Equity LifeStyle Properties, Inc. (NYSE: ELS) (referred to herein as
“we,” “us,” and “our”) today announced results for the quarter and nine
months ended September 30, 2014. All per share results are reported on a
fully diluted basis unless otherwise noted.
Financial Results for the Quarter Ended September 30, 2014
Normalized Funds from Operations (“Normalized FFO”) increased $3.7
million, or $0.04 per common share, to $63.1 million, or $0.69 per
common share, compared to $59.4 million, or $0.65 per common share, for
the same period in 2013. Funds from Operations (“FFO”) increased $37.0
million, or $0.41 per common share, to $57.4 million, or $0.63 per
common share, compared to $20.4 million, or $0.22 per common share, for
the same period in 2013. Net income available for common stockholders
decreased $4.2 million, or $0.05 per common share, to $25.7 million, or
$0.31 per common share, compared to $29.9 million, or $0.36 per common
share, for the same period in 2013.
Portfolio Performance
For the quarter ended September 30, 2014, property operating revenues,
excluding deferrals, increased $10.0 million to $188.9 million compared
to $178.9 million for the same period in 2013. For the nine months ended
September 30, 2014, property operating revenues, excluding deferrals,
increased $29.5 million to $553.8 million compared to $524.3 million for
the same period in 2013. For the quarter ended September 30, 2014,
income from property operations, excluding deferrals, increased $5.9
million to $105.7 million compared to $99.8 million for the same period
in 2013. For the nine months ended September 30, 2014, income from
property operations, excluding deferrals, increased $19.0 million to
$317.4 million compared to $298.4 million for the same period in 2013.
For the quarter ended September 30, 2014, Core property operating
revenues increased approximately 4.0 percent and income from Core
property operations increased approximately 5.0 percent compared to the
same period in 2013. For the nine months ended September 30, 2014, Core
property operating revenues increased approximately 3.6 percent and
income from Core property operations increased approximately 4.4 percent
compared to the same period in 2013.
Balance Sheet
During the third quarter, we paid off five mortgages totaling $29.7
million with a weighted average interest rate of 5.45 percent per annum.
We also refinanced the $53.8 million loan secured by our Colony Cove
community with a stated interest rate of 4.65 percent per annum that was
scheduled to mature in 2017. The new loan, with gross proceeds of $115.0
million, has a 25 year term and carries a stated interest rate of 4.64
percent per annum.
Interest coverage was approximately 3.3 times in the quarter. Expanded
disclosure on our balance sheet and debt statistics are included in the
tables below.
Acquisitions
In September 2014, we closed on the acquisition of three Northeast RV
resorts comprised of 826 sites for a purchase price of $11.8
million. Two of the properties are located in the coastal vacation
destination area of New Jersey and one property is in New Hampshire. The
acquisition properties are within close proximity to numerous existing
ELS assets and increased our presence in the Northeast markets to
approximately 25,000 sites. In addition, in October 2014, we closed on
the acquisition of a 270 site RV resort for a purchase price of $6.1
million. The property is located adjacent to an ELS MH community on the
east coast of Florida.
General Information
As of October 20, 2014, we own or have an interest in 383 quality
properties in 32 states and British Columbia consisting of 141,413
sites. We are a self-administered, self-managed real estate investment
trust (“REIT”) with headquarters in Chicago.
A live webcast of our conference call discussing these results will be
available via our website in the Investor Information section at www.equitylifestyle.com
at 10:00 a.m. Central Time on October 21, 2014.
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 recent acquisitions. These
forward-looking statements are subject to numerous assumptions, risks
and uncertainties, including, but not limited to:
-
our ability to control costs, real estate market conditions, the
actual rate of decline in 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 2014 and 2015 estimated net
income, FFO and Normalized FFO;
-
our ability to manage counterparty risk;
-
in the age-qualified properties, 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, 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 accounting for the entry of contracts with customers
representing a right-to-use the Properties under the Codification
Topic “Revenue Recognition;”
-
the outcome of the case currently pending in the California Superior
Court for Santa Clara County, Case No. 109CV140751, involving our
California Hawaiian manufactured home property including any
post-trial proceedings in the trial court or on appeal; and
-
other risks indicated from time to time in our filings with the
Securities and Exchange Commission.
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.
Tables follow:
|
|
|
|
|
Third Quarter 2014 - Selected Financial Data
|
|
|
|
(In millions, except per share data, unaudited)
|
|
|
|
|
|
|
|
Quarter Ended
|
|
|
|
September 30, 2014
|
|
Income from property operations - 2014 Core (1)
|
|
$
|
103.7
|
|
|
Income from property operations - Acquisitions (2)
|
|
2.0
|
|
|
Property management and general and administrative (excluding
transaction costs)
|
|
(18.1
|
)
|
|
Other income and expenses
|
|
5.7
|
|
|
Financing costs and other
|
|
(30.2
|
)
|
|
Normalized FFO (3)
|
|
63.1
|
|
|
Transaction costs
|
|
(0.6
|
)
|
|
Early debt retirement
|
|
(5.1
|
)
|
|
FFO (3)
|
|
$
|
57.4
|
|
|
|
|
|
|
|
Normalized FFO per share - fully diluted
|
|
$
|
0.69
|
|
|
FFO per share - fully diluted
|
|
$
|
0.63
|
|
|
|
|
|
|
|
|
|
|
|
|
Normalized FFO (3)
|
|
$
|
63.1
|
|
|
Non-revenue producing improvements to real estate
|
|
(6.0
|
)
|
|
Funds available for distribution (FAD) (3)
|
|
$
|
57.1
|
|
|
|
|
|
|
|
FAD per share - fully diluted
|
|
$
|
0.62
|
|
|
|
|
|
|
|
Weighted average shares outstanding - fully diluted
|
|
91.5
|
|
______________________
|
1.
