Els reports second quarter results
Chicago--(business wire)--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, 2019. 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, 2019 for the quarter ended june 30, 2019, total revenues increased $7.9 million, or 3.3 percent, to $248.4 million compared to $240.5 million for the same period in 2018. for the quarter ended june 30, 2019, net income available for common stockholders increased $0.3 million to $46.4 million, or $0.51 per common share, compared to $46.1 million, or $0.52 per common share, for the same period in 2018. for the six months ended june 30, 2019, total revenues increased $21.0 million, or 4.3 percent, to $507.5 million compared to $486.5 million for the same period in 2018. net income available for common stockholders for the six months ended june 30, 2019 increased $53.3 million, or $0.57 per common share, to $159.7 million, or $1.77 per common share, compared to $106.4 million, or $1.20 per common share, for the same period in 2018. non-gaap financial measures and portfolio performance for the quarter ended june 30, 2019, funds from operations (“ffo”) available for common stock and op unit holders increased $4.2 million, or $0.04 per common share, to $89.8 million, or $0.94 per common share, compared to $85.6 million, or $0.90 per common share, for the same period in 2018. for the six months ended june 30, 2019, ffo available for common stock and op unit holders increased $14.0 million, or $0.13 per common share, to $197.8 million, or $2.07 per common share, compared to $183.8 million, or $1.94 per common share, for the same period in 2018. for the quarter ended june 30, 2019, normalized funds from operations (“normalized ffo”) available for common stock and op unit holders increased $8.1 million, or $0.07 per common share, to $91.9 million, or $0.96 per common share, compared to $83.8 million, or $0.89 per common share, for the same period in 2018. for the six months ended june 30, 2019, normalized ffo available for common stock and op unit holders increased $17.9 million, or $0.16 per common share, to $199.6 million, or $2.08 per common share, compared to $181.7 million, or $1.92 per common share, for the same period in 2018. for the quarter ended june 30, 2019, property operating revenues, excluding deferrals, increased $13.2 million to $240.7 million compared to $227.5 million for the same period in 2018. for the six months ended june 30, 2019, property operating revenues, excluding deferrals, increased $29.4 million to $491.6 million compared to $462.2 million for the same period in 2018. for the quarter ended june 30, 2019, income from property operations, excluding deferrals and property management, increased $6.6 million to $135.7 million compared to $129.1 million for the same period in 2018. for the six months ended june 30, 2019, income from property operations, excluding deferrals and property management, increased $18.7 million to $289.1 million compared to $270.4 million for the same period in 2018. for the quarter ended june 30, 2019, core property operating revenues, excluding deferrals, increased approximately 4.9 percent and core income from property operations, excluding deferrals and property management, increased approximately 5.2 percent compared to the same period in 2018. for the six months ended june 30, 2019, core property operating revenues, excluding deferrals, increased approximately 4.4 percent and core income from property operations, excluding deferrals and property management, increased approximately 5.1 percent compared to the same period in 2018. investment activity on may 29, 2019, we completed the acquisition of white oak shores camping and rv resort, a 455-site recreational vehicle ("rv") community located in stella, north carolina for a purchase price of $20.5 million. the acquisition was funded with available cash. balance sheet activity during the quarter ended june 30, 2019, we sold approximately 0.5 million shares of our common stock under our at-the-market ("atm") equity offering program with a weighted average share price of $117.41 for gross proceeds of $59.3 million. we have $140.7 million of common stock available for issuance under our atm equity offering program. during the quarter ended june 30, 2019, we prepaid four loans secured by three manufactured home communities and one rv community, which were scheduled to mature in 2020. the loans had an outstanding principal balance of $66.8 million and a weighted average interest rate of 6.9% per annum. as part of the transaction, we incurred $1.4 million of prepayment penalties. we used the proceeds from the atm and our available cash to fund the loan prepayments. about equity lifestyle properties we are a self-administered, self-managed real estate investment trust (“reit”) with headquarters in chicago. as of july 22, 2019, we own or have an interest in 413 quality properties in 33 states and british columbia consisting of 155,973 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 23, 2019, 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. reporting calendar quarterly financial results and related earnings conference calls for the next three quarters are expected to occur as follows: release date earnings call third quarter 2019 monday, october 21, 2019 tuesday, october 22, 2019 10:00 a.m. ct fourth quarter 2019 monday, january 27, 2020 tuesday, january 28, 2020 10:00 a.m. ct first quarter 2020 monday, april 20, 2020 tuesday, april 21, 2020 10:00 a.m. ct forward-looking statements in addition to historical information, this press release includes certain “forward-looking statements” within the meaning of the private securities litigation reform act of 1995. when used, words such as "anticipate," "expect," "believe," "project," "intend," "may be" and "will be" and similar words or phrases, or the negative thereof, unless the context requires otherwise, are intended to identify forward-looking statements and may include without limitation, information regarding our expectations, goals or intentions