Company Announcements

ELS Reports Second Quarter Results

Continued Strong Performance;
Guidance Update

CHICAGO--(BUSINESS WIRE)--Jul. 18, 2022-- Equity LifeStyle Properties, Inc. (NYSE: ELS) (referred to herein as “we,” “us,” and “our”) today announced results for the quarter and six months ended June 30, 2022. All per share results are reported on a fully diluted basis unless otherwise noted.

Financial Results for the Quarter and Six Months Ended June 30, 2022

For the quarter ended June 30, 2022, total revenues increased $35.2 million, or 10.7%, to $365.3 million, compared to $330.1 million for the same period in 2021. For the quarter ended June 30, 2022, net income available for Common Stockholders increased $0.4 million, to $61.5 million, or $0.33 per Common Share, compared to $61.1 million, or $0.33 per Common Share, for the same period in 2021.

For the six months ended June 30, 2022, total revenues increased $91.7 million, or 14.5%, to $725.5 million, compared to $633.8 million for the same period in 2021. For the six months ended June 30, 2022, net income available for Common Stockholders increased $18.1 million, or $0.09 per Common Share, to $144.4 million, or $0.78 per Common Share, compared to $126.3 million, or $0.69 per Common Share, for the same period in 2021.

Non-GAAP Financial Measures and Portfolio Performance

For the quarter ended June 30, 2022, Funds from Operations (“FFO”) available for Common Stock and OP Unit holders increased $4.0 million, or $0.01 per Common Share, to $121.6 million, or $0.62 per Common Share, compared to $117.6 million, or $0.61 per Common Share, for the same period in 2021. For the six months ended June 30, 2022, Funds from Operations available for Common Stock and OP Unit holders increased $24.4 million, or $0.10 per Common Share, to $262.5 million, or $1.34 per Common Share, compared to $238.1 million, or $1.24 per Common Share, for the same period in 2021.

For the quarter ended June 30, 2022, Normalized Funds from Operations (“Normalized FFO”) available for Common Stock and OP Unit holders increased $7.0 million, or $0.03 per Common Share, to $125.3 million, or $0.64 per Common Share, compared to $118.3 million, or $0.61 per Common Share, for the same period in 2021. For the six months ended June 30, 2022, Normalized Funds from Operations available for Common Stock and OP Unit holders increased $25.8 million, or $0.12 per Common Share, to $266.7 million, or $1.37 per Common Share, compared to $240.9 million, or $1.25 per Common Share, for the same period in 2021.

For the quarter ended June 30, 2022, property operating revenues, excluding deferrals, increased $20.7 million to $315.8 million, compared to $295.1 million for the same period in 2021. For the six months ended June 30, 2022, property operating revenues, excluding deferrals, increased $57.8 million to $638.2 million, compared to $580.4 million for the same period in 2021. For the quarter ended June 30, 2022, income from property operations, excluding deferrals and property management, increased $8.3 million to $174.8 million, compared to $166.5 million for the same period in 2021. For the six months ended June 30, 2022, income from property operations, excluding deferrals and property management, increased $30.5 million to $367.3 million, compared to $336.8 million for the same period in 2021.

For the quarter ended June 30, 2022, Core property operating revenues, excluding deferrals, increased approximately 4.9% and Core income from property operations, excluding deferrals and property management, increased approximately 3.3%, compared to the same period in 2021. For the six months ended June 30, 2022, Core property operating revenues, excluding deferrals, increased approximately 7.2% and Core income from property operations, excluding deferrals and property management, increased approximately 6.2%, compared to the same period in 2021.

Business Updates

Pages 1 and 2 of this Earnings Release and Supplemental Financial Information provide an update on operations and 2022 guidance.

Investment Activity

In June 2022, we completed the acquisition of Holiday Trav-L-Park Resort, a 299-site oceanfront Recreational Vehicle (“RV”) community located in Emerald Isle, North Carolina, Oceanside RV Resort, a 139-site RV community located in Oceanside, California, and one land parcel adjacent to one of our properties for an aggregate purchase price of $97.4 million. Our total year to date acquisition investment is $113 million.

About Equity LifeStyle Properties

We are a self-administered, self-managed real estate investment trust (“REIT”) with headquarters in Chicago. As of July 18, 2022, we own or have an interest in 449 quality properties in 35 states and British Columbia consisting of 170,880 sites.

For additional information, please contact our Investor Relations Department at (800) 247-5279 or at investor_relations@equitylifestyle.com.

Conference Call

A live webcast of our conference call discussing these results will take place tomorrow, Tuesday, July 19, 2022, 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 2022 growth rates and Net Income, FFO and Normalized FFO per share data;
  • our ability to manage counterparty risk;
  • our ability to renew our insurance policies at existing rates and on consistent terms;
  • 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, including an adequate supply of homes at reasonable costs, 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;
  • our ability to obtain financing or refinance existing debt on favorable terms or at all;
  • the effect of inflation and 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 by or 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.

Our guidance acknowledges the existence of volatile economic conditions, which may impact our current guidance assumptions. Factors impacting 2022 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) change in customer demand regarding travel and outdoor vacation destinations; (viii) our ability to manage expenses in an inflationary environment; (ix) our ability to integrate and operate recent acquisitions in accordance with our estimates; (x) our ability to execute expansion/development opportunities in the face of supply chain delays/shortages; (xi) completion of pending transactions in their entirety and on assumed schedule; (xii) our ability to attract and retain property employees, particularly seasonal employees; (xiii) ongoing legal matters and related fees; and (xiv) costs to restore property operations and potential revenue losses following storms or other unplanned events. In addition, these forward-looking statements, including our 2022 guidance are subject to risks related to the COVID-19 pandemic, many of which are unknown, including the duration of the pandemic, the extent of the adverse health impact on the general population and on our residents, customers and employees in particular, its impact on the employment rate and the economy, the extent and impact of governmental responses and the impact of operational changes we have implemented and may implement in response to the pandemic.

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.

Supplemental Financial Information

Operations Update

Normalized FFO per Common Share

  • Second Quarter (“Q2”) 2022: $0.64 or 4.5% growth compared to the same period in 2021.
  • June Year to Date (“YTD”) 2022: $1.37 or 9.3% growth compared to the same period in 2021.

Core Income from property operations, excluding deferrals and property management

  • Q2 2022: 3.3% growth compared to the same period in 2021.
  • June YTD 2022: 6.2% growth compared to the same period in 2021.

MH - 60% of Total Property Operating Revenues

  • Q2 2022 Core MH base rental income: 5.7% growth compared to the same period in 2021, which reflects 5.3% growth from rate increases and 0.4% from occupancy gains.
  • June YTD 2022 Core MH base rental income: 5.7% growth compared to the same period in 2021, which reflects 5.2% growth from rate increases and 0.5% from occupancy gains.
  • June YTD 2022 Core MH occupancy increased by 97 sites since December 31, 2021.
  • June YTD 2022 Core Manufactured homeowners increased by 443 since December 31, 2021.
  • Q2 New home sales: 365 which represents the highest volume of new home sales in a quarter in our history.

