EX-99 2 elsex9914q18.htm EXHIBIT 99 Exhibit



N E W S R E L E A S E
elscorplogoa04.jpg                
CONTACT: Paul Seavey                             FOR IMMEDIATE RELEASE
(800) 247-5279                          January 28, 2019

                                                        
ELS REPORTS FOURTH QUARTER RESULTS
Continued Strong Performance
CHICAGO, IL – January 28, 2019 – Equity LifeStyle Properties, Inc. (NYSE: ELS) (referred to herein as “we,” “us,” and “our”) today announced results for the quarter and year ended December 31, 2018. All per share results are reported on a fully diluted basis unless otherwise noted.
Financial Results for the Quarter and Year Ended December 31, 2018     
For the quarter ended December 31, 2018, total revenues increased $13.5 million, or 5.9 percent, to $243.5 million compared to $230.0 million for the same period in 2017. Net income available for Common Stockholders for the quarter ended December 31, 2018 increased $5.2 million, or $0.05 per Common Share, to $50.2 million, or $0.56 per Common Share, compared to $45.0 million, or $0.51 per Common Share, for the same period in 2017.
For the year ended December 31, 2018, total revenues increased $61.4 million, or 6.6 percent, to $986.7 million compared to $925.3 million for the same period in 2017. Net income available for Common Stockholders for the year ended December 31, 2018 increased $22.7 million, or $0.21 per Common Share, to $212.6 million, or $2.38 per Common Share, compared to $189.9 million, or $2.17 per Common Share, for the same period in 2017.
Non-GAAP Financial Measures and Portfolio Performance
For the quarter ended December 31, 2018, Funds from Operations (“FFO”) available for Common Stock and OP Unit holders increased $11.0 million, or $0.11 per Common Share, to $90.4 million, or $0.95 per Common Share, compared to $79.4 million, or $0.84 per Common Share, for the same period in 2017. For the year ended December 31, 2018, FFO available for Common Stock and OP Unit holders increased $40.3 million, or $0.36 per Common Share, to $372.0 million, or $3.91 per Common Share, compared to $331.7 million, or $3.55 per Common Share, for the same period in 2017.
For the quarter ended December 31, 2018, Normalized Funds from Operations (“Normalized FFO”) available for Common Stock and OP Unit holders increased $9.7 million, or $0.09 per Common Share, to $92.3 million, or $0.97 per Common Share, compared to $82.6 million, or $0.88 per Common Share, for the same period in 2017. For the year ended December 31, 2018, Normalized FFO available for Common Stock and OP Unit holders increased $32.0 million, or $0.27 per Common Share, to $367.9 million, or $3.87 per Common Share, compared to $335.9 million, or $3.60 per Common Share, for the same period in 2017.
For the quarter ended December 31, 2018, property operating revenues, excluding deferrals, increased $16.9 million to $232.2 million compared to $215.3 million for the same period in 2017. For the year ended December 31, 2018, property operating revenues, excluding deferrals, increased $60.1 million to $936.0 million compared to $875.9 million for the same period in 2017. For the quarter ended December 31, 2018, income from property operations, excluding deferrals and property management, increased $13.8 million to $138.8 million compared to $125.0 million for the same period in 2017. For the year ended December 31, 2018, income from property operations, excluding deferrals and property management, increased $38.9 million to $547.7 million compared to $508.8 million for the same period in 2017.
For the quarter ended December 31, 2018, Core property operating revenues, excluding deferrals, increased approximately 4.5 percent and Core income from property operations, excluding deferrals and property management, increased approximately 6.3 percent compared to the same period in 2017. For the year ended December 31, 2018,

 
i 
 




Core property operating revenues, excluding deferrals, increased approximately 4.8 percent and Core income from property operations, excluding deferrals and property management, increased approximately 5.2 percent compared to the same period in 2017.
Investment Activity
On November 20, 2018, we completed the acquisition of Timber Creek, a 364-site RV Resort in Westerly, Rhode Island. The purchase price was $21.1 million and was funded with available cash and proceeds from debt financing transactions that closed during the quarter.
On December 13, 2018, we completed the acquisition of Palm Lake, a 915-site manufactured home community in Riviera Beach, Florida. The purchase price was $73.5 million and was funded with available cash and proceeds from debt financing transactions that closed during the quarter.
On December 20, 2018, we completed the acquisition of King Nummy, a 313-site RV resort in Cape May Court House, New Jersey. The purchase price was $7.6 million and was funded with available cash and proceeds from debt financing transactions that closed during the quarter.
On January 23, 2019, we closed on the sale of five all-age manufactured home communities located in Indiana and Michigan, collectively containing approximately 1,463 sites, for $89.7 million.
Balance Sheet Activity
During the quarter ended December 31, 2018, we closed on two financing transactions generating gross proceeds of $357.8 million. One transaction was a $250.6 million credit facility with Fannie Mae, secured by seven manufactured home communities, which has a weighted average interest rate of 4.29% per annum and a weighted average maturity of 12.6 years. Another transaction was a $107.2 million loan from Lincoln Financial Group, secured by five manufactured home communities, which has an interest rate of 4.10% per annum and a maturity of 20 years. The net proceeds from the transactions were primarily used for acquisitions and repayments of $196.8 million of other loans maturing in 2018 and 2019, with a weighted average interest rate of 6.29% per annum.

About Equity LifeStyle Properties    
We are a self-administered, self-managed real estate investment trust (“REIT”) with headquarters in Chicago. As of January 28, 2019, we own or have an interest in 409 quality properties in 33 states and British Columbia consisting of 153,984 sites.
Previously, when we posted investor presentations on our website, we also electronically furnished investor presentations with the Securities and Exchange Commission as exhibits to Current Reports on Form 8-K. Although we may furnish certain of our investor presentations as exhibits to Current Reports on Form 8-K, our future investor presentations may only be available on our website. Investors should periodically review our website for any such future presentations. 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, January 29, 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:
 
 
Release Date
 
Earnings Call
First Quarter 2019
 
Monday, April 22, 2019
 
Tuesday, April 23, 2019 10:00 a.m. CT
Second Quarter 2019
 
Monday, July 22, 2019
 
Tuesday, July 23, 2019 10:00 a.m. CT
Third Quarter 2019
 
Monday, October 21, 2019
 
Tuesday, October 22, 2019 10:00 a.m. CT

 
ii 
 




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 effect of changes in accounting for Leases set forth under the Codification Topic "Leases";
•
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 “Risk Factors” 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.

 
iii 
 


Investor Information



Equity Research Coverage (1)
Bank of America Merrill Lynch Global Research
BMO Capital Markets
Citi Research
Jeffrey Spector/ Joshua Dennerlein
John Kim
Michael Bilerman/ Nick Joseph
646-855-1363
212-885-4115
212-816-1383
jeff.spector@baml.com
johnp.kim@bmo.com
michael.bilerman@citi.com
joshua.dennerlein@baml.com
 
nicholas.joseph@citi.com
 
 
 
Evercore ISI
Green Street Advisors
Robert W. Baird & Company
Steve Sakwa/ Samir Khanal
John Pawlowski
Drew T. Babin
212-466-5600
949-640-8780
215-553-7816
steve.sakwa@evercoreisi.com
jpawlowski@greenst.com
dbabin@rwbaird.com
samir.khanal@evercoreisi.com
 
 
 
 
 
Wells Fargo Securities
 
 
Todd Stender
 
 
562-637-1371
 
 
todd.stender@wellsfargo.com
 
 
 
 
 
 
 
 

























______________________
1.
Any opinions, estimates or forecasts regarding our performance made by these analysts or agencies do not represent our opinions, estimates or forecasts. We do not by reference to these firms imply our endorsement of or concurrence with such information, conclusions or recommendations.

