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8-K


 
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 8-K

CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): October 19, 2015


EQUITY LIFESTYLE PROPERTIES, INC.
(Exact name of registrant as specified in its charter)


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)

(312) 279-1400
(Registrant's telephone number, including area code)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

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))

 




















Item 2.02        Results of Operations and Financial Condition

On October 19, 2015, Equity LifeStyle Properties, Inc. (referred to herein as “we,” “us,” and “our”) issued a news release announcing our results of operations for the three and nine months ended September 30, 2015.

The news release also contains detailed guidance assumptions on our projections for 2015 and preliminary projections for 2016. We project our Normalized Funds from Operations (“Normalized FFO”) per Common Share (fully diluted) and Funds from Operations (“FFO”) per Common Share (fully diluted) for the three months and year ending December 31, 2015 to be between $0.70 and $0.76. We also project our Normalized FFO and FFO per Common Share (fully diluted) for the year ending December 31, 2015 to be between $3.00 and $3.06 and $2.81 and $2.87, respectively. We preliminarily project our Normalized FFO and our FFO per Common Share (fully diluted) for the year ending December 31, 2016, to be between $3.15 and $3.25.
 
We also project our Net income per Common Share (fully diluted) for the three months and year ending December 31, 2015, to be between $0.37 and $0.43 and $1.50 and $1.56, respectively. We preliminarily project our Net income per Common Share (fully diluted) for the year ending December 31, 2016 to be between $1.87 and $1.97.

The projected 2015 and 2016 per Common Share amounts represent a range of possible outcomes and the mid-point of each range reflects management’s best estimate of the most likely outcome. Actual figures could vary materially from these amounts if any of our assumptions are incorrect. The news release is furnished as Exhibit 99.1 to this report on Form 8-K. The news release was also posted on our website, www.equitylifestyle.com, on October 19, 2015.

Item 7.01        Regulation FD Disclosure

Our annualized dividend for 2015 is $1.50 per common share. At the next quarterly Board of Directors meeting, our management intends to recommend an increase of $0.20 per common share to the annual dividend for 2016 for a total dividend of $1.70 per common share. Our Board of Directors has the sole discretion to approve an increase of the dividend and therefore there can be no assurance that this increase will be approved.

The information contained in Items 2.02, 7.01 and 9.01 of this report on Form 8-K, including Exhibit 99.1, shall not be deemed “filed” with the Securities and Exchange Commission nor incorporated by reference in any registration statement filed by Equity LifeStyle Properties, Inc. under the Securities Act of 1933, as amended.

This report includes certain “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. When used, words such as “anticipate,” “expect,” “believe,” “project,” “intend,” “may be” and “will be” and similar words or phrases, or the negative thereof, unless the context requires otherwise, are intended to identify forward-looking statements and may include, without limitation, information regarding our expectations, goals or intentions regarding the future, and the expected effect of our recent acquisitions. These forward-looking statements are subject to numerous assumptions, risks and uncertainties, including, but not limited to:
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 or increase future 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 2015 and 2016 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;
the completion of future transactions in their entirety, if any, and timing and effective integration with respect thereto;
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;
the outcome of pending or future lawsuits filed against us, including those disclosed in our filings with the Securities and Exchange Commission, by tenant groups seeking to limit rent increases and/or seeking large damage awards for our alleged failure to properly maintain certain properties or other tenant related matters, such as the case currently pending in the California Court of Appeal, Sixth Appellate District, Case No. H041913, involving our California Hawaiian manufactured home property, including any further proceedings on appeal or in the trial court; and
other risks indicated from time to time in our filings with the Securities and Exchange Commission.
    
These forward-looking statements are based on management's present expectations and beliefs about future events. As with any projection or forecast, these statements are inherently susceptible to uncertainty and changes in circumstances. We are under no obligation to, and expressly disclaim any obligation to, update or alter our forward-looking statements whether as a result of such changes, new information, subsequent events or otherwise.
We are a fully integrated owner and operator of lifestyle-oriented properties and own or have an interest in 387 quality properties in 32 states and British Columbia consisting of 143,895 sites. We are a self-administered, self-managed, real estate investment trust (REIT) with headquarters in Chicago.

Item 9.01        Financial Statements and Exhibits

(d) Exhibits

The information contained in the attached exhibit is unaudited and should be read in conjunction with the Registrant's annual and quarterly reports filed with the Securities and Exchange Commission.

99.1
Equity LifeStyle Properties, Inc. press release dated October 19, 2015, “ELS Reports Third Quarter Results”












SIGNATURES



Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this Report to be signed on its behalf by the undersigned thereunto duly authorized.
EQUITY LIFESTYLE PROPERTIES, INC.

By:/s/ Paul Seavey
Paul Seavey
Executive Vice President, Chief Financial Officer and Treasurer

Date: October 20, 2015



Document

N E W S R E L E A S E


FOR IMMEDIATE RELEASE
October 19, 2015


                                                        
ELS REPORTS THIRD QUARTER RESULTS
Continued Strong Core Performance

CHICAGO, IL – October 19, 2015 Equity LifeStyle Properties, Inc. (NYSE: ELS) (referred to herein as “we,” “us,” and “our”) today announced results for the quarter and nine months ended September 30, 2015. All per share results are reported on a fully diluted basis unless otherwise noted.
Financial Results for the Quarter Ended September 30, 2015
Normalized Funds from Operations (“Normalized FFO”) available for Common Stockholders increased $7.4 million, or $0.08 per Common Share, to $70.5 million, or $0.77 per Common Share, compared to $63.1 million, or $0.69 per common share, for the same period in 2014. Funds from Operations ("FFO") available for Common Stockholders increased $12.9 million, or $0.14 per Common Share, to $70.3 million, or $0.77 per Common Share, compared to $57.4 million, or $0.63 per Common Share, for the same period in 2014. Net income available for Common Stockholders increased $11.0 million, or $0.12 per Common Share, to $36.7 million, or $0.43 per Common Share, compared to $25.7 million, or $0.31 per Common Share, for the same period in 2014.
Portfolio Performance
For the quarter ended September 30, 2015, property operating revenues, excluding deferrals, increased $10.1 million to $199.3 million compared to $189.2 million for the same period in 2014. For the nine months ended September 30, 2015, property operating revenues, excluding deferrals, increased $30.8 million to $585.2 million compared to $554.4 million for the same period in 2014. For the quarter ended September 30, 2015, income from property operations, excluding deferrals and property management, increased $6.5 million to $112.2 million compared to $105.7 million for the same period in 2014. For the nine months ended September 30, 2015, income from property operations, excluding deferrals and property management, increased $20.7 million to $338.1 million compared to $317.4 million for the same period in 2014.
For the quarter ended September 30, 2015, Core property operating revenues increased approximately 4.1 percent and Core income from property operations, excluding deferrals and property management, increased approximately 5.0 percent compared to the same period in 2014. For the nine months ended September 30, 2015, Core property operating revenues increased approximately 4.2 percent and Core income from property operations, excluding deferrals and property management, increased approximately 5.4 percent compared to the same period in 2014.
About Equity LifeStyle Properties
We are a self-administered, self-managed real estate investment trust (“REIT”) with headquarters in Chicago.
As of October 19, 2015, we own or have an interest in 387 quality properties in 32 states and British Columbia consisting of 143,895 sites.
For additional information, please contact our Investor Relations Department at (800) 247-5279 or at investor_relations@equitylifestyle.com.
Conference Call
A live webcast of our conference call discussing these results will take place tomorrow, Tuesday, October 20, 2015, at 10:00 a.m. Central Time. Please visit the Investor Information section at www.equitylifestyle.com for the link. A replay of the webcast will be available for two weeks at this site.

 
i
 





Reporting Calendar
Quarterly financial results and related earnings conference calls for the next three quarters are expected to occur as follows:
 
