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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): April 22, 2019


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 April 22, 2019, Equity LifeStyle Properties, Inc. (referred to herein as “we,” “us,” and “our”) issued a news release announcing our results of operations for the three months ended March 31, 2019 and detailed guidance assumptions on our projections for 2019.

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 April 22, 2019.

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 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 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 effect from any breach of our, or any of our vendors', data management systems;
the dilutive effects of issuing additional securities;
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 on Form 10-Q.
    
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 412 quality properties in 33 states and British Columbia consisting of 155,133 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 April 22, 2019, “ELS Reports First 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: April 23, 2019



Exhibit
N E W S R E L E A S E

https://cdn.kscope.io/beced5209b635a9e52fc70ac4d09e5b3-elscorplogoa05.jpg
 
CONTACT: Paul Seavey
FOR IMMEDIATE RELEASE
(800) 247-5279
April 22, 2019


                                                        
ELS REPORTS FIRST QUARTER RESULTS
Continued Strong Performance
CHICAGO, IL – April 22, 2019 Equity LifeStyle Properties, Inc. (NYSE: ELS) (referred to herein as “we,” “us,” and “our”) today announced results for the quarter ended March 31, 2019. All per share results are reported on a fully diluted basis unless otherwise noted.
Financial Results for the Quarter Ended March 31, 2019     
For the quarter ended March 31, 2019, total revenues increased $13.1 million, or 5.3 percent, to $259.1 million compared to $246.0 million for the same period in 2018. For the quarter ended March 31, 2019, net income available for Common Stockholders increased $53.1 million, or $0.58 per Common Share, to $113.3 million, or $1.26 per Common Share, compared to $60.2 million, or $0.68 per Common Share, for the same period in 2018.
Non-GAAP Financial Measures and Portfolio Performance
For the quarter ended March 31, 2019, Funds from Operations (“FFO”) available for Common Stock and OP Unit holders increased $9.8 million, or $0.09 per Common Share, to $108.0 million or $1.13 per Common Share, compared to $98.2 million, or $1.04 per Common Share, for the same period in 2018.
For the quarter ended March 31, 2019, Normalized Funds from Operations (“Normalized FFO”) available for Common Stock and OP Unit holders increased $9.8 million, or $0.09 per Common Share, to $107.7 million, or $1.13 per Common Share, compared to $97.9 million, or $1.04 per Common Share, for the same period in 2018.
For the quarter ended March 31, 2019, property operating revenues, excluding deferrals, increased $16.2 million to $250.9 million compared to $234.7 million for the same period in 2018. For the quarter ended March 31, 2019, income from property operations, excluding deferrals and property management, increased $11.9 million to $153.4 million compared to $141.5 million for the same period in 2018.
For the quarter ended March 31, 2019, Core property operating revenues, excluding deferrals, increased approximately 4.0 percent and Core income from property operations, excluding deferrals and property management, increased approximately 4.9 percent compared to the same period in 2018.
Investment Activity
On March 25, 2019, we completed the acquisitions of Drummer Boy Camping Resort, a 465-site RV community located in Gettysburg, Pennsylvania, and Lake of the Woods Campground, a 303-site RV community located in Wautoma, Wisconsin, for a total purchase price of $25.4 million. These acquisitions were funded with available cash and a loan assumption of approximately $10.8 million, excluding mortgage premium of $0.4 million.
On April 10, 2019, we completed the acquisition of Round Top RV Campground, a 391-site RV community located in Gettysburg, Pennsylvania. The purchase price was approximately $12.4 million. This acquisition was funded with available cash and a loan assumption of approximately $7.8 million, excluding mortgage premium of $0.2 million.
About Equity LifeStyle Properties    

 
i 
 



We are a self-administered, self-managed real estate investment trust (“REIT”) with headquarters in Chicago. As of April 22, 2019, we own or have an interest in 412 quality properties in 33 states and British Columbia consisting of 155,133 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, April 23, 2019, 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
Second Quarter 2019
 
Monday, July 22, 2019
 
Tuesday, July 23, 2019 10:00 a.m. CT
Third Quarter 2019
 
Monday, October 21, 2019
 
Tuesday, October 22, 2019 10:00 a.m. CT
Fourth Quarter 2019
 
Monday, January 27, 2020
 
Tuesday, January 28, 2020 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 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 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;

 
ii 
 



the effect from any breach of our, or any of our vendors', data management systems;
the dilutive effects of issuing additional securities;
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 the “Risk Factors” section in our most recent Annual Report on Form 10-K and subsequent quarterly reports on Form 10-Q.
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
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
 
 
 
 
 
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.