regarding the future, and the expected effect of our acquisitions. these forward-looking statements are subject to numerous assumptions, risks and uncertainties, including, but not limited to: our ability to control costs and real estate market conditions, our ability to retain customers, the actual use of sites by customers and our success in acquiring new customers at our properties (including those that we may acquire); our ability to maintain historical or increase future rental rates and occupancy with respect to properties currently owned or that we may acquire; our ability to retain and attract customers renewing, upgrading and entering right-to-use contracts; our assumptions about rental and home sales markets; our assumptions and guidance concerning 2019, including estimated net income, ffo and normalized ffo; our ability to manage counterparty risk; our ability to renew our insurance policies at existing rates and on consistent terms; in the age-qualified properties, home sales results could be impacted by the ability of potential home buyers to sell their existing residences as well as by financial, credit and capital markets volatility; results from home sales and occupancy will continue to be impacted by local economic conditions, lack of affordable manufactured home financing and competition from alternative housing options including site-built single-family housing; impact of government intervention to stabilize site-built single-family housing and not manufactured housing; effective integration of recent acquisitions and our estimates regarding the future performance of recent acquisitions; the completion of future transactions in their entirety, if any, and timing and effective integration with respect thereto; unanticipated costs or unforeseen liabilities associated with recent acquisitions; ability to obtain financing or refinance existing debt on favorable terms or at all; the effect of interest rates; the effect from any breach of our, or any of our vendors', data management systems; the dilutive effects of issuing additional securities; the outcome of pending or future lawsuits or actions brought against us, including those disclosed in our filings with the securities and exchange commission; and other risks indicated from time to time in our filings with the securities and exchange commission. for further information on these and other factors that could impact us and the statements contained herein, refer to our filings with the securities and exchange commission, including the “risk factors” section in our most recent annual report on form 10-k and subsequent quarterly reports on form 10-q. these forward-looking statements are based on management's present expectations and beliefs about future events. as with any projection or forecast, these statements are inherently susceptible to uncertainty and changes in circumstances. we are under no obligation to, and expressly disclaim any obligation to, update or alter our forward-looking statements whether as a result of such changes, new information, subsequent events or otherwise. investor information equity research coverage (1) bank of america merrill lynch global research bmo capital markets citi research jeffrey spector/ joshua dennerlein john kim michael bilerman/ nick joseph 646-855-1363 212-885-4115 212-816-1383 jeff.spector@baml.com johnp.kim@bmo.com michael.bilerman@citi.com joshua.dennerlein@baml.com nicholas.joseph@citi.com evercore isi green street advisors robert w. baird & company steve sakwa/ samir khanal john pawlowski drew t. babin 212-466-5600 949-640-8780 215-553-7816 steve.sakwa@evercoreisi.com jpawlowski@greenst.com dbabin@rwbaird.com samir.khanal@evercoreisi.com wells fargo securities todd stender 562-637-1371 todd.stender@wellsfargo.com ______________________ 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 stock and op units outstanding and per share data, unaudited) as of and for the three months ended jun 30, 2019 mar 31, 2019 dec 31, 2018 sept 30, 2018 jun 30, 2018 operating information total revenues $ 248.4 $ 259.1 $ 243.5 $ 256.7 $ 240.5 net income $ 49.1 $ 120.5 $ 53.4 $ 59.7 $ 49.2 net income available for common stockholders $ 46.4 $ 113.3 $ 50.2 $ 56.1 $ 46.1 adjusted ebitdare (1) $ 117.7 $ 133.3 $ 117.9 $ 119.5 $ 109.2 ffo available for common stock and op unit holders (1)(2) $ 89.8 $ 108.0 $ 90.4 $ 97.7 $ 85.6 normalized ffo available for common stock and op unit holders (1)(2) $ 91.9 $ 107.7 $ 92.3 $ 93.9 $ 83.8 funds available for distribution ("fad") available for common stock and op unit holders (1)(2) $ 79.1 $ 97.6 $ 80.4 $ 82.1 $ 71.4 common stock and op units outstanding (in thousands) and per share data common stock and op units, end of the period 96,281 95,735 95,667 95,493 94,623 weighted average common stock and op units outstanding - fully diluted 95,930 95,624 95,577 95,263 94,623 net income per common share - fully diluted (3) $ 0.51 $ 1.26 $ 0.56 $ 0.63 $ 0.52 ffo per common share and op unit - fully diluted $ 0.94 $ 1.13 $ 0.95 $ 1.03 $ 0.90 normalized ffo per common share and op unit - fully diluted $ 0.96 $ 1.13 $ 0.97 $ 0.99 $ 0.89 dividends per common share $ 0.6125 $ 0.6125 $ 0.5500 $ 0.5500 $ 0.5500 balance sheet total assets $ 4,014 $ 4,009 $ 3,926 $ 3,855 $ 3,700 total liabilities $ 2,707 $ 2,752 $ 2,732 $ 2,665 $ 2,598 market capitalization total debt (4) $ 2,300 $ 2,372 $ 2,386 $ 2,318 $ 2,251 total market capitalization (5) $ 13,983 $ 13,315 $ 11,678 $ 11,528 $ 10,947 ratios total debt / total market capitalization 16.4 % 17.8 % 20.4 % 20.1 % 20.6 % total debt / adjusted ebitdare (6) 4.7 4.9 5.1 5.1 5.0 interest coverage (7) 4.7 4.6 4.5 4.4 4.4 fixed charges + preferred distributions coverage (8) 4.6 4.5 4.5 4.4 4.3 ______________________ 1. see non-gaap financial measures definitions and other terms at the end of the supplemental information for definitions of adjusted ebitdare, ffo, normalized ffo and fad and a reconciliation of consolidated net income to adjusted ebitdare. 