Continued Strong Performance;
CHICAGO, April 18, 2022--(BUSINESS WIRE)--Equity LifeStyle Properties, Inc. (NYSE: ELS) (referred to herein as "we," "us," and "our") today announced results for the quarter ended March 31, 2022. All per share results are reported on a fully diluted basis unless otherwise noted.
Financial Results for the Quarter Ended March 31, 2022
For the quarter ended March 31, 2022, total revenues increased $56.6 million, or 18.6 percent, to $360.2 million compared to $303.6 million for the same period in 2021. For the quarter ended March 31, 2022, net income available for Common Stockholders increased $17.7 million, or $0.09 per Common Share, to $82.9 million, or $0.45 per Common Share, compared to $65.2 million, or $0.36 per Common Share, for the same period in 2021.
Non-GAAP Financial Measures and Portfolio Performance
For the quarter ended March 31, 2022, Funds from Operations ("FFO") available for Common Stock and OP Unit holders increased $20.3 million, or $0.09 per Common Share, to $140.9 million, or $0.72 per Common Share, compared to $120.6 million, or $0.63 per Common Share, for the same period in 2021.
For the quarter ended March 31, 2022, Normalized Funds from Operations ("Normalized FFO") available for Common Stock and OP Unit holders increased $18.8 million, or $0.08 per Common Share, to $141.4 million, or $0.72 per Common Share, compared to $122.6 million, or $0.64 per Common Share, for the same period in 2021.
For the quarter ended March 31, 2022, property operating revenues, excluding deferrals, increased $37.2 million to $322.4 million, compared to $285.2 million for the same period in 2021. For the quarter ended March 31, 2022, income from property operations, excluding deferrals and property management, increased $22.3 million to $192.6 million, compared to $170.3 million for the same period in 2021.
For the quarter ended March 31, 2022, Core property operating revenues, excluding deferrals, increased approximately 9.5 percent and Core income from property operations, excluding deferrals and property management, increased approximately 9.0 percent compared to the same period in 2021.
Pages 1 and 2 of this Earnings Release and Supplemental Financial Information provide an update on operations and 2022 guidance.
In February 2022, we completed the acquisition of Blue Mesa Recreational Ranch, a 385-site membership Recreational Vehicle ("RV") community located in Gunnison, Colorado, and Pilot Knob RV Resort a 247-site RV community located in Winterhaven, California for an aggregate purchase price of $15.9 million.
Balance Sheet Activity
On February 24, 2022, we elected to extend our current "at the market" ("ATM") offering program by entering into new separate Equity Distribution Agreements, pursuant to which we may sell, from time to time, shares of our common stock, having an aggregate offering price of up to $500 million. The new Equity Distribution Agreements replace the equity distribution agreements for our prior ATM offering program which had an aggregate offering price of up to $200 million.
In April 2022, we closed on a secured refinancing transaction generating gross proceeds of $200.0 million. The loan is secured by one MH community, has a fixed interest rate of 3.36% per annum and matures in 12 years. The net proceeds from the transaction were used to repay all debt scheduled to mature in 2022, as well as, to repay amounts outstanding on the line of credit. As a result, we have no debt maturing for the remainder of 2022 and 15% of our outstanding debt matures over the next five years.
About Equity LifeStyle Properties
We are a self-administered, self-managed real estate investment trust ("REIT") with headquarters in Chicago. As of April 18, 2022, we own or have an interest in 446 quality properties in 35 states and British Columbia consisting of 169,984 sites.
For additional information, please contact our Investor Relations Department at (800) 247-5279 or at email@example.com.
A live webcast of our conference call discussing these results will take place tomorrow, Tuesday, April 19, 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.
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 2022 growth rates and 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;
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
We have continued our strong performance in 2022, as marked by these key operational and financial accomplishments:
Normalized FFO per Common Share on a fully diluted basis was $0.72 for the quarter ended March 31, 2022, 14% higher than the quarter ended March 31, 2021.
Core Portfolio generated growth of 9.0% in income from property operations, excluding deferrals and property management, for the quarter ended March 31, 2022 compared to the quarter ended March 31, 2021.
MH occupancy within our Core Portfolio increased by 296 sites as of March 31, 2022 compared to March 31, 2021.
Manufactured homeowners within our Core Portfolio increased by 191 to 65,623 as of March 31, 2022 compared to 65,432 as of December 31, 2021.
RV and marina and MH rental income within our Core Portfolio increased by 21.4% and 5.6%, respectively, for the quarter ended March 31, 2022, compared to quarter ended March 31, 2021.
RV Annual and MH rate increases within our Core Portfolio were 5.5% and 5.1%, respectively, for the quarter ended March 31, 2022, compared to the quarter ended March 31, 2021.
New home sales were 261 for the quarter ended March 31, 2022, compared to 192 for the quarter ended March 31, 2021, an increase of 35.9%.