|
|
See page 8 for details of the 2014 Core Income from Property
Operations.
|
|
2.
|
|
See page 9 for details of the Income from Property Operations for
the properties acquired during 2013 and 2014 (the “Acquisitions”).
|
|
3.
|
|
See page 6 for a reconciliation of Net income available for Common
Shares to FFO, Normalized FFO and FAD. See definitions of FFO,
Normalized FFO and FAD on page 22.
|
|
|
|
|
|
|
|
Consolidated Income Statement
|
|
|
|
(In thousands, unaudited)
|
|
|
|
|
|
|
|
|
|
Quarters Ended
|
|
Nine Months Ended
|
|
|
|
September 30,
|
|
September 30,
|
|
|
|
2014
|
|
2013
|
|
2014
|
|
2013
|
|
Revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Community base rental income
|
|
$
|
106,967
|
|
|
$
|
103,157
|
|
|
$
|
319,514
|
|
|
$
|
305,401
|
|
|
Rental home income
|
|
3,684
|
|
|
3,584
|
|
|
11,187
|
|
|
10,576
|
|
|
Resort base rental income
|
|
44,351
|
|
|
39,932
|
|
|
126,188
|
|
|
113,868
|
|
|
Right-to-use annual payments
|
|
11,404
|
|
|
12,323
|
|
|
33,859
|
|
|
35,889
|
|
|
Right-to-use contracts current period, gross
|
|
3,944
|
|
|
3,707
|
|
|
9,956
|
|
|
9,899
|
|
|
Right-to-use contracts, deferred, net of prior period amortization
|
|
(1,989
|
)
|
|
(1,856
|
)
|
|
(4,303
|
)
|
|
(4,446
|
)
|
|
Utility and other income
|
|
18,581
|
|
|
16,224
|
|
|
53,070
|
|
|
48,694
|
|
|
Gross revenues from home sales
|
|
8,717
|
|
|
5,415
|
|
|
20,455
|
|
|
12,328
|
|
|
Brokered resale revenue and ancillary services revenues, net
|
|
1,124
|
|
|
1,395
|
|
|
3,491
|
|
|
4,122
|
|
|
Interest income
|
|
1,902
|
|
|
2,200
|
|
|
6,477
|
|
|
6,173
|
|
|
Income from other investments, net (1)
|
|
1,869
|
|
|
1,885
|
|
|
6,098
|
|
|
5,989
|
|
|
Total revenues
|
|
200,554
|
|
|
187,966
|
|
|
585,992
|
|
|
548,493
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Property operating and maintenance
|
|
66,105
|
|
|
61,782
|
|
|
186,018
|
|
|
175,183
|
|
|
Rental home operating and maintenance
|
|
1,829
|
|
|
1,950
|
|
|
5,376
|
|
|
5,307
|
|
|
Real estate taxes
|
|
12,263
|
|
|
11,584
|
|
|
36,905
|
|
|
35,873
|
|
|
Sales and marketing, gross
|
|
3,018
|
|
|
3,842
|
|
|
8,118
|
|
|
9,536
|
|
|
Sales and marketing, deferred commissions, net
|
|
(757
|
)
|
|
(706
|
)
|
|
(2,022
|
)
|
|
(1,824
|
)
|
|
Property management
|
|
11,086
|
|
|
10,077
|
|
|
32,169
|
|
|
30,380
|
|
|
Depreciation on real estate assets and rental homes
|
|
27,831
|
|
|
26,460
|
|
|
83,234
|
|
|
81,793
|
|
|
Amortization of in-place leases
|
|
1,075
|
|
|
485
|
|
|
3,791
|
|
|
803
|
|
|
Cost of home sales
|
|
8,156
|
|
|
5,137
|
|
|
19,679
|
|
|
11,837
|
|
|
Home selling expenses
|
|
513
|
|
|
563
|
|
|
1,710
|
|
|
1,544
|
|
|
General and administrative (2)
|
|
7,623
|
|
|
7,606
|
|
|
20,178
|
|
|
21,261
|
|
|
Property rights initiatives
|
|
751
|
|
|
521
|
|
|
2,063
|
|
|
2,377
|
|
|
Early debt retirement
|
|
5,087
|
|
|
36,530
|
|
|
5,087
|
|
|
37,911
|
|
|
Interest and related amortization
|
|
27,864
|
|
|
29,206
|
|
|
84,177
|
|
|
89,706
|
|
|
Total expenses
|
|
172,444
|
|
|
195,037
|
|
|
486,483
|
|
|
501,687
|
|
|
Income (loss) from continuing operations before equity in income of
unconsolidated joint ventures and gain on sale of property
|
|
28,110
|
|
|
(7,071
|
)
|
|
99,509
|
|
|
46,806
|
|
|
Equity in income of unconsolidated joint ventures
|
|
1,237
|
|
|
439
|
|
|
3,768
|
|
|
1,624
|
|
|
Gain on sale of property (3)
|
|
929
|
|
|
—
|
|
|
929
|
|
|
—
|
|
|
Consolidated income (loss) from continuing operations
|
|
30,276
|
|
|
(6,632
|
)
|
|
104,206
|
|
|
48,430
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Discontinued Operations:(3)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income from discontinued operations
|
|
—
|
|
|
982
|
|
|
—
|
|
|
7,215
|
|
|
Gain on sale of property, net of tax
|
|
—
|
|
|
40,586
|
|
|
—
|
|
|
41,544
|
|
|
Income from discontinued operations
|
|
—
|
|
|
41,568
|
|
|
—
|
|
|
48,759
|
|
|
Consolidated net income
|
|
30,276
|
|
|
34,936
|
|
|
104,206
|
|
|
97,189
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income allocated to non-controlling interest-Common OP Units
|
|
(2,219
|
)
|
|
(2,753
|
)
|
|
(7,929
|
)
|
|
(7,483
|
)
|
|
Series C Redeemable Perpetual Preferred Stock Dividends
|
|
(2,311
|
)
|
|
(2,311
|
)
|
|
(6,949
|
)
|
|
(6,951
|
)
|
|
Net income available for Common Shares
|
|
$
|
25,746
|
|
|
$
|
29,872
|
|
|
$
|
89,328
|
|
|
$
|
82,755
|
|
_________________________________________
|
1.