4Q 2018 Supplemental information
1 
Equity LifeStyle Properties, Inc.


Financial Highlights

(In millions, except Common Stock and OP Units outstanding and per share data, unaudited)
 
As of and for the Three Months Ended
 
Dec 31, 2018
 
Sept 30, 2018
 
Jun 30, 2018
 
Mar 31, 2018
 
Dec 31, 2017
Operating Information
 
 
 
 
 
 
 
 
 
Total revenues
$
243.5

 
$
256.7

 
$
240.5

 
$
246.0

 
$
230.0

Net income
$
53.4

 
$
59.7

 
$
49.2

 
$
64.2

 
$
48.0

Net income available for Common Stockholders
$
50.2

 
$
56.1

 
$
46.1

 
$
60.2

 
$
45.0

Adjusted EBITDA (1)
$
117.3

 
$
118.9

 
$
108.6

 
$
122.0

 
$
106.7

FFO available for Common Stock and OP Unit holders (1)(2)
$
90.4

 
$
97.7

 
$
85.6

 
$
98.2

 
$
79.4

Normalized FFO available for Common Stock and OP Unit holders (1)(2)
$
92.3

 
$
93.9

 
$
83.8

 
$
97.9

 
$
82.6

Funds available for distribution ("FAD") available for Common Stock and OP Unit holders (1)(2)
$
80.4

 
$
82.1

 
$
71.4

 
$
89.1

 
$
72.6

 
 
 
 
 
 
 
 
 
 
Common Stock Outstanding (In thousands)
 and Per Share Data
 
 
 
 
 
 
 
 
 
Common Stock and OP Units, end of the period
95,667

 
95,493

 
94,623

 
94,565

 
94,420

Weighted average Common Stock and OP Units outstanding - Fully Diluted
95,577

 
95,263

 
94,623

 
94,577

 
94,295

Net income per Common Share - Fully Diluted (3)
$
0.56

 
$
0.63

 
$
0.52

 
$
0.68

 
$
0.51

FFO per Common Share and OP Unit - Fully Diluted
$
0.95

 
$
1.03

 
$
0.90

 
$
1.04

 
$
0.84

Normalized FFO per Common Share and OP Unit - Fully Diluted
$
0.97

 
$
0.99

 
$
0.89

 
$
1.04

 
$
0.88

Dividends per Common Share
$
0.550

 
$
0.550

 
$
0.550

 
$
0.550

 
$
0.488

 
 
 
 
 
 
 
 
 
 
Balance Sheet
 
 
 
 
 
 
 
 
 
Total assets
$
3,926

 
$
3,855

 
$
3,700

 
$
3,690

 
$
3,610

Total liabilities 
$
2,732

 
$
2,665

 
$
2,598

 
$
2,589

 
$
2,510

 
 
 
 
 
 
 
 
 
 
Market Capitalization
 
 
 
 
 
 
 
 
 
Total debt (4)
$
2,386

 
$
2,318

 
$
2,251

 
$
2,264

 
$
2,224

Total market capitalization (5)
$
11,678

 
$
11,528

 
$
10,947

 
$
10,564

 
$
10,629

 
 
 
 
 
 
 
 
 
 
Ratios
 
 
 
 
 
 
 
 
 
Total debt / total market capitalization
20.4
%
 
20.1
%
 
20.6
%
 
21.4
%
 
20.9
%
Total debt / Adjusted EBITDA (6)
5.1

 
5.1

 
5.0

 
5.1

 
5.1

Interest coverage (7)
4.5

 
4.4

 
4.4

 
4.4

 
4.4

Fixed charges + preferred distributions coverage (8)
4.4

 
4.4

 
4.3

 
4.2

 
4.1





______________________
1.
See Non-GAAP Financial Measures Definitions and Other Terms at the end of the supplemental information for definitions of Adjusted EBITDA, FFO, Normalized FFO and FAD and a reconciliation of Consolidated net income to Adjusted EBITDA.
2.
See page 7 for a reconciliation of Net income available for Common Stockholders to Non-GAAP financial measures FFO available for Common Stock and OP Unit holders, Normalized FFO available for Common Stock and OP Unit holders and FAD available for Common Stock and OP Unit holders.
3.
Net income per fully diluted Common Share is calculated before Income allocated to non-controlling interest- Common OP Units.
4.
Excludes deferred financing costs of approximately $26.4 million.
5.
See page 16 for market capitalization as of December 31, 2018.
6.
Calculated using trailing twelve months Adjusted EBITDA.
7.
Interest coverage is calculated by dividing trailing twelve months Adjusted EBITDA by the interest expense incurred during the same period.
8.
See Non-GAAP Financial Measures Definitions and Other Terms at the end of the supplemental information for a definition of fixed charges. This ratio is calculated by dividing trailing twelve months Adjusted EBITDA by the sum of fixed charges and preferred stock dividends during the same period.

4Q 2018 Supplemental information
2 
Equity LifeStyle Properties, Inc.


Consolidated Balance Sheets

(In thousands, except share and per share data)

 
December 31, 2018
 
December 31, 2017
 
(unaudited)
 
 
Assets
 
 
 
Investment in real estate:
 
 
 
Land
$
1,408,832

 
$
1,221,375

Land improvements
3,143,745

 
3,045,221

Buildings and other depreciable property
720,900

 
649,217

 
5,273,477

 
4,915,813

Accumulated depreciation
(1,631,888
)
 
(1,516,694
)
Net investment in real estate
3,641,589

 
3,399,119

Cash and restricted cash
60,542

 
31,085

Notes receivable, net
35,041

 
49,477

Investment in unconsolidated joint ventures
57,755

 
53,080

Deferred commission expense
40,308

 
31,443

Escrow deposits, goodwill and other assets, net
54,659

 
45,828

Assets held for sale, net
35,914

 
—

   Total Assets
$
3,925,808

 
$
3,610,032

 
 
 
 
Liabilities and Equity
 
 
 
Liabilities:
 
 
 
Mortgage notes payable
$
2,149,726

 
$
1,971,715

Term loan
198,626

 
198,302

Unsecured line of credit
—

 
30,000

Accrued expenses and accounts payable
102,854

 
80,744

Deferred revenue – upfront payments from right-to-use contracts
116,363

 
85,596

Deferred revenue – right-to-use annual payments
10,055

 
9,932

Accrued interest payable
8,759

 
8,387

Rents and other customer payments received in advance and security deposits
81,114

 
79,267

Distributions payable
52,617

 
46,047

Liabilities related to assets held for sale
12,350

 
—

Total Liabilities
2,732,464

 
2,509,990

Equity:
 
 
 
Stockholders’ Equity:
 
 
 
Preferred stock, $0.01 par value, 10,000,000 shares authorized as of December 31, 2018 and December 31, 2017; none issued and outstanding.
—

 
—

Common stock, $0.01 par value, 200,000,000 shares authorized as of December 31, 2018 and December 31, 2017; 89,921,018 and 88,585,160 shares issued and outstanding as of December 31, 2018 and December 31, 2017, respectively.
896

 
883

Paid-in capital
1,329,391

 
1,242,109

Distributions in excess of accumulated earnings
(211,034
)
 
(211,980
)
Accumulated other comprehensive income
2,299

 
942

Total Stockholders’ Equity
1,121,552

 
1,031,954

Non-controlling interests – Common OP Units
71,792

 
68,088

Total Equity
1,193,344

 
1,100,042

Total Liabilities and Equity
$
3,925,808

 
$
3,610,032




4Q 2018 Supplemental information
3 
Equity LifeStyle Properties, Inc.


