MHC Reports Year End Results;
2002 Reflects Stable Operating Performance
2002 Reflects Stable Operating Performance
CHICAGO, Jan. 28 /PRNewswire-FirstCall/ -- Manufactured Home Communities, Inc. (NYSE: MHC) today announced results for the quarter and twelve months ended December 31, 2002.
For the fourth quarter of 2002, Funds From Operations (FFO) were $17.4 million or $.63 per share on a fully diluted basis compared to $17.8 million or $.65 per fully diluted share in the same period in 2001. Fourth quarter property operating revenues were $56.6 million compared to $55.5 million in the fourth quarter of 2001. For the fourth quarter of 2002, average occupancy was 92.5 percent and average monthly base rent per site for the Core Portfolio was $407.42, up 5.6 percent from $385.94 in the same period last year.
For the year ended December 31, 2002, FFO were $68.4 million or $2.48 per share on a fully diluted basis compared to $67.0 million or $2.48 per fully diluted share in the same period in 2001. Property operating revenues for the twelve months ended December 31, 2002 were $226.7 million compared to $220.2 million for the same period in 2001. Average occupancy was 93.1 percent and average monthly base rent per site for the Core Portfolio was $403.04, up 5.3 percent from $382.65 in the same period last year.
MHC's management projects continued growth in 2003 core property performance. Core base rent rate growth is expected to be approximately 4 percent. Assuming current economic conditions continue to impact occupancies, overall revenue growth will be 2.5 to 3 percent. Core portfolio operating expenses are expected to grow in excess of CPI due to continued increases in insurance, real estate taxes and utility expenses. These projections would result in core NOI growth of approximately 2 percent.
Results for 2003 will be impacted by 1) the 2002 sales of primarily all-age communities in Michigan, Florida, Minnesota and Ohio coupled with the 2002 purchases of age-qualified communities in Florida, Arizona, and Texas, 2) continued competitive housing options impacting occupancy levels at certain communities and 3) variability in income from home sales operations. In the age-qualified communities, home sales results could be impacted by the ability of potential homebuyers to sell their existing residences as well as by financial markets volatility. In the all-age communities, results from home sales and occupancy will continue to be impacted by local economic conditions, lack of affordable manufactured home financing and competition from alternative housing options including site-built single family housing. Based upon these factors, MHC projects that FFO per share should be essentially the same in 2003 as in 2002.
The forward-looking statements contained in this news release are subject to certain risks and uncertainties including, but not limited to, the Company's ability to maintain rental rates and occupancy; the Company's assumptions about rental and home sales markets; the effect of interest rates as well as other risks indicated from time to time in the Company's filings with the Securities and Exchange Commission. The Company assumes no obligation to update or supplement forward-looking statements that become untrue because of subsequent events.
Manufactured Home Communities, Inc. owns or has a controlling interest in 141 quality communities in 22 states consisting of 51,464 sites. MHC is a self-administered, self-managed, real estate investment trust (REIT) with headquarters in Chicago.
A live webcast of the Company's conference call discussing these results
will be available via the Company's website in the Investor Info section at
http://www.mhchomes.com at 10:00 a.m. Central today.
Manufactured Home Communities, Inc.
Selected Financial Data
(Unaudited)
(Amounts in thousands except for per share data)
Quarters Ended Twelve Months Ended
Dec. 31, Dec. 31, Dec. 31, Dec. 31,
2002 2001 2002 2001
(Pro forma) (Pro forma)
Property Operations:
Base rental income $48,357 $48,471 $197,795 $194,104
PM / RV base
rental income 3,722 2,541 9,147 5,748
Utility and other
income 4,539 4,443 19,713 20,366
Property operating
revenues 56,618 55,455 226,655 220,218
Property operating
and maintenance 15,950 15,068 63,554 61,527
Real estate taxes 4,530 4,163 18,212 17,296
Property management 2,289 2,260 9,292 8,995
Property operating
expenses 22,769 21,491 91,058 87,818
Income from property
operations 33,849 33,964 135,597 132,400
Home Sales Operations:
Gross revenues from
inventory home sales 11,767 10,599 33,543 36,239
Cost of inventory
