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ELS Reports Third Quarter Results

CHICAGO--(BUSINESS WIRE)--

Continued Strong Performance; Preliminary 2019 Guidance

Equity LifeStyle Properties, Inc. (ELS) (referred to herein as “we,” “us,” and “our”) today announced results for the quarter and nine months ended September 30, 2018. 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, 2018

For the quarter ended September 30, 2018, total revenues increased $15.1 million, or 6.2 percent, to $256.7 million compared to $241.6 million for the same period in 2017. Net income available for Common Stockholders for the quarter ended September 30, 2018 increased $7.6 million, or $0.07 per Common Share, to $56.1 million, or $0.63 per Common Share, compared to $48.5 million, or $0.56 per Common Share, for the same period in 2017.

For the nine months ended September 30, 2018, total revenues increased $47.9 million, or 6.9 percent, to $743.2 million compared to $695.3 million for the same period in 2017. Net income available for Common Stockholders for the nine months ended September 30, 2018 increased $17.5 million or $0.16 per Common Share, to $162.4 million, or $1.82 per Common Share, compared to $144.9 million or $1.66 per Common Share, for the same period in 2017.

Non-GAAP Financial Measures and Portfolio Performance

For the quarter ended September 30, 2018, Funds from Operations (“FFO”) available for Common Stock and OP Unit holders increased $13.4 million, or $0.13 per Common Share, to $97.7 million or $1.03 per Common Share, compared to $84.3 million, or $0.90 per Common Share, for the same period in 2017. For the nine months ended September 30, 2018, FFO available for Common Stock and OP Unit holders increased $29.2 million, or $0.26 per Common Share, to $281.5 million or $2.97 per Common Share, compared to $252.3 million or $2.71 per Common Share, for the same period in 2017.

For the quarter ended September 30, 2018, Normalized Funds from Operations (“Normalized FFO”) available for Common Stock and OP Unit holders increased $8.8 million, or $0.08 per Common Share, to $93.9 million, or $0.99 per Common Share, compared to $85.1 million, or $0.91 per Common Share, for the same period in 2017. For the nine months ended September 30, 2018, Normalized FFO available for Common Stock and OP Unit holders increased $22.2 million or $0.19 per Common Share, to $275.6 million, or $2.91 per Common Share, compared to $253.4 million or $2.72 per Common Share, for the same period in 2017.

For the quarter ended September 30, 2018, property operating revenues, excluding deferrals, increased $14.3 million to $241.6 million compared to $227.3 million for the same period in 2017. For the nine months ended September 30, 2018, property operating revenues, excluding deferrals, increased $43.2 million to $703.9 million compared to $660.7 million for the same period in 2017. For the quarter ended September 30, 2018, income from property operations, excluding deferrals and property management, increased $10.3 million to $138.4 million compared to $128.1 million for the same period in 2017. For the nine months ended September 30, 2018, income from property operations, excluding deferrals and property management, increased $25.1 million to $408.9 million compared to $383.8 million for the same period in 2017.

For the quarter ended September 30, 2018, Core property operating revenues, excluding deferrals, increased approximately 3.5 percent and Core income from property operations, excluding deferrals and property management, increased approximately 4.8 percent compared to the same period in 2017. For the nine months ended September 30, 2018, Core property operating revenues, excluding deferrals, increased approximately 4.9 percent and Core income from property operations, excluding deferrals and property management, increased approximately 4.8 percent compared to the same period in 2017.

Balance Sheet Activity

During the quarter, we sold 861,141 shares of common stock as part of our ATM equity offering program at a weighted average price per share of $91.45, resulting in net cash proceeds of approximately $77.7 million.

Subsequent to the quarter, we paid off six mortgage loans of $66.3 million, including $0.1 million of prepayment penalties, using our line of credit. The loans had a weighted average interest rate of 6.07% per annum and were secured by six MH properties.

About Equity LifeStyle Properties

We are a self-administered, self-managed real estate investment trust (“REIT”) with headquarters in Chicago. As of October 22, 2018, we own or have an interest in 411 quality properties in 32 states and British Columbia consisting of 153,847 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 23, 2018, 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
Fourth Quarter 2018 Monday, January 28, 2019 Tuesday, January 29, 2019 10:00 a.m. CT
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

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 2018 and 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 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.

