A Wall Street credit ratings agency has stated that Atlantis plans to spend $121.5 million on capital projects over a four-year period.S&P, in a report prepared to accompany its rating of debt related to the refinancing of the resort, said that Atlantis will spend this amount on capital projects between 2015 and 2018. Projects to be funded include refurbishments of the Coral and Beach Towers and "other minor projects". Averaged over the four-year period, this amounts to spending of $30.3 million per year.The report states that Atlantis spent an average of $33.1 million per year on capital works between 2008 and 2013: $38 million in 2013, $25.7 million in 2012, $32.6 million 2011, $35.2 million in 2010, $27.4 million in 2009 and $39.8 million in 2008. The report adds that Atlantis spent $198 million, or $68,120 per guest room, on capital upgrades between 2008 and 2013 and an additional $44 million on special projects "mainly focused on various public spaces".Averaged per year, the capital investment amount highlighted by S&P for the 2015 to 2018 period represents a slight reduction in spending on average compared with its historical capital expenditure levels over the past six years.Speaking at a conference to announce the completion of its refinancing on July 2 - a closing drawn into question by the S&P report dated August 4, which highlights an August 19 closing date for the $1 billion commercial mortgage-backed securities transaction - Andrea Balkan, managing partner of Brookfield Real Estate Financial Partners, which holds Atlantis among its assets, had stated that the company is looking to invest a "significant sum" in a five-year capital expenditure plan for the resort.

The S&P report, prepared to inform potential investors in the Atlantis debt deal, reveals previously undisclosed details about Atlantis' operations and revenue stream based on consultations with Atlantis management, reviews of the company's property-level operating statements and other key documentation. S&P describes Atlantis as having a "diverse revenue stream", in which room revenue typically makes up only about 31 percent of total revenue, while food and beverage sales have historically contributed around 25 percent of revenue.The casino and a race and sports book generates about 16 percent of revenue while the water park generated around nine percent of the company's revenue in 2013. The report adds that the park's attendance has "increased significantly" each year since the project was completed in 2007.Demonstrating the seasonality of the resort, the report notes that Atlantis typically generates some 88 percent of its net cash flow (NCF) between March and August, while typically seeing negative NCF in September and October - the hurricane season.Elsewhere in the report, the data reveals that total revenue for the resort rose from $720.4 million in 2010 to $817.4 million in 2013, before falling again to $793.7 million in 2013. A further fall to $791.9 million is projected for 2014. Food and beverage revenue has risen from $182.1 million to $209.9 million from 2010 to 2013, while $207.7 million in revenue is projected for 2014.Casino revenue remained fairly static, rising slightly from $122.6 million to $130.8 million in 2013. This fell from $138.7 million in 2012. Revenue of $129.6 million is projected for 2014.S&P reported that Atlantis' average daily room rate (ADR) has fallen overall since 2009 from $330.89 to $298.32 in 2013, with a projected $301.78 for 2014.The data reveals that Atlantis paid $15 million in management fees in 2013, a slight increase from its management fees in 2010, of $13.6 million. The company is reimbursed by an agreement allowing it to collect the equivalent of one percent of gross revenue for its services.On Monday Guardian Business reported that S&P's analysis of Atlantis and its operations had led to a projection that its "long-term sustainable value", equivalent to a projection of the property's value, is some 54 percent lower than that determined by an appraiser. It linked this assessment to the fact that Atlantis will face "significant competition" from Baha Mar when it comes on-stream next year.According to S&P spokesperson April Kabahar, when analyzing a commercial mortgage-backed security (CMBS), S&P examines the underlying property - in this case, the Atlantis resort - and derives a property's long-term sustainable net cash flow, taking into consideration the cyclical nature of the commercial real estate markets and also volatility in certain asset/property types. By looking at the revenues and expenses that could impact the property's cash flow, such as occupancy rates, capital expenses and more, the agency makes certain projections. The number derived from this analysis represents S&P's "long-term sustainable" NCF, equivalent to a projection of the property's value.

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