RV and Marina - 32% of Total Property Operating Revenues

  • Q2 2022 Core RV and marina base rental income: 6.6% growth compared to the same period in 2021.
  • June YTD 2022 Core RV and marina base rental income: 13.9% growth compared to the same period in 2021.
  • Q2 2022 Core RV annual base rental income: 9.2% growth compared to the same period in 2021, which reflects 7.1% growth from rate increases and 2.1% from occupancy gains.
  • Q2 2022 combined Core Seasonal and Transient RV base rental income: 2.4% or $0.6 million growth over the same period in 2021. Growth was $0.5 million below the midpoint of our guidance.
  • June YTD 2022 combined Core Seasonal and Transient RV base rental income: 22.8% or $13.3 million growth over the same period in 2021.
  • Core RV Site Composition
   

 

June 30, 2022

 

June 30, 2021

   

Annual

32,000

 

 

31,300

 
   

Seasonal

12,100

 

 

10,700

 
   

Transient

12,500

 

 

14,200

 
   

Member

25,400

 

 

24,800

 
  • Second quarter total nights camped increased 1.8% and 8.3% compared to the quarter ended June 30, 2021 and June 30, 2019, respectively.
  • During the quarter and six months ended June 30, 2022 combined Utility, Payroll and Repair & Maintenance expense, which represent approximately two thirds of property operating expense, were 28.8% and 27.1%, respectively, of total property operating revenue compared to 27.7% and 26.1% for the quarter and six months ended June 30, 2021.
  • Added 458 and 514 expansion Sites during the quarter and six months ended June 30, 2022, respectively.
  • Core Transient RV base rental income for the 2022 4th of July holiday weekend declined 5.7% over 2021 and increased 14.7% over 2019.

2022 Guidance (1)

($ in millions except per share)

 

 

 

Third Quarter

 

Full Year

Net Income/share

 

$0.37 to $0.43

 

$1.54 to $1.64

FFO/share

 

$0.66 to $0.72

 

$2.65 to $2.75

Normalized FFO/share

 

$0.66 to $0.72

 

$2.68 to $2.78

 

 

 

 

 

Core Portfolio:

 

 

 

 

MH rate growth

 

5.3% to 5.5%

 

5.2% to 5.4%

RV Annual rate growth

 

6.6% to 6.8%

 

6.4% to 6.6%

Combined RV Seasonal and Transient base rental income growth

 

(2.5)% to (3.5)%

 

10.6% to 11.6%

Property operating revenue growth rate

 

4.3% to 4.9%

 

5.4% to 6.4%

Property operating expense growth rate

 

3.7% to 4.3%

 

5.2% to 6.2%

Income from property operations, excluding deferrals and property management growth rate(2)

 

4.7% to 5.3%

 

5.6% to 6.6%

______________________

(1)

Third quarter and full year 2022 guidance ranges represent a range of possible outcomes and the midpoint reflects management's estimate of the most likely outcome. Actual growth rates and per share amounts could vary materially from growth rates and per share amounts presented above if any of our assumptions, including occupancy and rate changes, our ability to manage expenses in an inflationary environment, our ability to integrate and operate recent acquisitions and costs to restore property operations and potential revenue losses following storms or other unplanned events, is incorrect. See Forward-Looking Statements in this release for additional factors impacting our 2022 guidance assumptions.

(2)

The expected contribution of our third quarter Core Income from property operations, excluding deferrals and property management is within a range of 24.6% to 25.6% of our expected full year Core Income from property operations, excluding deferrals and property management.

Investor Information

Equity Research Coverage(1)

Bank of America Securities

Barclays

Berenberg Bank

Jeffrey Spector/ Joshua Dennerlein

Anthony Powell

Keegan Carl

 

 

 

BMO Capital Markets

Citi Research

Colliers Securities

John Kim

Michael Bilerman/ Nick Joseph

David Toti

 

 

 

Evercore ISI

Green Street Advisors

RBC Capital Markets

Steve Sakwa/ Samir Khanal

John Pawlowski

Brad Heffern

 

 

 

Robert W. Baird & Company

Truist

UBS

Wes Golladay

Anthony Hau

Michael Goldsmith

 

 

 

______________________

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.

Financial Highlights

(In millions, except Common Shares and OP Units outstanding and per share data, unaudited)

 

 

As of and for the Three Months Ended

 

Jun 30,
2022

Mar 31,
2022

Dec 31,
2021

Sept 30,
2021

Jun 30,
2021

Operating Information

 

 

 

 

 

Total revenues

$

365.3

 

$

360.2

 

$

335.3

 

$

347.2

 

$

330.1

 

Net income

$

64.6

 

$

87.1

 

$

68.8

 

$

74.1

 

$

64.1

 

Net income available for Common Stockholders

$

61.5

 

$

82.9

 

$

65.5

 

$

70.6

 

$

61.1

 

Adjusted EBITDAre (1)

$

153.3

 

$

168.4

 

$

150.7

 

$

150.8

 

$

144.6

 

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

$

121.6

 

$

140.9

 

$

123.0

 

$

124.5

 

$

117.6

 

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

$

125.3

 

$

141.4

 

$

123.6

 

$

124.5

 

$

118.3

 

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

$

103.6

 

$

125.1

 

$

102.3

 

$

106.1

 

$

99.0

 

 

 

 

 

 

 

Common Shares and OP Units Outstanding (In thousands) and Per Share Data

 

 

 

 

 

Common Shares and OP Units, end of the period

 

195,373

 

 

195,303

 

 

194,946

 

 

192,852

 

 

192,847

 

Weighted average Common Shares and OP Units outstanding - Fully Diluted

 

195,227

 

 

195,246

 

 

193,412

 

 

192,736

 

 

192,701

 

Net income per Common Share - Fully Diluted (3)

$

0.33

 

$

0.45

 

$

0.36

 

$

0.38

 

$

0.33

 

FFO per Common Share and OP Unit - Fully Diluted

$

0.62

 

$

0.72

 

$

0.64

 

$

0.65

 

$

0.61

 

Normalized FFO per Common Share and OP Unit - Fully Diluted

$

0.64

 

$

0.72

 

$

0.64

 

$

0.65

 

$

0.61

 

Dividends per Common Share

$

0.4100

 

$

0.4100

 

$

0.3625

 

$

0.3625

 

$

0.3625

 

 

 

 

 

 

 

Balance Sheet

 

 

 

 

 

Total assets

$

5,400

 

$

5,265

 

$

5,308

 

$

4,982

 

$

4,824

 

Total liabilities

$

3,878

 

$

3,734

 

$

3,822

 

$

3,673

 

$

3,522

 

 

 

 

 

 

 

Market Capitalization

 

 

 

 

 

Total debt (4)

$

3,298

 

$

3,193

 

$

3,303

 

$

3,154

 

$

3,010

 

Total market capitalization (5)

$

17,066

 

$

18,130

 

$

20,392

 

$

18,216

 

$

17,340

 

 

 

 

 

 

 

Ratios

 

 

 

 

 

Total debt / total market capitalization

 

19.3

%

 

17.6

%

 

16.2

%

 

17.3

%

 

17.4

%

Total debt / Adjusted EBITDAre (6)

 

5.3

 

 

5.2

 

 

5.6

 

 

5.5

 

 

5.4

 

Interest coverage (7)

 

5.7

 

 

5.7

 

 

5.5

 

 

5.5

 

 

5.4

 

Fixed charges(8)

 

5.6

 

 

5.6

 

 

5.5

 

 

5.4

 

 

5.3

 

______________________

1.

