UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K/A
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): July 17, 2017
EQUITY LIFESTYLE PROPERTIES, INC.
(Exact name of registrant as specified in its charter)
Maryland | 1-11718 | 36-3857664 | ||
(State or other jurisdiction of incorporation) | (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 communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company o
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o
EXPLANATORY NOTE
This amendment (the “8-K/A”) to the Registrant’s Current Report on Form 8-K dated July 18, 2017 (the "Original 8-K") is being furnished solely for the purpose of including a conformed signature on the signature page of the Original 8-K. The Original 8-K was manually signed and dated on July 18, 2017. However, the conformed signature was inadvertently omitted from the signature page of the electronic submission of the Original 8-K. Other than including a conformed signature, this 8-K/A does not modify the disclosure contained in the Original 8-K. For your convenience, this 8-K/A includes the exhibit that was furnished with the Original 8-K. This exhibit should be read as of its date and the furnishing of this exhibit with this 8-K/A does not constitute an update or confirmation of such exhibit or an update to any filings or disclosures made subsequent to its date.
Item 2.02 Results of Operations and Financial Condition
On July 17, 2017, 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 six months ended June 30, 2017.
The news release also contains detailed guidance assumptions on our projections for 2017. We project our Net income per Common Share (fully diluted) for the three months ending September 30, 2017 and year ending December 31, 2017, to be between $0.52 and $0.58 and $2.14 and $2.24, respectively.
We also project our Funds from Operations (“FFO”) per Common Share (fully diluted) for the three months ending September 30, 2017 and year ending December 31, 2017 to be between $0.86 and $0.92 and $3.52 and $3.62, respectively. We project our Normalized Funds from Operations (“Normalized FFO”) per Common Share (fully diluted) for the three months ending September 30, 2017 and year ending December 31, 2017 to be between $0.86 and $0.92 and $3.52 and $3.62, respectively.
The projected 2017 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 results 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.equitylifestyleproperties.com, on July 17, 2017.
In accordance with General Instruction B.2. of Form 8-K, the information included in Items 2.02 and 9.01 of this Report on Form 8-K, including Exhibit 99.1, shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that Section, nor shall such information be deemed 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 2017 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 or actions brought against us, including those disclosed in our filings with the Securities and Exchange Commission; and |
• | other risks indicated from time to time in our filings with the Securities and Exchange Commission. |
For further information on these and other factors that could impact us and the statements contained herein, refer to our filings with the Securities and Exchange Commission, including “Risk Factors” in our most recent Annual Report on Form 10-K and subsequent quarterly reports.
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 393 quality properties in 32 states and British Columbia consisting of 147,107 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.
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 /s
Paul Seavey
Executive Vice President, Chief Financial Officer and Treasurer
Date: September 1, 2017
i
N E W S R E L E A S E
CONTACT: Paul Seavey FOR IMMEDIATE RELEASE
(800) 247-5279 July 17, 2017
ELS REPORTS SECOND QUARTER RESULTS
Continued Strong Performance
CHICAGO, IL – July 17, 2017 – Equity LifeStyle Properties, Inc. (NYSE: ELS) (referred to herein as “we,”
“us,” and “our”) today announced results for the quarter and six months ended June 30, 2017. All per share results are
reported on a fully diluted basis unless otherwise noted.
Financial Results for the Quarter and Six Months Ended June 30, 2017
For the quarter ended June 30, 2017, total revenues increased $11.2 million, or 5.3 percent, to $221.3 million
compared to $210.1 million for the same period in 2016. Net income available for Common Stockholders for the quarter
ended June 30, 2017 increased $4.0 million, or $0.03 per Common Share, to $39.5 million, or $0.45 per Common Share,
compared to $35.5 million, or $0.42 per Common Share, for the same period in 2016.
For the six months ended June 30, 2017, total revenues increased $23.5 million, or 5.5 percent, to $453.7
million compared to $430.2 million for the same period in 2016. Net income available for Common Stockholders for the
six months ended June 30, 2017 increased $10.3 million, or $0.10 per Common Share, to $96.4 million, or $1.11 per
Common Share, compared to $86.1 million, or $1.01 per Common Share, for the same period in 2016.
Non-GAAP Financial Measures and Portfolio Performance
For the quarter ended June 30, 2017, Funds from Operations (“FFO”) available for Common Stock and OP Unit
holders increased $6.0 million, or $0.06 per Common Share, to $74.9 million or $0.81 per Common Share, compared to
$68.9 million, or $0.75 per Common Share, for the same period in 2016. For the six months ended June 30, 2017, FFO
available for Common Stock and OP Unit holders increased $14.5 million, or $0.14 per Common Share, to $168.0
million or $1.81 per Common Share, compared to $153.5 million, or $1.67 per Common Share, for the same period in
2016.
For the quarter ended June 30, 2017, Normalized Funds from Operations (“Normalized FFO”) available for
Common Stock and OP Unit holders increased $5.8 million, or $0.06 per Common Share, to $75.1 million, or $0.81 per
Common Share, compared to $69.3 million, or $0.75 per Common Share, for the same period in 2016. For the six
months ended June 30, 2017, Normalized FFO available for Common Stock and OP Unit holders increased $14.2
million, or $0.14 per Common Share, to $168.3 million, or $1.81 per Common Share, compared to $154.1 million, or
$1.67 per Common Share, for the same period in 2016.
For the quarter ended June 30, 2017, property operating revenues, excluding deferrals, increased $14.0 million
to $211.4 million compared to $197.4 million for the same period in 2016. For the six months ended June 30, 2017,
property operating revenues, excluding deferrals, increased $28.5 million to $433.4 million compared to $404.9 million
for the same period in 2016. For the quarter ended June 30, 2017, income from property operations, excluding deferrals
and property management, increased $6.6 million to $120.0 million compared to $113.4 million for the same period in
2016. For the six months ended June 30, 2017, income from property operations, excluding deferrals and property
management, increased $15.0 million to $255.7 million compared to $240.7 million for the same period in 2016.
ii
For the quarter ended June 30, 2017, Core property operating revenues, excluding deferrals, increased
approximately 5.5 percent and Core income from property operations, excluding deferrals and property management,
increased approximately 4.8 percent compared to the same period in 2016. For the six months ended June 30, 2017,
Core property operating revenues, excluding deferrals, increased approximately 4.9 percent and Core income from
property operations, excluding deferrals and property management, increased approximately 4.3 percent compared to
the same period in 2016.