|
|
For the quarter ended September 30, 2013, includes a $1.0 million
reduction resulting from the change in the fair value of a
contingent asset. For both the nine months ended September 30, 2014
and 2013, includes a $0.1 million increase resulting from the change
in the fair value of a contingent asset.
|
|
2.
|
|
Includes transaction costs, see Reconciliation of Net Income to FFO,
Normalized FFO and FAD on page 6.
|
|
3.
|
|
Effective January 1, 2014, we adopted on a prospective basis the new
Accounting Standard Update 2014-08, Property, Plant, and Equipment:
Reporting Discontinued Operations and Disclosures of Disposals of
Components of an Entity which changed the definition of discontinued
operations. Under the new guidance the gain on sale of property
recognized during the third quarter did not meet the criteria of
discontinued operations and it is presented as part of our
continuous operations.
|
|
|
|
|
|
|
|
Reconciliation of Net Income to FFO, Normalized FFO and FAD
|
|
|
|
(In thousands, except per share data, unaudited)
|
|
|
|
|
|
|
|
|
|
Quarters Ended
|
|
Nine Months Ended
|
|
|
|
September 30,
|
|
September 30,
|
|
|
|
2014
|
|
2013
|
|
2014
|
|
2013
|
|
Net income available for Common Shares
|
|
$
|
25,746
|
|
|
$
|
29,872
|
|
|
$
|
89,328
|
|
|
$
|
82,755
|
|
|
Income allocated to common OP Units
|
|
2,219
|
|
|
2,753
|
|
|
7,929
|
|
|
7,483
|
|
|
Right-to-use contract upfront payments, deferred, net (1)
|
|
1,989
|
|
|
1,856
|
|
|
4,303
|
|
|
4,446
|
|
|
Right-to-use contract commissions, deferred, net (2)
|
|
(757
|
)
|
|
(706
|
)
|
|
(2,022
|
)
|
|
(1,824
|
)
|
|
Depreciation on real estate assets
|
|
25,058
|
|
|
24,807
|
|
|
74,947
|
|
|
76,946
|
|
|
Depreciation on real estate assets, discontinued operations
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,536
|
|
|
Depreciation on rental homes
|
|
2,773
|
|
|
1,653
|
|
|
8,287
|
|
|
4,847
|
|
|
Amortization of in-place leases
|
|
1,075
|
|
|
485
|
|
|
3,791
|
|
|
803
|
|
|
Depreciation on unconsolidated joint ventures
|
|
228
|
|
|
229
|
|
|
690
|
|
|
732
|
|
|
Gain on sale of property, net of tax
|
|
(929
|
)
|
|
(40,586
|
)
|
|
(929
|
)
|
|
(41,544
|
)
|
|
FFO (3)
|
|
$
|
57,402
|
|
|
$
|
20,363
|
|
|
$
|
186,324
|
|
|
$
|
136,180
|
|
|
Change in fair value of contingent consideration asset (4)
|
|
—
|
|
|
988
|
|
|
(65
|
)
|
|
(124
|
)
|
|
Transaction costs (5)
|
|
620
|
|
|
1,540
|
|
|
1,151
|
|
|
1,740
|
|
|
Early debt retirement
|
|
5,087
|
|
|
36,530
|
|
|
5,087
|
|
|
37,911
|
|
|
Normalized FFO (3)
|
|
63,109
|
|
|
59,421
|
|
|
192,497
|
|
|
175,707
|
|
|
Non-revenue producing improvements to real estate
|
|
(5,983
|
)
|
|
(5,726
|
)
|
|
(17,286
|
)
|
|
(16,966
|
)
|
|
FAD (3)
|
|
$
|
57,126
|
|
|
$
|
53,695
|
|
|
$
|
175,211
|
|
|
$
|
158,741
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income (loss) from continuing operations available per Common
Share - Basic
|
|
$
|
0.31
|
|
|
$
|
(0.10
|
)
|
|
$
|
1.07
|
|
|
$
|
0.46
|
|
|
Income (loss) from continuing operations available per Common
Share - Fully Diluted
|
|
$
|
0.31
|
|
|
$
|
(0.10
|
)
|
|
$
|
1.06
|
|
|
$
|
0.46
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income available per Common Share - Basic
|
|
$
|
0.31
|
|
|
$
|
0.36
|
|
|
$
|
1.07
|
|
|
$
|
1.00
|
|
|
Net income available per Common Share - Fully Diluted
|
|
$
|
0.31
|
|
|
$
|
0.36
|
|
|
$
|
1.06
|
|
|
$
|
0.99
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
FFO per Common Share - Basic
|
|
$
|
0.63
|
|
|
$
|
0.22
|
|
|
$
|
2.05
|
|
|
$
|
1.50
|
|
|
FFO per Common Share - Fully Diluted
|
|
$
|
0.63
|
|
|
$
|
0.22
|
|
|
$
|
2.04
|
|
|
$
|
1.49
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Normalized FFO per Common Share - Basic
|
|
$
|
0.70
|
|
|
$
|
0.66
|
|
|
$
|
2.12
|
|
|
$
|
1.94
|
|
|
Normalized FFO per Common Share - Fully Diluted
|
|
$
|
0.69
|
|
|
$
|
0.65
|
|
|
$
|
2.10
|
|
|
$
|
1.93
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
FAD per Common Share - Basic
|
|
$
|
0.63
|
|
|
$
|
0.59
|
|
|
$
|
1.93
|
|
|
$
|
1.75
|
|
|
FAD per Common Share - Fully Diluted
|
|
$
|
0.62
|
|
|
$
|
0.59
|
|
|
$
|
1.92
|
|
|
$
|
1.74
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average Common Shares - Basic
|
|
83,531
|
|
|
83,021
|
|
|
83,295
|
|
|
83,023
|
|
|
Average Common Shares and OP Units - Basic
|
|
90,784
|
|
|
90,625
|
|
|
90,766
|
|
|
90,529
|
|
|
Average Common Shares and OP Units - Fully Diluted
|
|
91,528
|
|
|
91,259
|
|
|
91,471
|
|
|
91,149
|
|
______________________________
|
1.
