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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): January 20, 2016


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 January 25, 2016, Equity LifeStyle Properties, Inc. (referred to herein as “we,” “us,” and “our”) issued a news release announcing our results of operations for the three months and year ended December 31, 2015.

The news release also contains detailed guidance assumptions on our projections for 2016. We project our Normalized Funds from Operations (“Normalized FFO”) and our funds from operations (“FFO”) per Common Share (fully diluted) for the three months ended March 31, 2016 and year ending December 31, 2016 to be between $0.87 and $0.93 and $3.15 and $3.25, respectively.
 
We also project our Net income per Common Share (fully diluted) for the three months ended March 31, 2016 and year ending December 31, 2016, to be between $0.54 and $0.60 and $1.86 and $1.96, respectively.

The projected 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 January 25, 2016.

Item 5.02     Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain
Officers; Compensatory Arrangements of Certain Officers.

(e) Compensatory Arrangements of Certain Officers.

2016 Restricted Stock Award:

On January 21, 2016, the Compensation, Nominating and Corporate Governance Committee (the “Compensation Committee”) of the Board of Directors the Company approved the 2016 Restricted Stock Award (the “2016 Award”) pursuant to the authority set forth in the 2014 Equity Incentive Plan. The 2016 Award has a grant date of February 1, 2016 and will vest on December 31, 2016. The 2016 Award grant price will be the stock price at the end of the day on February 1, 2016.

The 2016 Award for each eligible executive follows:

Name
Title
Award
Marguerite Nader
President and Chief Executive Officer
22,000 Shares
Paul Seavey
Executive Vice President, Chief Financial Officer and Treasurer
18,000 Shares
Patrick Waite
Executive Vice President and Chief Operating Officer
18,000 Shares
Roger Maynard
Executive Vice President - Asset Management
10,000 Shares

Item 8.01     Other Events

On January 20, 2016, we announced the tax treatment of our 2015 common and preferred stock distributions. The following table summarizes the income tax treatment of our 2015 common distributions.

Common Stock (CUSIP No. 29472R108)
Record
Date
Payable
Date
Distribution
Per Share
Total Distribution Allocable to 2015
Ordinary
Taxable
Dividend
Nondividend Distribution
12/26/14

1/9/2015
$0.325000
$0.124727
$0.116634
$0.008093
03/27/15
04/10/15
$0.375000
$0.375000
$0.350668
$0.024332
06/26/15
07/10/15
$0.375000
$0.375000
$0.350668
$0.024332
09/25/15

10/9/2015
$0.375000
$0.375000
$0.350668
$0.024332
12/28/15
01/08/16
$0.375000
$0.000000
$0.000000
$0.000000
TOTALS
 
$1.825000
$1.249727
$1.168638
$0.081089





The common stock distribution with a record date of December 26, 2014 is a split-year distribution with $0.0.124727 allocable to 2015 for federal income tax purposes. The common stock distribution with a record date of December 28, 2015, paid on January 8, 2016, will be allocated to 2016 for federal income tax purposes.

Series C Cumulative Redeemable Perpetual Preferred Stock (CUSIP No. 29472R405).
Record
Date
Payable
Date
Distribution
Per Share (1)
Ordinary
Taxable
Dividend
3/20/2015
3/31/2015
$0.421875
$0.421875
06/19/15
06/30/15
$0.421875
$0.421875
09/18/15
09/30/15
$0.421875
$0.421875
12/11/15
12/31/15
$0.421875
$0.421875
TOTALS
 
$1.687500
$1.687500

(1) The distributions represent the distributions on each Depository Share (representing 1/100 of a share of Series C Preferred Stock).

Stockholders are encouraged to consult with their tax advisors as to the specific tax treatment of the distributions they received from us.

The information contained in Items 2.02 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 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 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 143,887 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 January 25, 2016, “ELS Reports Fourth Quarter Results”









SIGNATURE



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: January 26, 2016



Document

N E W S R E L E A S E


CONTACT: Paul Seavey                             FOR IMMEDIATE RELEASE
(800) 247-5279                          January 25, 2016


                                                        
ELS REPORTS FOURTH QUARTER RESULTS
Continued Strong Core Performance; 2016 Guidance Update

CHICAGO, IL – January 25, 2016 Equity LifeStyle Properties, Inc. (NYSE: ELS) (referred to herein as “we,” “us,” and “our”) today announced results for the quarter and year ended December 31, 2015. All per share results are reported on a fully diluted basis unless otherwise noted.
Financial Results for the Quarter Ended December 31, 2015
Normalized Funds from Operations (“Normalized FFO”) available for Common Stockholders increased $6.8 million, or $0.08 per Common Share, to $67.6 million, or $0.74 per Common Share, compared to $60.8 million, or $0.66 per Common Share, for the same period in 2014. Funds from Operations (“FFO”) available for Common Stockholders increased $6.8 million, or $0.07 per Common Share, to $67.1 million, or $0.73 per Common Share, compared to $60.3 million, or $0.66 per Common Share, for the same period in 2014. Net income available for Common Stockholders increased $5.1 million, or $0.06 per Common Share, to $34.5 million, or $0.41 per Common Share, compared to $29.4 million, or $0.35 per Common Share, for the same period in 2014.
Portfolio Performance
For the quarter ended December 31, 2015, property operating revenues, excluding deferrals, increased $8.7 million to $189.0 million compared to $180.3 million for the same period in 2014. For the year ended December 31, 2015, property operating revenues, excluding deferrals, increased $39.5 million to $774.2 million compared to $734.7 million for the same period in 2014. For the quarter ended December 31, 2015, income from property operations, excluding deferrals and property management, increased $6.8 million to $111.6 million compared to $104.8 million for the same period in 2014. For the year ended December 31, 2015, income from property operations, excluding deferrals and property management, increased $27.4 million to $449.6 million compared to $422.2 million for the same period in 2014.
For the quarter ended December 31, 2015, Core property operating revenues, excluding deferrals, increased approximately 3.9 percent and Core income from property operations, excluding deferrals and property management, increased approximately 5.8 percent compared to the same period in 2014. For the year ended December 31, 2015, Core property operating revenues, excluding deferrals, increased approximately 4.1 percent and Core income from property operations, excluding deferrals and property management, increased approximately 5.5 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 January 25, 2016, we own or have an interest in 387 quality properties in 32 states and British Columbia consisting of 143,887 sites.
For additional information, please contact our Investor Relations Department at (800) 247-5279 or at investor_relations@equitylifestyle.com.





