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, 2015. all per share results are reported on a fully diluted basis unless otherwise noted. financial results for the quarter ended march 31, 2015 normalized funds from operations (“normalized ffo”) increased $4.7 million, or $0.04 per common share, to $76.5 million, or $0.83 per common share, compared to $71.8 million, or $0.79 per common share, for the same period in 2014. funds from operations (“ffo”) decreased $12.3 million, or $0.14 per common share, to $59.1 million, or $0.64 per common share, compared to $71.4 million, or $0.78 per common share, for the same period in 2014. net income available for common stockholders decreased $10.9 million, or $0.14 per common share, to $27.2 million, or $0.32 per common share, compared to $38.1 million, or $0.46 per common share, for the same period in 2014. ffo and net income available for stockholders were impacted by the early debt retirement expense of approximately $17.0 million. portfolio performance for the quarter ended march 31, 2015, property operating revenues, excluding deferrals, increased $10.7 million to $197.3 million compared to $186.6 million for the same period in 2014. for the quarter ended march 31, 2015, income from property operations, excluding deferrals and property management, increased $8.5 million to $119.4 million compared to $110.9 million for the same period in 2014. for the quarter ended march 31, 2015, core property operating revenues increased approximately 4.1 percent and core income from property operations, excluding deferrals and property management, increased approximately 6.0 percent compared to the same period in 2014. balance sheet activity during the first quarter we completed our previously announced refinancing plan. we closed on loans with total gross proceeds of approximately $395.3 million. the loans have a weighted average maturity of 21 years, are secured by 26 manufactured home properties and rv resorts and carry a weighted average interest rate of 3.93 percent per annum. proceeds from the financing were used to retire approximately $370.2 million of loans maturing at various times throughout 2015 and 2016, which were secured by 32 manufactured home properties and rv resorts with a weighted average interest rate of 5.58 percent per annum. we incurred approximately $17.0 million in early debt retirement expense related to these loans. in addition, during the first quarter, we paid off a maturing mortgage loan of approximately $13.3 million with a stated interest rate of 5.20 percent per annum, which was secured by a manufactured home property. on april 8, 2015, we paid off a maturing mortgage loan of approximately $35.4 million secured by three rv resorts with a stated interest rate of 5.93 percent per annum. investment activity in february 2015, we closed on the acquisition of bogue pines and whispering pines, two properties located in coastal north carolina for a total purchase price of approximately $12.3 million, which was funded with available cash. these assets contain 150 manufactured home sites and 278 rv sites. about equity lifestyle properties we are a self-administered, self-managed real estate investment trust (“reit”) with headquarters in chicago. as of april 20, 2015, we own or have an interest in 386 quality properties in 32 states and british columbia consisting of 143,541 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 21, 2015, at 10:00 a.m. central time. please visit the investor information section at www.equitylifestyle.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 recent acquisitions. these forward-looking statements are subject to numerous assumptions, risks and uncertainties, including, but not limited to: our ability to control costs, real estate market conditions, the actual rate of decline in 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 2015 estimated net income, ffo and normalized ffo; our ability to manage counterparty risk; in the age-qualified properties, home sales results could be impacted by the ability of potential homebuyers to sell their existing residences as well as by financial, credit and capital markets volatility; results from home sales and occupancy will continue to be impacted by local economic conditions, lack of affordable manufactured home financing and competition from alternative housing options including site-built single-family housing; impact of government intervention to stabilize site-built single family housing and not manufactured housing; effective integration of recent acquisitions and our estimates regarding the future performance of recent acquisitions; the completion of future transactions in their entirety, if any, and timing and effective integration with respect thereto; unanticipated costs or unforeseen liabilities associated with recent acquisitions; ability to obtain financing or refinance existing debt on favorable terms or at all; the effect of interest rates; the dilutive effects of issuing additional securities; the effect of accounting for the entry of contracts with customers representing a right-to-use the properties under the codification topic “revenue recognition;” the outcome of pending or future lawsuits filed against us by tenant groups seeking to limit rent increases and/or seeking large damage awards for our alleged failure to properly maintain certain properties or other tenant related matters, such as the case currently pending in the california court of appeal, sixth appellate district, case no. h041913, involving our california hawaiian manufactured home property, including any further proceedings on appeal or in the trial court; and other risks indicated from time to time in our filings with the securities and exchange commission. 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 dbabin@rwbaird.com gmehta@cantor.com todd.stender@wellsfargo.com paul.adornato@bmo.com michael.bilerman@citi.com nicholas.joseph@citi.com bank of america merrill lynchglobal research jana.galan@baml.com dbragg@greenstreetadvisors.com rburke@greenstreetadvisors.com ______________________ financial highlights (in millions, except shares outstanding and per share data, unaudited) as of and for the three months ended march 31,2015 december 31,2014 september 30,2014 june 30,2014 march 31,2014 200.6 normalized ebitda (1) shares outstanding and per share data balance sheet ______________________ first quarter 2015 - selected financial data (in millions, except per share data, unaudited) ______________________ balance sheet (in thousands, except share and per share data) march 31,2015(unaudited) december 31, 2014 assets total assets liabilities and equity liabilities: total equity total liabilities and equity 3,468,794 consolidated income statement (in thousands, unaudited) quarters endedmarch 31, general and administrative (1) net income available for common shares _________________________________________ 1. includes transaction costs, see reconciliation of net income to