Els reports third 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 nine months ended september 30, 2022. all per share results are reported on a fully diluted basis unless otherwise noted. financial results for the quarter and nine months ended september 30, 2022 for the quarter ended september 30, 2022, total revenues increased $33.7 million, or 9.7%, to $381.0 million, compared to $347.2 million for the same period in 2021. for the quarter ended september 30, 2022, net income available for common stockholders decreased $3.4 million, to $67.2 million, or $0.36 per common share, compared to $70.6 million, or $0.38 per common share, for the same period in 2021. for the nine months ended september 30, 2022, total revenues increased $125.4 million, or 12.8%, to $1,106.5 million, compared to $981.1 million for the same period in 2021. for the nine months ended september 30, 2022, net income available for common stockholders increased $14.7 million, or $0.06 per common share, to $211.6 million, or $1.14 per common share, compared to $196.9 million, or $1.08 per common share, for the same period in 2021. non-gaap financial measures and portfolio performance for the quarter ended september 30, 2022, funds from operations (“ffo”) available for common stock and op unit holders increased $9.9 million, or $0.04 per common share, to $134.4 million, or $0.69 per common share, compared to $124.5 million, or $0.65 per common share, for the same period in 2021. for the nine months ended september 30, 2022, funds from operations available for common stock and op unit holders increased $34.3 million, or $0.15 per common share, to $396.9 million, or $2.03 per common share, compared to $362.6 million, or $1.88 per common share, for the same period in 2021. for the quarter ended september 30, 2022, normalized funds from operations (“normalized ffo”) available for common stock and op unit holders increased $12.3 million, or $0.05 per common share, to $136.8 million, or $0.70 per common share, compared to $124.5 million, or $0.65 per common share, for the same period in 2021. for the nine months ended september 30, 2022, normalized funds from operations available for common stock and op unit holders increased $38.1 million, or $0.17 per common share, to $403.5 million, or $2.07 per common share, compared to $365.4 million, or $1.90 per common share, for the same period in 2021. for the quarter ended september 30, 2022, property operating revenues, excluding deferrals, increased $24.1 million to $332.8 million, compared to $308.7 million for the same period in 2021. for the nine months ended september 30, 2022, property operating revenues, excluding deferrals, increased $81.9 million to $971.0 million, compared to $889.1 million for the same period in 2021. for the quarter ended september 30, 2022, income from property operations, excluding deferrals and property management, increased $11.1 million to $183.9 million, compared to $172.8 million for the same period in 2021. for the nine months ended september 30, 2022, income from property operations, excluding deferrals and property management, increased $41.6 million to $551.2 million, compared to $509.6 million for the same period in 2021. for the quarter ended september 30, 2022, core property operating revenues, excluding deferrals, increased approximately 5.3% and core income from property operations, excluding deferrals and property management, increased approximately 3.5%, compared to the same period in 2021. for the nine months ended september 30, 2022, core property operating revenues, excluding deferrals, increased approximately 6.5% and core income from property operations, excluding deferrals and property management, increased approximately 5.3%, compared to the same period in 2021. business updates pages 1 and 2 of this earnings release and supplemental financial information provide an update on operations, hurricane ian and 2022 guidance. investment activity in july 2022, we continued our partnership with rvc outdoor destinations and acquired an 80% equity interest in a joint venture for a total value of $1.1 million. the joint venture owns one property under development located in gulf shores, alabama. during the third quarter, we completed the acquisition of two parcels of land adjacent to two of our mh properties for an aggregate purchase price of $7.3 million. about equity lifestyle properties we are a self-administered, self-managed real estate investment trust (“reit”) with headquarters in chicago. as of october 17, 2022, we own or have an interest in 445 quality properties in 35 states and british columbia consisting of 170,245 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, october 18, 2022, at 10:00 a.m. central time. please visit the investor relations section at www.equitylifestyleproperties.com for the link. a replay of the webcast will be available for two weeks at this site. forward-looking statements in addition to historical information, this press release includes certain “forward-looking statements” within the meaning of the private securities litigation reform act of 1995. when used, words such as “anticipate,” “expect,” “believe,” “project,” “intend,” “may be” and “will be” and similar words or phrases, or the negative thereof, unless the context requires otherwise, are intended to identify forward-looking statements and may include without limitation, information regarding our expectations, goals or intentions regarding the future, and the expected effect of our acquisitions. these forward-looking statements are subject to numerous assumptions, risks and uncertainties, including, but not limited to: our ability to control costs and real estate market conditions, our ability to retain customers, the actual use of sites by customers and our success in acquiring new customers at our properties (including those that we may acquire); our ability to maintain historical or increase future rental rates and occupancy with respect to properties currently owned or that we may acquire; our ability