See Non-GAAP Financial Measures Definitions and Reconciliations at the end of the supplemental financial information for definitions of Adjusted EBITDAre, FFO, Normalized FFO and FAD and a reconciliation of Consolidated net income to Adjusted EBITDAre.

2.

See page 9 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 $29.8 million as of June 30, 2022.

5.

See page 16 for the calculation of market capitalization as of June 30, 2022.

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 Reconciliations at the end of the supplemental financial 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.

Consolidated Balance Sheets

(In thousands, except share and per share data)

 

 

June 30, 2022

 

December 31, 2021

 

(unaudited)

 

 

Assets

 

 

 

Investment in real estate:

 

 

 

Land

$

2,073,106

 

 

$

2,019,787

 

Land improvements

 

4,031,259

 

 

 

3,912,062

 

Buildings and other depreciable property

 

1,138,211

 

 

 

1,057,215

 

 

 

7,242,576

 

 

 

6,989,064

 

Accumulated depreciation

 

(2,197,013

)

 

 

(2,103,774

)

Net investment in real estate

 

5,045,563

 

 

 

4,885,290

 

Cash and restricted cash

 

42,426

 

 

 

123,398

 

Notes receivable, net

 

41,925

 

 

 

39,955

 

Investment in unconsolidated joint ventures

 

84,113

 

 

 

70,312

 

Deferred commission expense

 

48,806

 

 

 

47,349

 

Other assets, net

 

136,755

 

 

 

141,567

 

Total Assets

$

5,399,588

 

 

$

5,307,871

 

 

 

 

 

Liabilities and Equity

 

 

 

Liabilities:

 

 

 

Mortgage notes payable, net

$

2,724,040

 

 

$

2,627,783

 

Term loan, net

 

496,373

 

 

 

297,436

 

Unsecured line of credit

 

47,800

 

 

 

349,000

 

Accounts payable and other liabilities

 

185,961

 

 

 

172,285

 

Deferred membership revenue

 

188,582

 

 

 

176,439

 

Accrued interest payable

 

9,520

 

 

 

9,293

 

Rents and other customer payments received in advance and security deposits

 

145,265

 

 

 

118,696

 

Distributions payable

 

80,311

 

 

 

70,768

 

Total Liabilities

 

3,877,852

 

 

 

3,821,700

 

Equity:

 

 

 

Preferred stock, $0.01 par value, 10,000,000 shares authorized as of June 30, 2022 and December 31, 2021; none issued and outstanding.

 

 

 

 

 

Common stock, $0.01 par value, 600,000,000 shares authorized as of June 30, 2022 and December 31, 2021; 186,076,327 and 185,640,379 shares issued and outstanding as of June 30, 2022 and December 31, 2021, respectively.

 

1,916

 

 

 

1,913

 

Paid-in capital

 

1,622,876

 

 

 

1,593,362

 

Distributions in excess of accumulated earnings

 

(191,828

)

 

 

(183,689

)

Accumulated other comprehensive income

 

16,241

 

 

 

3,524

 

Total Stockholders’ Equity

 

1,449,205

 

 

 

1,415,110

 

Non-controlling interests – Common OP Units

 

72,531

 

 

 

71,061

 

Total Equity

 

1,521,736

 

 

 

1,486,171

 

Total Liabilities and Equity

$

5,399,588

 

 

$

5,307,871

 

Consolidated Statements of Income

(In thousands, unaudited)

 

 

Quarters Ended June 30,

 

Six Months Ended June 30,

 

2022

 

2021

 

2022

 

2021

Revenues:

 

 

 

 

 

 

 

Rental income

$

275,330

 

 

$

255,698

 

 

$

560,395

 

 

$

504,720

 

Annual membership subscriptions

 

15,592

 

 

 

14,267

 

 

 

30,749

 

 

 

27,921

 

Membership upgrade sales current period, gross

 

9,535

 

 

 

9,207

 

 

 

16,686

 

 

 

19,221

 

Membership upgrade sales upfront payments, deferred, net

 

(6,367

)

 

 

(6,454

)

 

 

(10,451

)

 

 

(13,881

)

Other income

 

14,195

 

 

 

14,185

 

 

 

27,736

 

 

 

24,706

 

Gross revenues from home sales, brokered resales and ancillary services (1)

 

52,681

 

 

 

40,237

 

 

 

92,390

 

 

 

65,478

 

Interest income

 

1,722

 

 

 

1,742

 

 

 

3,481

 

 

 

3,509

 

Income from other investments, net

 

2,617

 

 

 

1,222

 

 

 

4,521

 

 

 

2,158

 

Total revenues

 

365,305

 

 

 

330,104

 

 

 

725,507

 

 

 

633,832

 

 

 

 

 

 

 

 

 

Expenses:

 

 

 

 

 

 

 

Property operating and maintenance

 

114,307

 

 

 

102,663

 

 

 

218,299

 

 

 

191,536

 

Real estate taxes

 

19,182

 

 

 

17,896

 

 

 

38,639

 

 

 

35,746

 

Sales and marketing, gross

 

6,409

 

 

 

6,298

 

 

 

11,323

 

 

 

12,474

 

Membership sales commissions, deferred, net

 

(957

)

 

 

(1,438

)

 

 

(1,540

)

 

 

(2,937

)

Property management

 

19,099

 

 

 

16,560

 

 

 

36,970

 

 

 

31,940

 

Depreciation and amortization

 

50,796

 

 

 

48,316

 

 

 

100,190

 

 

 

93,714

 

Cost of home sales, brokered resales and ancillary services (1)

 

40,971

 

 

 

31,793

 

 

 

71,670

 

 

 

50,710

 

Home selling expenses and ancillary operating expenses (1)

 

7,584

 

 

 

6,090

 

 

 

14,066

 

 

 

11,031

 

General and administrative

 

11,695

 

 

 