These forward-looking statements are based on management's present expectations and beliefs about future events. As with any projection or forecast, these statements are inherently susceptible to uncertainty and changes in circumstances. We are under no obligation to, and expressly disclaim any obligation to, update or alter our forward-looking statements whether as a result of such changes, new information, subsequent events or otherwise.

 

Investor Information

 
 

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/ Ryan Lumb 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

rlumb@greenstreetadvisors.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, forecasts or predictions. We do not by reference to these firms imply our endorsement of or concurrence with such information, conclusions or recommendations.
 
 

Financial Highlights

 

(In millions, except Common Stock and OP Units outstanding and per share data, unaudited)

 
As of and for the Three Months Ended

Sept 30,
2018

 

June 30,
2018

 

March 31,
2018

 

Dec 31,
2017

 

Sept 30,
2017

Operating Information        
Total revenues $   256.7   $   240.5   $   246.0   $   230.0   $   241.6  
Net income $ 59.7 $ 49.2 $ 64.2 $ 48.0 $ 54.9
Net income available for Common Stockholders $ 56.1 $ 46.1 $ 60.2 $ 45.0 $ 48.5
Adjusted EBITDA (1) $ 118.9 $ 108.6 $ 122.0 $ 106.7 $ 111.5
FFO available for Common Stock and OP Unit holders (1)(2) $ 97.7 $ 85.6 $ 98.2 $ 79.4 $ 84.3
Normalized FFO available for Common Stock and OP Unit holders (1)(2) $ 93.9 $ 83.8 $ 97.9 $ 82.6 $ 85.1
Funds available for distribution ("FAD") available for Common Stock and OP Unit holders (1)(2) $ 82.1 $ 71.4 $ 89.1 $ 72.6 $ 74.0
 
Common Stock Outstanding (In thousands)

and Per Share Data

Common Stock and OP Units, end of the period 95,493 94,623 94,565 94,420 93,334
Weighted average Common Stock and OP Units outstanding - Fully Diluted 95,263 94,623 94,577 94,295 93,324
Net income per Common Share - Fully Diluted (3) $ 0.63 $ 0.52 $ 0.68 $ 0.51 $ 0.56
FFO per Common Share and OP Unit - Fully Diluted $ 1.03 $ 0.90 $ 1.04 $ 0.84 $ 0.90
Normalized FFO per Common Share and OP Unit - Fully Diluted $ 0.99 $ 0.89 $ 1.04 $ 0.88 $ 0.91
Dividends per Common Share $ 0.550 $ 0.550 $ 0.550 $ 0.488 $ 0.488
 
Balance Sheet
Total assets $ 3,855 $ 3,700 $ 3,690 $ 3,610 $ 3,526
Total liabilities $ 2,665 $ 2,598 $ 2,589 $ 2,510 $ 2,511
 
Market Capitalization
Total debt (4) $ 2,318 $ 2,251 $ 2,264 $ 2,224 $ 2,200
Total market capitalization (5) $ 11,528 $ 10,947 $ 10,564 $ 10,629 $ 10,141
 
Ratios
Total debt / total market capitalization 20.1 % 20.6 % 21.4 % 20.9 % 21.7 %
Total debt + preferred stock / total market capitalization 20.1 % 20.6 % 21.4 % 20.9 % 21.7 %
Total debt / Adjusted EBITDA (6) 5.1 5.0 5.1 5.1 5.1
Interest coverage (7) 4.4 4.4 4.4 4.4 4.4
Fixed charges + preferred distributions coverage (8) 4.4 4.3 4.2 4.1 4.0

______________________

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 $23.6 million.
5. See page 18 for market capitalization as of September 30, 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.
     
 

Consolidated Balance Sheets

 

(In thousands, except share and per share data)

