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

FORM 8-K

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

Date of Report (Date of earliest event reported): October 22, 2018


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





 





Item 2.02    Results of Operations and Financial Condition

On October 22, 2018, Equity LifeStyle Properties, Inc. (referred to herein as “we,” “us,” and “our”) issued a news release announcing our results of operations for the three and nine months ended September 30, 2018.

The news release also contains detailed guidance assumptions on our projections for the year ending December 31, 2018 and preliminary projections for the year ending December 31, 2019. We project our Net income per Common Share (fully diluted) for the three months and the year ending December 31, 2018 to be between $0.54 and $0.60 and $2.37 and $2.43, respectively. We preliminarily project our Net income per Common Share (fully diluted) for the year ending December 31, 2019 to be between $2.55 and $2.65.

We also project our Funds from Operations (“FFO”) per Common Share (fully diluted) for the three months and year ending December 31, 2018 to be between $0.93 and $0.99 and $3.90 and $3.96, respectively. We project our Normalized Funds from Operations (“Normalized FFO”) per Common Share (fully diluted) for the three months and year ending December 31, 2018 to be between $0.94 and $1.00 and $3.85 and $3.91, respectively. We preliminarily project our FFO and Normalized FFO per Common Share (fully diluted) for the year ending December 31, 2019 to be between $4.07 and $4.17, respectively.

The projected 2018 and 2019 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 is 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 October 22, 2018.

Item 7.01 Regulation FD Disclosure

Our annualized dividend for 2018 is $2.20 per Common Share. At the next quarterly Board of Directors meeting, our management intends to recommend that we increase our annual dividend by $0.25 per Common Share for 2019 for a total dividend of $2.45 per Common Share. Our Board of Directors has the sole discretion to approve an increase of the dividend and therefore there can be no assurance that this increase will be approved.

In accordance with General Instruction B.2. of Form 8-K, the information included in Items 2.02, 7.01 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 and real estate market conditions, our ability to retain 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 2018 and 2019, including estimated net income, FFO and Normalized FFO;
our ability to manage counterparty risk;
our ability to renew our insurance policies at existing rates and on consistent terms;
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 changes in accounting for Leases set forth under the Codification Topic "Leases";
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 411 quality properties in 32 states and British Columbia consisting of 153,847 sites. We are a self-administered, self-managed, real estate investment trust with headquarters in Chicago.

Item 9.01    Financial Statements and Exhibits

(d) Exhibits

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

99.1 Equity LifeStyle Properties, Inc. press release dated October 22, 2018, “ELS Reports Third 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: October 23, 2018



Exhibit
N E W S R E L E A S E
http://api.tenkwizard.com/cgi/image?quest=1&rid=23&ipage=12507730&doc=3                
CONTACT: Paul Seavey                             FOR IMMEDIATE RELEASE
(800) 247-5279                          October 22, 2018

                                                        
ELS REPORTS THIRD QUARTER RESULTS
Continued Strong Performance; Preliminary 2019 Guidance
CHICAGO, IL – October 22, 2018 Equity LifeStyle Properties, Inc. (NYSE: ELS) (referred to herein as “we,” “us,” and “our”) today announced results for the quarter and nine months ended September 30, 2018. All per share results are reported on a fully diluted basis unless otherwise noted.
Financial Results for the Quarter and Nine Months Ended September 30, 2018     
For the quarter ended September 30, 2018, total revenues increased $15.1 million, or 6.2 percent, to $256.7 million compared to $241.6 million for the same period in 2017. Net income available for Common Stockholders for the quarter ended September 30, 2018 increased $7.6 million, or $0.07 per Common Share, to $56.1 million, or $0.63 per Common Share, compared to $48.5 million, or $0.56 per Common Share, for the same period in 2017.
For the nine months ended September 30, 2018, total revenues increased $47.9 million, or 6.9 percent, to $743.2 million compared to $695.3 million for the same period in 2017. Net income available for Common Stockholders for the nine months ended September 30, 2018 increased $17.5 million or $0.16 per Common Share, to $162.4 million, or $1.82 per Common Share, compared to $144.9 million or $1.66 per Common Share, for the same period in 2017.
Non-GAAP Financial Measures and Portfolio Performance
For the quarter ended September 30, 2018, Funds from Operations (“FFO”) available for Common Stock and OP Unit holders increased $13.4 million, or $0.13 per Common Share, to $97.7 million or $1.03 per Common Share, compared to $84.3 million, or $0.90 per Common Share, for the same period in 2017. For the nine months ended September 30, 2018, FFO available for Common Stock and OP Unit holders increased $29.2 million, or $0.26 per Common Share, to $281.5 million or $2.97 per Common Share, compared to $252.3 million or $2.71 per Common Share, for the same period in 2017.
For the quarter ended September 30, 2018, Normalized Funds from Operations (“Normalized FFO”) available for Common Stock and OP Unit holders increased $8.8 million, or $0.08 per Common Share, to $93.9 million, or $0.99 per Common Share, compared to $85.1 million, or $0.91 per Common Share, for the same period in 2017. For the nine months ended September 30, 2018, Normalized FFO available for Common Stock and OP Unit holders increased $22.2 million or $0.19 per Common Share, to $275.6 million, or $2.91 per Common Share, compared to $253.4 million or $2.72 per Common Share, for the same period in 2017.
For the quarter ended September 30, 2018, property operating revenues, excluding deferrals, increased $14.3 million to $241.6 million compared to $227.3 million for the same period in 2017. For the nine months ended September 30, 2018, property operating revenues, excluding deferrals, increased $43.2 million to $703.9 million compared to $660.7 million for the same period in 2017. For the quarter ended September 30, 2018, income from property operations, excluding deferrals and property management, increased $10.3 million to $138.4 million compared to $128.1 million for the same period in 2017. For the nine months ended September 30, 2018, income from property operations, excluding deferrals and property management, increased $25.1 million to $408.9 million compared to $383.8 million for the same period in 2017.
For the quarter ended September 30, 2018, Core property operating revenues, excluding deferrals, increased approximately 3.5 percent and Core income from property operations, excluding deferrals and property management, increased approximately 4.8 percent compared to the same period in 2017. For the nine months ended September 30,