|
|
We are required by GAAP to defer, over the estimated customer life,
recognition of non-refundable upfront payments from the entry of
right-to-use contracts and upgrade sales. The customer life is
currently estimated to range from one to 31 years and is based upon
our experience operating the membership platform since 2008. The
amount shown represents the deferral of a substantial portion of
current period upgrade sales, offset by amortization of prior period
sales.
|
|
2.
|
|
We are required by GAAP to defer recognition of commissions paid
related to the entry of right-to-use contracts. The deferred
commissions will be 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 definitions of FFO, Normalized FFO and FAD on page 22.
|
|
4.
|
|
Included in Income from other investments, net on the Consolidated
Income Statement on page 5.
|
|
5.
|
|
Included in general and administrative on the Consolidated Income
Statement on page 5.
|
|
|
|
|
|
|
|
Consolidated Income from Property Operations (1)
|
|
|
|
(In millions, except home site and occupancy figures, unaudited)
|
|
|
|
|
|
|
|
|
|
Quarters Ended
|
|
Nine Months Ended
|
|
|
|
September 30,
|
|
September 30,
|
|
|
|
2014
|
|
2013
|
|
2014
|
|
2013
|
|
Community base rental income (2)
|
|
$
|
107.0
|
|
|
$
|
103.2
|
|
|
$
|
319.5
|
|
|
$
|
305.4
|
|
|
Rental home income
|
|
3.7
|
|
|
3.6
|
|
|
11.2
|
|
|
10.6
|
|
|
Resort base rental income (3)
|
|
44.4
|
|
|
39.9
|
|
|
126.2
|
|
|
113.9
|
|
|
Right-to-use annual payments
|
|
11.4
|
|
|
12.3
|
|
|
33.9
|
|
|
35.9
|
|
|
Right-to-use contracts current period, gross
|
|
3.9
|
|
|
3.7
|
|
|
10.0
|
|
|
9.9
|
|
|
Utility and other income
|
|
18.5
|
|
|
16.2
|
|
|
53.0
|
|
|
48.6
|
|
|
Property operating revenues
|
|
188.9
|
|
|
178.9
|
|
|
553.8
|
|
|
524.3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Property operating, maintenance, and real estate taxes
|
|
78.4
|
|
|
73.3
|
|
|
222.9
|
|
|
211.1
|
|
|
Rental home operating and maintenance
|
|
1.8
|
|
|
2.0
|
|
|
5.4
|
|
|
5.3
|
|
|
Sales and marketing, gross
|
|
3.0
|
|
|
3.8
|
|
|
8.1
|
|
|
9.5
|
|
|
Property operating expenses
|
|
83.2
|
|
|
79.1
|
|
|
236.4
|
|
|
225.9
|
|
|
Income from property operations (1)
|
|
$
|
105.7
|
|
|
$
|
99.8
|
|
|
$
|
317.4
|
|
|
$
|
298.4
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Manufactured home site figures and occupancy averages:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total sites
|
|
69,933
|
|
|
69,566
|
|
|
69,949
|
|
|
69,032
|
|
|
Occupied sites
|
|
64,405
|
|
|
63,782
|
|
|
64,363
|
|
|
63,225
|
|
|
Occupancy %
|
|
92.1
|
%
|
|
91.7
|
%
|
|
92.0
|
%
|
|
91.6
|
%
|
|
Monthly base rent per site
|
|
$
|
554
|
|
|
$
|
539
|
|
|
$
|
552
|
|
|
$
|
537
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Core total sites
|
|
68,595
|
|
|
68,633
|
|
|
68,611
|
|
|
68,636
|
|
|
Core occupied sites
|
|
63,266
|
|
|
63,020
|
|
|
63,223
|
|
|
62,971
|
|
|
Core occupancy %
|
|
92.2
|
%
|
|
91.8
|
%
|
|
92.1
|
%
|
|
91.7
|
%
|
|
Core monthly base rent per site
|
|
$
|
553
|
|
|
$
|
539
|
|
|
$
|
551
|
|
|
$
|
537
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Resort base rental income:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Annual
|
|
$
|
26.1
|
|
|
$
|
23.9
|
|
|
$
|
76.8
|
|
|
$
|
70.3
|
|
|
Seasonal
|
|
3.3
|
|
|
3.1
|
|
|
19.3
|
|
|
18.0
|
|
|
Transient
|
|
15.0
|
|
|
12.9
|
|
|
30.1
|
|
|
25.6
|
|
|
Total resort base rental income
|
|
$
|
44.4
|
|
|
$
|
39.9
|
|
|
$
|
126.2
|
|
|
$
|
113.9
|
|
_________________________
|
1.