 
Release Date
 
Earnings Call
Fourth Quarter 2015
 
Monday, January 25, 2016
 
Tuesday, January 26, 2016 10:00 a.m. CT
First Quarter 2016
 
Monday, April 18, 2016
 
Tuesday, April 19, 2016 10:00 a.m. CT
Second Quarter 2016
 
Monday, July 18, 2016
 
Tuesday, July 19, 2016 10:00 a.m. CT
Forward-Looking Statements
In addition to historical information, this press release includes certain “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. When used, words such as “anticipate,” “expect,” “believe,” “project,” “intend,” “may be” and “will be” and similar words or phrases, or the negative thereof, unless the context requires otherwise, are intended to identify forward-looking statements and may include, without limitation, information regarding our expectations, goals or intentions regarding the future, and the expected effect of our recent acquisitions. These forward-looking statements are subject to numerous assumptions, risks and uncertainties, including, but not limited to:
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 or increase future 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 2015 and 2016 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;
the completion of future transactions in their entirety, if any, and timing and effective integration with respect thereto;
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;
the outcome of pending or future lawsuits filed against us, including those disclosed in our filings with the Securities and Exchange Commission, by tenant groups seeking to limit rent increases and/or seeking large damage awards for our alleged failure to properly maintain certain properties or other tenant related matters, such as the case currently pending in the California Court of Appeal, Sixth Appellate District, Case No. H041913, involving our California Hawaiian manufactured home property, including any further proceedings on appeal or in the trial court; and
other risks indicated from time to time in our filings with the Securities and Exchange Commission.
These forward-looking statements are based on management's present expectations and beliefs about future events. As with any projection or forecast, these statements are inherently susceptible to uncertainty and changes in circumstances. We are under no obligation to, and expressly disclaim any obligation to, update or alter our forward-looking statements whether as a result of such changes, new information, subsequent events or otherwise.

 
ii
 





Investor Information



Equity Research Coverage (1)
Robert W. Baird & Company
Cantor Fitzgerald
Wells Fargo Securities
Drew T. Babin
Gaurav Mehta
Todd Stender
215-553-7816
212-915-1221
562-637-1371
dbabin@rwbaird.com
gmehta@cantor.com
todd.stender@wellsfargo.com
 
 
 
BMO Capital Markets
Citi Research
 
Paul Adornato
Michael Bilerman/ Nick Joseph
 
212-885-4170
212-816-1383
 
paul.adornato@bmo.com
michael.bilerman@citi.com
 
 
nicholas.joseph@citi.com
 
 
 
 
Bank of America Merrill Lynch Global Research
Green Street Advisors
 
Jana Galan
David Bragg/ Ryan Burke
 
646-855-3081
949-640-8780
 
jana.galan@baml.com
dbragg@greenstreetadvisors.com
 
 
rburke@greenstreetadvisors.com
 




























______________________
1.
Any opinions, estimates or forecasts regarding our performance made by these analysts or agencies do not represent our opinions, forecasts or predictions. We do not by reference to these firms imply our endorsement of or concurrence with such information, conclusions or recommendations.

3Q 2015 Supplemental information
1 
Equity LifeStyle Properties, Inc.


Financial Highlights

(In millions, except shares outstanding and per share data, unaudited)
 
As of and for the Three Months Ended
 
September 30, 2015
June 30,
2015
March 31, 2015
December 31, 2014
September 30,
2014
Operating Information
 
 
 
 
 
Total revenues
$
210.1

$
201.5

$
208.4

$
190.3

$
200.8

Net income
$
42.1

$
36.8

$
31.8

$
34.3

$
30.3

Net income available for Common Shares
$
36.7

$
31.8

$
27.2

$
29.4

$
25.7

Normalized EBITDA (1)
$
99.0

$
92.9

$
106.1

$
91.2

$
93.3

FFO available for Common Shares (1)(2)
$
70.3

$
64.5

$
59.1

$
60.3

$
57.4

Normalized FFO available for Common Shares  (1)(2)
$
70.5

$
64.5

$
76.5

$
60.8

$
63.1

Funds available for distribution (FAD) available for Common Shares (1)(2)
$
62.5

$
53.6

$
69.1

$
53.2

$
57.1

 
 
 
 
 

Shares Outstanding and Per Share Data
 
 
 
 

Common stock and OP units, end of the period
91,505

91,498

91,462

91,112

91,138

Weighted average Common Shares outstanding - fully diluted
91,940

91,851

91,777

91,644

91,528

Net income per Common Share - fully diluted
$
0.43

$
0.38

$
0.32

$
0.35

$
0.31

FFO per Common Share - fully diluted
$
0.77

$
0.70

$
0.64

$
0.66

$
0.63

Normalized FFO per Common Share - fully diluted
$
0.77

$
0.70

$
0.83

$
0.66

$
0.69

FAD per Common Share - fully diluted
$
0.68

$
0.58

$
0.75

$
0.58

$
0.62

Dividends per Common Share
$
0.375

$
0.375

$
0.375

$
0.325

$
0.325

 
 
 
 
 
 
Balance Sheet
 
 
 
 
 
Total assets
$
3,440

$
3,448

$
3,469

$
3,446

$
3,451

Total liabilities
$
2,450

$
2,466

$
2,490

$
2,467

$
2,475

 
 
 
 
 
 
Market Capitalization
 
 
 
 
 
Total debt
$
2,156

$
2,167

$
2,212

$
2,212

$
2,206

Total market capitalization (3)
$
7,651

$
7,114

$
7,374

$
7,045

$
6,203

 
 
 
 
 
 
Ratios
 
 
 
 
 
Total debt / total market capitalization
28.2
%
30.5
%
30.0
%
31.4
%
35.6
%
Total debt + preferred stock / total market capitalization
30.0
%
32.4
%
31.8
%
33.3
%
37.8
%
Total debt / Normalized EBITDA (4)
5.5

5.7

5.8

5.9

5.9

Interest coverage (5)
4.0

3.7

4.1

3.4

3.5

Fixed charges + preferred distributions coverage (6)
3.5

3.3

3.6

3.0

3.1




______________________
1.
See page 19-20 for non-GAAP measure definitions of Normalized EBITDA, FFO, Normalized FFO and FAD.
2.
See page 6 for a reconciliation of Net income available for Common Shares to FFO available for Common Shares, Normalized FFO available for Common Shares and FAD available for Common Shares.
3.
See page 17 for market capitalization calculation as of September 30, 2015.
4.
Represents trailing twelve months Normalized EBITDA. We believe trailing twelve months Normalized EBITDA provides additional information for determining our ability to meet future debt service requirements.
5.
Interest coverage is calculated by dividing Normalized EBITDA for the period by the interest expense incurred.
6.
See page 20 for a definition of fixed charges. This ratio is calculated by dividing Normalized EBITDA for the period by the sum of fixed charges and preferred stock dividends.

3Q 2015 Supplemental information
2 
Equity LifeStyle Properties, Inc.


Third Quarter 2015 - Selected Financial Data

(In millions, except shares outstanding and per share data, unaudited)
 
Quarter Ended
 
September 30, 2015
Income from property operations, excluding deferrals and property management - 2015 Core (1)
$
110.7

Income from property operations, excluding deferrals and property management - Acquisitions (2)
1.5

Property management and general and administrative (excluding transaction costs)
(18.5
)
Other income and expenses
5.3

Financing costs and other
(28.5
)
Normalized FFO available for Common Shares (3)
70.5

Transaction costs
(0.1
)
FFO available for Common Shares(3)
$
70.4

 
 
Normalized FFO per Common Share - fully diluted
$
0.77

FFO per Common Share - fully diluted
$
0.77

 
 
 
 
Normalized FFO available for Common Shares (3)
$
70.5

Non-revenue producing improvements to real estate
(7.9
)
FAD available for Common Shares (3)
$
62.6

 
 
FAD per Common Share - fully diluted
$
0.68

 
 
Weighted average Common Shares outstanding - fully diluted
91.9

 
 


















______________________
1.
See page 19-20 for definitions of Income from property operations, excluding deferrals and property management, and Core. See page 8 for details of the 2015 Core Income from Property Operations, excluding deferrals and property management.
2.
See page 20 for definition of Acquisition properties. See page 9 for details of the Income from Property Operations, excluding deferrals and property management for the Acquisition properties.
3.
See page 6 for a reconciliation of Net income available for Common Shares to FFO available for Common Shares, Normalized FFO available for Common Shares and FAD available for Common Shares. See definitions of FFO, Normalized FFO and FAD on page 19.