Consolidated Income Statements

(In thousands, unaudited)

 
Quarters Ended December 31,

Years Ended December 31,
 
2018
 
2017
 
2018
 
2017
Revenues:
 
 
 
 
 
 
 
Community base rental income
$
132,188

 
$
123,780

 
$
518,252

 
$
489,613

Rental home income
3,746

 
3,515

 
14,329

 
14,344

Resort base rental income
56,070

 
49,212

 
239,906

 
218,806

Right-to-use annual payments
12,162

 
11,665

 
47,778

 
45,798

Right-to-use contracts current period, gross
3,222

 
2,920

 
15,191

 
14,132

Right-to-use contract upfront payments, deferred, net
(1,191
)
 
(342
)
 
(7,380
)
 
(4,108
)
Utility and other income
24,804

 
24,181

 
100,562

 
93,252

Gross revenues from home sales
9,311

 
11,430

 
36,064

 
36,302

Brokered resale and ancillary services revenues, net
204

 
(290
)
 
3,584

 
3,798

Interest income
1,867

 
2,038

 
7,525

 
7,580

Income from other investments, net
1,068

 
1,877

 
10,842

 
5,795

    Total revenues
243,451

 
229,986

 
986,653

 
925,312

 
 
 
 
 
 
 
 
Expenses:
 
 
 
 
 
 
 
Property operating and maintenance
73,559

 
73,000

 
313,003

 
294,119

Rental home operating and maintenance
1,879

 
1,698

 
6,836

 
6,610

Real estate taxes
15,077

 
13,024

 
55,892

 
55,010

Sales and marketing, gross
2,857

 
2,577

 
12,542

 
11,438

Right-to-use contract commissions, deferred, net
(69
)
 
18

 
(813
)
 
(354
)
Property management
12,994

 
12,509

 
53,736

 
51,252

Depreciation on real estate assets and rental homes
33,392

 
30,606

 
130,022

 
121,455

Amortization of in-place leases
2,118

 
103

 
7,187

 
2,231

Cost of home sales
9,527

 
11,122

 
37,475

 
36,513

Home selling expenses
946

 
885

 
4,095

 
4,186

General and administrative
11,161

 
8,398

 
37,684

 
31,737

Other expenses
387

 
334

 
1,483

 
1,148

Early debt retirement
1,071

 
2,785

 
1,071

 
2,785

Interest and related amortization
26,515

 
25,842

 
104,993

 
100,570

    Total expenses
191,414

 
182,901

 
765,206

 
718,700

Income before equity in income of unconsolidated joint ventures
52,037

 
47,085

 
221,447

 
206,612

Equity in income of unconsolidated joint ventures
1,343


889


4,939


3,765

Consolidated net income
53,380

 
47,974

 
226,386

 
210,377

 
 
 
 
 
 
 
 
Income allocated to non-controlling interest-Common OP Units
(3,206
)
 
(2,963
)
 
(13,774
)
 
(12,788
)
Redeemable perpetual preferred stock dividends and original issuance costs
(8
)

(18
)

(16
)

(7,685
)
Net income available for Common Stockholders
$
50,166


$
44,993


$
212,596


$
189,904







4Q 2018 Supplemental information
4 
Equity LifeStyle Properties, Inc.


























Non-GAAP Financial Measures





4Q 2018 Supplemental information
5 
Equity LifeStyle Properties, Inc.


Selected Non-GAAP Financial Measures

(In millions, except per share data, unaudited)

 
Quarter Ended
 
December 31, 2018
Income from property operations, excluding deferrals and property management - 2018 Core (1)
$
133.5

Income from property operations, excluding deferrals and property management - Non-Core (1)
5.3

Property management and general and administrative
(22.6
)
Other income and expenses
2.6

Interest and related amortization
(26.5
)
Normalized FFO available for Common Stock and OP Unit holders (2)
92.3

Early debt retirement
(1.1
)
Insurance proceeds due to catastrophic weather event and other, net (3)
(0.8
)
FFO available for Common Stock and OP Unit holders (2)
$
90.4

 
 
Normalized FFO per Common Share and OP Unit - Fully Diluted
$
0.97

FFO per Common Share and OP Unit - Fully Diluted
$
0.95

 
 
 
 
Normalized FFO available for Common Stock and OP Unit holders (2)
$
92.3

Non-revenue producing improvements to real estate (2)
(11.9
)
FAD available for Common Stock and OP Unit holders (2)
$
80.4

 
 
Weighted average Common Stock and OP Units - Fully Diluted
95.6

 
 















__________________
1.
See Non-GAAP Financial Measures Definitions and Other Terms at the end of the supplemental information for definitions of Income from property operations, excluding deferrals and property management, Core, Non-Core, and a reconciliation of Net income available for Common Stockholders to Income from property operations, excluding deferrals and property management. See page 9 for details of the Core Income from Property Operations, excluding deferrals and property management. See page 10 for details of the Non-Core Income from Property Operations, excluding deferrals and property management.
2.
See Non-GAAP Financial Measures Definitions and Other Terms at the end of the supplemental information for definitions of FFO, Normalized FFO, FAD and Non-revenue producing improvements to real estate. See page 7 for a reconciliation of Net income available for Common Stockholders to FFO available for Common Stock and OP Unit holders, Normalized FFO available for Common Stock and OP Unit holders and FAD available for Common Stock and OP Unit holders.
3.
Includes $1.6 million related to settlement of a previously disclosed civil investigation by certain California district attorneys and $0.8 million insurance recovery revenue from reimbursement for capital expenditures related to Hurricane Irma.


4Q 2018 Supplemental information
6 
Equity LifeStyle Properties, Inc.