Investment Activity
During the quarter, we completed the acquisition of Paradise Park Largo, a 108-site manufactured home
community located in Largo, Florida. The purchase price of approximately $8.0 million was funded with available cash,
loan assumption of $3.6 million, and new loan proceeds of $2.3 million.
During the quarter, we entered into a joint venture agreement to purchase Crosswinds Mobile Home Park, a
376-site manufactured home community located in St. Petersburg, Florida. Our ownership interest is 49% and the
purchase price of the Property was $18.4 million.
About Equity LifeStyle Properties
We are a self-administered, self-managed real estate investment trust (“REIT”) with headquarters in Chicago.
As of July 17, 2017, we own or have an interest in 393 quality properties in 32 states and British Columbia consisting of
147,107 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, July 18, 2017,
at 10:00 a.m. Central Time. Please visit the Investor Information section at www.equitylifestyleproperties.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
Third Quarter 2017 Monday, October 16, 2017 Tuesday, October 17, 2017 10:00 a.m. CT
Fourth Quarter 2017 Monday, January 29, 2018 Tuesday, January 30, 2018 10:00 a.m. CT
First Quarter 2018 Monday, April 23, 2018 Tuesday, April 24, 2018 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
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 2017 estimated net income, FFO and Normalized FFO;
• our ability to manage counterparty risk;
iii
• in the age-qualified properties, home sales results could be impacted by the ability of potential home buyers 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 or actions brought against us, including those disclosed in our filings
with the Securities and Exchange Commission; and
• other risks indicated from time to time in our filings with the Securities and Exchange Commission.
For further information on these and other factors that could impact us and the statements contained herein,
refer to our filings with the Securities and Exchange Commission, including “Risk Factors” in our most recent
Annual Report on Form 10-K and subsequent quarterly reports.
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.
2Q 2017 Supplemental information 1 Equity LifeStyle Properties, Inc.
Investor Information
Equity Research Coverage (1)
Robert W. Baird & Company Cantor Fitzgerald Green Street Advisors
Drew T. Babin Gaurav Mehta Ryan Burke/Ryan Lumb
215-553-7816 212-915-1221 949-640-8780
dbabin@rwbaird.com gmehta@cantor.com rburke@greenstreetadvisors.com
rlumb@greenstreetadvisors.com
Bank of America Merrill Lynch
Global Research Citi Research Wells Fargo Securities
Jeffrey Spector Michael Bilerman/ Nick Joseph Todd Stender
646-855-1363 212-816-1383 562-637-1371
jeff.spector@baml.com michael.bilerman@citi.com todd.stender@wellsfargo.com
nicholas.joseph@citi.com
BMO Capital Markets Evercore ISI
John Kim Steve Sakwa/ Gwen Clark
212-885-4170 212-446-5600
john.kim@bmo.com steve.sakwa@evercoreisi.com
gwen.clark@evercoreisi.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.
2Q 2017 Supplemental information 2 Equity LifeStyle Properties, Inc.
Financial Highlights
(In millions, except Common Stock and OP Units outstanding and per share data, unaudited)
As of and for the Three Months Ended
June 30,
2017
March 31,
2017
December 31,
2016
September 30,
2016
June 30,
2016
Operating Information
Total revenues ................................................................ $ 221.3 $ 232.4 $ 214.0 $ 226.2 $ 210.1
Net income..................................................................... $ 44.5 $ 63.1 $ 42.4 $ 46.8 $ 40.8
Net income available for Common Stockholders ................ $ 39.5 $ 56.9 $ 37.0 $ 41.0 $ 35.5
Adjusted EBITDA (1) ....................................................... $ 100.8 $ 118.9 $ 101.4 $ 103.4 $ 95.9
FFO available for Common Stock and OP Unit holders(1)(2) . $ 74.9 $ 93.1 $ 72.5 $ 76.9 $ 68.9
Normalized FFO available for Common Stock and OP
Unit holders(1)(2) .............................................................. $ 75.1
$ 93.2
$ 75.2
$ 77.2
$ 69.3
Funds available for distribution (FAD) available for
Common Stock and OP Unit holders(1)(2) ........................... $ 63.5
$ 86.0
$ 65.8
$ 67.2
$ 58.4
Common Stock Outstanding (In thousands)
and Per Share Data
Common Stock and OP Units, end of the period ................. 92,840 92,780 92,699 92,507 92,499
Weighted average Common Stock and OP Units
outstanding - fully diluted ................................................ 93,063
93,011
92,965
92,910
92,264
Net income per Common Share - fully diluted ................... $ 0.45 $ 0.65 $ 0.43 $ 0.48 $ 0.42
FFO per Common Share - fully diluted ............................. $ 0.81 $ 1.00 $ 0.78 $ 0.83 $ 0.75
Normalized FFO per Common Share - fully diluted ............ $ 0.81 $ 1.00 $ 0.81 $ 0.83 $ 0.75
Dividends per Common Share .......................................... $ 0.488 $ 0.488 $ 0.425 $ 0.425 $ 0.425
Balance Sheet
Total assets ..................................................................... $ 3,485 $ 3,471 $ 3,479 $ 3,470 $ 3,486
Total liabilities ................................................................ $ 2,386 $ 2,371 $ 2,397 $ 2,396 $ 2,420
Market Capitalization
Total debt ....................................................................... $ 2,072 $ 2,078 $ 2,110 $ 2,111 $ 2,134
Total market capitalization (3) ........................................... $ 10,224 $ 9,364 $ 8,930 $ 9,387 $ 9,675
Ratios
Total debt / total market capitalization ............................... 20.3 % 22.2 % 23.6 % 22.5 % 22.1 %
Total debt + preferred stock / total market capitalization ..... 21.6 % 23.6 % 25.2 % 23.9 % 23.5 %
Total debt / Adjusted EBITDA (4) ...................................... 4.9 5.0 5.1 5.2 5.3
Interest coverage (5) ......................................................... 4.3 4.2 4.1 4.1 4.0
Fixed charges + preferred distributions coverage (6) ............ 3.9 3.8 3.7 3.6 3.5
______________________
1. See Non-GAAP Financial Measure Definitions and Other Terms at the end of the supplemental information for definitions of Adjusted EBITDA, FFO,
Normalized FFO and FAD; and reconciliation of Consolidated net income to Adjusted EBITDA.
2. See page 7 for a reconciliation of Net income available for Common Stockholders to Non-GAAP financial measures FFO available for Common Stock and OP
Unit holders, Normalized FFO available for Common Stock and OP Unit holders and FAD available for Common Stock and OP Unit holders.