3Q 2015 Supplemental information
3 
Equity LifeStyle Properties, Inc.


Balance Sheet

(In thousands, except share and per share data)
 
September 30,
2015
 
December 31,
2014
 
(unaudited)
 
Assets
 
 
 
Investment in real estate:
 
 
 
Land
$
1,101,685

 
$
1,091,550

Land improvements
2,773,269

 
2,734,304

Buildings and other depreciable property
584,132

 
562,059

 
4,459,086

 
4,387,913

Accumulated depreciation
(1,254,085
)
 
(1,169,492
)
Net investment in real estate
3,205,001

 
3,218,421

Cash
85,662

 
73,714

Notes receivable, net
36,334

 
37,137

Investment in unconsolidated joint ventures
17,554

 
13,512

Deferred financing costs, net
24,263

 
21,833

Deferred commission expense
30,781

 
28,589

Escrow deposits, goodwill, and other assets, net
40,062

 
53,133

Total Assets
$
3,439,657

 
$
3,446,339

Liabilities and Equity
 
 
 
Liabilities:
 
 
 
Mortgage notes payable
$
1,956,246

 
$
2,012,246

Term loan
200,000

 
200,000

Unsecured lines of credit

 

Accrued expenses and accounts payable
93,167

 
64,520

Deferred revenue – upfront payments from right-to-use contracts
78,103

 
74,174

Deferred revenue – right-to-use annual payments
10,860

 
9,790

Accrued interest payable
8,579

 
9,496

Rents and other customer payments received in advance and security deposits
69,212

 
67,463

Distributions payable
34,314

 
29,623

Total Liabilities
2,450,481

 
2,467,312

Equity:
 
 
 
Stockholders’ Equity:
 
 
 
Preferred stock, $0.01 par value 9,945,539 shares authorized as of September 30, 2015 and 9,765,900 shares authorized as of December 31, 2014; none issued and outstanding. As of December 31, 2014 includes 179,639 authorized shares 6% Series D Cumulative Preferred stock authorized, none issued and outstanding.

 

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 September 30, 2015 and December 31, 2014 at liquidation value
136,144

 
136,144

Common stock, $0.01 par value 200,000,000 shares authorized as of September 30, 2015 and December 31, 2014; 84,296,350 and 83,879,779 shares issued and outstanding as of September 30, 2015 and December 31, 2014, respectively
843

 
838

Paid-in capital
1,039,842

 
1,029,601

Distributions in excess of accumulated earnings
(253,396
)
 
(254,209
)
Accumulated other comprehensive loss
(1,612
)
 
(381
)
Total Stockholders’ Equity
921,821

 
911,993

Non-controlling interests – Common OP Units
67,355

 
67,034

Total Equity
989,176

 
979,027

Total Liabilities and Equity
$
3,439,657

 
$
3,446,339



3Q 2015 Supplemental information
4 
Equity LifeStyle Properties, Inc.


Consolidated Income Statement

(In thousands, unaudited)
 
Quarters Ended
 
Nine months ended
 
September 30,
 
September 30,
 
2015
 
2014
 
2015
 
2014
Revenues:
 
 
 
 
 
 
 
Community base rental income
$
110,908

 
$
106,967

 
$
330,251

 
$
319,514

Rental home income
3,413

 
3,684

 
10,526

 
11,187

Resort base rental income
49,765

 
44,351

 
142,837

 
126,188

Right-to-use annual payments
11,334

 
11,404

 
33,260

 
33,859

Right-to-use contracts current period, gross
3,889

 
4,168

 
10,264

 
10,512

Right-to-use contract upfront payments, deferred, net
(1,701
)
 
(1,989
)
 
(3,929
)
 
(4,303
)
Utility and other income
20,027

 
18,581

 
58,010

 
53,070

Gross revenues from home sales
7,878

 
8,717

 
24,341

 
20,455

Brokered resale revenue and ancillary services revenues, net
1,051

 
1,124

 
4,045

 
3,491

Interest income
1,758

 
1,902

 
5,314

 
6,477

Income from other investments, net
1,822

 
1,869

 
5,119

 
6,098

    Total revenues
210,144

 
200,778

 
620,038

 
586,548

 
 
 
 
 
 
 
 
Expenses:
 
 
 
 
 
 
 
Property operating and maintenance
69,227

 
66,105

 
194,522

 
186,018

Rental home operating and maintenance
1,874

 
1,829

 
5,232

 
5,376

Real estate taxes
12,923

 
12,263

 
38,169

 
36,905

Sales and marketing, gross
3,105

 
3,242

 
9,139

 
8,674

Right-to-use contract commissions, deferred, net
(464
)
 
(757
)
 
(1,471
)
 
(2,022
)
Property management
11,361

 
11,086

 
33,750

 
32,169

Depreciation on real estate assets and rental homes
28,410

 
27,831

 
84,861

 
83,234

Amortization of in-place leases
616

 
1,075

 
1,950

 
3,791

Cost of home sales
7,868

 
8,156

 
23,685

 
19,679

Home selling expenses
861

 
513

 
2,386

 
1,710

General and administrative (1)
7,225

 
7,623

 
22,172

 
20,178

Property rights initiatives and other
687

 
751

 
1,934

 
2,063

Early debt retirement

 
5,087

 
16,922

 
5,087

Interest and related amortization
26,227

 
27,864

 
79,648

 
84,177

    Total expenses
169,920

 
172,668

 
512,899

 
487,039

Income before equity in income of unconsolidated joint ventures and gain on sale of property
40,224

 
28,110

 
107,139

 
99,509

Equity in income of unconsolidated joint ventures
1,882

 
1,237

 
3,606

 
3,768

Gain on sale of property

 
929

 

 
929

Consolidated net income
42,106

 
30,276

 
110,745

 
104,206

 
 
 
 
 
 
 
 
Income allocated to non-controlling interest-Common OP Units
(3,136
)
 
(2,219
)
 
(8,191
)
 
(7,929
)
Series C Redeemable Perpetual Preferred Stock Dividends
(2,297
)
 
(2,311
)
 
(6,910
)
 
(6,949
)
Net income available for Common Shares
$
36,673

 
$
25,746

 
$
95,644

 
$
89,328











_________________________________________
1.
Includes transaction costs, see Reconciliation of Net income available for Common Shares to FFO available for Common Shares, Normalized FFO available for Common Shares and FAD available for Common Shares on page 6.

3Q 2015 Supplemental information
5 
Equity LifeStyle Properties, Inc.