10,228

 

 

 

23,992

 

 

 

20,740

 

Other expenses

 

4,189

 

 

 

800

 

 

 

5,009

 

 

 

1,498

 

Early debt retirement

 

640

 

 

 

755

 

 

 

1,156

 

 

 

2,784

 

Interest and related amortization

 

28,053

 

 

 

27,131

 

 

 

55,517

 

 

 

53,406

 

Total expenses

 

301,968

 

 

 

267,092

 

 

 

575,291

 

 

 

502,642

 

Loss on sale of real estate, net

 

 

 

 

 

 

 

 

 

 

(59

)

Income before equity in income of unconsolidated joint ventures

 

63,337

 

 

 

63,012

 

 

 

150,216

 

 

 

131,131

 

Equity in income of unconsolidated joint ventures

 

1,253

 

 

 

1,068

 

 

 

1,424

 

 

 

1,936

 

Consolidated net income

 

64,590

 

 

 

64,080

 

 

 

151,640

 

 

 

133,067

 

 

 

 

 

 

 

 

 

Income allocated to non-controlling interests – Common OP Units

 

(3,073

)

 

 

(3,021

)

 

 

(7,217

)

 

 

(6,768

)

Redeemable perpetual preferred stock dividends

 

(8

)

 

 

(8

)

 

 

(8

)

 

 

(8

)

Net income available for Common Stockholders

$

61,509

 

 

$

61,051

 

 

$

144,415

 

 

$

126,291

 

______________________

1.

Prior period amounts have been reclassified to conform to the current period presentation.

Non-GAAP Financial Measures

This document contains certain non-GAAP measures used by management that we believe are helpful to understand 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 are they 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 9 and Non-GAAP Financial Measures Definitions and Reconciliations on pages 18 - 20.

Selected Non-GAAP Financial Measures

(In millions, except per share data, unaudited)

 

 

Quarter Ended

 

June 30, 2022

Income from property operations, excluding deferrals and property management - 2022 Core (1)

$

166.6

 

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

 

8.2

 

Property management and general and administrative

 

(30.8

)

Other income and expenses (excluding transaction/pursuit costs)

 

9.4

 

Interest and related amortization

 

(28.1

)

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

$

125.3

 

Early debt retirement

 

(0.6

)

Transaction/pursuit costs (3)

 

(3.1

)

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

$

121.6

 

 

 

FFO per Common Share and OP Unit - Fully Diluted

$

0.62

 

Normalized FFO per Common Share and OP Unit - Fully Diluted

$

0.64

 

 

 

 

 

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

$

125.3

 

Non-revenue producing improvements to real estate

 

(21.7

)

FAD for Common Stock and OP Unit holders (2)

$

103.6

 

 

 

Weighted average Common Shares and OP Units - Fully Diluted

 

195.2

 

______________________

1.

See page 11 for details of the Core Income from Property Operations, excluding deferrals and property management. See page 12 for details of the Non-Core Income from Property Operations, excluding deferrals and property management.

2.

See page 9 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.

3.

Represents transaction/pursuit costs related to unconsummated acquisitions included in Other expenses in the Consolidated Statements of Income on page 6.

Reconciliation of Net Income to Non-GAAP Financial Measures

(In thousands, except per share data, unaudited)

 

 

 

Quarters Ended June 30,

 

Six Months Ended June 30,

 

 

2022

 

2021

 

2022

 

2021

Net income available for Common Stockholders

 

$

61,509

 

 

$

61,051

 

 

$

144,415

 

 

$

126,291

 

Income allocated to non-controlling interests – Common OP Units

 

 

3,073

 

 

 

3,021

 

 

 

7,217

 

 

 

6,768

 

Membership upgrade sales upfront payments, deferred, net

 

 

6,367

 

 

 

6,454

 

 

 

10,451

 

 

 

13,881

 

Membership sales commissions, deferred, net

 

 

(957

)

 

 

(1,438

)

 

 

(1,540

)

 

 

(2,937

)

Depreciation and amortization

 

 

50,796

 

 

 

48,316

 

 

 

100,190

 

 

 

93,714

 

Depreciation on unconsolidated joint ventures

 

 

835

 

 

 

184

 

 

 

1,776

 

 

 

367

 

Loss on sale of real estate, net

 

 

 

 

 

 

 

 

 

 

 

59

 

FFO available for Common Stock and OP Unit holders

 

 

121,623

 

 

 

117,588

 

 

 

262,509

 

 

 

238,143

 

Early debt retirement

 

 

640

 

 

 

755

 

 

 

1,156

 

 

 

2,784

 

Transaction/pursuit costs (1)

 

 

3,082

 

 

 

 

 

 

3,082

 

 

 

 

Normalized FFO available for Common Stock and OP Unit holders

 

 

125,345

 

 

 

118,343

 

 

 

266,747

 

 

 

240,927

 

Non-revenue producing improvements to real estate

 

 

(21,738

)

 

 

(19,308

)

 

 

(38,106

)

 

 

(30,892

)

FAD for Common Stock and OP Unit holders

 

$

103,607

 

 

$

99,035

 

 

$

228,641

 

 

$

210,035

 

 

 

 

 

 

 

 

 

 

Net income available per Common Share - Basic

 

$

0.33

 

 

$

0.33

 

 

$

0.78

 

 

$

0.69

 

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

 

$

0.33

 

 

$

0.33

 

 

$

0.78

 

 

$

0.69

 

 

 

 

 

 

 

 

 

 

FFO per Common Share and OP Unit - Basic

 

$

0.62

 

 

$

0.61

 

 

$

1.35

 

 

$

1.24

 

FFO per Common Share and OP Unit - Fully Diluted

 

$

0.62

 

 

$

0.61

 

 

$

1.34

 

 

$

1.24

 

 

 

 

 

 

 

 

 

 

Normalized FFO per Common Share and OP Unit - Basic

 

$

0.64

 

 

$

0.61

 

 

$

1.37

 

 

$

1.25

 

Normalized FFO per Common Share and OP Unit - Fully Diluted

 

$

0.64

 

 

$

0.61

 

 

$

1.37

 

 

$

1.25

 

 

 

 

 

 

 

 

 

 

Weighted average Common Shares outstanding - Basic

 

 

185,767

 

 

 

182,337

 

 

 

185,729

 

 

 

182,142

 

Weighted average Common Shares and OP Units outstanding - Basic

 

 

195,064

 

 

 

192,490

 

 

 

195,028

 

 

 

192,454

 

Weighted average Common Shares and OP Units outstanding - Fully Diluted

 

 

195,227

 

 

 

192,701

 

 

 

195,253

 

 

 

192,668

 

______________________

1.

Represents transaction/pursuit costs related to unconsummated acquisitions included in Other expenses in the Consolidated Statements of Income on page 6.

2.

