition of CCI in 2006 and the acquisition of Sequoia Golf on September 30, 2014.

(11) Includes the following adjustments to reconcile net income (loss) to net cash provided by operating activities from our Unaudited Consolidated Condensed Statements of Cash Flows: Net change in prepaid expenses and other assets, net change in receivables and membership notes, net change in accounts payable and accrued liabilities, net change in other current liabilities, bad debt expense, equity in loss (earnings) from unconsolidated ventures, gain on investment in unconsolidated ventures, distribution from investment in unconsolidated ventures, debt issuance costs and term loan discount, accretion of discount on member deposits, net change in deferred tax assets and liabilities and net change in other long-term liabilities. Certain other adjustments to reconcile net income (loss) to net cash provided by operating activities are not included as they are excluded from both net cash provided by operating activities and Adjusted EBITDA.

(12) Includes other business activities including ancillary revenues related to alliance arrangements, a portion of the revenue associated with upgrade offerings, costs of operations at managed clubs, corporate overhead expenses and shared services expenses.

CLUBCORP HOLDINGS, INC.
SUMMARIZED FINANCIAL INFORMATION BY SEGMENT
(In thousands)
(Unaudited financial information)
Fourth quarter ended Year ended
December 27,
2016
(16 weeks)
December 29,
2015
(16 weeks)
December 27,
2016
(52 weeks)
December 29,
2015
(52 weeks)
Revenues
Golf and Country Clubs (1)$271,675 $259,484 $879,085 $841,341
Business, Sports and Alumni Clubs (1)66,938 66,418 193,390 190,876
Other operations9,958 6,712 25,016 19,853
Elimination of intersegment revenues and segment reporting adjustments(4,010) (4,265) (13,137) (14,383)
Revenues relating to divested clubs (2)740 3,339 4,126 15,180
Total consolidated revenues$345,301 $331,688 $1,088,480 $1,052,867
Golf and Country Clubs Adjusted EBITDA$84,413 $81,189 $260,595 $245,696
Business, Sports and Alumni Clubs Adjusted EBITDA$16,882 $17,004 $41,592 $39,712

______________________

(1) Includes segment reporting adjustments representing estimated deferred revenue, calculated using current membership life estimates, related to initiation payments that would have been recognized in the applicable period but for the application of purchase accounting in connection with the acquisition of CCI in 2006 and the acquisition of Sequoia Golf on September 30, 2014.

(2) When clubs are divested, the associated revenues are excluded from segment results for all periods presented.

CLUBCORP HOLDINGS, INC.
UNAUDITED CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS
For the Sixteen Weeks and Fiscal Years Ended December 27, 2016 and December 29, 2015
(In thousands, except per share amounts)
(Unaudited financial information)
Fourth quarter ended Year ended
December 27,
2016
(16 weeks)
December 29,
2015
(16 weeks)
%
Change
December 27,
2016
(52 weeks)
December 29,
2015
(52 weeks)
%
Change
REVENUES:
Club operations$238,966 $230,506 3.7% $781,000 $757,472 3.1%
Food and beverage104,316 99,797 4.5% 302,510 291,582 3.7%
Other revenues2,019 1,385 45.8% 4,970 3,813 30.3%
Total revenues345,301 331,688 4.1% 1,088,480 1,052,867 3.4%
DIRECT AND SELLING, GENERAL AND ADMINISTRATIVE EXPENSES:
Club operating costs exclusive of depreciation213,924 207,215 3.2% 695,990 681,989 2.1%
Cost of food and beverage sales exclusive of depreciation32,674 30,786 6.1% 100,490 96,103 4.6%
Depreciation and amortization33,462 32,328 3.5% 107,200 103,944 3.1%
Provision for doubtful accounts754 675 11.7% 3,141 2,551 23.1%
Loss on disposals of assets5,594 6,093 (8.2)% 12,320 19,402 (36.5)%
Impairment of assets2,356 3,030 (22.2)% 4,654 5,144 (9.5)%
Equity in (earnings) loss from unconsolidated ventures(1,717) 374 (559.1)% (5,013) 1,308 (483.3)%
Selling, general and administrative25,160 32,647 (22.9)% 77,745 82,616 (5.9)%
OPERATING INCOME33,094 18,540 78.5% 91,953 59,810 53.7%
Interest and investment income194 1,701 (88.6)% 608 5,517 (89.0)%
Interest expense(26,658) (22,085) (20.7)% (87,188) (70,672) (23.4)%
Loss on extinguishment of debt (2,599) 100.0% (2,599) 100.0%
INCOME (LOSS) BEFORE INCOME TAXES6,630 (4,443) 249.2% 5,373 (7,944) 167.6%
INCOME TAX (EXPENSE) BENEFIT(1,224) (1,816) 32.6% (1,348) (1,629) 17.2%
NET INCOME (LOSS)5,406 (6,259) 186.4% 4,025 (9,573) 142.0%
NET (INCOME) LOSS ATTRIBUTABLE TO NONCONTROLLING INTERESTS(182) (87) (109.2)% (448) 61 (834.4)%
NET INCOME (LOSS) ATTRIBUTABLE TO CLUBCORP$5,224 $(6,346) 182.3% $3,577 $(9,512) 137.6%
WEIGHTED AVERAGE SHARES OUTSTANDING, BASIC64,538 64,409 0.2% 64,517 64,364 0.2%
WEIGHTED AVERAGE SHARES OUTSTANDING, DILUTED64,627 64,409 0.3% 64,584 64,364 0.3%
INCOME (LOSS) PER COMMON SHARE:
Net income (loss) attributable to ClubCorp, Basic$0.08 $(0.10) 180.0% $0.05 $(0.15) 133.3%
Net income (loss) attributable to ClubCorp, Diluted$0.08 $(0.10) 180.0% $0.05 $(0.15) 133.3%
Cash dividends declared per common share$0.26 $0.13 100.0% $0.53 $0.52 1.9%