 
i
 





Conference Call
A live webcast of our conference call discussing these results will take place tomorrow, Tuesday, January 26, 2016, 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.
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
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
Third Quarter 2016
 
Monday, October 17, 2016
 
Tuesday, October 18, 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 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.

 
ii
 





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.

 
iii
 





Investor Information



Equity Research Coverage (1)
Robert W. Baird & Company
BMO Capital Markets
Green Street Advisors
Drew T. Babin
Paul Adornato
David Bragg/ Ryan Burke
215-553-7816
212-885-4170
949-640-8780
dbabin@rwbaird.com
paul.adornato@bmo.com
dbragg@greenstreetadvisors.com
 
 
rburke@greenstreetadvisors.com
BB&T Capital Markets
Cantor Fitzgerald
 
David J. Toti
Gaurav Mehta
Wells Fargo Securities
212-419-4620
212-915-1221
Todd Stender
dtoti@bbandtcm.com
gmehta@cantor.com
562-637-1371
 
 
todd.stender@wellsfargo.com
Bank of America Merrill Lynch Global Research
Citi Research
 
Jana Galan
Michael Bilerman/ Nick Joseph
 
646-855-3081
212-816-1383
 
jana.galan@baml.com
michael.bilerman@citi.com
 
 
nicholas.joseph@citi.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.

4Q 2015 Supplemental information
1 
Equity LifeStyle Properties, Inc.


Financial Highlights

(In millions, except Stock outstanding and per share data, unaudited)
 
As of and for the Three Months Ended
 
December 31, 2015
September 30,
2015
June 30, 2015
March 31, 2015
December 31,
2014
Operating Information
 
 
 
 
 
Total revenues
$
201.6

$
210.1

$
201.5

$
208.4

$
190.3

Net income
$
39.8

$
42.1

$
36.8

$
31.8

$
34.3

Net income available for Common Stockholders
$
34.5

$
36.7

$
31.8

$
27.2

$
29.4

Normalized EBITDA (1)
$
96.0

$
99.0

$
92.9

$
106.1

$
91.2

FFO available for Common Stockholders (1)(2)
$
67.1

$
70.3

$
64.5

$
59.1

$
60.3

Normalized FFO available for Common Stockholders (1)(2)
$
67.6

$
70.5

$
64.5

$
76.5

$
60.8

Funds available for distribution (FAD) available for Common Stockholders (1)(2)
$
57.0

$
62.5

$
53.6

$
69.1

$
53.2

 
 
 
 
 

Stock Outstanding and Per Share Data
 
 
 
 

Common stock and OP units, end of the period
91,461

91,505

91,498

91,462

91,112

Weighted average Common Stock outstanding - fully diluted
91,875

91,940

91,851

91,777

91,644

Net income per Common Share - fully diluted
$
0.41

$
0.43

$
0.38

$
0.32

$
0.35

FFO per Common Share - fully diluted
$
0.73

$
0.77

$
0.70

$
0.64

$
0.66

Normalized FFO per Common Share - fully diluted
$
0.74

$
0.77

$
0.70

$
0.83

$
0.66

FAD per Common Share - fully diluted
$
0.62

$
0.68

$
0.58

$
0.75

$
0.58

Dividends per Common Share
$
0.375

$
0.375

$
0.375

$
0.375

$
0.325

 
 
 
 
 
 
Balance Sheet
 
 
 
 
 
Total assets
$
3,420

$
3,440

$
3,448

$
3,469

$
3,446

Total liabilities
$
2,427

$
2,450

$
2,466

$
2,490

$
2,467

 
 
 
 
 
 
Market Capitalization
 
 
 
 
 
Total debt
$
2,146

$
2,156

$
2,167

$
2,212

$
2,212

Total market capitalization (3)
$
8,380

$
7,651

$
7,114

$
7,374

$
7,045

 
 
 
 
 
 
Ratios
 
 
 
 
 
Total debt / total market capitalization
25.6
%
28.2
%
30.5
%
30.0
%
31.4
%
Total debt + preferred stock / total market capitalization
27.2
%
30.0
%
32.4
%
31.8
%
33.3
%
Total debt / Normalized EBITDA (4)
5.4

5.5

5.7

5.8

5.9

Interest coverage (5)
3.9

4.0

3.7

4.1

3.4

Fixed charges + preferred distributions coverage (6)
3.4

3.5

3.3

3.6

3.0




______________________
1.
See page 17-18 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 Stockholders to FFO available for Common Stockholders, Normalized FFO available for Common Stockholders and FAD available for Common Stockholders.
3.
See page 15 for market capitalization calculation as of December 31, 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 18 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.

