Australia markets closed
  • ALL ORDS

    7,137.60
    -11.00 (-0.15%)
     
  • ASX 200

    6,955.20
    -13.40 (-0.19%)
     
  • AUD/USD

    0.6650
    -0.0042 (-0.62%)
     
  • OIL

    69.24
    -0.72 (-1.03%)
     
  • GOLD

    1,980.60
    -15.30 (-0.77%)
     
  • Bitcoin AUD

    41,897.20
    -657.20 (-1.54%)
     
  • CMC Crypto 200

    606.79
    -11.59 (-1.87%)
     
  • AUD/EUR

    0.6177
    +0.0007 (+0.11%)
     
  • AUD/NZD

    1.0727
    +0.0031 (+0.29%)
     
  • NZX 50

    11,580.81
    -14.13 (-0.12%)
     
  • NASDAQ

    12,767.05
    +37.82 (+0.30%)
     
  • FTSE

    7,405.45
    -94.15 (-1.26%)
     
  • Dow Jones

    32,237.53
    +132.28 (+0.41%)
     
  • DAX

    14,957.23
    -253.16 (-1.66%)
     
  • Hang Seng

    19,915.68
    -133.96 (-0.67%)
     
  • NIKKEI 225

    27,385.25
    -34.36 (-0.13%)
     

ELS Reports Fourth Quarter Results

Continued Strong Performance;

Provides 2023 Guidance and Increases Annual Dividend

CHICAGO, January 30, 2023--(BUSINESS WIRE)--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, 2022. All per share results are reported on a fully diluted basis unless otherwise noted.

Financial Results for the Quarter and Year Ended December 31, 2022

For the quarter ended December 31, 2022, total revenues increased $5.3 million, or 1.6%, to $340.6 million, compared to $335.3 million for the same period in 2021. For the quarter ended December 31, 2022, net income available for Common Stockholders increased $7.5 million, to $73.0 million, or $0.39 per Common Share, compared to $65.5 million, or $0.36 per Common Share, for the same period in 2021.

For the year ended December 31, 2022, total revenues increased $130.7 million, or 9.9%, to $1,447.1 million, compared to $1,316.4 million for the same period in 2021. For the year ended December 31, 2022, net income available for Common Stockholders increased $22.1 million, or $0.10 per Common Share, to $284.6 million, or $1.53 per Common Share, compared to $262.5 million, or $1.43 per Common Share, for the same period in 2021.

Non-GAAP Financial Measures and Portfolio Performance

For the quarter ended December 31, 2022, Funds from Operations ("FFO") available for Common Stock and OP Unit holders increased $3.6 million, or $0.01 per Common Share, to $126.6 million, or $0.65 per Common Share, compared to $123.0 million, or $0.64 per Common Share, for the same period in 2021. For the year ended December 31, 2022, FFO available for Common Stock and OP Unit holders increased $38.0 million, or $0.16 per Common Share, to $523.6 million, or $2.68 per Common Share, compared to $485.6 million, or $2.52 per Common Share, for the same period in 2021.

For the quarter ended December 31, 2022, Normalized Funds from Operations ("Normalized FFO") available for Common Stock and OP Unit holders increased $4.6 million, or $0.02 per Common Share, to $128.1 million, or $0.66 per Common Share, compared to $123.6 million, or $0.64 per Common Share, for the same period in 2021. For the year ended December 31, 2022, Normalized FFO available for Common Stock and OP Unit holders increased $42.7 million, or $0.19 per Common Share, to $531.6 million, or $2.72 per Common Share, compared to $489.0 million, or $2.53 per Common Share, for the same period in 2021.

For the quarter ended December 31, 2022, property operating revenues, excluding deferrals, increased $9.8 million to $306.4 million, compared to $296.6 million for the same period in 2021. For the year ended December 31, 2022, property operating revenues, excluding deferrals, increased $91.9 million to $1,277.5 million, compared to $1,185.6 million for the same period in 2021. For the quarter ended December 31, 2022, income from property operations, excluding deferrals and property management, increased $8.2 million to $180.6 million, compared to $172.4 million for the same period in 2021. For the year ended December 31, 2022, income from property operations, excluding deferrals and property management, increased $49.9 million to $731.9 million, compared to $682.0 million for the same period in 2021.

