Maryland | 1-11718 | 36-3857664 | ||
(State or other jurisdiction of incorporation or organization) | (Commission File No.) | (IRS Employer Identification Number) | ||
Two North Riverside Plaza, Chicago, Illinois | 60606 | |||
(Address of principal executive offices) | (Zip Code) |
o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
o Pre-commencement material pursuant to Rule 14a14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
o Pre-commencement material pursuant to Rule 13e-4(c) under the Exchange Act (17 CFE 240.13e-4(c)) |
• | our ability to control costs, real estate market conditions, the actual rate of decline in customers, the actual use of sites by customers and our success in acquiring new customers at our properties (including those that we may acquire); |
• | our ability to maintain historical rental rates and occupancy with respect to properties currently owned or that we may acquire; |
• | our ability to retain and attract customers renewing, upgrading and entering right-to-use contracts; |
• | our assumptions about rental and home sales markets; |
• | our assumptions and guidance concerning 2013 estimated net income, FFO and Normalized FFO; |
• | our ability to manage counterparty risk; |
• | in the age-qualified properties, home sales results could be impacted by the ability of potential homebuyers to sell their existing residences as well as by financial, credit and capital markets volatility; |
• | 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; |
• | impact of government intervention to stabilize site-built single family housing and not manufactured housing; |
• | effective integration of recent acquisitions and our estimates regarding the future performance of recent acquisitions; |
• | unanticipated costs or unforeseen liabilities associated with recent acquisitions; |
• | ability to obtain financing or refinance existing debt on favorable terms or at all; |
• | the effect of interest rates; |
• | the dilutive effects of issuing additional securities; |
• | the effect of accounting for the entry of contracts with customers representing a right-to-use the Properties under the Codification Topic “Revenue Recognition;” and |
• | other risks indicated from time to time in our filings with the Securities and Exchange Commission. |
Exhibit 99.1 | Equity LifeStyle Properties, Inc. press release dated April 22, 2013, “ELS Reports First Quarter Results” |
• | our ability to control costs, real estate market conditions, the actual rate of decline in customers, the actual use of sites by customers and our success in acquiring new customers at our properties (including those that we may acquire); |
• | our ability to maintain historical rental rates and occupancy with respect to properties currently owned or that we may acquire; |
• | our ability to retain and attract customers renewing, upgrading and entering right-to-use contracts; |
• | our assumptions about rental and home sales markets; |
• | our assumptions and guidance concerning 2013 estimated net income, FFO and Normalized FFO; |
• | our ability to manage counterparty risk; |
• | in the age-qualified properties, home sales results could be impacted by the ability of potential homebuyers to sell their existing residences as well as by financial, credit and capital markets volatility; |
• | 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; |
• | impact of government intervention to stabilize site-built single family housing and not manufactured housing; |
• | effective integration of recent acquisitions and our estimates regarding the future performance of recent acquisitions; |
• | unanticipated costs or unforeseen liabilities associated with recent acquisitions; |
• | ability to obtain financing or refinance existing debt on favorable terms or at all; |
• | the effect of interest rates; |
• | the dilutive effects of issuing additional securities; |
• | the effect of accounting for the entry of contracts with customers representing a right-to-use the Properties under the Codification Topic “Revenue Recognition;” and |
• | other risks indicated from time to time in our filings with the Securities and Exchange Commission. |
First Quarter 2013 - Selected Financial Data |
Quarter Ended | |||
March 31, 2013 | |||
Income from property operations - 2013 Core (1) | $ | 106.8 | |
