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false0000895417EQUITY LIFESTYLE PROPERTIES INC 0000895417 2020-01-24 2020-01-27


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

FORM 8-K

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

Date of Report (Date of earliest event reported): January 24, 2020


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):

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:
 
 
 
Title of each class
Trading Symbol(s)
Name of each exchange on which registered
Common Stock, $0.01 Par Value
ELS
New York Stock Exchange

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  

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.


 





Item 2.02    Results of Operations and Financial Condition

On January 27, 2020, Equity LifeStyle Properties, Inc. (referred to herein as “we,” “us,” and “our”) issued a news release announcing our results of operations for the three months and year ended December 31, 2019 and detailed guidance assumptions on our projections for 2020.

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 January 27, 2020.

Item 8.01     Other Events

On January 24, 2020, we announced the tax treatment of our 2019 common stock distributions. The common stock distributions are adjusted for the 2-for-1 stock split on October 15, 2019 to stockholders of record as of October 1, 2019. The following table summarizes the income tax treatment of our 2019 distributions. All numbers in the table are reported on a post-split basis.

Common Stock (CUSIP No. 29472R108)
Record
Date
Payable
Date
Distribution
Per Share
Total Distribution Allocable to 2019
Ordinary Taxable Dividend
Qualified REIT Dividend for
IRC § 199A
12/28/2018
1/11/2019
$0.275000
$0.031500
$0.031500
$0.031500
3/29/2019
4/12/2019
$0.306250
$0.306250
$0.306250
$0.306250
6/28/2019
7/12/2019
$0.306250
$0.306250
$0.306250
$0.306250
9/27/2019
10/11/2019
$0.306250
$0.306250
$0.306250
$0.306250
12/27/2019
1/10/2020
$0.306250
$0.290788
$0.290788
$0.290788
TOTALS
 
$1.500000
$1.241038
$1.241038
$1.241038

The common stock distribution with a record date of December 28, 2018, paid on January 11, 2019, is a split-year distribution with $0.031500 allocable to 2019 for federal income tax purposes. The common stock distribution with a record date of December 27, 2019, paid on January 10, 2020, is a split-year distribution with $0.290788 considered a distribution made in 2019 and $0.015462 allocable to 2020 for federal income tax purposes.

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

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 attract and retain customers entering, renewing and upgrading membership subscriptions;
our assumptions about rental and home sales markets;
our assumptions and guidance concerning 2020, 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 413 quality properties in 33 states and British Columbia consisting of 156,513 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 January 27, 2020, “ELS Reports Fourth Quarter Results”
104 Cover Page Interactive Data File included as Exhibit 101 (embedded within the Inline XBRL document)






SIGNATURE


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

 
 
EQUITY LIFESTYLE PROPERTIES, INC.
 
 
By: /s/ Paul Seavey
 
 
Paul Seavey
 
 
Executive Vice President, Chief Financial Officer and Treasurer


Date: January 28, 2020



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

https://cdn.kscope.io/602bc7ec6bd4d7989ac8ea12bf7841fd-elslogoa24.jpg
 
CONTACT: Paul Seavey
FOR IMMEDIATE RELEASE
(800) 247-5279
January 27, 2020
                                    
ELS REPORTS FOURTH QUARTER RESULTS
Continued Strong Performance
CHICAGO, IL – January 27, 2020 Equity LifeStyle Properties, Inc. (NYSE: ELS) (referred to herein as “we,” “us,” and “our”) today announced results for the quarter and year ended December 31, 2019. All Common Stock and OP Units as well as per share results reflect the two for one stock split that was completed on October 15, 2019. Additionally, all per share results are reported on a fully diluted basis unless otherwise noted.
Financial Results for the Quarter and Year Ended December 31, 2019     
For the quarter ended December 31, 2019, total revenues increased $15.1 million, or 6.2 percent, to $258.6 million compared to $243.5 million for the same period in 2018. For the quarter ended December 31, 2019, net income available for Common Stockholders increased $4.8 million, or $0.02 per Common Share, to $55.0 million, or $0.30 per Common Share, compared to $50.2 million, or $0.28 per Common Share, for the same period in 2018.
For the year ended December 31, 2019, total revenues increased $50.6 million, or 5.1 percent, to $1,037.3 million compared to $986.7 million for the same period in 2018. For the year ended December 31, 2019, net income available for Common Stockholders increased $66.5 million, or $0.35 per Common Share, to $279.1 million, or $1.54 per Common Share, compared to $212.6 million, or $1.19 per Common Share, for the same period in 2018.
Non-GAAP Financial Measures and Portfolio Performance
For the quarter ended December 31, 2019, Funds from Operations (“FFO”) available for Common Stock and OP Unit holders increased $9.1 million, or $0.05 per Common Share, to $99.5 million, or $0.52 per Common Share, compared to $90.4 million, or $0.47 per Common Share, for the same period in 2018. For the year ended December 31, 2019, FFO available for Common Stock and OP Unit holders increased $34.0 million, or $0.15 per Common Share, to $406.0 million, or $2.11 per Common Share, compared to $372.0 million, or $1.96 per Common Share, for the same period in 2018.
For the quarter ended December 31, 2019, Normalized Funds from Operations (“Normalized FFO”) available for Common Stock and OP Unit holders increased $7.2 million, or $0.04 per Common Share, to $99.5 million, or $0.52 per Common Share, compared to $92.3 million, or $0.48 per Common Share, for the same period in 2018. For the year ended December 31, 2019, Normalized FFO available for Common Stock and OP Unit holders increased $33.9 million, or $0.15 per Common Share, to $401.8 million, or $2.09 per Common Share, compared to $367.9 million, or $1.94 per Common Share, for the same period in 2018.
For the quarter ended December 31, 2019, property operating revenues, excluding deferrals, increased $16.5 million to $248.7 million compared to $232.2 million for the same period in 2018. For the year ended December 31, 2019, property operating revenues, excluding deferrals, increased $60.5 million to $996.5 million compared to $936.0 million for the same period in 2018. For the quarter ended December 31, 2019, income from property operations, excluding deferrals and property management, increased $8.2 million to $147.0 million compared to $138.8 million for the same period in 2018. For the year ended December 31, 2019, income from property operations, excluding deferrals and property management, increased $33.7 million to $581.4 million compared to $547.7 million for the same period in 2018.
For the quarter ended December 31, 2019, Core property operating revenues, excluding deferrals, increased approximately 5.3 percent and Core income from property operations, excluding deferrals and property management,