 
i 
 



2018, Core property operating revenues, excluding deferrals, increased approximately 4.9 percent and Core income from property operations, excluding deferrals and property management, increased approximately 4.8 percent compared to the same period in 2017.
Balance Sheet Activity
During the quarter, we sold 861,141 shares of common stock as part of our ATM equity offering program at a weighted average price per share of $91.45, resulting in net cash proceeds of approximately $77.7 million.
Subsequent to the quarter, we paid off six mortgage loans of $66.3 million, including $0.1 million of prepayment penalties, using our line of credit. The loans had a weighted average interest rate of 6.07% per annum and were secured by six MH properties.
About Equity LifeStyle Properties    
We are a self-administered, self-managed real estate investment trust (“REIT”) with headquarters in Chicago. As of October 22, 2018, we own or have an interest in 411 quality properties in 32 states and British Columbia consisting of 153,847 sites.
For additional information, please contact our Investor Relations Department at (800) 247-5279 or at investor_relations@equitylifestyle.com.
Conference Call    
A live webcast of our conference call discussing these results will take place tomorrow, Tuesday, October 23, 2018, 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
Fourth Quarter 2018
 
Monday, January 28, 2019
 
Tuesday, January 29, 2019 10:00 a.m. CT
First Quarter 2019
 
Monday, April 22, 2019
 
Tuesday, April 23, 2019 10:00 a.m. CT
Second Quarter 2019
 
Monday, July 22, 2019
 
Tuesday, July 23, 2019 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 and real estate market conditions, our ability to retain 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 2018 and 2019, including estimated net income, FFO and Normalized FFO;
our ability to manage counterparty risk;
our ability to renew our insurance policies at existing rates and on consistent terms;

 
ii 
 



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 changes in accounting for Leases set forth under the Codification Topic "Leases";
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.

 
iii 
 



Investor Information



Equity Research Coverage (1)
Bank of America Merrill Lynch Global Research
BMO Capital Markets
Citi Research
Jeffrey Spector/ Joshua Dennerlein
John Kim
Michael Bilerman/ Nick Joseph
646-855-1363
212-885-4115
212-816-1383
jeff.spector@baml.com
johnp.kim@bmo.com
michael.bilerman@citi.com
joshua.dennerlein@baml.com
 
nicholas.joseph@citi.com
 
 
 
Evercore ISI
Green Street Advisors
Robert W. Baird & Company
Steve Sakwa/ Samir Khanal
John Pawlowski/ Ryan Lumb
Drew T. Babin
212-466-5600
949-640-8780
215-553-7816
steve.sakwa@evercoreisi.com
jpawlowski@greenst.com
dbabin@rwbaird.com
samir.khanal@evercoreisi.com
rlumb@greenstreetadvisors.com
 
 
 
 
Wells Fargo Securities
 
 
Todd Stender
 
 
562-637-1371
 
 
todd.stender@wellsfargo.com
 
 
 
 
 
 
 
 

























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

3Q 2018 Supplemental information
1 
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
 
Sept 30, 2018
June 30, 2018
March 31, 2018
Dec 31, 2017
Sept 30, 2017
Operating Information
 
 
 
 
 
Total revenues
$
256.7

$
240.5

$
246.0

$
230.0

$
241.6

Net income
$
59.7

$
49.2

$
64.2

$
48.0

$
54.9

Net income available for Common Stockholders
$
56.1

$
46.1

$
60.2

$
45.0

$
48.5

Adjusted EBITDA (1)
$
118.9

$
108.6

$
122.0

$
106.7

$
111.5

FFO available for Common Stock and OP Unit holders (1)(2)
$
97.7

$
85.6

$
98.2

$
79.4

$
84.3

Normalized FFO available for Common Stock and OP Unit holders (1)(2)
$
93.9

$
83.8

$
97.9

$
82.6

$
85.1

Funds available for distribution ("FAD") available for Common Stock and OP Unit holders (1)(2)
$
82.1

$
71.4

$
89.1

$
72.6

$
74.0

 
 
 
 
 
 
Common Stock Outstanding (In thousands)
 and Per Share Data
 
 
 
 
 
Common Stock and OP Units, end of the period
95,493

94,623

94,565

94,420

93,334

Weighted average Common Stock and OP Units outstanding - Fully Diluted
95,263

94,623

94,577

94,295

93,324

Net income per Common Share - Fully Diluted (3)
$
0.63

$
0.52

$
0.68

$
0.51

$
0.56

FFO per Common Share and OP Unit - Fully Diluted
$
1.03

$
0.90

$
1.04

$
0.84

$
0.90

Normalized FFO per Common Share and OP Unit - Fully Diluted
$
0.99

$
0.89

$
1.04

$
0.88

$
0.91

Dividends per Common Share
$
0.550

$
0.550

$
0.550

$
0.488

$
0.488

 
 
 
 
 
 
Balance Sheet
 
 
 
 
 
Total assets
$
3,855

$
3,700

$
3,690

$
3,610

$
3,526

Total liabilities 
$
2,665

$
2,598

$
2,589

$
2,510

$
2,511

 
 
 
 
 
 
Market Capitalization
 
 
 
 
 
Total debt (4)
$
2,318

$
2,251

$
2,264

$
2,224

$
2,200

Total market capitalization (5)
$
11,528

$
10,947

$
10,564

$
10,629

$
10,141

 
 
 
 
 
 
Ratios
 
 
 
 
 
Total debt / total market capitalization
20.1
%
20.6
%
21.4
%
20.9
%
21.7
%
Total debt + preferred stock / total market capitalization
20.1
%
20.6
%
21.4
%
20.9
%
21.7
%
Total debt / Adjusted EBITDA (6)
5.1

5.0

5.1

5.1

5.1

Interest coverage (7)
4.4

4.4

4.4

4.4

4.4

Fixed charges + preferred distributions coverage (8)
4.4

4.3

4.2

4.1

4.0


______________________
1.
See Non-GAAP Financial Measures Definitions and Other Terms at the end of the supplemental information for definitions of Adjusted EBITDA, FFO, Normalized FFO and FAD and a 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.
Net income per fully diluted Common Share is calculated before Income allocated to non-controlling interest- Common OP Units.
4.
Excludes deferred financing costs of approximately $23.6 million.
5.
See page 18 for market capitalization as of September 30, 2018.
6.
Calculated using trailing twelve months Adjusted EBITDA.
7.
Interest coverage is calculated by dividing trailing twelve months Adjusted EBITDA by the interest expense incurred during the same period.
8.
See Non-GAAP Financial Measures 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.