Reconciliation of Net Income to Non-GAAP Financial Measures

(In thousands, except per share data, unaudited)

 
Quarters Ended December 31,

Years Ended December 31,
 
2018
 
2017
 
2018
 
2017
Net income available for Common Stockholders
$
50,166

 
$
44,993

 
$
212,596

 
$
189,904

Income allocated to Common OP Units
3,206

 
2,963

 
13,774

 
12,788

Right-to-use contract upfront payments, deferred, net (1)
1,191

 
342

 
7,380

 
4,108

Right-to-use contract commissions, deferred, net (2)
(69
)
 
18

 
(813
)
 
(354
)
Depreciation on real estate assets
30,905

 
28,075

 
120,212

 
111,014

Depreciation on rental homes 
2,487

 
2,531

 
9,810

 
10,441

Amortization of in-place leases
2,118

 
103

 
7,187

 
2,231

Depreciation on unconsolidated joint ventures
426

 
362

 
1,816

 
1,533

FFO available for Common Stock and OP Unit holders (3)
90,430

 
79,387

 
371,962

 
331,665

Insurance proceeds due to catastrophic weather event and other, net (4)
800

 
—

 
(5,125
)
 
757

Early debt retirement
1,071

 
2,785

 
1,071

 
2,785

Transaction costs
—

 
400

 
—

 
724

Normalized FFO available for Common Stock and OP Unit holders (3)
92,301

 
82,572

 
367,908

 
335,931

Non-revenue producing improvements to real estate (3)
(11,864
)
 
(10,010
)
 
(44,829
)
 
(39,833
)
FAD available for Common Stock and OP Unit holders (3)
$
80,437

 
$
72,562

 
$
323,079

 
$
296,098

 
 
 
 
 
 
 
 
Net income available per Common Share - Basic
$
0.56

 
$
0.51

 
$
2.39

 
$
2.18

Net income available per Common Share - Fully Diluted (5)
$
0.56

 
$
0.51

 
$
2.38

 
$
2.17

 
 
 
 
 
 
 
 
FFO per Common Share and OP Unit-Basic
$
0.95

 
$
0.85

 
$
3.93

 
$
3.57

FFO per Common Share and OP Unit-Fully Diluted
$
0.95

 
$
0.84

 
$
3.91

 
$
3.55

 
 
 
 
 
 
 
 
Normalized FFO per Common Share and OP Unit-Basic
$
0.97

 
$
0.88

 
$
3.88

 
$
3.61

Normalized FFO per Common Share and OP Unit-Fully Diluted
$
0.97

 
$
0.88

 
$
3.87

 
$
3.60

 
 
 
 
 
 
 
 
Average Common Stock - Basic
89,570

 
88,115

 
88,964

 
86,997

Average Common Stock and OP Units - Basic
95,316

 
93,949

 
94,757

 
93,030

Average Common Stock and OP Units - Fully Diluted
95,577

 
94,295

 
95,055

 
93,425







___________________________
1.
The Company adopted ASU 2014-09, Revenue from Contracts with Customers, and all related amendments, effective January 1, 2018. Upon adoption, right-to-use nonrefundable upfront payments are recognized on a straight-line basis over 20 years to reflect our current estimated customer life for the majority of our upgrade contracts. The amount shown represents the deferral of a substantial portion of current period upgrade sales, offset by amortization of prior period sales.
2.
The deferred commissions are amortized using the same method as used for the related non-refundable upfront payments from the entry of right-to-use contracts and upgrade sales. The amount shown represents the deferral of a substantial portion of current period commissions on those contracts, offset by the amortization of prior period commissions.
3.
See Non-GAAP Financial Measures Definitions and Other Terms at the end of the supplemental information for definitions of FFO, Normalized FFO, FAD and Non-revenue producing improvements to real estate.
4.
Includes $0.8 million and $6.7 million of insurance recovery revenue from reimbursement for capital expenditures related to Hurricane Irma for the quarter and year ended December 31, 2018, respectively, and $1.6 million related to settlement of a previously disclosed civil investigation by certain California district attorneys for the quarter and year ended December 31, 2018.
5.
Net income per fully diluted Common Share is calculated before Income allocated to non-controlling interest- Common OP Units.

4Q 2018 Supplemental information
7 
Equity LifeStyle Properties, Inc.


Consolidated Income from Property Operations (1)

(In millions, except home site and occupancy figures, unaudited)

 
Quarters Ended December 31,
 
Years Ended December 31,
 
2018
 
2017
 
2018
 
2017
Community base rental income (2)
$
132.2

 
$
123.8

 
$
518.2

 
$
489.6

Rental home income
3.7

 
3.5

 
14.3

 
14.3

Resort base rental income (3)
56.1

 
49.2

 
239.9

 
218.8

Right-to-use annual payments
12.2

 
11.7

 
47.8

 
45.8

Right-to-use contracts current period, gross
3.2

 
2.9

 
15.2

 
14.1

Utility and other income (4)
24.8

 
24.2

 
100.6

 
93.3

    Property operating revenues
232.2


215.3

 
936.0

 
875.9

 
 
 
 
 
 
 
 
Property operating, maintenance and real estate taxes (5)
88.6

 
86.0

 
368.9

 
349.1

Rental home operating and maintenance
1.9

 
1.7

 
6.9

 
6.6

Sales and marketing, gross
2.9

 
2.6

 
12.5

 
11.4

    Property operating expenses
93.4

 
90.3

 
388.3

 
367.1

Income from property operations, excluding deferrals and property management (1)
$
138.8

 
$
125.0

 
$
547.7

 
$
508.8

 
 
 
 
 
 
 
 
Manufactured home site figures and occupancy averages:
 
 
 
 
 
 
 
Total sites
72,735

 
71,109

 
72,020

 
71,064

Occupied sites
68,906

 
67,098

 
68,120

 
66,894

Occupancy %
94.7
%
 
94.4
%
 
94.6
%
 
94.1
%
Monthly base rent per site
$
639

 
$
615

 
$
634

 
$
610

 
 
 
 
 
 
 
 
Resort base rental income:
 
 
 
 
 
 
 
Annual
$
38.9

 
$
34.6

 
$
148.1

 
133.2

Seasonal
8.6

 
7.8

 
37.7

 
36.2

Transient
8.6

 
6.8

 
54.1

 
49.4

     Total resort base rental income
$
56.1

 
$
49.2

 
$
239.9

 
$
218.8









_________________________
1.
Excludes property management and the GAAP deferral of right-to-use contract upfront payments and related commissions, net. See page 4 for the Consolidated Income Statements and see Non-GAAP Financial Measures Definitions and Other Terms at the end of the supplemental information for the definition and reconciliation of Income from property operations, excluding deferrals and property management to Net income available to Common Stockholders.
2.
See the manufactured home site figures and occupancy averages below within this table.
3.
See resort base rental income detail included below within this table.
4.
Utility and other income includes Hurricane Irma insurance recovery revenues of $1.2 million and $7.7 million, including $1.2 million and $4.9 million, which we have identified as business interruption, for the quarter and year ended December 31, 2018, respectively. Utility and other income includes Hurricane Irma insurance recovery revenues of $4.1 million and $7.2 million for the quarter and year ended December 31, 2017, respectively.
5.
Property operating, maintenance and real estate taxes includes debris removal and cleanup costs related to Hurricane Irma of $2.6 million for the year ended December 31, 2018 and $4.2 million and $7.5 million for the quarter and year ended December 31, 2017, respectively.


4Q 2018 Supplemental information
8 
Equity LifeStyle Properties, Inc.