 
September 30, 2018 December 31, 2017
(unaudited)
Assets
Investment in real estate:
Land $ 1,342,925 $ 1,221,375
Land improvements 3,114,815 3,045,221
Buildings and other depreciable property 708,600   649,217  
5,166,340 4,915,813
Accumulated depreciation (1,613,158 ) (1,516,694 )
Net investment in real estate 3,553,182 3,399,119
Cash and restricted cash 112,410 31,085
Notes receivable, net 35,889 49,477
Investment in unconsolidated joint ventures 57,366 53,080
Deferred commission expense 40,352 31,443
Escrow deposits, goodwill, and other assets, net 55,838   45,828  
Total Assets $ 3,855,037   $ 3,610,032  
Liabilities and Equity
Liabilities:
Mortgage notes payable $ 2,016,257 $ 1,971,715
Term loan 198,545 198,302
Unsecured line of credit 80,000 30,000
Accrued expenses and accounts payable 102,620 80,744
Deferred revenue – upfront payments from right-to-use contracts 115,172 85,596
Deferred revenue – right-to-use annual payments 11,025 9,932
Accrued interest payable 8,369 8,387
Rents and other customer payments received in advance and security deposits 80,011 79,267
Distributions payable 52,521   46,047  
Total Liabilities 2,664,520   2,509,990  
Equity:
Stockholders’ Equity:
Preferred stock, $0.01 par value, 10,000,000 shares authorized as of September 30, 2018 and December 31, 2017; none issued and outstanding.
Common stock, $0.01 par value, 200,000,000 shares authorized as of September 30, 2018 and December 31, 2017; 89,746,747 and 88,585,160 shares issued and outstanding as of September 30, 2018 and December 31, 2017, respectively. 895 883
Paid-in capital 1,325,648 1,242,109
Distributions in excess of accumulated earnings (211,743 ) (211,980 )
Accumulated other comprehensive income 3,959   942  
Total Stockholders’ Equity 1,118,759 1,031,954
Non-controlling interests – Common OP Units 71,758   68,088  
Total Equity 1,190,517   1,100,042  
Total Liabilities and Equity $ 3,855,037   $ 3,610,032  
     
 

Consolidated Income Statements

 

(In thousands, unaudited)

 
 
Quarters Ended September 30, Nine Months Ended September 30,
2018   2017 2018   2017
Revenues:
Community base rental income $ 130,746 $ 123,177 $ 386,064 $ 365,833
Rental home income 3,507 3,592 10,583 10,829
Resort base rental income 64,351 58,471 183,836 169,594
Right-to-use annual payments 12,206 11,531 35,616 34,133
Right-to-use contracts current period, gross 4,863 4,208 11,969 11,212
Right-to-use contract upfront payments, deferred, net (2,883 ) (1,670 ) (6,189 ) (3,766 )
Utility and other income 25,917 26,295 75,758 69,071
Gross revenues from home sales 9,339 10,012 26,753 24,872
Brokered resale and ancillary services revenues, net 1,362 1,983 3,380 4,088
Interest income 1,846 1,974 5,658 5,542
Income from other investments, net 5,421   2,052   9,774   3,918  
Total revenues 256,675 241,625 743,202 695,326
 
Expenses:
Property operating and maintenance 84,445 80,164 239,444 221,119
Rental home operating and maintenance 1,904 1,704 4,957 4,912
Real estate taxes 13,240 14,006 40,815 41,986
Sales and marketing, gross 3,568 3,277 9,685 8,861
Right-to-use contract commissions, deferred, net (458 ) (176 ) (744 ) (372 )
Property management 13,589 13,160 40,742 38,743
Depreciation on real estate assets and rental homes 32,856 30,493 96,630 90,849
Amortization of in-place leases 2,124 138 5,069 2,128
Cost of home sales 9,742 10,377 27,948 25,391
Home selling expenses 1,101 1,447 3,149 3,301
General and administrative 8,816 7,505 26,523 23,339
Other expenses 386 324 1,096 814
Interest and related amortization 26,490   25,027   78,478   74,728  
Total expenses 197,803   187,446   573,792   535,799  
Income before equity in income of unconsolidated joint ventures 58,872 54,179 169,410 159,527
Equity in income of unconsolidated joint ventures 788   686   3,596   2,876  
Consolidated net income 59,660   54,865   173,006   162,403  
 
Income allocated to non-controlling interest-Common OP Units (3,590 ) (3,286 ) (10,569 ) (9,825 )
Redeemable perpetual preferred stock dividends and original issuance costs   (3,054 ) (8 ) (7,667 )
Net income available for Common Stockholders $ 56,070   $ 48,525   $ 162,429   $ 144,911  
 
 

Non-GAAP Financial Measures

   
 

Selected Non-GAAP Financial Measures

 

(In millions, except per share data, unaudited)

 
 
Quarter Ended
September 30, 2018
Income from property operations, excluding deferrals and property management - 2018 Core (1) $ 133.3
Income from property operations, excluding deferrals and property management - Non-Core (1) 5.1
Property management and general and administrative (22.4 )
Other income and expenses 4.4
Interest and related amortization (26.5 )
Normalized FFO available for Common Stock and OP Unit holders (2) 93.9
Insurance proceeds due to catastrophic weather event (3) 3.8  
FFO available for Common Stock and OP Unit holders (2) $ 97.7  
 