For the quarter ended December 31, 2022, Core property operating revenues, excluding deferrals, increased approximately 5.1% and Core income from property operations, excluding deferrals and property management, increased approximately 7.3%, compared to the same period in 2021. For the year ended December 31, 2022, Core property operating revenues, excluding deferrals, increased approximately 6.1% and Core income from property operations, excluding deferrals and property management, increased approximately 5.7%, compared to the same period in 2021.

Business Updates

Pages 1 and 2 of this Earnings Release and Supplemental Financial Information provide an update on operations and 2023 guidance.

Investment Activity

In November 2022, we acquired an 80% interest in a joint venture with RVC Outdoor Destinations for a total purchase price of $2.4 million. The joint venture owns one Recreational Vehicle ("RV") property under construction located in Sandusky, Ohio.

In November 2022, we acquired a 50% interest in a joint venture with Kampgrounds of America for a total purchase price of $5.1 million. The joint venture owns and operates, through its wholly owned subsidiary, Bald Mountain RV, LLC, a 283-site RV community located in Hiawassee, Georgia.

In December 2022, we completed the acquisition of Whippoorwill, a 288-site RV community located in Marmora, New Jersey for a purchase price of $21.8 million.

2023 Dividends

Our Board of Directors has approved setting the annual dividend rate for 2023 at $1.79 per share of Common Stock, an increase of 9.1%, or $0.15, over the current $1.64 per share of Common Stock for 2022. Our Board of Directors, in its sole discretion, will determine the amount of each quarterly dividend in advance of payment.

About Equity LifeStyle Properties

We are a self-administered, self-managed real estate investment trust ("REIT") with headquarters in Chicago. As of January 30, 2023, we own or have an interest in 448 properties in 35 states and British Columbia consisting of 170,965 sites.

For additional information, please contact our Investor Relations Department at (800) 247-5279 or at investor_relations@equitylifestyle.com.

Conference Call

A live audio webcast of our conference call discussing these results will take place tomorrow, Tuesday, January 31, 2023, at 10:00 a.m. Central Time. Please visit the Investor Relations section at www.equitylifestyleproperties.com for the link. A replay of the webcast will be available for two weeks at this site.

Forward-Looking Statements

In addition to historical information, this press release includes certain "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. When used, words such as "anticipate," "expect," "believe," "project," "intend," "may be" and "will be" and similar words or phrases, or the negative thereof, unless the context requires otherwise, are intended to identify forward-looking statements and may include without limitation, information regarding our expectations, goals or intentions regarding the future, and the expected effect of our acquisitions. These forward-looking statements are subject to numerous assumptions, risks and uncertainties, including, but not limited to:

  • our ability to control costs and real estate market conditions, our ability to retain customers, the actual use of sites by customers and our success in acquiring new customers at our properties (including those that we may acquire);

  • our ability to maintain historical or increase future rental rates and occupancy with respect to properties currently owned or that we may acquire;

  • our ability to attract and retain customers entering, renewing and upgrading membership subscriptions;

  • our assumptions about rental and home sales markets;

  • our assumptions and guidance concerning Net Income, FFO and Normalized FFO per share data;

  • our ability to manage counterparty risk;

  • our ability to renew our insurance policies at existing rates and on consistent terms;

  • home sales results could be impacted by the ability of potential homebuyers to sell their existing residences as well as by financial, credit and capital markets volatility;

  • results from home sales and occupancy will continue to be impacted by local economic conditions, including an adequate supply of homes at reasonable costs, lack of affordable manufactured home financing and competition from alternative housing options including site-built single-family housing;

  • impact of government intervention to stabilize site-built single-family housing and not manufactured housing;

  • effective integration of recent acquisitions and our estimates regarding the future performance of recent acquisitions;

  • the completion of future transactions in their entirety, if any, and timing and effective integration with respect thereto;

  • unanticipated costs or unforeseen liabilities associated with recent acquisitions;

  • the effect of Hurricane Ian on our business including, but not limited to the following: (i) the timing and cost of recovery, (ii) the impact of the condition of properties and homes on occupancy demand and related rent revenue and (iii) the timing and amount of insurance proceeds;

  • our ability to obtain financing or refinance existing debt on favorable terms or at all;

  • the effect of inflation and interest rates;

  • the effect from any breach of our, or any of our vendors' data management systems;

  • the dilutive effects of issuing additional securities;

  • the outcome of pending or future lawsuits or actions brought by or against us, including those disclosed in our filings with the Securities and Exchange Commission; and

  • other risks indicated from time to time in our filings with the Securities and Exchange Commission.