1Q 2019 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
 
Mar 31, 2019
Dec 31, 2018
Sept 30, 2018
Jun 30, 2018
Mar 31, 2018
Operating Information
 
 
 
 
 
Total revenues
$
259.1

$
243.5

$
256.7

$
240.5

$
246.0

Net income
$
120.5

$
53.4

$
59.7

$
49.2

$
64.2

Net income available for Common Stockholders
$
113.3

$
50.2

$
56.1

$
46.1

$
60.2

Adjusted EBITDAre (1)
$
133.3

$
117.9

$
119.5

$
109.2

$
122.6

FFO available for Common Stock and OP Unit holders (1)(2)
$
108.0

$
90.4

$
97.7

$
85.6

$
98.2

Normalized FFO available for Common Stock and OP Unit holders (1)(2)
$
107.7

$
92.3

$
93.9

$
83.8

$
97.9

Funds available for distribution ("FAD") available for Common Stock and OP Unit holders (1)(2)
$
97.6

$
80.4

$
82.1

$
71.4

$
89.1

 
 
 
 
 
 
Common Stock and OP Units Outstanding (In thousands)
 and Per Share Data
 
 
 
 
 
Common Stock and OP Units, end of the period
95,735

95,667

95,493

94,623

94,565

Weighted average Common Stock and OP Units outstanding - Fully Diluted
95,624

95,577

95,263

94,623

94,577

Net income per Common Share - Fully Diluted (3)
$
1.26

$
0.56

$
0.63

$
0.52

$
0.68

FFO per Common Share and OP Unit - Fully Diluted
$
1.13

$
0.95

$
1.03

$
0.90

$
1.04

Normalized FFO per Common Share and OP Unit - Fully Diluted
$
1.13

$
0.97

$
0.99

$
0.89

$
1.04

Dividends per Common Share
$
0.6125

$
0.5500

$
0.5500

$
0.5500

$
0.5500

 
 
 
 
 
 
Balance Sheet
 
 
 
 
 
Total assets
$
4,009

$
3,926

$
3,855

$
3,700

$
3,690

Total liabilities 
$
2,752

$
2,732

$
2,665

$
2,598

$
2,589

 
 
 
 
 
 
Market Capitalization
 
 
 
 
 
Total debt (4)
$
2,372

$
2,386

$
2,318

$
2,251

$
2,264

Total market capitalization (5)
$
13,315

$
11,678

$
11,528

$
10,947

$
10,564

 
 
 
 
 
 
Ratios
 
 
 
 
 
Total debt / total market capitalization
17.8
%
20.4
%
20.1
%
20.6
%
21.4
%
Total debt / Adjusted EBITDAre (6)
4.9

5.1

5.1

5.0

5.1

Interest coverage (7)
4.6

4.5

4.4

4.4

4.4

Fixed charges + preferred distributions coverage (8)
4.5

4.5

4.4

4.3

4.2





______________________
1.
See Non-GAAP Financial Measures Definitions and Other Terms at the end of the supplemental information for definitions of Adjusted EBITDAre, FFO, Normalized FFO and FAD and a reconciliation of Consolidated net income to Adjusted EBITDAre.
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 Common Share - Fully Diluted is calculated before Income allocated to non-controlling interest - Common OP Units.
4.
Excludes deferred financing costs of approximately $25.9 million as of March 31, 2019.
5.
See page 16 for market capitalization as of March 31, 2019.
6.
Calculated using trailing twelve months Adjusted EBITDAre.
7.
Calculated by dividing trailing twelve months Adjusted EBITDAre 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 EBITDAre by the sum of fixed charges and preferred stock dividends during the same period.

1Q 2019 Supplemental information
2 
Equity LifeStyle Properties, Inc.



Consolidated Balance Sheets

(In thousands, except share and per share data)

 
March 31, 2019
 
December 31, 2018
 
(unaudited)
 
 
Assets
 
 
 
Investment in real estate:
 
 
 
Land
$
1,412,050

 
$
1,408,832

Land improvements
3,184,597

 
3,143,745

Buildings and other depreciable property
747,268

 
720,900

 
5,343,915

 
5,273,477

Accumulated depreciation
(1,668,008
)
 
(1,631,888
)
Net investment in real estate
3,675,907

 
3,641,589

Cash and restricted cash
144,222

 
68,974

Notes receivable, net
34,811

 
35,041

Investment in unconsolidated joint ventures
58,465

 
57,755

Deferred commission expense
40,405

 
40,308

Other assets, net
55,067

 
46,227

Assets held for sale, net

 
35,914

Total Assets
$
4,008,877

 
$
3,925,808

Liabilities and Equity
 
 
 
Liabilities:
 
 
 
Mortgage notes payable, net
$
2,147,490

 
$
2,149,726

Term loan, net
198,706

 
198,626

Accounts payable and other liabilities
120,298

 
102,854

Deferred revenue – upfront payments from right-to-use contracts
118,134

 
116,363

Deferred revenue – right-to-use annual payments
13,046

 
10,055

Accrued interest payable
8,729

 
8,759

Rents and other customer payments received in advance and security deposits
86,519

 
81,114

Distributions payable
58,637

 
52,617

Liabilities related to assets held for sale

 
12,350

Total Liabilities
2,751,559

 
2,732,464

Equity:
 
 
 
Stockholders’ Equity:
 
 
 
Preferred stock, $0.01 par value, 10,000,000 shares authorized as of March 31, 2019 and December 31, 2018; none issued and outstanding.