to attract and retain customers entering, renewing and upgrading membership subscriptions; our assumptions about rental and home sales markets; our assumptions and guidance concerning net income, ffo and normalized ffo per share data; our ability to manage counterparty risk; our ability to renew our insurance policies at existing rates and on consistent terms; home sales results could be impacted by the ability of potential homebuyers to sell their existing residences as well as by financial, credit and capital markets volatility; results from home sales and occupancy will continue to be impacted by local economic conditions, including an adequate supply of homes at reasonable costs, lack of affordable manufactured home financing and competition from alternative housing options including site-built single-family housing; impact of government intervention to stabilize site-built single-family housing and not manufactured housing; effective integration of recent acquisitions and our estimates regarding the future performance of recent acquisitions; the completion of future transactions in their entirety, if any, and timing and effective integration with respect thereto; unanticipated costs or unforeseen liabilities associated with recent acquisitions; the effect of hurricane ian on our business including, but not limited to the following: (i) the timing and cost of recovery, (ii) the impact of the condition of properties and homes on occupancy demand and related rent revenue and (iii) the timing and amount of insurance proceeds; our ability to obtain financing or refinance existing debt on favorable terms or at all; the effect of inflation and interest rates; the effect from any breach of our, or any of our vendors' data management systems; the dilutive effects of issuing additional securities; the outcome of pending or future lawsuits or actions brought by or against us, including those disclosed in our filings with the securities and exchange commission; and other risks indicated from time to time in our filings with the securities and exchange commission. our guidance acknowledges the existence of volatile economic conditions, which may impact our current guidance assumptions. factors impacting 2022 guidance include, but are not limited to the following: (i) the mix of site usage within the portfolio; (ii) yield management on our short-term resort and marina sites; (iii) scheduled or implemented rate increases on community, resort and marina sites; (iv) scheduled or implemented rate increases in annual payments under membership subscriptions; (v) occupancy changes; (vi) our ability to attract and retain membership customers; (vii) change in customer demand regarding travel and outdoor vacation destinations; (viii) our ability to manage expenses in an inflationary environment; (ix) our ability to integrate and operate recent acquisitions in accordance with our estimates; (x) our ability to execute expansion/development opportunities in the face of supply chain delays/shortages; (xi) completion of pending transactions in their entirety and on assumed schedule; (xii) our ability to attract and retain property employees, particularly seasonal employees; (xiii) ongoing legal matters and related fees; and (xiv) costs to restore property operations and potential revenue losses following storms or other unplanned events. in addition, these forward-looking statements, including our 2022 guidance are subject to risks related to the covid-19 pandemic, many of which are unknown, including the duration of the pandemic, the extent of the adverse health impact on the general population and on our residents, customers and employees in particular, its impact on the employment rate and the economy, the extent and impact of governmental responses and the impact of operational changes we have implemented and may implement in response to the pandemic. for further information on these and other factors that could impact us and the statements contained herein, refer to our filings with the securities and exchange commission, including the “risk factors” section in our most recent annual report on form 10-k and subsequent quarterly reports on form 10-q. these forward-looking statements are based on management's present expectations and beliefs about future events. as with any projection or forecast, these statements are inherently susceptible to uncertainty and changes in circumstances. we are under no obligation to, and expressly disclaim any obligation to, update or alter our forward-looking statements whether as a result of such changes, new information, subsequent events or otherwise. supplemental financial information operations update normalized ffo per common share third quarter (“q3”) 2022: $0.70 or 8.5% growth compared to the same period in 2021. september year to date (“ytd”) 2022: $2.07 or 9.0% growth compared to the same period in 2021. core income from property operations, excluding deferrals and property management q3 2022: 3.5% growth compared to the same period in 2021. september ytd 2022: 5.3% growth compared to the same period in 2021. revenues mh - 60% of total property operating revenues q3 2022 core mh base rental income: 5.9% growth compared to the same period in 2021, which reflects 5.5% growth from rate increases and 0.4% from occupancy gains. september ytd 2022 core mh base rental income: 5.7% growth compared to the same period in 2021, which reflects 5.3% growth from rate increases and 0.4% from occupancy gains. september ytd 2022 core mh occupancy increased by 119 sites since december 31, 2021. september ytd 2022 core manufactured homeowners increased by 633 since december 31, 2021. q3 2022 new home sales: 331 sales with an average sales price of $106,000. by october month-end, we anticipate sending 2023 rent increase notices to approximately 51% of our mh residents. these rent increases will be effective by february 1, 2023 and have an average growth rate in the range of 6.2% to 6.6%. rv and marina - 32% of total property operating revenues q3 2022 