Core Income from Property Operations (1)

(In millions, except home site and occupancy figures, unaudited)

 
Quarters Ended December 31,
 
Years Ended December 31,
 
2018
 
2017
 
Change (2)
 
2018
 
2017
 
Change (2)
Community base rental income (3)
$
129.3

 
$
123.6

 
4.6
 %
 
$
511.4

 
$
489.1

 
4.6
 %
Rental home income
3.7

 
3.5

 
6.6
 %
 
14.3

 
14.3

 
(0.1
)%
Resort base rental income (4)
51.6

 
48.6

 
6.2
 %
 
225.4

 
211.1

 
6.8
 %
Right-to-use annual payments
12.2

 
11.7

 
4.1
 %
 
47.8

 
45.8

 
4.3
 %
Right-to-use contracts current period, gross
3.2

 
2.9

 
10.3
 %
 
15.2

 
14.1

 
7.5
 %
Utility and other income (5)
23.3

 
23.4

 
(0.3
)%
 
93.8

 
92.0

 
1.9
 %
    Property operating revenues
223.3

 
213.7

 
4.5
 %
 
907.9

 
866.4

 
4.8
 %
 
 
 
 
 
 
 
 
 
 
 
 
Property operating, maintenance and real estate taxes (6)
85.1

 
83.9

 
1.5
 %
 
357.1

 
342.8

 
4.1
 %
Rental home operating and maintenance
1.9

 
1.7

 
10.7
 %
 
6.8

 
6.6

 
3.4
 %
Sales and marketing, gross
2.8

 
2.6

 
10.7
 %
 
12.5

 
11.5

 
9.6
 %
    Property operating expenses
89.8

 
88.2

 
1.9
 %
 
376.4

 
360.9

 
4.3
 %
Income from property operations, excluding deferrals and property management (1)
$
133.5

 
$
125.5

 
6.3
 %
 
$
531.5

 
$
505.5

 
5.2
 %
Occupied sites (7)
67,472

 
67,093

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Core manufactured home site figures and occupancy averages:
 
 
 
 
 
 
Total sites
70,928

 
70,873

 
 
 
70,908

 
70,873

 
 
Occupied sites
67,349

 
66,991

 
 
 
67,180

 
66,832

 
 
Occupancy %
95.0
%
 
94.5
%
 
 
 
94.7
%
 
94.3
%
 
 
Monthly base rent per site
$
640

 
$
615

 
 
 
$
634

 
$
610

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Resort base rental income:
 
 
 
 
 
 
 
 
 
 
 
Annual
$
36.3

 
$
34.1

 
6.5
 %
 
$
140.5

 
$
131.7

 
6.6
 %
Seasonal
8.2

 
7.8

 
5.0
 %
 
36.2

 
33.6

 
7.8
 %
Transient
7.1

 
6.7

 
6.3
 %
 
48.7

 
45.8

 
6.6
 %
     Total resort base rental income
$
51.6

 
$
48.6

 
6.2
 %
 
$
225.4

 
$
211.1

 
6.8
 %





___________________________
1.
Excludes property management and the GAAP deferral of right-to-use contract upfront payments and related commissions, net. See Non-GAAP Financial Measures Definitions and Other Terms at the end of the supplemental information for definitions of Income from property operations, excluding deferrals and property management, and Core.
2.
Calculations prepared using actual results without rounding.
3.
See the Core manufactured home site figures and occupancy averages included below within this table.
4.
See resort base rental income detail included below within this table.
5.
Utility and other income includes Hurricane Irma insurance recovery revenues of $2.4 million for the year ended December 31, 2018 and $3.4 million and $6.4 million for the quarter and year ended December 31, 2017, respectively.
6.
Property operating, maintenance and real estate taxes includes debris removal and cleanup costs related to Hurricane Irma of $2.2 million for the year ended December 31, 2018 and $3.4 million and $6.7 million for the quarter and year ended December 31, 2017, respectively.
7.
Occupied sites are presented as of the end of the period. Occupied sites increased by 379 from 67,093 at December 31, 2017.

4Q 2018 Supplemental information
9 
Equity LifeStyle Properties, Inc.


Non-Core Income from Property Operations (1)

(In millions, unaudited)

 
Quarter Ended
 
Year Ended
 
December 31, 2018
 
December 31, 2018
Community base rental income
$
2.9

 
$
6.8

Resort base rental income
4.4

 
14.5

Utility income and other property income (2)
1.5

 
6.8

  Property operating revenues
8.8

 
28.1

 
 
 
 
  Property operating expenses
3.5

 
11.9

Income from property operations, excluding deferrals and property management (1)
$
5.3

 
$
16.2


































______________________
1.
Excludes property management and the GAAP deferral of right-to-use contract upfront payments and related commissions, net. See Non-GAAP Financial Measures Definitions and Other Terms at the end of the supplemental information for definitions of Income from property operations, excluding deferrals and property management, and Non-Core.
2.
Utility and other property includes Hurricane Irma insurance recovery revenues of $1.2 million and $5.3 million, which we have identified as business interruption for the quarter and year ended December 31, 2018, respectively.




4Q 2018 Supplemental information
10 
Equity LifeStyle Properties, Inc.


Income from Rental Home Operations

(In millions, except occupied rentals, unaudited)

 
Quarters ended December 31,
 
Years Ended December 31,
 
2018
 
2017
 
2018
 
2017
Manufactured homes:
 
 
 
 
 
 
 
Rental operations revenues (1)
$
11.8

 
$
11.8

 
$
46.9

 
$
48.9

Rental operations expense
1.9

 
1.7

 
6.8

 
6.6

   Income from rental operations
9.9

 
10.1

 
40.1

 
42.3

Depreciation on rental homes (2)
2.5

 
2.5

 
9.8

 
10.4

   Income from rental operations, net of depreciation (3)
$
7.4

 
$
7.6

 
$
30.3

 
$
31.9

 
 
 
 
 
 
 
 
Occupied rentals: (4)
 
 
 
 
 
 
 
New
2,835

 
2,533

 
 
 
 
Used
1,406

 
1,884

 
 
 
 
   Total occupied rental sites
4,241

 
4,417

 
 
 
 

 
As of December 31, 2018
 
As of December 31, 2017
Cost basis in rental homes: (5)
Gross
 
Net of Depreciation
 
Gross
 
Net of Depreciation
New
$
166.5

 
$
136.3

 
$
132.5

 
$
105.8

Used
33.9

 
15.8

 
43.4

 
23.8

  Total rental homes
$
200.4

 
$
152.1

 
$
175.9

 
$
129.6















__________________________
1.
For the quarters ended December 31, 2018 and 2017, approximately $8.0 million and $8.3 million, respectively, of the rental operations revenue are included in Community base rental income in the Consolidated Income from Property Operations table on page 8. For the year ended December 31, 2018 and 2017, approximately $32.6 million and $34.6 million, respectively, of the rental operations revenue are included in Community base rental income in the Consolidated Income from Property Operations table on page 8. The remainder of the rental operations revenue is included in Rental home income for the quarters and year ended December 31, 2018 and 2017 in the Consolidated Income from Property Operations table on page 8.
2.
Included in Depreciation on real estate and rental homes in the Consolidated Statements of Income and Comprehensive Income.
3.
See Non-GAAP Financial Measures Definitions and Other Terms at the end of the supplemental information for the definition of Income from rental operations, net of depreciation.
4.
Occupied rentals as of the end of the period in our Core portfolio. Included in the quarters ended December 31, 2018 and 2017 are 279 and 268 homes rented through our ECHO joint venture, respectively. For the year ended December 31, 2018 and 2017, the rental home investment associated with our ECHO joint venture totals approximately $9.8 million and $9.1 million, respectively.
5.
Includes both occupied and unoccupied rental homes. New home cost basis did not include the costs associated with our ECHO joint venture. At December 31, 2018 and 2017, our investment in the ECHO joint venture was approximately $16.2 million and $15.6 million, respectively.