4Q 2015 Supplemental information
2 
Equity LifeStyle Properties, Inc.


Fourth Quarter 2015 - Selected Financial Data

(In millions, except Stock outstanding and per share data, unaudited)
 
Quarter Ended
 
December 31, 2015
Income from property operations, excluding deferrals and property management - 2015 Core (1)
$
109.9

Income from property operations, excluding deferrals and property management - Acquisitions (2)
1.7

Property management and general and administrative (excluding transaction costs)
(18.7
)
Other income and expenses
3.1

Financing costs and other
(28.4
)
Normalized FFO available for Common Stockholders (3)
67.6

Transaction costs
(0.5
)
Early debt retirement

FFO available for Common Stockholders(3)
$
67.1

 
 
Normalized FFO per Common Share - fully diluted
$
0.74

FFO per Common Share - fully diluted
$
0.73

 
 
 
 
Normalized FFO available for Common Stockholders (3)
$
67.6

Non-revenue producing improvements to real estate
(10.6
)
FAD available for Common Stockholders (3)
$
57.0

 
 
FAD per Common Share - fully diluted
$
0.62

 
 
Weighted average Common Stock outstanding - fully diluted
91.9

 
 
















______________________
1.
See page 17-18 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 18 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 Stockholders to FFO available for Common Stockholders, Normalized FFO available for Common Stockholders and FAD available for Common Stockholders. See definitions of FFO, Normalized FFO and FAD on page 17 and Non-revenue producing improvements on page 18.

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


Balance Sheet

(In thousands, except share and per share data)
 
December 31,
2015
 
December 31,
2014
 
(unaudited)
 
Assets
 
 
 
Investment in real estate:
 
 
 
Land
$
1,101,676

 
$
1,091,550

Land improvements
2,787,882

 
2,734,304

Buildings and other depreciable property
588,041

 
562,059

 
4,477,599

 
4,387,913

Accumulated depreciation
(1,282,423
)
 
(1,169,492
)
Net investment in real estate
3,195,176

 
3,218,421

Cash
80,258

 
73,714

Notes receivable, net
35,463

 
37,137

Investment in unconsolidated joint ventures
17,741

 
13,512

Deferred financing costs, net
23,368

 
21,833

Deferred commission expense
30,865

 
28,589

Escrow deposits, goodwill, and other assets, net
37,190

 
53,133

Total Assets
$
3,420,061

 
$
3,446,339

Liabilities and Equity
 
 
 
Liabilities:
 
 
 
Mortgage notes payable
$
1,945,713

 
$
2,012,246

Term loan
200,000

 
200,000

Unsecured lines of credit

 

Accrued expenses and accounts payable
76,044

 
64,520

Deferred revenue – upfront payments from right-to-use contracts
78,405

 
74,174

Deferred revenue – right-to-use annual payments
9,878

 
9,790

Accrued interest payable
8,715

 
9,496

Rents and other customer payments received in advance and security deposits
74,300

 
67,463

Distributions payable
34,315

 
29,623

Total Liabilities
2,427,370

 
2,467,312

Equity:
 
 
 
Stockholders’ Equity:
 
 
 
Preferred stock, $0.01 par value 9,945,539 shares authorized as of December 31, 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 December 31, 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 December 31, 2015 and December 31, 2014; 84,253,065 and 83,879,779 shares issued and outstanding as of December 31, 2015 and December 31, 2014, respectively
843

 
838

Paid-in capital
1,039,139

 
1,029,601

Distributions in excess of accumulated earnings
(250,506
)
 
(254,209
)
Accumulated other comprehensive loss
(553
)
 
(381
)
Total Stockholders’ Equity
925,067

 
911,993

Non-controlling interests – Common OP Units
67,624

 
67,034

Total Equity
992,691

 
979,027

Total Liabilities and Equity
$
3,420,061

 
$
3,446,339



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


Consolidated Income Statement

(In thousands, unaudited)
 
Quarters Ended
 
Years Ended
 
December 31,
 
December 31,
 
2015
 
2014
 
2015
 
2014
Revenues:
 
 
 
 
 
 
 
Community base rental income
$
111,795

 
$
107,372

 
$
442,046

 
$
426,886

Rental home income
3,486

 
3,640

 
14,012

 
14,827

Resort base rental income
41,923

 
37,780

 
184,760

 
163,968

Right-to-use annual payments
11,183

 
11,001

 
44,443

 
44,860

Right-to-use contracts current period, gross
2,519

 
3,380

 
12,783

 
13,892

Right-to-use contract upfront payments, deferred, net
(302
)
 
(1,197
)
 
(4,231
)
 
(5,501
)
Utility and other income
18,143

 
17,138

 
76,153

 
70,209

Gross revenues from home sales
8,809

 
7,963

 
33,150

 
28,418

Brokered resale revenue and ancillary services revenues, net
104

 
359

 
4,149

 
3,850

Interest income
1,716

 
1,870

 
7,030

 
8,347

Income from other investments, net
2,240

 
955

 
7,359

 
7,053

    Total revenues
201,616

 
190,261

 
821,654

 
776,809

 
 
 
 
 
 
 
 
Expenses:
 
 
 
 
 
 
 
Property operating and maintenance
60,146

 
57,896

 
254,668

 
243,914

Rental home operating and maintenance
1,935

 
2,065

 
7,167

 
7,441

Real estate taxes
12,793

 
11,809

 
50,962

 
48,714

Sales and marketing, gross
2,612

 
3,744

 
11,751

 
12,418

Right-to-use contract commissions, deferred, net
(85
)
 
