Els reports first 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 ended march 31, 2019. all per share results are reported on a fully diluted basis unless otherwise noted. financial results for the quarter ended march 31, 2019 for the quarter ended march 31, 2019, total revenues increased $13.1 million, or 5.3 percent, to $259.1 million compared to $246.0 million for the same period in 2018. for the quarter ended march 31, 2019, net income available for common stockholders increased $53.1 million, or $0.58 per common share, to $113.3 million, or $1.26 per common share, compared to $60.2 million, or $0.68 per common share, for the same period in 2018. non-gaap financial measures and portfolio performance for the quarter ended march 31, 2019, funds from operations (“ffo”) available for common stock and op unit holders increased $9.8 million, or $0.09 per common share, to $108.0 million or $1.13 per common share, compared to $98.2 million, or $1.04 per common share, for the same period in 2018. for the quarter ended march 31, 2019, normalized funds from operations (“normalized ffo”) available for common stock and op unit holders increased $9.8 million, or $0.09 per common share, to $107.7 million, or $1.13 per common share, compared to $97.9 million, or $1.04 per common share, for the same period in 2018. for the quarter ended march 31, 2019, property operating revenues, excluding deferrals, increased $16.2 million to $250.9 million compared to $234.7 million for the same period in 2018. for the quarter ended march 31, 2019, income from property operations, excluding deferrals and property management, increased $11.9 million to $153.4 million compared to $141.5 million for the same period in 2018. for the quarter ended march 31, 2019, core property operating revenues, excluding deferrals, increased approximately 4.0 percent and core income from property operations, excluding deferrals and property management, increased approximately 4.9 percent compared to the same period in 2018. investment activity on march 25, 2019, we completed the acquisitions of drummer boy camping resort, a 465-site rv community located in gettysburg, pennsylvania, and lake of the woods campground, a 303-site rv community located in wautoma, wisconsin, for a total purchase price of $25.4 million. these acquisitions were funded with available cash and a loan assumption of approximately $10.8 million, excluding mortgage premium of $0.4 million. on april 10, 2019, we completed the acquisition of round top rv campground, a 391-site rv community located in gettysburg, pennsylvania. the purchase price was approximately $12.4 million. this acquisition was funded with available cash and a loan assumption of approximately $7.8 million, excluding mortgage premium of $0.2 million. about equity lifestyle properties we are a self-administered, self-managed real estate investment trust (“reit”) with headquarters in chicago. as of april 22, 2019, we own or have an interest in 412 quality properties in 33 states and british columbia consisting of 155,133 sites. for additional information, please contact our investor relations department at (800) 247-5279 or at investor_relations@equitylifestyle.com. conference call a live webcast of our conference call discussing these results will take place tomorrow, tuesday, april 23, 2019, at 10:00 a.m. central time. please visit the investor information section at www.equitylifestyleproperties.com for the link. a replay of the webcast will be available for two weeks at this site. reporting calendar quarterly financial results and related earnings conference calls for the next three quarters are expected to occur as follows: 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 jeffrey spector/ joshua dennerlein 212-885-4115 jeff.spector@baml.com johnp.kim@bmo.com michael.bilerman@citi.com joshua.dennerlein@baml.com nicholas.joseph@citi.com steve.sakwa@evercoreisi.com jpawlowski@greenst.com dbabin@rwbaird.com samir.khanal@evercoreisi.com todd.stender@wellsfargo.com financial highlights (in millions, except common stock and op units outstanding and per share data, unaudited) mar 31,2019 dec 31,2018 sept 30,2018 jun 30,2018 mar 31,2018 and per share data consolidated balance sheets (in thousands, except share and per share data) land consolidated income statements (in thousands, unaudited) non-gaap financial measures selected non-gaap financial measures (in millions, except per share data, unaudited) 1. reconciliation of net income to non-gaap financial measures (in thousands, except per share data, unaudited) consolidated income from property operations (1) (in millions, except home site and occupancy figures, unaudited) core income from property operations (1) (in millions, except home site and occupancy figures, unaudited) (6.0) % (13.1) % (0.3) % non-core income from property operations (1) (in millions, unaudited) income from rental home operations (in millions, except occupied rentals, unaudited) net ofdepreciation net ofdepreciation total sites and home sales (in thousands, except sites and home sale volumes, unaudited) 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) 2019 core guidance assumptions (1) (in millions, unaudited) quarterended secondquarter 2019 growthfactors (2) december 31,2018 growthfactors (2) 2019 assumptions regarding non-core properties (1) (in millions, unaudited) december 31,2019 (4) right-to-use memberships - select data (unaudited) 2019 (1) market capitalization (in millions, except share and op unit data, unaudited) total commonstock/units % of totalcommonstock/units % of totalmarketcapitalization debt maturity schedule debt maturity schedule as of march 31, 2019 (in thousands, unaudited) secureddebt weightedaverageinterestrate unsecureddebt weightedaverageinterestrate % oftotaldebt weightedaverageinterestrate non-gaap financial measures definitions and other terms this document contains certain non-gaap measures used by management that we believe are helpful in understanding our business, as further discussed in the paragraphs below. we believe investors should review these non-gaap measures along with gaap net income and cash flow from operating activities, investing activities and financing activities, when evaluating an equity reit’s operating performance. our definitions and calculations of these non-gaap financial and operating measures and other terms may differ from the definitions and methodologies used by other reits and, accordingly, may not be comparable. these non-gaap financial and operating measures do not represent cash generated from operating activities in accordance with gaap, nor