Net income per fully diluted Common Share is calculated before Income allocated to non-controlling interest - Common OP Units.

Consolidated Income from Property Operations (1)

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

 

 

Quarters Ended June 30,

 

Six Months Ended June 30,

 

2022

 

2021

 

2022

 

2021

MH base rental income (2)

$

158.7

 

 

$

150.1

 

 

$

316.0

 

 

$

299.1

 

Rental home income (2)

 

3.8

 

 

 

4.3

 

 

 

7.8

 

 

 

8.6

 

RV and marina base rental income (2)

 

98.3

 

 

 

89.0

 

 

 

207.1

 

 

 

172.6

 

Annual membership subscriptions

 

15.6

 

 

 

14.3

 

 

 

30.7

 

 

 

27.9

 

Membership upgrade sales current period, gross

 

9.5

 

 

 

9.2

 

 

 

16.7

 

 

 

19.2

 

Utility and other income (2)

 

29.9

 

 

 

28.2

 

 

 

59.9

 

 

 

53.0

 

Property operating revenues

 

315.8

 

 

 

295.1

 

 

 

638.2

 

 

 

580.4

 

 

 

 

 

 

 

 

 

Property operating, maintenance and real estate taxes (2)

 

134.6

 

 

 

122.3

 

 

 

259.6

 

 

 

231.1

 

Sales and marketing, gross

 

6.4

 

 

 

6.3

 

 

 

11.3

 

 

 

12.5

 

Property operating expenses

 

141.0

 

 

 

128.6

 

 

 

270.9

 

 

 

243.6

 

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

$

174.8

 

 

$

166.5

 

 

$

367.3

 

 

$

336.8

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Manufactured home site figures and occupancy averages:

 

 

 

 

 

 

 

Total sites

 

73,442

 

 

 

73,182

 

 

 

73,452

 

 

 

73,088

 

Occupied sites

 

69,693

 

 

 

69,405

 

 

 

69,670

 

 

 

69,354

 

Occupancy %

 

94.9

%

 

 

94.8

%

 

 

94.9

%

 

 

94.9

%

Monthly base rent per site

$

759

 

 

$

721

 

 

$

756

 

 

$

719

 

 

 

 

 

 

 

 

 

RV and marina base rental income:

 

 

 

 

 

 

 

Annual

$

66.6

 

 

$

58.8

 

 

$

131.0

 

 

$

113.3

 

Seasonal

 

9.5

 

 

 

7.4

 

 

 

36.1

 

 

 

22.8

 

Transient

 

22.2

 

 

 

22.8

 

 

 

40.0

 

 

 

36.5

 

Total RV and marina base rental income

$

98.3

 

 

$

89.0

 

 

$

207.1

 

 

$

172.6

 

______________________

1.

Excludes property management and the GAAP deferral of membership upgrade sales upfront payments and membership sales commissions, net.

2.

MH base rental income, Rental home income, RV and marina base rental income and Utility income, net of bad debt expense, are presented in Rental income in the Consolidated Statements of Income on page 6. Bad debt expense is presented in Property operating, maintenance and real estate taxes in this table.

Core Income from Property Operations (1)

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

 
 

 

Quarters Ended June 30,

 

Six Months Ended June 30,

 

2022

 

2021

 

Change (2)

 

2022

 

2021

 

Change (2)

MH base rental income

$

155.8

 

 

$

147.4

 

 

5.7

%

 

$

310.2

 

 

$

293.6

 

 

5.7

%

Rental home income

 

3.8

 

 

 

4.3

 

 

(10.9

)%

 

 

7.8

 

 

 

8.6

 

 

(9.4

)%

RV and marina base rental income

 

87.4

 

 

 

81.9

 

 

6.6

%

 

 

183.8

 

 

 

161.4

 

 

13.9

%

Annual membership subscriptions

 

15.4

 

 

 

14.3

 

 

7.9

%

 

 

30.5

 

 

 

27.9

 

 

9.2

%

Membership upgrade sales current period, gross

 

9.3

 

 

 

9.2

 

 

1.2

%

 

 

16.4

 

 

 

19.2

 

 

(14.5

)%

Utility and other income

 

26.1

 

 

 

26.8

 

 

(2.7

)%

 

 

52.4

 

 

 

50.3

 

 

4.2

%

Property operating revenues

 

297.8

 

 

 

283.9

 

 

4.9

%

 

 

601.1

 

 

 

561.0

 

 

7.2

%

 

 

 

 

 

 

 

 

 

 

 

 

Utility expense

 

33.7

 

 

 

30.9

 

 

9.0

%

 

 

67.3

 

 

 

59.9

 

 

12.3

%

Payroll

 

28.5

 

 

 

26.7

 

 

6.8

%

 

 

53.1

 

 

 

49.7

 

 

6.9

%

Repair & Maintenance

 

23.6

 

 

 

21.0

 

 

12.3

%

 

 

42.4

 

 

 

36.9

 

 

14.9

%

Insurance and other (3)

 

22.4

 

 

 

21.5

 

 

4.1

%

 

 

44.5

 

 

 

41.2

 

 

8.0

%

Real estate taxes

 

16.7

 

 

 

16.2

 

 

3.4

%

 

 

33.9

 

 

 

32.4

 

 

4.7

%

Sales and marketing, gross

 

6.3

 

 

 

6.3

 

 

0.8

%

 

 

11.2

 

 

 

12.5

 

 

(9.8

)%

Property operating expenses

 

131.2

 

 

 

122.6

 

 

7.0

%

 

 

252.4

 

 

 

232.6

 

 

8.6

%

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

$

166.6

 

 

$

161.3

 

 

3.3

%

 

$

348.7

 

 

$

328.4

 

 

6.2

%

 

 

 

 

 

 

 

 

 

 

 

 

Occupied sites (4)

 

68,992

 

 

 

68,711

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Core manufactured home site figures and occupancy averages:

 

 

 

 

 

 

 

 

 

 

 

Total sites

 

72,454

 

 

 

72,186

 

 

 

 

 

72,455

 

 

 

72,091

 

 

 

Occupied sites

 

68,915

 

 

 

68,642

 

 

 

 

 

68,895

 

 

 

68,595

 

 

 

Occupancy % (5)

 

95.1

%

 

 

95.1

%

 

 

 

 

95.1

%

 

 

95.2

%

 

 

Monthly base rent per site

$

753

 

 

$

716

 

 

 

 

$

750

 

 

$

713

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Core RV and marina base rental income:

 

 

 

 

 

 

 

 

 

 

 

Annual (6)

$

57.4

 

 

$

52.6

 

 

9.1

%

 

$

112.8

 

 

$

103.6

 

 

8.9

%

Seasonal

 

9.0

 

 

 

6.9

 

 

30.6

%

 

 

34.0

 

 

 

22.1

 

 

54.1

%

Transient

 

21.0

 