3Q 2018 Supplemental information
2 
Equity LifeStyle Properties, Inc.



Consolidated Balance Sheets

(In thousands, except share and per share data)

 
September 30, 2018
 
December 31, 2017
 
(unaudited)
 
 
Assets
 
 
 
Investment in real estate:
 
 
 
Land
$
1,342,925

 
$
1,221,375

Land improvements
3,114,815

 
3,045,221

Buildings and other depreciable property
708,600

 
649,217

 
5,166,340

 
4,915,813

Accumulated depreciation
(1,613,158
)
 
(1,516,694
)
Net investment in real estate
3,553,182

 
3,399,119

Cash and restricted cash
112,410

 
31,085

Notes receivable, net
35,889

 
49,477

Investment in unconsolidated joint ventures
57,366

 
53,080

Deferred commission expense
40,352

 
31,443

Escrow deposits, goodwill, and other assets, net
55,838

 
45,828

Total Assets
$
3,855,037

 
$
3,610,032

Liabilities and Equity
 
 
 
Liabilities:
 
 
 
Mortgage notes payable
$
2,016,257

 
$
1,971,715

Term loan
198,545

 
198,302

Unsecured line of credit
80,000

 
30,000

Accrued expenses and accounts payable
102,620

 
80,744

Deferred revenue – upfront payments from right-to-use contracts
115,172

 
85,596

Deferred revenue – right-to-use annual payments
11,025

 
9,932

Accrued interest payable
8,369

 
8,387

Rents and other customer payments received in advance and security deposits
80,011

 
79,267

Distributions payable
52,521

 
46,047

Total Liabilities
2,664,520

 
2,509,990

Equity:
 
 
 
Stockholders’ Equity:
 
 
 
Preferred stock, $0.01 par value, 10,000,000 shares authorized as of September 30, 2018 and December 31, 2017; none issued and outstanding.

 

Common stock, $0.01 par value, 200,000,000 shares authorized as of September 30, 2018 and December 31, 2017; 89,746,747 and 88,585,160 shares issued and outstanding as of September 30, 2018 and December 31, 2017, respectively.
895

 
883

Paid-in capital
1,325,648

 
1,242,109

Distributions in excess of accumulated earnings
(211,743
)
 
(211,980
)
Accumulated other comprehensive income
3,959

 
942

Total Stockholders’ Equity
1,118,759

 
1,031,954

Non-controlling interests – Common OP Units
71,758

 
68,088

Total Equity
1,190,517

 
1,100,042

Total Liabilities and Equity
$
3,855,037

 
$
3,610,032




3Q 2018 Supplemental information
3 
Equity LifeStyle Properties, Inc.



Consolidated Income Statements

(In thousands, unaudited)

 
Quarters Ended September 30,

Nine Months Ended September 30,
 
2018
 
2017
 
2018
 
2017
Revenues:
 
 
 
 
 
 
 
Community base rental income
$
130,746

 
$
123,177

 
$
386,064

 
$
365,833

Rental home income
3,507

 
3,592

 
10,583

 
10,829

Resort base rental income
64,351

 
58,471

 
183,836

 
169,594

Right-to-use annual payments
12,206

 
11,531

 
35,616

 
34,133

Right-to-use contracts current period, gross
4,863

 
4,208

 
11,969

 
11,212

Right-to-use contract upfront payments, deferred, net
(2,883
)
 
(1,670
)
 
(6,189
)
 
(3,766
)
Utility and other income
25,917

 
26,295

 
75,758

 
69,071

Gross revenues from home sales
9,339

 
10,012

 
26,753

 
24,872

Brokered resale and ancillary services revenues, net
1,362

 
1,983

 
3,380

 
4,088

Interest income
1,846

 
1,974

 
5,658

 
5,542

Income from other investments, net
5,421

 
2,052

 
9,774

 
3,918

    Total revenues
256,675

 
241,625

 
743,202

 
695,326

 
 
 
 
 
 
 
 
Expenses:
 
 
 
 
 
 
 
Property operating and maintenance
84,445

 
80,164

 
239,444

 
221,119

Rental home operating and maintenance
1,904

 
1,704

 
4,957

 
4,912

Real estate taxes
13,240

 
14,006

 
40,815

 
41,986

Sales and marketing, gross
3,568

 
3,277

 
9,685

 
8,861

Right-to-use contract commissions, deferred, net
(458
)
 
(176
)
 
(744
)
 
(372
)
Property management
13,589

 
13,160

 
40,742

 
38,743

Depreciation on real estate assets and rental homes
32,856

 
30,493

 
96,630

 
90,849

Amortization of in-place leases
2,124

 
138

 
5,069

 
2,128

Cost of home sales
9,742

 
10,377

 
27,948

 
25,391

Home selling expenses
1,101

 
1,447

 
3,149

 
3,301

General and administrative
8,816

 
7,505

 
26,523

 
23,339

Other expenses
386

 
324

 
1,096

 
814

Interest and related amortization
26,490

 
25,027

 
78,478

 
74,728

    Total expenses
197,803

 
187,446

 
573,792

 
535,799

Income before equity in income of unconsolidated joint ventures
58,872

 
54,179

 
169,410

 
159,527

Equity in income of unconsolidated joint ventures
788


686


3,596


2,876

Consolidated net income
59,660

 
54,865

 
173,006

 
162,403

 
 
 
 
 
 
 
 
Income allocated to non-controlling interest-Common OP Units
(3,590
)
 
(3,286
)
 
(10,569
)
 
(9,825
)
Redeemable perpetual preferred stock dividends and original issuance costs


(3,054
)

(8
)

(7,667
)
Net income available for Common Stockholders
$
56,070


$
48,525


$
162,429


$
144,911







3Q 2018 Supplemental information
4 
Equity LifeStyle Properties, Inc.



























Non-GAAP Financial Measures





3Q 2018 Supplemental information
5 
Equity LifeStyle Properties, Inc.