Income from property operations - 2012 Acquisitions (2) | 1.3 | ||
Property management and general and administrative | (17.1 | ) | |
Other income and expenses | 5.6 | ||
Financing costs and other | (32.6 | ) | |
Normalized FFO (3) | 64.0 | ||
Change in fair value of contingent consideration asset (4) | 1.0 | ||
FFO (3) (5) | $ | 65.0 | |
Normalized FFO per share - fully diluted | $ | 1.41 | |
FFO per share - fully diluted | $ | 1.43 | |
Normalized FFO (3) | $ | 64.0 | |
Non-revenue producing improvements to real estate | (4.1 | ) | |
Funds available for distribution (FAD) (3) | $ | 59.9 | |
FAD per share - fully diluted | $ | 1.32 | |
Weighted average shares outstanding - fully diluted | 45.5 | ||
1. | See page 8 for details of the 2013 Core Income from Property Operations. |
2. | See page 9 for details of the Income from Property Operations for the properties acquired during 2012 (the “2012 Acquisitions”). |
3. | See page 6 for a reconciliation of Net income available for Common Shares to FFO, Normalized FFO and FAD. See definition of FFO, Normalized FFO and FAD on page 21. |
4. | Represents the increase in fair value of the net asset described in the following sentences. We own both a fee interest and a ground leasehold interest in a 2,200 site property. The ground lease provides a purchase option to the lessee and a put option to the lessor. Either option may be exercised upon the death of the fee holder. We are the beneficiary of an escrow funded by the seller consisting of approximately 114,000 shares of our common stock. The escrow was established to protect us from future scheduled ground lease payment increases as well as scheduled increases in the option purchase price over time. The current fair value estimate of the escrow is $7.7 million. We will revalue the asset based on the market value of our common stock as of each reporting date and will recognize in earnings any increase or decrease in fair value of the escrow. |
5. | First quarter 2013 FFO adjusted to include a deduction for depreciation expense on rental homes would have been $63.2 million, or $1.39 per fully diluted share. |
Consolidated Income Statement |
Quarters Ended | |||||||
March 31, | |||||||
2013 | 2012 | ||||||
Revenues: | |||||||
Community base rental income | $ | 105,813 | $ | 102,954 | |||
Rental home income | 4,165 | 3,043 | |||||
Resort base rental income | 40,739 | 37,579 | |||||
Right-to-use annual payments | 11,523 | 11,751 | |||||
Right-to-use contracts current period, gross | 2,831 | 2,244 | |||||
Right-to-use contracts, deferred, net of prior period amortization | (1,040 | ) | (607 | ) | |||
Utility and other income | 17,165 | 16,403 | |||||
Gross revenues from home sales | 2,839 | 2,060 | |||||
Brokered resale revenue and ancillary services revenues, net | 1,796 | 1,746 | |||||
Interest income | 2,277 | 2,630 | |||||
Income from other investments, net (1) | 2,480 | 1,488 | |||||
Total revenues | 190,588 | 181,291 | |||||
Expenses: | |||||||
Property operating and maintenance | 56,674 | 54,442 | |||||
Rental home operating and maintenance | 2,187 | 1,605 | |||||
Real estate taxes | 12,917 | 12,522 | |||||
Sales and marketing, gross | 2,361 | 1,643 | |||||
Sales and marketing, deferred commissions, net | (463 | ) | (242 | ) | |||
Property management | 10,249 | 9,751 | |||||
Depreciation on real estate assets and rental homes | 26,783 | 26,099 | |||||
Amortization of in-place leases | 159 | 18,365 | |||||
Cost of home sales | 2,960 | 2,216 | |||||
Home selling expenses | 527 | 333 | |||||
General and administrative | 6,816 | 6,232 | |||||
Rent control initiatives and other | 232 | 479 | |||||
Interest and related amortization | 30,252 | 30,956 | |||||
Total expenses | 151,654 | 164,401 | |||||
Income before equity in income of unconsolidated joint ventures and gain on sale of property | 38,934 | 16,890 | |||||
Equity in income of unconsolidated joint ventures | 576 | 763 | |||||
Gain on sale of property, net of tax (2) | 958 | — | |||||
Consolidated net income | 40,468 | 17,653 | |||||
Income allocated to non-controlling interest-Common OP Units | (3,133 | ) | (1,191 | ) | |||
Series A Redeemable Perpetual Preferred Stock Dividends | — | (4,031 | ) | ||||
Series C Redeemable Perpetual Preferred Stock Dividends | (2,311 | ) | — | ||||
Net income available for Common Shares | $ | 35,024 | $ | 12,431 | |||