 

 

22.4

 

 

(6.6

)%

 

 

37.0

 

 

 

35.7

 

 

3.7

%

Total Seasonal and Transient

$

30.0

 

 

$

29.3

 

 

2.4

%

 

$

71.0

 

 

$

57.8

 

 

22.8

%

 

 

 

 

 

 

 

 

 

 

 

 

Total RV and marina base rental income

$

87.4

 

 

$

81.9

 

 

6.6

%

 

$

183.8

 

 

$

161.4

 

 

13.9

%

 

 

 

 

 

 

 

 

 

 

 

 

Core utility information:

 

 

 

 

 

 

 

 

 

 

 

Income

$

14.7

 

 

$

13.4

 

 

9.7

%

 

$

30.2

 

 

$

26.9

 

 

12.3

%

Expense

 

33.7

 

 

 

30.9

 

 

9.1

%

 

 

67.3

 

 

 

59.9

 

 

12.4

%

Expense, net

$

19.0

 

 

$

17.5

 

 

8.6

%

 

$

37.1

 

 

$

33.0

 

 

12.4

%

 

 

 

 

 

 

 

 

 

 

 

 

Utility Recovery Rate (7)

 

43.6

%

 

 

43.4

%

 

 

 

 

44.9

%

 

 

44.9

%

 

 

_____________________

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.

Includes bad debt expense for the periods presented.

4.

Occupied sites are presented as of the end of the period. Occupied sites have increased by 97 from 68,895 at December 31, 2021.

5.

The decrease in the occupancy rate for the six months ended June 30, 2022 is due to the addition of expansion sites.

6.

Core Annual marina base rental income represents approximately 99% of the total Core marina base rental income for all periods presented.

7.

Calculated by dividing the utility income by utility expense.

Non-Core Income from Property Operations (1)

(In millions, unaudited)

 

Quarter Ended

 

Six Months Ended

 

June 30, 2022

 

June 30, 2022

MH base rental income

$

2.9

 

 

$

5.8

 

RV and marina base rental income

 

10.9

 

 

 

23.3

 

Annual membership subscriptions

 

0.2

 

 

 

0.3

 

Utility and other income

 

3.7

 

 

 

7.4

 

Membership upgrade sales current period, gross

 

0.3

 

 

 

0.3

 

Property operating revenues

 

18.0

 

 

 

37.1

 

 

 

 

 

 

 

Property operating expenses (2)

 

9.8

 

 

 

18.5

 

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

$

8.2

 

 

$

18.6

 

 

 

 

 

 

 

 

 

 

 

 

 

______________________

1.

Excludes property management and the GAAP deferral of membership upgrade sales upfront payments and membership sales commissions, net.

2.

Includes bad debt expense for the period presented.

Income from Rental Home Operations

(In millions, except occupied rentals, unaudited)

 

Quarters Ended June 30,

 

Six Months Ended June 30,

 

2022

 

2021

 

2022

 

2021

Manufactured homes:

 

 

 

 

 

 

 

 

 

 

 

Rental operations revenues (1)

$

10.9

 

 

$

12.4

 

 

$

22.2

 

 

$

24.8

 

Rental home operations expense (2)

 

1.2

 

 

 

1.3

 

 

 

2.6

 

 

 

2.5

 

Income from rental home operations

 

9.7

 

 

 

11.1

 

 

 

19.6

 

 

 

22.3

 

Depreciation on rental homes (3)

 

2.5

 

 

 

2.7

 

 

 

5.0

 

 

 

5.3

 

Income from rental operations, net of depreciation

$

7.2

 

 

$

8.4

 

 

$

14.6

 

 

$

17.0

 

 

 

 

 

 

 

 

 

 

 

 

 

Occupied rentals: (4)

 

 

 

 

 

 

 

 

 

 

 

New

 

2,742

 

 

 

3,305

 

 

 

 

 

 

 

Used

 

375

 

 

 

491

 

 

 

 

 

 

 

Total occupied rental sites

 

3,117

 

 

 

3,796

 

 

 

 

 

 

 

 

As of June 30, 2022

 

As of June 30, 2021

Cost basis in rental homes: (5)

Gross

 

Net of
Depreciation

 

Gross

 

Net of
Depreciation

New

$

221.3

 

 

$

184.1

 

 

$

230.8

 

 

$

196.5

 

Used

 

14.6

 

 

 

6.1

 

 

 

17.8

 

 

 

11.7

 

Total rental homes

$

235.9

 

 

$

190.2

 

 

$

248.6

 

 

$

208.2

 

______________________

1.

For the quarters ended June 30, 2022 and 2021, approximately $7.1 million and $8.1 million, respectively, of the rental operations revenue is included in the MH base rental income in the Core Income from Property Operations on page 11. The remainder of the rental operations revenue is included in Rental home income for the quarters ended June 30, 2022 and 2021 in the Core Income from Property Operations on page 11.

2.

Rental home operations expense is included in Property operating, maintenance and real estate taxes in the Consolidated Income from Property Operations on page 10. Rental home operations expense is included in Insurance and other in the Core Income from Property Operations on page 11.

3.

Depreciation on rental homes in our Core portfolio is presented in Depreciation and amortization in the Consolidated Statements of Income on page 6.

4.

Occupied rentals as of the end of the period in our Core portfolio. Included in the quarters ended June 30, 2022 and 2021 were 185 and 282 homes rented through ECHO Financing LLC ("ECHO joint venture"), respectively. As of June 30, 2022 and 2021, the rental home investment associated with the ECHO joint venture totaled approximately $7.1 million and $11.1 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. As of June 30, 2022 and 2021, our investment in the ECHO joint venture was approximately $18.7 million and $17.7 million, respectively.

Total Sites and Home Sales

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

 
 

Summary of Total Sites as of June 30, 2022

 

 

 

Sites (1)

MH sites

73,400

 

RV sites:

 

 

Annual

34,200

 

Seasonal

12,700

 

Transient

14,900

 

Marina slips

6,900

 

Membership (2)

25,800

 

Joint Ventures (3)

3,000

 

Total

170,900

 

Home Sales - Select Data

 

 

Quarters Ended June 30,

 

Six Months Ended June 30,

 

2022

 

2021

 

2022

 

2021

Total New Home Sales Volume (4)

 

365

 

 

 

295

 

 

 

626

 

 

 

487

 

New Home Sales Volume - ECHO joint venture

 

29

 

 

 

16

 

 

 

51

 

 

 

24

 

New Home Sales Gross Revenues (4)

$

33,848

 

 

$

23,320

 

 

$

59,378

 

 

$

37,658

 

 

 

 

 

 

 

 

 

 

 

 

 

Total Used Home Sales Volume

 

97

 

 

 

108

 

 

 

169

 

 

 

210

 

Used Home Sales Gross Revenues

$

1,367

 

 

$

1,107

 

 

$

2,365

 

 

$

1,989

 

 

 

 

 

 

 

 

 

 

 

 

 

Brokered Home Resales Volume

 

263

 

 

 

212

 

 

 

451

 

 

 

372

 

Brokered Home Resales Gross Revenues

$

1,049

 

 

$

588

 

 

$

1,660

 

 

$

1,020

 

______________________

1.