Our guidance acknowledges the existence of volatile economic conditions, which may impact our current guidance assumptions. Factors impacting 2023 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 2023 guidance are subject to risks related to the COVID-19 pandemic, many of which are unknown, including the duration of the pandemic, the extent of the adverse health impact on the general population and on our residents, customers and employees in particular, its impact on the employment rate and the economy, the extent and impact of governmental responses and the impact of operational changes we have implemented and may implement in response to the pandemic.

For further information on these and other factors that could impact us and the statements contained herein, refer to our filings with the Securities and Exchange Commission, including the "Risk Factors" section in our most recent Annual Report on Form 10-K and subsequent quarterly reports on Form 10-Q.

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

Supplemental Financial Information

Operations and Financial Update

  • Net income available for Common Stockholders was $1.53 per fully diluted share, for the year ended December 31, 2022, 7.0% higher than the year ended December 31, 2021.

  • Normalized FFO per Common Share on a fully diluted basis was $2.72 for the year ended December 31, 2022, 7.4% higher than the year ended December 31, 2021.

  • Acquired four RV communities, one membership RV community, an 80% interest in two joint ventures with RV properties under development, a 50% interest in one joint venture with one RV community, and three land parcels with an aggregate value of approximately $150.9 million.

  • Added 1,036 expansion sites during the year ended December 31, 2022.

  • New home sales of 1,176 for the year ended December 31, 2022, which was the highest in company history.

  • During the year ended December 31, 2022, we entered into a $200.0 million unsecured term loan agreement. The term of the loan is five years and bears interest at a rate of Secured Overnight Financing Rate ("SOFR") plus approximately 1.30% to 1.80%, depending on leverage levels.

  • During the year ended December 31, 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 11 years.

  • During the year ended December 31, 2022, we entered into our current at-the-market ("ATM") equity offering program with an aggregate offering price of up to $500.0 million. The full capacity remains available for issuance.

  • Recognized $40.6 million of expenses for debris removal and cleanup costs related to Hurricane Ian and an offsetting insurance recovery revenue accrual of $40.6 million for the quarter and year ended December 31, 2022.

  • Recorded a $5.4 million reduction to the carrying value of certain assets and offsetting insurance recovery revenue of $5.4 million as a result of Hurricane Ian for the year ended December 31, 2022.

Core Portfolio

  • Core portfolio generated growth of 5.7% in income from property operations, excluding deferrals and property management, for the year ended December 31, 2022, compared to the year ended December 31, 2021.

  • Core MH base rental income increased by 5.8% during the year ended December 31, 2022, compared to the year ended December 31, 2021. The increase is due to 5.4% growth from rate increases and 0.4% from occupancy gains.

  • Maintained average Core MH occupancy at 95.1% for the years ended December 31, 2022 and 2021.

  • Manufactured homeowners within our Core portfolio increased by 637 to 66,069 as of December 31, 2022, compared to 65,432 as of December 31, 2021.

  • Core RV and marina base rental income for the year ended December 31, 2022 increased by 9.1%, compared to the year ended December 31, 2021.

  • Combined Core Seasonal and Transient RV base rental income for the year ended December 31, 2022 increased by 9.5% or $11.1 million, compared to the year ended December 31, 2021.

  • RV Annual occupancy within our Core RV and Thousand Trails portfolios increased by 570 during the year ended December 31, 2022, compared to the year ended December 31, 2021.

Non-Core Portfolio

  • During the quarter ended December 31, 2022, operations at our Fort Myers Beach, Gulf Air, Pine Island, and Ramblers Rest properties were interrupted as a result of Hurricane Ian, therefore we designated them as Non-core properties. This change is reflected throughout the results represented in this release and in our Supplemental Financial Information package.