Net income per Common Share - Basic | $ | 0.84 | $ | 0.30 | |||
Net income per Common Share - Fully Diluted | $ | 0.84 | $ | 0.30 | |||
Average Common Shares - Basic | 41,513 | 41,088 | |||||
Average Common Shares and OP Units - Basic | 45,242 | 45,069 | |||||
Average Common Shares and OP Units - Fully Diluted | 45,530 | 45,369 |
1. | For the quarter ended March 31, 2013, includes approximately $1.0 million resulting from the increase in the fair value of a net asset. See footnote 4 on page 4 for a detailed explanation. |
2. | For the quarter ended March 31, 2013, a $1.0 million gain was recognized as a result of new tax legislation that was passed that eliminated a previously accrued built-in-gain tax liability related to the disposition of our Cascade property. |
Reconciliation of Net Income to FFO, Normalized FFO and FAD |
Quarters Ended | |||||||
March 31, | |||||||
2013 | 2012 | ||||||
Net income available for Common Shares | $ | 35,024 | $ | 12,431 | |||
Income allocated to common OP Units | 3,133 | 1,191 | |||||
Right-to-use contract upfront payments, deferred, net (1) | 1,040 | 607 | |||||
Right-to-use contract commissions, deferred, net (2) | (463 | ) | (242 | ) | |||
Depreciation on real estate assets | 25,038 | 24,698 | |||||
Depreciation on rental homes | 1,745 | 1,401 | |||||
Amortization of in-place leases | 159 | 18,365 | |||||
Depreciation on unconsolidated joint ventures | 273 | 295 | |||||
Gain on sale of property, net of tax | (958 | ) | — | ||||
FFO (3) (4) | $ | 64,991 | $ | 58,746 | |||
Change in fair value of contingent consideration asset (5) | (1,018 | ) | — | ||||
Normalized FFO (3) | 63,973 | 58,746 | |||||
Non-revenue producing improvements to real estate | (4,080 | ) | (4,818 | ) | |||
FAD (3) | $ | 59,893 | $ | 53,928 | |||
FFO per Common Share - Basic | $ | 1.44 | $ | 1.30 | |||
FFO per Common Share - Fully Diluted | $ | 1.43 | $ | 1.29 | |||
Normalized FFO per Common Share - Basic | $ | 1.41 | $ | 1.30 | |||
Normalized FFO per Common Share - Fully Diluted | $ | 1.41 | $ | 1.29 | |||
FAD per Common Share - Basic | $ | 1.32 | $ | 1.20 | |||
FAD per Common Share - Fully Diluted | $ | 1.32 | $ | 1.19 |
1. | We are required by GAAP to defer, over the estimated customer life, recognition of non-refundable upfront payments from the entry of right-to-use contracts and upgrade sales. The customer life is currently estimated to range from one to 31 years and is based upon our experience operating the membership platform since 2008 as well as historical attrition rates provided to us by Privileged Access. The amount shown represents the deferral of a substantial portion of current period upgrade sales, offset by amortization of prior period sales. |
2. | We are required by GAAP to defer recognition of commissions paid related to the entry of right-to-use contracts. The deferred commissions will be amortized using the same method as used for the related non-refundable upfront payments from the entry of right-to-use contracts and upgrade sales. The amount shown represents the deferral of a substantial portion of current period commissions on those contracts, offset by the amortization of prior period commissions. |
3. | See definition of FFO, Normalized FFO and FAD on page 21. |
4. | FFO adjusted to include a deduction for depreciation expense on rental homes for the quarters ended March 31, 2012 and 2013 would have been $63.2 million, or $1.39 per fully diluted share, and $57.3 million, or $1.26 per fully diluted share, respectively. |
5. | See footnote 4 on page 4 for a detailed explanation. |
Consolidated Income from Property Operations (1) |
Quarters Ended | |||||||
March 31, | |||||||
2013 | 2012 | ||||||
Community base rental income (2) | $ | 105.8 | $ | 103.0 | |||
Rental home income | 4.2 | 3.0 | |||||
Resort base rental income (3) | 40.7 | 37.6 | |||||
Right-to-use annual payments | 11.5 | 11.8 | |||||
Right-to-use contracts current period, gross | 2.8 | 2.2 | |||||
Utility and other income | 17.2 | 16.4 | |||||
Property operating revenues | 182.2 | 174.0 | |||||
Property operating, maintenance, and real estate taxes | 69.5 | 67.0 | |||||
Rental home operating and maintenance | 2.2 | 1.6 | |||||
Sales and marketing, gross | 2.4 | 1.6 | |||||
Property operating expenses | 74.1 | 70.2 | |||||
Income from property operations | $ | 108.1 | $ | 103.8 | |||