Selected Non-GAAP Financial Measures

(In millions, except per share data, unaudited)

 
Quarter Ended
 
September 30, 2018
Income from property operations, excluding deferrals and property management - 2018 Core (1)
$
133.3

Income from property operations, excluding deferrals and property management - Non-Core (1)
5.1

Property management and general and administrative
(22.4
)
Other income and expenses
4.4

Interest and related amortization
(26.5
)
Normalized FFO available for Common Stock and OP Unit holders (2)
93.9

Insurance proceeds due to catastrophic weather event (3)
3.8

FFO available for Common Stock and OP Unit holders (2)
$
97.7

 
 
Normalized FFO per Common Share and OP Unit - Fully Diluted
$
0.99

FFO per Common Share and OP Unit - Fully Diluted
$
1.03

 
 
 
 
Normalized FFO available for Common Stock and OP Unit holders (2)
$
93.9

Non-revenue producing improvements to real estate (2)
(11.8
)
FAD available for Common Stock and OP Unit holders (2)
$
82.1

 
 
Weighted average Common Stock and OP Units - Fully Diluted
95.3

 
 
















__________________
1.
See Non-GAAP Financial Measures Definitions and Other Terms at the end of the supplemental information for definitions of Income from property operations, excluding deferrals and property management, Core, Non-Core, and a reconciliation of Net income available for Common Stockholders to Income from property operations, excluding deferrals and property management. See page 9 for details of the Core Income from Property Operations, excluding deferrals and property management. See page 10 for details of the Non-Core Income from Property Operations, excluding deferrals and property management.
2.
See Non-GAAP Financial Measures Definitions and Other Terms at the end of the supplemental information for definitions of FFO, Normalized FFO, FAD and Non-revenue producing improvements to real estate. See page 7 for a reconciliation of Net income available for Common Stockholders to 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.
Represents insurance recovery revenue from reimbursement for capital expenditures related to Hurricane Irma.


3Q 2018 Supplemental information
6 
Equity LifeStyle Properties, Inc.



Reconciliation of Net Income to Non-GAAP Financial Measures

(In thousands, except per share data, unaudited)

 
Quarters Ended September 30,

Nine Months Ended September 30,
 
2018
 
2017
 
2018
 
2017
Net income available for Common Stockholders
$
56,070

 
$
48,525

 
$
162,429

 
$
144,911

Income allocated to Common OP Units
3,590

 
3,286

 
10,569

 
9,825

Right-to-use contract upfront payments, deferred, net (1)
2,883

 
1,670

 
6,189

 
3,766

Right-to-use contract commissions, deferred, net (2)
(458
)
 
(176
)
 
(744
)
 
(372
)
Depreciation on real estate assets
30,424

 
27,879

 
89,307

 
82,939

Depreciation on rental homes 
2,432

 
2,614

 
7,323

 
7,910

Amortization of in-place leases
2,124

 
138

 
5,069

 
2,128

Depreciation on unconsolidated joint ventures
651

 
360

 
1,390

 
1,171

FFO available for Common Stock and OP Unit holders (3)
97,716

 
84,296

 
281,532

 
252,278

Transaction costs

 

 

 
324

Preferred stock original issuance costs

 
757

 

 
757

Insurance proceeds due to catastrophic weather event (4)
(3,833
)
 

 
(5,925
)
 

Normalized FFO available for Common Stock and OP Unit holders (3)
93,883

 
85,053

 
275,607

 
253,359

Non-revenue producing improvements to real estate (3)
(11,790
)
 
(11,015
)
 
(32,965
)
 
(29,823
)
FAD available for Common Stock and OP Unit holders (3)
$
82,093

 
$
74,038

 
$
242,642

 
$
223,536

 
 
 
 
 
 
 
 
Net income available per Common Share - Basic
$
0.63

 
$
0.56

 
$
1.83

 
$
1.67

Net income available per Common Share - Fully Diluted (5)
$
0.63

 
$
0.56

 
$
1.82

 
$
1.66

 
 
 
 
 
 
 
 
FFO per Common Share and OP Unit-Basic
$
1.03

 
$
0.91

 
$
2.98

 
$
2.72

FFO per Common Share and OP Unit-Fully Diluted
$
1.03

 
$
0.90

 
$
2.97

 
$
2.71

 
 
 
 
 
 
 
 
Normalized FFO per Common Share and OP Unit-Basic
$
0.99

 
$
0.92

 
$
2.91

 
$
2.73

Normalized FFO per Common Share and OP Unit-Fully Diluted
$
0.99

 
$
0.91

 
$
2.91

 
$
2.72

 
 
 
 
 
 
 
 
Average Common Stock - Basic
89,200

 
87,037

 
88,760

 
86,620

Average Common Stock and OP Units - Basic
94,971

 
92,873

 
94,569

 
92,720

Average Common Stock and OP Units - Fully Diluted
95,263

 
93,324

 
94,827

 
93,135









___________________________
1.
The Company adopted ASU 2014-09, Revenue from Contracts with Customers, and all related amendments, effective January 1, 2018. Upon adoption, right-to-use upfront nonrefundable payments are recognized on a straight-line basis over 20 years to reflect our current estimated customer life for the majority of our upgrade contracts. The amount shown represents the deferral of a substantial portion of current period upgrade sales, offset by amortization of prior period sales.
2.
The deferred commissions are 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 Measures Definitions and Other Terms at the end of the supplemental information for definitions of FFO, Normalized FFO, FAD and Non-revenue producing improvements to real estate.
4.
Represents insurance recovery revenue from reimbursement for capital expenditures related to Hurricane Irma.
5.
Net income per fully diluted Common Share is calculated before Income allocated to non-controlling interest- Common OP Units.

3Q 2018 Supplemental information
7 
Equity LifeStyle Properties, Inc.



