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, 2014. all per share results are reported on a fully diluted basis unless otherwise noted. financial results for the quarter ended june 30, 2014 normalized funds from operations (“normalized ffo”) increased $5.3 million, or $0.06 per common share, to $57.6 million, or $0.63 per common share, compared to $52.3 million, or $0.57 per common share, for the same period in 2013. funds from operations (“ffo”) increased $6.7 million, or $0.07 per common share, to $57.6 million, or $0.63 per common share, compared to $50.8 million, or $0.56 per common share, for the same period in 2013. net income available for common stockholders increased $7.6 million, or $0.09 per common share, to $25.5 million, or $0.30 per common share, compared to $17.9 million, or $0.21 per common share, for the same period in 2013. portfolio performance for the quarter ended june 30, 2014, property operating revenues, excluding deferrals, increased $8.9 million to $178.4 million compared to $169.5 million for the same period in 2013. for the six months ended june 30, 2014, property operating revenues, excluding deferrals, increased $19.4 million to $364.8 million compared to $345.4 million for the same period in 2013. for the quarter ended june 30, 2014, income from property operations, excluding deferrals, increased $6.2 million to $100.7 million compared to $94.5 million for the same period in 2013. for the six months ended june 30, 2014, income from property operations, excluding deferrals, increased $12.9 million to $211.6 million compared to $198.7 million for the same period in 2013. for the quarter ended june 30, 2014, core property operating revenues increased approximately 2.9 percent and income from core property operations increased approximately 4.1 percent compared to the same period in 2013. for the six months ended june 30, 2014, core property operating revenues increased approximately 3.4 percent and income from core property operations increased approximately 4.1 percent compared to the same period in 2013. balance sheet during the second quarter, we closed on loans resulting in proceeds of $54.0 million, bearing a weighted average interest rate of 4.54 percent per annum and maturing in 2034 and 2038 and paid off approximately $36.0 million in mortgages with a weighted average interest rate of 5.64 percent per annum. on july 1, 2014, we paid off $8.4 million in maturing mortgages with a weighted average interest rate of 5.44 percent per annum. on july 17, 2014, we amended our $380.0 million line of credit which had a rate of libor plus 1.65 percent per annum, a maturity date in 2016 and a one year extension option. the amended line of credit has $400.0 million available and additional capacity of $100.0 million, a rate of libor plus 1.40 percent per annum at our current leverage level, a maturity date in 2018 and a one year extension option. we also extended our $200.0 million term loan with a rate of libor plus 1.85 percent per annum and a maturity date in 2017. the extension has a maturity date in 2020 and a rate of libor plus 1.35 percent per annum at our current leverage ratio. in connection with the closing of the term loan, we also entered into a three year swap to fix libor at 1.04 percent per annum. interest coverage was approximately 3.3 times in the quarter. cash on our balance sheet as of june 30, 2014 was approximately $84.8 million. expanded disclosure on our balance sheet and debt statistics are included in the tables below. general information as of july 21, 2014, we own or have an interest in 379 quality properties in 32 states and british columbia consisting of 140,303 sites. we are a self-administered, self-managed real estate investment trust (“reit”) with headquarters in chicago. a live webcast of our conference call discussing these results will be available via our website in the investor information section at www.equitylifestyle.com at 10:00 a.m. central time on july 22, 2014. 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 2014 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 the case currently pending in the california superior court for santa clara county, case no. 109cv140751, involving our california hawaiian manufactured home property including any post-trial proceedings in the trial court or on appeal; 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. tables follow: second quarter 2014 - selected financial data (in millions, except per share data, unaudited) ______________________ consolidated income statement (in thousands, unaudited) __________________ reconciliation of net income to ffo, normalized ffo and fad (in thousands, except per share data, unaudited) ______________________________ consolidated income from property operations (1) (in millions, except home site and occupancy figures, unaudited) _________________________ 2014 core income from property operations (1) (in millions, except home site and occupancy figures, unaudited) ____________________________ acquisitions - 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) __________________________ 2014 guidance - selected financial data (1) (in millions, except per share data, unaudited) _____________________________________ third quarter 2014 guidance - selected financial data (1) (in millions, except per share data, unaudited) _____________________________________ 2014 core (1) guidance assumptions - income from property operations (in millions, unaudited) december 31, 2013 growth factors (2) growth factors (2) _______________________________ 2014 assumptions regarding acquisition properties (1) (in millions, unaudited) ___________________________________ right-to-use memberships - select data (in thousands, except member count, number of zone park passes, number of annuals and number of upgrades, unaudited) ________________________________ balance sheet (in thousands, except share and per share data) debt maturity schedule & summary secured debt maturity schedule as of june 30, 2014 (in thousands, unaudited) debt summary as of june 30, 2014 (in millions, except weighted average interest and average years to maturity, unaudited) ____________________________ market capitalization (in millions, except share and op unit data, unaudited) funds from operations (“ffo”) is a non-gaap financial measure. we believe ffo, as defined by the board of governors of the national association of real estate investment trusts (“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. 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. normalized funds from operations (“normalized ffo”) is a non-gaap measure. 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. funds available for distribution (“fad”) is a non-gaap financial measure. we define fad as normalized ffo less non-revenue producing capital expenditures. investors should review ffo, normalized ffo and 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 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.