3. See page 16 for market capitalization calculation as of June 30, 2017.
4. Calculated using trailing twelve months Adjusted EBITDA. We believe trailing twelve months Adjusted EBITDA provides additional information for
determining our ability to meet future debt service requirements.
5. Interest coverage is calculated by dividing trailing twelve months Adjusted EBITDA by the interest expense incurred during the same period.
6. See Non-GAAP Financial Measure Definitions and Other Terms at the end of the supplemental information for a definition of fixed charges. This ratio is
calculated by dividing trailing twelve months Adjusted EBITDA by the sum of fixed charges and preferred stock dividends during the same period.
2Q 2017 Supplemental information 3 Equity LifeStyle Properties, Inc.
Balance Sheet
(In thousands, except share and per share data)
June 30,
2017 December 31,
2016 (unaudited)
Assets
Investment in real estate:
Land .......................................................................................................................................... $ 1,167,510 $ 1,163,987
Land improvements..................................................................................................................... 2,922,201 2,893,759
Buildings and other depreciable property ....................................................................................... 641,931 627,590
4,731,642 4,685,336
Accumulated depreciation ............................................................................................................ (1,459,931 ) (1,399,531 )
Net investment in real estate ........................................................................................................ 3,271,711 3,285,805
Cash .......................................................................................................................................... 67,740 56,340
Notes receivable, net ................................................................................................................... 48,253 34,520
Investment in unconsolidated joint ventures ................................................................................... 21,766 19,369
Deferred commission expense ...................................................................................................... 31,453 31,375
Escrow deposits, goodwill, and other assets, net (1) ......................................................................... 44,435 51,578
Total Assets ............................................................................................................................... $ 3,485,358 $ 3,478,987
Liabilities and Equity
Liabilities:
Mortgage notes payable ............................................................................................................... $ 1,855,028 $ 1,891,900
Term loan ................................................................................................................................... 199,483 199,379
Accrued expenses and accounts payable (1) .................................................................................... 93,451 89,864
Deferred revenue – upfront payments from right-to-use contracts .................................................... 83,580 81,484
Deferred revenue – right-to-use annual payments ........................................................................... 12,559 9,817
Accrued interest payable .............................................................................................................. 8,044 8,379
Rents and other customer payments received in advance and security deposits .................................. 88,543 76,906
Distributions payable................................................................................................................... 45,259 39,411
Total Liabilities ......................................................................................................................... 2,385,947 2,397,140
Equity:
Stockholders’ Equity:
Preferred stock, $0.01 par value, 9,945,539 shares authorized as of June 30, 2017 and
December 31, 2016; 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 June 30, 2017 and
December 31, 2016 at liquidation value 136,144
136,144
Common stock, $0.01 par value, 200,000,000 shares authorized as of June 30, 2017 and
December 31, 2016; 87,004,507 and 85,529,386 shares issued and outstanding as of June
30, 2017 and December 31, 2016, respectively 868
854
Paid-in capital ............................................................................................................................ 1,121,307 1,103,048
Distributions in excess of accumulated earnings ............................................................................. (219,641 ) (231,276 )
Accumulated other comprehensive income (loss) ........................................................................... 30 (227 )
Total Stockholders’ Equity ........................................................................................................... 1,038,708 1,008,543
Non-controlling interests – Common OP Units ............................................................................... 60,703 73,304
Total Equity .............................................................................................................................. 1,099,411 1,081,847
Total Liabilities and Equity ....................................................................................................... $ 3,485,358 $ 3,478,987
1. As of December 31, 2016, Escrow deposits, goodwill, and other assets, net includes insurance receivable of approximately $10.9 million, and Accrued
expenses and accounts payable includes approximately $13.3 million litigation settlement payable related to resolution of the California lawsuits. These
amounts were received and paid during the first quarter of 2017.
2Q 2017 Supplemental information 4 Equity LifeStyle Properties, Inc.
Consolidated Income Statement
(In thousands, unaudited)
Quarters Ended Six Months Ended
June 30, June 30,
2017 2016 2017 2016
Revenues:
Community base rental income ........................................................................ $ 121,964 $ 115,385 $ 242,656 $ 229,461
Rental home income ....................................................................................... 3,632 3,543 7,237 7,088
Resort base rental income ............................................................................... 50,055 44,732 111,123 100,166
Right-to-use annual payments .......................................................................... 11,350 11,187 22,602 22,241
Right-to-use contracts current period, gross ...................................................... 3,798 3,086 7,004 5,618
Right-to-use contract upfront payments, deferred, net ........................................ (1,321 ) (798 ) (2,096 ) (1,100 )
Utility and other income ................................................................................. 20,650 19,523 42,776 40,316
Gross revenues from home sales ...................................................................... 7,833 9,130 14,860 17,344
Brokered resale revenue and ancillary services revenues, net .............................. 444 398 2,105 1,816
Interest income .............................................................................................. 1,798 1,625 3,568 3,285
Income from other investments, net .................................................................. 1,109 2,270 1,866 3,993
Total revenues ............................................................................................ 221,312 210,081 453,701 430,228
Expenses:
Property operating and maintenance ................................................................. 72,901 66,647 140,955 129,601
Rental home operating and maintenance ........................................................... 1,657 1,581 3,208 3,106
Real estate taxes ............................................................................................. 13,943 12,869 27,980 26,067
Sales and marketing, gross .............................................................................. 2,894 2,931 5,584 5,424
Right-to-use contract commissions, deferred, net ............................................... (112 ) (116 ) (196 ) (12 )
Property management ..................................................................................... 13,023 12,044 25,583 23,807
Depreciation on real estate assets and rental homes ............................................ 30,247 29,029 60,357 57,684
Amortization of in-place leases ........................................................................ 958 428 1,990 763
Cost of home sales ......................................................................................... 7,895 9,481 15,014 17,762
Home selling expenses.................................................................................... 929 805 1,854 1,639
General and administrative .............................................................................. 8,461 8,255 15,834 15,663
Other expenses, including property rights initiatives .......................................... 271 527 490 1,181
Interest and related amortization ...................................................................... 24,822 25,561 49,701 51,195
Total expenses ............................................................................................ 177,889 170,042 348,354 333,880
Income before equity in income of unconsolidated joint ventures........................ 43,423 40,039 105,347 96,348
Equity in income of unconsolidated joint ventures ......................................... 1,040 765 2,190 1,646
Consolidated net income ................................................................................. 44,463 40,804 107,537 97,994
Income allocated to non-controlling interest-Common OP Units ......................... (2,649 ) (2,998 ) (6,539 ) (7,308 )
Series C Redeemable Perpetual Preferred Stock Dividends ................................. (2,316 ) (2,316 ) (4,613 ) (4,613 )
Net income available for Common Stockholders ............................................ $ 39,498 $ 35,490 $ 96,385 $ 86,073
2Q 2017 Supplemental information 5 Equity LifeStyle Properties, Inc.