2. see page 7 for a reconciliation of net income available for common stockholders to non-gaap financial measures ffo available for common stock and op unit holders, normalized ffo available for common stock and op unit holders and fad available for common stock and op unit holders. 3. net income per common share - fully diluted is calculated before income allocated to non-controlling interest - common op units. 4. excludes deferred financing costs of approximately $25.2 million as of june 30, 2019. 5. see page 16 for market capitalization as of june 30, 2019. 6. calculated using trailing twelve months adjusted ebitdare. 7. calculated by dividing trailing twelve months adjusted ebitdare by the interest expense incurred during the same period. 8. see non-gaap financial measures definitions and other terms at the end of the supplemental information for a definition of fixed charges. this ratio is calculated by dividing trailing twelve months adjusted ebitdare by the sum of fixed charges and preferred stock dividends during the same period. consolidated balance sheets (in thousands, except share and per share data) june 30, 2019 december 31, 2018 (unaudited) assets investment in real estate: land $ 1,418,353 $ 1,408,832 land improvements 3,236,899 3,143,745 buildings and other depreciable property 781,671 720,900 5,436,923 5,273,477 accumulated depreciation (1,704,091 ) (1,631,888 ) net investment in real estate 3,732,832 3,641,589 cash and restricted cash 90,457 68,974 notes receivable, net 36,010 35,041 investment in unconsolidated joint ventures 55,195 57,755 deferred commission expense 40,710 40,308 other assets, net 59,274 46,227 assets held for sale, net — 35,914 total assets $ 4,014,478 $ 3,925,808 liabilities and equity liabilities: mortgage notes payable, net $ 2,075,689 $ 2,149,726 term loan, net 198,787 198,626 accounts payable and other liabilities 127,051 102,854 deferred revenue – upfront payments from right-to-use contracts 121,047 116,363 deferred revenue – right-to-use annual payments 13,022 10,055 accrued interest payable 8,187 8,759 rents and other customer payments received in advance and security deposits 104,249 81,114 distributions payable 58,972 52,617 liabilities related to assets held for sale — 12,350 total liabilities 2,707,004 2,732,464 equity: preferred stock, $0.01 par value, 10,000,000 shares authorized as of june 30, 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 june 30, 2019 and december 31, 2018, respectively; 91,032,007 and 89,921,018 shares issued and outstanding as of june 30, 2019 and december 31, 2018, respectively. 906 896 paid-in capital 1,397,613 1,329,391 distributions in excess of accumulated earnings (162,204 ) (211,034 ) accumulated other comprehensive income (loss) (242 ) 2,299 total stockholders’ equity 1,236,073 1,121,552 non-controlling interests – common op units 71,401 71,792 total equity 1,307,474 1,193,344 total liabilities and equity $ 4,014,478 $ 3,925,808 consolidated income statements (in thousands, unaudited) quarters ended june 30, six months ended june 30, 2019 2018 2019 2018 revenues: rental income $ 212,007 $ 199,155 $ 435,573 $ 406,148 right-to-use annual payments (membership subscriptions) 12,586 11,891 24,902 23,410 right-to-use contracts current period, gross (membership upgrade sales) 5,041 3,944 8,879 7,106 right-to-use contract upfront payments, deferred, net (2,912 ) (2,021 ) (4,683 ) (3,306 ) other income 10,265 12,536 20,635 25,572 gross revenues from home sales 7,825 9,105 14,300 17,414 brokered resale and ancillary services revenues, net 872 617 2,431 2,018 interest income 1,803 1,862 3,554 3,812 income from other investments, net 879 3,413 1,865 4,353 total revenues 248,366 240,502 507,456 486,527 expenses: property operating and maintenance 84,868 81,720 162,816 158,052 real estate taxes 15,107 13,440 30,430 27,575 sales and marketing, gross 4,214 3,305 7,623 6,117 right-to-use contract commissions, deferred, net (389 ) (262 ) (580 ) (286 ) property management 14,385 13,472 28,070 27,153 depreciation and amortization 37,776 34,345 75,753 66,719 cost of home sales 8,164 9,632 14,796 18,206 home selling expenses 1,102 973 2,185 2,048 general and administrative 9,225 9,669 19,134 17,707 other expenses 540 367 967 710 early debt retirement 1,491 — 1,491 — interest and related amortization 26,024 26,285 52,417 51,988 total expenses 202,507 192,946 395,102 375,989 gain on sale of real estate, net — — 52,507 — income before equity in income of unconsolidated joint ventures 45,859 47,556 164,861 110,538 equity in income of unconsolidated joint ventures 3,226 1,613 4,759 2,808 consolidated net income 49,085 49,169 169,620 113,346 income allocated to non-controlling interests – common op units (2,676 ) (3,024 ) (9,902 ) (6,979 ) redeemable perpetual preferred stock dividends (8 ) (8 ) (8 ) (8 ) net income available for common stockholders $ 46,401 $ 46,137 $ 159,710 $ 106,359 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 flow from operating activities, investing activities and financing activities, when evaluating an equity reit’s operating performance. our definitions and calculations of these non-gaap financial and operating measures and other terms may differ from the definitions and methodologies used by other reits and, accordingly, may not be comparable. these non-gaap financial and operating measures do not represent cash generated from operating activities in accordance with gaap, nor do they represent cash available to pay distributions and should not be considered as an alternative to net income, determined in accordance with gaap, as an indication of our financial performance, or to cash 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, please refer to both reconciliation of net income to non-gaap financial measures on page 7 and non-gaap financial measures definitions and reconciliation on pages 18 - 20. selected non-gaap financial measures (in millions, except per share data, unaudited) quarter ended june 30, 2019 income from property operations, excluding deferrals and property management - 2019 core (1) $ 131.5 income from