 
i 
 



increased approximately 4.6 percent compared to the same period in 2018. For the year ended December 31, 2019, Core property operating revenues, excluding deferrals, increased approximately 4.7 percent and Core income from property operations, excluding deferrals and property management, increased approximately 5.0 percent compared to the same period in 2018.
About Equity LifeStyle Properties    
We are a self-administered, self-managed real estate investment trust (“REIT”) with headquarters in Chicago. As of January 27, 2020, we own or have an interest in 413 quality properties in 33 states and British Columbia consisting of 156,513 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, January 28, 2020, at 10:00 a.m. Central Time. Please visit the Investor Relations section at www.equitylifestyleproperties.com for the link. A replay of the webcast will be available for two weeks at this site.
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 attract and retain customers entering, renewing and upgrading membership subscriptions;
our assumptions about rental and home sales markets;
our assumptions and guidance concerning 2020, 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;
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

 
ii 
 



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 Securities
BMO Capital Markets
Citi Research
Jeffrey Spector/ Joshua Dennerlein
John Kim
Michael Bilerman/ Nick Joseph
 
 
 
Evercore ISI
Green Street Advisors
Robert W. Baird & Company
Steve Sakwa/ Samir Khanal
John Pawlowski
Drew T. Babin
 
 
 
Wells Fargo Securities
 
 
Todd Stender
 
 
 
 
 
 
 
 



































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

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



Financial Highlights

(In millions, except Common Stock and OP Units outstanding and per share data (adjusted for stock split), unaudited)
 
As of and for the Three Months Ended
 
Dec 31, 2019
Sept 30, 2019
Jun 30, 2019
Mar 31, 2019
Dec 31, 2018
Operating Information
 
 
 
 
 
Total revenues
$
258.6

$
271.2

$
248.4

$
259.1

$
243.5

Net income
$
58.1

$
68.2

$
49.1

$
120.5

$
53.4

Net income available for Common Stockholders
$
55.0

$
64.5

$
46.4

$
113.3

$
50.2

Adjusted EBITDAre (1)
$
124.5

$
127.0

$
117.7

$
133.3

$
117.9

FFO available for Common Stock and OP Unit holders (1)(2)
$
99.5

$
108.6

$
89.8

$
108.0

$
90.4

Normalized FFO available for Common Stock and OP Unit holders (1)(2)
$
99.5

$
102.7

$
91.9

$
107.7

$
92.3

Funds Available for Distribution ("FAD") for Common Stock and OP Unit holders (1)(2)
$
84.6

$
88.4

$
79.1

$
97.6

$
80.4

 
 
 
 
 
 
Common Stock and OP Units Outstanding (In thousands) and Per Share Data
 
 
 
 
 
Common Stock and OP Units, end of the period
192,581

192,574

192,562

191,470

191,334

Weighted average Common Stock and OP Units outstanding - Fully Diluted
192,458

192,400

191,860

191,248

191,154

Net income per Common Share - Fully Diluted (3)
$
0.30

$
0.35

$
0.26

$
0.63

$
0.28

FFO per Common Share and OP Unit - Fully Diluted
$
0.52

$
0.56

$
0.47

$
0.56

$
0.47

Normalized FFO per Common Share and OP Unit - Fully Diluted
$
0.52

$
0.53

$
0.48

$
0.56

$
0.48

Dividends per Common Share
$
0.3063

$
0.3063

$
0.3063

$
0.3063

$
0.2750

 
 
 
 
 
 
Balance Sheet
 
 
 
 
 
Total assets
$
4,151

$
4,137

$
4,014

$
4,009

$
3,926

Total liabilities
$
2,829

$
2,818

$
2,707

$
2,752

$
2,732

 
 
 
 
 
 
Market Capitalization
 
 
 
 
 
Total debt (4)
$
2,432

$
2,406

$
2,300

$
2,372

$
2,386

Total market capitalization (5)
$
15,988

$
15,270

$
13,983

$
13,315

$
11,678

 
 
 
 
 
 
Ratios
 
 
 
 
 
Total debt / total market capitalization
15.2
%
15.8
%
16.4
%
17.8
%
20.4
%
Total debt / Adjusted EBITDAre (6)
4.8

4.9

4.7

4.9

5.1

Interest coverage (7)
4.9

4.8

4.7

4.6

4.5

Fixed charges(8)
4.8

4.7

4.6

4.5

4.5





______________________
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 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 $24.0 million as of December 31, 2019.
5.
See page 16 for the calculation of market capitalization as of December 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, if any, during the same period.

4Q 2019 Supplemental information
2 
Equity LifeStyle Properties, Inc.



Consolidated Balance Sheets

(In thousands, except share and per share data (adjusted for stock split))

 
December 31, 2019
 
December 31, 2018
 
(unaudited)
 
 
Assets
 
 
 
Investment in real estate:
 
 
 
Land
$
1,525,407

 
$
1,408,832

Land improvements
3,336,070

 
3,143,745

Buildings and other depreciable property
881,572

 
720,900

 
5,743,049

 
5,273,477

Accumulated depreciation
(1,776,224
)
 
(1,631,888
)
Net investment in real estate
3,966,825

 
3,641,589

Cash and restricted cash
28,860

 
68,974

Notes receivable, net
37,558

 
35,041

Investment in unconsolidated joint ventures
20,074

 
57,755

Deferred commission expense
41,149

 
40,308

Other assets, net
56,809

 
46,227

Assets held for sale, net

 
35,914

Total Assets
$
4,151,275

 
$
3,925,808

 
 
 
 
Liabilities and Equity
 
 
 
Liabilities:
 
 
 
Mortgage notes payable, net
$
2,049,509

 
$
2,149,726

Term loan, net
198,949

 
198,626

Unsecured line of credit
160,000

 