Consolidated Income from Property Operations (1)

(In millions, except home site and occupancy figures, unaudited)

 
Quarters Ended September 30,
 
Nine Months Ended September 30,
 
2018
 
2017
 
2018
 
2017
Community base rental income (2)
$
130.7

 
$
123.2

 
$
386.1

 
$
365.8

Rental home income
3.5

 
3.6

 
10.6

 
10.8

Resort base rental income (3)
64.4

 
58.5

 
183.8

 
169.6

Right-to-use annual payments
12.2

 
11.5

 
35.6

 
34.1

Right-to-use contracts current period, gross
4.9

 
4.2

 
12.0

 
11.2

Utility and other income (4)
25.9

 
26.3

 
75.8

 
69.2

    Property operating revenues
241.6

 
227.3

 
703.9

 
660.7

 
 
 
 
 
 
 
 
Property operating, maintenance and real estate taxes (5)
97.7

 
94.2

 
280.3

 
263.1

Rental home operating and maintenance
1.9

 
1.7

 
5.0

 
4.9

Sales and marketing, gross
3.6

 
3.3

 
9.7

 
8.9

    Property operating expenses
103.2

 
99.2

 
295.0

 
276.9

Income from property operations, excluding deferrals and property management (1)
$
138.4

 
$
128.1

 
$
408.9

 
$
383.8

 
 
 
 
 
 
 
 
Manufactured home site figures and occupancy averages:
 
 
 
 
 
 
 
Total sites
72,221

 
71,113

 
71,782

 
71,049

Occupied sites
68,330

 
67,017

 
67,857

 
66,827

Occupancy %
94.6
%
 
94.2
%
 
94.5
%
 
94.1
%
Monthly base rent per site
$
638

 
$
613

 
$
632

 
$
608

 
 
 
 
 
 
 
 
Resort base rental income:
 
 
 
 
 
 
 
Annual
$
37.4

 
$
33.6

 
$
109.2

 
98.6

Seasonal
4.9

 
5.0

 
29.0

 
28.4

Transient
22.1

 
19.9

 
45.6

 
42.6

     Total resort base rental income
$
64.4

 
$
58.5

 
$
183.8

 
$
169.6









_________________________
1.
Excludes property management and the GAAP deferral of right-to-use contract upfront payments and related commissions, net. See page 4 for the Consolidated Income Statements and see Non-GAAP Financial Measures Definitions and Other Terms at the end of the supplemental information for the definition and reconciliation of Income from property operations, excluding deferrals and property management to Net income available to Common Stockholders.
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.
4.
Includes impact of Hurricane Irma. Utility and other income includes insurance recovery revenues of $1.3 million and $6.5 million, including $1.2 million and $3.7 million which we have identified as business interruption, for the quarter and nine months ended September 30, 2018. Utility and other income includes insurance recovery revenues of $3.1 million in the quarter and nine months ended September 30, 2017.
5.
Includes the impact of Hurricane Irma. Property operating, maintenance and real estate taxes includes debris removal and cleanup costs of $0.1 million and $2.6 million for the quarter and nine months ended September 30, 2018 and $3.3 million for the quarter and nine months ended September 30, 2017.


3Q 2018 Supplemental information
8 
Equity LifeStyle Properties, Inc.




Core Income from Property Operations (1)

(In millions, except home site and occupancy figures, unaudited)

 
Quarters Ended September 30,
 
Nine Months Ended September 30,
 
2018
 
2017
 
Change (2)
 
2018
 
2017
 
Change (2)
Community base rental income (3)
$
128.4

 
$
123.0

 
4.4
 %
 
$
382.2

 
$
365.5

 
4.6
 %
Rental home income
3.5

 
3.6

 
(2.4
)%
 
10.6

 
10.8

 
(2.3
)%
Resort base rental income (4)
59.9

 
56.6

 
5.9
 %
 
173.8

 
162.5

 
7.0
 %
Right-to-use annual payments
12.2

 
11.5

 
6.1
 %
 
35.6

 
34.1

 
4.4
 %
Right-to-use contracts current period, gross
4.9

 
4.2

 
15.6
 %
 
12.0

 
11.2

 
6.8
 %
Utility and other income (5)
24.1

 
26.1

 
(7.9
)%
 
70.4

 
68.5

 
2.7
 %
    Property operating revenues
233.0

 
225.0

 
3.5
 %
 
684.6

 
652.6

 
4.9
 %
 
 
 
 
 
 
 
 
 
 
 
 
Property operating, maintenance and real estate taxes (6)
94.2

 
92.8

 
1.5
 %
 
271.9

 
259.0

 
5.0
 %
Rental home operating and maintenance
1.9

 
1.7

 
11.7
 %
 
5.0

 
4.9

 
0.9
 %
Sales and marketing, gross
3.6

 
3.3

 
8.8
 %
 
9.7

 
8.9

 
9.3
 %
    Property operating expenses
99.7

 
97.8

 
1.9
 %
 
286.6

 
272.8

 
5.1
 %
Income from property operations, excluding deferrals and property management (1)
$
133.3

 
$
127.2

 
4.8
 %
 
$
398.0

 
$
379.8

 
4.8
 %
Occupied sites (7)
67,302

 
66,967

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Core manufactured home site figures and occupancy averages:
 
 
 
 
 
 
Total sites
70,923

 
70,877

 
 
 
70,901

 
70,873

 
 
Occupied sites
67,188

 
66,910

 
 
 
67,123

 
66,779

 
 
Occupancy %
94.7
%
 
94.4
%
 
 
 
94.7
%
 
94.2
%
 
 
Monthly base rent per site
$
637

 
$
613

 
 
 
$
633

 
$
608

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Resort base rental income:
 
 
 
 
 
 
 
 
 
 
 
Annual
$
35.4

 
$
33.3

 
6.4
 %
 
$
104.1

 
$
97.6

 
6.7
 %
Seasonal
4.5

 
4.3

 
4.0
 %
 
28.1

 
25.8

 
8.6
 %
Transient
20.0

 
19.0

 
5.4
 %
 
41.6

 
39.1

 
6.6
 %
     Total resort base rental income
$
59.9

 
$
56.6

 
5.9
 %
 
$
173.8

 
$
162.5

 
7.0
 %





___________________________
1.
Excludes property management and the GAAP deferral of right-to-use contract upfront payments and related commissions, net. See Non-GAAP Financial Measures Definitions and Other Terms at the end of the supplemental information 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.
Includes impact of Hurricane Irma. Utility and other income includes insurance recovery revenues of $2.4 million for the nine months ended September 30, 2018 and $3.1 million for the quarter and nine months ended September 30, 2017.
6.
Includes impact of Hurricane Irma. Property operating, maintenance and real estate taxes includes debris removal and cleanup costs of $2.2 million for the nine months ended September 30, 2018 and $3.3 million for the quarter and nine months ended September 30, 2017.
7.
Occupied sites are presented as of the end of the period. Occupied sites have increased by 209 from 67,093 at December 31, 2017.

