Kind Angel of the World Cyprus

International Theme Park Services, Inc.

Background

International Theme Park Services, Inc.

• A world-wide management and consulting firm located in Cincinnati, Ohio (USA) established in 1983.

• Formed to fill the demand for practical knowledge and hands-on experience in leisure and attendance driven industries.

• A full service organization that offers complete consultation and management services in the areas of: Theme Parks, Amusement Parks, Resorts, Waterparks, Observation Towers, Specialty Attractions, Family Entertainment Centers, Malls, Aquariums, and Zoos.

• Maintains a complete database of most current industry information and research.

• Stays up to date on the leisure industry and its trends. Remains abreast of current economic influences, state-of-the-art advances, and knowing what visitors expect.

• Defines, develops and establishes programs and procedures specifically for each project.

• Approaches each project with vitality and a commitment to excellence.

• Works to ensure that the highest standard of quality and professionalism are planned and integrated throughout the entire project.

ITPS and IAAPA (Industry Association)

• Dennis Speigel is a past president of IAAPA and currently serves on the Board of Directors.– Chaired the Education committee – Created the Cornell University

Education Institute Program– As part of the IAAPA Strategic

Planning Committee, Dennis recommended, developed and chaired the first long range plans / goals for IAAPA

– 2010 Lifetime Service Award• ITPS staff have chaired on

numerous association committees.

• ITPS staff have written numerous articles for IAAPA publication.

• ITPS brought IAAPA to Russia.

Report Methodology

• No pre-conceived notions.• Visit the marketplace. • Undertake due diligence in gathering data and most recent

research.• Experience other leisure opportunities.• Tour the site and determine key site characteristics.

Industry Overview

Industry Overview

• The Kind Angel of the World would be entering the overall leisure and attractions industry, an industry that boasts a very long and successful history. Detailed data is shared through the industry’s global governing bodies.

• Specifically, the Kind Angel of the World, although distinctive as a monument / statue of an Angel symbolizing peace, is proposed to operate as a commercial vertical structure that offers observation levels and other ancillary components of a cultural and entertainment nature.

• The vertical structures / towers industry evolved out of the leisure and attractions industry. Its foundations date back several years. Through the years, more tower operations have been built – and continue to be built - all over the world.

• The towers and vertical structures industry is monitored through several organizations, most notably the World Federation of Great Towers.

Concept Review

Towers, Vertical Structures, & Monuments

Concept Review

• The approximate height of the proposed Kind Angel of the World is 135 meters (443 feet).

• The structure would be a “green” operation, boasting a self-sustaining environment.

• The following components have been currently proposed for inclusion in the Kind Angel of the World in Cyprus.– Concert Hall– Bar-Restaurants– Cafes– Mini-Bars– Meeting Rooms– Office Space– Exhibition Hall– Observation Platforms

Concept Review

Site Review

Site and Location

• Cyprus is the third largest island in the Mediterranean and today is one of its most popular tourist destinations.

• Available modes of transport are by road, sea and air. Cyprus offers a modernized roadway system connecting its main districts, and has two international airports.

• The proposed location for the Kind Angel of the World is near the village of Monagroulli, about five to seven kilometers east of Limassol, Republic of Cyprus. The exact location encompasses 6.3 hectares (15.5 acres, 63,000 square meters) along beachfront property near Alamanos Beach.

Site and Location

• Limassol is the second largest city in Cyprus and is located on the southern coast at Akrotiri Bay. It is the largest port in the Mediterranean transit trade. Built between the two ancient cities of Amathus and Kourion, Limassol has become an important tourism, trade and service center. Many annual festivals are held in Limassol.

• The proposed site for the project can be easily accessed from the main roadway linking Limassol and Larnaca. While some travel is necessary on secondary roads, the distance from the main road is not a hindrance.

Site and Location

• Although the project site is not far from Limassol, there are no other nearby demand generators to bring people to the site, except for a couple of nearby restaurants.

• The reported development of a nearby university will greatly enhance the site’s overall marketability.

• Further, ITPS believes the impact of the Kind Angel of the World operation in the area will help to generate new commercial ventures, thus ultimately bringing more traffic to the site.