Reconciliation of Net Income to FFO, Normalized FFO and FAD

(In thousands, except shares outstanding and per share data, unaudited)
 
Quarters Ended
 
Nine months ended
 
September 30,
 
September 30,
 
2015
 
2014
 
2015
 
2014
    Net income available for Common Shares
$
36,673

 
$
25,746

 
$
95,644

 
$
89,328

Income allocated to common OP Units
3,136

 
2,219

 
8,191

 
7,929

Right-to-use contract upfront payments, deferred, net (1)
1,701

 
1,989

 
3,929

 
4,303

Right-to-use contract commissions, deferred, net (2)
(464
)
 
(757
)
 
(1,471
)
 
(2,022
)
Depreciation on real estate assets
25,747

 
25,058

 
76,811

 
74,947

Depreciation on rental homes 
2,663

 
2,773

 
8,050

 
8,287

Amortization of in-place leases
616

 
1,075

 
1,950

 
3,791

Depreciation on unconsolidated joint ventures
274

 
228

 
799

 
690

Gain on sale of property

 
(929
)
 

 
(929
)
   FFO available for Common Shares(3)
$
70,346

 
$
57,402

 
$
193,903

 
$
186,324

Change in fair value of contingent consideration asset (4)

 

 

 
(65
)
Transaction costs (5)
121

 
620

 
603

 
1,151

Early debt retirement

 
5,087

 
16,922

 
5,087

   Normalized FFO available for Common Shares(3)
70,467

 
63,109

 
211,428

 
192,497

Non-revenue producing improvements to real estate
(7,931
)
 
(5,983
)
 
(26,196
)
 
(17,286
)
   FAD available for Common Shares (3)
$
62,536

 
$
57,126

 
$
185,232

 
$
175,211

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income available per Common Share - Basic
$
0.44

 
$
0.31

 
$
1.14

 
$
1.07

Net income available per Common Share - Fully Diluted
$
0.43

 
$
0.31

 
$
1.13

 
$
1.06

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
FFO per Common Share - Basic
$
0.77

 
$
0.63

 
$
2.13

 
$
2.05

FFO per Common Share - Fully Diluted
$
0.77

 
$
0.63

 
$
2.11

 
$
2.04

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Normalized FFO per Common Share - Basic
$
0.77

 
$
0.70

 
$
2.32

 
$
2.12

Normalized FFO per Common Share - Fully Diluted
$
0.77

 
$
0.69

 
$
2.30

 
$
2.10

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
FAD per Common Share - Basic
$
0.69

 
$
0.63

 
$
2.03

 
$
1.93

FAD per Common Share - Fully Diluted
$
0.68

 
$
0.62

 
$
2.02

 
$
1.92

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Average Common Shares - Basic
84,057

 
83,531

 
84,016

 
83,295

Average Common Shares and OP Units - Basic
91,269

 
90,784

 
91,236

 
90,766

Average Common Shares and OP Units - Fully Diluted
91,940

 
91,528

 
91,877

 
91,471










______________________________
1.
We are required by GAAP to defer, over the estimated customer life, recognition of non-refundable upfront payments from sales of new and upgrade right-to-use contracts. The customer life is currently estimated to be 31 years and is based upon our experience operating the membership platform since 2008. 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 page 19 for non-GAAP measure definitions of FFO, Normalized FFO and FAD.
4.
Included in Income from other investments, net on the Consolidated Income Statement on page 5.
5.
Included in general and administrative on the Consolidated Income Statement on page 5.

3Q 2015 Supplemental information
6 
Equity LifeStyle Properties, Inc.


Consolidated Income from Property Operations (1)

(In millions, except home site and occupancy figures, unaudited)
 
Quarters Ended
 
Nine months ended
 
September 30,
 
September 30,
 
2015
 
2014
 
2015
 
2014
Community base rental income (2)
$
110.9

 
$
107.0

 
$
330.3

 
$
319.5

Rental home income
3.4

 
3.7

 
10.5

 
11.2

Resort base rental income (3)
49.8

 
44.4

 
142.8

 
126.2

Right-to-use annual payments
11.3

 
11.4

 
33.3

 
33.9

Right-to-use contracts current period, gross
3.9

 
4.2

 
10.3

 
10.5

Utility and other income
20.0

 
18.5

 
58.0

 
53.1

    Property operating revenues
199.3

 
189.2

 
585.2

 
554.4

 
 
 

 
 
 
 
Property operating, maintenance and real estate taxes
82.1

 
78.5

 
232.8

 
222.9

Rental home operating and maintenance
1.9

 
1.8

 
5.2

 
5.4

Sales and marketing, gross
3.1

 
3.2

 
9.1

 
8.7

    Property operating expenses
87.1

 
83.5

 
247.1

 
237.0

Income from property operations, excluding deferrals and property management (1)
$
112.2

 
$
105.7

 
$
338.1

 
$
317.4

 
 
 
 
 
 
 
 
Manufactured home site figures and occupancy averages:
 
 
 
 
 
 
 
Total sites
70,126

 
69,933

 
70,112

 
69,949

Occupied sites
64,918

 
64,405

 
64,767

 
64,363

Occupancy %
92.6
%
 
92.1
%
 
92.4
%
 
92.0
%
Monthly base rent per site
$
569

 
$
554

 
$
567

 
$
552

 
 
 
 
 
 
 
 
Resort base rental income:
 
 
 
 
 
 
 
Annual
$
29.1

 
$
26.1

 
$
85.5

 
$
76.8

Seasonal
3.9

 
3.3

 
22.6

 
19.3

Transient
16.8

 
15.0

 
34.7

 
30.1

     Total resort base rental income
$
49.8

 
$
44.4

 
$
142.8

 
$
126.2











 


_________________________
1.
See page 5 for the Consolidated Income Statement and page 19-20 for a definition and reconciliation of Income from property operations, excluding deferrals and property management.
2.
See the manufactured home site figures and occupancy averages below within this table.
3.
See resort base rental income detail included below within this table.

3Q 2015 Supplemental information
7 
Equity LifeStyle Properties, Inc.


2015 Core Income from Property Operations (1)

(In millions, except home site and occupancy figures, unaudited)
 
Quarters Ended
 
 
 
Nine months ended
 
 
 
September 30,
 
%
 
September 30,
 
%
 
2015
 
2014
 
Change (2)
 
2015
 
2014
 
Change (2)
Community base rental income (3)
$
110.8

 
$
107.0

 
3.6
 %
 
$
330.0

 
$
319.5

 
3.3
 %
Rental home income
3.4

 
3.7

 
(7.4
)%
 
10.5

 
11.2

 
(5.9
)%
Resort base rental income (4)
46.5

 
43.3

 
7.5
 %
 
133.6

 
123.7

 
8.0
 %
Right-to-use annual payments
11.3

 
11.4

 
(0.6
)%
 
33.3

 
33.9

 
(1.8
)%
Right-to-use contracts current period, gross
3.9

 
4.2

 
(6.7
)%
 
10.3

 
10.5

 
(2.4
)%
Utility and other income
19.8

 
18.5

 
6.4
 %
 
57.1

 
52.9

 
8.1
 %
    Property operating revenues
195.7

 
188.1

 
4.1
 %
 
574.8

 
551.7

 
4.2
 %
 
 
 
 
 
 
 
 
 
 
 
 
Property operating, maintenance and real estate taxes
80.0

 
77.7

 
3.1
 %
 
227.5

 
221.6

 
2.7
 %
Rental home operating and maintenance
1.9

 
1.8

 
2.5
 %
 
5.2

 
5.4

 
(2.7
)%
Sales and marketing, gross
3.1

 
3.2

 
(4.3
)%
 
9.1

 
8.7

 
5.3
 %
    Property operating expenses
85.0

 
82.7

 
2.8
 %
 
241.8

 
235.7

 
2.6
 %
Income from property operations, excluding deferrals and property management (1)
$
110.7

 
$
105.4

 
5.0
 %
 
$
333.0

 
$
316.0

 
5.4
 %
Occupied sites (5)
64,880

 
64,500

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Core manufactured home site figures and occupancy averages:
 
 
 
 
 
 
Total sites
69,848

 
69,805

 

 
69,851

 
69,821

 
 
Occupied sites
64,785

 
64,405

 
 
 
64,645

 
64,363

 
 
Occupancy %
92.8
%
 
92.3
%
 
 
 
92.5
%
 
92.2
%
 
 
Monthly base rent per site
$
570

 
$
554

 
 
 
$
567

 
$
552

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Resort base rental income:
 
 
 
 
 
 
 
 
 
 
 
Annual
$
26.8

 
$
25.3

 
5.9
 %
 
$
78.9

 
$
74.6

 
5.8
 %
Seasonal
3.7

 
3.3

 
12.5
 %
 
21.4

 
19.3

 
10.8
 %
Transient
16.0

 
14.7

 
9.0
 %
 
33.3

 
29.8

 
11.8
 %
        Total resort base rental income
$
46.5

 
$
43.3

 
7.5
 %
 
$
133.6

 
$
123.7

 
8.0
 %











____________________________
1.
See page 19-20 for definitions of Income from property operations, excluding deferrals and property management, and Core.
2.
Calculations prepared using actual results without rounding.
3.
See the Core manufactured home site figures and occupancy averages included below within this table.
4.
See resort base rental income detail included below within this table.
5.
Occupied sites as of the end of the period shown. Occupied sites have increased by 339 from 64,541 at December 31, 2014.