Accounts payable and other liabilities
124,665

 
102,854

Deferred revenue – upfront payments from membership upgrade sales
126,814

 
116,363

Deferred revenue – annual membership subscriptions
10,599

 
10,055

Accrued interest payable
8,639

 
8,759

Rents and other customer payments received in advance and security deposits
91,234

 
81,114

Distributions payable
58,978

 
52,617

Liabilities related to assets held for sale

 
12,350

Total Liabilities
2,829,387

 
2,732,464

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

 

Common stock, $0.01 par value, 400,000,000 and 200,000,000 shares authorized as of December 31, 2019 and December 31, 2018, respectively; 182,089,595 and 179,842,036 shares issued and outstanding as of December 31, 2019 and December 31, 2018, respectively.
1,812

 
1,792

Paid-in capital
1,402,696

 
1,328,495

Distributions in excess of accumulated earnings
(154,318
)
 
(211,034
)
Accumulated other comprehensive income (loss)
(380
)
 
2,299

Total Stockholders’ Equity
1,249,810

 
1,121,552

Non-controlling interests – Common OP Units
72,078

 
71,792

Total Equity
1,321,888

 
1,193,344

Total Liabilities and Equity
$
4,151,275

 
$
3,925,808



4Q 2019 Supplemental information
3 
Equity LifeStyle Properties, Inc.



Consolidated Income Statements

(In thousands, unaudited)

 
Quarters Ended December 31,

Years Ended December 31,
 
2019
 
2018
 
2019
 
2018
Revenues:
 
 
 
 
 
 
 
Rental income
$
218,946

 
$
203,864

 
$
879,635

 
$
821,114

Annual membership subscriptions
12,963

 
12,162

 
51,015

 
47,778

Membership upgrade sales current period, gross
4,502

 
3,222

 
19,111

 
15,191

Membership upgrade sales upfront payments, deferred, net
(2,238
)
 
(1,191
)
 
(10,451
)
 
(7,380
)
Other income
11,165

 
12,944

 
43,063

 
51,935

Gross revenues from home sales
11,917

 
9,311

 
34,655

 
36,064

Brokered resale and ancillary services revenues, net
(1,071
)
 
204

 
3,493

 
3,584

Interest income
1,822

 
1,867

 
7,207

 
7,525

Income from other investments, net
634

 
1,068

 
9,528

 
10,842

Total revenues
258,640

 
243,451

 
1,037,256

 
986,653

 
 
 
 
 
 
 
 
Expenses:
 
 
 
 
 
 
 
Property operating and maintenance
79,939

 
75,438

 
333,520

 
319,839

Real estate taxes
16,742

 
15,077

 
62,338

 
55,892

Sales and marketing, gross
3,897

 
2,857

 
15,583

 
12,542

Membership sales commissions, deferred, net
(326
)
 
(69
)
 
(1,219
)
 
(813
)
Property management
13,834

 
12,994

 
56,509

 
53,736

Depreciation and amortization
39,325

 
35,510

 
152,110

 
137,209

Cost of home sales
11,866

 
9,527

 
35,096

 
37,475

Home selling expenses
1,183

 
946

 
4,401

 
4,095

General and administrative
7,835

 
11,161

 
35,679

 
37,684

Other expenses
438

 
387

 
2,865

 
1,483

Early debt retirement

 
1,071

 
1,491

 
1,071

Interest and related amortization
26,259

 
26,515

 
104,223

 
104,993

Total expenses
200,992

 
191,414

 
802,596

 
765,206

Gain on sale of real estate, net

 

 
52,507

 

Income before equity in income of unconsolidated joint ventures
57,648

 
52,037

 
287,167

 
221,447

Equity in income of unconsolidated joint ventures
478


1,343


8,755


4,939

Consolidated net income
58,126

 
53,380

 
295,922

 
226,386

 
 
 
 
 
 
 
 
Income allocated to non-controlling interests – Common OP Units
(3,166
)
 
(3,206
)
 
(16,783
)
 
(13,774
)
Redeemable perpetual preferred stock dividends
(8
)
 
(8
)

(16
)

(16
)
Net income available for Common Stockholders
$
54,952

 
$
50,166

 
$
279,123

 
$
212,596





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



Non-GAAP Financial Measures

This document contains certain non-GAAP measures used by management that we believe are helpful in understanding our business. We believe investors should review these non-GAAP measures along with GAAP net income and cash flows 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 flows 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. For definitions and reconciliations of non-GAAP measures to our financial statements as prepared under GAAP, refer to both Reconciliation of Net Income to Non-GAAP Financial Measures on page 7 and Non-GAAP Financial Measures Definitions and Reconciliations on pages 18 - 20.







4Q 2019 Supplemental information
5 
Equity LifeStyle Properties, Inc.



Selected Non-GAAP Financial Measures

(In millions, except per share data (adjusted for stock split), unaudited)

 
Quarter Ended
 
December 31, 2019
Income from property operations, excluding deferrals and property management - 2019 Core (1)
$
139.5

Income from property operations, excluding deferrals and property management - Non-Core (1)
7.5

Property management and general and administrative
(21.7
)
Other income and expenses
0.5

Interest and related amortization
(26.3
)
Normalized FFO and FFO available for Common Stock and OP Unit holders (2)
$
99.5

 
 
Normalized FFO per Common Share and OP Unit - Fully Diluted
$0.52
FFO per Common Share and OP Unit - Fully Diluted
$0.52
 
 
 
 
Normalized FFO available for Common Stock and OP Unit holders (2)
$
99.5

Non-revenue producing improvements to real estate (2)
(14.9
)
FAD for Common Stock and OP Unit holders (2)
$
84.6

 
 
Weighted average Common Stock and OP Units - Fully Diluted
192.5


























__________________________
1.
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 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 for Common Stock and OP Unit holders.

4Q 2019 Supplemental information
6 
Equity LifeStyle Properties, Inc.