|
|
See page 5 for a complete Income Statement. The line items that we
include in property operating revenues and property operating
expenses are also individually included in our Consolidated Income
Statement. Income from property operations excludes property
management expenses and the GAAP deferral of right-to-use contract
upfront payments and related commissions, net.
|
|
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.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2014 Core Income from Property Operations (1)
|
|
|
|
(In millions, except home site and occupancy figures, unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Quarters Ended
|
|
|
|
|
Nine Months Ended
|
|
|
|
|
|
|
September 30,
|
|
%
|
|
September 30,
|
|
%
|
|
|
|
2014
|
|
2013
|
|
Change (2)
|
|
2014
|
|
2013
|
|
Change (2)
|
|
Community base rental income (3)
|
|
$
|
105.0
|
|
|
$
|
101.9
|
|
|
3.0
|
%
|
|
$
|
313.5
|
|
|
$
|
304.1
|
|
|
3.1
|
%
|
|
Rental home income
|
|
3.7
|
|
|
3.6
|
|
|
2.5
|
%
|
|
11.1
|
|
|
10.6
|
|
|
5.4
|
%
|
|
Resort base rental income (4)
|
|
42.4
|
|
|
39.9
|
|
|
6.2
|
%
|
|
121.2
|
|
|
113.9
|
|
|
6.5
|
%
|
|
Right-to-use annual payments
|
|
11.4
|
|
|
12.3
|
|
|
(7.5
|
)%
|
|
33.9
|
|
|
35.9
|
|
|
(5.7
|
)%
|
|
Right-to-use contracts current period, gross
|
|
3.9
|
|
|
3.7
|
|
|
6.4
|
%
|
|
10.0
|
|
|
9.9
|
|
|
0.6
|
%
|
|
Utility and other income
|
|
18.2
|
|
|
16.1
|
|
|
13.0
|
%
|
|
52.2
|
|
|
48.6
|
|
|
7.3
|
%
|
|
Property operating revenues
|
|
184.6
|
|
|
177.5
|
|
|
4.0
|
%
|
|
541.9
|
|
|
523.0
|
|
|
3.6
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Property operating, maintenance, and real estate taxes
|
|
76.1
|
|
|
73.1
|
|
|
4.2
|
%
|
|
217.7
|
|
|
210.7
|
|
|
3.4
|
%
|
|
Rental home operating and maintenance
|
|
1.8
|
|
|
1.9
|
|
|
(6.5
|
)%
|
|
5.4
|
|
|
5.3
|
|
|
1.0
|
%
|
|
Sales and marketing, gross
|
|
3.0
|
|
|
3.8
|
|
|
(21.4
|
)%
|
|
8.1
|
|
|
9.5
|
|
|
(14.9
|
)%
|
|
Property operating expenses
|
|
80.9
|
|
|
78.8
|
|
|
2.7
|
%
|
|
231.2
|
|
|
225.5
|
|
|
2.5
|
%
|
|
Income from property operations (1)
|
|
$
|
103.7
|
|
|
$
|
98.7
|
|
|
5.0
|
%
|
|
$
|
310.7
|
|
|
$
|
297.5
|
|
|
4.4
|
%
|
|
Occupied sites (5)
|
|
63,356
|
|
|
63,100
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Core manufactured home site figures and occupancy averages:
|
|
|
|
|
|
|
|
|
|
|
Total sites
|
|
68,595
|
|
|
68,633
|
|
|
|
|
|
68,611
|
|
|
68,636
|
|
|
|
|
|
Occupied sites
|
|
63,266
|
|
|
63,020
|
|
|
|
|
|
63,223
|
|
|
62,971
|
|
|
|
|
|
Occupancy %
|
|
92.2
|
%
|
|
91.8
|
%
|
|
|
|
|
92.1
|
%
|
|
91.7
|
%
|
|
|
|
|
Monthly base rent per site
|
|
$
|
553
|
|
|
$
|
539
|
|
|
|
|
|
$
|
551
|
|
|
$
|
537
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Resort base rental income:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Annual
|
|
$
|
25.1
|
|
|
$
|
23.9
|
|
|
5.4
|
%
|
|
$
|
74.1
|
|
|
$
|
70.4
|
|
|
5.4
|
%
|
|
Seasonal
|
|
3.2
|
|
|
3.1
|
|
|
1.3
|
%
|
|
18.9
|
|
|
18.0
|
|
|
5.0
|
%
|
|
Transient
|
|
14.1
|
|
|
12.9
|
|
|
8.9
|
%
|
|
28.2
|
|
|
25.5
|
|
|
10.3
|
%
|
|
Total resort base rental income
|
|
$
|
42.4
|
|
|
$
|
39.9
|
|
|
6.2
|
%
|
|
$
|
121.2
|
|
|
$
|
113.9
|
|
|
6.5
|
%
|
____________________________
|
1.
|
|
2014 Core properties include properties we owned and operated during
all of 2013 and 2014. Income from property operations excludes
property management expenses and the GAAP deferral of right-to-use
contract upfront payments and related commissions, net.
|
|
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.
|
|
Occupied sites as of the end of the period shown. Occupied sites
have increased by 168 from 63,188 at December 31, 2013.
|
|
|
|
|
|
|
|
Acquisitions - Income from Property Operations (1)
|
|
|
|
(In millions, unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
Nine Months
|
|
|
|
Quarter Ended
|
|
Ended
|
|
|
|
September 30,
|
|
September 30,
|
|
|
|
2014
|
|
2014
|
|
Community base rental income
|
|
$
|
2.0
|
|
|
$
|
6.0
|
|
Resort base rental income
|
|
1.9
|
|
|
5.0
|
|
Utility income and other property income
|
|
0.4
|
|
|
0.9
|
|
Property operating revenues
|
|
4.3
|
|
|
11.9
|
|
|
|
|
|
|
|
|
Property operating expenses
|
|
2.3
|
|
|
5.2
|
|
Income from property operations
|
|
$
|
2.0
|
|
|
$
|
6.7
|
______________________
|
1.