(595
)
 
(1,556
)
 
(2,617
)
Property management
10,778

 
10,469

 
44,528

 
42,638

Depreciation on real estate assets and rental homes
28,748

 
27,830

 
113,609

 
111,065

Amortization of in-place leases
408

 
208

 
2,358

 
3,999

Cost of home sales
8,594

 
7,068

 
32,279

 
26,747

Home selling expenses
805

 
632

 
3,191

 
2,342

General and administrative (1)
8,472

 
7,232

 
30,644

 
27,410

Property rights initiatives and other
1,052

 
860

 
2,986

 
2,923

Early debt retirement
(9
)
 

 
16,913

 
5,087

Interest and related amortization
26,083

 
28,118

 
105,731

 
112,295

    Total expenses
162,332

 
157,336

 
675,231

 
644,376

Income before equity in income of unconsolidated joint ventures and gain on sale of property
39,284

 
32,925

 
146,423

 
132,433

Equity in income of unconsolidated joint ventures
483

 
809

 
4,089

 
4,578

Gain on sale of property

 
528

 

 
1,457

Consolidated net income
39,767

 
34,262

 
150,512

 
138,468

 
 
 
 
 
 
 
 
Income allocated to non-controlling interest-Common OP Units
(2,950
)
 
(2,534
)
 
(11,141
)
 
(10,463
)
Series C Redeemable Perpetual Preferred Stock Dividends
(2,316
)
 
(2,325
)
 
(9,226
)
 
(9,274
)
Net income available for Common Stockholders
$
34,501

 
$
29,403

 
$
130,145

 
$
118,731











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

4Q 2015 Supplemental information
5 
Equity LifeStyle Properties, Inc.


Reconciliation of Net Income to FFO, Normalized FFO and FAD

(In thousands, except Stock outstanding and per share data, unaudited)
 
Quarters Ended
 
Years Ended
 
December 31,
 
December 31,
 
2015
 
2014
 
2015
 
2014
    Net income available for Common Stockholders
$
34,501

 
$
29,403

 
$
130,145

 
$
118,731

Income allocated to common OP Units
2,950

 
2,534

 
11,141

 
10,463

Right-to-use contract upfront payments, deferred, net (1)
302

 
1,197

 
4,231

 
5,501

Right-to-use contract commissions, deferred, net (2)
(85
)
 
(595
)
 
(1,556
)
 
(2,617
)
Depreciation on real estate assets
26,123

 
25,212

 
102,934

 
100,159

Depreciation on rental homes 
2,625

 
2,618

 
10,675

 
10,906

Amortization of in-place leases
408

 
208

 
2,358

 
3,999

Depreciation on unconsolidated joint ventures
282

 
214

 
1,081

 
903

Gain on sale of property

 
(528
)
 

 
(1,457
)
   FFO available for Common Stockholders (3)
67,106

 
60,263

 
261,009

 
246,588

Change in fair value of contingent consideration asset (4)

 

 

 
(65
)
Transaction costs (5)
527

 
496

 
1,130

 
1,647

Early debt retirement
(9
)
 

 
16,913

 
5,087

   Normalized FFO available for Common Stockholders (3)
67,624

 
60,759

 
279,052

 
253,257

Non-revenue producing improvements to real estate
(10,584
)
 
(7,591
)
 
(36,780
)
 
(24,877
)
   FAD available for Common Stockholders (3)
$
57,040

 
$
53,168

 
$
242,272

 
$
228,380

 
 
 
 
 
 
 
 
Net income available per Common Share - Basic
$
0.41

 
$
0.35

 
$
1.55

 
$
1.42

Net income available per Common Share - Fully Diluted
$
0.41

 
$
0.35

 
$
1.54

 
$
1.41

 
 
 
 
 
 
 
 
FFO per Common Share - Basic
$
0.74

 
$
0.66

 
$
2.86

 
$
2.72

FFO per Common Share - Fully Diluted
$
0.73

 
$
0.66

 
$
2.84

 
$
2.69

 
 
 
 
 
 
 
 
Normalized FFO per Common Share - Basic
$
0.74

 
$
0.67

 
$
3.06

 
$
2.79

Normalized FFO per Common Share - Fully Diluted
$
0.74

 
$
0.66

 
$
3.04

 
$
2.77

 
 
 
 
 
 
 
 
FAD per Common Share - Basic
$
0.62

 
$
0.59

 
$
2.66

 
$
2.52

FAD per Common Share - Fully Diluted
$
0.62

 
$
0.58

 
$
2.64

 
$
2.50

 
 
 
 
 
 
 
 
Average Common Stock - Basic
84,072

 
83,562

 
84,031

 
83,362

Average Common Stock and OP Units - Basic
91,280

 
90,794

 
91,247

 
90,773

Average Common Stock and OP Units - Fully Diluted
91,875

 
91,644

 
91,907

 
91,511










______________________________
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. For 2015, the customer life was estimated to be 31 years and was 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 17 for non-GAAP measure definitions of FFO, Normalized FFO and FAD and page 18 for the definition of Non-revenue producing improvements.
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.