 

Common stock, $0.01 par value, 200,000,000 shares authorized as of March 31, 2019 and December 31, 2018; 89,996,134 and 89,921,018 shares issued and outstanding as of March 31, 2019 and December 31, 2018, respectively.
896

 
896

Paid-in capital
1,332,410

 
1,329,391

Distributions in excess of accumulated earnings
(152,848
)
 
(211,034
)
Accumulated other comprehensive income
1,368

 
2,299

Total Stockholders’ Equity
1,181,826

 
1,121,552

Non-controlling interests – Common OP Units
75,492

 
71,792

Total Equity
1,257,318

 
1,193,344

Total Liabilities and Equity
$
4,008,877

 
$
3,925,808




1Q 2019 Supplemental information
3 
Equity LifeStyle Properties, Inc.



Consolidated Income Statements

(In thousands, unaudited)

 
Quarters Ended March 31,
 
2019
 
2018
Revenues:
 
 
 
Rental income
$
223,566

 
$
206,993

Right-to-use annual payments
12,316

 
11,519

Right-to-use contracts current period, gross
3,838

 
3,162

Right-to-use contract upfront payments, deferred, net
(1,771
)
 
(1,285
)
Other income
10,370

 
13,036

Gross revenues from home sales
6,475

 
8,309

Brokered resale and ancillary services revenues, net
1,559

 
1,401

Interest income
1,751

 
1,950

Income from other investments, net
986

 
940

    Total revenues
259,090

 
246,025

 
 
 
 
Expenses:
 
 
 
Property operating and maintenance
77,948

 
76,332

Real estate taxes
15,323

 
14,135

Sales and marketing, gross
3,409

 
2,812

Right-to-use contract commissions, deferred, net
(191
)
 
(24
)
Property management
13,685

 
13,681

Depreciation and amortization
37,977

 
32,374

Cost of home sales
6,632

 
8,574

Home selling expenses
1,083

 
1,075

General and administrative
9,909

 
8,038

Other expenses
427

 
343

Interest and related amortization
26,393

 
25,703

    Total expenses
192,595

 
183,043

Gain on sale of real estate, net
52,507

 

Income before equity in income of unconsolidated joint ventures
119,002

 
62,982

Equity in income of unconsolidated joint ventures
1,533


1,195

Consolidated net income
120,535

 
64,177

 
 
 
 
Income allocated to non-controlling interest - Common OP Units
(7,226
)
 
(3,955
)
Net income available for Common Stockholders
$
113,309


$
60,222

 
 
 
 






1Q 2019 Supplemental information
4 
Equity LifeStyle Properties, Inc.



























Non-GAAP Financial Measures





1Q 2019 Supplemental information
5 
Equity LifeStyle Properties, Inc.



Selected Non-GAAP Financial Measures

(In millions, except per share data, unaudited)

 
Quarter Ended
 
March 31, 2019
Income from property operations, excluding deferrals and property management - 2019 Core (1)
$
145.8

Income from property operations, excluding deferrals and property management - Non-Core (1)
7.6

Property management and general and administrative
(23.6
)
Other income and expenses
4.3

Interest and related amortization
(26.4
)
Normalized FFO available for Common Stock and OP Unit holders (2)
107.7

Insurance proceeds due to catastrophic weather event (3)
0.3

FFO available for Common Stock and OP Unit holders (2)
$
108.0

 
 
Normalized FFO per Common Share and OP Unit - Fully Diluted
$
1.13

FFO per Common Share and OP Unit - Fully Diluted
$
1.13

 
 
 
 
Normalized FFO available for Common Stock and OP Unit holders (2)
$
107.7

Non-revenue producing improvements to real estate (2)
(10.1
)
FAD available for Common Stock and OP Unit holders (2)
$
97.6

 
 
Weighted average Common Stock and OP Units - Fully Diluted
95.6

 
 

















__________________
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.


1Q 2019 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 March 31,
 
2019
 
2018
Net income available for Common Stockholders
$
113,309

 
$
60,222

Income allocated to Common OP Units
7,226

 
3,955

Right-to-use contract upfront payments, deferred, net
1,771

 
1,285

Right-to-use contract commissions, deferred, net
(191
)
 
(24
)
Depreciation and amortization
37,977

 
32,374

Depreciation on unconsolidated joint ventures
433

 
373

Gain on sale of real estate, net
(52,507
)
 

FFO available for Common Stock and OP Unit holders (1)
108,018

 
98,185

Insurance proceeds due to catastrophic weather event and other, net (2)
(349
)
 
(286
)
Normalized FFO available for Common Stock and OP Unit holders (1)
107,669

 
97,899

Non-revenue producing improvements to real estate (1)
(10,064
)
 
(8,764
)
FAD available for Common Stock and OP Unit holders (1)
$
97,605

 
$
89,135

 
 
 
 