Market

Total Projected Market

2014 2015 2016 2017 2018

RESIDENT MARKET

Primary Market

Lemesos (Limassol) 246,200 250,100 254,000 258,000 262,100

Larnaka 143,300 145,500 147,800 150,100 152,500

Subtotal Primary Market 389,500 395,600 401,800 408,100 414,600

Secondary Market

Lefkosia (Nicosia) 333,500 338,700 344,000 349,400 354,900

Pafos 83,600 84,900 86,200 87,600 89,000

Ammochostos (Famagusta) 48,300 49,100 49,900 50,700 51,500

Subtotal Secondary Market 465,400 472,700 480,100 487,700 495,400

Total Resident Market 854,900 868,300 881,900 895,800 910,000

TOURIST MARKET

Tourist Arrivals 2,244,900 2,263,200 2,281,700 2,300,400 2,319,200

Excursionist Arrivals 366,200 392,500 420,800 451,000 483,400

Total Tourist Market 2,611,100 2,655,700 2,702,500 2,751,400 2,802,600

TOTAL MARKET 3,466,000 3,524,000 3,584,400 3,647,200 3,712,600

Attendance and Demand

Market Penetration and Attendance

Estimated

Market Segment Size Low Probable High Low Probable High

Resident Market: 854,900 18.2% 20.0% 22.0% 155,436 170,980 188,078

Tourist Market: 2,611,100 22.7% 25.0% 27.5% 593,432 652,775 718,053

Totals 3,466,000 748,868 823,755 906,131

Annual Attendance

Year 1 Year 2 Year 3 Year 4 Year 5

Market Segment 2014 2015 2016 2017 2018

Market Size:

Resident Market: 854,900 868,300 881,900 895,800 910,000

Tourist Market: 2,611,100 2,655,700 2,702,500 2,751,400 2,802,600

Market Penetration:

Resident Market: 20.0% 20.0% 20.0% 20.0% 20.0%

Tourist Market: 25.0% 25.0% 25.0% 25.0% 25.0%

Market Segment Attendance:

Resident Market: 170,980 173,660 176,380 179,160 182,000

Tourist Market: 652,775 663,925 675,625 687,850 700,650

Annual Attendance 823,755 837,585 852,005 867,010 882,650

Potential

Market Penetration

Potential

Annual Attendance

Potential Market Penetration

Projected Annual Attendance

790,000

800,000

810,000

820,000

830,000

840,000

850,000

860,000

870,000

880,000

890,000

2014 2015 2016 2017 2018

Year 1 Year 2 Year 3 Year 4 Year 5

823,755

837,585

852,005

867,010

882,650

Financial Analysis

Per Capita Revenues

• The financial analysis for the Kind Angel of the World in Cyprus utilized data and information from the attractions and leisure industry, in particular that of other tower and vertical structure operations, in the projection of revenues and operating expenses.

• The forecasts and projections were based on the current concept and attendance projections, and have indicated the financial or economic potential and viability of the project through financial measures.

Year 1 Year 2 Year 3 Year 4 Year 5

Per Capita Revenues 2014 2015 2016 2017 2018

Admissions $17.09 $17.77 $18.48 $19.22 $19.99

Parking $0.25 $0.26 $0.27 $0.28 $0.29

Food & Beverage $16.23 $16.88 $17.56 $18.26 $18.99

Conferences / Events $3.42 $3.55 $3.70 $3.84 $4.00

Merchandise $4.27 $4.44 $4.62 $4.81 $5.00

Theater / Museum $1.50 $1.56 $1.62 $1.69 $1.75

Miscellaneous $0.10 $0.10 $0.11 $0.11 $0.12

Total Per Capita $42.86 $44.57 $46.36 $48.21 $50.14

Operating Revenues

• Based on comparisons of leisure pricing, and after examining price relationships of other vertical structures to waterparks or amusements parks within the same market, ITPS has assumed an adult admission price of $25.00 USD for the Kind Angel of the World.