4Q 2018 Supplemental information
11 
Equity LifeStyle Properties, Inc.


Total Sites and Home Sales

(In thousands, except sites and home sale volumes, unaudited)

Summary of Total Sites as of December 31, 2018
 
 
Sites
Community sites
73,300

Resort sites:
 
    Annuals
29,100

    Seasonal
11,300

    Transient
11,500

Membership (1)
24,300

Joint Ventures (2)
5,900

Total
155,400


Home Sales - Select Data
 
 
 
 
 
 
 
 
Quarters Ended
 
Years Ended
 
December 31,
 
December 31,
 
2018
 
2017
 
2018
 
2017
Total New Home Sales Volume (3)
139

 
184

 
556

 
597

     New Home Sales Volume - ECHO joint venture
26

 
32

 
100

 
158

New Home Sales Gross Revenues (3)
$
7,190

 
$
9,035

 
$
27,833

 
$
25,759

 
 
 
 
 
 
 
 
Total Used Home Sales Volume
249

 
326

 
1,091

 
1,280

Used Home Sales Gross Revenues
$
2,121

 
$
2,395

 
$
8,231

 
$
10,543

 
 
 
 
 
 
 
 
Brokered Home Resales Volume
175

 
221

 
852

 
880

Brokered Home Resale Revenues, net
$
281

 
$
310

 
$
1,290

 
$
1,235


















__________________________
1.
Sites primarily utilized by approximately 111,100 members. Includes approximately 5,900 sites rented on an annual basis.
2.
Joint ventures have approximately 2,700 annual Sites, 400 seasonal Sites, 500 transient Sites and includes approximately 2,300 marina slips.
3.
Total new home sales volume includes home sales from our ECHO joint venture. New home sales gross revenues does not include the revenues associated with our ECHO joint venture.


4Q 2018 Supplemental information
12 
Equity LifeStyle Properties, Inc.


2019 Guidance - Selected Financial Data (1)

Our guidance acknowledges the existence of volatile economic conditions, which may impact our current guidance assumptions. Factors impacting 2019 guidance include, but are not limited to the following: (i) the mix of site usage within the portfolio; (ii) yield management on our short-term resort sites; (iii) scheduled or implemented rate increases on community and resort sites; (iv) scheduled or implemented rate increases in annual payments under right-to-use contracts; (v) occupancy changes; (vi) our ability to retain and attract customers renewing or entering right-to-use contracts; (vii) our ability to integrate and operate recent acquisitions in accordance with our estimates; (viii) completion of pending transactions in their entirety and on assumed schedule; (ix) ongoing legal matters and related fees; and (x) costs to restore property operations and potential revenue losses following storms or other unplanned events.

(In millions, except per share data, unaudited)

 
Quarter Ending
 
Year Ending
 
March 31, 2019
 
December 31, 2019
Income from property operations, excluding deferrals and property management - Core (2)
$
145.2

 
$
556.6

Income from property operations - Non-Core (3)
7.1

 
19.9

Property management and general and administrative
(23.2
)
 
(91.0
)
Other income and expenses
3.8

 
14.2

Interest and related amortization
(26.4
)
 
(105.8
)
Normalized FFO and FFO available for Common Stock and OP Unit holders (4)
106.5

 
393.9

    Depreciation on real estate and other
(37.1
)
 
(138.3
)
    Depreciation on rental homes
(2.4
)
 
(9.6
)
    Deferral of right-to-use contract sales revenue and commission, net
(1.4
)
 
(6.4
)
    Gain on sale of real estate, net
53.2

 
53.2

    Income allocated to non-controlling interest-Common OP Units
(7.1
)
 
(17.4
)
Net income available for Common Stockholders
$
111.7

 
$
275.4

 
 
 
 
 
 
 
 
Net income per Common Share - Fully Diluted (5)
$1.21 - $1.27

 
$3.01 - $3.11

FFO per Common Share and OP Unit - Fully Diluted
$1.08 - $1.14

 
$4.07 - $4.17

Normalized FFO per Common Share and OP Unit - Fully Diluted
$1.08 - $1.14

 
$4.07 - $4.17

 
 
 
 
Weighted average Common Stock outstanding - Fully Diluted
95.6

 
95.7








_____________________________________
1.
Each line item represents the mid-point of a range of possible outcomes and reflects management’s estimate of the most likely outcome. Actual Normalized FFO available for Common Stock and OP Unit holders, Normalized FFO per Common Share and OP Unit, FFO available for Common Stock and OP Unit holders, FFO per Common Share and OP Unit, Net income available for Common Stockholders and Net income per Common Share could vary materially from amounts presented above if any of our assumptions is incorrect.
2.
See page 14 for 2019 Core Guidance Assumptions. Amount represents 2018 Income from property operations, excluding deferrals and property management, from the 2019 Core properties of $138.9 million multiplied by an estimated growth rate of 4.5% and $530.9 million multiplied by an estimated growth rate of 4.8% for the quarter ending March 31, 2019 and year ending December 31, 2019, respectively.
3.
See page 14 for the 2019 Assumptions regarding the Non-Core Properties.
4.
See Non-GAAP Financial Measures Definitions and Other Terms at the end of the supplemental information for definitions of Normalized FFO and FFO.
5.
Net income per fully diluted Common Share is calculated before Income allocated to non-controlling interest- Common OP Units.

4Q 2018 Supplemental information
13 
Equity LifeStyle Properties, Inc.


2019 Core Guidance Assumptions (1) 
(In millions, unaudited)
 
Quarter Ended
 
First Quarter 2019
 
Year Ended
 
2019
 
March 31, 2018
 
Growth Factors (2)
 
December 31, 2018
 
Growth Factors (2)
Community base rental income
$
124.8

 
4.9
 %
 
$
505.3

 
4.6
 %
Rental home income
3.2

 
4.0
 %
 
13.1

 
(0.6
)%
Resort base rental income (3)
63.3

 
4.6
 %
 
233.4

 
5.0
 %
Right-to-use annual payments
11.5

 
1.8
 %
 
47.8

 
1.5
 %
Right-to-use contracts current period, gross
3.2

 
(3.0
)%
 
15.2

 
1.4
 %
Utility and other income
24.0

 
(6.4
)%
 
93.5

 
(5.7
)%
    Property operating revenues
230.0

 
3.4
 %
 
908.3

 
3.3
 %
 
 
 
 
 
 
 
 
Property operating, maintenance, and real estate taxes
86.9

 
1.7
 %
 
358.4

 
1.5
 %
Rental home operating and maintenance
1.4

 
(5.6
)%
 
6.5

 
(13.7
)%
Sales and marketing, gross
2.8

 
2.6
 %
 
12.5

 
0.2
 %
    Property operating expenses
91.1

 
1.6
 %
 
377.4

 
1.2
 %
Income from property operations, excluding deferrals and property management
$
138.9

 
4.5
 %
 
$
530.9

 
4.8
 %
 
 
 
 
 
 
 
 
Resort base rental income:
 
 
 
 
 
 
 