MH sites are generally leased on an annual basis to residents who own or lease factory-built homes, including manufactured homes. Annual RV and marina sites are leased on an annual basis to customers who generally have an RV, factory-built cottage, boat or other unit placed on the site, including those Northern properties that are open for the summer season. Seasonal RV and marina sites are leased to customers generally for one to six months. Transient RV and marina sites are leased to customers on a short-term basis.

2.

Sites primarily utilized by approximately 131,000 members. Includes approximately 6,300 sites rented on an annual basis.

3.

Joint ventures have approximately 1,800 annual Sites and 1,200 transient Sites.

4.

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 the ECHO joint venture.

Memberships - Select Data

(Unaudited)

     
     

 

 

Years Ended December 31,

 

 

 

 

2018

 

2019

 

2020

 

2021

 

Six Months
Ended
June 30,
2022 (1)

Member Count (2)

 

 

111,094

 

 

 

115,680

 

 

 

116,169

 

 

 

125,149

 

 

 

131,049

 

Thousand Trails Camping Pass (TTC) Origination

 

 

37,528

 

 

 

41,484

 

 

 

44,129

 

 

 

50,523

 

 

 

27,157

 

TTC Sales

 

 

17,194

 

 

 

19,267

 

 

 

20,587

 

 

 

23,923

 

 

 

12,284

 

RV Dealer TTC Activations

 

 

20,334

 

 

 

22,217

 

 

 

23,542

 

 

 

26,600

 

 

 

14,873

 

Number of annuals (3)

 

 

5,888

 

 

 

5,938

 

 

 

5,986

 

 

 

6,320

 

 

 

6,341

 

Number of upgrade sales (4)

 

 

2,500

 

 

 

2,919

 

 

 

3,373

 

 

 

4,863

 

 

 

1,969

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(In thousands, unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Annual membership subscriptions

 

$

47,778

 

 

$

51,015

 

 

$

53,085

 

 

$

58,251

 

 

$

30,749

 

RV base rental income from annuals

 

$

18,363

 

 

$

19,634

 

 

$

20,761

 

 

$

23,127

 

 

$

12,388

 

RV base rental income from seasonals/transients

 

$

19,840

 

 

$

20,181

 

 

$

18,126

 

 

$

25,562

 

 

$

10,867

 

Membership upgrade sales current period, gross

 

$

15,191

 

 

$

19,111

 

 

$

21,739

 

 

$

36,270

 

 

$

16,686

 

Utility and other income

 

$

2,410

 

 

$

2,422

 

 

$

2,426

 

 

$

2,735

 

 

$

1,093

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

______________________

1.

Activity through June 30, 2022.

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 memberships 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.

Market Capitalization

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

     
     

Capital Structure as of June 30, 2022

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total
Common
Shares/Units

 

% of Total
Common
Shares/Units

 

Total

 

% of Total

 

% of Total
Market
Capitalization

 

 

 

 

 

 

 

 

 

 

 

 

 

Secured Debt

 

 

 

 

 

 

$

2,750

 

 

83.4

%

 

 

Unsecured Debt

 

 

 

 

 

 

 

548

 

 

16.6

%

 

 

Total Debt (1)

 

 

 

 

 

 

$

3,298

 

 

100.0

%

 

19.3

%

 

 

 

 

 

 

 

 

 

 

 

 

 

Common Shares

 

 

186,076,327

 

 

95.2

%

 

 

 

 

 

 

 

OP Units

 

 

9,297,011

 

 

4.8

%

 

 

 

 

 

 

 

Total Common Shares and OP Units

 

 

195,373,338

 

 

100.0

%

 

 

 

 

 

 

 

Common Stock price at June 30, 2022

 

$

70.47

 

 

 

 

 

 

 

 

 

 

Fair Value of Common Shares and OP Units

 

 

 

 

 

 

$

13,768

 

 

100.0

%

 

 

Total Equity

 

 

 

 

 

 

$

13,768

 

 

100.0

%

 

80.7

%

 

 

 

 

 

 

 

 

 

 

 

 

 

Total Market Capitalization

 

 

 

 

 

 

$

17,066

 

 

 

 

100.0

%

______________________

1.

Excludes deferred financing costs of approximately $29.8 million.

Debt Maturity Schedule

Debt Maturity Schedule as of June 30, 2022
(In thousands, unaudited)

 

Year

 

Secured
Debt

 

Weighted
Average
Interest
Rate

 

Unsecured
Debt (1)

 

Weighted
Average
Interest
Rate

 

Total Debt

 

% of Total
Debt

 

Weighted
Average
Interest
Rate

 

2022

 

$

 

 

%

 

$

 

 

%

 

$

 

 

%

 

%

 

2023

 

 

94,355

 

 

4.94

%

 

 

 

 

%

 

 

94,355

 

 

2.90

%

 

4.94

%

 

2024

 

 

10,116

 

 

5.49

%

 

 

 

 

%

 

 

10,116

 

 

0.31

%

 

5.49

%

 

2025

 

 

94,538

 

 

3.45

%

 

 

 

 

%

 

 

94,538

 

 

2.91

%

 

3.45

%

 

2026

 

 

 

 

%

 

 

300,000

 

 

1.79

%

 

 

300,000

 

 

9.23

%

 

1.79

%

 

2027

 

 

 

 

%

 

 

200,000

 

 

2.01

%

 

 

200,000

 

 

6.15

%

 

2.01

%

 

2028

 

 

209,675

 

 

4.19

%

 

 

 

 

%

 

 

209,675

 

 

6.45

%

 

4.19

%

 

2029

 

 

39,727

 

 

4.10

%

 

 

 

 

%

 

 

39,727

 

 

1.22

%

 

4.10

%

 

2030

 

 

275,385

 

 

2.69

%

 

 

 

 

%

 

 

275,385

 

 

8.47

%

 

2.69

%

 

2031

 

 

263,642

 

 

2.46

%

 

 

 

 

%

 

 

263,642

 

 

8.11

%

 

2.46

%

 

Thereafter

 

 

1,762,573

 

 

3.77

%

 

 

 

 

%

 

 

1,762,573

 

 

54.23

%

 

3.77

%

 

Total

 

$

2,750,011

 

 

3.61

%

 

$

500,000

 

 

1.88

%

 

$

3,250,011

 

 

100.0

%

 

3.34

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Unsecured Line of Credit

 

 

 

 

 

 

 

47,800

 

 

 

 

 

47,800

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Note Premiums

 

 

213

 

 

 

 

 

 

 

 

 

 

213

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total Debt

 

 

2,750,224

 

 

 

 

 

547,800

 

 

 

 

 

3,298,024

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Deferred Financing Costs

 

 

(26,185

)

 

 

 

 

(3,627

)

 

 

 

 

(29,812

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total Debt, net

 

$

2,724,039

 

 

 

 

$

544,173

 

 

 

 

$

3,268,212

 

 

 

 

3.48

%

(1)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Average Years to Maturity

 

 

11.7

 

 

 

 

 

4.1

 

 

 

 

 

10.4

 

 

 

 

 

 

______________________

1.