CLUBCORP HOLDINGS, INC.
UNAUDITED CONSOLIDATED CONDENSED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
For the Sixteen Weeks and Fiscal Years Ended December 27, 2016 and December 29, 2015
(In thousands)
(Unaudited financial information)
Fourth quarter ended Year ended
December 27,
2016
(16 weeks)
December 29,
2015
(16 weeks)
%
Change
December 27,
2016
(52 weeks)
December 29,
2015
(52 weeks)
%
Change
NET INCOME (LOSS)$5,406 $(6,259) 186.4% $4,025 $(9,573) 142.0%
Foreign currency translation(1,204) 504 (338.9)% (2,389) (2,959) 19.3%
OTHER COMPREHENSIVE LOSS(1,204) 504 (338.9)% (2,389) (2,959) 19.3%
COMPREHENSIVE INCOME (LOSS)4,202 (5,755) 173.0% 1,636 (12,532) 113.1%
COMPREHENSIVE (INCOME) LOSS ATTRIBUTABLE TO NONCONTROLLING INTERESTS(182) (87) (109.2)% (448) 61 (834.4)%
COMPREHENSIVE INCOME (LOSS) ATTRIBUTABLE TO CLUBCORP$4,020 $(5,842) 168.8% $1,188 $(12,471) 109.5%


CLUBCORP HOLDINGS, INC.
UNAUDITED CONSOLIDATED CONDENSED BALANCE SHEETS
As of December 27, 2016 and December 29, 2015
(In thousands of dollars, except share and per share amounts)
(Unaudited financial information)
December 27, 2016 December 29, 2015
ASSETS
CURRENT ASSETS:
Cash and cash equivalents$84,601 $116,347
Receivables, net of allowances79,115 68,671
Inventories22,743 20,929
Prepaids and other assets16,116 19,907
Total current assets202,575 225,854
Investments1,569 3,005
Property and equipment, net1,553,382 1,534,520
Notes receivable, net of allowances8,161 7,448
Goodwill312,811 312,811
Intangibles, net29,348 31,252
Other assets16,615 16,634
Long-term deferred tax asset4,253 3,727
TOTAL ASSETS$2,128,714 $2,135,251
LIABILITIES AND EQUITY
CURRENT LIABILITIES:
Current maturities of long-term debt$19,422 $20,414
Membership initiation deposits - current portion170,355 152,996
Accounts payable39,260 39,487
Accrued expenses42,539 37,441
Accrued taxes19,256 15,473
Other liabilities71,092 69,192
Total current liabilities361,924 335,003
Long-term debt1,067,071 1,079,320
Membership initiation deposits205,076 204,305
Deferred tax liability, net209,347 214,184
Other liabilities132,909 123,657
Total liabilities1,976,327 1,956,469
EQUITY
Common stock, $0.01 par value, 200,000,000 shares authorized; 65,498,897 and 64,740,736 issued and outstanding at December 27, 2016 and December 29, 2015, respectively655 647
Additional paid-in capital235,871 263,921
Accumulated other comprehensive loss(9,638) (7,249)
Accumulated deficit(82,260) (88,955)
Treasury stock, at cost (192,989 shares at December 27, 2016)(2,258)
Total stockholders’ equity142,370 168,364
Noncontrolling interests in consolidated subsidiaries and variable interest entities10,017 10,418
Total equity152,387 178,782
TOTAL LIABILITIES AND EQUITY$2,128,714 $2,135,251