Manufactured home site figures and occupancy averages: | |||||||
Total sites | 74,113 | 74,078 | |||||
Occupied sites | 66,509 | 66,022 | |||||
Occupancy % | 89.7 | % | 89.1 | % | |||
Monthly base rent per site | $ | 530 | $ | 520 | |||
Core total sites | 73,985 | 73,950 | |||||
Core occupied sites | 66,509 | 66,015 | |||||
Core occupancy % | 89.9 | % | 89.3 | % | |||
Core monthly base rent per site | $ | 530 | $ | 520 | |||
Resort base rental income: | |||||||
Annual | $ | 23.0 | $ | 21.3 | |||
Seasonal | 11.8 | 11.6 | |||||
Transient | 5.9 | 4.7 | |||||
Total resort base rental income | $ | 40.7 | $ | 37.6 |
1. | See page 5 for a complete Income Statement. The line items that we include in property operating revenues and property operating expenses are also individually included in our Consolidated Income Statement. Income from property operations excludes property management expenses and the GAAP deferral of right-to-use contract upfront payments and related commissions, net. |
2. | See the manufactured home site figures and occupancy averages table below within this table. |
3. | See resort base rental income table included below within this table. |
2013 Core Income from Property Operations (1) |
Quarters Ended | ||||||||||
March 31, | % | |||||||||
2013 | 2012 | Change (2) | ||||||||
Community base rental income (3) | $ | 105.8 | $ | 102.9 | 2.8 | % | ||||
Rental home income | 4.2 | 3.0 | 36.8 | % | ||||||
Resort base rental income (4) | 38.5 | 37.6 | 2.5 | % | ||||||
Right-to-use annual payments | 11.5 | 11.8 | (1.9 | )% | ||||||
Right-to-use contracts current period, gross | 2.8 | 2.2 | 26.2 | % | ||||||
Utility and other income | 17.0 | 16.4 | 3.5 | % | ||||||
Property operating revenues | 179.8 | 173.9 | 3.4% (5) | |||||||
Property operating, maintenance, and real estate taxes | 68.4 | 66.9 | 2.2 | % | ||||||
Rental home operating and maintenance | 2.2 | 1.6 | 35.5 | % | ||||||
Sales and marketing, gross | 2.4 | 1.6 | 43.7 | % | ||||||
Property operating expenses | 73.0 | 70.1 | 4.0% (5) | |||||||
Income from property operations | $ | 106.8 | $ | 103.8 | 2.9% (5) | |||||
Occupied sites (6) | 66,622 | 66,104 | ||||||||
Core manufactured home site figures and occupancy averages: | ||||||||||
Total sites | 73,985 | 73,950 | ||||||||
Occupied sites | 66,509 | 66,015 | ||||||||
Occupancy % | 89.9 | % | 89.3 | % | ||||||
Monthly base rent per site | $ | 530 | $ | 520 | ||||||
Resort base rental income: | ||||||||||
Annual | $ | 22.0 | $ | 21.3 | 3.4 | % | ||||
Seasonal | 11.3 | 11.6 | (2.6 | )% | ||||||
Transient | 5.2 | 4.7 | 10.5 | % | ||||||
Total resort base rental income | $ | 38.5 | $ | 37.6 | 2.5 | % |
1. | 2013 Core properties include properties we owned and operated during all of 2012 and 2013. Income from property operations excludes property management expenses and the GAAP deferral of right-to-use contract upfront payments and related commissions, net. |
2. | Calculations prepared using unrounded numbers. |
3. | See the Core manufactured home site figures and occupancy averages included below within this table. |
4. | See resort base rental income table included below within this table. |
5. | Growth rate excluding right-to-use contract sales and sales and marketing expenses is 3.1%, 3.0%, and 3.1% for property operating revenues, property operating expenses, and income from property operations, respectively, for the quarter ended March 31, 2013. |
6. | Occupied sites as of the end of the period shown. Occupied sites have increased by 141 from 66,481 at December 31, 2012. |
2012 Acquisitions - Income from Property Operations (1) |
Quarter Ended | |||
March 31, | |||
2013 | |||
Resort base rental income | $ | 2.2 | |
Utility income and other property income | 0.2 | ||
Property operating revenues | 2.4 | ||
Property operating expenses | 1.1 | ||
Income from property operations | $ | 1.3 |
1. | Represents actual performance of two properties we acquired during 2012. Excludes property management expenses. |
Income from Rental Home Operations |
Quarters Ended | |||||||
March 31, | |||||||
2013 | 2012 | ||||||
Manufactured homes: | |||||||
New home | $ | 5.5 | $ | 4.0 | |||
Used home | 9.3 | 7.2 | |||||
Rental operations revenues (1) | 14.8 | 11.2 | |||||
Rental operations expense | (2.2 | ) | (1.6 | ) | |||
Income from rental operations, before depreciation | 12.6 | 9.6 | |||||