Reconciliation of Net Income to Non-GAAP Financial Measures

(In thousands, except per share data (adjusted for stock split), unaudited)

 
 
Quarters Ended December 31,

Years Ended December 31,
 
 
2019
 
2018
 
2019
 
2018
Net income available for Common Stockholders
 
$
54,952

 
$
50,166

 
$
279,123

 
$
212,596

Income allocated to non-controlling interests – Common OP Units
 
3,166

 
3,206

 
16,783

 
13,774

Membership upgrade sales upfront payments, deferred, net
 
2,238

 
1,191

 
10,451

 
7,380

Membership sales commissions, deferred, net
 
(326
)
 
(69
)
 
(1,219
)
 
(813
)
Depreciation and amortization
 
39,325

 
35,510

 
152,110

 
137,209

Depreciation on unconsolidated joint ventures
 
176

 
426

 
1,223

 
1,816

Gain on sale of real estate, net
 

 

 
(52,507
)
 

FFO available for Common Stock and OP Unit holders
 
99,531

 
90,430

 
405,964

 
371,962

Early debt retirement
 

 
1,071

 
2,085

 
1,071

Insurance proceeds due to catastrophic weather event and other, net (1)
 

 
800

 
(6,205
)
 
(5,125
)
Normalized FFO available for Common Stock and OP Unit holders
 
99,531

 
92,301

 
401,844

 
367,908

Non-revenue producing improvements to real estate
 
(14,889
)
 
(11,864
)
 
(52,159
)
 
(44,829
)
FAD for Common Stock and OP Unit holders
 
$
84,642

 
$
80,437

 
$
349,685

 
$
323,079

 
 
 
 
 
 
 
 
 
Net income available per Common Share - Basic
 
$
0.30

 
$
0.28

 
$
1.54

 
$
1.19

Net income available per Common Share - Fully Diluted (2)
 
$
0.30

 
$
0.28

 
$
1.54

 
$
1.19

 
 
 
 
 
 
 
 
 
FFO per Common Share and OP Unit - Basic
 
$
0.52

 
$
0.47

 
$
2.12

 
$
1.96

FFO per Common Share and OP Unit - Fully Diluted
 
$
0.52

 
$
0.47

 
$
2.11

 
$
1.96

 
 
 
 
 
 
 
 
 
Normalized FFO per Common Share and OP Unit - Basic
 
$
0.52

 
$
0.48

 
$
2.10

 
$
1.94

Normalized FFO per Common Share and OP Unit - Fully Diluted
 
$
0.52

 
$
0.48

 
$
2.09

 
$
1.94

 
 
 
 
 
 
 
 
 
Average Common Stock - Basic
 
181,664

 
179,140

 
180,805

 
177,928

Average Common Stock and OP Units - Basic
 
192,157

 
190,632

 
191,739

 
189,514

Average Common Stock and OP Units - Fully Diluted
 
192,458

 
191,154

 
191,995

 
190,110













______________________
1.
Includes $0.8 million, $6.2 million and $6.7 million of insurance recovery revenue from reimbursement for capital expenditures related to Hurricane Irma for the quarter ended December 31, 2018 and for the years ended 2019 and 2018, respectively. Also includes $1.6 million related to settlement of a previously disclosed civil investigation by certain California district attorneys for the quarter and year ended December 31, 2018.
2.
Net income per fully diluted Common Share is calculated before Income allocated to non-controlling interest - Common OP Units.

4Q 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 December 31,
 
Years Ended December 31,
 
2019
 
2018
 
2019
 
2018
Community base rental income (2)
$
138.5

 
$
132.2

 
$
547.6

 
$
518.2

Rental home income
3.9

 
3.7

 
14.9

 
14.3

Resort and marina base rental income (3)
65.1

 
56.1

 
269.9

 
239.9

Annual membership subscriptions
13.0

 
12.2

 
51.0

 
47.8

Membership upgrade sales current period, gross
4.5

 
3.2

 
19.1

 
15.2

Utility and other income (4)
23.7

 
24.8

 
94.0

 
100.6

    Property operating revenues
248.7

 
232.2

 
996.5

 
936.0

 
 
 
 
 
 
 
 
Property operating, maintenance and real estate taxes (5)
96.3

 
88.6

 
394.0

 
368.9

Rental home operating and maintenance
1.5

 
1.9

 
5.6

 
6.9

Sales and marketing, gross
3.9

 
2.9

 
15.5

 
12.5

    Property operating expenses
101.7

 
93.4

 
415.1

 
388.3

Income from property operations, excluding deferrals and property management (1)
$
147.0

 
$
138.8

 
$
581.4

 
$
547.7

 
 
 
 
 
 
 
 
Manufactured home site figures and occupancy averages:
 
 
 
 
 
 
 
Total sites
72,149

 
72,735

 
72,128

 
72,020

Occupied sites
68,456

 
68,906

 
68,428

 
68,120

Occupancy %
94.9
%
 
94.7
%
 
94.9
%
 
94.6
%
Monthly base rent per site
$
675

 
$
639

 
$
667

 
$
634

 
 
 
 
 
 
 
 
Resort and marina base rental income:
 
 
 
 
 
 
 
Annual
$
46.5

 
$
38.9

 
$
169.0

 
$
148.1

Seasonal
9.3

 
8.6

 
41.5

 
37.7

Transient
9.3

 
8.6

 
59.4

 
54.1

     Total resort and marina base rental income
$
65.1

 
$
56.1

 
$
269.9

 
$
239.9












____________________
1.
Excludes property management and the GAAP deferral of membership upgrade sales upfront payments and membership sales commissions, net.
2.
See the manufactured home site figures and occupancy averages included below within this table.
3.
See resort and marina base rental income detail included below within this table.
4.
Includes Hurricane Irma insurance recovery revenues of $0.8 million, which we have identified as business interruption related to Non-Core properties for the year ended December 31, 2019, and Hurricane Irma insurance recovery revenues of $1.2 million and $7.7 million, of which we have identified $1.2 million and $4.9 million as business interruption related to Non-Core properties, for the quarter and year ended December 31, 2018, respectively.
5.
Includes bad debt expense for the periods presented. For the year ended December 31, 2018, expenses include debris removal and cleanup costs related to Hurricane Irma of $2.6 million.