3Q 2018 Supplemental information
9 
Equity LifeStyle Properties, Inc.



Non-Core Income from Property Operations (1)

(In millions, unaudited)

 
Quarter Ended
 
Nine Months Ended
 
September 30, 2018
 
September 30, 2018
Community base rental income
$
2.3

 
$
3.9

Resort base rental income
4.4

 
10.0

Utility income and other property income (2)
1.9

 
5.4

  Property operating revenues
8.6

 
19.3

 
 
 
 
  Property operating expenses (2)
3.5

 
8.4

Income from property operations, excluding deferrals and property management (1)
$
5.1

 
$
10.9



































______________________
1.
Excludes property management and the GAAP deferral of right-to-use contract upfront payments and related commissions, net. See Non-GAAP Financial Measures Definitions and Other Terms at the end of the supplemental information for definitions of Income from property operations, excluding deferrals and property management, and Non-Core.
2.
Includes impact of Hurricane Irma. Utility and other property includes insurance recovery revenues of $1.3 million and $4.2 million, including proceeds which we have identified as business interruption for the quarter and nine months ended September 30, 2018. Property operating expenses includes debris removal and cleanup costs of $0.1 million and $0.4 million for the quarter and nine months ended September 30, 2018.


3Q 2018 Supplemental information
10 
Equity LifeStyle Properties, Inc.



Income from Rental Home Operations

(In millions, except occupied rentals, unaudited)

 
Quarters ended September 30,
 
Nine Months Ended September 30,
 
2018
 
2017
 
2018
 
2017
Manufactured homes:
 
 
 
 
 
 
 
Rental operations revenues (1)
$
11.5

 
$
12.2

 
$
35.1

 
$
37.1

Rental operations expense
1.9

 
1.7

 
5.0

 
4.9

   Income from rental operations
9.6

 
10.5

 
30.1

 
32.2

Depreciation on rental homes (2)
2.4

 
2.6

 
7.3

 
7.9

   Income from rental operations, net of depreciation (3)
$
7.2

 
$
7.9

 
$
22.8

 
$
24.3

 
 
 
 
 
 
 
 
Occupied rentals: (4)
 
 
 
 
 
 
 
New
2,704

 
2,492

 
 
 
 
Used
1,515

 
2,010

 
 
 
 
   Total occupied rental sites
4,219

 
4,502

 
 
 
 

 
As of September 30, 2018
 
As of September 30, 2017
Cost basis in rental homes: (5)
Gross
 
Net of Depreciation
 
Gross
 
Net of Depreciation
New
$
151.9

 
$
122.9

 
$
131.4

 
$
105.4

Used
36.6

 
17.8

 
44.6

 
24.8

  Total rental homes
$
188.5

 
$
140.7

 
$
176.0

 
$
130.2















__________________________
1.
For the quarters ended September 30, 2018 and 2017, approximately $8.0 million and $8.7 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. For the nine months ended September 30, 2018 and 2017, approximately $24.5 million and $26.3 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 Rental home income for the quarters and nine months ended September 30, 2018 and 2017 in the Consolidated Income from Property Operations table on page 8.
2.
Included in Depreciation on real estate and rental homes in the Consolidated Statements of Income and Comprehensive Income.
3.
See Non-GAAP Financial Measures Definitions and Other Terms at the end of the supplemental information for the definition of Income from rental operations, net of depreciation.
4.
Occupied rentals as of the end of the period in our Core portfolio. Included in the quarters ended September 30, 2018 and 2017 are 265 and 254 homes rented through our ECHO joint venture, respectively. For the nine months ended September 30, 2018 and 2017, the rental home investment associated with our ECHO joint venture totals approximately $9.4 million and $9.2 million, respectively.
5.
Includes both occupied and unoccupied rental homes. New home cost basis does not include the costs associated with our ECHO joint venture. At September 30, 2018 and 2017, our investment in the ECHO joint venture was approximately $16.1 million and $15.5 million, respectively.



3Q 2018 Supplemental information
11 
Equity LifeStyle Properties, Inc.



Total Sites and Home Sales

(In thousands, except sites and home sale volumes, unaudited)

Summary of Total Sites as of September 30, 2018
 
 
Sites
Community sites
72,400

Resort sites:
 
    Annuals
28,500

    Seasonal
11,300

    Transient
11,400

Membership (1)
24,300

Joint Ventures (2)
5,900

Total
153,800


Home Sales - Select Data
 
 
 
 
 
 
 
 
Quarters Ended
 
Nine Months Ended
 
September 30,
 
September 30,
 
2018
 
2017
 
2018
 
2017
Total New Home Sales Volume (3)
141

 
173

 
417

 
413

     New Home Sales Volume - ECHO joint venture
31

 
48

 
74

 
126

New Home Sales Gross Revenues (3)
$
7,048

 
$
7,233

 
$
20,643

 
$
16,724

 
 
 
 
 
 
 
 
Total Used Home Sales Volume
304

 
331

 
842

 
954

Used Home Sales Gross Revenues
$
2,291

 
$
2,779

 
$
6,110

 
$
8,148

 
 
 
 
 
 
 
 
Brokered Home Resales Volume
231

 
239

 
677

 
659

Brokered Home Resale Revenues, net
$
358

 
$
337

 
$
1,009

 
$
925


















__________________________
1.
Sites primarily utilized by approximately 112,500 members. Includes approximately 5,800 sites rented on an annual basis.
2.
Joint ventures have approximately 2,700 annual Sites, 400 seasonal Sites, 500 transient Sites and includes approximately 2,300 marina slips.
3.
Total new home sales volume includes home sales from our ECHO joint venture. New home sales gross revenues does not include the revenues associated with our ECHO joint venture.


3Q 2018 Supplemental information
12 
Equity LifeStyle Properties, Inc.