Depreciation on rental homes | (1.7 | ) | (1.4 | ) | |||
Income from rental operations, after depreciation | $ | 10.9 | $ | 8.2 | |||
Occupied rentals: (2) | |||||||
New | 2,000 | 1,473 | |||||
Used | 4,141 | 3,278 |
As of | |||||||||||||||
March 31, 2013 | March 31, 2012 | ||||||||||||||
Cost basis in rental homes: (3) | Gross | Net of Depreciation | Gross | Net of Depreciation | |||||||||||
New | $ | 112.3 | $ | 101.8 | $ | 87.9 | $ | 80.6 | |||||||
Used | 77.4 | 69.4 | 63.2 | 58.4 | |||||||||||
Total rental homes | $ | 189.7 | $ | 171.2 | $ | 151.1 | $ | 139.0 |
1. | For the quarters ended March 31, 2013 and 2012, approximately $10.6 million and $8.2 million, respectively, are included in the Community base rental income line in the Consolidated Income from Property Operations table on page 7. The remainder of the rental operations revenue is included in the Rental home income line in the Consolidated Income from Property Operations table on page 7. |
2. | Occupied rentals as of the end of the period shown. |
3. | Includes both occupied and unoccupied rental homes. |
Total Sites and Home Sales |
Summary of Total Sites as of March 31, 2013 | |||||||
Sites | |||||||
Community sites | 74,100 | ||||||
Resort sites: | |||||||
Annuals | 22,800 | ||||||
Seasonal | 9,000 | ||||||
Transient | 9,600 | ||||||
Membership (1) | 24,100 | ||||||
Joint Ventures (2) | 3,100 | ||||||
Total | 142,700 | ||||||
Home Sales - Select Data | |||||||
Quarters Ended | |||||||
March 31, | |||||||
2013 | 2012 | ||||||
New Home Sales Volume | 10 | 13 | |||||
New Home Sales Gross Revenues | $ | 481 | $ | 704 | |||
Used Home Sales Volume | 366 | 314 | |||||
Used Home Sales Gross Revenues | $ | 2,358 | $ | 1,356 | |||
Brokered Home Resales Volume | 221 | 263 | |||||
Brokered Home Resale Revenues, net | $ | 318 | $ | 329 |
1. | Sites primarily utilized by approximately 95,000 members. Includes approximately 4,400 sites rented on an annual basis. |
2. | Joint venture income is included in the Equity in income from unconsolidated joint ventures line in the Consolidated Income Statement on page 5. |
2013 Guidance - Selected Financial Data (1) |
Year Ended | |||
December 31, 2013 | |||
Income from property operations - 2013 Core (2) | $ | 406.2 | |
Income from property operations - 2012 Acquisitions (3) | 2.5 | ||
Property management and general and administrative | (66.9 | ) | |
Other income and expenses (4) | 17.4 | ||
Financing costs and other | (129.7 | ) | |
Normalized FFO (5) | 229.5 | ||
Change in fair value of contingent consideration asset (6) | 1.0 | ||
FFO (5) | 230.5 | ||
Depreciation on real estate and other | (101.5 | ) | |
Depreciation on rental homes | (7.3 | ) | |
Deferral of right-to-use contract sales revenue and commission, net | (2.7 | ) | |
Income allocated to OP units | (9.9 | ) | |
Gain on sale of property | 1.0 | ||
Net income available to common shares | $ | 110.1 | |
Normalized FFO per share - fully diluted | $4.94 - $5.14 | ||
FFO per share - fully diluted | $4.96 - $5.16 | ||
Net income per common share - fully diluted (7) | $2.54 - $2.74 | ||
Weighted average shares outstanding - fully diluted | 45.5 |
1. | Each line item represents the mid-point of a range of possible outcomes and reflects management’s estimate of the most likely outcome. Actual Normalized FFO, Normalized FFO per share, FFO, FFO per share, Net Income and Net Income per share could vary materially from amounts presented above if any of our assumptions is incorrect. |
2. | See page 14 for 2013 Core Guidance Assumptions. Amount represents 2012 income from property operations from the 2013 Core Properties of $395.4 million multiplied by an estimated growth rate of 2.7%. |
3. | See page 15 for the 2013 Assumptions regarding the 2012 Acquisitions. |
4. | See page 16 for 2011 Acquired Chattel Loan Assumptions. |
5. | See page 21 for definitions of Normalized FFO and FFO. |
6. | See footnote 4 on page 4 for a detailed explanation. |
7. | Net income per fully diluted common share is calculated before Income allocated to OP Units. |
Second Quarter 2013 Guidance - Selected Financial Data (1) |
Quarter Ended | |||
June 30, 2013 | |||
Income from property operations - 2013 Core (2) | $ | 96.9 | |
Income from property operations - 2012 Acquisitions (3) | 0.4 | ||
Property management and general and administrative | (17.0 | ) | |