Non-GAAP Financial Measures
2Q 2017 Supplemental information 6 Equity LifeStyle Properties, Inc.
Second Quarter 2017 - Selected Non-GAAP Financial Measures
(In millions, except per share data, unaudited)
Quarter Ended
June 30, 2017
Income from property operations, excluding deferrals and property management - 2017 Core (1) ..................................... $ 118.4
Income from property operations, excluding deferrals and property management - Acquisitions (2) .................................. 1.6
Property management and general and administrative (excluding transaction costs) ....................................................... (21.3 )
Other income and expenses ...................................................................................................................................... 3.5
Financing costs and other ......................................................................................................................................... (27.1 )
Normalized FFO available for Common Stock and OP Unit holders (3) .................................................................... 75.1
Transaction costs ..................................................................................................................................................... (0.2 )
FFO available for Common Stock and OP Unit holders (3) ....................................................................................... $ 74.9
Normalized FFO per Common Share - fully diluted .................................................................................................... $ 0.81
FFO per Common Share - fully diluted ...................................................................................................................... $ 0.81
Normalized FFO available for Common Stock and OP Unit holders (3) .................................................................... $ 75.1
Non-revenue producing improvements to real estate ................................................................................................... (11.6 )
FAD available for Common Stock and OP Unit holders (3) ....................................................................................... $ 63.5
Weighted average Common Stock and OP Units - fully diluted .................................................................................... 93.1
___________________
1. See Non-GAAP Financial Measure Definitions and Other Terms at the end of the supplemental information for definitions of Non-GAAP financial measures
Income from property operations, excluding deferrals and property management, and Core, and reconciliation of income from property operations, excluding
deferrals and property management to income before equity in income of unconsolidated joint ventures. See page 9 for details of the 2017 Core Income from
Property Operations, excluding deferrals and property management.
2. See Non-GAAP Financial Measure Definitions and Other Terms at the end of the supplemental information for a definition of Acquisition properties. See page
10 for details of the Income from Property Operations, excluding deferrals and property management for the Acquisitions.
3. See page 7 for a reconciliation of Net income available for Common Stockholders to Non-GAAP financial measures FFO available for Common Stock and OP
Unit holders, Normalized FFO available for Common Stock and OP Unit holders and FAD available for Common Stock and OP Unit holders. See definitions of
Non-GAAP financial measures of FFO, Normalized FFO and FAD and Non-revenue producing improvements in Non-GAAP Financial Measure Definitions
and Other Terms at the end of the supplemental information.
2Q 2017 Supplemental information 7 Equity LifeStyle Properties, Inc.
Reconciliation of Net Income to Non-GAAP Financial Measures
(In thousands, except per share data, unaudited)
Quarters Ended Six Months Ended
June 30, June 30,
2017 2016 2017 2016
Net income available for Common Stockholders .................................. $ 39,498 $ 35,490 $ 96,385 $ 86,073
Income allocated to Common OP Units ..................................................... 2,649 2,998 6,539 7,308
Right-to-use contract upfront payments, deferred, net (1) .............................. 1,321 798 2,096 1,100
Right-to-use contract commissions, deferred, net (2) .................................... (112 ) (116 ) (196 ) (12 )
Depreciation on real estate assets .............................................................. 27,608 26,362 55,061 52,370
Depreciation on rental homes ................................................................... 2,639 2,667 5,296 5,314
Amortization of in-place leases ................................................................. 958 428 1,990 763
Depreciation on unconsolidated joint ventures ............................................ 364 305 811 595
FFO available for Common Stock and OP Unit holders (3) ................... 74,925 68,932 167,982 153,511
Transaction costs (4) ................................................................................. 220 398 324 598
Normalized FFO available for Common Stock and OP Unit holders(3) .. 75,145 69,330 168,306 154,109
Non-revenue producing improvements to real estate ................................... (11,648 ) (10,980 ) (18,808 ) (18,317 )
FAD available for Common Stock and OP Unit holders (3) .................... $ 63,497 $ 58,350 $ 149,498 $ 135,792
Net income available per Common Share - Basic .................................... $ 0.46 $ 0.42 $ 1.12 $ 1.02
Net income available per Common Share - Fully Diluted ........................ $ 0.45 $ 0.42 $ 1.11 $ 1.01
FFO per Common Share & OP Units-Basic ............................................ $ 0.81 $ 0.75 $ 1.81 $ 1.68
FFO per Common Share & OP Units-Fully Diluted ................................ $ 0.81 $ 0.75 $ 1.81 $ 1.67
Normalized FFO per Common Share & OP Units-Basic ......................... $ 0.81 $ 0.76 $ 1.82 $ 1.68
Normalized FFO per Common Share & OP Units-Fully Diluted ............. $ 0.81 $ 0.75 $ 1.81 $ 1.67
Average Common Stock - Basic................................................................ 86,763 84,516 86,408 84,419
Average Common Stock and OP Units - Basic ........................................... 92,649 91,721 92,643 91,625
Average Common Stock and OP Units - Fully Diluted ................................ 93,063 92,264 93,041 92,163
_____________________________
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 2017, the customer life is estimated to be 40 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 Non-GAAP Financial Measure Definitions and Other Terms at the end of the supplemental information for Non-GAAP financial measure definitions of
FFO, Normalized FFO and FAD and for a definition of Non-revenue producing improvements.
4. Included in General and administrative on the Consolidated Income Statement on page 4.
2Q 2017 Supplemental information 8 Equity LifeStyle Properties, Inc.