2018 Guidance - Selected Financial Data (1)

Our guidance acknowledges the existence of volatile economic conditions, which may impact our current guidance assumptions. Factors impacting 2018 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 Ending
 
Year Ending
 
December 31, 2018
 
December 31, 2018
Income from property operations, excluding deferrals and property management - 2018 Core (2)
$
132.3

 
$
530.3

Income from property operations - Non-Core (3) (4)
4.8

 
15.7

Property management and general and administrative
(21.1
)
 
(88.4
)
Other income and expenses
2.7

 
15.1

Interest and related amortization
(26.2
)
 
(104.6
)
Normalized FFO available for Common Stock and OP Unit holders (5)
92.5

 
368.1

Early debt retirement
(1.1
)
 
(1.1
)
Insurance proceeds due to catastrophic weather event (6)

 
5.9

FFO available for Common Stock and OP Unit holders (5)
91.4

 
372.9

    Depreciation on real estate and other
(33.2
)
 
(129.0
)
    Depreciation on rental homes
(2.4
)
 
(9.8
)
    Deferral of right-to-use contract sales revenue and commission, net
(1.2
)
 
(6.5
)
    Income allocated to non-controlling interest-Common OP Units
(3.3
)
 
(13.6
)
Net income available for Common Stockholders
$
51.3

 
$
214.0

 
 
 
 
 
 
 
 
Net income per Common Share - Fully Diluted (7)
$0.54 - $0.60

 
$2.37 - $2.43

FFO per Common Share and OP Unit - Fully Diluted
$0.93 - $0.99

 
$3.90 - $3.96

Normalized FFO per Common Share and OP Unit - Fully Diluted
$0.94 - $1.00

 
$3.85 - $3.91

 
 
 
 
Weighted average Common Stock outstanding - Fully Diluted
95.5

 
95.0


_____________________________________
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 and OP Unit, FFO available for Common Stock and OP Unit holders, FFO per Common Share and OP Unit, 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 2018 Core Guidance Assumptions. Amount represents 2017 Income from property operations, excluding deferrals and property management, from the 2018 Core properties of $125.5 million multiplied by an estimated growth rate of 5.4% and $505.5 million multiplied by an estimated growth rate of 4.9% for the quarter ending and year ending December 31, 2018, respectively.
3.
Includes insurance proceeds for business interruption related to Hurricane Irma. As this insurance claim is currently in process, we can not provide assurance that the anticipated insurance proceeds will be received as projected nor can we provide assurance as to the amount that may be received.
4.
See page 14 for the 2018 Assumptions regarding the Non-Core Properties.
5.
See Non-GAAP Financial Measures Definitions and Other Terms at the end of the supplemental information for definitions of Normalized FFO and FFO.
6.
Includes insurance recovery revenue from reimbursement for capital expenditures related to Hurricane Irma.
7.
Net income per fully diluted Common Share is calculated before Income allocated to non-controlling interest- Common OP Units.

3Q 2018 Supplemental information
13 
Equity LifeStyle Properties, Inc.



2018 Core Guidance Assumptions (1) 
(In millions, unaudited)
 
Quarter Ended
 
Fourth Quarter 2018
 
Year Ended
 
2018
 
December 31, 2017
 
Growth Factors (2)
 
December 31, 2017
 
Growth Factors (2)
Community base rental income
$
123.6

 
4.7
 %
 
$
489.1

 
4.6
 %
Rental home income
3.5

 
3.9
 %
 
14.3

 
(0.8
)%
Resort base rental income (3)
48.6

 
5.8
 %
 
211.1

 
6.7
 %
Right-to-use annual payments
11.7

 
3.4
 %
 
45.8

 
4.1
 %
Right-to-use contracts current period, gross
2.9

 
 %
 
14.1

 
5.4
 %
Utility and other income
23.4

 
(11.3
)%
 
92.0

 
(0.8
)%
    Property operating revenues
213.7

 
3.1
 %
 
866.4

 
4.4
 %
 
 
 
 
 
 
 
 
Property operating, maintenance, and real estate taxes
83.9

 
(0.1
)%
 
342.9

 
3.7
 %
Rental home operating and maintenance
1.7

 
(8.7
)%
 
6.6

 
(1.6
)%
Sales and marketing, gross
2.6

 
3.4
 %
 
11.4

 
8.0
 %
    Property operating expenses
88.2

 
(0.2
)%
 
360.9

 
3.8
 %
Income from property operations, excluding deferrals and property management
$
125.5

 
5.4
 %
 
$
505.5

 
4.9
 %
 
 
 
 
 
 
 
 
Resort base rental income:
 
 
 
 
 
 
 
Annual
$
34.1

 
6.3
 %
 
$
131.7

 
6.6
 %
Seasonal
7.8

 
3.4
 %
 
33.6

 
7.4
 %
Transient
6.7

 
6.5
 %
 
45.8

 
6.6
 %
    Total resort base rental income
$
48.6

 
5.8
 %
 
$
211.1

 
6.7
 %


2018 Assumptions Regarding Non-Core Properties (1) 
(In millions, unaudited)
 
Quarter Ending
 
Year Ending
 
December 31, 2018 (4)
 
December 31, 2018 (4)
Community base rental income
$
2.4

 
$
6.3

Resort base rental income
4.5

 
14.5

Utility and other income (5)
1.6

 
6.9

  Property operating revenues
8.5

 
27.7

 
 
 
 
Property operating, maintenance, and real estate taxes
3.7

 
12.0

  Property operating expenses
3.7

 
12.0

Income from property operations, excluding deferrals and property management
$
4.8

 
$
15.7



_____________________________________
1.
See Non-GAAP Financial Measures Definitions and Other Terms at the end of the supplemental information for definitions of Core and Non-Core.
2.
Management’s estimate of the growth of property operations in the 2018 Core Properties compared to actual 2017 performance. Represents our estimate of the mid-point of a range of possible outcomes. Calculations prepared using actual results without rounding. Actual growth for Core properties 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 Non-Core properties. Actual income from property operations for Non-Core properties could vary materially from amounts presented above if any of our assumptions is incorrect.
5.
Includes insurance proceeds for business interruption related to Hurricane Irma. As this insurance claim is currently in process, we can not provide assurance that the anticipated proceeds will be received as projected nor can we provide assurance as to the amount that may be received.

3Q 2018 Supplemental information
14 
Equity LifeStyle Properties, Inc.



Preliminary Guidance 2019 Guidance - Selected Financial Data (1)

Our guidance acknowledges the existence of volatile economic conditions, which may impact our current guidance assumptions. Factors impacting 2019 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; and (x) costs to restore property operations following storms or other unplanned events.