Other income and expenses | 4.1 | ||
Financing costs and other | (32.7 | ) | |
Normalized FFO (4) | 51.7 | ||
Change in fair value of contingent consideration asset (5) | — | ||
FFO (4) | 51.7 | ||
Depreciation on real estate and other | (25.4 | ) | |
Depreciation on rental homes | (1.8 | ) | |
Deferral of right-to-use contract sales revenue and commission, net | (0.7 | ) | |
Income allocated to OP units | (2.0 | ) | |
Net income available to common shares | $ | 21.8 | |
Normalized FFO per share - fully diluted | $1.09 - $1.19 | ||
FFO per share - fully diluted | $1.09 - $1.19 | ||
Net income per common share - fully diluted (6) | $0.47 - $0.57 | ||
Weighted average shares outstanding - fully diluted | 45.5 | ||
1. | Each line item represents the mid-point of a range of possible outcomes and reflects management’s best estimate of the most likely outcome. Actual Normalized FFO, Normalized FFO per share, FFO, FFO per share, Net Income and Net Income per share could vary materially from amounts presented above if any of our assumptions is incorrect. |
2. | See page 14 for Core Guidance Assumptions. Amount represents Core Income from property operations for the 2013 Core Properties in 2012 for the quarter ended June 30, 2012 of $95.3 million multiplied by an estimated growth rate of 1.7%. |
3. | See page 15 for the 2013 Assumptions regarding the 2012 Acquisitions. |
4. | See page 21 for definitions of Normalized FFO and FFO. |
5. | See footnote 4 on page 4 for a detailed explanation. |
6. | Net income per fully diluted common share is calculated before Income allocated to OP Units. |
2013 Core (1) |
Guidance Assumptions - Income from Property Operations |
Year Ended | 2013 | Quarter Ended | Second Quarter 2013 | ||||||||||
December 31, 2012 | Growth Factors (2) | June 30, 2012 | Growth Factors (2) | ||||||||||
Community base rental income | $ | 414.2 | 2.8 | % | $ | 103.2 | 3.0 | % | |||||
Rental home income | 14.1 | 30.3 | % | 3.4 | 32.5 | % | |||||||
Resort base rental income (3) | 134.3 | 2.9 | % | 30.4 | 2.5 | % | |||||||
Right-to-use annual payments | 47.7 | (0.4 | )% | 12.2 | (2.2 | )% | |||||||
Right-to-use contracts current period, gross | 13.4 | 3.6 | % | 2.9 | 25.4 | % | |||||||
Utility and other income | 64.3 | 0.4 | % | 17.6 | (7.9 | )% | |||||||
Property operating revenues | 688.0 | 3.0 | % | 169.7 | 2.4% (4) | ||||||||
Property operating, maintenance, and real estate taxes | (274.4 | ) | 2.5 | % | (70.3 | ) | 1.8 | % | |||||
Rental home operating and maintenance | (7.4 | ) | 19.5 | % | (1.5 | ) | 37.7 | % | |||||
Sales and marketing, gross | (10.8 | ) | 11.5 | % | (2.6 | ) | 21.2 | % | |||||
Property operating expenses | (292.6 | ) | 3.3 | % | (74.4 | ) | 3.2% (4) | ||||||
Income from property operations | $ | 395.4 | 2.7 | % | $ | 95.3 | 1.7% (4) | ||||||
Resort base rental income: | |||||||||||||
Annual | $ | 87.2 | 3.8 | % | $ | 21.5 | 4.2 | % | |||||
Seasonal | 21.1 | (1.3 | )% | 2.7 | — | % | |||||||
Transient | 26.0 | 3.1 | % | 6.2 | (2.2 | )% | |||||||
Total resort base rental income | $ | 134.3 | 2.9 | % | $ | 30.4 | 2.5 | % |
1. | 2013 Core properties include properties we expect to own and operate during all of 2012 and 2013. Excludes property management expenses and the GAAP deferral of right to use contract upfront payments and related commissions, net. |
2. | Management’s estimate of the growth of property operations in the 2013 Core Properties compared to actual 2012 performance. Represents our estimate of the mid-point of a range of possible outcomes. Calculations prepared using unrounded numbers. Actual growth could vary materially from amounts presented above if any of our assumptions is incorrect. |
3. | See Resort base rental income table included below within this table. |
4. | Growth rate excluding right-to-use contract sales and sales and marketing expenses is 3.0%, 3.0%, and 2.9% for property operating revenues, property operating expenses, and income from property operations, respectively, for the year ended December 31, 2012. |
2013 Assumptions Regarding 2012 Acquisitions (1) |
Year Ended | Quarter Ended | ||||||
December 31, 2013 | June 30, 2013 | ||||||
Resort base rental income | $ | 5.9 | $ | 1.2 | |||
Utility income and other property income | 0.5 | 0.1 | |||||
Property operating revenues | 6.4 | 1.3 | |||||