ffo, normalized ffo and fad on page 6. reconciliation of net income to ffo, normalized ffo and fad (in thousands, except per share data, unaudited) quarters endedmarch 31, fad (3) ______________________________ consolidated income from property operations (1) (in millions, except home site and occupancy figures, unaudited) quarters endedmarch 31, _________________________ 2015 core income from property operations (1) (in millions, except home site and occupancy figures, unaudited) quarters endedmarch 31, %change (2) ____________________________ acquisitions - income from property operations (1) (in millions, unaudited) quarter endedmarch 31,2015 income from property operations, excluding deferrals and property management ______________________ income from rental home operations (in millions, except occupied rentals, unaudited) quarters endedmarch 31, manufactured homes: income from rental operations, before depreciation 8.6 9.1 as of cost basis in rental homes: (3) net ofdepreciation net ofdepreciation used 62.2 45.4 64.3 53.9 ____________________________ total sites and home sales (in thousands, except sites and home sale volumes, unaudited) summary of total sites as of march 31, 2015 quarters endedmarch 31, __________________________ our guidance acknowledges the existence of volatile economic conditions, which may impact our current guidance assumptions. factors impacting 2015 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; and (ix) ongoing legal matters and related fees. (in millions, except per share data, unaudited) quarter endedjune 30, 2015 year endeddecember 31, 2015 net income available to common shares _____________________________________ 2015 core guidance assumptions(1) (in millions, unaudited) quarter endedjune 30,2014 secondquarter 2015growthfactors (2) year endeddecember 31, 2014 2015growthfactors (2) )% 2015 assumptions regarding acquisition properties (1) (in millions, unaudited) quarter endedjune 30, 2015 (4) year endeddecember 31, 2015 (4) _______________________________ right-to-use memberships - select data (in thousands, except member count, number of thousand trail camping pass, number of annuals and number of upgrades, unaudited) 2015 (1) — 8,173 3,100 ________________________________ market capitalization (in millions, except share and op unit data, unaudited) capital structure as of march 31, 2015 totalcommonstock/units % of total % of total % of total % total market capitalization $ 7,374 100.0 % perpetual preferred equity as of march 31, 2015 outstandingshares liquidationvalue annualdividendper share annualdividendvalue debt maturity schedule debt maturity schedule as of march 31, 2015(in thousands, unaudited) secureddebt weightedaverageinterestrate unsecureddebt weightedaverageinterestrate total debt % of totaldebt weightedaverageinterestrate (1) % (1) ________________________________ non-gaap financial measures definitions and other terms this document contains certain non-gaap measures we believe are helpful in understanding our business, as further discussed in the paragraphs below. investors should review funds from operations (“ffo”), normalized funds from operations (“normalized ffo”) and funds available for distribution (“fad”), along with gaap net income and cash flow from operating activities, investing activities and financing activities, when evaluating an equity reit’s operating performance. 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. 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. ffo, normalized ffo and fad 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. ffo. we define ffo as net income, computed in accordance with gaap, excluding gains and actual or estimated losses from sales of properties, plus real estate related depreciation and amortization, impairments, if any, and after adjustments for unconsolidated partnerships and joint ventures. adjustments for unconsolidated partnerships and joint ventures are calculated to reflect ffo on the same basis. 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 nareit, is generally an appropriate 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 ffo. we define normalized ffo as ffo excluding the following non-operating income and expense items: a) the financial impact of contingent consideration; b) gains and losses from early debt extinguishment, including prepayment penalties and defeasance costs; c) property acquisition and other transaction costs related to mergers and acquisitions; and d) other miscellaneous non-comparable items. we believe that ffo and normalized ffo are helpful to investors as supplemental measures of the performance of an equity reit. we believe that by excluding the effect of depreciation, amortization and actual or estimated gains or losses from sales of real estate, all of which are based on historical costs and which 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 and the change in fair value of our contingent consideration asset 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. fad. we define fad as normalized ffo less non-revenue producing capital expenditures. income from property operations, excluding deferrals and property management. we define income from property operations, excluding deferrals and property management as rental income, utility income and right-to-use income less property and maintenance expenses, real estate tax, sales and marketing expenses, property management and the gaap deferral of right-to-use contract upfront payments and related commissions, net. we believe that this non-gaap financial measure is helpful to investors and analysts as a direct measure of the actual operating results of our manufactured home and rv properties. the following table reconciles income before equity in income of unconsolidated joint ventures to income from property operations(amounts in thousands): quarters endedmarch 31, earnings before interest, tax, depreciation and amortization (ebitda) and normalized ebitda. we define ebitda as net income or loss before interest income and expense, income taxes, depreciation and amortization. we define normalized ebitda as ebitda excluding the following non-operating income and expense items: a) the financial impact of contingent consideration; b) gains and losses from early debt extinguishment, including prepayment penalties and defeasance costs; c) property acquisition and other transaction costs related to mergers and acquisitions; and d) other miscellaneous non-comparable items. the following table reconciles income before equity in income of unconsolidated joint ventures to ebitda and normalized ebitda (amounts in thousands): quarters endedmarch 31, depreciation on real estate assets and amortization of in-place leases core. the core properties include properties we expect to own and operate during all of 2014 and 2015. acquisitions. the acquisition properties include seven properties acquired during 2014 and two properties acquired during 2015. 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.