2023 Guidance (1) (2)

($ in millions, except per share)

2023

First Quarter

Full Year

Net Income/share

$0.42 to $0.48

$1.65 to $1.75

FFO/share

$0.70 to $0.76

$2.79 to $2.89

Normalized FFO/share

$0.70 to $0.76

$2.79 to $2.89

2022 Actual

2023 Growth Rates

Core Portfolio:

First Quarter

Full Year

First Quarter

Full Year

MH base rental income

$154.4

$626.0

6.0% to 6.6%

6.0% to 7.0%

RV and marina base rental income (3)

$102.7

$393.4

5.8% to 6.4%

5.7% to 6.7%

Property operating revenues

$310.2

$1,240.2

5.7% to 6.3%

5.7% to 6.7%

Property operating expenses

$124.9

$526.4

7.5% to 8.1%

6.7% to 7.7%

Income from property operations, excluding deferrals and property management

$185.3

$713.8

4.4% to 5.0%

5.0% to 6.0%

Non Core Portfolio:

2023 Full Year

Income from property operations, excluding deferrals and property management

$17.7 to $21.7

Other Guidance Assumptions:

2023 Full Year

Property management and general administrative

$114.4 to $120.4

Debt Assumptions:

Weighted average debt outstanding

$3,300 to $3,500

Interest and related amortization

$127.5 to $133.5

(1)

First quarter and full year 2023 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 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 2023 guidance assumptions.

(2)

Guidance assumptions do not include future capital events (financing transactions, acquisitions or dispositions) or the use of free cash flow.

(3)

Core RV Annual revenue represents approximately 61.5% and 66.5% of first quarter 2023 and full year 2023 RV and marina base rental income, respectively. Core RV Annual revenue first quarter 2023 growth rate range is 8.2% to 8.8% and the full year 2023 growth rate range is 7.5% to 8.5%.

Investor Information

Equity Research Coverage(1)

Bank of America Securities

Barclays

BMO Capital Markets

Jeffrey Spector/Joshua Dennerlein

Anthony Powell

John Kim

Citi Research

Colliers Securities

Evercore ISI

Nick Joseph

David Toti

Steve Sakwa/Samir Khanal

Green Street Advisors

RBC Capital Markets

Robert W. Baird & Company

John Pawlowski

Brad Heffern

Wes Golladay

Truist

UBS

Wolfe Research

Anthony Hau

Michael Goldsmith

Andrew Rosivach/Keegan Carl

______________________

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 Shares and OP Units outstanding and per share data, unaudited)

As of and for the Quarter Ended

Dec 31,
2022

Sep 30,
2022

Jun 30,
2022

Mar 31,
2022

Dec 31,
2021

Operating Information

Total revenues

$

340.6

$

381.0

$

365.3

$

360.2

$

335.3

Net income

$

76.7

$

70.5

$

64.6

$

87.1

$

68.8

Net income available for Common Stockholders

$

73.0

$

67.2

$

61.5

$

82.9

$

65.5

Adjusted EBITDAre (1)

$

159.2

$

166.4

$

153.3

$

168.4

$

150.7

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

$

126.6

$

134.4

$

121.6

$

140.9

$

123.0

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

$

128.1

$

136.8

$

125.3

$

141.4

$

123.6

Funds Available for Distribution ("FAD") for Common Stock and OP Unit holders (1)(2)

$

106.9

$

115.4

$

103.6

$

125.1

$

102.3

Common Shares and OP Units Outstanding (In thousands) and Per Share Data

Common Shares and OP Units, end of the period

195,386

195,380

195,373

195,303

194,946

Weighted average Common Shares and OP Units outstanding - Fully Diluted

195,281

195,269

195,227

195,246

193,412

Net income per Common Share - Fully Diluted (3)

$

0.39

$

0.36

$

0.33

$

0.45

$

0.36

FFO per Common Share and OP Unit - Fully Diluted

$

0.65

$

0.69

$

0.62

$

0.72

$

0.64

Normalized FFO per Common Share and OP Unit - Fully Diluted

$

0.66

$

0.70

$

0.64

$

0.72

$

0.64

Dividends per Common Share

$

0.4100

$

0.4100

$

0.4100

$

0.4100

$

0.3625

Balance Sheet

Total assets

$

5,493

$

5,405

$

5,400

$

5,265

$

5,308

Total liabilities

$

3,975

$

3,886

$

3,878

$

3,734

$

3,822

Market Capitalization

Total debt (4)

$

3,416

$

3,329

$

3,298

$

3,193

$

3,303

Total market capitalization (5)

$

16,038

$

15,607

$

17,066

$

18,130

$

20,392

Ratios

Total debt / total market capitalization

21.3

%

21.3

%

19.3

%

17.6

%

16.2

%

Total debt / Adjusted EBITDAre (6)

5.3

5.2

5.3

5.2

5.6

Interest coverage (7)

5.6

5.7

5.7

5.7

5.5

Fixed charges(8)

5.6

5.6

5.6

5.6

5.5

______________________

1.