3Q 2015 Supplemental information
8 
Equity LifeStyle Properties, Inc.


Acquisitions - Income from Property Operations (1)

(In millions, unaudited)
 
Quarter Ended
 
Nine months ended
 
September 30,
2015
 
September 30,
2015
Community base rental income
$
0.1

 
$
0.3

Resort base rental income
3.2

 
9.2

Utility income and other property income
0.3

 
0.8

  Property operating revenues
3.6

 
10.3

 
 
 
 
  Property operating expenses
2.1

 
5.2

Income from property operations, excluding deferrals and property management
$
1.5

 
$
5.1








































______________________
1.
See page 20 for definition of Acquisition properties.

3Q 2015 Supplemental information
9 
Equity LifeStyle Properties, Inc.


Income from Rental Home Operations

(In millions, except occupied rentals, unaudited)
 
Quarters Ended
 
Nine months ended
 
September 30,
 
September 30,
 
2015
 
2014
 
2015
 
2014
Manufactured homes:
 
 
 
 
 
 
 
New home
$
5.6

 
$
5.6

 
$
16.9

 
$
17.2

Used home
7.0

 
7.9

 
21.3

 
23.8

   Rental operations revenues (1)
12.6

 
13.5

 
38.2

 
41.0

Rental operations expense
1.9

 
1.8

 
5.2

 
5.4

   Income from rental operations, before depreciation
10.7

 
11.7

 
33.0

 
35.6

Depreciation on rental homes
2.7

 
2.8

 
8.1

 
8.3

   Income from rental operations, after depreciation
$
8.0

 
$
8.9

 
$
25.0

 
$
27.3

 
 
 
 
 
 
 
 
Occupied rentals: (2)
 
 
 
 
 
 
 
New
2,076

 
2,087

 
 
 
 
Used
2,876

 
3,276

 
 
 
 
   Total occupied rental sites
4,952

 
5,363

 

 


 
As of
 
September 30, 2015
 
September 30, 2014
Cost basis in rental homes: (3)
Gross
 
Net of Depreciation
 
Gross
 
Net of Depreciation
New
$
110.2

 
$
89.2

 
$
110.7

 
$
94.2

Used
58.8

 
39.0

 
64.2

 
50.5

  Total rental homes
$
169.0

 
$
128.2

 
$
174.9

 
$
144.7















____________________________
1.
For the quarters ended September 30, 2015 and 2014, approximately $9.2 million and $9.8 million, respectively, are included in the Community base rental income in the Consolidated Income from Property Operations table on page 7. For the nine months ended September 30, 2015 and 2014, approximately $27.7 million and $29.8 million, respectively, are included in the Community base rental income 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 in the Consolidated Income from Property Operations table on page 7.
2.
Occupied rentals as of the end of the period shown in our Core portfolio. For the quarters ended September 30, 2015 and 2014, includes 72 and 15 homes rented through our ECHO joint venture, respectively. For the nine months ended September 30, 2015 and 2014, the rental home investment associated with our ECHO joint venture totals approximately $2.5 million and $0.6 million.
3.
Includes both occupied and unoccupied rental homes. New home cost basis does not include the costs associated with our ECHO joint venture. At September 30, 2015 and 2014, our investment in the ECHO joint venture was approximately $10.0 million and $6.0 million, respectively.

3Q 2015 Supplemental information
10 
Equity LifeStyle Properties, Inc.


Total Sites and Home Sales

(In thousands, except sites and home sale volumes, unaudited)
Summary of Total Sites as of September 30, 2015
 
 
Sites
Community sites
70,100

Resort sites:
 
    Annuals
25,800

    Seasonal
10,400

    Transient
10,400

Membership (1)
24,100

Joint Ventures (2)
3,100

Total
143,900


Home Sales - Select Data
 
 
 
 
 
 
 
 
Quarters Ended
 
Nine months ended
 
September 30,
 
September 30,
 
2015
 
2014
 
2015
 
2014
Total New Home Sales Volume (3)
123

 
106

 
352

 
237

     New Home Sales Volume - ECHO joint venture
52

 
52

 
140

 
94

New Home Sales Gross Revenues(3)
$
3,901

 
$
4,051

 
$
12,186

 
$
9,771

 
 
 
 
 
 
 
 
Used Home Sales Volume
357

 
424

 
1,174

 
1,144

Used Home Sales Gross Revenues
$
3,977

 
$
4,666

 
$
12,155

 
$
10,684

 
 
 
 
 
 
 
 
Brokered Home Resales Volume
202

 
251

 
668

 
720

Brokered Home Resale Revenues, net
$
290

 
$
336

 
$
941

 
$
916




















__________________________
1.
Sites primarily utilized by approximately 102,000 members. Includes approximately 5,400 sites rented on an annual basis.
2.
Joint venture income is included in the Equity in income from unconsolidated joint ventures in the Consolidated Income Statement on page 5.
3.
Total new home sales volume includes home sales from our ECHO joint venture. New home sales gross revenues does not include the revenues associated with our ECHO joint venture.

3Q 2015 Supplemental information
11 
Equity LifeStyle Properties, Inc.


2015 Guidance - Selected Financial Data (1)

Our guidance acknowledges the existence of volatile economic conditions, which may impact our current guidance assumptions. Factors impacting 2015 guidance include, but are not limited to the following: (i) the mix of site usage within the portfolio; (ii) yield management on our short-term resort sites; (iii) scheduled or implemented rate increases on community and resort sites; (iv) scheduled or implemented rate increases in annual payments under right-to-use contracts; (v) occupancy changes; (vi) our ability to retain and attract customers renewing or entering right-to-use contracts; (vii) our ability to integrate and operate recent acquisitions in accordance with our estimates; (viii) completion of pending transactions in their entirety and on assumed schedule; and (ix) ongoing legal matters and related fees.