Net income available per Common Share - Basic
$
1.26

 
$
0.68

Net income available per Common Share - Fully Diluted (3)
$
1.26

 
$
0.68

 
 
 
 
FFO per Common Share and OP Unit-Basic
$
1.13

 
$
1.04

FFO per Common Share and OP Unit-Fully Diluted
$
1.13

 
$
1.04

 
 
 
 
Normalized FFO per Common Share and OP Unit-Basic
$
1.13

 
$
1.04

Normalized FFO per Common Share and OP Unit-Fully Diluted
$
1.13

 
$
1.04

 
 
 
 
Average Common Stock - Basic
89,780

 
88,524

Average Common Stock and OP Units - Basic
95,521

 
94,352

Average Common Stock and OP Units - Fully Diluted
95,624

 
94,577

 
 
 
 


















___________________________

1.
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.
2.
Represents insurance recovery revenue from reimbursement for capital expenditures related to Hurricane Irma.
3.
Net income per fully diluted Common Share is calculated before Income allocated to non-controlling interest - Common OP Units.

1Q 2019 Supplemental information
7 
Equity LifeStyle Properties, Inc.



Consolidated Income from Property Operations (1)

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

 
Quarters Ended March 31,
 
2019
 
2018
Community base rental income (2)
$
135.3

 
$
126.7

Rental home income
3.6

 
3.5

Resort base rental income (3)
72.1

 
64.3

Right-to-use annual payments
12.3

 
11.5

Right-to-use contracts current period, gross
3.8

 
3.2

Utility and other income (4)
23.8

 
25.5

    Property operating revenues
250.9

 
234.7

 
 
 
 
Property operating, maintenance and real estate taxes (5)
92.9

 
89.0

Rental home operating and maintenance
1.2

 
1.4

Sales and marketing, gross
3.4

 
2.8

    Property operating expenses
97.5

 
93.2

Income from property operations, excluding deferrals and property management (1)
$
153.4

 
$
141.5

 
 
 
 
Manufactured home site figures and occupancy averages:
 
 
 
Total sites
72,370

 
71,328

Occupied sites
68,590

 
67,372

Occupancy %
94.8
%
 
94.5
%
Monthly base rent per site
$
657

 
$
626

 
 
 
 
Resort base rental income:
 
 
 
Annual
$
39.0

 
$
35.2

Seasonal
21.1

 
19.0

Transient
12.0

 
10.1

     Total resort base rental income
$
72.1

 
$
64.3










_________________________
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 for Common Stockholders.
2.
See the manufactured home site figures and occupancy averages included below within this table.
3.
See resort base rental income detail included below within this table.
4.
Utility and other income includes Hurricane Irma insurance recovery revenues of $0.6 million, which we have identified as business interruption related to Non-Core properties for the quarter ended March 31, 2019 and $3.5 million, including $1.0 million which we have identified as business interruption related to Non-Core properties, for the quarter ended March 31, 2018.
5.
Property operating, maintenance and real estate taxes includes bad debt expense for the quarters ended March 31, 2019 and 2018. Property operating, maintenance and real estate taxes includes debris removal and cleanup costs related to Hurricane Irma of $2.4 million for the quarter ended March 31, 2018.


1Q 2019 Supplemental information
8 
Equity LifeStyle Properties, Inc.



Core Income from Property Operations (1)

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

 
Quarters Ended March 31,
 
2019
 
2018
 
Change (2)
Community base rental income (3)
$
131.0

 
$
124.8

 
5.0
 %
Rental home income
3.5

 
3.2

 
8.0
 %
Resort base rental income (4)
65.9

 
63.3

 
4.2
 %
Right-to-use annual payments
12.3

 
11.5

 
6.9
 %
Right-to-use contracts current period, gross
3.8

 
3.2

 
21.4
 %
Utility and other income (5)
22.7

 
24.1

 
(6.0
)%
    Property operating revenues
239.2

 
230.1

 
4.0
 %
 
 
 
 
 
 
Property operating, maintenance and real estate taxes (6)
88.8

 
86.9

 
2.2
 %
Rental home operating and maintenance
1.2

 
1.4

 
(13.1
)%
Sales and marketing, gross
3.4

 
2.8

 
21.4
 %
    Property operating expenses
93.4

 
91.1

 
2.6
 %
Income from property operations, excluding deferrals and property management (1)
$
145.8

 
$
139.0

 
4.9
 %
Occupied sites (7)
66,389

 
66,030

 
 
 
 
 
 
 
 
Core manufactured home site figures and occupancy averages:
Total sites
69,573

 
69,519

 
 
Occupied sites
66,295

 
65,926

 
 
Occupancy %
95.3
%
 
94.8
%
 
 
Monthly base rent per site
$
659

 
$
631

 
 
 
 
 
 
 
 
Resort base rental income:
 
 
 
 
 
Annual
$
37.3

 
$
35.2

 
6.1
 %
Seasonal
19.2

 
18.7

 
2.8
 %
Transient
9.4

 
9.4

 
(0.3
)%
     Total resort base rental income
$
65.9

 
$
63.3

 
4.2
 %







___________________________
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 Core resort base rental income detail included below within this table.
5.
Utility and other income includes Hurricane Irma insurance recovery revenues of $2.2 million for the quarter ended March 31, 2018.
6.
Property operating, maintenance and real estate taxes includes bad debt expense for the quarters ended March 31, 2019 and 2018. Property operating, maintenance and real estate taxes includes debris removal and cleanup costs related to Hurricane Irma of $2.2 million for the quarter ended March 31, 2018.
7.
Occupied sites are presented as of the end of the period. Occupied sites have increased by 78 from 66,311 at December 31, 2018.