4Q 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
 
Years Ended
 
December 31,
 
December 31,
 
2015
 
2014
 
2015
 
2014
Community base rental income (2)
$
111.8

 
$
107.4

 
$
442.0

 
$
426.9

Rental home income
3.5

 
3.6

 
14.0

 
14.8

Resort base rental income (3)
41.9

 
37.8

 
184.8

 
164.0

Right-to-use annual payments
11.2

 
11.0

 
44.4

 
44.9

Right-to-use contracts current period, gross
2.5

 
3.4

 
12.8

 
13.9

Utility and other income
18.1

 
17.1

 
76.2

 
70.2

    Property operating revenues
189.0

 
180.3

 
774.2

 
734.7

 
 
 

 
 
 
 
Property operating, maintenance and real estate taxes
72.9

 
69.7

 
305.6

 
292.7

Rental home operating and maintenance
1.9

 
2.1

 
7.2

 
7.4

Sales and marketing, gross
2.6

 
3.7

 
11.8

 
12.4

    Property operating expenses
77.4

 
75.5

 
324.6

 
312.5

Income from property operations, excluding deferrals and property management (1)
$
111.6

 
$
104.8

 
$
449.6

 
$
422.2

 
 
 
 
 
 
 
 
Manufactured home site figures and occupancy averages:
 
 
 
 
 
 
 
Total sites
70,115

 
69,959

 
70,113

 
69,951

Occupied sites
65,032

 
64,444

 
64,832

 
64,384

Occupancy %
92.8
%
 
92.1
%
 
92.5
%
 
92.0
%
Monthly base rent per site
$
573

 
$
555

 
$
568

 
$
553

 
 
 
 
 
 
 
 
Resort base rental income:
 
 
 
 
 
 
 
Annual
$
29.8

 
$
27.3

 
$
115.4

 
$
104.0

Seasonal
6.4

 
5.7

 
29.0

 
25.1

Transient
5.7

 
4.8

 
40.4

 
34.9

     Total resort base rental income
$
41.9

 
$
37.8

 
$
184.8

 
$
164.0











 


_________________________
1.
See page 5 for the Consolidated Income Statement and page 17-18 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.

4Q 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
 
 
 
Years Ended
 
 
 
December 31,
 
%
 
December 31,
 
%
 
2015
 
2014
 
Change (2)
 
2015
 
2014
 
Change (2)
Community base rental income (3)
$
111.7

 
$
107.4

 
4.0
 %
 
$
441.6

 
$
426.9

 
3.5
 %
Rental home income
3.5

 
3.6

 
(4.2
)%
 
14.0

 
14.8

 
(5.5
)%
Resort base rental income (4)
38.9

 
36.2

 
7.3
 %
 
172.5

 
159.9

 
7.9
 %
Right-to-use annual payments
11.2

 
11.0

 
1.6
 %
 
44.4

 
44.9

 
(0.9
)%
Right-to-use contracts current period, gross
2.5

 
3.4

 
(25.5
)%
 
12.8

 
13.9

 
(8.0
)%
Utility and other income
17.8

 
17.1

 
4.7
 %
 
75.1

 
70.0

 
7.3
 %
    Property operating revenues
185.6

 
178.7

 
3.9
 %
 
760.4

 
730.4

 
4.1
 %
 
 
 
 
 
 
 
 
 
 
 
 
Property operating, maintenance and real estate taxes
71.2

 
69.0

 
3.1
 %
 
298.7

 
290.6

 
2.8
 %
Rental home operating and maintenance
1.9

 
2.1

 
(6.3
)%
 
7.2

 
7.4

 
(3.7
)%
Sales and marketing, gross
2.6

 
3.7

 
(30.3
)%
 
11.7

 
12.4

 
(5.4
)%
    Property operating expenses
75.7

 
74.8

 
1.2
 %
 
317.6

 
310.4

 
2.3
 %
Income from property operations, excluding deferrals and property management (1)
$
109.9

 
$
103.9

 
5.8
 %
 
$
442.8

 
$
420.0

 
5.5
 %
Occupied sites (5)
65,014

 
64,541

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Core manufactured home site figures and occupancy averages:
 
 
 
 
 
 
Total sites
69,837

 
69,831

 

 
69,847

 
69,823

 
 
Occupied sites
64,903

 
64,444

 
 
 
64,709

 
64,384

 
 
Occupancy %
92.9
%
 
92.3
%
 
 
 
92.6
%
 
92.2
%
 
 
Monthly base rent per site
$
574

 
$
555

 
 
 
$
569

 
$
553

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Resort base rental income:
 
 
 
 
 
 
 
 
 
 
 
Annual
$
27.5

 
$
25.9

 
6.1
 %
 
$
106.4

 
$
100.5

 
5.9
 %
Seasonal
6.0

 
5.6

 
6.6
 %
 
27.4

 
24.9

 
9.9
 %
Transient
5.4

 
4.7

 
14.8
 %
 
38.7

 
34.5

 
12.2
 %
     Total resort base rental income
$
38.9

 
$
36.2

 
7.3
 %
 
$
172.5

 
$
159.9

 
7.9
 %











____________________________
1.
See page 17-18 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 473 from 64,541 at December 31, 2014.

4Q 2015 Supplemental information
8 
Equity LifeStyle Properties, Inc.


Acquisitions - Income from Property Operations (1)

(In millions, unaudited)
 
Quarter Ended
 
Year Ended
 
December 31,
2015
 
December 31,
2015
Community base rental income
$
0.1

 
$
0.4

Resort base rental income
3.1

 
12.3

Utility income and other property income
0.3

 
1.1

  Property operating revenues
3.5

 
13.8

 
 
 
 
  Property operating expenses
1.8

 
7.0

Income from property operations, excluding deferrals and property management
$
1.7

 
$
6.8








































______________________
1.
See page 18 for definition of Acquisition properties.

4Q 2015 Supplemental information
9 
Equity LifeStyle Properties, Inc.