4Q 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 December 31,
 
Years Ended December 31,
 
2019
 
2018
 
Change (2)
 
2019
 
2018
 
Change (2)
Community base rental income (3)
$
134.7

 
$
127.7

 
5.5
 %
 
$
531.9

 
$
505.3

 
5.3
 %
Rental home income
3.9

 
3.4

 
13.9
 %
 
14.8

 
13.1

 
12.8
 %
Resort base rental income (4)
56.2

 
53.5

 
5.3
 %
 
243.8

 
233.4

 
4.5
 %
Annual membership subscriptions
13.0

 
12.2

 
6.5
 %
 
51.0

 
47.8

 
6.7
 %
Membership upgrade sales current period, gross
4.5

 
3.2

 
39.7
 %
 
19.1

 
15.2

 
25.8
 %
Utility and other income (5)
22.8

 
23.3

 
(2.4
)%
 
90.6

 
93.5

 
(3.2
)%
    Property operating revenues
235.1

 
223.3

 
5.3
 %
 
951.2

 
908.3

 
4.7
 %
 
 
 
 
 
 
 
 
 
 
 
 
Property operating, maintenance and real estate taxes (6) (7)
90.2

 
85.3

 
5.8
 %
 
372.9

 
358.4

 
4.1
 %
Rental home operating and maintenance
1.5

 
1.8

 
(16.7
)%
 
5.6

 
6.5

 
(13.9
)%
Sales and marketing, gross
3.9

 
2.8

 
36.7
 %
 
15.5

 
12.5

 
24.3
 %
    Property operating expenses
95.6

 
89.9

 
6.3
 %
 
394.0

 
377.4

 
4.4
 %
Income from property operations, excluding deferrals and property management (1)
$
139.5

 
$
133.4

 
4.6
 %
 
$
557.2

 
$
530.9

 
5.0
 %
 
 
 
 
 
 
 
 
 
 
 
 
Occupied sites (8)
66,712

 
66,311

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Core manufactured home site figures and occupancy averages:
 
 
 
 
 
 
Total sites
69,706

 
69,573

 
 
 
69,652

 
69,553

 
 
Occupied sites
66,584

 
66,196

 
 
 
66,441

 
66,046

 
 
Occupancy %
95.5
%
 
95.1
%
 
 
 
95.4
%
 
95.0
%
 
 
Monthly base rent per site
$
674

 
$
643

 
 
 
$
667

 
$
638

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Resort base rental income:
 
 
 
 
 
 
 
 
 
 
 
Annual
$
39.7

 
$
37.7

 
5.5
 %
 
$
154.3

 
$
145.7

 
6.0
 %
Seasonal
8.7

 
8.2

 
6.6
 %
 
37.7

 
36.3

 
4.0
 %
Transient
7.8

 
7.6

 
2.4
 %
 
51.8

 
51.4

 
0.8
 %
     Total resort base rental income
$
56.2

 
$
53.5

 
5.3
 %
 
$
243.8

 
$
233.4

 
4.5
 %






______________________
1.
Excludes property management and the GAAP deferral of membership upgrades sales upfront payments and membership sales commissions, net.
2.
Calculations prepared using actual results without rounding.
3.
See 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.
Includes Hurricane Irma insurance recovery revenues of $2.4 million for the year ended December 31, 2018.
6.
Real estate tax expense for the quarter ended December 31, 2019 includes incremental full year 2019 costs incurred during the quarter as a result of an increase in assessed tax values at certain properties for the year ended December 31, 2019. For the year ended December 31, 2018, expenses resulting from Hurricane Irma were $2.2 million, which were incurred during the first quarter of 2018.
7.
Includes bad debt expense for the periods presented.
8.
Occupied sites are presented as of the end of the period. Occupied sites have increased by 401 from 66,311 at December 31, 2018.

4Q 2019 Supplemental information
9 
Equity LifeStyle Properties, Inc.



Non-Core Income from Property Operations (1)

(In millions, unaudited)

 
Quarter Ended
 
Year Ended
 
December 31, 2019
 
December 31, 2019
Community base rental income
$
3.8

 
$
15.7

Rental home income

 
0.1

Resort and marina base rental income
8.9

 
26.1

Utility and other income (2)
0.9

 
3.4

  Property operating revenues
13.6

 
45.3

 
 
 
 
  Property operating expenses (3)
6.1

 
21.1

Income from property operations, excluding deferrals and property management (1)
$
7.5

 
$
24.2





































______________________
1.
Excludes property management and the GAAP deferral of membership upgrade sales upfront payments and membership sales commissions, net.
2.
Includes Hurricane Irma insurance recovery revenues of $0.8 million, which we have identified as business interruption for the year ended December 31, 2019.
3.
Includes bad debt expense for the periods presented.

4Q 2019 Supplemental information
10 
Equity LifeStyle Properties, Inc.



Income from Rental Home Operations

(In millions, except occupied rentals, unaudited)

 
Quarters Ended December 31,
 
Years Ended December 31,
 
2019
 
2018
 
2019
 
2018
Manufactured homes:
 
 
 
 
 
 
 
Rental operations revenues (1)
$
11.7

 
$
11.0

 
$
45.9

 
$
44.0

Rental operations expense
1.5

 
1.8

 
5.6

 
6.5

   Income from rental operations
10.2

 
9.2

 
40.3

 
37.5

Depreciation on rental homes (2)
2.8

 
2.4

 
10.4

 
9.3

   Income from rental operations, net of depreciation
$
7.4

 
$
6.8

 
$
29.9

 
$
28.2

 
 
 
 
 
 
 
 
Occupied rentals: (3)
 
 
 
 
 
 
 
New
3,175

 
2,728

 
 
 
 
Used
791

 
1,224

 
 
 
 
   Total occupied rental sites
3,966

 
3,952

 
 
 
 

 
As of December 31, 2019
 
As of December 31, 2018
Cost basis in rental homes: (4)
Gross
 
Net of Depreciation
 
Gross
 
Net of Depreciation
New
$
226.0

 
$
191.0

 
$
158.6

 
$
136.5

Used
20.9

 
9.0

 
29.5

 
14.5

  Total rental homes
$
246.9

 
$
200.0

 
$
188.1

 
$
151.0


















______________________
1.
For both quarters ended December 31, 2019 and 2018, approximately $7.8 million and $7.6 million, respectively, of the rental operations revenue is included in the Community base rental income in the Core Income from Property Operations on page 9. For both years ended December 31, 2019 and 2018, approximately $31.2 million and $30.8 million, respectively, of the rental operations revenue is 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 and years ended December 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.
Occupied rentals as of the end of the period in our Core portfolio. Included in the quarters ended December 31, 2019 and 2018 were 289 and 279 homes rented through our ECHO joint venture, respectively. For the quarters ended December 31, 2019 and 2018, the rental home investment associated with our ECHO joint venture totaled approximately $10.9 million and $9.8 million, respectively.
4.
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 December 31, 2019 and 2018, our investment in the ECHO joint venture was approximately $16.9 million and $16.2 million, respectively.