1Q 2019 Supplemental information
9 
Equity LifeStyle Properties, Inc.



Non-Core Income from Property Operations (1)

(In millions, unaudited)

 
Quarter Ended
 
March 31, 2019
Community base rental income
$
4.3

Rental home income
0.1

Resort base rental income
6.2

Utility and other income (2)
1.1

  Property operating revenues
11.7

 
 
  Property operating expenses (3)
4.1

Income from property operations, excluding deferrals and property management (1)
$
7.6


































______________________
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.
Utility and other income includes Hurricane Irma insurance recovery revenues of $0.6 million, which we have identified as business interruption for the quarter ended March 31, 2019.
3.
Property operating, maintenance and real estate taxes includes bad debt expense for the quarters ended March 31, 2019 and 2018.


1Q 2019 Supplemental information
10 
Equity LifeStyle Properties, Inc.



Income from Rental Home Operations

(In millions, except occupied rentals, unaudited)

 
Quarters Ended March 31,
 
2019
 
2018
Manufactured homes:
 
 
 
Rental operations revenues (1)
$
11.2

 
$
11.1

Rental operations expense
1.2

 
1.4

   Income from rental operations
10.0

 
9.7

Depreciation on rental homes (2)
2.4

 
2.4

   Income from rental operations, net of depreciation (3)
$
7.6

 
$
7.3

 
 
 
 
Occupied rentals: (4)
 
 
 
New
2,860

 
2,529

Used
1,106

 
1,569

   Total occupied rental sites
3,966

 
4,098


 
As of March 31, 2019
 
As of March 31, 2018
Cost basis in rental homes: (5)
Gross
 
Net of Depreciation
 
Gross
 
Net of Depreciation
New
$
171.7

 
$
141.0

 
$
131.4

 
$
104.4

Used
27.3

 
12.7

 
36.1

 
18.7

  Total rental homes
$
199.0

 
$
153.7

 
$
167.5

 
$
123.1

















__________________________
1.
For the quarters ended March 31, 2019 and 2018, approximately $7.7 million and $7.9 million, respectively, of the rental operations revenue are included in the Community base rental income in the Core Income from Property Operations on page 9. The remainder of the rental operations revenue is included in Rental home income for the quarters ended March 31, 2019 and 2018 in the Core Income from Property Operations on page 9.
2.
Depreciation on rental homes in our Core portfolio is included in Depreciation and amortization in the Consolidated Income Statements on page 4.
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 March 31, 2019 and 2018 were 290 and 276 homes rented through our ECHO joint venture, respectively. For the quarters ended March 31, 2019 and 2018, the rental home investment associated with our ECHO joint venture totaled approximately $10.5 million and $9.4 million, respectively.
5.
Includes both occupied and unoccupied rental homes in our Core portfolio. New home cost basis does not include the costs associated with our ECHO joint venture. At March 31, 2019 and 2018, our investment in the ECHO joint venture was approximately $16.4 million and $15.8 million, respectively.



1Q 2019 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 March 31, 2019
 
 
Sites
Community sites
71,900

Resort sites:
 
    Annuals
29,500

    Seasonal
11,300

    Transient
11,800

Right-to-use Membership (1)
24,300

Joint Ventures (2)
5,900

Total
154,700


Home Sales - Select Data
 
 
 
 
Quarters Ended March 31,
 
2019
 
2018
Total New Home Sales Volume (3)
91

 
130

     New Home Sales Volume - ECHO joint venture
13

 
18

New Home Sales Gross Revenues (3)
$
4,564

 
$
6,736

 
 
 
 
Total Used Home Sales Volume
219

 
241

Used Home Sales Gross Revenues
$
1,911

 
$
1,573

 
 
 
 
Brokered Home Resales Volume
168

 
193

Brokered Home Resale Revenues, net
$
278

 
$
282


















__________________________
1.
Sites primarily utilized by approximately 112,400 members. Includes approximately 5,900 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.


1Q 2019 Supplemental information
12 
Equity LifeStyle Properties, Inc.