core rv and marina base rental income: 4.1% growth compared to the same period in 2021. september ytd 2022 core rv and marina base rental income: 10.3% growth compared to the same period in 2021. q3 2022 core rv annual base rental income: 8.7% growth compared to the same period in 2021, which reflects 6.6% growth from rate increases and 2.1% from occupancy gains. q3 2022 combined core seasonal and transient rv base rental income: exceeded our previously provided guidance with a decline of 2.0% from the same period in 2021 as a result of better than expected seasonal rental income. september ytd 2022 combined core seasonal and transient rv base rental income: increased 13.0% or $12.5 million over the same period in 2021. core rv site composition september 30, 2022 september 30, 2021 annual 32,200 31,600 seasonal 12,100 10,700 transient 12,200 13,800 member 25,400 24,800 third quarter total nights camped increased 1.8% and 7.4% compared to the quarters ended september 30, 2021 and september 30, 2019, respectively. we have set rv annual rates for the 2023 season for 95% of our annual sites. these rate increases will take effect between november 1, 2022 and april 1, 2023 and have an average growth rate in the range of 7.6% to 8.0%. expenses utility expense - 27% of total property operating expenses the increase in utility expense was driven by average electric rate increases of 14% in q3 2022 and 11% for september ytd 2022 compared to the same periods in 2021. the rv properties, which generate lower expense recovery due to the transient component of the business, experienced the highest rate increases in the quarter with increases in the northeast and south ranging from 16% to 29%. hurricane ian update and 2022 guidance (1) hurricane ian update hurricane ian made landfall on the west coast of florida on september 28, 2022. approximately 60% of our florida portfolio was in the path of the storm as it moved across the state. during the storm, we prioritized the safety of our residents, guests and employees. for the majority of our properties the impact was limited to flooding, wind, wind-blown debris and falling trees and branches. these properties have resumed operations. the most significant damage to our properties occurred in or near the fort myers area. six of our properties in or near this market continue to experience utility disruptions and are temporarily closed. the properties include four rv parks and two marinas with a total of 2,100 sites/slips. during the storm, the four rv properties experienced strong winds as well as significant flooding, including from unprecedented storm surges that resulted in damage to certain common area buildings, utility infrastructure and residents’ homes. the two marinas suffered wind related building damage and the process of restoring the buildings has begun. we currently expect these properties will resume operations during the fourth quarter, although certain locations may operate at a limited capacity. over the last 20 days, we have worked towards quickly returning our properties to full operating condition with efforts focused on debris cleanup and removal and initiating the process to restore impacted buildings and infrastructure. based on our prior experience with recovery following major storms, developing restoration plans and estimating costs to execute on those plans takes time, often several weeks. we did not record any expenses related to property damage and restoration work during the third quarter of 2022 given the short period of time between the storm’s passage and the end of the reporting period. we have reviewed our assets impacted by the storm for potential impairment and determined that the estimated future cash flows are greater than the net book value of the assets. as such, it is appropriate not to impair any assets based on our recoverability tests. as part of our review and based on information currently available, we have determined that storm-related damage to certain assets supported a $3.7 million reduction to the carrying value of those assets, which is included in loss on sale of real estate and impairment, net in the consolidated statements of income on page 6. we believe the costs to restore these damaged assets will be included in our insurance claim. 2022 guidance our updated per share guidance for 2022 net income, ffo and normalized ffo is presented below. we have withdrawn our previously provided full year core guidance for revenue, expense and noi for the following reasons: the recency of the hurricane ian storm event; the status of our ongoing assessment of the storm’s impact on our properties; and the uncertainty with respect to property operating revenues and expenses for the affected properties as we resume full operations following the storm. the updated guidance does not include an assumption that we will receive insurance reimbursement for losses resulting from business interruption in 2022. in accordance with gaap, insurance reimbursement for business interruption losses is to be recognized as revenue upon receipt. at this time, we do not have an estimate of the total potential clean up and restoration costs. we believe we have adequate insurance coverage, subject to deductibles, including business interruption, though we are unable to predict the timing or amount of insurance recovery. ($ in millions except per share) full year net income/share $1.46 to $1.52 ffo/share $2.60 to $2.66 normalized ffo/share $2.64 to $2.70 ______________________ (1) full year 2022 guidance ranges represent a range of possible outcomes and the midpoint reflects management's estimate of the most likely outcome. actual growth rates and per share amounts could vary materially from growth rates and per share amounts presented above if any of our assumptions, including occupancy and rate changes, our ability to manage expenses in an inflationary environment, our ability to integrate and operate recent acquisitions and costs to restore property operations and potential revenue losses following storms