property operations, excluding deferrals and property management - non-core (1) 4.2 property management and general and administrative (23.6 ) other income and expenses (2) 5.8 interest and related amortization (26.0 ) normalized ffo available for common stock and op unit holders (3) 91.9 early debt retirement (4) (2.1 ) ffo available for common stock and op unit holders (3) $ 89.8 normalized ffo per common share and op unit - fully diluted $0.96 ffo per common share and op unit - fully diluted $0.94 normalized ffo available for common stock and op unit holders (3) $ 91.9 non-revenue producing improvements to real estate (3) (12.8 ) fad available for common stock and op unit holders (3) $ 79.1 weighted average common stock and op units - fully diluted 95.9 __________________________ 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. includes $2.6 million of income from unconsolidated joint ventures related to a refinancing transaction. this income was previously included in our third quarter 2019 forecast. see page 7 for a reconciliation of net income available for common stockholders to ffo available for common stock and op unit holders, normalized ffo available for common stock and op unit holders and fad available for common stock and op unit holders. includes our portion of early debt retirement costs incurred by unconsolidated joint ventures. 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, 2019 2018 2019 2018 net income available for common stockholders $ 46,401 $ 46,137 $ 159,710 $ 106,359 income allocated to non-controlling interests – common op units 2,676 3,024 9,902 6,979 right-to-use contract upfront payments, deferred, net 2,912 2,021 4,683 3,306 right-to-use contract commissions, deferred, net (389 ) (262 ) (580 ) (286 ) depreciation and amortization 37,776 34,345 75,753 66,719 depreciation on unconsolidated joint ventures 441 367 873 739 gain on sale of real estate, net — — (52,507 ) — ffo available for common stock and op unit holders 89,817 85,632 197,834 183,816 early debt retirement (1) 2,085 — 2,085 — insurance proceeds due to catastrophic weather event and other, net (2) — (1,806 ) (349 ) (2,092 ) normalized ffo available for common stock and op unit holders 91,902 83,826 199,570 181,724 non-revenue producing improvements to real estate (12,849 ) (12,411 ) (22,913 ) (21,175 ) fad available for common stock and op unit holders $ 79,053 $ 71,415 $ 176,657 $ 160,549 net income available per common share - basic $ 0.51 $ 0.52 $ 1.78 $ 1.20 net income available per common share - fully diluted (3) $ 0.51 $ 0.52 $ 1.77 $ 1.20 ffo per common share and op unit - basic $ 0.94 $ 0.91 $ 2.07 $ 1.95 ffo per common share and op unit - fully diluted $ 0.94 $ 0.90 $ 2.07 $ 1.94 normalized ffo per common share and op unit - basic $ 0.96 $ 0.89 $ 2.09 $ 1.93 normalized ffo per common share and op unit - fully diluted $ 0.96 $ 0.89 $ 2.08 $ 1.92 average common stock - basic 90,156 88,549 89,969 88,537 average common stock and op units - basic 95,799 94,375 95,660 94,364 average common stock and op units - fully diluted 95,930 94,623 95,773 94,600 _________________________ includes our portion of early debt retirement costs incurred by unconsolidated joint ventures. represents insurance recovery revenue from reimbursement for capital expenditures related to hurricane irma. 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, 2019 2018 2019 2018 community base rental income (2) $ 136.2 $ 128.6 $ 271.5 $ 255.3 rental home income 3.6 3.6 7.2 7.1 resort base rental income (3) 61.0 55.2 133.1 119.5 right-to-use annual payments (membership subscriptions) 12.6 11.9 24.9 23.4 right-to-use contracts current period, gross (membership upgrade sales) 5.0 3.9 8.9 7.1 utility and other income (4) 22.3 24.3 46.0 49.8 property operating revenues 240.7 227.5 491.6 462.2 property operating, maintenance and real estate taxes (5) 99.5 93.5 192.4 182.6 rental home operating and maintenance 1.3 1.6 2.5 3.1 sales and marketing, gross 4.2 3.3 7.6 6.1 property operating expenses 105.0 98.4 202.5 191.8 income from property operations, excluding deferrals and property management (1) $ 135.7 $ 129.1 $ 289.1 $ 270.4 manufactured home site figures and occupancy averages: total sites 71,988 71,797 72,178 71,563 occupied sites 68,316 67,870 68,453 67,620 occupancy % 94.9 % 94.5 % 94.8 % 94.5 % monthly base rent per site $ 665 $ 631 $ 661 $ 629 resort base rental income: annual $ 40.8 $ 36.6 $ 79.8 $ 71.8 seasonal 5.7 5.2 26.8 24.2 transient 14.5 13.4 26.5 23.5 total resort base rental income $ 61.0 $ 55.2 $ 133.1 $ 119.5 _________________________ excludes property management and the gaap deferral of right-to-use contract upfront payments and related commissions, net. see the manufactured home site figures and occupancy averages included below within this table. see resort base rental income detail included below within this table. includes hurricane irma insurance recovery revenues of $0.6 million, which we have identified as business interruption related to non-core properties for the six months ended june 30, 2019 and hurricane irma insurance recovery revenues of $1.7 million and $5.2 million, of which we have identified $1.5 million and $2.5 million as business interruption related to non-core properties, for the quarter and six months ended june 30, 2018, respectively. property operating, maintenance and real estate taxes includes bad debt expense for the quarters ended june 30, 2019 and 2018. property operating, maintenance and real estate taxes includes debris removal and cleanup costs related to hurricane irma of $0.2 million and $2.6 million for the quarter and six months ended june 30, 2018, respectively. core income from property operations (1) (in millions, except home site and occupancy figures, unaudited) quarters ended june 30, six months ended june 30, 2019 2018 change (2) 2019 2018 change (2) community base rental income (3) $ 132.4 $ 125.9 5.2 % $ 263.5 $ 250.7 5.1 % rental home income 3.6 3.3 10.9 % 7.1 6.5 9.5 % resort base rental income (4) 56.2 53.9 4.1 % 122.1 