home sales (10,132) (8,474) (27,192) (28,486)
Gross profit from
inventory home sales 1,635 2,125 6,351 7,753
Brokered resale
revenues, net 358 393 1,592 1,723
Home selling expenses (1,611) (2,126) (7,671) (8,240)
Ancillary services
revenues, net (84) 133 522 1,093
Income from home
sales and other 298 525 794 2,329
Other Income and Expenses:
Interest income 244 233 967 1,178
Other corporate income 399 109 1,277 1,353
General and
administrative (2,277) (1,606) (8,192) (6,676)
Operating income
(EBITDA) 32,513 33,225 130,443 130,584
Interest and related
amortization (12,336) (12,602) (50,729) (52,329)
Income from
discontinued
operations 357 263 1,208 1,197
Depreciation on
corporate assets (320) (298) (1,277) (1,243)
Income allocated
to Preferred
OP Units (2,813) (2,813) (11,252) (11,252)
Funds from
operations (FFO) $17,401 $17,775 $68,393 $66,957
Depreciation on real
estate and other
costs (9,043) (8,838) (36,036) (34,833)
Gain on sale of
properties and
other 11,744 75 13,014 8,168
Income allocated to
Common OP Units (3,917) (1,805) (8,926) (8,209)
Net Income $16,185 $7,207 $36,445 $32,083
Net income per Common
Share - Basic $0.74 $.34 $1.69 $1.53
Net income per Common
Share - Fully Diluted $0.73 $.33 $1.64 $1.49
FFO per Common Share
- Basic $0.64 $.67 $2.53 $2.53
FFO per Common Share
- Fully Diluted $0.63 $.65 $2.48 $2.48
Average Common Shares
- Basic 21,794 21,266 21,617 21,036
Average Common Shares
and OP Units - Basic 27,163 26,703 27,020 26,501
Average Common Shares
and OP Units
- Fully Diluted 27,678 27,293 27,632 27,010
The Company believes that Funds From Operations provide an indicator of its financial performance and is influenced by both the operations of the properties and the capital structure of the Company. FFO is defined by the National Association of Real Estate Investment Trusts ("NAREIT") as net income (computed in accordance with generally accepted accounting principles ["GAAP"]), before allocation to minority interests, excluding gains (or losses) from sales of property, plus real estate depreciation. The Company computes FFO in accordance with the NAREIT definition, which may differ from the methodology for calculating FFO utilized by other equity REITs and, accordingly, may not be comparable to such other REITs.
The pro forma amounts shown for the quarter and twelve months ended
December 31, 2001 have no effect on previously reported FFO or Net Income.
The 2001 amounts have been reclassified to conform to the 2002 financial
presentation for comparison purposes.
Manufactured Home Communities, Inc.
(Unaudited)
As Of As Of
Selected Balance Sheet Data: December 31, December 31,
2002 2001
(amounts in 000's) (amounts in 000's)
Total real estate, net $1,060,163 $1,024,550
Cash and cash equivalents $7,270 $1,346
Total assets $1,159,247 $1,099,759
Mortgage notes payable $575,370 $590,371
Unsecured debt $184,863 $118,486
Total liabilities $813,128 $753,462
Minority interest $168,418 $171,147
Total shareholder's equity $177,701 $175,150
As Of As Of
Total Shares and OP December 31, December 31,
Units Outstanding: 2002 2001
Total Common Shares Outstanding 22,093,241 21,562,343
Total Common OP Units Outstanding 5,367,327 5,426,374
Manufactured Home ("MH") and
Park Model / Recreational Vehicle As Of As Of
("PM/RV") December 31, December 31,
Site Totals: 2002 2001
MH Sites Owned and Operated 43,701 42,204
MH Sites Owned in Joint Ventures 1,521 1,521
PM/RV Sites Owned and Operated 6,242 3,497
Total Sites - Continuing Operations 51,464 47,222
MH Sites Sold:
College Heights Restructuring --- 3,220
Camelot Acres - Discontinued Operations --- 319
Total Sites 51,464 50,761
Quarters Ended Twelve Months Ended
Manufactured Home Site and Dec. 31, Dec. 31, Dec. 31, Dec. 31,
Occupancy Averages: 2002 2001 2002 2001
Total Sites 43,567 42,517 42,962 43,023
Occupied Sites 40,303 39,982 39,988 40,618
Occupancy % 92.5% 94.0% 93.1% 94.4%
Monthly Base Rent Per Site $402.23 $384.15 $399.68 $378.74
Core* Monthly Base
Rent Per Site $407.42 $385.94 $403.04 $382.65
(*) Represents rent per site for properties owned in both periods of
comparison. All numbers exclude site and occupancy information for
the properties sold during 2002.
Quarters Ended Twelve Months Ended
Dec. 31, Dec. 31, Dec. 31, Dec. 31,
Home Sales: 2002 2001 2002 2001
New Home Sales Volume 146 146 420 485
New Home Sales Gross
Revenues $10,560 $9,958 $30,618 $32,608
Used Home Sales Volume 58 41 184 250
Used Home Sales
Gross Revenues $1,207 $641 $2,925 $3,631
Brokered Home
Resale Volume 226 251 986 1,114
Brokered Home Resale
Revenues, net $358 $393 $1,592 $1,723
SOURCE Manufactured Home Communities, Inc.