Normalized FFO per Common Share and OP Unit - Fully Diluted $ 0.99
FFO per Common Share and OP Unit - Fully Diluted $ 1.03
 
 
Normalized FFO available for Common Stock and OP Unit holders (2) $ 93.9
Non-revenue producing improvements to real estate (2) (11.8 )
FAD available for Common Stock and OP Unit holders (2) $ 82.1  
 
Weighted average Common Stock and OP Units - Fully Diluted 95.3

__________________

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. Represents insurance recovery revenue from reimbursement for capital expenditures related to Hurricane Irma.
     
 

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,
2018   2017 2018   2017
Net income available for Common Stockholders $ 56,070 $ 48,525 $ 162,429 $ 144,911
Income allocated to Common OP Units 3,590 3,286 10,569 9,825
Right-to-use contract upfront payments, deferred, net (1) 2,883 1,670 6,189 3,766
Right-to-use contract commissions, deferred, net (2) (458 ) (176 ) (744 ) (372 )
Depreciation on real estate assets 30,424 27,879 89,307 82,939
Depreciation on rental homes 2,432 2,614 7,323 7,910
Amortization of in-place leases 2,124 138 5,069 2,128
Depreciation on unconsolidated joint ventures 651   360   1,390   1,171  
FFO available for Common Stock and OP Unit holders (3) 97,716 84,296 281,532 252,278
Transaction costs 324
Preferred stock original issuance costs 757 757
Insurance proceeds due to catastrophic weather event (4) (3,833 )   (5,925 )  
Normalized FFO available for Common Stock and OP Unit holders (3) 93,883 85,053 275,607 253,359
Non-revenue producing improvements to real estate (3) (11,790 ) (11,015 ) (32,965 ) (29,823 )
FAD available for Common Stock and OP Unit holders (3) $ 82,093   $ 74,038   $ 242,642   $ 223,536  
 
Net income available per Common Share - Basic $ 0.63 $ 0.56 $ 1.83 $ 1.67
Net income available per Common Share - Fully Diluted (5) $ 0.63 $ 0.56 $ 1.82 $ 1.66
 
FFO per Common Share and OP Unit-Basic $ 1.03 $ 0.91 $ 2.98 $ 2.72
FFO per Common Share and OP Unit-Fully Diluted $ 1.03 $ 0.90 $ 2.97 $ 2.71
 
Normalized FFO per Common Share and OP Unit-Basic $ 0.99 $ 0.92 $ 2.91 $ 2.73
Normalized FFO per Common Share and OP Unit-Fully Diluted $ 0.99 $ 0.91 $ 2.91 $ 2.72
 
Average Common Stock - Basic 89,200 87,037 88,760 86,620
Average Common Stock and OP Units - Basic 94,971 92,873 94,569 92,720
Average Common Stock and OP Units - Fully Diluted 95,263 93,324 94,827 93,135

___________________________

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 upfront nonrefundable 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. Represents insurance recovery revenue from reimbursement for capital expenditures related to Hurricane Irma.
5. Net income per fully diluted Common Share is calculated before Income allocated to non-controlling interest- Common OP Units.
     
 

Consolidated Income from Property Operations (1)

 

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

 
Quarters Ended September 30, Nine Months Ended September 30,
2018   2017 2018   2017
Community base rental income (2) $ 130.7 $ 123.2 $ 386.1 $ 365.8
Rental home income 3.5 3.6 10.6 10.8
Resort base rental income (3) 64.4 58.5 183.8 169.6
Right-to-use annual payments 12.2 11.5 35.6 34.1
Right-to-use contracts current period, gross 4.9 4.2 12.0 11.2
Utility and other income (4) 25.9   26.3   75.8   69.2  
Property operating revenues 241.6 227.3 703.9 660.7
 
Property operating, maintenance and real estate taxes (5) 97.7 94.2 280.3 263.1
Rental home operating and maintenance 1.9 1.7 5.0 4.9
Sales and marketing, gross 3.6   3.3   9.7   8.9  
Property operating expenses 103.2   99.2   295.0   276.9  
Income from property operations, excluding deferrals and property management (1) $ 138.4   $ 128.1   $ 408.9   $ 383.8  
 