(In millions, except per share data, unaudited)

 
Year Ending
 
December 31, 2019
Income from property operations, excluding deferrals and property management - 2019 Core (2)
$
560.4

Income from property operations - Non-Core  (3)
11.2

Property management and general and administrative
(91.0
)
Other income and expenses
14.8

Interest and related amortization
(101.6
)
Normalized FFO and FFO available for Common Stock and OP Unit holders (4)
393.8

    Depreciation on real estate and other
(129.6
)
    Depreciation on rental homes
(9.8
)
    Deferral of right-to-use contract sales revenue and commission, net
(5.8
)
    Income allocated to non-controlling interest-Common OP Units
(14.7
)
Net income available for Common Stockholders
$
233.9

 
 
 
 
Net income per Common Share - Fully Diluted (5)
$2.55 - $2.65

FFO per Common Share and OP Unit - Fully Diluted
$4.07 - $4.17

Normalized FFO per Common Share and OP Unit - Fully Diluted
$4.07 - $4.17

 
 
Weighted average Common Stock outstanding - Fully Diluted
95.7









_____________________________________
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 and OP Unit, FFO available for Common Stock and OP Unit holders, FFO per Common Share and OP Unit, 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 16 for Preliminary 2019 Core Guidance Assumptions. Amount represents estimated 2018 Income from property operations, excluding deferrals and property management, from the 2019 Core properties of $535.6 million multiplied by an estimated growth rate of 4.6% for the year ending December 31, 2019.
3.
See page 16 for the 2019 Assumptions Regarding Non-Core 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 Common OP Units.

3Q 2018 Supplemental information
15 
Equity LifeStyle Properties, Inc.



Preliminary 2019 Core Guidance Assumptions (1) 
(In millions, unaudited)
 
Year Ending
 
2019
 
December 31, 2018
 
Growth Factors (2)
Community base rental income
$
512.4

 
4.3
 %
Rental home income
14.2

 
0.2
 %
Resort base rental income (3)
233.3

 
5.2
 %
Right-to-use annual payments
47.7

 
1.6
 %
Right-to-use contracts current period, gross
14.9

 
 %
Utility and other income
92.3

 
(4.0
)%
    Property operating revenues
914.8

 
3.4
 %
 
 
 
 
Property operating, maintenance, and real estate taxes
360.4

 
1.9
 %
Rental home operating and maintenance
6.5

 
(9.2
)%
Sales and marketing, gross
12.3

 
2.7
 %
    Property operating expenses
379.2

 
1.8
 %
Income from property operations, excluding deferrals and property management
$
535.6

 
4.6
 %
 
 
 
 
Resort base rental income:
 
 
 
Annual
$
145.6

 
5.8
 %
Seasonal
36.1

 
3.1
 %
Transient
51.6

 
5.0
 %
    Total resort base rental income
$
233.3

 
5.2
 %


2019 Assumptions Regarding Non-Core Properties (1) 
(In millions, unaudited)
 
Year Ending
 
December 31, 2019 (4)
Community base rental income
$
9.2

Resort base rental income
13.0

Utility and other income
1.0

  Property operating revenues
23.2

 
 
Property operating, maintenance, and real estate taxes
12.0

  Property operating expenses
12.0

Income from property operations, excluding deferrals and property management
$
11.2




_____________________________________
1.
See Non-GAAP Financial Measures Definitions and Other Terms at the end of the supplemental information for definitions of Core and Non-Core properties.
2.
Management’s estimate of the growth of property operations in the 2019 Core Properties compared to estimated 2018 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 Non-Core properties. Actual income from property operations for the Non-Core properties could vary materially from amounts presented above if any of our assumptions is incorrect.


3Q 2018 Supplemental information
16 
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,
 
2015
 
2016
 
2017
 
2018 (1)
 
2019 (1)
Member Count (2)
102,413

 
104,728

 
106,456

 
110,245

 
113,000

Thousand Trails Camping Pass (TTC) Origination
25,544

 
29,576

 
31,618

 
36,541

 
37,600

    TTC Sales
11,877

 
12,856

 
14,128

 
16,665

 
17,400

    RV Dealer TTC Activations
13,667

 
16,720

 
17,490

 
19,876

 
20,200

Number of annuals (3)
5,470

 
5,756

 
5,843

 
5,900

 
6,000

Number of upgrade sales (4)
2,687

 
2,477

 
2,514

 
2,500

 
2,500

 
 
 
 
 
 
 
 
 

Right-to-use annual payments
$
44,441

 
$
45,036

 
$
45,798

 
$
47,700

 
$
48,500

Resort base rental income from annuals
$
13,821

 
$
15,413

 
$
16,841

 
$
18,300

 
$
19,500

Resort base rental income from seasonals/transients
$
15,795

 
$
17,344

 
$
18,231

 
$
19,600

 
$
21,200

Upgrade contract initiations (5)
$
12,783

 
$
12,312

 
$
14,130

 
$
14,900

 
$
14,900

Utility and other income
$
2,430

 
$
2,442

 
$
2,254

 
$
2,300

 
$
2,300

 
 
 
 
 
 
 
 
 
 

























________________________________
1.
Guidance estimate. Each line item represents our estimate of the mid-point of a possible range of outcomes and reflects management’s best estimate of the most likely outcome. Actual figures could vary materially from amounts presented above if any of our assumptions is incorrect.
2.
Members have entered into right-to-use contracts with us that entitle them to use certain properties on a continuous basis for up to 21 days.
3.
Members who rent a specific site for an entire year in connection with their right-to-use contract.
4.
Existing customers who have upgraded agreements are eligible for enhanced benefits, including but not limited to 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.
5.
Revenues associated with contract upgrades, included in Right-to-use contracts current period, gross, on our Consolidated Income Statements on page 4.

3Q 2018 Supplemental information
17 
Equity LifeStyle Properties, Inc.



Market Capitalization

(In millions, except share and OP Unit data, unaudited)

Capital Structure as of September 30, 2018
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total Common Stock/Units
 
% of Total Common Stock/Units
 
Total
 
% of Total
 
% of Total Market Capitalization
 
 
 
 
 
 
 
 
 
 
Secured Debt
 
 
 
 
$
2,038

 
87.9
%
 
 
Unsecured Debt
 
 
 
 
280

 
12.1
%
 
 
Total Debt (1)
 
 
 
 
$
2,318

 
100.0
%
 
20.1
%