117.2 4.2 % right-to-use annual payments (membership subscriptions) 12.6 11.9 5.8 % 24.9 23.4 6.3 % right-to-use contracts current period, gross (membership upgrade sales) 5.0 3.9 27.8 % 8.9 7.1 24.9 % utility and other income (5) 21.8 21.9 (0.4 )% 44.4 46.0 (3.3 )% property operating revenues 231.6 220.8 4.9 % 470.9 450.9 4.4 % property operating, maintenance and real estate taxes (6) 94.6 91.0 4.0 % 183.5 178.0 3.1 % rental home operating and maintenance 1.3 1.5 (15.4 )% 2.5 2.9 (14.2 )% sales and marketing, gross 4.2 3.3 27.5 % 7.6 6.1 24.7 % property operating expenses 100.1 95.8 4.5 % 193.6 187.0 3.5 % income from property operations, excluding deferrals and property management (1) $ 131.5 $ 125.0 5.2 % $ 277.3 $ 263.9 5.1 % occupied sites (7) 66,515 66,091 core manufactured home site figures and occupancy averages: total sites 69,638 69,552 69,605 69,536 occupied sites 66,405 66,000 66,350 65,963 occupancy % 95.4 % 94.9 % 95.3 % 94.9 % monthly base rent per site $ 665 $ 636 $ 662 $ 633 resort base rental income: annual $ 38.3 $ 36.1 6.0 % $ 75.6 $ 71.3 6.1 % seasonal 5.1 4.9 4.0 % 24.3 23.6 3.1 % transient 12.8 12.9 (1.1 )% 22.2 22.3 (0.8 )% total resort base rental income $ 56.2 $ 53.9 4.1 % $ 122.1 $ 117.2 4.2 % _________________________ excludes property management and the gaap deferral of right-to-use contract upfront payments and related commissions, net. calculations prepared using actual results without rounding. see core manufactured home site figures and occupancy averages included below within this table. see core resort base rental income detail included below within this table. includes hurricane irma insurance recovery revenues of $0.1 million and $2.3 million for the quarter and six months ended june 30, 2018, respectively. property operating, maintenance and real estate taxes includes bad debt expense for the quarters ended june 30, 2019 and 2018. property operating, maintenance and real estate taxes includes debris removal and cleanup costs related to hurricane irma of $0.1 million and $2.3 million for the quarter and six months ended june 30, 2018, respectively. occupied sites are presented as of the end of the period. occupied sites have increased by 204 from 66,311 at december 31, 2018. non-core income from property operations (1) (in millions, unaudited) quarter ended six months ended june 30, 2019 june 30, 2019 community base rental income $ 3.8 $ 8.1 rental home income — 0.1 resort base rental income 4.8 11.0 utility and other income (2) 0.5 1.6 property operating revenues 9.1 20.8 property operating expenses (3) 4.9 9.0 income from property operations, excluding deferrals and property management (1) $ 4.2 $ 11.8 _________________________ 1. excludes property management and the gaap deferral of right-to-use contract upfront payments and related commissions, net. utility and other income includes hurricane irma insurance recovery revenues of $0.6 million, which we have identified as business interruption for the six months ended june 30, 2019. property operating, maintenance and real estate taxes includes bad debt expense for the quarter ended june 30, 2019. income from rental home operations (in millions, except occupied rentals, unaudited) quarters ended june 30, six months ended june 30, 2019 2018 2019 2018 manufactured homes: rental operations revenues (1) $ 11.4 $ 11.1 $ 22.6 $ 22.2 rental operations expense 1.3 1.5 2.5 2.9 income from rental operations 10.1 9.6 20.1 19.3 depreciation on rental homes (2) 2.5 2.3 4.9 4.6 income from rental operations, net of depreciation $ 7.6 $ 7.3 $ 15.2 $ 14.7 occupied rentals: (3) new 3,006 2,547 used 1,007 1,467 total occupied rental sites 4,013 4,014 as of june 30, 2019 as of june 30, 2018 cost basis in rental homes: (4) gross net of depreciation gross net of depreciation new $ 192.0 $ 159.9 $ 135.9 $ 110.3 used 25.1 11.6 34.5 24.5 total rental homes $ 217.1 $ 171.5 $ 170.4 $ 134.8 _________________________ for both quarters ended june 30, 2019 and 2018, approximately $7.8 million 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 ended june 30, 2019 and 2018 in the core income from property operations on page 9. depreciation on rental homes in our core portfolio is included in depreciation and amortization in the consolidated income statements on page 4. occupied rentals as of the end of the period in our core portfolio. included in the quarters ended june 30, 2019 and 2018 were 298 and 264 homes rented through our echo joint venture, respectively. for the quarters ended june 30, 2019 and 2018, the rental home investment associated with our echo joint venture totaled approximately $10.6 million and $9.2 million, respectively. 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 june 30, 2019 and 2018, our investment in the echo joint venture was approximately $16.5 million and $15.9 million, respectively. total sites and home sales (in thousands, except sites and home sale volumes, unaudited) summary of total sites as of june 30, 2019 sites community sites 72,000 resort sites: annuals 30,400 seasonal 11,300 transient 12,100 right-to-use membership (1) 24,300 joint ventures (2) 5,900 total 156,000 home sales - select data quarters ended june 30, six months ended june 30, 2019 2018 2019 2018 total new home sales volume (3) 117 146 208 276 new home sales volume - echo joint venture 18 25 31 43 new home sales gross revenues (3) $ 6,064 $ 6,859 $ 10,628 $ 13,595 total used home sales volume 210 297 429 538 used home sales gross revenues $ 1,761 $ 2,246 $ 3,672 $ 3,819 brokered home resales volume 237 253 405 446 brokered home resale revenues, net $ 379 $ 369 $ 657 $ 651 _________________________ 1. sites primarily utilized by approximately 115,400 members. includes approximately 5,800 sites rented on an annual basis. 2. joint ventures have approximately 2,700 annual sites, 400 seasonal sites, 500 transient sites and includes approximately 2,300 marina slips. 3. total new home sales volume includes home sales from our echo joint venture. new home sales gross revenues does not include the revenues associated with our echo joint venture. 