(In millions, except per share data, unaudited)
 
Quarter Ended
 
Year Ended
 
December 31, 2015
 
December 31, 2015
Income from property operations, excluding deferrals and property management - 2015 Core (2)
$
109.8

 
$
442.8

Income from property operations - Acquisitions (3)
1.5

 
6.7

Property management and general and administrative
(18.1
)
 
(73.4
)
Other income and expenses
1.9

 
17.1

Financing costs and other
(28.3
)
 
(115.0
)
Normalized FFO available for Common Shares (4)
66.8

 
278.2

Transaction costs

 
(0.6
)
Early debt retirement

 
(16.9
)
FFO available for Common Shares (4)
66.8

 
260.7

    Depreciation on real estate and other
(26.5
)
 
(105.9
)
    Depreciation on rental homes
(2.6
)
 
(10.7
)
    Deferral of right-to-use contract sales revenue and commission, net
(0.9
)
 
(3.4
)
    Income allocated to OP units
(2.9
)
 
(11.1
)
Net income available for Common Shares
$
33.9

 
$
129.6

 
 
 
 
Normalized FFO per Common Share - fully diluted
$0.70 - $0.76

 
$3.00 - $3.06

FFO per Common Share - fully diluted
$0.70 - $0.76

 
$2.81 - $2.87

Net income per Common Share - fully diluted (5)
$0.37 - $0.43

 
$1.50 - $1.56

 
 
 
 
Weighted average Common Shares outstanding - fully diluted
92.0

 
91.9










_____________________________________
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 available for Common Shares, Normalized FFO per Common Share, FFO available for Common Shares, FFO per Common Share, Net income available for Common Shares and Net income per Common Share could vary materially from amounts presented above if any of our assumptions are incorrect.
2.
See page 13 for 2015 Core Guidance Assumptions. Amount represents 2014 income from property operations, excluding deferrals and property management, from the 2015 Core properties of $103.9 million multiplied by an estimated growth rate of 5.7% and $419.9 million multiplied by an estimated growth rate of 5.4% for the quarter and year ended December 31, 2015, respectively.
3.
See page 13 for the 2015 Assumptions regarding the Acquisition properties.
4.
See page 19 for definitions of Normalized FFO and FFO.
5.
Net income per fully diluted Common Share is calculated before Income allocated to Common OP Units.

3Q 2015 Supplemental information
12 
Equity LifeStyle Properties, Inc.


2015 Core Guidance Assumptions(1) 
(In millions, unaudited)
 
Quarter Ended
 
Fourth Quarter 2015
 
Year Ended
 
 2015
 
December 31,
2014
 
Growth Factors (2)
 
December 31,
2014
 
Growth Factors (2)
Community base rental income
$
107.4

 
3.6
 %
 
$
426.9

 
3.4
 %
Rental home income
3.6

 
(5.8
)%
 
14.8

 
(5.9
)%
Resort base rental income (3)
36.2

 
6.6
 %
 
159.9

 
7.7
 %
Right-to-use annual payments
11.0

 
0.8
 %
 
44.9

 
(1.1
)%
Right-to-use contracts current period, gross
3.4

 
(6.9
)%
 
13.9

 
(3.5
)%
Utility and other income
17.1

 
1.5
 %
 
69.9

 
6.5
 %
    Property operating revenues
178.7

 
3.5
 %
 
730.3

 
4.0
 %
 
 
 
 
 
 
 
 
Property operating, maintenance, and real estate taxes
69.0

 
1.6
 %
 
290.6

 
2.4
 %
Rental home operating and maintenance
2.1

 
(4.9
)%
 
7.4

 
(3.3
)%
Sales and marketing, gross
3.7

 
(20.8
)%
 
12.4

 
(2.6
)%
    Property operating expenses
74.8

 
0.3
 %
 
310.4

 
2.1
 %
Income from property operations, excluding deferrals and property management
$
103.9

 
5.7
 %
 
$
419.9

 
5.4
 %
 
 
 

 
 
 
 
Resort base rental income:
 
 
 
 
 
 
 
Annual
$
25.9

 
6.0
 %
 
$
100.5

 
5.8
 %
Seasonal
5.6

 
8.0
 %
 
24.9

 
10.2
 %
Transient
4.7

 
8.0
 %
 
34.5

 
11.3
 %
    Total resort base rental income
$
36.2

 
6.6
 %
 
$
159.9

 
7.7
 %


2015 Assumptions Regarding Acquisition Properties (1)
(In millions, unaudited)
 
Quarter Ended
 
Year Ended
 
December 31, 2015 (4)
 
December 31, 2015 (4)
Community base rental income
$
0.1

 
$
0.4

Resort base rental income
3.0

 
12.2

Utility income and other property income
0.2

 
1.1

  Property operating revenues
3.3

 
13.7

 
 
 
 
Property operating, maintenance, and real estate taxes
1.8

 
7.0

  Property operating expenses
1.8

 
7.0

Income from property operations, excluding deferrals and property management
$
1.5

 
$
6.7






_______________________________
1.
Refer to page 20 for definition of Core and Acquisition properties.
2.
Management’s estimate of the growth of property operations in the 2015 Core properties compared to actual 2014 performance. Represents our estimate of the mid-point of a range of possible outcomes. Calculations prepared using actual results without rounding. Actual growth could vary materially from amounts presented above if any of our assumptions are incorrect.
3.
See Resort base rental income table included below within this table.
4.
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 are incorrect.

3Q 2015 Supplemental information
13 
Equity LifeStyle Properties, Inc.


Preliminary 2016 Guidance - Selected Financial Data (1)

Our guidance acknowledges the existence of volatile economic conditions, which may impact our current guidance assumptions. Factors impacting 2016 guidance include, but are not limited to the following: (i) the mix of site usage within the portfolio; (ii) yield management on our short-term resort sites; (iii) scheduled or implemented rate increases on community and resort sites; (iv) scheduled or implemented rate increases in annual payments under right-to-use contracts; (v) occupancy changes; (vi) our ability to retain and attract customers renewing or entering right-to-use contracts; (vii) our ability to integrate and operate recent acquisitions in accordance with our estimates; (viii) completion of pending transactions in their entirety and on assumed schedule; and (ix) ongoing legal matters and related fees.

(In millions, except per share data, unaudited)

 
Year Ended
 
December 31, 2016
Income from property operations, excluding deferrals and property management - 2016 Core (2)
$
466.5

Income from property operations - Acquisitions
1.6

Property management and general and administrative
(76.3
)
Other income and expenses
14.7

Financing costs and other
(111.6
)
Normalized FFO and FFO available for Common Shares (3)
294.9

    Depreciation on real estate and other
(103.8
)
    Depreciation on rental homes
(10.5
)
    Deferral of right-to-use contract sales revenue and commission, net
(3.9
)
    Income allocated to OP units
(13.9
)
Net income available for Common Shares
$
162.8

 
 
Normalized FFO per Common Share - fully diluted
$3.15 - $3.25

FFO per Common Share - fully diluted
$3.15 - $3.25

Net income per Common Share - fully diluted (4)
$1.87 - $1.97

 
 
Weighted average Common Shares outstanding - fully diluted
92.3














_____________________________________
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 available for Common Shares, Normalized FFO per common share, FFO available for Common Shares, FFO per common share, Net income available for Common Shares and Net income per common share could vary materially from amounts presented above if any of our assumptions are incorrect.
2.
See page 15 for 2016 Core Guidance Assumptions. Amount represents 2015 income from property operations, excluding deferrals and property management, from the 2016 Core properties of $448.7 million multiplied by an estimated growth rate of 4.0% for the year ended December 31, 2016.
3.
See page 19 for definitions of Normalized FFO and FFO.
4.
Net income per fully diluted Common Share is calculated before Income allocated to Common OP Units.

3Q 2015 Supplemental information
14 
Equity LifeStyle Properties, Inc.


Preliminary 2016 Core (1) Guidance Assumptions -
Income from Property Operations

(In millions, unaudited)

 
Estimated
 
 2016 Growth
 
2015
 
 Factors (2)
Community base rental income
$
441.2

 
3.5
 %
Rental home income
14.0

 
(6.7
)%
Resort base rental income (3)
183.2

 
5.1
 %
Right-to-use annual payments
44.4

 
(0.1
)%
Right-to-use contracts current period, gross
13.4

 
(1.4
)%
Utility and other income
75.3

 
1.1
 %
    Property operating revenues
771.5

 
3.1
 %
 
 
 
 
Property operating, maintenance, and real estate taxes
303.5

 
2.1
 %
Rental home operating and maintenance
7.2

 
(7.1
)%
Sales and marketing, gross
12.1

 
3.9
 %
    Property operating expenses
322.8

 
2.0
 %
Income from property operations
$
448.7

 
4.0
 %
 

 
 
Resort base rental income:
 
 
 
Annual
$
114.6

 
5.7
 %
Seasonal
28.9

 
4.0
 %
Transient
39.7

 
4.0
 %
    Total resort base rental income
$
183.2

 
5.1
 %



















_______________________________
1.
2016 Core properties include properties we expect to own and operate during all of 2015 and 2016. 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 2016 Core Properties compared to actual 2015 performance. Represents our estimate of the mid-point of a range of possible outcomes. Calculations prepared using actual results without rounding. Actual growth could vary materially from amounts presented above if any of our assumptions are incorrect.
3.
See Resort base rental income table included below within this table.