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.

2.

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.

3.

Net income per Common Share - Fully Diluted is calculated before Income allocated to non-controlling interest - Common OP Units.

4.

Excludes deferred financing costs of approximately $28.1 million as of December 31, 2022.

5.

See page 17 for the calculation of market capitalization as of December 31, 2022.

6.

Calculated using trailing twelve months Adjusted EBITDAre.

7.

Calculated by dividing trailing twelve months Adjusted EBITDAre by the interest expense incurred during the same period.

8.

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)

December 31,
2022

December 31,
2021

(unaudited)

Assets

Investment in real estate:

Land

$

2,084,532

$

2,019,787

Land improvements

4,115,439

3,912,062

Buildings and other depreciable property

1,169,590

1,057,215

7,369,561

6,989,064

Accumulated depreciation

(2,258,540

)

(2,103,774

)

Net investment in real estate

5,111,021

4,885,290

Cash and restricted cash

22,347

123,398

Notes receivable, net

45,356

39,955

Investment in unconsolidated joint ventures

81,404

70,312

Deferred commission expense

50,441

47,349

Other assets, net

181,950

141,567

Total Assets

$

5,492,519

$

5,307,871

Liabilities and Equity

Liabilities:

Mortgage notes payable, net

$

2,693,167

$

2,627,783

Term loan, net

496,817

297,436

Unsecured line of credit

198,000

349,000

Accounts payable and other liabilities

175,148

172,285

Deferred membership revenue

197,743

176,439

Accrued interest payable

11,739

9,293

Rents and other customer payments received in advance and security deposits

122,318

118,696

Distributions payable

80,102

70,768

Total Liabilities

3,975,034

3,821,700

Equity:

Preferred stock, $0.01 par value, 10,000,000 shares authorized as of December 31, 2022 and December 31, 2021; none issued and outstanding.

Common stock, $0.01 par value, 600,000,000 shares authorized as of December 31, 2022 and December 31, 2021; 186,120,298 and 185,640,379 shares issued and outstanding as of December 31, 2022 and December 31, 2021, respectively.

1,916

1,913

Paid-in capital

1,628,618

1,593,362

Distributions in excess of accumulated earnings

(204,248

)

(183,689

)

Accumulated other comprehensive income

19,119

3,524

Total Stockholders’ Equity

1,445,405

1,415,110

Non-controlling interests – Common OP Units

72,080

71,061

Total Equity

1,517,485

1,486,171

Total Liabilities and Equity

$

5,492,519

$

5,307,871

Consolidated Statements of Income

(In thousands, unaudited)

Quarters Ended December 31,

Years Ended December 31,

2022

2021

2022

2021

Revenues:

Rental income

$

269,190

$

258,282

$

1,118,601

$

1,032,575

Annual membership subscriptions

16,212

15,203

63,215

58,251

Membership upgrade sales current period, gross

6,890

6,927

34,661

36,270

Membership upgrade sales upfront payments, deferred, net

(3,475

)

(3,945

)

(21,703

)

(25,079

)

Other income

12,828

13,539

56,144

50,298

Gross revenues from home sales, brokered resales and ancillary services (1)

35,242

42,467

180,179

152,517

Interest income

2,084

1,702

7,430

7,016

Income from other investments, net

1,633

1,159

8,553

4,555

Total revenues

340,604

335,334

1,447,080

1,316,403

Expenses:

Property operating and maintenance

101,677

98,283

443,157

398,983

Real estate taxes

17,772

18,517

74,145

72,671

Sales and marketing, gross

5,047

4,756

23,513

23,743

Membership sales commissions, deferred, net

(450

)

(670

)

(3,196

)

(5,075

)

Property management

18,110

17,024

74,083

65,979

Depreciation and amortization

49,625

50,317

202,362

188,444

Cost of home sales, brokered resales and ancillary services (1)

27,118

35,081

139,012