or other unplanned events, is incorrect. see forward-looking statements in this release for additional factors impacting our 2022 guidance assumptions. investor information equity research coverage(1) bank of america securities barclays bmo capital markets jeffrey spector/joshua dennerlein anthony powell john kim citi research colliers securities evercore isi nick joseph david toti steve sakwa/samir khanal green street advisors rbc capital markets robert w. baird & company john pawlowski brad heffern wes golladay truist ubs wolfe research anthony hau michael goldsmith andrew rosivach/keegan carl ______________________ financial highlights (in millions, except common shares and op units outstanding and per share data, unaudited) as of and for the quarter ended sep 30, 2022 jun 30, 2022 mar 31, 2022 dec 31, 2021 sept 30, 2021 operating information total revenues $ 381.0 $ 365.3 $ 360.2 $ 335.3 $ 347.2 net income $ 70.5 $ 64.6 $ 87.1 $ 68.8 $ 74.1 net income available for common stockholders $ 67.2 $ 61.5 $ 82.9 $ 65.5 $ 70.6 adjusted ebitdare (1) $ 166.4 $ 153.3 $ 168.4 $ 150.7 $ 150.8 ffo available for common stock and op unit holders (1)(2) $ 134.4 $ 121.6 $ 140.9 $ 123.0 $ 124.5 normalized ffo available for common stock and op unit holders (1)(2) $ 136.8 $ 125.3 $ 141.4 $ 123.6 $ 124.5 funds available for distribution ("fad") for common stock and op unit holders (1)(2) $ 115.4 $ 103.6 $ 125.1 $ 102.3 $ 106.1 common shares and op units outstanding (in thousands) and per share data common shares and op units, end of the period 195,380 195,373 195,303 194,946 192,852 weighted average common shares and op units outstanding - fully diluted 195,269 195,227 195,246 193,412 192,736 net income per common share - fully diluted (3) $ 0.36 $ 0.33 $ 0.45 $ 0.36 $ 0.38 ffo per common share and op unit - fully diluted $ 0.69 $ 0.62 $ 0.72 $ 0.64 $ 0.65 normalized ffo per common share and op unit - fully diluted $ 0.70 $ 0.64 $ 0.72 $ 0.64 $ 0.65 dividends per common share $ 0.4100 $ 0.4100 $ 0.4100 $ 0.3625 $ 0.3625 balance sheet total assets $ 5,405 $ 5,400 $ 5,265 $ 5,308 $ 4,982 total liabilities $ 3,886 $ 3,878 $ 3,734 $ 3,822 $ 3,673 market capitalization total debt (4) $ 3,329 $ 3,298 $ 3,193 $ 3,303 $ 3,154 total market capitalization (5) $ 15,607 $ 17,066 $ 18,130 $ 20,392 $ 18,216 ratios total debt / total market capitalization 21.3 % 19.3 % 17.6 % 16.2 % 17.3 % total debt / adjusted ebitdare (6) 5.2 5.3 5.2 5.6 5.5 interest coverage (7) 5.7 5.7 5.7 5.5 5.5 fixed charges(8) 5.6 5.6 5.6 5.5 5.4 ________________ consolidated balance sheets (in thousands, except share and per share data) september 30, 2022 december 31, 2021 (unaudited) assets investment in real estate: land $ 2,080,234 $ 2,019,787 land improvements 4,083,036 3,912,062 buildings and other depreciable property 1,139,755 1,057,215 7,303,025 6,989,064 accumulated depreciation (2,246,214 ) (2,103,774 ) net investment in real estate 5,056,811 4,885,290 cash and restricted cash 30,510 123,398 notes receivable, net 44,653 39,955 investment in unconsolidated joint ventures 88,352 70,312 deferred commission expense 50,029 47,349 other assets, net 135,091 141,567 total assets $ 5,405,446 $ 5,307,871 liabilities and equity liabilities: mortgage notes payable, net $ 2,708,751 $ 2,627,783 term loan, net 496,595 297,436 unsecured line of credit 94,984 349,000 accounts payable and other liabilities 184,771 172,285 deferred membership revenue 195,290 176,439 accrued interest payable 10,317 9,293 rents and other customer payments received in advance and security deposits 115,035 118,696 distributions payable 80,314 70,768 total liabilities 3,886,057 3,821,700 equity: preferred stock, $0.01 par value, 10,000,000 shares authorized as of september 30, 2022 and december 31, 2021; none issued and outstanding. — — common stock, $0.01 par value, 600,000,000 shares authorized as of september 30, 2022 and december 31, 2021; 186,108,851 and 185,640,379 shares issued and outstanding as of september 30, 2022 and december 31, 2021, respectively. 1,916 1,913 paid-in capital 1,625,751 1,593,362 distributions in excess of accumulated earnings (200,969 ) (183,689 ) accumulated other comprehensive income 20,476 3,524 total stockholders’ equity 1,447,174 1,415,110 non-controlling interests – common op units 72,215 71,061 total equity 1,519,389 1,486,171 total liabilities and equity $ 5,405,446 $ 5,307,871 consolidated statements of income (in thousands, unaudited) quarters ended september 30, nine months ended september 30, 2022 2021 2022 2021 revenues: rental income. $ 289,016 $ 269,573 $ 849,411 $ 774,293 annual membership subscriptions 16,254 15,127 47,003 43,048 membership upgrade sales current period, gross 11,085 10,122 27,771 29,343 membership upgrade sales upfront payments, deferred, net (7,777 ) (7,253 ) (18,228 ) (21,134 ) other income 15,580 12,053 43,316 36,759 gross revenues from home sales, brokered resales and ancillary services (1) 52,547 44,570 144,937 110,048 interest income. 1,865 1,805 5,346 5,314 income from other investments, net 2,399 1,238 6,920 3,396 total revenues 380,969 347,235 1,106,476 981,067 expenses: property operating and maintenance 123,181 109,164 341,480 300,700 real estate taxes 17,734 18,408 56,373 54,154 sales and marketing, gross 7,143 6,513 18,466 18,987 membership sales commissions, deferred, net (1,206 ) (1,468 ) (2,746 ) (4,405 ) property management 19,003 17,015 55,973 48,955 depreciation and amortization 52,547 44,414 152,737 138,127 cost of home sales, brokered resales and ancillary services (1) 40,224 34,830 111,894 85,541 home selling expenses and ancillary operating expenses (1) 7,080 6,558 21,146 17,588 general and administrative 11,086 10,401 35,078 31,141 other expenses 1,627 797 6,636 2,295 early debt retirement — — 1,156 2,784 interest and related amortization 29,759 27,361 85,276 80,767 total expenses 308,178 273,993 883,469 776,634 loss on sale of real estate and impairment, net (2) (3,747 ) — (3,747 ) (59 ) income before equity in income of unconsolidated joint ventures 