3Q 2015 Supplemental information
15 
Equity LifeStyle Properties, Inc.


Right-To-Use Memberships - Select Data

(In thousands, except member count, number of Thousand Trail Camping Pass, number of annuals and number of upgrades, unaudited)
 
Year Ended December 31,
 
2012
 
2013
 
2014
 
2015 (1)
 
2016 (1)
Member Count (2)
96,687

 
98,277

 
96,130

 
98,400

 
99,700

Thousand Trails Camping Pass (TTC) Origination (3)
10,198

 
15,607

 
18,187

 
24,400

 
26,800

    TTC Sales
8,909

 
9,289

 
10,014

 
11,700

 
13,800

    RV Dealer TTC Activations
1,289

 
6,318

 
8,173

 
12,700

 
13,000

Number of annuals (4)
4,280

 
4,830

 
5,142

 
5,400

 
5,700

Number of upgrade sales (5)
3,069

 
2,999

 
2,978

 
2,800

 
2,600

 
 
 
 
 
 
 
 
 
 
Right-to-use annual payments (6)
$
47,662

 
$
47,967

 
$
44,860

 
$
44,350

 
$
44,300

Resort base rental income from annuals
$
9,585

 
$
11,148

 
$
12,491

 
$
13,800

 
$
15,300

Resort base rental income from seasonals/transients
$
11,042

 
$
12,692

 
$
13,894

 
$
15,450

 
$
16,100

Upgrade contract initiations (7)
$
14,025

 
$
13,815

 
$
13,892

 
$
13,400

 
$
13,225

Utility and other income
$
2,407

 
$
2,293

 
$
2,455

 
$
2,430

 
$
2,700

 
 
 
 
 
 
 
 
 
 

























________________________________
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 are 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.
TTCs allow access to any of five geographic areas in the United States.
4.
Members who rent a specific site for an entire year in connection with their right-to-use contract.
5.
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.
6.
The years ended December 31, 2012 and December 31, 2013, include $0.1 million and $2.1 million, respectively, of revenue recognized related to our right-to-use annual memberships activated through our dealer program. During the third quarter of 2013, we changed the accounting treatment of revenues and expenses associated with the RV dealer program to recognize as revenue only the cash received from members generated by the program.
7.
Revenues associated with contract upgrades, included in Right-to-use contracts current period, gross, on our Consolidated Income Statement on page 5.

3Q 2015 Supplemental information
16 
Equity LifeStyle Properties, Inc.


Market Capitalization

(In millions, except share and OP Unit data, unaudited)
Capital Structure as of September 30, 2015
 
 
 
 
 
 
 
 
 
 
 
 
 
Total Common Stock/Units
% of Total
Total
% of Total
% of Total
 
 
 
 
 
 
 
 
Secured Debt
 
 
$
1,956

90.7
%
 
 
Unsecured Debt
 
 
200

9.3
%
 
 
Total Debt
 
 
$
2,156

100.0
%
28.2
%
 
 
 
 
 
 
 
 
Common Stock
84,296,350

92.1
%
 
 
 
 
OP Units
7,208,228

7.9
%
 
 
 
 
Total Common Stock and OP Units
91,504,578

100.0
%
 
 
 
 
Common Stock price at September 30, 2015
$
58.57

 
 
 
 
 
Fair Value of Common Stock
 
 
$
5,359

97.5
%
 
 
Perpetual Preferred Equity
 
 
136

2.5
%
 
 
Total Equity
 
 
$
5,495

100.0
%
71.8
%
 
 
 
 
 
 
 
 
Total Market Capitalization
 
 
$
7,651

 
100.0
%
 
 
 
 
 
 
 
 
Perpetual Preferred Equity as of September 30, 2015
 
 
 
 
 
 
 
 
 
 
 
Series
Callable Date
 
Outstanding Shares
Liquidation Value
Annual Dividend Per Share
Annual Dividend Value
6.75% Series C
9/7/2017
 
54,458
$136
$168.75
$
9.2



























3Q 2015 Supplemental information
17 
Equity LifeStyle Properties, Inc.


Debt Maturity Schedule

Debt Maturity Schedule as of September 30, 2015
(In thousands, unaudited)

Year
 
Secured Debt
 
Weighted Average Interest Rate
 
Unsecured Debt
 
Weighted Average Interest Rate
 
Total Debt
 
% of Total Debt
 
Weighted Average Interest Rate
 
2015
 
$

 
%
 
$

 

 
$

 
%
 
%
 
2016
 
80,425

 
5.79
%
 

 

 
80,425

 
3.75
%
 
5.79
%
 
2017
 
58,068

 
5.80
%
 

 

 
58,068

 
2.71
%
 
5.80
%
 
2018
 
204,073

 
5.97
%
 

 

 
204,073

 
9.51
%
 
5.97
%
 
2019
 
205,722

 
6.27
%
 

 

 
205,722

 
9.58
%
 
6.27
%
 
2020
 
124,645

 
6.13
%
 
200,000

 
2.39
%
 
324,645

 
15.12
%
 
3.83
%
 
2021
 
194,248

 
5.01
%
 

 

 
194,248

 
9.05
%
 
5.01
%
 
2022
 
154,805

 
4.59
%
 

 

 
154,805

 
7.21
%
 
4.59
%
 
2023
 
114,428

 
5.14
%
 

 

 
114,428

 
5.33
%
 
5.14
%
 
Thereafter
 
810,099

 
4.18
%
 

 

 
810,099

 
37.74
%
 
4.18
%
 
Total
 
$
1,946,513

 
5.00
%
 
$
200,000

 
2.39
%
 
$
2,146,513

 
100.0
%
 
4.76
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Note Premiums
 
9,733

 
 
 

 
 
 
9,733

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total Debt
 
$
1,956,246

 
4.74
%
(1) 
$
200,000

 
2.39
%
 
$
2,156,246

 
 
 
4.53
%
(1) 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Average Years to Maturity
 
11.2
 
 
 
4.3
 
 
 
10.6
 
 
 
 
 




























______________________
1.     Effective interest rate including amortization of note premiums.


3Q 2015 Supplemental information
18 
Equity LifeStyle Properties, Inc.


Non-GAAP Financial Measures Definitions and Other Terms

This document contains certain non-GAAP measures we believe are helpful in understanding our business, as further discussed in the paragraphs below. Investors should review Funds from Operations (“FFO”), Normalized Funds from Operations (“Normalized FFO”) and Funds available for distribution (“FAD”), along with GAAP net income and cash flow from operating activities, investing activities and financing activities, when evaluating an equity REIT’s operating performance. We compute FFO in accordance with our interpretation of standards established by the National Association of Real Estate Investment Trusts (“NAREIT”), which may not be comparable to FFO reported by other REITs that do not define the term in accordance with the current NAREIT definition or that interpret the current NAREIT definition differently than we do. Normalized FFO presented herein is not necessarily comparable to normalized FFO presented by other real estate companies due to the fact that not all real estate companies use the same methodology for computing this amount. FFO, Normalized FFO and FAD do not represent cash generated from operating activities in accordance with GAAP, nor do they represent cash available to pay distributions and should not be considered as an alternative to net income, determined in accordance with GAAP, as an indication of our financial performance, or to cash flow from operating activities, determined in accordance with GAAP, as a measure of our liquidity, nor is it indicative of funds available to fund our cash needs, including our ability to make cash distributions.