Consolidated Income from Property Operations (1)
(In millions, except home site and occupancy figures, unaudited)
Quarters Ended Six Months Ended
June 30, June 30,
2017 2016 2017 2016
Community base rental income (2) .................................................................... $ 122.0 $ 115.4 $ 242.7 $ 229.5
Rental home income ....................................................................................... 3.6 3.5 7.2 7.1
Resort base rental income (3) ............................................................................ 50.1 44.8 111.1 100.2
Right-to-use annual payments .......................................................................... 11.3 11.2 22.6 22.2
Right-to-use contracts current period, gross ...................................................... 3.8 3.1 7.0 5.6
Utility and other income ................................................................................. 20.6 19.4 42.8 40.3
Property operating revenues ......................................................................... 211.4 197.4 433.4 404.9
Property operating, maintenance and real estate taxes ........................................ 86.8 79.5 168.9 155.7
Rental home operating and maintenance ........................................................... 1.7 1.6 3.2 3.1
Sales and marketing, gross .............................................................................. 2.9 2.9 5.6 5.4
Property operating expenses ........................................................................ 91.4 84.0 177.7 164.2
Income from property operations, excluding deferrals and property
management (1) $ 120.0
$ 113.4
$ 255.7
$ 240.7
Manufactured home site figures and occupancy averages:
Total sites ...................................................................................................... 71,043 70,409 71,017 70,262
Occupied sites ................................................................................................ 66,822 65,607 66,732 65,380
Occupancy %................................................................................................. 94.0 % 93.2 % 93.9 % 93.1 %
Monthly base rent per site ............................................................................... $ 608 $ 586 $ 606 $ 585
Resort base rental income:
Annual .......................................................................................................... $ 32.9 $ 30.4 $ 65.0 60.4
Seasonal ........................................................................................................ 4.9 4.1 23.4 20.3
Transient ....................................................................................................... 12.3 10.3 22.7 19.5
Total resort base rental income .................................................................... $ 50.1 $ 44.8 $ 111.1 $ 100.2
_________________________
1. See page 4 for the Consolidated Income Statement and see Non-GAAP Financial Measure Definitions and Other Terms at the end of the supplemental
information for Non-GAAP measure definitions 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.
2Q 2017 Supplemental information 9 Equity LifeStyle Properties, Inc.
2017 Core Income from Property Operations (1)
(In millions, except home site and occupancy figures, unaudited)
Quarters Ended Six Months Ended
June 30, % June 30, %
2017 2016 Change (2) 2017 2016 Change (2)
Community base rental income (3) ............................ $ 120.7 $ 115.2 4.8 % $ 240.3 $ 229.3 4.8 %
Rental home income ............................................... 3.6 3.5 2.5 % 7.2 7.1 2.1 %
Resort base rental income (4) .................................... 47.8 44.2 8.1 % 104.6 99.4 5.3 %
Right-to-use annual payments .................................. 11.3 11.2 1.5 % 22.6 22.2 1.6 %
Right-to-use contracts current period, gross .............. 3.8 3.1 23.1 % 7.0 5.6 24.7 %
Utility and other income ......................................... 20.3 19.5 4.4 % 42.0 40.2 4.4 %
Property operating revenues ................................. 207.5 196.7 5.5 % 423.7 403.8 4.9 %
Property operating, maintenance and real estate
taxes ..................................................................... 84.5
79.2
7.3 % 164.4
155.1
6.0 %
Rental home operating and maintenance ................... 1.7 1.6 4.8 % 3.2 3.1 3.3 %
Sales and marketing, gross ...................................... 2.9 2.9 (1.3 )% 5.6 5.4 2.9 %
Property operating expenses ................................ 89.1 83.7 6.5 % 173.2 163.7 5.9 %
Income from property operations, excluding
deferrals and property management (1) .................. $ 118.4
$ 113.0
4.8 % $ 250.5
$ 240.1
4.3 %
Occupied sites (5) ................................................... 65,981 65,406
Core manufactured home site figures and occupancy averages:
Total sites .............................................................. 69,987 69,984 69,979 69,985
Occupied sites ........................................................ 65,898 65,312 65,826 65,233
Occupancy %......................................................... 94.2 % 93.3 % 94.1 % 93.2 %
Monthly base rent per site ....................................... $ 611 $ 588 $ 608 $ 586
Resort base rental income:
Annual .................................................................. $ 31.9 $ 30.1 6.0 % $ 63.1 $ 60.0 5.3 %
Seasonal ................................................................ 4.5 4.0 13.7 % 20.9 20.1 3.8 %
Transient ............................................................... 11.4 10.1 12.3 % 20.6 19.3 6.7 %
Total resort base rental income ............................ $ 47.8 $ 44.2 8.1 % $ 104.6 $ 99.4 5.3 %
___________________________
1. See Non-GAAP Financial Measure Definitions and Other Terms at the end of the supplemental information for definitions of Non-GAAP measures 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 255 from 65,726 at December 31, 2016.
2Q 2017 Supplemental information 10 Equity LifeStyle Properties, Inc.
Acquisitions - Income from Property Operations (1)
(In millions, unaudited)
Quarter
Ended
Six Months
Ended
June 30,
2017
June 30,
2017
Community base rental income ........................................................................................................... $ 1.3 $ 2.4
Resort base rental income .................................................................................................................. 2.3 6.5
Utility income and other property income ............................................................................................ 0.3 0.8
Property operating revenues ............................................................................................................. 3.9 9.7
Property operating expenses ............................................................................................................. 2.3 4.5
Income from property operations, excluding deferrals and property management ............................ $ 1.6 $ 5.2
______________________
1. See Non-GAAP Financial Measure Definitions and Other Terms at the end of the supplemental information for a definition of Acquisitions.
2Q 2017 Supplemental information 11 Equity LifeStyle Properties, Inc.
Income from Rental Home Operations
(In millions, except occupied rentals, unaudited)
Quarters Ended Six Months Ended
June 30, June 30,
2017 2016 2017 2016
Manufactured homes:
New home ............................................................................... $ 7.0 $ 6.3 $ 13.6 $ 12.5
Used home .............................................................................. 5.5 6.3 11.3 12.7
Rental operations revenues (1) ................................................. 12.5 12.6 24.9 25.2
Rental operations expense ......................................................... 1.7 1.6 3.2 3.1
Income from rental operations ................................................ 10.8 11.0 21.7 22.1
Depreciation on rental homes .................................................... 2.6 2.7 5.3 5.3
Income from rental operations, net of depreciation(4) ............ $ 8.2 $ 8.3 $ 16.4 $ 16.8
Occupied rentals: (2)
New ........................................................................................ 2,517 2,267
Used ....................................................................................... 2,157 2,595
Total occupied rental sites .................................................... 4,674 4,862
As of
June 30, 2017 June 30, 2016
Cost basis in rental homes: (3) Gross
Net of
Depreciation Gross
Net of
Depreciation
New ........................................................................................ $ 129.9 $ 100.1 $ 120.7 $ 96.2
Used ....................................................................................... 48.2 18.5 54.7 30.4
Total rental homes .................................................................. $ 178.1 $ 118.6 $ 175.4 $ 126.6
__________________________
1. For the quarters ended June 30, 2017 and 2016, approximately $8.8 million and $9.0 million, respectively, of the rental operations revenue are included in the
Community base rental income in the Consolidated Income from Property Operations table on page 8. The remainder of the rental operations revenue is
included in the Rental home income in the Consolidated Income from Property Operations table on page 8.