2022 Guidance (1)
($ in millions except per share)
$0.31 to $0.37
$1.61 to $1.71
$0.58 to $0.64
$2.67 to $2.77
$0.59 to $0.65
$2.68 to $2.78
MH rate growth
5.1% to 5.3%
5.1% to 5.3%
RV Annual rate growth
6.3% to 6.5%
5.9% to 6.1%
Combined RV Seasonal and Transient base rental income growth
3.5% to 4.5%
13.5% to 14.5%
Property operating revenue growth rate
4.2% to 4.8%
5.5% to 6.5%
Property operating expense growth rate
6.1% to 6.7%
4.3% to 5.3%
Income from property operations, excluding deferrals and property management growth rate(2) (3)
2.7% to 3.3%
6.3% to 7.3%
Second quarter and 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.
The expected contribution of our second quarter Core Income from property operations, excluding deferrals and property management is within a range of 23% to 24% of our expected full year Core Income from property operations, excluding deferrals and property management.
As disclosed in our Quarterly Report on Form 10-Q for the quarter ended June 30, 2021, Utility and other income in our Core portfolio for the second quarter of 2021 included insurance recovery revenue of $2.4 million related to Hurricane Hanna.
Equity Research Coverage(1)
Bank of America Securities
Jeffrey Spector/ Joshua Dennerlein
BMO Capital Markets
Michael Bilerman/ Nick Joseph
Green Street Advisors
RBC Capital Markets
Steve Sakwa/ Samir Khanal
Robert W. Baird & Company
Any opinions, estimates or forecasts regarding our performance made by these analysts or agencies do not represent our opinions, forecasts or predictions. We do not, by reference to these firms, imply our endorsement of or concurrence with such information, conclusions or recommendations.
(In millions, except Common Shares and OP Units outstanding and per share data, unaudited)
As of and for the Three Months Ended
Net income available for Common Stockholders
Adjusted EBITDAre (1)
FFO available for Common Stock and OP Unit holders (1)(2)
Normalized FFO available for Common Stock and OP Unit holders (1)(2)
Funds Available for Distribution ("FAD") for Common Stock and OP Unit holders (1)(2)
Common Shares and OP Units Outstanding (In thousands) and Per Share Data
Common Shares and OP Units, end of the period
Weighted average Common Shares and OP Units outstanding - Fully Diluted
Net income per Common Share - Fully Diluted (3)
FFO per Common Share and OP Unit - Fully Diluted
Normalized FFO per Common Share and OP Unit - Fully Diluted
Dividends per Common Share
Total debt (4)
Total market capitalization (5)
Total debt / total market capitalization
Total debt / Adjusted EBITDAre (6)
Interest coverage (7)
See Non-GAAP Financial Measures Definitions and Reconciliations at the end of the supplemental financial information for definitions of Adjusted EBITDAre, FFO, Normalized FFO and FAD and a reconciliation of Consolidated net income to Adjusted EBITDAre.
See page 9 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 for Common Stock and OP Unit holders.
Net income per Common Share - Fully Diluted is calculated before Income allocated to non-controlling interest - Common OP Units.
Excludes deferred financing costs of approximately $29.4 million as of March 31, 2022.
See page 16 for the calculation of market capitalization as of March 31, 2022.
Calculated using trailing twelve months Adjusted EBITDAre.
Calculated by dividing trailing twelve months Adjusted EBITDAre by the interest expense incurred during the same period.
See Non-GAAP Financial Measures Definitions and Reconciliations at the end of the supplemental financial information for a definition of fixed charges. This ratio is calculated by dividing trailing twelve months Adjusted EBITDAre by the sum of fixed charges and preferred stock dividends, if any, during the same period.
Consolidated Balance Sheets
(In thousands, except share and per share data)
March 31, 2022
December 31, 2021
Investment in real estate:
Buildings and other depreciable property
Net investment in real estate
Cash and restricted cash
Notes receivable, net
Investment in unconsolidated joint ventures
Deferred commission expense
Other assets, net
Liabilities and Equity
Mortgage notes payable, net
Term loan, net
Unsecured line of credit
Accounts payable and other liabilities
Deferred membership revenue
Accrued interest payable
Rents and other customer payments received in advance and security deposits
Preferred stock, $0.01 par value, 10,000,000 shares authorized as of March 31, 2022 and December 31, 2021; none issued and outstanding.
Common stock, $0.01 par value, 600,000,000 shares authorized as of March 31, 2022 and December 31, 2021; 186,006,354 and 185,640,379 shares issued and outstanding as of March 31, 2022 and December 31, 2021, respectively.
Distributions in excess of accumulated earnings
Accumulated other comprehensive income
Total Stockholders’ Equity
Non-controlling interests – Common OP Units
Total Liabilities and Equity
Consolidated Statements of Income
(In thousands, unaudited)
Quarters Ended March 31,