FFO. We define FFO as net income, computed in accordance with GAAP, excluding gains and actual or estimated losses from sales of properties, plus real estate related depreciation and amortization, impairments, if any, and after adjustments for unconsolidated partnerships and joint ventures. Adjustments for unconsolidated partnerships and joint ventures are calculated to reflect FFO on the same basis. We receive up-front non-refundable payments from the entry of right-to-use contracts. In accordance with GAAP, the upfront non-refundable payments and related commissions are deferred and amortized over the estimated customer life. Although the NAREIT definition of FFO does not address the treatment of non-refundable right-to-use payments, we believe that it is appropriate to adjust for the impact of the deferral activity in our calculation of FFO.

We believe FFO, as defined by NAREIT, is generally an appropriate measure of performance for an equity REIT. While FFO is a relevant and widely used measure of operating performance for equity REITs, it does not represent cash flow from operations or net income as defined by GAAP, and it should not be considered as an alternative to these indicators in evaluating liquidity or operating performance.
Normalized FFO. We define Normalized FFO as FFO excluding the following non-operating income and expense items: a) the financial impact of contingent consideration; b) gains and losses from early debt extinguishment, including prepayment penalties and defeasance costs; c) property acquisition and other transaction costs related to mergers and acquisitions; and d) other miscellaneous non-comparable items.
We believe that FFO and Normalized FFO are helpful to investors as supplemental measures of the performance of an equity REIT. We believe that by excluding the effect of depreciation, amortization and actual or estimated gains or losses from sales of real estate, all of which are based on historical costs and which may be of limited relevance in evaluating current performance, FFO can facilitate comparisons of operating performance between periods and among other equity REITs. We further believe that Normalized FFO provides useful information to investors, analysts and our management because it allows them to compare our operating performance to the operating performance of other real estate companies and between periods on a consistent basis without having to account for differences not related to our operations. For example, we believe that excluding the early extinguishment of debt, property acquisition and other transaction costs related to mergers and acquisitions and the change in fair value of our contingent consideration asset from Normalized FFO allows investors, analysts and our management to assess the sustainability of operating performance in future periods because these costs do not affect the future operations of the properties. In some cases, we provide information about identified non-cash components of FFO and Normalized FFO because it allows investors, analysts and our management to assess the impact of those items.
FAD. We define FAD as Normalized FFO less non-revenue producing capital expenditures.
Income from Property Operations, excluding deferrals and property management. We define Income from property operations, excluding deferrals and property management as rental income, utility income and right-to-use income less property and maintenance expenses, real estate tax, sales and marketing expenses, property management and the GAAP deferral of right-to-use contract upfront payments and related commissions, net. We believe that this non-GAAP financial measure is helpful to investors and analysts as a direct measure of the actual operating results of our manufactured home and RV properties.



3Q 2015 Supplemental information
19 
Equity LifeStyle Properties, Inc.


The following table reconciles Income before equity in income of unconsolidated joint ventures to Income from property operations(amounts in thousands):
 
 
Quarters Ended
 
Nine months ended
 
 
September 30,
 
September 30,
 
 
2015
 
2014
 
2015
 
2014
Income before equity in income of unconsolidated joint ventures
 
$
40,224

 
$
28,110

 
$
107,139

 
$
99,509

Right-to-use upfront payments, deferred, net
 
1,701

 
1,989

 
3,929

 
4,303

Gross revenues from home sales
 
(7,878
)
 
(8,717
)
 
(24,341
)
 
(20,455
)
Brokered resale revenues and ancillary services revenues, net
 
(1,051
)
 
(1,124
)
 
(4,045
)
 
(3,491
)
Interest income
 
(1,758
)
 
(1,902
)
 
(5,314
)
 
(6,477
)
Income from other investments, net
 
(1,822
)
 
(1,869
)
 
(5,119
)
 
(6,098
)
Right-to-use contract commissions, deferred, net
 
(464
)
 
(757
)
 
(1,471
)
 
(2,022
)
Property management
 
11,361

 
11,086

 
33,750

 
32,169

Depreciation on real estate and rental homes
 
28,410

 
27,831

 
84,861

 
83,234

Amortization of in-place leases
 
616

 
1,075

 
1,950

 
3,791

Cost of homes sales
 
7,868

 
8,156

 
23,685

 
19,679

Home selling expenses
 
861

 
513

 
2,386

 
1,710

General and administrative
 
7,225

 
7,623

 
22,172

 
20,178

Property rights initiatives and other
 
687

 
751

 
1,934

 
2,063

Early debt retirement
 

 
5,087

 
16,922

 
5,087

Interest and related amortization
 
26,227

 
27,864

 
79,648

 
84,177

Income from property operations, excluding deferrals and property management
 
$
112,207

 
$
105,716

 
$
338,086

 
$
317,357

Right-to-use contracts, deferred and sales and marketing, deferred, net
 
(1,237
)
 
(1,232
)
 
(2,458
)
 
(2,281
)
Property management
 
(11,361
)
 
(11,086
)
 
(33,750
)
 
(32,169
)
Income from property operations
 
$
99,609

 
$
93,398

 
$
301,878

 
$
282,907

Earnings before interest, tax, depreciation and amortization (EBITDA) and Normalized EBITDA. We define EBITDA as net income or loss before interest income and expense, income taxes, depreciation and amortization. We define Normalized EBITDA as EBITDA excluding the following non-operating income and expense items: a) the financial impact of contingent consideration; b) gains and losses from early debt extinguishment, including prepayment penalties and defeasance costs; c) property acquisition and other transaction costs related to mergers and acquisitions; and d) other miscellaneous non-comparable items. The following table reconciles Income before equity in income of unconsolidated joint ventures to EBITDA and Normalized EBITDA (amounts in thousands):
 
 
Quarters Ended
 
Nine months ended
 
 
September 30,
 
September 30,
 
 
2015
 
2014
 
2015
 
2014
Income before equity in income of unconsolidated joint ventures
 
$
40,224

 
$
28,110

 
$
107,139

 
$
99,509

Right-to-use contract upfront payments, deferred, net
 
1,701

 
1,989

 
3,929

 
4,303

Right-to-use contract commissions, deferred, net
 
(464
)
 
(757
)
 
(1,471
)
 
(2,022
)
Depreciation on real estate assets and rental homes
 
28,410

 
27,831

 
84,861

 
83,234

Amortization of in-place leases
 
616

 
1,075

 
1,950

 
3,791

Depreciation on corporate assets
 
275

 
220

 
813

 
649

Interest and related amortization
 
26,227

 
27,864

 
79,648

 
84,177

Equity in income from unconsolidated joint ventures
 
1,882

 
1,237

 
3,606

 
3,768

EBITDA
 
$
98,871

 
$
87,569

 
$
280,475

 
$
277,409

Change in fair value of contingent consideration asset
 

 

 

 
(65
)
Transaction costs
 
121

 
620

 
603

 
1,151

Early debt retirement
 

 
5,087

 
16,922

 
5,087

Normalized EBITDA
 
$
98,992

 
$
93,276

 
$
298,000

 
$
283,582

Core. The Core properties include properties we expect to own and operate during all of 2014 and 2015.
Acquisitions. The Acquisition properties include seven properties acquired during 2014 and three properties acquired during 2015.
Non-Revenue Producing Improvements. Represents capital expenditures that will not directly result in increased revenue or expense savings and are primarily comprised of common area improvements, furniture, and mechanical improvements.
Fixed Charges. Fixed charges consist of interest expense, amortization of note premiums and debt issuance costs.

3Q 2015 Supplemental information
20 
Equity LifeStyle Properties, Inc.