2019 guidance - selected financial data (1) our guidance acknowledges the existence of volatile economic conditions, which may impact our current guidance assumptions. factors impacting 2019 guidance include, but are not limited to the following: (i) the mix of site usage within the portfolio; (ii) yield management on our short-term resort sites; (iii) scheduled or implemented rate increases on community and resort sites; (iv) scheduled or implemented rate increases in annual payments under right-to-use contracts; (v) occupancy changes; (vi) our ability to retain and attract customers renewing or entering right-to-use contracts; (vii) our ability to integrate and operate recent acquisitions in accordance with our estimates; (viii) completion of pending transactions in their entirety and on assumed schedule; (ix) ongoing legal matters and related fees; and (x) costs to restore property operations and potential revenue losses following storms or other unplanned events. (in millions, except per share data, unaudited) quarter ending year ending september 30, 2019 december 31, 2019 income from property operations, excluding deferrals and property management - core (2) $ 141.3 $ 557.7 income from property operations - non-core (3) 4.7 20.9 property management and general and administrative (22.8 ) (92.3 ) other income and expenses 4.4 16.7 interest and related amortization (25.4 ) (102.9 ) normalized ffo available for common stock and op unit holders 102.2 400.1 early debt retirement (4) — (2.1 ) insurance proceeds due to catastrophic weather event (5) — 0.3 ffo available for common stock and op unit holders 102.2 398.3 depreciation and amortization (37.0 ) (150.6 ) deferral of right-to-use contract sales revenue and commission, net (2.4 ) (8.1 ) gain on sale of real estate, net — 52.5 income allocated to non-controlling interest-common op units (3.4 ) (16.4 ) net income available for common stockholders $ 59.4 $ 275.7 net income per common share - fully diluted (6) $0.62 - $0.68 $2.99 - $3.09 ffo per common share and op unit - fully diluted $1.03 - $1.09 $4.10 - $4.20 normalized ffo per common share and op unit - fully diluted $1.03 - $1.09 $4.12 - $4.22 weighted average common stock outstanding - fully diluted 96.2 96.0 _________________________ 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. see page 14 for 2019 core guidance assumptions. amount represents 2018 income from property operations, excluding deferrals and property management, from the 2019 core properties of $133.6 million multiplied by an estimated growth rate of 5.7% and $530.9 million multiplied by an estimated growth rate of 5.0% for the quarter ending september 30, 2019 and year ending december 31, 2019, respectively. see page 14 for the 2019 assumptions regarding the non-core properties. includes our portion of early debt retirement costs incurred by unconsolidated joint ventures. includes insurance recovery revenue from reimbursement for capital expenditures related to hurricane irma. net income per common share - fully diluted is calculated before income allocated to non-controlling interest- common op units. 2019 core guidance assumptions (1) (in millions, unaudited) quarter ended third quarter 2019 year ended 2019 september 30, 2018 growth factors (2) december 31, 2018 growth factors (2) community base rental income $ 126.9 5.0 % $ 505.3 5.1 % rental home income 3.2 13.5 % 13.1 10.6 % resort base rental income (3) 62.7 4.8 % 233.4 4.4 % right-to-use annual payments (membership subscriptions) 12.2 4.7 % 47.8 5.5 % right-to-use contracts current period, gross (membership upgrade sales) 4.9 8.2 % 15.2 15.6 % utility and other income 24.2 (4.5 )% 93.5 (5.6 )% property operating revenues 234.1 4.2 % 908.3 4.1 % property operating, maintenance, and real estate taxes 95.1 2.3 % 358.4 2.6 % rental home operating and maintenance 1.8 (15.7 )% 6.5 (16.0 )% sales and marketing, gross 3.6 4.1 % 12.5 13.7 % property operating expenses 100.5 2.1 % 377.4 2.7 % income from property operations, excluding deferrals and property management $ 133.6 5.7 % $ 530.9 5.0 % resort base rental income: annual $ 36.7 5.5 % $ 145.7 5.5 % seasonal 4.5 2.5 % 36.3 3.2 % transient 21.5 4.2 % 51.4 2.0 % total resort base rental income $ 62.7 4.8 % $ 233.4 4.4 % 2019 assumptions regarding non-core properties (1) (in millions, unaudited) quarter ending year ending june 30, 2019 (4) december 31, 2019 (4) community base rental income $ 3.8 $ 15.7 rental home income — 0.1 resort base rental income 5.7 21.4 utility and other income 0.6 2.7 property operating revenues 10.1 39.9 property operating, maintenance, and real estate taxes 5.4 19.0 property operating expenses 5.4 19.0 income from property operations, excluding deferrals and property management $ 4.7 $ 20.9 _________________________ see non-gaap financial measures definitions and other terms at the end of the supplemental information for definitions of core and non-core. management’s estimate of the growth of property operations in the 2019 core properties compared to actual 2018 performance. represents our estimate of the mid-point of a range of possible outcomes. calculations prepared using actual results without rounding. actual growth for core properties could vary materially from amounts presented above if any of our assumptions is incorrect. see resort base rental income detail included below within this table. each line item represents our estimate of the mid-point of a possible range of outcomes and reflects management’s best estimate of the most likely outcome for the non-core properties. actual income from property operations for non-core properties could vary materially from amounts presented above if any of our assumptions is incorrect. right-to-use memberships - select data (unaudited) years ended december 31, 2015 2016 2017 2018 2019 (1) member count (2) 102,413 104,728 106,456 111,094 116,000 thousand trails camping pass (ttc) origination 25,544 29,576 31,618 37,528 40,300 ttc sales 11,877 12,856 14,128 17,194 18,700 rv dealer