do they represent cash available to pay distributions and should not be considered as an alternative to net income, determined in accordance with gaap, as an indication of our financial performance, or to cash flow from operating activities, determined in accordance with gaap, as a measure of our liquidity, nor is it indicative of funds available to fund our cash needs, including our ability to make cash distributions. funds from operations (ffo). we define ffo as net income, computed in accordance with gaap, excluding gains or losses from sales of properties, depreciation and amortization related to real estate, impairment charges, and adjustments to reflect our share of ffo of unconsolidated joint ventures. adjustments for unconsolidated joint ventures are calculated to reflect ffo on the same basis. we compute ffo in accordance with our interpretation of standards established by the national association of real estate investment trusts (“nareit”), which may not be comparable to ffo reported by other reits that do not define the term in accordance with the current nareit definition or that interpret the current nareit definition differently than we do. we receive up-front non-refundable payments from the entry of right-to-use contracts. in accordance with gaap, the upfront non-refundable payments and related commissions are deferred and amortized over the estimated customer life. although the nareit definition of ffo does not address the treatment of non-refundable right-to-use payments, we believe that it is appropriate to adjust for the impact of the deferral activity in our calculation of ffo. we believe ffo, as defined by the board of governors of nareit, is generally a measure of performance for an equity reit. while ffo is a relevant and widely used measure of operating performance for equity reits, it does not represent cash flow from operations or net income as defined by gaap, and it should not be considered as an alternative to these indicators in evaluating liquidity or operating performance. normalized funds from operations (normalized ffo). we define normalized ffo as ffo excluding the following non-operating income and expense items: a) gains and losses from early debt extinguishment, including prepayment penalties and defeasance costs, and b) other miscellaneous non-comparable items. normalized ffo presented herein is not necessarily comparable to normalized ffo presented by other real estate companies due to the fact that not all real estate companies use the same methodology for computing this amount. funds available for distribution (fad). we define fad as normalized ffo less non-revenue producing capital expenditures. we believe that ffo, normalized ffo and fad are helpful to investors as supplemental measures of the performance of an equity reit. we believe that by excluding the effect of gains or losses from sales of properties, depreciation and amortization related to real estate, impairment charges, which are based on historical costs and may be of limited relevance in evaluating current performance, ffo can facilitate comparisons of operating performance between periods and among other equity reits. we further believe that normalized ffo provides useful information to investors, analysts and our management because it allows them to compare our operating performance to the operating performance of other real estate companies and between periods on a consistent basis without having to account for differences not related to our operations. for example, we believe that excluding the early extinguishment of debt, property acquisition and other transaction costs related to mergers and acquisitions from normalized ffo allows investors, analysts and our management to assess the sustainability of operating performance in future periods because these costs do not affect the future operations of the properties. in some cases, we provide information about identified non-cash components of ffo and normalized ffo because it allows investors, analysts and our management to assess the impact of those items. income from property operations, excluding deferrals and property management. we define income from property operations, excluding deferrals and property management as rental income, utility and other income and right-to-use income less property and rental home operating and maintenance expenses, real estate taxes, sales and marketing expenses, excluding property management and the gaap deferral of right-to-use contract upfront payments and related commissions, net. for comparative purposes, we present bad debt expense within property operating, maintenance and real estate taxes in the current and prior periods. we believe that this non-gaap financial measure is helpful to investors and analysts as a measure of the operating results of our manufactured home and rv communities. the following table reconciles net income available for common stockholders to income from property operations (amounts in thousands): 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 (amounts in thousands): core. the core properties include properties we owned and operated during all of 2018 and 2019. we believe core is a measure that is useful to investors for annual comparison as it removes the fluctuations associated with acquisitions, dispositions and significant transactions or unique situations. non-core. the non-core properties include all properties that were not owned and operated during all of 2018 and 2019. this includes, but is not limited to, two properties acquired during the first quarter of 2019, five properties sold during the first quarter of 2019, five properties acquired during 2018 and fiesta key and sunshine key rv resorts. income from rental operations, net of depreciation. we use income from rental operations, net of depreciation as an alternative measure to evaluate the operating results of our home rental program. income from rental operations, net of depreciation, represents income from rental operations less depreciation expense on rental homes. we believe this measure is meaningful for investors as it provides a complete picture of the home rental program operating results, including the impact of depreciation, which affects our home rental program investment decisions. non-revenue producing improvements. represents capital expenditures that will not directly result in increased revenue or expense savings and are primarily comprised of common area improvements, furniture and mechanical improvements. fixed charges. fixed charges consist of interest expense, amortization of note premiums and debt issuance costs.