|
|
Represents actual performance of five properties we acquired during
2013 and five properties we acquired during 2014. Excludes property
management expenses.
|
|
|
|
|
|
|
|
Income from Rental Home Operations
|
|
|
|
(In millions, except occupied rentals, unaudited)
|
|
|
|
|
|
|
|
|
|
Quarters Ended
|
|
Nine Months Ended
|
|
|
|
September 30,
|
|
September 30,
|
|
|
|
2014
|
|
2013
|
|
2014
|
|
2013
|
|
Manufactured homes:
|
|
|
|
|
|
|
|
|
|
|
|
|
New home
|
|
$
|
5.6
|
|
|
$
|
5.6
|
|
|
$
|
17.2
|
|
|
$
|
16.6
|
|
Used home
|
|
7.8
|
|
|
7.7
|
|
|
23.6
|
|
|
22.9
|
|
Rental operations revenues (1)
|
|
13.4
|
|
|
13.3
|
|
|
40.8
|
|
|
39.5
|
|
Rental operations expense
|
|
1.8
|
|
|
2.0
|
|
|
5.4
|
|
|
5.3
|
|
Income from rental operations, before depreciation
|
|
11.6
|
|
|
11.3
|
|
|
35.4
|
|
|
34.2
|
|
Depreciation on rental homes
|
|
2.8
|
|
|
1.7
|
|
|
8.3
|
|
|
4.8
|
|
Income from rental operations, after depreciation
|
|
$
|
8.8
|
|
|
$
|
9.6
|
|
|
$
|
27.1
|
|
|
$
|
29.4
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Occupied rentals: (2)
|
|
|
|
|
|
|
|
|
|
|
|
|
New
|
|
2,087
|
|
|
2,032
|
|
|
|
|
|
|
|
Used
|
|
3,253
|
|
|
3,380
|
|
|
|
|
|
|
|
Total occupied rental sites
|
|
5,340
|
|
|
5,412
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As of
|
|
|
|
September 30, 2014
|
|
September 30, 2013
|
|
|
|
|
|
Net of
|
|
|
|
Net of
|
|
Cost basis in rental homes: (3)
|
|
Gross
|
|
Depreciation
|
|
Gross
|
|
Depreciation
|
|
New
|
|
$
|
110.7
|
|
|
$
|
94.2
|
|
|
$
|
112.6
|
|
|
$
|
100.4
|
|
Used
|
|
64.2
|
|
|
50.5
|
|
|
63.7
|
|
|
55.6
|
|
Total rental homes
|
|
$
|
174.9
|
|
|
$
|
144.7
|
|
|
$
|
176.3
|
|
|
$
|
156.0
|
____________________________
|
1.
|
|
For the quarters ended September 30, 2014 and 2013, approximately
$9.8 million and $9.7 million, respectively, are included in the
Community base rental income in the Consolidated Income from
Property Operations table on page 7. For the nine months ended
September 30, 2014 and 2013, approximately $29.6 million and $28.9
million, respectively, are included in the Community base rental
income in the Consolidated Income from Property Operations table on
page 7. The remainder of the rental operations revenue is included
in the Rental home income in the Consolidated Income from Property
Operations table on page 7.
|
|
2.
|
|
Occupied rentals as of the end of the period shown in our Core
portfolio. Includes 15 homes rented through our Echo joint venture.
|
|
3.
|
|
Includes both occupied and unoccupied rental homes. New home cost
basis does not include the costs associated with our Echo joint
venture. At September 30, 2014, our investment in the Echo joint
venture was $6.0 million.
|
|
|
|
|
|
Total Sites and Home Sales
|
|
|
|
(In thousands, except sites and home sale volumes, unaudited)
|
|
|
|
|
|
Summary of Total Sites as of September 30, 2014
|
|
|
|
|
|
Sites
|
|
Community sites
|
|
69,900
|
|
Resort sites:
|
|
|
|
Annuals
|
|
24,800
|
|
Seasonal
|
|
9,100
|
|
Transient
|
|
10,100
|
|
Membership (1)
|
|
24,100
|
|
Joint Ventures (2)
|
|
3,100
|
|
Total
|
|
141,100
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Home Sales - Select Data
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Quarters Ended
|
|
Nine Months Ended
|
|
|
|
September 30,
|
|
September 30,
|
|
|
|
2014
|
|
2013
|
|
2014
|
|
2013
|
|
Total New Home Sales Volume (3)
|
|
106
|
|
|
36
|
|
|
237
|
|
|
69
|
|
New Home Sales Volume - ECHO joint venture
|
|
52
|
|
|
12
|
|
|
94
|
|
|
14
|
|
New Home Sales Gross Revenues(3)
|
|
$
|
4,051
|
|
|
$
|
1,530
|
|
|
$
|
9,771
|
|
|
$
|
3,269
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Used Home Sales Volume
|
|
424
|
|
|
402
|
|
|
1,144
|
|
|
1,141
|
|
Used Home Sales Gross Revenues
|
|
$
|
4,666
|
|
|
$
|
3,885
|
|
|
$
|
10,684
|
|
|
$
|
9,059
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Brokered Home Resales Volume
|
|
251
|
|
|
176
|
|
|
720
|
|
|
623
|
|
Brokered Home Resale Revenues, net
|
|
$
|
336
|
|
|
$
|
225
|
|
|
$
|
916
|
|
|
$
|
840
|
__________________________
|
1.
|
|
Sites primarily utilized by approximately 97,000 members. Includes
approximately 5,000 sites rented on an annual basis.
|
|
2.
|
|
Joint venture income is included in the Equity in income from
unconsolidated joint ventures in the Consolidated Income Statement
on page 5.
|
|
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. The quarter and nine months
ended September 30, 2013 also include one third-party dealer sale.
|
|
|
|
2014 Guidance - Selected Financial Data (1)
|
|
Our guidance acknowledges the existence of volatile economic
conditions, which may impact our current guidance assumptions.