69,044 73,242 219,260 204,374 equity in income of unconsolidated joint ventures 1,465 851 2,889 2,786 consolidated net income 70,509 74,093 222,149 207,160 income allocated to non-controlling interests – common op units (3,346 ) (3,468 ) (10,563 ) (10,236 ) redeemable perpetual preferred stock dividends — — (8 ) (8 ) net income available for common stockholders $ 67,163 $ 70,625 $ 211,578 $ 196,916 ______________________ non-gaap financial measures this document contains certain non-gaap measures used by management that we believe are helpful to understand our business. we believe investors should review these non-gaap measures along with gaap net income and cash flows from operating activities, investing activities and financing activities, when evaluating an equity reit’s operating performance. our definitions and calculations of these non-gaap financial and operating measures and other terms may differ from the definitions and methodologies used by other reits and, accordingly, may not be comparable. these non-gaap financial and operating measures do not represent cash generated from operating activities in accordance with gaap, nor do they represent cash available to pay distributions and should not be considered as an alternative to net income, determined in accordance with gaap, as an indication of our financial performance, or to cash flows from operating activities, determined in accordance with gaap, as a measure of our liquidity, nor are they indicative of funds available to fund our cash needs, including our ability to make cash distributions. for definitions and reconcilitions of non-gaap measures to our financial statements as prepared under gaap, refer to both reconciliation of net income to non-gaap financial measures on page 9 and non-gaap financial measures definitions and reconciliations on pages 19- 21. selected non-gaap financial measures (in millions, except per share data, unaudited) quarter ended september 30, 2022 income from property operations, excluding deferrals and property management - 2022 core (1) $ 173.1 income from property operations, excluding deferrals and property management - non-core (1) 10.8 property management and general and administrative (30.1 ) other income and expenses (excluding transaction/pursuit costs) 12.8 interest and related amortization (29.8 ) normalized ffo available for common stock and op unit holders (2) $ 136.8 transaction/pursuit costs (3) (0.3 ) lease termination expenses (4) (2.1 ) ffo available for common stock and op unit holders (2) $ 134.4 ffo per common share and op unit - fully diluted $ 0.69 normalized ffo per common share and op unit - fully diluted $ 0.70 normalized ffo available for common stock and op unit holders (2) $ 136.8 non-revenue producing improvements to real estate (21.4 ) fad for common stock and op unit holders (2) $ 115.4 weighted average common shares and op units - fully diluted 195.3 ______________________ reconciliation of net income to non-gaap financial measures (in thousands, except per share data, unaudited) quarters ended september 30, nine months ended september 30, 2022 2021 2022 2021 net income available for common stockholders $ 67,163 $ 70,625 $ 211,578 $ 196,916 income allocated to non-controlling interests – common op units 3,346 3,468 10,563 10,236 membership upgrade sales upfront payments, deferred, net 7,777 7,253 18,228 21,134 membership sales commissions, deferred, net (1,206 ) (1,468 ) (2,746 ) (4,405 ) depreciation and amortization 52,547 44,414 152,737 138,127 depreciation on unconsolidated joint ventures 1,035 180 2,811 547 loss on sale of real estate and impairment, net (1) 3,747 — 3,747 59 ffo available for common stock and op unit holders 134,409 124,472 396,918 362,614 early debt retirement — — 1,156 2,784 transaction/pursuit costs (2) 302 — 3,384 — lease termination expenses (3) 2,073 — 2,073 — normalized ffo available for common stock and op unit holders 136,784 124,472 403,531 365,398 non-revenue producing improvements to real estate (21,405 ) (18,369 ) (59,511 ) (49,263 ) fad for common stock and op unit holders $ 115,379 $ 106,103 $ 344,020 $ 316,135 net income available per common share - basic $ 0.36 $ 0.38 $ 1.14 $ 1.08 net income available per common share - fully diluted (4) $ 0.36 $ 0.38 $ 1.14 $ 1.08 ffo per common share and op unit - basic $ 0.69 $ 0.65 $ 2.03 $ 1.88 ffo per common share and op unit - fully diluted $ 0.69 $ 0.65 $ 2.03 $ 1.88 normalized ffo per common share and op unit - basic $ 0.70 $ 0.65 $ 2.07 $ 1.90 normalized ffo per common share and op unit - fully diluted $ 0.70 $ 0.65 $ 2.07 $ 1.90 weighted average common shares outstanding - basic 185,814 183,469 185,758 182,590 weighted average common shares and op units outstanding - basic 195,102 192,525 195,053 192,478 weighted average common shares and op units outstanding - fully diluted 195,269 192,736 195,248 192,689 ______________________ consolidated income from property operations (1) (in millions, except home site and occupancy figures, unaudited) quarters ended september 30, nine months ended september 30, 2022 2021 2022 2021 mh base rental income (2) $ 159.0 $ 151.1 $ 475.1 $ 450.3 rental home income (2) 3.7 4.1 11.5 12.7 rv and marina base rental income (2) 109.9 100.6 317.0 273.2 annual membership subscriptions 16.3 15.1 47.0 43.0 membership upgrade sales current period, gross 11.1 10.1 27.8 29.3 utility and other income (2) 32.8 27.7 92.6 80.6 property operating revenues 332.8 308.7 971.0 889.1 property operating, maintenance and real estate taxes (2) 141.8 129.4 401.3 360.5 sales and marketing, gross 7.1 6.5 18.5 19.0 property operating expenses 148.9 135.9 419.8 379.5 income from property operations, excluding deferrals and property management (1) $ 183.9 $ 172.8 $ 551.2 $ 509.6 manufactured home site figures and occupancy averages: total sites 73,198 73,293 73,368 73,156 occupied sites 69,730 69,474 69,690 69,394 occupancy % 95.3 % 94.8 % 95.0 % 94.9 % monthly base rent per site $ 760 $ 725 $ 757 $ 721 rv and marina base rental income: annual $ 68.0 $ 