Year 1 Year 2 Year 3 Year 4 Year 5

Revenues 2014 2015 2016 2017 2018

Admissions $14,075,914 $14,884,723 $15,746,416 $16,665,059 $17,642,496

Parking $205,939 $217,772 $230,382 $243,817 $258,144

Food & Beverage $13,372,118 $14,140,487 $14,959,289 $15,831,653 $16,761,930

Conferences / Events $2,815,183 $2,976,945 $3,149,324 $3,332,980 $3,528,827

Merchandise $3,518,978 $3,721,181 $3,936,655 $4,166,224 $4,411,034

Concerts $2,400,000 $2,496,000 $2,595,840 $2,699,674 $2,807,661

Theater / Museum $1,235,633 $1,306,633 $1,382,293 $1,462,903 $1,548,863

Miscellaneous $82,376 $87,109 $92,153 $97,527 $103,258

Total Operating Revenues $37,706,141 $39,830,850 $42,092,352 $44,499,837 $47,062,213

Operating Expenses

Year 1 Year 2 Year 3 Year 4 Year 5

Category 2014 2015 2016 2017 2018

Cost of Goods Sold:

Food & Beverage $4,680,241 $4,949,170 $5,235,751 $5,541,079 $5,866,676

Merchandise $1,583,540 $1,674,531 $1,771,495 $1,874,801 $1,984,965

Concerts $1,920,000 $1,996,800 $2,076,672 $2,159,739 $2,246,128

Total $8,183,781 $8,620,502 $9,083,918 $9,575,618 $10,097,769

Operating Expenses:

Salaries/Wages $7,541,228 $7,842,877 $8,156,592 $8,482,856 $8,822,170

Marketing $3,770,614 $3,921,439 $4,078,296 $4,241,428 $4,411,085

Maintenance $1,508,246 $1,568,575 $1,631,318 $1,696,571 $1,764,434

Rentals/Services $1,885,307 $1,960,719 $2,039,148 $2,120,714 $2,205,543

Utilities $942,654 $980,360 $1,019,574 $1,060,357 $1,102,771

Supplies $1,319,715 $1,372,504 $1,427,404 $1,484,500 $1,543,880

Insurance $565,592 $588,216 $611,744 $636,214 $661,663

Miscellaneous $1,319,715 $1,372,504 $1,427,404 $1,484,500 $1,543,880

Total $18,853,071 $19,607,193 $20,391,481 $21,207,140 $22,055,426

Projected Cash Flow

Year 1 Year 2 Year 3 Year 4 Year 5

Category 2014 2015 2016 2017 2018

Operating Revenues $37,706,141 $39,830,850 $42,092,352 $44,499,837 $47,062,213

Sponsorship Revenues $565,592 $597,463 $631,385 $667,498 $705,933

Total Revenues $38,271,733 $40,428,313 $42,723,737 $45,167,334 $47,768,146

Less: Cost of Goods Sold $8,183,781 $8,620,502 $9,083,918 $9,575,618 $10,097,769

Gross Margin $30,087,952 $31,807,811 $33,639,819 $35,591,716 $37,670,376

Less: Operating Expenses $18,853,071 $19,607,193 $20,391,481 $21,207,140 $22,055,426

Less: Management Fee $1,131,184 $1,194,926 $1,262,771 $1,334,995 $1,411,866

Earnings Before Interest, Taxes,

Depreciation and Amortization $10,103,697 $11,005,692 $11,985,568 $13,049,581 $14,203,084

Percent EBITDA/Revenues 27% 28% 28% 29% 30%

Cumulative Earnings $10,103,697 $21,109,389 $33,094,957 $46,144,537 $60,347,622

Net Warranted Investment

• The projected earnings during the first five years of operation would support an investment of between $60.0 million USD and $72.0 million USD. The medium investment level is shown to be $66 million USD.

• Based on these assumptions, the internal rate of return for the project is 30 percent.

• Overall results indicate that the Kind Angel of the World in Cyprus can operate profitably if all assumptions and parameters that impact results as presented are achieved.

Factor Low Medium High

Average Earnings - Years 1 through 5 $12,069,524 $12,069,524 $12,069,524

Multiplier 5.0 5.5 6.0

Capitalization Rate 20.0% 18.2% 16.7%

Net Warranted Investment $60,000,000 $66,000,000 $72,000,000

Global Commercial Attractiveness

Global Commercial Attractiveness

THE HIGHEST MONUMENTS IN THE WORLD

Kind Angel of the World Cyprus

International Theme Park Services, Inc.