Annual
$
35.2

 
5.9
 %
 
$
145.7

 
5.4
 %
Seasonal
18.7

 
3.0
 %
 
36.3

 
3.1
 %
Transient
9.4

 
3.0
 %
 
51.4

 
5.0
 %
    Total resort base rental income
$
63.3

 
4.6
 %
 
$
233.4

 
5.0
 %


2019 Assumptions Regarding Non-Core Properties (1) 
(In millions, unaudited)
 
Quarter Ending
 
Year Ending
 
March 31, 2019 (4)
 
December 31, 2019 (4)
Community base rental income
$
4.4

 
$
16.1

Rental home income
0.1

 
0.2

Resort base rental income
5.6

 
19.8

Utility and other income
1.3

 
2.7

  Property operating revenues
11.4

 
38.8

 
 
 
 
Property operating, maintenance, and real estate taxes
4.3

 
18.9

  Property operating expenses
4.3

 
18.9

Income from property operations, excluding deferrals and property management
$
7.1

 
$
19.9



_____________________________________
1.
See Non-GAAP Financial Measures Definitions and Other Terms at the end of the supplemental information for definitions of Core and Non-Core.
2.
Management’s estimate of the growth of property operations in the 2019 Core Properties compared to actual 2018 performance. Represents our estimate of the mid-point of a range of possible outcomes. Calculations prepared using actual results without rounding. Actual growth for Core properties could vary materially from amounts presented above if any of our assumptions is incorrect.
3.
See Resort base rental income table included below within this table.
4.
Each line item represents our estimate of the mid-point of a possible range of outcomes and reflects management’s best estimate of the most likely outcome for the Non-Core properties. Actual income from property operations for Non-Core properties could vary materially from amounts presented above if any of our assumptions is incorrect.


4Q 2018 Supplemental information
14 
Equity LifeStyle Properties, Inc.


Right-To-Use Memberships - Select Data

(Unaudited)
 
Year Ended December 31,
 
2015
 
2016
 
2017
 
2018
 
2019 (1)
Member Count (2)
102,413

 
104,728

 
106,456

 
111,094

 
115,000

Thousand Trails Camping Pass (TTC) Origination
25,544

 
29,576

 
31,618

 
37,528

 
38,600

    TTC Sales
11,877

 
12,856

 
14,128

 
17,194

 
17,800

    RV Dealer TTC Activations
13,667

 
16,720

 
17,490

 
20,334

 
20,800

Number of annuals (3)
5,470

 
5,756

 
5,843

 
5,888

 
6,000

Number of upgrade sales (4)
2,687

 
2,477

 
2,514

 
2,500

 
2,700

 
 
 
 
 
 
 
 
 
 
(In thousands, unaudited)
 
 
 
 
 
 
 
 

Right-to-use annual payments
$
44,441

 
$
45,036

 
$
45,798

 
$
47,778

 
$
48,500

Resort base rental income from annuals
$
13,821

 
$
15,413

 
$
16,841

 
$
18,363

 
$
19,600

Resort base rental income from seasonals/transients
$
15,795

 
$
17,344

 
$
18,231

 
$
19,840

 
$
21,200

Upgrade contract initiations (5)
$
12,783

 
$
12,312

 
$
14,130

 
$
15,191

 
$
15,400

Utility and other income
$
2,430

 
$
2,442

 
$
2,254

 
$
2,410

 
$
2,300

 
 
 
 
 
 
 
 
 
 

























________________________________
1.
Guidance estimate. Each line item represents our estimate of the mid-point of a possible range of outcomes and reflects management’s best estimate of the most likely outcome. Actual figures could vary materially from amounts presented above if any of our assumptions is incorrect.
2.
Members have entered into right-to-use contracts with us that entitle them to use certain properties on a continuous basis for up to 21 days.
3.
Members who rent a specific site for an entire year in connection with their right-to-use contract.
4.
Existing customers who have upgraded agreements are eligible for enhanced benefits, including but not limited to longer stays, can make earlier reservations, may receive discounts on rental units, and may have access to additional properties. Upgrades require a non-refundable upfront payment.
5.
Revenues associated with contract upgrades, included in Right-to-use contracts current period, gross, on our Consolidated Income Statements on page 4.

4Q 2018 Supplemental information
15 
Equity LifeStyle Properties, Inc.


Market Capitalization

(In millions, except share and OP Unit data, unaudited)

Capital Structure as of December 31, 2018
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total Common Stock/Units
 
% of Total Common Stock/Units
 
Total
 
% of Total
 
% of Total Market Capitalization
 
 
 
 
 
 
 
 
 
 
Secured Debt (1)
 
 
 
 
$
2,186

 
91.6
%
 
 
Unsecured Debt
 
 
 
 
200

 
8.4
%
 
 
Total Debt (1) (2)
 
 
 
 
$
2,386

 
100.0
%
 
20.4
%
 
 
 
 
 
 
 
 
 
 
Common Stock
89,921,018

 
94.0
%
 
 
 
 
 
 
OP Units
5,745,966

 
6.0
%
 
 
 
 
 
 
Total Common Stock and OP Units
95,666,984

 
100.0
%
 
 
 
 
 
 
Common Stock price at December 31, 2018
$
97.13

 
 
 
 
 
 
 
 
Fair Value of Common Stock and OP Units
 
 
 
 
$
9,292

 
100.0
%
 
 
Total Equity
 
 
 
 
$
9,292

 
100.0
%
 
79.6
%
 
 
 
 
 
 
 
 
 
 
Total Market Capitalization
 
 
 
 
$
11,678

 
 
 
100.0
%





























_________________
1.    Secured debt includes $11.2 million presented in Liabilities related to assets held for sale on the Consolidated Balance Sheets.
2.    Excludes deferred financing costs of approximately $26.4 million.

4Q 2018 Supplemental information
16 
Equity LifeStyle Properties, Inc.


Debt Maturity Schedule

Debt Maturity Schedule as of December 31, 2018
(In thousands, unaudited)

Year
 
Secured Debt
 
Weighted Average Interest Rate
 
Unsecured Debt
 
Weighted Average Interest Rate
 
Total Debt
 
% of Total Debt
 
Weighted Average Interest Rate
 
2019
 
$
—

 
—
%
 
$
—

 
—
%
 
$
—

 
—
%
 
—
%
 
2020
 
116,975

 
6.14
%
 
—

 
—
%
 
116,975

 
4.90
%
 
6.14
%
 
    2021 (1)
 
183,591

 
5.01
%
 
—

 
—
%
 
183,591

 
7.70
%
 
5.01
%
 
2022
 
142,434

 
4.58
%
 
—

 
—
%
 
142,434

 
5.97
%
 
4.58
%
 
2023
 
105,799

 
5.07
%
 
200,000

 
3.05
%
 
305,799

 
12.82
%
 
3.75
%
 
2024
 
—

 
—
%
 
—

 
—
%
 
—

 
—
%
 
—
%
 
2025
 
103,266

 
3.45
%
 
—

 
—
%
 
103,266

 
4.33
%
 
3.45
%
 
2026
 
—

 
—
%
 
—

 
—
%
 
—

 
—
%
 
—
%
 
2027
 
—

 
—
%
 
—

 
—
%
 
—

 
—
%
 
—
%
 
2028
 
226,185

 
4.19
%
 
—

 
—
%
 
226,185

 
9.48
%
 
4.19
%
 
Thereafter
 
1,306,672

 
4.24
%
 
—

 
—
%
 
1,306,672

 
54.79
%
 
4.24
%
 
Total  (1)
 