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; (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
 
June 30, 2019
 
December 31, 2019
Income from property operations, excluding deferrals and property management - Core (2)
$
130.2

 
$
555.6

Income from property operations - Non-Core (3)
4.1

 
20.9

Property management and general and administrative
(22.7
)
 
(90.3
)
Other income and expenses
3.2

 
16.8

Interest and related amortization
(26.6
)
 
(106.1
)
Normalized FFO available for Common Stock and OP Unit holders (4)
88.2

 
396.9

Early debt retirement on unconsolidated joint venture

 
(0.4
)
Insurance proceeds due to catastrophic weather event (5)

 
0.3

FFO available for Common Stock and OP Unit holders (4)
88.2

 
396.8

    Depreciation and amortization
(38.1
)
 
(147.4
)
    Deferral of right-to-use contract sales revenue and commission, net
(1.7
)
 
(7.0
)
    Gain on sale of real estate, net

 
52.5

    Income allocated to non-controlling interest-Common OP Units
(2.9
)
 
(17.6
)
Net income available for Common Stockholders
$
45.5

 
$
277.3

 
 
 
 
 
 
 
 
Net income per Common Share - Fully Diluted (6)
$0.47 - $0.53

 
$3.03 - $3.13

FFO per Common Share and OP Unit - Fully Diluted
$0.89 - $0.95

 
$4.09 - $4.19

Normalized FFO per Common Share and OP Unit - Fully Diluted
$0.89 - $0.95

 
$4.10 - $4.20

 
 
 
 
Weighted average Common Stock outstanding - Fully Diluted
95.8

 
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 14 for 2019 Core Guidance Assumptions. Amount represents 2018 Income from property operations, excluding deferrals and property management, from the 2019 Core properties of $125.0 million multiplied by an estimated growth rate of 4.1% and $530.9 million multiplied by an estimated growth rate of 4.6% for the quarter ending June 30, 2019 and year ending December 31, 2019, respectively.
3.
See page 14 for the 2019 Assumptions regarding the Non-Core Properties.
4.
See Non-GAAP Financial Measures Definitions and Other Terms at the end of the supplemental information for definitions of Normalized FFO and FFO.
5.
Includes insurance recovery revenue from reimbursement for capital expenditures related to Hurricane Irma.
6.
Net income per Common Share - Fully Diluted is calculated before Income allocated to non-controlling interest- Common OP Units.

1Q 2019 Supplemental information
13 
Equity LifeStyle Properties, Inc.



2019 Core Guidance Assumptions (1) 
(In millions, unaudited)
 
Quarter Ended
 
Second Quarter 2019
 
Year Ended
 
2019
 
June 30, 2018
 
Growth Factors (2)
 
December 31, 2018
 
Growth Factors (2)
Community base rental income
$
125.9

 
4.9
 %
 
$
505.3

 
4.8
 %
Rental home income
3.3

 
7.1
 %
 
13.1

 
7.3
 %
Resort base rental income (3)
54.0

 
5.1
 %
 
233.4

 
4.8
 %
Right-to-use annual payments
11.9

 
4.0
 %
 
47.8

 
3.7
 %
Right-to-use contracts current period, gross
3.9

 
7.8
 %
 
15.2

 
8.2
 %
Utility and other income
21.8

 
1.2
 %
 
93.5

 
(5.6
)%
    Property operating revenues
220.8

 
4.6
 %
 
908.3

 
3.7
 %
 
 
 
 
 
 
 
 
Property operating, maintenance, and real estate taxes
91.0

 
5.2
 %
 
358.4

 
2.6
 %
Rental home operating and maintenance
1.5

 
(11.0
)%
 
6.5

 
(15.1
)%
Sales and marketing, gross
3.3

 
15.2
 %
 
12.5

 
8.4
 %
    Property operating expenses
95.8

 
5.2
 %
 
377.4

 
2.5
 %
Income from property operations, excluding deferrals and property management
$
125.0

 
4.1
 %
 
$
530.9

 
4.6
 %
 
 
 
 
 
 
 
 
Resort base rental income:
 
 
 
 
 
 
 
Annual
$
36.2

 
5.8
 %
 
$
145.7

 
5.5
 %
Seasonal
4.9

 
3.0
 %
 
36.3

 
3.0
 %
Transient
12.9

 
4.0
 %
 
51.4

 
4.0
 %
    Total resort base rental income
$
54.0

 
5.1
 %
 
$
233.4

 
4.8
 %


2019 Assumptions Regarding Non-Core Properties (1) 
(In millions, unaudited)
 
Quarter Ending
 
Year Ending
 
June 30, 2019 (4)
 
December 31, 2019 (4)
Community base rental income
$
3.8

 
$
15.9

Rental home income

 
0.1

Resort base rental income
4.9

 
21.1

Utility and other income
0.5

 
2.6

  Property operating revenues
9.2

 
39.7

 
 
 
 
Property operating, maintenance, and real estate taxes
5.1

 
18.8

  Property operating expenses
5.1

 
18.8

Income from property operations, excluding deferrals and property management
$
4.1

 
$
20.9




_____________________________________
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 2019 Core Properties compared to actual 2018 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 detail 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.

1Q 2019 Supplemental information
14 
Equity LifeStyle Properties, Inc.