Property operating, maintenance, and real estate taxes | (3.9 | ) | (0.9 | ) | |||
Property operating expenses | (3.9 | ) | (0.9 | ) | |||
Income from property operations | $ | 2.5 | $ | 0.4 |
1. | Each line item represents our estimate of the mid-point of a possible range of outcomes and reflects management's best estimate of the most likely outcome for the Acquisition Properties. Actual income from property operations for the Acquisition Properties could vary materially from amounts presented above if any of our assumptions is incorrect. |
2011 Acquired Chattel Loan Assumptions |
2013 | |||||||
Contractual cash flows to maturity beginning January 1, | $ | 134.1 | |||||
Expected cash flows to maturity beginning January 1, | 50.4 | ||||||
Expected interest income to maturity beginning January 1, | 26.8 | ||||||
Actual through | 2013 Guidance | ||||||
March 31, 2013 | Assumptions | ||||||
Default rate | 13 | % | 24 | % | |||
Recoveries as percentage of defaults | 25 | % | 25 | % | |||
Yield | 21 | % | 21 | % | |||
Average carrying amount of loans | $ | 24.5 | $ | 22.0 | |||
Contractual principal pay downs | 1.2 | 3.6 | |||||
Contractual interest income | 1.3 | 5.4 | |||||
Expected cash flows applied to principal | 1.2 | 2.2 | |||||
Expected cash flows applied to interest income | 1.3 | 4.6 |
Balance Sheet |
March 31, 2013 | December 31, 2012 | ||||||
(unaudited) | |||||||
Assets | |||||||
Investment in real estate: | |||||||
Land | $ | 1,019,581 | $ | 1,019,581 | |||
Land improvements | 2,626,613 | 2,624,218 | |||||
Buildings and other depreciable property | 540,485 | 527,718 | |||||
4,186,679 | 4,171,517 | ||||||
Accumulated depreciation | (990,671 | ) | (963,657 | ) | |||
Net investment in real estate | 3,196,008 | 3,207,860 | |||||
Cash | 81,821 | 37,140 | |||||
Notes receivable, net | 50,263 | 53,172 | |||||
Investment in joint ventures | 8,454 | 8,420 | |||||
Rent and other customer receivables, net | 1,008 | 1,206 | |||||
Deferred financing costs, net | 19,386 | 20,696 | |||||
Retail inventory | 1,632 | 1,569 | |||||
Deferred commission expense | 23,305 | 22,842 | |||||
Escrow deposits, goodwill, and other assets, net | 44,689 | 45,321 | |||||
Total Assets | $ | 3,426,566 | $ | 3,398,226 | |||
Liabilities and Equity | |||||||
Liabilities: | |||||||
Mortgage notes payable | $ | 2,051,435 | $ | 2,069,866 | |||
Term loan | 200,000 | 200,000 | |||||
Unsecured lines of credit | — | — | |||||
Accrued payroll and other operating expenses | 63,811 | 63,736 | |||||
Deferred revenue – upfront payments from right-to-use contracts | 64,019 | 62,979 | |||||
Deferred revenue – right-to-use annual payments | 16,010 | 11,088 | |||||
Accrued interest payable | 10,520 | 10,548 | |||||
Rents and other customer payments received in advance and security deposits | 56,633 | 55,707 | |||||
Distributions payable | 22,664 | — | |||||
Total Liabilities | 2,485,092 | 2,473,924 | |||||
Equity: | |||||||
Stockholders’ Equity: | |||||||
Preferred stock, $0.01 par value 9,945,539 shares authorized as of March 31, 2013 and December 31, 2012; none issued and outstanding as of March 31, 2013 and December 31, 2012 | — | — | |||||
6.75% Series C Cumulative Redeemable Perpetual Preferred Stock, $0.01 par value, 54,461 shares authorized and 54,458 issued and outstanding as of March 31, 2013 and December 31, 2012 at liquidation value | 136,144 | 136,144 | |||||
Common stock, $0.01 par value 100,000,000 shares authorized; 41,674,652 and 41,596,655 shares issued and outstanding as of March 31, 2013 and December 31, 2012, respectively | 416 | 416 | |||||
Paid-in capital | 1,014,204 | 1,012,930 | |||||
Distributions in excess of accumulated earnings | (273,465 | ) | (287,652 | ) | |||
Accumulated other comprehensive loss | (2,148 | ) | (2,590 | ) | |||
Total Stockholders’ Equity | 875,151 | 859,248 | |||||
Non-controlling interests – Common OP Units | 66,323 | 65,054 | |||||
Total Equity | 941,474 | 924,302 | |||||
Total Liabilities and Equity | $ | 3,426,566 | $ | 3,398,226 |
Right-To-Use Memberships - Select Data |
Year Ended December 31, | |||||||||||||||||||
2009 | 2010 | 2011 | 2012 | 2013 (1) | |||||||||||||||
Member Count (2) | 105,850 | 102,726 | 99,567 | 96,687 | 95,000 | ||||||||||||||
Right-to-use annual payments (3) | $ | 50,765 | $ | 49,831 | $ | 49,122 | $ | 47,662 | $ | 47,500 | |||||||||