$
2,184,922

 
4.43
%
 
$
200,000

 
3.05
%
 
$
2,384,922

 
100.0
%
 
4.31
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Unsecured Line of Credit (2)
 
—

 
 
 
—

 

 
—

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Note Premiums
 
994

 
 
 
—

 
 
 
994

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total Debt
 
2,185,916

 
 
 
200,000

 
 
 
2,385,916

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Deferred Financing Costs (1)
 
(25,015
)
 
 
 
(1,374
)
 
 
 
(26,389
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total Debt, net
 
$
2,160,901

 
 
 
$
198,626

 
 
 
$
2,359,527

 
 
 
4.45
%
(3) 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Average Years to Maturity
 
13.8
 
 
 
4.4
 
 
 
13.0
 
 
 
 
 




















__________________
1.
Secured debt includes $11.2 million presented in Liabilities related to assets held for sale on the Consolidated Balance Sheets.
2.
Reflects outstanding balance on the Line of Credit as of December 31, 2018.
3.
Reflects effective interest rate including amortization of note premiums and deferred financing costs.


4Q 2018 Supplemental information
17 
Equity LifeStyle Properties, Inc.


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 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 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; b) acquisition and other transaction costs related to business combinations; and c) 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 depreciation, amortization, impairments, if any, 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 business combinations 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 tax, sales and marketing expenses, excluding 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 measure of the operating results of our manufactured home and RV communities.

4Q 2018 Supplemental information
18 
Equity LifeStyle Properties, Inc.


The following table reconciles Net income available for Common Stockholders to Income from property operations (amounts in thousands):
 
 
Quarters Ended December 31,

Years Ended December 31,
 
 
2018
 
2017
 
2018
 
2017
Net income available for Common Stockholders
 
$
50,166

 
$
44,993

 
$
212,596

 
$
189,904

Redeemable perpetual preferred stock dividends and original issuance costs
 
8

 
18

 
16

 
7,685

Income allocated to non-controlling interests - Common OP Units
 
3,206

 
2,963

 
13,774

 
12,788

Equity in income of unconsolidated joint ventures
 
(1,343
)
 
(889
)
 
(4,939
)
 
(3,765
)
Income before equity in income of unconsolidated joint ventures
 
52,037

 
47,085

 
221,447

 
206,612

Right-to-use upfront payments, deferred, net
 
1,191

 
342

 
7,380

 
4,108

Gross revenues from home sales
 
(9,311
)
 
(11,430
)
 
(36,064
)
 
(36,302
)
Brokered resale and ancillary services revenues, net
 
(204
)
 
290

 
(3,584
)
 
(3,798
)
Interest income
 
(1,867
)
 
(2,038
)
 
(7,525
)
 
(7,580
)
Income from other investments, net
 
(1,068
)
 
(1,877
)
 
(10,842
)
 
(5,795
)
Right-to-use contract commissions, deferred, net
 
(69
)
 
18

 
(813
)
 
(354
)
Property management
 
12,994

 
12,509

 
53,736

 
51,252

Depreciation on real estate and rental homes
 
33,392

 
30,606

 
130,022

 
121,455

Amortization of in-place leases
 
2,118

 
103

 
7,187

 
2,231

Cost of homes sales
 
9,527

 
11,122

 
37,475

 
36,513

Home selling expenses
 
946

 
885

 
4,095

 
4,186

General and administrative
 
11,161

 
8,398

 
37,684

 
31,737

Other expenses
 
387

 
334

 
1,483

 
1,148

Early debt retirement
 
1,071

 
2,785

 
1,071

 
2,785

Interest and related amortization
 
26,515

 
25,842

 
104,993

 
100,570

Income from property operations, excluding deferrals and property management
 
138,820

 
124,974

 
547,745

 
508,768

Right-to-use contracts, upfront payments and commissions, deferred, net
 
(1,122
)
 
(360
)
 
(6,567
)
 
(3,754
)
Property management
 
(12,994
)
 
(12,509
)
 
(53,736
)
 
(51,252
)
Income from property operations
 
$
124,704

 
$
112,105

 
$
487,442

 
$
453,762

EARNINGS BEFORE INTEREST, TAX, DEPRECIATION AND AMORTIZATION (EBITDA) AND ADJUSTED EBITDA. EBITDA is defined as net income or loss before interest income and expense, income taxes, depreciation and amortization. We define Adjusted EBITDA as EBITDA excluding the following non-operating income and expense items: a) gains and losses from early debt extinguishment, including prepayment penalties and defeasance costs; b) property acquisition and other transaction costs related to business combinations; c) GAAP deferral of right-to-use contract upfront payments and related commissions, net; d) depreciation on unconsolidated joint ventures; e) impairments, if any; and f) other miscellaneous non-comparable items. EBITDA and Adjusted EBITDA provide us with an understanding of one aspect of earnings before the impact of investing and financing charges. We believe that EBITDA and Adjusted EBITDA may be useful to an investor in evaluating our operating performance and liquidity because the measures are widely used to measure a company’s operating performance and they are used by rating agencies and other parties, including lenders, to evaluate our creditworthiness.








4Q 2018 Supplemental information
19 
Equity LifeStyle Properties, Inc.


The following table reconciles Consolidated net income to EBITDA and Adjusted EBITDA (amounts in thousands):
 
 
Quarters Ended December 31,
 
Years Ended December 31,
 
 
2018
 
2017
 
2018
 
2017
Consolidated net income
 
$
53,380

 
$
47,974

 
$
226,386

 
$
210,377

Interest income
 
(1,867
)
 
(2,038
)
 
(7,525
)
 
(7,580
)
Depreciation on real estate assets and rental homes
 
33,392

 
30,606

 
130,022

 
121,455

Amortization of in-place leases
 
2,118

 
103

 
7,187

 
2,231

Depreciation on corporate assets
 
387

 
334

 
1,483

 
1,263

Depreciation on unconsolidated joint ventures
 
426

 
362

 
1,816

 
1,533

Interest and related amortization
 
26,515

 
25,842

 
104,993

 
100,570

EBITDA
 
114,351

 
103,183

 
464,362

 
429,849

Right-to-use contract upfront payments, deferred, net
 
1,191

 
342

 
7,380

 
4,108

Right-to-use contract commissions, deferred, net
 
(69
)
 
18

 
(813
)
 
(354
)
Insurance proceeds due to catastrophic weather event and other, net
 
800

 
—

 
(5,125
)
 
757

Early debt retirement
 
1,071

 
2,785

 
1,071

 
2,785

Transaction costs
 
—

 
400

 
—

 
724

Adjusted EBITDA
 
$
117,344

 
$
106,728

 
$
466,875

 
$
437,869

CORE. The Core properties include properties we owned and operated during all of 2017 and 2018. 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 2017 and 2018. This includes, but is not limited to, eight properties acquired during 2018, three properties acquired during 2017 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.


4Q 2018 Supplemental information
20 
Equity LifeStyle Properties, Inc.