Right-To-Use Memberships - Select Data

(Unaudited)

 
Year Ended December 31,
 
2015
 
2016
 
2017
 
2018
 
2019 (1)
Member Count (2)
102,413

 
104,728

 
106,456

 
111,094

 
116,000

Thousand Trails Camping Pass (TTC) Origination
25,544

 
29,576

 
31,618

 
37,528

 
39,500

    TTC Sales
11,877

 
12,856

 
14,128

 
17,194

 
18,200

    RV Dealer TTC Activations
13,667

 
16,720

 
17,490

 
20,334

 
21,300

Number of annuals (3)
5,470

 
5,756

 
5,843

 
5,888

 
5,900

Number of upgrade sales (4)
2,687

 
2,477

 
2,514

 
2,500

 
2,800

 
 
 
 
 
 
 
 
 
 
(In thousands, unaudited)
 
 
 
 
 
 
 
 
 
Right-to-use annual payments
$
44,441

 
$
45,036

 
$
45,798

 
$
47,778

 
$
49,600

Resort base rental income from annuals
$
13,821

 
$
15,413

 
$
16,841

 
$
18,363

 
$
19,600

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

 
$
17,344

 
$
18,231

 
$
19,840

 
$
21,100

Upgrade contract initiations (5)
$
12,783

 
$
12,312

 
$
14,130

 
$
15,191

 
$
16,400

Utility and other income
$
2,430

 
$
2,442

 
$
2,254

 
$
2,410

 
$
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, the ability to make earlier reservations, potential discounts on rental units, and potential 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.

1Q 2019 Supplemental information
15 
Equity LifeStyle Properties, Inc.



Market Capitalization

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

Capital Structure as of March 31, 2019
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total Common Stock/Units
 
% of Total Common Stock/Units
 
Total
 
% of Total
 
% of Total Market Capitalization
 
 
 
 
 
 
 
 
 
 
Secured Debt
 
 
 
 
$
2,172

 
91.6
%
 
 
Unsecured Debt
 
 
 
 
200

 
8.4
%
 
 
Total Debt (1)
 
 
 
 
$
2,372

 
100.0
%
 
17.8
%
 
 
 
 
 
 
 
 
 
 
Common Stock
89,996,134

 
94.0
%
 
 
 
 
 
 
OP Units
5,739,161

 
6.0
%
 
 
 
 
 
 
Total Common Stock and OP Units
95,735,295

 
100.0
%
 
 
 
 
 
 
Common Stock price at March 31, 2019
$
114.30

 
 
 
 
 
 
 
 
Fair Value of Common Stock and OP Units
 
 
 
 
$
10,943

 
100.0
%
 
 
Total Equity
 
 
 
 
$
10,943

 
100.0
%
 
82.2
%
 
 
 
 
 
 
 
 
 
 
Total Market Capitalization
 
 
 
 
$
13,315

 
 
 
100.0
%






























_________________
1.    Excludes deferred financing costs of approximately $25.9 million.

1Q 2019 Supplemental information
16 
Equity LifeStyle Properties, Inc.



Debt Maturity Schedule

Debt Maturity Schedule as of March 31, 2019
(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
 
2019
 
$

 
%
 
$

 
%
 
$

 
%
 
%
 
2020
 
116,307

 
6.14
%
 

 
%
 
116,307

 
4.91
%
 
6.14
%
 
2021
 
171,485

 
5.01
%
 

 
%
 
171,485

 
7.23
%
 
5.01
%
 
2022
 
141,389

 
4.58
%
 

 
%
 
141,389

 
5.96
%
 
4.58
%
 
2023
 
105,044

 
5.06
%
 
200,000

 
3.05
%
 
305,044

 
12.87
%
 
3.75
%
 
2024
 
10,760

 
5.49
%
 

 
%
 
10,760

 
0.45
%
 
5.49
%
 
2025
 
102,665

 
3.45
%
 

 
%
 
102,665

 
4.33
%
 
3.45
%
 
2026
 

 
%
 

 
%
 

 
%
 
%
 
2027
 

 
%
 

 
%
 

 
%
 
%
 
2028
 
225,075

 
4.19
%
 

 
%
 
225,075

 
9.49
%
 
4.19
%
 
Thereafter
 
1,298,088

 
4.24
%
 

 
%
 
1,298,088

 
54.75
%
 
4.24
%
 
Total
 
$
2,170,813

 
4.43
%
 
$
200,000

 
3.05
%
 
$
2,370,813

 
100.0
%
 
4.31
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Unsecured Line of Credit
 

 
 
 

 

 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Note Premiums
 
1,326

 
 
 

 
 
 
1,326

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total Debt
 
2,172,139

 
 
 
200,000

 
 
 
2,372,139

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Deferred Financing Costs
 
(24,649
)
 
 
 
(1,294
)
 
 
 
(25,943
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total Debt, net
 
$
2,147,490

 
 
 
$
198,706

 
 
 
$
2,346,196

 
 
 
4.47
%
(1) 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Average Years to Maturity
 
13.5
 
 
 
4.1
 
 
 
12.7
 
 
 
 
 





















__________________
1.
Reflects effective interest rate including amortization of note premiums and deferred financing costs.