Number of Zone Park Passes (ZPPs) (4) | — | 4,487 | 7,404 | 10,198 | 15,000 | ||||||||||||||
Number of annuals (5) | 2,484 | 3,062 | 3,555 | 4,280 | 4,800 | ||||||||||||||
Resort base rental income from annuals | $ | 5,950 | $ | 6,712 | $ | 8,069 | $ | 9,585 | $ | 11,100 | |||||||||
Number of upgrades (6) | 3,379 | 3,659 | 3,930 | 3,069 | 3,150 | ||||||||||||||
Upgrade contract initiations (7) | $ | 15,372 | $ | 17,430 | $ | 17,663 | $ | 13,431 | $ | 13,900 | |||||||||
Resort base rental income from seasonals/transients | $ | 10,121 | $ | 10,967 | $ | 10,852 | $ | 11,042 | $ | 11,800 | |||||||||
Utility and other income | $ | 1,883 | $ | 2,059 | $ | 2,444 | $ | 2,407 | $ | 2,300 |
1. | Guidance estimate. Each line item represents our estimate of the mid-point of a possible range of outcomes and reflects management’s best estimate of the most likely outcome. Actual figures could vary materially from amounts presented above if any of our assumptions is incorrect. |
2. | Members have entered into right-to-use contracts with us that entitle them to use certain properties on a continuous basis for up to 21 days. |
3. | The year ended December 31, 2012 and the year ending December 31, 2013, include $0.1 million and $1.6 million, respectively, of revenue recognized related to our right-to-use annual memberships activated through our dealer program. No cash is received from the members during the first year of membership for memberships activated through the dealer program. Revenue earned is offset by non-cash membership sales and marketing expenses related to advertising provided by RV dealers. |
4. | ZPPs allow access to up to five zones of the United States and require annual payments. |
5. | Members who rent a specific site for an entire year in connection with their right to use contract. |
6. | Existing customers that have upgraded agreements are eligible for longer stays, can make earlier reservations, may receive discounts on rental units, and may have access to additional Properties. Upgrades require a non-refundable upfront payment. |
7. | Revenues associated with contract upgrades, included in the line item Right-to-use contracts current period, gross, on our Consolidated Income Statement on page 5. |
Debt Maturity Schedule & Summary |
Year | Amount | |||
2013 | $ | 65,718 | ||
2014 | 132,074 | |||
2015 | 589,564 | |||
2016 | 227,399 | |||
2017 | 90,950 | |||
2018 | 204,202 | |||
2019 | 213,832 | |||
2020 | 137,425 | |||
2021+ | 367,168 | |||
Total (1) | $ | 2,028,332 |
Total | Secured | Unsecured | |||||||||
Balance | Weighted Average Interest (2) | Average Years to Maturity | Balance | Weighted Average Interest (2) | Average Years to Maturity | Balance | Weighted Average Interest (2) | Average Years to Maturity | |||
Consolidated Debt | $2,251 | 5.3% | 4.7 | $2,051 | 5.5% | 4.8 | $200 | 3.1% | 4.3 |
1. | Represents our mortgage notes payable excluding $23.1 million net note premiums and our $200 million term loan as of March 31, 2013. As of March 31, 2013, we had an unsecured line of credit with a borrowing capacity of $380.0 million which accrued interest at a rate of LIBOR plus 1.40% to 2.00% per annum and contained a 0.25% to 0.40% facility fee. The unsecured line of credit matures on September 15, 2016 and has a one-year extension option. |
2. | Includes loan costs amortization. |
Market Capitalization |
Capital Structure as of March 31, 2013 | |||||||||||||
Total | % of Total | Total | % of Total | % of Total | |||||||||
Secured debt | $ | 2,051 | 91.1 | % | |||||||||
Unsecured debt | 200 | 8.9 | % | ||||||||||
Total debt | $ | 2,251 | 100.0 | % | 38.3 | % | |||||||
Common Shares | 41,674,652 | 91.8 | % | ||||||||||
OP Units | 3,728,160 | 8.2 | % | ||||||||||
Total Common Shares and OP Units | 45,402,812 | 100.0 | % | ||||||||||
Common Share price | $ | 76.80 | |||||||||||
Fair value of Common Shares | $ | 3,487 | 96.2 | % | |||||||||
Perpetual Preferred Equity | 136 | 3.8 | % | ||||||||||
Total Equity | $ | 3,623 | 100.0 | % | 61.7 | % | |||||||
Total market capitalization | $ | 5,874 | 100.0 | % | |||||||||
Perpetual Preferred Equity as of March 31, 2013 | |||||||||||||
Annual Dividend | |||||||||||||
Series | Callable Date | Outstanding Shares | Liquidation Value | Per Share | Value | ||||||||
6.75% Series C | 9/7/2017 | 54,458 | $136 | $1.6875 | $9 |
Non-GAAP Financial Measures |