Factors impacting 2014 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) performance of the chattel loans we purchased in
connection with a prior acquisition; (viii) our ability to integrate
and operate recent acquisitions in accordance with our estimates;
(ix) completion of pending transactions in their entirety and on
assumed schedule; and (x) ongoing legal matters and related fees.
|
|
|
|
|
|
(In millions, except per share data, unaudited)
|
|
|
|
|
|
|
|
Year Ended
|
|
|
|
December 31, 2014
|
|
Income from property operations - 2014 Core (2)
|
|
$
|
412.7
|
|
|
Income from property operations - Acquisitions (3)
|
|
9.1
|
|
|
Property management and general and administrative
|
|
(68.9
|
)
|
|
Other income and expenses
|
|
19.6
|
|
|
Financing costs and other
|
|
(121.6
|
)
|
|
Normalized FFO (4)
|
|
250.9
|
|
|
Change in fair value of contingent consideration asset
|
|
0.1
|
|
|
Transaction costs
|
|
(1.2
|
)
|
|
Early debt retirement
|
|
(5.1
|
)
|
|
FFO (4)
|
|
244.7
|
|
|
Depreciation on real estate and other
|
|
(105.0
|
)
|
|
Depreciation on rental homes
|
|
(11.0
|
)
|
|
Deferral of right-to-use contract sales revenue and commission, net
|
|
(3.3
|
)
|
|
Income allocated to OP units
|
|
(10.0
|
)
|
|
Gain on sale of land parcel
|
|
0.9
|
|
|
Net income available to common shares
|
|
$
|
116.3
|
|
|
|
|
|
|
|
Normalized FFO per share - fully diluted
|
|
$2.71 - $2.77
|
|
FFO per share - fully diluted
|
|
$2.65 - $2.71
|
|
Net income per common share - fully diluted (5)
|
|
$1.35 - $1.41
|
|
|
|
|
|
|
Weighted average shares outstanding - fully diluted
|
|
91.5
|
|
_____________________________________
|
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, Normalized FFO per share, FFO, FFO
per share, Net Income and Net Income per share could vary materially
from amounts presented if any of our assumptions are incorrect.
|
|
2.
|
|
See page 14 for 2014 Core Guidance Assumptions. Amount represents
2013 income from property operations from the 2014 Core Properties
of $395.4 million multiplied by an estimated growth rate of 4.4%.
|
|
3.
|
|
See page 15 for the 2014 Assumptions regarding the Acquisition
Properties.
|
|
4.
|
|
See page 22 for definitions of Normalized FFO and FFO.
|
|
5.
|
|
Net income per fully diluted common share is calculated before
Income allocated to OP Units.
|
|
|
|
Fourth Quarter 2014 Guidance - Selected Financial Data (1)
|
|
Our guidance acknowledges the existence of volatile economic
conditions, which may impact our current guidance assumptions.
Factors impacting 2014 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) performance of the chattel loans we purchased in
connection with a prior acquisition; (viii) our ability to integrate
and operate recent acquisitions in accordance with our estimates;
(ix) completion of pending transactions in their entirety and on
assumed schedule; and (x) ongoing legal matters and related fees.
|
|
|
|
|
|
(In millions, except per share data, unaudited)
|
|
|
|
|
|
|
|
Quarter Ended
|
|
|
|
December 31, 2014
|
|
Income from property operations - 2014 Core (2)
|
|
$
|
102.0
|
|
|
Income from property operations - Acquisitions (3)
|
|
2.4
|
|
|
Property management and general and administrative
|
|
(17.7
|
)
|
|
Other income and expenses
|
|
2.1
|
|
|
Financing costs and other
|
|
(30.4
|
)
|
|
Normalized FFO and FFO (4)
|
|
58.4
|
|
|
Depreciation on real estate and other
|
|
(25.6
|
)
|
|
Depreciation on rental homes
|
|
(2.7
|
)
|
|
Deferral of right-to-use contract sales revenue and commission, net
|
|
(1.0
|
)
|
|
Income allocated to OP units
|
|
(2.3
|
)
|
|
Net income available to common shares
|
|
$
|
26.8
|
|
|
|
|
|
|
|
Normalized FFO per share - fully diluted
|
|
$0.61 - $0.67
|
|
FFO per share - fully diluted
|
|
$0.61 - $0.67
|
|
Net income per common share - fully diluted (5)
|
|
$0.29 - $0.35
|
|
|
|
|
|
|
Weighted average shares outstanding - fully diluted
|
|
91.5
|
|
_____________________________________
|
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, Normalized FFO per share, FFO, FFO
per share, Net Income and Net Income per share could vary materially
from amounts presented above if any of our assumptions are incorrect.
|
|
2.
|
|
See page 14 for 2014 Core Guidance Assumptions. Amount represents
2013 income from property operations from the 2014 Core Properties
of $97.9 million multiplied by an estimated growth rate of 4.2%.
|
|
3.
|
|
See page 15 for the 2014 Assumptions regarding the Acquisition
Properties.
|
|
4.
|
|
See page 22 for definitions of Normalized FFO and FFO.
|
|
5.