Manufactured home site figures and occupancy averages:
Total sites 72,221 71,113 71,782 71,049
Occupied sites 68,330 67,017 67,857 66,827
Occupancy % 94.6 % 94.2 % 94.5 % 94.1 %
Monthly base rent per site $ 638 $ 613 $ 632 $ 608
 
Resort base rental income:
Annual $ 37.4 $ 33.6 $ 109.2 98.6
Seasonal 4.9 5.0 29.0 28.4
Transient 22.1   19.9   45.6   42.6  
Total resort base rental income $ 64.4   $ 58.5   $ 183.8   $ 169.6  

_________________________

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. Includes impact of Hurricane Irma. Utility and other income includes insurance recovery revenues of $1.3 million and $6.5 million, including $1.2 million and $3.7 million which we have identified as business interruption, for the quarter and nine months ended September 30, 2018. Utility and other income includes insurance recovery revenues of $3.1 million in the quarter and nine months ended September 30, 2017.
5. Includes the impact of Hurricane Irma. Property operating, maintenance and real estate taxes includes debris removal and cleanup costs of $0.1 million and $2.6 million for the quarter and nine months ended September 30, 2018 and $3.3 million for the quarter and nine months ended September 30, 2017.
 
 

Core Income from Property Operations (1)

 

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

 
 
Quarters Ended September 30, Nine Months Ended September 30,
2018   2017   Change (2) 2018   2017   Change (2)
Community base rental income (3) $ 128.4 $ 123.0 4.4 % $ 382.2 $ 365.5 4.6 %
Rental home income 3.5 3.6 (2.4 )% 10.6 10.8 (2.3 )%
Resort base rental income (4) 59.9 56.6 5.9 % 173.8 162.5 7.0 %
Right-to-use annual payments 12.2 11.5 6.1 % 35.6 34.1 4.4 %
Right-to-use contracts current period, gross 4.9 4.2 15.6 % 12.0 11.2 6.8 %
Utility and other income (5) 24.1   26.1   (7.9 )% 70.4   68.5   2.7 %
Property operating revenues 233.0 225.0 3.5 % 684.6 652.6 4.9 %
 
Property operating, maintenance and real estate taxes (6) 94.2 92.8 1.5 % 271.9 259.0 5.0 %
Rental home operating and maintenance 1.9 1.7 11.7 % 5.0 4.9 0.9 %
Sales and marketing, gross 3.6   3.3   8.8 % 9.7   8.9   9.3 %
Property operating expenses 99.7   97.8   1.9 % 286.6   272.8   5.1 %
Income from property operations, excluding deferrals and property management (1) $ 133.3   $ 127.2   4.8 % $ 398.0   $ 379.8   4.8 %
Occupied sites (7) 67,302 66,967
 
Core manufactured home site figures and occupancy averages:
Total sites 70,923 70,877 70,901 70,873
Occupied sites 67,188 66,910 67,123 66,779
Occupancy % 94.7 % 94.4 % 94.7 % 94.2 %
Monthly base rent per site $ 637 $ 613 $ 633 $ 608
 
Resort base rental income:
Annual $ 35.4 $ 33.3 6.4 % $ 104.1 $ 97.6 6.7 %
Seasonal 4.5 4.3 4.0 % 28.1 25.8 8.6 %
Transient 20.0   19.0   5.4 % 41.6   39.1   6.6 %
Total resort base rental income $ 59.9   $ 56.6   5.9 % $ 173.8   $ 162.5   7.0 %

___________________________

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. Includes impact of Hurricane Irma. Utility and other income includes insurance recovery revenues of $2.4 million for the nine months ended September 30, 2018 and $3.1 million for the quarter and nine months ended September 30, 2017.
6. Includes impact of Hurricane Irma. Property operating, maintenance and real estate taxes includes debris removal and cleanup costs of $2.2 million for the nine months ended September 30, 2018 and $3.3 million for the quarter and nine months ended September 30, 2017.
7. Occupied sites are presented as of the end of the period. Occupied sites have increased by 209 from 67,093 at December 31, 2017.
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Non-Core Income from Property Operations (1)

 

(In millions, unaudited)

 
Quarter Ended Nine Months Ended
September 30, 2018 September 30, 2018
Community base rental income $ 2.3 $ 3.9
Resort base rental income 4.4 10.0
Utility income and other property income (2) 1.9   5.4
Property operating revenues 8.6 19.3
 
Property operating expenses (2) 3.5   8.4
Income from property operations, excluding deferrals and property management (1) $ 5.1   $