60.5 $ 199.0 $ 173.7 seasonal 9.5 7.3 45.6 30.1 transient 32.4 32.8 72.4 69.4 total rv and marina base rental income $ 109.9 $ 100.6 $ 317.0 $ 273.2 ______________________ core income from property operations (1) (in millions, except home site and occupancy figures, unaudited) quarters ended september 30, nine months ended september 30, 2022 2021 change (2) 2022 2021 change (2) mh base rental income $ 157.0 $ 148.3 5.9 % $ 467.2 $ 441.9 5.7 % rental home income 3.7 4.1 (9.8 ) % 11.5 12.7 (9.5 )% rv and marina base rental income 96.7 92.9 4.1 % 280.5 254.2 10.3 % annual membership subscriptions 16.1 15.1 6.1 % 46.6 43.0 8.1 % membership upgrade sales current period, gross 10.3 10.1 2.1 % 26.8 29.3 (8.8 )% utility and other income 28.3 25.8 9.9 % 80.6 76.1 6.1 % property operating revenues 312.1 296.3 5.3 % 913.2 857.2 6.5 % utility expense 39.3 35.1 12.1 % 106.6 95.0 12.2 % payroll 30.6 27.8 10.2 % 83.7 77.5 8.1 % repair & maintenance 22.6 21.4 5.5 % 65.0 58.3 11.4 % insurance and other (3) 23.1 21.9 5.7 % 67.5 63.1 7.0 % real estate taxes 16.8 16.3 3.2 % 50.8 48.7 4.2 % sales and marketing, gross 6.6 6.5 1.7 % 17.9 19.0 (5.9 )% property operating expenses 139.0 129.0 7.8 % 391.5 361.6 8.3 % income from property operations, excluding deferrals and property management (1) $ 173.1 $ 167.3 3.5 % $ 521.7 $ 495.6 5.3 % occupied sites (4) 69,014 68,778 _____________________ core income from property operations (continued) (in millions, except home site and occupancy figures, unaudited) quarters ended september 30, nine months ended september 30, 2022 2021 change (1) 2022 2021 change (1) core manufactured home site figures and occupancy averages: total sites 72,455 72,301 72,455 72,161 occupied sites 68,950 68,711 68,914 68,633 occupancy % 95.2 % 95.0 % 95.1 % 95.1 % monthly base rent per site $ 759 $ 720 $ 753 $ 715 core rv and marina base rental income: annual (2) $ 58.5 $ 53.9 8.6% $ 171.3 $ 157.5 8.8% seasonal 8.7 7.2 21.2% 42.7 29.2 46.0% transient 29.5 31.8 (7.2)% 66.5 67.5 (1.4)% total seasonal and transient $ 38.2 $ 39.0 (2.0)% $ 109.2 $ 96.7 12.9% total rv and marina base rental income $ 96.7 $ 92.9 4.1% $ 280.5 $ 254.2 13.9% core utility information: income $ 16.3 $ 14.9 9.4% $ 46.5 $ 41.7 11.5% expense 39.3 35.1 12.1% 106.6 95.0 12.2% expense, net $ 23.0 $ 20.2 13.9% $ 60.1 $ 53.3 12.8% utility recovery rate (3) 41.5 % 42.5 % 43.6 % 43.9 % _____________________ non-core income from property operations (1) (in millions, unaudited) quarter ended nine months ended september 30, 2022 september 30, 2022 mh base rental income $ 2.0 $ 7.8 rv and marina base rental income 13.2 36.5 annual membership subscriptions 0.2 0.5 utility and other income 4.4 12.0 membership upgrade sales current period, gross 0.8 1.0 property operating revenues 20.6 57.8 property operating expenses (2) 9.8 28.3 income from property operations, excluding deferrals and property management (1) $ 10.8 $ 29.5 ______________________ income from rental home operations (in millions, except occupied rentals, unaudited) quarters ended september 30, nine months ended september 30, 2022 2021 2022 2021 manufactured homes: rental operations revenues (1) $ 10.4 $ 12.0 $ 32.6 $ 36.7 rental home operations expense (2) 1.5 1.5 4.1 4.0 income from rental home operations 8.9 10.5 28.5 32.7 depreciation on rental homes (3) 2.5 2.7 7.5 8.0 income from rental operations, net of depreciation $ 6.4 $ 7.8 $ 21.0 $ 24.7 occupied rentals: (4) new 2,594 3,132 used 355 456 total occupied rental sites 2,949 3,588 as of september 30, 2022 as of september 30, 2021 cost basis in rental homes: (5) gross net of depreciation gross net of depreciation new $ 221.8 $ 179.6 $ 231.7 $ 198.2 used 15.2 6.5 16.7 10.9 total rental homes $ 237.0 $ 186.1 $ 248.4 $ 209.1 ______________________ total sites and home sales (in thousands, except sites and home sale volumes, unaudited) summary of total sites as of september 30, 2022 sites (1) mh sites 72,700 rv sites: annual 34,400 seasonal 12,700 transient 14,600 marina slips 6,900 membership (2) 25,800 joint ventures (3) 3,100 total 170,200 home sales - select data quarters ended september 30, nine months ended september 30, 2022 2021 2022 2021 total new home sales volume (4) 331 338 957 825 new home sales volume - echo joint venture 21 32 72 56 new home sales gross revenues (4) $ 32,850 $ 26,413 $ 92,228 $ 64,071 total used home sales volume 81 104 250 314 used home sales gross revenues $ 972 $ 863 $ 3,337 $ 2,852 brokered home resales volume. 223 171 674 543 brokered home resales gross revenues $ 931 $ 535 $ 2,591 $ 1,555 ______________________ memberships - select data (unaudited) years ended december 31, 2018 2019 2020 2021 nine months ended september 30, 2022 (1) member count (2) 111,094 115,680 116,169 125,149 132,185 thousand trails camping pass (ttc) origination 37,528 41,484 44,129 50,523 42,436 ttc sales 17,194 19,267 20,587 23,923 19,504 rv dealer ttc activations 20,334 22,217 23,542 26,600 22,932 number of annuals (3) 5,888 5,938 5,986 6,320 6,416 number of upgrade sales (4) 2,500 2,919 3,373 4,863 3,288 (in thousands, unaudited) annual membership subscriptions $ 47,778 $ 51,015 $ 53,085 $ 58,251 $ 47,003 rv base rental income from annuals $ 18,363 $ 19,634 $ 20,761 $ 23,127 $ 19,092 rv base rental income from seasonals/transients $ 19,840 $ 20,181 $ 18,126 $ 25,562 $ 20,667 membership upgrade sales current period, gross $ 15,191 $ 19,111 $ 21,739 $ 36,270 $ 27,771 utility and other income $ 2,410 $ 2,422 $ 2,426 $ 2,735 $ 1,950 ______________________ market capitalization (in millions, except share and op unit data, unaudited) capital structure as of september 30, 2022 total common shares/units % of total common shares/units total % of total % of total market capitalization secured debt $ 2,734 82.1 % unsecured debt 595 17.9 % total debt (1) $ 3,329 100.0 % 21.3 % common shares 186,108,851 95.3 % op units 9,270,971 4.7 % total common shares and op units 195,379,822 100.0 % common stock price at september 30, 2022 $ 62.84 fair value of common shares and op units $ 12,278 100.0 % total equity $ 12,278 100.0 % 78.7 % total market capitalization $ 15,607 100.0 % ______________________ 1. excludes deferred financing costs of approximately $29.0 million. debt maturity schedule debt maturity schedule as of september 30, 2022 (in thousands, unaudited) year secured debt weighted average interest rate unsecured debt (1) weighted average interest rate total debt % of total debt weighted average interest rate 2022 $ — — % $ — — % $ — — % — % 2023 93,447 4.92 % — — % 93,447 2.89 % 4.92 % 2024 10,061 5.49 % — — % 10,061 0.31 % 5.49 % 2025 93,879 3.45 % — — % 93,879 2.90 % 3.45 % 2026 — — % 300,000 1.79 % 300,000 9.28 % 1.79 % 2027 — — % 200,000 2.01 % 200,000 6.18 % 3.45 % 2028 208,409 4.19 % — — % 208,409 6.44 % 4.19 % 2029 39,525 4.10 % — — % 39,525 1.22 % 4.10 % 2030 275,385 2.69 % — — % 275,385 8.51 % 2.69 % 2031 261,567 2.46 % — — % 261,567 8.09 % 2.46 % thereafter 1,751,864 3.76 % — — % 1,751,864 54.17 % 3.76 % total $ 2,734,137 3.60 % $ 500,000 2.45 % $ 3,234,137 100.0 % 3.43 % unsecured line of credit — 94,984 94,984 note premiums 173 — 173 total debt 2,734,310 594,984 3,329,294 deferred financing costs (25,559 ) (3,405 ) (28,964 ) total debt, net $ 2,708,751 $ 591,579 $ 3,300,330 3.59 % (1 ) average years to maturity 11.4 3.7 10.1 ______________________ non-gaap financial measures definitions and reconciliations funds from operations (ffo). we define ffo as net income, computed in accordance with gaap, excluding gains or losses from sales of properties, depreciation and amortization related to real estate, impairment charges and adjustments to reflect our share of ffo of unconsolidated joint ventures. adjustments for unconsolidated joint ventures are calculated to reflect ffo on the same basis. we compute ffo in accordance with our interpretation of standards established by the national association of real estate investment trusts (“nareit”), which may not be comparable to ffo reported by other reits that do not define the term in accordance with the current nareit definition or that interpret the current nareit definition differently than we do. we receive non-refundable upfront payments from membership upgrade contracts. in accordance with gaap, the non-refundable upfront payments and related commissions are deferred and amortized over the estimated membership upgrade contract term. although the nareit definition of ffo does not address the treatment of non-refundable upfront payments, we believe that it is appropriate to adjust for the impact of the deferral activity in our calculation of ffo. we believe ffo, as defined by the board of governors of nareit, is generally a measure of performance for an equity reit. while ffo is a relevant and widely used measure of operating performance for equity reits, it does not represent cash flow from operations or net income as defined by gaap, and it should not be considered as an alternative to these indicators in evaluating liquidity or operating performance. normalized funds from operations (normalized ffo). we define normalized ffo as ffo excluding non-operating income and expense items, such as gains and losses from early debt extinguishment, including prepayment penalties and defeasance costs, transaction/pursuit costs, and other miscellaneous non-comparable items. normalized ffo presented herein is not necessarily comparable to normalized ffo presented by other real estate companies due to the fact that not all real estate companies use the same methodology for computing this amount. funds available for distribution (fad). we define fad as normalized ffo less non-revenue producing capital expenditures. we believe that ffo, normalized ffo and fad are helpful to investors as supplemental measures of the performance of an equity reit. we believe that by excluding the effect of gains or losses from sales of properties, depreciation and amortization related to real estate and impairment charges, which are based on historical costs and may be of limited relevance in evaluating current performance, ffo can facilitate comparisons of operating performance between periods and among other equity reits. we further believe that normalized ffo provides useful information to investors, analysts and our management because it allows them to compare our operating performance to the operating performance of other real estate companies and between periods on a consistent basis without having to account for differences not related to our operations. for example, we believe that excluding the early extinguishment of debt and other miscellaneous non-comparable items from ffo allows investors, analysts and our management to assess the sustainability of operating performance in future periods because these costs do not affect the future operations of the properties. in some cases, we provide information about identified non-cash components of ffo and normalized ffo because it allows investors, analysts and our management to assess the impact of those items. income from property operations, excluding deferrals and property management. we define income from property operations, excluding deferrals and property management as rental income, membership subscriptions and upgrade sales, utility and other income less property and rental home operating and maintenance expenses, real estate taxes, sales and marketing expenses, excluding property management and the gaap deferral of membership upgrade sales upfront payments and membership sales commissions, net. for comparative purposes, we present bad debt expense within property operating, maintenance and real estate taxes in the current and prior periods. we believe that this non-gaap financial measure is helpful to investors and analysts as a measure of the operating results of our properties. the following table reconciles net income available for common stockholders to income from property operations: quarters ended september 30, nine months ended september 30, (amounts in thousands) 2022 2021 2022 2021 net income available for common stockholders $ 67,163 $ 