4Q 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 December 31, 2019
 
 
Sites
Community sites
72,100

Resort sites:
 
    Annuals
29,600

    Seasonal
10,200

    Transient
14,100

Marina slips
2,300

Membership (1)
24,600

Joint Ventures (2)
3,600

Total
156,500


Home Sales - Select Data
 
 
 
 
 
 
 
 
Quarters Ended December 31,
 
Years Ended December 31,
 
2019
 
2018
 
2019
 
2018
Total New Home Sales Volume (3)
160

 
139

 
496

 
556

     New Home Sales Volume - ECHO joint venture
15

 
26

 
65

 
100

New Home Sales Gross Revenues (3)
$
9,942

 
$
7,190

 
$
27,434

 
$
27,833

 
 
 
 
 
 
 
 
Total Used Home Sales Volume
200

 
249

 
827

 
1,091

Used Home Sales Gross Revenues
$
1,975

 
$
2,121

 
$
7,221

 
$
8,231

 
 
 
 
 
 
 
 
Brokered Home Resales Volume
193

 
175

 
868

 
852

Brokered Home Resale Revenues, net
$
295

 
$
281

 
$
1,372

 
$
1,290


















______________________
1.
Sites primarily utilized by approximately 115,700 members. Includes approximately 5,900 sites rented on an annual basis.
2.
Joint ventures have approximately 2,900 annual Sites, 400 seasonal Sites, and 300 transient Sites.
3.
Total new home sales volume includes home sales from our ECHO joint venture. New home sales gross revenues does not include the revenues associated with our ECHO joint venture.

4Q 2019 Supplemental information
12 
Equity LifeStyle Properties, Inc.



2020 Guidance - Selected Financial Data (1)

Our guidance acknowledges the existence of volatile economic conditions, which may impact our current guidance assumptions. Factors impacting 2020 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 and marina sites; (iii) scheduled or implemented rate increases on community, resort and marina sites; (iv) scheduled or implemented rate increases in annual payments under membership subscriptions; (v) occupancy changes; (vi) our ability to attract and retain membership customers; (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
 
March 31, 2020
 
December 31, 2020
Income from property operations, excluding deferrals and property management - Core (2)
$
161.9

 
$
606.9

Income from property operations - Non-Core (3)
2.7

 
11.9

Property management and general and administrative
(25.2
)
 
(96.0
)
Other income and expenses
2.2

 
10.2

Interest and related amortization
(26.8
)
 
(106.3
)
Normalized FFO and FFO available for Common Stock and OP Unit holders
114.8

 
426.7

    Depreciation and amortization
(38.7
)
 
(151.5
)
Deferral of membership upgrade sales upfront payments and membership sales commission, net
(1.8
)
 
(9.9
)
    Income allocated to non-controlling interest-Common OP Units
(4.0
)
 
(14.4
)
Net income available for Common Stockholders
$
70.3

 
$
250.9

 
 
 
 
 
 
 
 
Net income per Common Share - Fully Diluted (4)
$0.37 - $0.41

 
$1.35 - $1.41

FFO per Common Share and OP Unit - Fully Diluted
$0.58 - $0.62

 
$2.19 - $2.25

Normalized FFO per Common Share and OP Unit - Fully Diluted
$0.58 - $0.62

 
$2.19 - $2.25

 
 
 
 
Weighted average Common Stock outstanding - Fully Diluted
192.6

 
192.7










______________________
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 2020 Core Guidance Assumptions. Amount represents 2019 Income from property operations, excluding deferrals and property management, from the 2020 Core properties of $153.1 million multiplied by an estimated growth rate of 5.7% and $575.5 million multiplied by an estimated growth rate of 5.5% for the quarter and year ending December 31, 2020, respectively.
3.
See page 14 for 2020 Non-Core Guidance Assumptions.
4.
Net income per Common Share - Fully Diluted is calculated before Income allocated to non-controlling interest - Common OP Units.

4Q 2019 Supplemental information
13 
Equity LifeStyle Properties, Inc.



2020 Core Guidance Assumptions (1) 
(In millions, unaudited)
 
Quarter Ended
 
First Quarter 2020
 
Year Ended
 
2020
 
March 31, 2019
 
Growth Factors (2)
 
December 31, 2019
 
Growth Factors (2)
Community base rental income
$
134.8

 
4.9
 %
 
$
547.2

 
4.4
%
Rental home income
3.5

 
12.4
 %
 
14.8

 
3.9
%
Resort base rental income (3)
72.2

 
6.0
 %
 
260.3

 
5.0
%
Annual membership subscriptions
12.3

 
4.7
 %
 
51.0

 
4.4
%
Membership upgrade sales current period, gross
3.8

 
8.3
 %
 
19.1

 
6.5
%
Utility and other income
23.7

 
4.8
 %
 
92.8

 
2.4
%
    Property operating revenues
250.3

 
5.4
 %
 
985.2

 
4.4
%
 
 
 
 
 
 
 
 
Property operating, maintenance and real estate taxes (4)
92.6

 
4.7
 %
 
388.5

 
2.9
%
Rental home operating and maintenance
1.2

 
(0.5
)%
 
5.6

 
1.9
%
Sales and marketing, gross
3.4

 
9.8
 %
 
15.6

 
4.7
%
    Property operating expenses
97.2

 
4.9
 %
 
409.7

 
2.9
%
Income from property operations, excluding deferrals and property management
$
153.1

 
5.7
 %
 
$
575.5

 
5.5
%
 
 
 
 
 
 
 
 
Resort base rental income:
 
 
 
 
 
 
 