Income from Rental Home Operations

(In millions, except occupied rentals, unaudited)
 
Quarters Ended
 
Years Ended
 
December 31,
 
December 31,
 
2015
 
2014
 
2015
 
2014
Manufactured homes:
 
 
 
 
 
 
 
New home
$
5.9

 
$
5.5

 
$
22.8

 
$
22.7

Used home
6.6

 
7.7

 
27.8

 
31.4

   Rental operations revenues (1)
12.5

 
13.2

 
50.6

 
54.1

Rental operations expense
1.9

 
2.1

 
7.2

 
7.4

   Income from rental operations, before depreciation
10.6

 
11.1

 
43.4

 
46.7

Depreciation on rental homes
2.6

 
2.6

 
10.7

 
10.9

   Income from rental operations, after depreciation
$
8.0

 
$
8.5

 
$
32.7

 
$
35.8

 
 
 
 
 
 
 
 
Occupied rentals: (2)
 
 
 
 
 
 
 
New
2,170

 
2,020

 
 
 
 
Used
2,797

 
3,223

 
 
 
 
   Total occupied rental sites
4,967

 
5,243

 

 


 
As of
 
December 31, 2015
 
December 31, 2014
Cost basis in rental homes: (3)
Gross
 
Net of Depreciation
 
Gross
 
Net of Depreciation
New
$
111.8

 
$
89.7

 
$
107.7

 
$
90.1

Used
57.4

 
36.1

 
63.3

 
48.0

  Total rental homes
$
169.2

 
$
125.8

 
$
171.0

 
$
138.1















____________________________
1.
For the quarters ended December 31, 2015 and 2014, approximately $9.0 million and $9.5 million, respectively, are included in the Community base rental income in the Consolidated Income from Property Operations table on page 7. For the years ended December 31, 2015 and 2014, approximately $36.6 million and $39.3 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 years ended December 31, 2015 and 2014, includes 100 and 33 homes rented through our ECHO joint venture, respectively. For the years ended December 31, 2015 and 2014, the rental home investment associated with our ECHO joint venture totals approximately $3.4 million and $1.1 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 December 31, 2015 and 2014, our investment in the ECHO joint venture was approximately $10.4 million and $6.3 million, respectively.

4Q 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 December 31, 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
 
Years Ended
 
December 31,
 
December 31,
 
2015
 
2014
 
2015
 
2014
Total New Home Sales Volume (3)
127

 
99

 
479

 
336

     New Home Sales Volume - ECHO joint venture
38

 
42

 
178

 
136

New Home Sales Gross Revenues(3)
$
5,488

 
$
3,813

 
$
17,674

 
$
13,584

 
 
 
 
 
 
 
 
Used Home Sales Volume
315

 
382

 
1,489

 
1,526

Used Home Sales Gross Revenues
$
3,321

 
$
4,150

 
$
15,476

 
$
14,834

 
 
 
 
 
 
 
 
Brokered Home Resales Volume
216

 
216

 
884

 
936

Brokered Home Resale Revenues, net
$
328

 
$
306

 
$
1,269

 
$
1,222




















__________________________
1.
Sites primarily utilized by approximately 102,400 members. Includes approximately 5,500 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.

4Q 2015 Supplemental information
11 
Equity LifeStyle Properties, Inc.


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)

 
Quarter Ended
 
Year Ended
 
March 31, 2016
 
December 31, 2016
Income from property operations, excluding deferrals and property management - 2016 Core (2)
$
124.2

 
$
467.2

Income from property operations - Acquisitions (3)
0.7

 
1.6

Property management and general and administrative
(19.2
)
 
(77.2
)
Other income and expenses
4.7

 
14.6

Financing costs and other
(28.0
)
 
(111.6
)
Normalized FFO and FFO available for Common Stockholders (4)
82.4

 
294.6

    Depreciation on real estate and other
(26.6
)
 
(105.8
)
    Depreciation on rental homes
(2.6
)
 
(10.5
)
    Deferral of right-to-use contract sales revenue and commission, net
(0.5
)
 
(2.7
)
    Income allocated to non-controlling interest-Common OP Units
(4.2
)
 
(13.8
)
Net income available for Common Stockholders
$
48.5

 
$
161.8

 
 
 
 
Normalized FFO per Common Share - fully diluted
$0.87 - $0.93

 
$3.15 - $3.25

FFO per Common Share - fully diluted
$0.87 - $0.93

 
$3.15 - $3.25

Net income per Common Share - fully diluted (5)
$0.54 - $0.60

 
$1.86 - $1.96

 
 
 
 
Weighted average Common Stock outstanding - fully diluted
92.0

 
92.1












_____________________________________
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 Stockholders, Normalized FFO per Common Share, FFO available for Common Stockholders, FFO per Common Share, Net income available for Common Stockholders 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 2016 Core Guidance Assumptions. Amount represents 2015 income from property operations, excluding deferrals and property management, from the 2016 Core properties of $119.3 million multiplied by an estimated growth rate of 4.1% and $448.8 million multiplied by an estimated growth rate of 4.1% for the quarter ended March 31, 2016 and the year ended December 31, 2016, respectively.
3.
See page 13 for the 2016 Assumptions regarding the Acquisition properties.
4.
See page 17 for definitions of Normalized FFO and FFO.
5.
Net income per fully diluted Common Share is calculated before Income allocated to non-controlling interest-Common OP Units.

4Q 2015 Supplemental information
12 
Equity LifeStyle Properties, Inc.