ttc activations 13,667 16,720 17,490 20,334 21,600 number of annuals (3) 5,470 5,756 5,843 5,888 5,700 number of upgrade sales (4) 2,687 2,477 2,514 2,500 2,900 (in thousands, unaudited) right-to-use annual payments (membership subscriptions) $ 44,441 $ 45,036 $ 45,798 $ 47,778 $ 50,400 resort base rental income from annuals $ 13,821 $ 15,413 $ 16,841 $ 18,363 $ 19,500 resort base rental income from seasonals/transients $ 15,795 $ 17,344 $ 18,231 $ 19,840 $ 20,600 upgrade contract initiations (5) $ 12,783 $ 12,312 $ 14,130 $ 15,191 $ 17,600 utility and other income $ 2,430 $ 2,442 $ 2,254 $ 2,410 $ 2,300 _________________________ guidance estimate. each line item represents our estimate of the mid-point of a possible range of outcomes and reflects management’s best estimate of the most likely outcome. actual figures could vary materially from amounts presented above if any of our assumptions is incorrect. members have entered into right-to-use contracts (membership subscriptions) with us that entitle them to use certain properties on a continuous basis for up to 21 days. members who rent a specific site for an entire year in connection with their right-to-use contracts (membership subscriptions). 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. revenues associated with contract upgrades, included in right-to-use contracts current period, gross, (membership upgrade sales) on our consolidated income statements on page 4. market capitalization (in millions, except share and op unit data, unaudited) capital structure as of june 30, 2019 total common stock/units % of total common stock/units total % of total % of total market capitalization secured debt $ 2,100 91.3 % unsecured debt 200 8.7 % total debt (1) $ 2,300 100.0 % 16.4 % common stock 91,032,007 94.5 % op units 5,249,161 5.5 % total common stock and op units 96,281,168 100.0 % common stock price at june 30, 2019 $ 121.34 fair value of common stock and op units $ 11,683 100.0 % total equity $ 11,683 100.0 % 83.6 % total market capitalization $ 13,983 100.0 % _________________________ excludes deferred financing costs of approximately $25.2 million. debt maturity schedule debt maturity schedule as of june 30, 2019 (in thousands, unaudited) year secured debt weighted average interest rate unsecured debt weighted average interest rate total debt % of total debt weighted average interest rate 2019 $ — — % $ — — % $ — — % — % 2020 48,915 5.18 % — — % 48,915 2.13 % 5.18 % 2021 170,650 5.01 % — — % 170,650 7.42 % 5.01 % 2022 148,175 4.62 % — — % 148,175 6.45 % 4.62 % 2023 104,304 5.05 % 200,000 3.05 % 304,304 13.24 % 3.74 % 2024 10,729 5.49 % — — % 10,729 0.47 % 5.49 % 2025 102,078 3.45 % — — % 102,078 4.44 % 3.45 % 2026 — — % — — % — — % — % 2027 — — % — — % — — % — % 2028 223,983 4.19 % — — % 223,983 9.75 % 4.19 % thereafter 1,289,518 4.24 % — — % 1,289,518 56.11 % 4.24 % total $ 2,098,352 4.35 % $ 200,000 3.05 % $ 2,298,352 100.0 % 4.24 % unsecured line of credit — — — note premiums 1,361 — 1,361 total debt 2,099,713 200,000 2,299,713 deferred financing costs (24,024 ) (1,213 ) (25,237 ) total debt, net $ 2,075,689 $ 198,787 $ 2,274,476 4.46 % (1) average years to maturity 13.6 3.9 12.8 _________________________ reflects effective interest rate during the second quarter of 2019, including 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 up-front non-refundable payments from the entry of right-to-use contracts. in accordance with gaap, the upfront non-refundable payments and related commissions are deferred and amortized over the estimated customer life. although the nareit definition of ffo does not address the treatment of non-refundable right-to-use payments, we believe that it is appropriate to adjust for the impact of the deferral activity in our calculation of ffo. we believe ffo, as defined by the board of governors of nareit, is generally a measure of performance for an equity reit. while ffo is a relevant and widely used measure of operating performance for equity reits, it does not represent cash flow from operations or net income as defined by gaap, and it should not be considered as an alternative to these indicators in evaluating liquidity or operating performance. normalized funds from operations (normalized ffo). we define normalized ffo as ffo excluding the following non-operating income and expense items: a) gains and losses from early debt extinguishment, including prepayment penalties and defeasance costs, and b) other miscellaneous non-comparable items. normalized ffo presented herein is not necessarily comparable to normalized ffo presented by other real estate companies due to the fact that not all real estate companies use the same methodology for computing this amount. funds available for distribution (fad). we define fad as normalized ffo less non-revenue producing capital expenditures. we believe that ffo, normalized ffo and fad are helpful to investors as supplemental measures of the performance of an equity reit. we believe that by excluding the effect of gains or losses from sales of properties, depreciation and amortization related to real estate, impairment charges, which are based on historical costs and may be of limited relevance in evaluating current performance, ffo can facilitate comparisons of operating performance between periods and among other equity reits. we further believe that normalized ffo provides useful information to investors, analysts and our management because it allows them to compare our operating performance to the operating performance of other real estate companies and between periods on a consistent basis without having to account for differences not related to our operations. for example, we believe that excluding the early extinguishment of debt, property acquisition and other transaction costs related to mergers and acquisitions from normalized ffo allows investors, analysts and our management to assess the sustainability of operating performance in future periods because these costs do not affect the future operations of the properties. in some