Annual
$
39.1

 
6.6
 %
 
$
161.4

 
5.5
%
Seasonal
21.1

 
6.8
 %
 
41.3

 
6.0
%
Transient
12.0

 
2.8
 %
 
57.6

 
3.0
%
    Total resort base rental income
$
72.2

 
6.0
 %
 
$
260.3

 
5.0
%


2020 Non-Core Guidance Assumptions (1) 
(In millions, unaudited)
 
Quarter Ending
 
Year Ending
 
March 31, 2020
 
December 31, 2020
Community base rental income
$

 
$
0.1

Rental home income

 

Resort and marina base rental income
5.4

 
23.7

Utility and other income
0.5

 
2.4

  Property operating revenues
5.9

 
26.2

 
 
 
 
  Property operating expenses (4)
3.2

 
14.3

Income from property operations, excluding deferrals and property management
$
2.7

 
$
11.9






___________________
1.
Each line item represents the mid-point of a range of possible outcomes and reflects management’s best estimate of the most likely outcome. Actual income from property operations could vary materially from amounts presented above if any of our assumptions is incorrect.
2.
Management’s estimate of the growth of property operations in the 2020 Core Properties compared to actual 2019 performance. Represents 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.
Includes bad debt expense for the periods presented.

4Q 2019 Supplemental information
14 
Equity LifeStyle Properties, Inc.



Memberships - Select Data

(Unaudited)

 
 
 
 
2016
 
2017
 
2018
 
2019
 
2020 (1)
Member Count (2)
 
104,728

 
106,456

 
111,094

 
115,680

 
120,000

Thousand Trails Camping Pass (TTC) Origination
 
29,576

 
31,618

 
37,528

 
41,484

 
42,700

TTC Sales
 
12,856

 
14,128

 
17,194

 
19,267

 
20,300

RV Dealer TTC Activations
 
16,720

 
17,490

 
20,334

 
22,217

 
22,400

Number of annuals (3)
 
5,756

 
5,843

 
5,888

 
5,938

 
6,100

Number of upgrade sales (4)
 
2,477

 
2,514

 
2,500

 
2,919

 
3,200

 
 
 
 
 
 
 
 
 
 
 
(In thousands, unaudited)
 
 
 
 
 
 
 
 
 
 
Annual membership subscriptions
 
$
45,036

 
$
45,798

 
$
47,778

 
$
51,015

 
$
53,200

Resort base rental income from annuals
 
$
15,413

 
$
16,841

 
$
18,363

 
$
19,634

 
$
21,200

Resort base rental income from seasonals/transients
 
$
17,344

 
$
18,231

 
$
19,840

 
$
20,181

 
$
21,800

Upgrade contract initiations (5)
 
$
12,312

 
$
14,130

 
$
15,191

 
$
19,111

 
$
20,350

Utility and other income
 
$
2,442

 
$
2,254

 
$
2,410

 
$
2,422

 
$
2,000

 
 
 
 
 
 
 
 
 
 
 

























______________________
1.
Guidance estimate. Each line item represents the mid-point of a range of possible 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 annual subscriptions 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 membership subscriptions.
4.
Existing members 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 membership upgrades are included in membership upgrade sales current period, gross on our Consolidated Income Statements on page 4.

4Q 2019 Supplemental information
15 
Equity LifeStyle Properties, Inc.




Market Capitalization

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

Capital Structure as of December 31, 2019
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total Common Stock/Units
 
% of Total Common Stock/Units
 
Total
 
% of Total
 
% of Total Market Capitalization
 
 
 
 
 
 
 
 
 
 
 
Secured Debt
 
 
 
 
 
$
2,072

 
85.2
%
 
 
Unsecured Debt
 
 
 
 
 
360

 
14.8
%
 
 
Total Debt (1)
 
 
 
 
 
$
2,432

 
100.0
%
 
15.2
%
 
 
 
 
 
 
 
 
 
 
 
Common Stock
 
182,089,595

 
94.6
%
 
 
 
 
 
 
OP Units
 
10,491,222

 
5.4
%
 
 
 
 
 
 
Total Common Stock and OP Units
 
192,580,817

 
100.0
%
 
 
 
 
 
 
Common Stock price at December 31, 2019
 
$
70.39

 
 
 
 
 
 
 
 
Fair Value of Common Stock and OP Units
 
 
 
 
 
$
13,556

 
100.0
%
 
 
Total Equity
 
 
 
 
 
$
13,556

 
100.0
%
 
84.8
%
 
 
 
 
 
 
 
 
 
 
 
Total Market Capitalization
 
 
 
 
 
$
15,988

 
 
 
100.0
%





























______________________
1.    Excludes deferred financing costs of approximately $24.0 million.

4Q 2019 Supplemental information
16 
Equity LifeStyle Properties, Inc.



Debt Maturity Schedule

Debt Maturity Schedule as of December 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
 
2020
 
$
48,294

 
5.18
%
 
$

 
%
 
$
48,294

 
2.13
%
 
5.18
%
 
2021
 
168,924

 
5.01
%
 

 
%
 
168,924

 
7.44
%
 
5.01
%
 
2022
 
146,002

 
4.62
%
 

 
%
 
146,002

 
6.43
%
 
4.62
%
 
2023
 
102,776

 
5.04
%
 
200,000

 
3.05
%
 
302,776

 
13.33
%
 
3.73
%
 
2024
 
10,634

 
5.49
%
 

 
%
 
10,634

 
0.47
%
 
5.49
%
 
2025
 
100,879

 
3.45
%
 

 
%
 
100,879

 
4.44
%
 
3.45
%
 
2026
 

 
%
 

 
%
 

 
%
 
%
 
2027
 

 
%
 

 
%
 

 
%
 
%
 
2028
 
221,748

 
4.19
%
 

 
%
 
221,748

 
9.76
%
 
4.19
%
 
2029
 

 
%
 

 
%
 

 
%
 
%
 
Thereafter
 
1,272,049

 
4.24
%
 

 
%
 
1,272,049

 
56.01
%
 
4.24
%
 
Total
 
$
2,071,306

 
4.35
%
 
$
200,000

 
3.05
%
 
$
2,271,306

 
100.0
%
 
4.24
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Unsecured Line of Credit (1)
 