2016 Core Guidance Assumptions (1) 
(In millions, unaudited)
 
Quarter Ended
 
First Quarter 2016
 
Year Ended
 
2016
 
March 31, 2015
 
Growth Factors (2)
 
December 31, 2015
 
Growth Factors (2)
Community base rental income
$
109.2

 
3.8
 %
 
$
441.6

 
3.5
 %
Rental home income
3.6

 
(5.7
)%
 
14.0

 
(7.1
)%
Resort base rental income (3)
51.5

 
5.6
 %
 
183.4

 
4.9
 %
Right-to-use annual payments
11.0

 
0.4
 %
 
44.4

 
0.1
 %
Right-to-use contracts current period, gross
2.8

 
(7.2
)%
 
12.8

 
1.9
 %
Utility and other income
19.0

 
2.2
 %
 
76.0

 
0.1
 %
    Property operating revenues
197.1

 
3.6
 %
 
772.2

 
3.1
 %
 
 
 
 
 
 
 
 
Property operating, maintenance, and real estate taxes
73.6

 
3.1
 %
 
304.5

 
1.6
 %
Rental home operating and maintenance
1.7

 
(9.4
)%
 
7.2

 
(6.7
)%
Sales and marketing, gross
2.5

 
3.4
 %
 
11.7

 
6.8
 %
    Property operating expenses
77.8

 
2.8
 %
 
323.4

 
1.6
 %
Income from property operations, excluding deferrals and property management
$
119.3

 
4.1
 %
 
$
448.8

 
4.1
 %
 
 
 
 
 

 
 
Resort base rental income:
 
 
 
 
 
 
 
Annual
$
27.8

 
5.7
 %
 
$
114.6

 
5.7
 %
Seasonal
15.0

 
5.0
 %
 
28.7

 
4.0
 %
Transient
8.7

 
6.4
 %
 
40.1

 
3.5
 %
    Total resort base rental income
$
51.5

 
5.6
 %
 
$
183.4

 
4.9
 %


2016 Assumptions Regarding Acquisition Properties (1)
(In millions, unaudited)
 
Quarter Ended
 
Year Ended
 
March 31, 2016 (4)
 
December 31, 2016 (4)
Community base rental income
$
0.1

 
$
0.5

Resort base rental income
1.0

 
2.4

Utility income and other property income
0.1

 
0.4

  Property operating revenues
1.2

 
3.3

 
 
 
 
Property operating, maintenance, and real estate taxes
0.5

 
1.7

  Property operating expenses
0.5

 
1.7

Income from property operations, excluding deferrals and property management
$
0.7

 
$
1.6






_______________________________
1.
Refer to page 18 for definition of Core and Acquisition properties.
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.
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.

4Q 2015 Supplemental information
13 
Equity LifeStyle Properties, Inc.




4Q 2015 Supplemental information
14 
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
 
2016 (1)
Member Count (2)
96,687

 
98,277

 
96,130

 
102,413

 
105,300

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

 
15,607

 
18,187

 
25,544

 
27,700

    TTC Sales
8,909

 
9,289

 
10,014

 
11,877

 
13,800

    RV Dealer TTC Activations
1,289

 
6,318

 
8,173

 
13,667

 
13,900

Number of annuals (4)
4,280

 
4,830

 
5,142

 
5,470

 
5,750

Number of upgrade sales (5)
3,069

 
2,999

 
2,978

 
2,687

 
2,600

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

 
$
47,967

 
$
44,860

 
$
44,441

 
$
44,500

Resort base rental income from annuals
$
9,585

 
$
11,148

 
$
12,491

 
$
13,821

 
$
15,300

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

 
$
12,692

 
$
13,894

 
$
15,795

 
$
16,400

Upgrade contract initiations (7)
$
14,025

 
$
13,815

 
$
13,892

 
$
12,783

 
$
13,000

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.

4Q 2015 Supplemental information
15 
Equity LifeStyle Properties, Inc.


Market Capitalization

(In millions, except share and OP Unit data, unaudited)
Capital Structure as of December 31, 2015
 
 
 
 
 
 
 
 
 
 
 
 
 
Total Common Stock/Units
% of Total Common Stock/Units
Total
% of Total
% of Total Market Capitalization
 
 
 
 
 
 
 
 
Secured Debt
 
 
$
1,946

90.7
%
 
 
Unsecured Debt
 
 
200

9.3
%
 
 
Total Debt
 
 
$
2,146

100.0
%
25.6
%
 
 
 
 
 
 
 
 
Common Stock
84,253,065

92.1
%
 
 
 
 
OP Units
7,207,678

7.9
%
 
 
 
 
Total Common Stock and OP Units
91,460,743

100.0
%
 
 
 
 
Common Stock price at December 31, 2015
$
66.67

 
 
 
 
 
Fair Value of Common Stock
 
 
$
6,098

97.8
%
 
 
Perpetual Preferred Equity
 
 
136

2.2
%
 
 
Total Equity
 
 
$
6,234

100.0
%
74.4
%
 
 
 
 
 
 
 
 
Total Market Capitalization
 
 
$
8,380

 
100.0
%
 
 
 
 
 
 
 
 
Perpetual Preferred Equity as of December 31, 2015
 
 
 
 
 
 
 
 
 
 
 
Series
Callable Date
 
Outstanding Stock
Liquidation Value
Annual Dividend Per Share
Annual Dividend Value
6.75% Series C
9/7/2017
 
54,458
$136
$168.75
$
9.2



























4Q 2015 Supplemental information
16 
Equity LifeStyle Properties, Inc.