1Q 2019 Supplemental information
17 
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 or losses from sales of properties, depreciation and amortization related to real estate, impairment charges, and adjustments to reflect our share of FFO of unconsolidated joint ventures. Adjustments for unconsolidated 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) gains and losses from early debt extinguishment, including prepayment penalties and defeasance costs, and b) 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 gains or losses from sales of properties, depreciation and amortization related to real estate, impairment charges, which are based on historical costs and 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 and other income and right-to-use income less property and rental home operating and maintenance expenses, real estate taxes, sales and marketing expenses, excluding property management and the GAAP deferral of right-to-use contract upfront payments and related commissions, net. For comparative purposes, we present bad debt expense within Property operating, maintenance and real estate taxes in the current and prior periods. 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.

1Q 2019 Supplemental information
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Equity LifeStyle Properties, Inc.



The following table reconciles Net income available for Common Stockholders to Income from property operations (amounts in thousands):
 
 
Quarters Ended March 31,
 
 
2019
 
2018
Net income available for Common Stockholders
 
$
113,309

 
$
60,222

Income allocated to non-controlling interests - Common OP Units
 
7,226

 
3,955

Equity in income of unconsolidated joint ventures
 
(1,533
)
 
(1,195
)
Income before equity in income of unconsolidated joint ventures
 
119,002

 
62,982

Gain on sale of real estate, net
 
(52,507
)
 

Right-to-use upfront payments, deferred, net
 
1,771

 
1,285

Gross revenues from home sales
 
(6,475
)
 
(8,309
)
Brokered resale and ancillary services revenues, net
 
(1,559
)
 
(1,401
)
Interest income
 
(1,751
)
 
(1,950
)
Income from other investments, net
 
(986
)
 
(940
)
Right-to-use contract commissions, deferred, net
 
(191
)
 
(24
)
Property management
 
13,685

 
13,681

Depreciation and amortization
 
37,977

 
32,374

Cost of homes sales
 
6,632

 
8,574

Home selling expenses
 
1,083

 
1,075

General and administrative
 
9,909

 
8,038

Other expenses
 
427

 
343

Interest and related amortization
 
26,393

 
25,703

Income from property operations, excluding deferrals and property management
 
153,410

 
141,431

Right-to-use contracts, upfront payments and commissions, deferred, net
 
(1,580
)
 
(1,261
)
Property management
 
(13,685
)
 
(13,681
)
Income from property operations
 
$
138,145

 
$
126,489

EARNINGS BEFORE INTEREST, TAX, DEPRECIATION AND AMORTIZATION FOR REAL ESTATE (EBITDAre) AND ADJUSTED EBITDAre. We define EBITDAre as net income or loss excluding interest income and expense, income taxes, depreciation and amortization, gains or losses from sales of properties, impairments charges, and adjustments to reflect our share of EBITDAre of unconsolidated joint ventures. We compute EBITDAre in accordance with our interpretation of the standards established by NAREIT, which may not be comparable to EBITDAre 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 EBITDAre 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 EBITDAre.
We define Adjusted EBITDAre as EBITDAre excluding non-operating income and expense items such as gains and losses from early debt extinguishment, including prepayment penalties and defeasance costs, and other miscellaneous non-comparable items.
We believe that EBITDAre and Adjusted EBITDAre may be useful to an investor in evaluating our operating performance and liquidity because the measures are widely used to measure the operating performance of an equity REIT.







1Q 2019 Supplemental information
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Equity LifeStyle Properties, Inc.




The following table reconciles Consolidated net income to EBITDAre and Adjusted EBITDAre (amounts in thousands):
 
 
Quarters Ended March 31,
 
 
2019
 
2018
Consolidated net income
 
$
120,535

 
$
64,177

Interest income
 
(1,751
)
 
(1,950
)
Right-to-use contract upfront payments, deferred, net
 
1,771

 
1,285

Right-to-use contract commissions, deferred, net
 
(191
)
 
(24
)
Real estate depreciation and amortization
 
37,977

 
32,374

Other depreciation and amortization
 
427

 
343

Interest and related amortization
 
26,393

 
25,703

Gain on sale of real estate, net
 
(52,507
)
 

Adjustments to our share of EBITDAre of unconsolidated joint ventures 
 
1,001

 
964

EBITDAre
 
133,655

 
122,872

Insurance proceeds due to catastrophic weather event
 
(349
)
 
(286
)
Adjusted EBITDAre
 
$
133,306

 
$
122,586

CORE. The Core properties include properties we owned and operated during all of 2018 and 2019. 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.
NON-CORE. The Non-Core properties include all properties that were not owned and operated during all of 2018 and 2019. This includes, but is not limited to, two properties acquired during the first quarter of 2019, five properties sold during the first quarter of 2019, five properties acquired during 2018 and Fiesta Key and Sunshine Key RV Resorts.
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.


1Q 2019 Supplemental information
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Equity LifeStyle Properties, Inc.