Reflects effective interest rate for the quarter ended June 30, 2022, including interest associated with the line of credit and amortization of note premiums and deferred financing costs.

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 membership upgrade contract term. 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 non-operating income and expense items, such as gains and losses from early debt extinguishment, including prepayment penalties and defeasance costs, transaction/pursuit costs, and 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 properties.

The following table reconciles Net income available for Common Stockholders to Income from property operations:

 

 

Quarters Ended June 30,

 

Six Months Ended June 30,

(amounts in thousands)

 

2022

 

2021

 

2022

 

2021

Net income available for Common Stockholders

 

$

61,509

 

 

$

61,051

 

 

$

144,415

 

 

$

126,291

 

Redeemable perpetual preferred stock dividends

 

 

8

 

 

 

8

 

 

 

8

 

 

 

8

 

Income allocated to non-controlling interests – Common OP Units

 

 

3,073

 

 

 

3,021

 

 

 

7,217

 

 

 

6,768

 

Equity in income of unconsolidated joint ventures

 

 

(1,253

)

 

 

(1,068

)

 

 

(1,424

)

 

 

(1,936

)

Income before equity in income of unconsolidated joint ventures

 

 

63,337

 

 

 

63,012

 

 

 

150,216

 

 

 

131,131

 

Loss on sale of real estate, net

 

 

 

 

 

 

 

 

 

 

 

59

 

Membership upgrade sales upfront payments, deferred, net

 

 

6,367

 

 

 

6,454

 

 

 

10,451

 

 

 

13,881

 

Gross revenues from home sales, brokered resales and ancillary services (1)

 

 

(52,681

)

 

 

(40,237

)

 

 

(92,390

)

 

 

(65,478

)

Interest income

 

 

(1,722

)

 

 

(1,742

)

 

 

(3,481

)

 

 

(3,509

)

Income from other investments, net

 

 

(2,617

)

 

 

(1,222

)

 

 

(4,521

)

 

 

(2,158

)

Membership sales commissions, deferred, net

 

 

(957

)

 

 

(1,438

)

 

 

(1,540

)

 

 

(2,937

)

Property management

 

 

19,099

 

 

 

16,560

 

 

 

36,970

 

 

 

31,940

 

Depreciation and amortization

 

 

50,796

 

 

 

48,316

 

 

 

100,190

 

 

 

93,714

 

Cost of home sales, brokered resales and ancillary services (1)

 

 

40,971

 

 

 

31,793

 

 

 

71,670

 

 

 

50,710

 

Home selling expenses and ancillary operating expenses

 

 

7,584

 

 

 

6,090

 

 

 

14,066

 

 

 

11,031

 

General and administrative

 

 

11,695

 

 

 

10,228

 

 

 

23,992

 

 

 

20,740

 

Other expenses

 

 

4,189

 

 

 

800

 

 

 

5,009

 

 

 

1,498

 

Early debt retirement

 

 

640

 

 

 

755

 

 

 

1,156

 

 

 

2,784

 

Interest and related amortization

 

 

28,053

 

 

 

27,131

 

 

 

55,517

 

 

 

53,406

 

Income from property operations, excluding deferrals and property management

 

 

174,754

 

 

 

166,500

 

 

 

367,305

 

 

 

336,812

 

Membership upgrade sales upfront payments, and membership sales commissions, deferred, net

 

 

(5,410

)

 

 

(5,016

)

 

 

(8,911

)

 

 

(10,944

)

Property management

 

 

(19,099

)

 

 

(16,560

)

 

 

(36,970

)

 

 

(31,940

)

Income from property operations

 

$

150,245

 

 

$

144,924

 

 

$

321,424

 

 

$

293,928

 

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, transaction/pursuit 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.

______________________

1.

Prior period amounts have been reclassified to conform to the current period presentation.

The following table reconciles Consolidated net income to EBITDAre and Adjusted EBITDAre:

 

 

Quarters Ended June 30,

 

Six Months Ended June 30,

(amounts in thousands)

 

2022

 

2021

 

2022

 

2021

Consolidated net income

 

$

64,590

 

 

$

64,080

 

 

$

151,640

 

 

$

133,067

 

Interest income

 

 

(1,722

)

 

 

(1,742

)

 

 

(3,481

)

 

 

(3,509

)

Membership upgrade sales upfront payments, deferred, net

 

 

6,367

 

 

 

6,454

 

 

 

10,451

 

 

 

13,881

 

Membership sales commissions, deferred, net

 

 

(957

)

 

 

(1,438

)

 

 

(1,540

)

 

 

(2,937

)

Real estate depreciation and amortization

 

 

50,796

 

 

 

48,316

 

 

 

100,190

 

 

 

93,714

 

Other depreciation and amortization

 

 

1,119

 

 

 

740

 

 

 

1,946

 

 

 

1,444

 

Interest and related amortization

 

 

28,053

 

 

 

27,131

 

 

 

55,517

 

 

 

53,406

 

Loss on sale of real estate, net

 

 

 

 

 

 

 

 

 

 

 

59

 

Adjustments to our share of EBITDAre of unconsolidated joint ventures

 

 

1,361

 

 

 

273

 

 

 

2,817

 

 

 

519

 

EBITDAre

 

 

149,607

 

 

 

143,814

 

 

 

317,540

 

 

 

289,644

 

Early debt retirement

 

 

640

 

 

 

755

 

 

 

1,156

 

 

 

2,784

 

Transaction/pursuit costs (1)

 

 

3,082

 

 

 

 

 

 

3,082

 

 

 

 

Adjusted EBITDAre

 

$

153,329

 

 

$

144,569

 

 

$

321,778

 

 

$

292,428

 

CORE. The Core properties include properties we owned and operated during all of 2021 and 2022. 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 2021 and 2022. This includes, but is not limited to, six RV communities and eleven marinas acquired during 2021, one membership RV community and three RV communities acquired during 2022 and our Westwinds MH community and Nicholson Plaza.

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.

______________________

1.

Represents transaction/pursuit costs related to unconsummated acquisitions included in Other expenses in the Consolidated Statements of Income on page 6.

 

Paul Seavey
(800) 247-5279

Source: Equity LifeStyle Properties, Inc.