Debt Maturity Schedule

Debt Maturity Schedule as of December 31, 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
 
2016
 
$
80,264

 
5.79
%
 
$

 

 
$
80,264

 
3.76
%
 
5.79
%
 
2017
 
57,909

 
5.80
%
 

 

 
57,909

 
2.71
%
 
5.80
%
 
2018
 
203,128

 
5.97
%
 

 

 
203,128

 
9.51
%
 
5.97
%
 
2019
 
204,828

 
6.27
%
 

 

 
204,828

 
9.59
%
 
6.27
%
 
2020
 
124,104

 
6.13
%
 
200,000

 
2.39
%
 
324,104

 
15.17
%
 
3.82
%
 
2021
 
193,481

 
5.01
%
 

 

 
193,481

 
9.05
%
 
5.01
%
 
2022
 
153,915

 
4.59
%
 

 

 
153,915

 
7.20
%
 
4.59
%
 
2023
 
113,819

 
5.14
%
 

 

 
113,819

 
5.33
%
 
5.14
%
 
2024
 

 
%
 

 

 

 
%
 
%
 
Thereafter
 
805,419

 
4.18
%
 

 

 
805,419

 
37.69
%
 
4.18
%
 
Total
 
$
1,936,867

 
5.00
%
 
$
200,000

 
2.39
%
 
$
2,136,867

 
100.0
%
 
4.75
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Note Premiums
 
8,846

 
 
 

 
 
 
8,846

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total Debt
 
$
1,945,713

 
4.75
%
(1) 
$
200,000

 
2.39
%
 
$
2,145,713

 
 
 
4.53
%
(1) 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Average Years to Maturity
 
10.9
 
 
 
4.1
 
 
 
10.3
 
 
 
 
 




























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


4Q 2015 Supplemental information
17 
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, impairments, if any, 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.



4Q 2015 Supplemental information
18 
Equity LifeStyle Properties, Inc.


The following table reconciles Income before equity in income of unconsolidated joint ventures and gain on sale of property to Income from property operations(amounts in thousands):
 
 
Quarters Ended
 
Years Ended
 
 
December 31,
 
December 31,
 
 
2015
 
2014
 
2015
 
2014
Income before equity in income of unconsolidated joint ventures and gain on sale of property
 
$
39,284

 
$
32,925

 
$
146,423

 
$
132,433

Right-to-use upfront payments, deferred, net
 
302

 
1,197

 
4,231

 
5,501

Gross revenues from home sales
 
(8,809
)
 
(7,963
)
 
(33,150
)
 
(28,418
)
Brokered resale revenues and ancillary services revenues, net
 
(104
)
 
(359
)
 
(4,149
)
 
(3,850
)
Interest income
 
(1,716
)
 
(1,870
)
 
(7,030
)
 
(8,347
)
Income from other investments, net
 
(2,240
)
 
(955
)
 
(7,359
)
 
(7,053
)
Right-to-use contract commissions, deferred, net
 
(85
)
 
(595
)
 
(1,556
)
 
(2,617
)
Property management
 
10,778

 
10,469

 
44,528

 
42,638

Depreciation on real estate and rental homes
 
28,748

 
27,830

 
113,609

 
111,065

Amortization of in-place leases
 
408

 
208

 
2,358

 
3,999

Cost of homes sales
 
8,594

 
7,068

 
32,279

 
26,747

Home selling expenses
 
805

 
632

 
3,191

 
2,342

General and administrative
 
8,472

 
7,232

 
30,644

 
27,410

Property rights initiatives and other
 
1,052

 
860

 
2,986

 
2,923

Early debt retirement
 
(9
)
 

 
16,913

 
5,087

Interest and related amortization
 
26,083

 
28,118

 
105,731

 
112,295

Income from property operations, excluding deferrals and property management
 
111,563

 
104,797

 
449,649

 
422,155

Right-to-use contracts, deferred and sales and marketing, deferred, net
 
(217
)
 
(602
)
 
(2,675
)
 
(2,884
)
Property management
 
(10,778
)
 
(10,469
)
 
(44,528
)
 
(42,638
)
Income from property operations
 
$
100,568

 
$
93,726

 
$
402,446

 
$
376,633

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; d) impairments, if any; and e) 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
 
Years Ended
 
 
December 31,
 
December 31,
 
 
2015
 
2014
 
2015
 
2014
Income before equity in income of unconsolidated joint ventures and gain on sale of property
 
$
39,284

 
$
32,925

 
$
146,423

 
$
132,433

Right-to-use contract upfront payments, deferred, net
 
302

 
1,197

 
4,231

 
5,501

Right-to-use contract commissions, deferred, net
 
(85
)
 
(595
)
 
(1,556
)
 
(2,617
)
Depreciation on real estate assets and rental homes
 
28,748

 
27,830

 
113,609

 
111,065

Amortization of in-place leases
 
408

 
208

 
2,358

 
3,999

Depreciation on corporate assets
 
276

 
241

 
1,089

 
890

Interest and related amortization
 
26,083

 
28,118

 
105,731

 
112,295

Equity in income from unconsolidated joint ventures
 
483

 
809

 
4,089

 
4,578

EBITDA
 
95,499

 
90,733

 
375,974

 
368,144

Change in fair value of contingent consideration asset
 

 

 

 
(65
)
Transaction costs
 
527

 
496

 
1,130

 
1,647

Early debt retirement
 
(9
)
 

 
16,913

 
5,087

Normalized EBITDA
 
$
96,017

 
$
91,229

 
$
394,017

 
$
374,813

Core. The Core properties include properties we owned and operated 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.

4Q 2015 Supplemental information
19 
Equity LifeStyle Properties, Inc.