 
 
 
160,000

 
 
 
160,000

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Note Premiums
 
1,110

 
 
 

 
 
 
1,110

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total Debt
 
2,072,416

 
 
 
360,000

 
 
 
2,432,416

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Deferred Financing Costs
 
(22,907
)
 
 
 
(1,051
)
 
 
 
(23,958
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total Debt, net
 
$
2,049,509

 
 
 
$
358,949

 
 
 
$
2,408,458

 
 
 
4.37
%
(2) 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Average Years to Maturity
 
13.1
 
 
 
2.7
 
 
 
11.5
 
 
 
 
 





















______________________
1.
Reflects outstanding balance on the Line of Credit as of December 31, 2019. The Line of Credit matures in October 2021 and had an effective interest rate of 2.59% for the year ended December 31, 2019.
2.Reflects effective interest rate for the year ended December 31, 2019, including amortization of note premiums and deferred financing costs.

4Q 2019 Supplemental information
17 
Equity LifeStyle Properties, Inc.



Non-GAAP Financial Measures Definitions and Reconciliations

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 non-refundable upfront payments from membership upgrade contracts. In accordance with GAAP, the non-refundable upfront 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 upfront 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 and 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 and other miscellaneous non-comparable items from 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, membership subscriptions and upgrade sales, utility and other 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 membership upgrade sales upfront payments and membership sales 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.

4Q 2019 Supplemental information
18 
Equity LifeStyle Properties, Inc.



The following table reconciles Net income available for Common Stockholders to Income from property operations:
 
 
Quarters Ended December 31,

Years Ended December 31,
(amounts in thousands)
 
2019
 
2018
 
2019
 
2018
Net income available for Common Stockholders
 
$
54,952

 
$
50,166

 
$
279,123

 
$
212,596

Redeemable perpetual preferred stock dividends
 
8

 
8

 
16

 
16

Income allocated to non-controlling interests – Common OP Units
 
3,166

 
3,206

 
16,783

 
13,774

Equity in income of unconsolidated joint ventures
 
(478
)
 
(1,343
)
 
(8,755
)
 
(4,939
)
Income before equity in income of unconsolidated joint ventures
 
57,648

 
52,037

 
287,167

 
221,447

Gain on sale of real estate, net
 

 

 
(52,507
)
 

Membership upgrade sales upfront payments, deferred, net
 
2,238

 
1,191

 
10,451

 
7,380

Gross revenues from home sales
 
(11,917
)
 
(9,311
)
 
(34,655
)
 
(36,064
)
Brokered resale and ancillary services revenues, net
 
1,071

 
(204
)
 
(3,493
)
 
(3,584
)
Interest income
 
(1,822
)
 
(1,867
)
 
(7,207
)
 
(7,525
)
Income from other investments, net
 
(634
)
 
(1,068
)
 
(9,528
)
 
(10,842
)
Membership sales commissions, deferred, net
 
(326
)
 
(69
)
 
(1,219
)
 
(813
)
Property management
 
13,834

 
12,994

 
56,509

 
53,736

Depreciation and amortization
 
39,325

 
35,510

 
152,110

 
137,209

Cost of home sales
 
11,866

 
9,527

 
35,096

 
37,475

Home selling expenses
 
1,183

 
946

 
4,401

 
4,095

General and administrative
 
7,835

 
11,161

 
35,679

 
37,684

Other expenses
 
438

 
387

 
2,865

 
1,483

Early debt retirement
 

 
1,071

 
1,491

 
1,071

Interest and related amortization
 
26,259

 
26,515

 
104,223

 
104,993

Income from property operations, excluding deferrals and property management
 
146,998

 
138,820

 
581,383

 
547,745

Membership upgrade sales upfront payments, and membership sales commissions, deferred, net
 
(1,912
)
 
(1,122
)
 
(9,232
)
 
(6,567
)
Property management
 
(13,834
)
 
(12,994
)
 
(56,509
)
 
(53,736
)
Income from property operations
 
$
131,252

 
$
124,704

 
$
515,642

 
$
487,442

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 non-refundable upfront payments from membership upgrade contracts. In accordance with GAAP, the non-refundable upfront 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 upfront 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.


4Q 2019 Supplemental information
19 
Equity LifeStyle Properties, Inc.






The following table reconciles Consolidated net income to EBITDAre and Adjusted EBITDAre:
 
 
Quarters Ended December 31,
 
Years Ended December 31,
(amounts in thousands)
 
2019
 
2018
 
2019
 
2018
Consolidated net income
 
$
58,126

 
$
53,380

 
$
295,922

 
$
226,386

Interest income
 
(1,822
)
 
(1,867
)
 
(7,207
)
 
(7,525
)
Membership upgrade sales upfront payments, deferred, net
 
2,238

 
1,191

 
10,451

 
7,380

Membership sales commissions, deferred, net
 
(326
)
 
(69
)
 
(1,219
)
 
(813
)
Real estate depreciation and amortization
 
39,325

 
35,510

 
152,110

 
137,209

Other depreciation and amortization
 
438

 
387

 
1,774

 
1,483

Interest and related amortization
 
26,259

 
26,515

 
104,223

 
104,993

Gain on sale of real estate, net
 

 

 
(52,507
)
 

Adjustments to our share of EBITDAre of unconsolidated joint ventures 
 
273

 
987

 
3,131

 
4,112

EBITDAre
 
124,511

 
116,034

 
506,678

 
473,225

Early debt retirement
 

 
1,071

 
2,085

 
1,071

Insurance proceeds due to catastrophic weather event and other, net
 

 
800

 
(6,205
)
 
(5,125
)
Adjusted EBITDAre
 
$
124,511

 
$
117,905

 
$
502,558

 
$
469,171

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 properties that were not owned and operated during all of 2018 and 2019. This includes, but is not limited to, four properties and the marinas acquired and five properties sold during 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 do not directly result in increased revenue or expense savings and are primarily comprised of common area improvements, furniture and mechanical improvements.
FIXED CHARGES. Fixed charges consist of interest expense, amortization of note premiums and debt issuance costs.


4Q 2019 Supplemental information
20 
Equity LifeStyle Properties, Inc.