cases, we provide information about identified non-cash components of ffo and normalized ffo because it allows investors, analysts and our management to assess the impact of those items. income from property operations, excluding deferrals and property management. we define income from property operations, excluding deferrals and property management as rental income, utility and other income and right-to-use income less property and rental home operating and maintenance expenses, real estate taxes, sales and marketing expenses, excluding property management and the gaap deferral of right-to-use contract upfront payments and related commissions, net. for comparative purposes, we present bad debt expense within property operating, maintenance and real estate taxes in the current and prior periods. we believe that this non-gaap financial measure is helpful to investors and analysts as a measure of the operating results of our manufactured home and rv communities. 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) 2019 2018 2019 2018 net income available for common stockholders $ 46,401 $ 46,137 $ 159,710 $ 106,359 redeemable perpetual preferred stock dividends 8 8 8 8 income allocated to non-controlling interests – common op units 2,676 3,024 9,902 6,979 equity in income of unconsolidated joint ventures (3,226 ) (1,613 ) (4,759 ) (2,808 ) income before equity in income of unconsolidated joint ventures 45,859 47,556 164,861 110,538 gain on sale of real estate, net — — (52,507 ) — right-to-use contract upfront payments, deferred, net 2,912 2,021 4,683 3,306 gross revenues from home sales (7,825 ) (9,105 ) (14,300 ) (17,414 ) brokered resale and ancillary services revenues, net (872 ) (617 ) (2,431 ) (2,018 ) interest income (1,803 ) (1,862 ) (3,554 ) (3,812 ) income from other investments, net (879 ) (3,413 ) (1,865 ) (4,353 ) right-to-use contract commissions, deferred, net (389 ) (262 ) (580 ) (286 ) property management 14,385 13,472 28,070 27,153 depreciation and amortization 37,776 34,345 75,753 66,719 cost of home sales 8,164 9,632 14,796 18,206 home selling expenses 1,102 973 2,185 2,048 general and administrative 9,225 9,669 19,134 17,707 other expenses 540 367 967 710 early debt retirement 1,491 — 1,491 — interest and related amortization 26,024 26,285 52,417 51,988 income from property operations, excluding deferrals and property management 135,710 129,061 289,120 270,492 right-to-use contracts, upfront payments and commissions, deferred, net (2,523 ) (1,759 ) (4,103 ) (3,020 ) property management (14,385 ) (13,472 ) (28,070 ) (27,153 ) income from property operations $ 118,802 $ 113,830 $ 256,947 $ 240,319 earnings before interest, tax, depreciation and amortization for real estate (ebitdare) and adjusted ebitdare. we define ebitdare as net income or loss excluding interest income and expense, income taxes, depreciation and amortization, gains or losses from sales of properties, impairments charges, and adjustments to reflect our share of ebitdare of unconsolidated joint ventures. we compute ebitdare in accordance with our interpretation of the standards established by nareit, which may not be comparable to ebitdare reported by other reits that do not define the term in accordance with the current nareit definition or that interpret the current nareit definition differently than we do. we receive up-front non-refundable payments from the entry of right-to-use contracts. in accordance with gaap, the upfront non-refundable payments and related commissions are deferred and amortized over the estimated customer life. although the nareit definition of ebitdare does not address the treatment of non-refundable right-to-use payments, we believe that it is appropriate to adjust for the impact of the deferral activity in our calculation of ebitdare. we define adjusted ebitdare as ebitdare excluding non-operating income and expense items such as gains and losses from early debt extinguishment, including prepayment penalties and defeasance costs, and other miscellaneous non-comparable items. we believe that ebitdare and adjusted ebitdare may be useful to an investor in evaluating our operating performance and liquidity because the measures are widely used to measure the operating performance of an equity reit. the following table reconciles consolidated net income to ebitdare and adjusted ebitdare: quarters ended june 30, six months ended june 30, (amounts in thousands) 2019 2018 2019 2018 consolidated net income $ 49,085 $ 49,169 $ 169,620 $ 113,346 interest income (1,803 ) (1,862 ) (3,554 ) (3,812 ) right-to-use contract upfront payments, deferred, net 2,912 2,021 4,683 3,306 right-to-use contract commissions, deferred, net (389 ) (262 ) (580 ) (286 ) real estate depreciation and amortization 37,776 34,345 75,753 66,719 other depreciation and amortization 449 367 876 710 interest and related amortization 26,024 26,285 52,417 51,988 gain on sale of real estate, net — — (52,507 ) — adjustments to our share of ebitdare of unconsolidated joint ventures 1,598 947 2,599 1,911 ebitdare 115,652 111,010 249,307 233,882 early debt retirement 2,085 — 2,085 — insurance proceeds due to catastrophic weather event — (1,806 ) (349 ) (2,092 ) adjusted ebitdare $ 117,737 $ 109,204 $ 251,043 $ 231,790 core. the core properties include properties we owned and operated during all of 2018 and 2019. we believe core is a measure that is useful to investors for annual comparison as it removes the fluctuations associated with acquisitions, dispositions and significant transactions or unique situations. non-core. the non-core properties include all properties that were not owned and operated during all of 2018 and 2019. this includes, but is not limited to, four properties 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 will not directly result in increased revenue or expense savings and are primarily comprised of common area improvements, furniture and mechanical improvements. fixed charges. fixed charges consist of interest expense, amortization of note premiums and debt issuance costs.