2. Occupied rentals as of the end of the period in our Core portfolio. Included in the quarters ended June 30, 2017 and 2016 are 262 and 143 homes rented through
our ECHO joint venture, respectively. For the six months ended June 30, 2017 and 2016, the rental home investment associated with our ECHO joint venture
totals approximately $8.8 million and $5.4 million, respectively.
3. Includes both occupied and unoccupied rental homes. New home cost basis does not include the costs associated with our ECHO joint venture. At both June 30,
2017 and 2016, our investment in the ECHO joint venture was approximately $15.4 million.
4. See Non-GAAP Financial Measure Definitions and Other Terms at the end of the supplemental information for the Non-GAAP measure definition of Income
from rental operations, net of depreciation.
2Q 2017 Supplemental information 12 Equity LifeStyle Properties, Inc.
Total Sites and Home Sales
(In thousands, except sites and home sale volumes, unaudited)
Summary of Total Sites as of June 30, 2017
Sites
Community sites .......................................................................................................................................................... 71,100
Resort sites:
Annuals ................................................................................................................................................................... 26,600
Seasonal .................................................................................................................................................................. 11,200
Transient .................................................................................................................................................................. 10,500
Membership (1) ............................................................................................................................................................. 24,100
Joint Ventures (2)........................................................................................................................................................... 3,600
Total ........................................................................................................................................................................... 147,100
Home Sales - Select Data
Quarters Ended Six Months Ended
June 30, June 30,
2017 2016 2017 2016
Total New Home Sales Volume (3) ........................................................................ 120 180 240 301
New Home Sales Volume - ECHO joint venture ................................................. 41 63 78 97
New Home Sales Gross Revenues(3) ..................................................................... $ 4,548 $ 6,044 $ 9,491 $ 11,443
Total Used Home Sales Volume ........................................................................... 338 342 623 653
Used Home Sales Gross Revenues ....................................................................... $ 3,285 $ 3,086 $ 5,369 $ 5,901
Brokered Home Resales Volume .......................................................................... 252 217 420 403
Brokered Home Resale Revenues, net .................................................................. $ 346 $ 329 $ 588 $ 608
__________________________
1. Sites primarily utilized by approximately 107,500 members. Includes approximately 5,700 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 4.
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.
2Q 2017 Supplemental information 13 Equity LifeStyle Properties, Inc.
2017 Guidance - Selected Financial Data (1)
Our guidance acknowledges the existence of volatile economic conditions, which may impact our current guidance assumptions.
Factors impacting 2017 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; (ix) ongoing
legal matters and related fees; and (x) costs to restore property operations and potential revenue losses following storms or other
unplanned events.
(In millions, except per share data, unaudited)
Quarter Ended Year Ended
September 30, 2017 December 31, 2017
Income from property operations, excluding deferrals and property management - 2017
Core (2) ....................................................................................................................... $ 125.6
$ 499.1
Income from property operations - Acquisitions (3) .......................................................... 1.5 8.8
Property management and general and administrative ..................................................... (20.4 ) (81.0 )
Other income and expenses .......................................................................................... 3.8 13.8
Financing costs and other ............................................................................................. (27.2 ) (108.3 )
Normalized FFO available for Common Stock and OP Unit holders (4) ....................... 83.3 332.4
Transaction costs ......................................................................................................... — (0.3 )
FFO available for Common Stock and OP Unit holders (4) .......................................... 83.3 332.1
Depreciation on real estate and other ......................................................................... (28.2 ) (114.1 )
Depreciation on rental homes .................................................................................... (2.6 ) (10.6 )
Deferral of right-to-use contract sales revenue and commission, net .............................. (0.9 ) (3.4 )
Income allocated to non-controlling interest-Common OP Units ................................... (3.2 ) (12.8 )
Net income available for Common Stockholders ......................................................... $ 48.4 $ 191.2
Net income per Common Share - fully diluted (5) ............................................................ $0.52 - $0.58 $2.14 - $2.24
FFO per Common Share - fully diluted .......................................................................... $0.86 - $0.92 $3.52 - $3.62
Normalized FFO per Common Share - fully diluted ........................................................ $0.86 - $0.92 $3.52 - $3.62
Weighted average Common Stock outstanding - fully diluted ........................................... 93.1 93.1
_____________________________________
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 Stock and OP Unit holders, Normalized FFO per Common Share, FFO available for Common Stock and OP Unit holders, 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 is incorrect.
2. See page 14 for 2017 Core Guidance Assumptions. Amount represents 2016 income from property operations, excluding deferrals and property management,
from the 2017 Core properties of $118.2 million multiplied by an estimated growth rate of 6.3% and $476.1 million multiplied by an estimated growth rate of
4.8% for the quarter ended June 30, 2017 and the year ended December 31, 2017, respectively.
3. See page 14 for the 2017 Assumptions regarding the Acquisition properties.
4. See Non-GAAP Financial Measure Definitions and Other Terms at the end of the supplemental information 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.
2Q 2017 Supplemental information 14 Equity LifeStyle Properties, Inc.
2017 Core Guidance Assumptions (1)
(In millions, unaudited)
Quarter
Ended
Third
Quarter 2017 Year Ended 2017
September 30,
2016
Growth
Factors (2)
December 31,
2016
Growth
Factors (2)
Community base rental income ........................................................ $ 116.1 4.8 % $ 462.3 4.7 %
Rental home income ....................................................................... 3.5 5.1 % 14.1 3.0 %
Resort base rental income (3) ............................................................ 53.3 6.1 % 196.8 5.2 %
Right-to-use annual payments .......................................................... 11.3 0.8 % 45.0 0.8 %
Right-to-use contracts current period, gross ....................................... 3.7 (9.9 )% 12.3 5.5 %
Utility and other income .................................................................. 21.0 0.7 % 80.9 1.6 %
Property operating revenues ......................................................... 208.9 4.2 % 811.4 4.3 %
Property operating, maintenance, and real estate taxes ........................ 85.8 1.6 % 317.3 3.7 %
Rental home operating and maintenance ........................................... 1.8 (2.2 )% 6.9 (1.6 )%
Sales and marketing, gross .............................................................. 3.1 — % 11.1 2.1 %
Property operating expenses ......................................................... 90.7 1.5 % 335.3 3.5 %
Income from property operations, excluding deferrals and
property management
..................................................................................................... $ 118.2
6.3 % $ 476.1
4.8 %
Resort base rental income: ............................................................