70,625 $ 211,578 $ 196,916 redeemable perpetual preferred stock dividends — — 8 8 income allocated to non-controlling interests – common op units 3,346 3,468 10,563 10,236 equity in income of unconsolidated joint ventures (1,465 ) (851 ) (2,889 ) (2,786 ) income before equity in income of unconsolidated joint ventures 69,044 73,242 219,260 204,374 loss on sale of real estate and impairment, net (1) 3,747 — 3,747 59 membership upgrade sales upfront payments, deferred, net 7,777 7,253 18,228 21,134 gross revenues from home sales, brokered resales and ancillary services (2) (52,547 ) (44,570 ) (144,937 ) (110,048 ) interest income (1,865 ) (1,805 ) (5,346 ) (5,314 ) income from other investments, net (2,399 ) (1,238 ) (6,920 ) (3,396 ) membership sales commissions, deferred, net (1,206 ) (1,468 ) (2,746 ) (4,405 ) property management 19,003 17,015 55,973 48,955 depreciation and amortization 52,547 44,414 152,737 138,127 cost of home sales, brokered resales and ancillary services (2) 40,224 34,830 111,894 85,541 home selling expenses and ancillary operating expenses (2) 7,080 6,558 21,146 17,588 general and administrative 11,086 10,401 35,078 31,141 other expenses 1,627 797 6,636 2,295 early debt retirement — — 1,156 2,784 interest and related amortization 29,759 27,361 85,276 80,767 income from property operations, excluding deferrals and property management 183,877 172,790 551,182 509,602 membership upgrade sales upfront payments, and membership sales commissions, deferred, net (6,571 ) (5,785 ) (15,482 ) (16,729 ) property management (19,003 ) (17,015 ) (55,973 ) (48,955 ) income from property operations $ 158,303 $ 149,990 $ 479,727 $ 443,918 earnings before interest, tax, depreciation and amortization for real estate (ebitdare) and adjusted ebitdare. we define ebitdare as net income or loss excluding interest income and expense, income taxes, depreciation and amortization, gains or losses from sales of properties, impairments charges, and adjustments to reflect our share of ebitdare of unconsolidated joint ventures. we compute ebitdare in accordance with our interpretation of the standards established by nareit, which may not be comparable to ebitdare reported by other reits that do not define the term in accordance with the current nareit definition or that interpret the current nareit definition differently than we do. we receive non-refundable upfront payments from membership upgrade contracts. in accordance with gaap, the non-refundable upfront payments and related commissions are deferred and amortized over the estimated customer life. although the nareit definition of ebitdare does not address the treatment of non-refundable upfront payments, we believe that it is appropriate to adjust for the impact of the deferral activity in our calculation of ebitdare. we define adjusted ebitdare as ebitdare excluding non-operating income and expense items, such as gains and losses from early debt extinguishment, including prepayment penalties and defeasance costs, transaction/pursuit costs and other miscellaneous non-comparable items. we believe that ebitdare and adjusted ebitdare may be useful to an investor in evaluating our operating performance and liquidity because the measures are widely used to measure the operating performance of an equity reit. ______________________ the following table reconciles consolidated net income to ebitdare and adjusted ebitdare: quarters ended september 30, nine months ended september 30, (amounts in thousands) 2022 2021 2022 2021 consolidated net income $ 70,509 $ 74,093 $ 222,149 $ 207,160 interest income (1,865 ) (1,805 ) (5,346 ) (5,314 ) membership upgrade sales upfront payments, deferred, net 7,777 7,253 18,228 21,134 membership sales commissions, deferred, net (1,206 ) (1,468 ) (2,746 ) (4,405 ) real estate depreciation and amortization 52,547 44,414 152,737 138,127 other depreciation and amortization 1,327 718 3,273 2,162 interest and related amortization 29,759 27,361 85,276 80,767 loss on sale of real estate and impairment, net (1) 3,747 — 3,747 59 adjustments to our share of ebitdare of unconsolidated joint ventures 1,439 259 4,256 778 ebitdare 164,034 150,825 481,574 440,468 early debt retirement — — 1,156 2,784 transaction/pursuit costs (2) 302 — 3,384 — lease termination expenses (3) 2,073 — 2,073 — adjusted ebitdare $ 166,409 $ 150,825 $ 488,187 $ 443,252 core. the core properties include properties we owned and operated during all of 2021 and 2022. we believe core is a measure that is useful to investors for annual comparison as it removes the fluctuations associated with acquisitions, dispositions and significant transactions or unique situations. non-core. the non-core properties include properties that were not owned and operated during all of 2021 and 2022. this includes, but is not limited to, six rv communities and eleven marinas acquired during 2021, one membership rv community and three rv communities acquired during 2022 and our westwinds mh community and an adjacent shopping center. the ground leases with respect to westwinds and the adjacent shopping center terminated on august 31, 2022. income from rental operations, net of depreciation. we use income from rental operations, net of depreciation as an alternative measure to evaluate the operating results of our home rental program. income from rental operations, net of depreciation, represents income from rental operations less depreciation expense on rental homes. we believe this measure is meaningful for investors as it provides a complete picture of the home rental program operating results, including the impact of depreciation, which affects our home rental program investment decisions. non-revenue producing improvements. represents capital expenditures that do not directly result in increased revenue or expense savings and are primarily comprised of common area improvements, furniture and mechanical improvements. fixed charges. fixed charges consist of interest expense, amortization of note premiums and debt issuance costs. ______________________