CLUBCORP HOLDINGS, INC.
UNAUDITED CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
For the Sixteen Weeks and Fiscal Years Ended December 27, 2016 and December 29, 2015
(In thousands of dollars)
(Unaudited financial information)
Fourth quarter ended Year ended
December 27,
2016
(16 weeks)
December 29,
2015
(16 weeks)
December 29,
2015
(52 weeks)
December 30,
2014
(52 weeks)
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss)$5,406 $(6,259) $4,025 $(9,573)
Adjustments to reconcile net income (loss) to cash flows from operating activities:
Depreciation33,077 31,460 105,437 101,037
Amortization385 867 1,763 2,907
Asset impairments2,356 3,030 4,654 5,144
Bad debt expense754 668 3,141 2,605
Equity in (earnings) loss from unconsolidated ventures(1,717) 374 (5,013) 1,308
Gain on investment in unconsolidated ventures (1,575) (5,082)
Distribution from investment in unconsolidated ventures1,988 1,810 5,950 5,845
Loss on disposals of assets5,594 6,090 12,320 19,399
Debt issuance costs and term loan discount1,756 12,316 5,204 15,600
Accretion of discount on member deposits6,553 6,244 20,416 20,307
Equity-based compensation2,128 1,460 7,005 4,970
Net change in deferred tax assets and liabilities(2,834) (2,344) (3,048) (7,082)
Net change in prepaid expenses and other assets4,068 (4,185) 368 (7,636)
Net change in receivables and membership notes30,140 35,888 (3,931) 6,619
Net change in accounts payable and accrued liabilities2,592 4,466 (2,577) 2,499
Net change in other current liabilities(33,189) (35,110) 3,078 (555)
Net change in other long-term liabilities726 (1,544) (1,138) (6,042)
Net cash provided by operating activities59,783 53,656 157,654 152,270
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property and equipment(35,242) (29,134) (108,770) (105,244)
Acquisition of clubs (2,705) (9,793) (58,582)
Proceeds from dispositions334 3,186 370 3,764
Proceeds from insurance7,756 12,190
Net change in restricted cash and capital reserve funds157 (120) 631 (183)
Net cash used in investing activities(26,995) (28,773) (105,372) (160,245)
CASH FLOWS FROM FINANCING ACTIVITIES:
Repayments of long-term debt(30,293) (235,267) (79,636) (247,313)
Proceeds from new debt borrowings 350,000 37,000 350,000
Repayments of revolving credit facility borrowings (47,000) (57,000)
Proceeds from revolving credit facility borrowings 57,000
Debt issuance and modification costs(811) (16,032) (3,106) (17,525)
Dividends to owners(8,495) (8,400) (33,972) (33,583)
Repurchases of common stock(721) (2,258)
Equity offering costs (887) (887)
Share repurchases for tax withholdings related to certain equity-based awards (226) (1,443)
Excess tax benefit from equity-based awards 1,055 1,055
Distributions to noncontrolling interest (849) (1,071)
Proceeds from new membership initiation deposits90 229 205 749
Repayments of membership initiation deposits(639) (418) (2,189) (1,496)
Net cash (used in) provided by financing activities(40,869) 43,280 (85,031) 48,486
EFFECT OF EXCHANGE RATE CHANGES ON CASH595 1,051 1,003 789
NET DECREASE IN CASH AND CASH EQUIVALENTS

(7,486) 69,214 (31,746) 41,300
CASH AND CASH EQUIVALENTS - BEGINNING OF PERIOD92,087 47,133 116,347 75,047
CASH AND CASH EQUIVALENTS - END OF PERIOD$84,601 $116,347 $84,601 $116,347
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid for interest$23,419 $19,936 $56,949 $51,368
Cash paid for income taxes$2,358 $6,782 $5,721 $11,297


Media Relations: Patty Jerde 972-888-7790 patty.jerde@clubcorp.com Investor Relations: Frank Molina 972-888-6206 frank.molina@clubcorp.com

Source:ClubCorp Holdings Inc.