Annual .......................................................................................... $ 30.9 5.6 % $ 122.3 5.3 %
Seasonal ........................................................................................ 3.8 10.0 % 30.2 4.4 %
Transient ....................................................................................... 18.6 6.0 % 44.3 5.5 %
Total resort base rental income ..................................................... $ 53.3 6.1 % $ 196.8 5.2 %
2017 Assumptions Regarding Acquisition Properties (1)
(In millions, unaudited)
Quarter Ended Year Ended
September 30,
2017 (4)
December 31,
2017 (4)
Community base rental income .............................................................................................. $ 1.4 $ 5.1
Resort base rental income ..................................................................................................... 2.2 11.4
Utility income and other property income ............................................................................... 0.3 1.5
Property operating revenues ................................................................................................ 3.9 18.0
Property operating, maintenance, and real estate taxes ............................................................. 2.4 9.2
Property operating expenses ................................................................................................
Income from property operations, excluding deferrals and property management ............... $ 1.5 $ 8.8
_____________________________________
1. See Non-GAAP Financial Measure Definitions and Other Terms at the end of the supplemental information for a definition of Core and Acquisition
properties.
2. Management’s estimate of the growth of property operations in the 2017 Core Properties compared to actual 2016 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 is 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 is incorrect.
2Q 2017 Supplemental information 15 Equity LifeStyle Properties, Inc.
Right-To-Use Memberships - Select Data
(In thousands, except member count, number of Thousand Trails Camping Pass, number of annuals and number of upgrades, unaudited)
Year Ended December 31,
2013 2014 2015 2016 2017 (1)
Member Count (2) ................................................................................ 98,277 96,130 102,413 104,728 106,500
Thousand Trails Camping Pass (TTC) Origination (3) .............................. 15,607 18,187 25,544 29,576 31,000
TTC Sales ....................................................................................... 9,289 10,014 11,877 12,856 13,400
RV Dealer TTC Activations ............................................................... 6,318 8,173 13,667 16,720 17,600
Number of annuals (4) ........................................................................... 4,830 5,142 5,470 5,756 5,900
Number of upgrade sales (5) .................................................................. 2,999 2,978 2,687 2,477 2,600
Right-to-use annual payments (6) ........................................................... $ 47,967 $ 44,860 $ 44,441 $ 45,036 $ 45,400
Resort base rental income from annuals ................................................. $ 11,148 $ 12,491 $ 13,821 $ 15,413 $ 16,800
Resort base rental income from seasonals/transients ................................ $ 12,692 $ 13,894 $ 15,795 $ 17,344 $ 18,000
Upgrade contract initiations (7) .............................................................. $ 13,815 $ 13,892 $ 12,783 $ 12,312 $ 13,000
Utility and other income ....................................................................... $ 2,293 $ 2,455 $ 2,430 $ 2,442 $ 2,400
________________________________
1. Guidance estimate. Each line item represents our estimate of the mid-point of a possible range of outcomes and reflects management’s best estimate of the most
likely outcome. Actual figures could vary materially from amounts presented above if any of our assumptions is incorrect.
2. Members have entered into right-to-use contracts with us that entitle them to use certain properties on a continuous basis for up to 21 days.
3. 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 year ended December 31, 2013 includes $2.1 million 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 4.
2Q 2017 Supplemental information 16 Equity LifeStyle Properties, Inc.
Market Capitalization
(In millions, except share and OP Unit data, unaudited)
Capital Structure as of June 30, 2017
Total
Common
Stock/Units
% of Total
Common
Stock/Units Total % of Total
% of Total
Market
Capitalization
Secured Debt $ 1,872 90.3 %
Unsecured Debt 200 9.7 %
Total Debt (1) $ 2,072 100.0 % 20.3 %
Common Stock 87,004,507 93.7 %
OP Units 5,835,253 6.3 %
Total Common Stock and OP Units 92,839,760 100.0 %
Common Stock price at June 30, 2017 $ 86.34
Fair Value of Common Stock and OP Units $ 8,016 98.3 %
Perpetual Preferred Stock 136 1.7 %
Total Equity $ 8,152 100.0 % 79.7 %
Total Market Capitalization $ 10,224 100.0 %
Perpetual Preferred Stock as of June 30, 2017
Series
Callable
Date
Outstanding
Stock
Liquidation
Value
Annual
Dividend Per
Share
Annual
Dividend
Value
6.75% Series C 9/7/2017 54,458 $ 136 $ 168.8 $ 9.2
_________________
1. Excludes deferred financing costs of approximately $17.8 million.
2Q 2017 Supplemental information 17 Equity LifeStyle Properties, Inc.
Debt Maturity Schedule
Debt Maturity Schedule as of June 30, 2017
(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
2017 6,876 6.47 % — — 6,876 0.33 % 6.47 %
2018 203,463 5.95 % — — 203,463 9.84 % 5.95 %
2019 199,211 6.27 % — — 199,211 9.63 % 6.27 %
2020 120,700 6.14 % 200,000 2.39 % 320,700 15.51 % 3.80 %
2021 188,724 5.01 % — — 188,724 9.13 % 5.01 %
2022 148,368 4.59 % — — 148,368 7.17 % 4.59 %
2023 109,992 5.11 % — — 109,992 5.32 % 5.11 %
2024 — — % — — — — % — %
2025 106,690 3.45 % — — 106,690 5.16 % 3.45 %
2026 — — % — — — — % — %
Thereafter 783,993 4.27 % — — 783,993 37.91 % 4.27 %
Total $ 1,868,017 4.90 % $ 200,000 2.39 % $ 2,068,017 100.0 % 4.65 %
Note Premiums 4,298 — 4,298
Total Debt 1,872,315
200,000
2,072,315
Deferred Financing Costs (17,287 ) (517 ) (17,804 )
Total Debt, net 1,855,028 4.92 % (1) 199,483 2.52 % $ 2,054,511 4.69 % (1)
Average Years to Maturity 10.8 2.6 10.0
______________________
1. Reflects effective interest rate including amortization of note premiums and amortization of deferred loan cost for secured and total debt and stated
interest rate for unsecured debt.
2Q 2017 Supplemental information 18 Equity LifeStyle Properties, Inc.
Non-GAAP Financial Measures Definitions and Other Terms
This document contains certain Non-GAAP measures used by management that we believe are helpful in understanding our
business, as further discussed in the paragraphs below. We believe investors should review these Non-GAAP measures along with
GAAP net income and cash flow from operating activities, investing activities and financing activities, when evaluating an equity
REIT’s operating performance. Our definitions and calculations of these Non-GAAP financial and operating measures and other
terms may differ from the definitions and methodologies used by other REITs and, accordingly, may not be comparable. These Non-
GAAP financial and operating measures 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.
FUNDS FROM OPERATIONS (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 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. 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 the Board of Governors of NAREIT, is generally a 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 FUNDS FROM OPERATIONS (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. 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.
FUNDS AVAILABLE FOR DISTRIBUTION (FAD). We define FAD as Normalized FFO less non-revenue producing capital
expenditures.
We believe that FFO, Normalized FFO and FAD 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 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.
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 operating 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 measure of the operating results of our manufactured home and RV
communities.
2Q 2017 Supplemental information 19 Equity LifeStyle Properties, Inc.
The following table reconciles Net income available for Common Stockholders to Income from property operations (amounts in
thousands):
Quarters Ended Six Months Ended
June 30, June 30,
2017 2016 2017 2016
Net income available for Common Stockholders ............................................. $ 39,498 $ 35,490 $ 96,385 $ 86,073
Series C Redeemable Perpetual Preferred Stock Dividends ............................... 2,316 2,316 4,613 4,613
Income allocated to non-controlling interests - Common OP Units ..................... 2,649 2,998 6,539 7,308
Equity in income of unconsolidated joint ventures ............................................ (1,040 ) (765 ) (2,190 ) (1,646 )
Income before equity in income of unconsolidated joint ventures ...................... $ 43,423 $ 40,039 $ 105,347 $ 96,348
Right-to-use upfront payments, deferred, net ................................................... 1,321 798 2,096 1,100
Gross revenues from home sales ..................................................................... (7,833 ) (9,130 ) (14,860 ) (17,344 )
Brokered resale revenues and ancillary services revenues, net ........................... (444 ) (398 ) (2,105 ) (1,816 )
Interest income ............................................................................................. (1,798 ) (1,625 ) (3,568 ) (3,285 )
Income from other investments, net ................................................................ (1,109 ) (2,270 ) (1,866 ) (3,993 )
Right-to-use contract commissions, deferred, net ............................................. (112 ) (116 ) (196 ) (12 )
Property management .................................................................................... 13,023 12,044 25,583 23,807
Depreciation on real estate and rental homes .................................................... 30,247 29,029 60,357 57,684
Amortization of in-place leases ...................................................................... 958 428 1,990 763
Cost of homes sales ....................................................................................... 7,895 9,481 15,014 17,762
Home selling expenses .................................................................................. 929 805 1,854 1,639
General and administrative ............................................................................ 8,461 8,255 15,834 15,663
Property rights initiatives and other................................................................. 271 527 490 1,181
Interest and related amortization ..................................................................... 24,822 25,561 49,701 51,195
Income from property operations, excluding deferrals and property
management ................................................................................................ 120,054
113,428
255,671
240,692
Right-to-use contracts, deferred and sales and marketing, deferred, net ............... (1,209 ) (682 ) (1,900 ) (1,088 )
Property management .................................................................................... (13,023 ) (12,044 ) (25,583 ) (23,807 )
Income from property operations ................................................................... $ 105,822 $ 100,702 $ 228,188 $ 215,797
EARNINGS BEFORE INTEREST, TAX, DEPRECIATION AND AMORTIZATION (EBITDA) AND ADJUSTED EBITDA.
EBITDA is defined as net income or loss before interest income and expense, income taxes, depreciation and amortization. We
define Adjusted 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) GAAP deferral of right-to-use contract
upfront payments and related commissions, net; e) impairments, if any; and f) other miscellaneous non-comparable items. EBITDA
and Adjusted EBITDA provide us with an understanding of one aspect of earnings before the impact of investing and financing
charges. We believe that EBITDA and Adjusted EBITDA may be useful to an investor in evaluating our operating performance and
liquidity because the measures are widely used to measure a company’s operating performance and they are used by rating agencies
and other parties, including lenders, to evaluate our creditworthiness.
The following table reconciles Consolidated net income to EBITDA and Adjusted EBITDA (amounts in thousands):
Quarters Ended Six Months Ended
June 30, June 30,
2017 2016 2017 2016
Consolidated net income ................................................................................. $ 44,463 $ 40,804 $ 107,537 $ 97,994
Interest Income ............................................................................................. (1,798 ) (1,625 ) (3,568 ) (3,285 )
Depreciation on real estate assets and rental homes ........................................... 30,247 29,029 60,357 57,684
Amortization of in-place leases ....................................................................... 958 428 1,990 763
Depreciation on corporate assets ..................................................................... 314 279 603 558
Depreciation on unconsolidated joint ventures .................................................. 364 305 811 595
Interest and related amortization ..................................................................... 24,822 25,561 49,701 51,195
EBITDA ....................................................................................................... 99,370 94,781 217,431 205,504
Right-to-use contract upfront payments, deferred, net ........................................ 1,321 798 2,096 1,100
Right-to-use contract commissions, deferred, net .............................................. (112 ) (116 ) (196 ) (12 )
Transaction costs ........................................................................................... 220 398 324 598
Adjusted EBITDA ......................................................................................... $ 100,799 $ 95,861 $ 219,655 $ 207,190
2Q 2017 Supplemental information 20 Equity LifeStyle Properties, Inc.
CORE. The Core properties include properties we owned and operated during all of 2016 and 2017. We believe Core is a measure
that is useful to investors for annual comparison as it removes the fluctuations associated with acquisitions, dispositions and
significant transactions or unique situations.
ACQUISITIONS. The Acquisition properties include all properties that were not owned and operated in 2016 and 2017. This
includes, but is not limited to, one property acquired during 2017, four properties acquired during 2016, and Tropical Palms RV
Resort.
INCOME FROM RENTAL OPERATIONS, NET OF DEPRECIATION. We use Income from rental operations, net of
depreciation as an alternative measure to evaluate the operating results of our home rental program. Income from rental operations,
net of depreciation, represents income from rental operations less depreciation expense on rental homes. We believe this
measure is meaningful for investors as it provides a complete picture of the home rental program operating results including the
impact of depreciation which affects our home rental program investment decisions.
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.