|
|
Net income per fully diluted common share is calculated before
Income allocated to OP Units.
|
|
|
|
|
|
|
|
|
|
|
|
|
2014 Core (1)
|
|
Guidance Assumptions - Income from Property Operations
|
|
|
|
(In millions, unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fourth
|
|
|
|
Year Ended
|
|
2014
|
|
Quarter Ended
|
|
Quarter 2014
|
|
|
|
December 31,
|
|
Growth
|
|
December 31,
|
|
Growth
|
|
|
|
2013
|
|
Factors (2)
|
|
2013
|
|
Factors (2)
|
|
Community base rental income
|
|
$
|
406.6
|
|
|
3.0
|
%
|
|
$
|
102.4
|
|
|
2.9
|
%
|
|
Rental home income
|
|
14.2
|
|
|
3.6
|
%
|
|
3.7
|
|
|
(1.4
|
)%
|
|
Resort base rental income (3)
|
|
147.0
|
|
|
6.2
|
%
|
|
33.1
|
|
|
5.3
|
%
|
|
Right-to-use annual payments
|
|
48.0
|
|
|
(5.9
|
)%
|
|
12.1
|
|
|
(6.8
|
)%
|
|
Right-to-use contracts current period, gross
|
|
13.1
|
|
|
1.3
|
%
|
|
3.2
|
|
|
3.6
|
%
|
|
Utility and other income
|
|
63.6
|
|
|
7.3
|
%
|
|
15.0
|
|
|
7.2
|
%
|
|
Property operating revenues
|
|
692.5
|
|
|
3.5
|
%
|
|
169.5
|
|
|
3.0
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Property operating, maintenance, and real estate taxes
|
|
(276.9
|
)
|
|
3.2
|
%
|
|
(66.2
|
)
|
|
2.7
|
%
|
|
Rental home operating and maintenance
|
|
(7.4
|
)
|
|
(1.3
|
)%
|
|
(2.1
|
)
|
|
(7.0
|
)%
|
|
Sales and marketing, gross
|
|
(12.8
|
)
|
|
(16.0
|
)%
|
|
(3.3
|
)
|
|
(19.4
|
)%
|
|
Property operating expenses
|
|
(297.1
|
)
|
|
2.2
|
%
|
|
(71.6
|
)
|
|
1.4
|
%
|
|
Income from property operations (1)
|
|
$
|
395.4
|
|
|
4.4
|
%
|
|
$
|
97.9
|
|
|
4.2
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Resort base rental income:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Annual
|
|
$
|
94.6
|
|
|
5.5
|
%
|
|
$
|
24.3
|
|
|
5.6
|
%
|
|
Seasonal
|
|
22.9
|
|
|
5.0
|
%
|
|
4.9
|
|
|
5.0
|
%
|
|
Transient
|
|
29.5
|
|
|
9.4
|
%
|
|
3.9
|
|
|
3.8
|
%
|
|
Total resort base rental income
|
|
$
|
147.0
|
|
|
6.2
|
%
|
|
$
|
33.1
|
|
|
5.3
|
%
|
_______________________________
|
1.
|
|
2014 Core properties include properties we expect to own and operate
during all of 2013 and 2014. Excludes property management expenses
and the GAAP deferral of right to use contract upfront payments and
related commissions, net.
|
|
2.
|
|
Management’s estimate of the growth of property operations in the
2014 Core Properties compared to actual 2013 performance. Represents
our estimate of the mid-point of a range of possible outcomes.
Calculations prepared using actual results without rounding. Actual
growth could vary materially from amounts presented above if any of
our assumptions are incorrect.
|
|
3.
|
|
See Resort base rental income table included below within this table.
|
|
|
|
2014 Assumptions Regarding Acquisition Properties (1)
|
|
|
|
(In millions, unaudited)
|
|
|
|
|
|
|
|
|
|
Year Ended
|
|
Quarter Ended
|
|
|
|
December 31, 2014 (2)
|
|
December 31, 2014 (2)
|
|
Community base rental income
|
|
$
|
8.0
|
|
|
$
|
2.0
|
|
|
Rental home income
|
|
0.1
|
|
|
—
|
|
|
Resort base rental income
|
|
6.9
|
|
|
1.9
|
|
|
Utility income and other property income
|
|
1.1
|
|
|
0.3
|
|
|
Property operating revenues
|
|
16.1
|
|
|
4.2
|
|
|
|
|
|
|
|
|
|
|
Property operating, maintenance, and real estate taxes
|
|
(7.0
|
)
|
|
(1.8
|
)
|
|
Property operating expenses
|
|
(7.0
|
)
|
|
(1.8
|
)
|
|
Income from property operations
|
|
$
|
9.1
|
|
|
$
|
2.4
|
|
___________________________________
|
1.
|
|
The acquisition properties include five properties acquired during
2013 and five properties acquired during 2014.
|
|
2.
|
|
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 Acquisition Properties. Actual
income from property operations for the Acquisition Properties could
vary materially from amounts presented above if any of our
assumptions are incorrect.
|
|
|
|
Preliminary 2015 Guidance - Selected Financial Data (1)
|
|
|
|
Our guidance acknowledges the existence of volatile economic
conditions, which may impact our current guidance assumptions.
Factors impacting 2015 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) performance of the chattel loans we purchased in
connection with a prior acquisition; (viii) our ability to integrate
and operate recent acquisitions in accordance with our estimates;
(ix) completion of pending transactions in their entirety and on
assumed schedule; and (x) ongoing legal matters and related fees.
|
|
|
|
|
|
(In millions, except per share data unaudited)
|
|
|
|
|
|
|
|
Year Ended
|
|
|
|
December 31, 2015
|
|
Income from property operations - 2015 Core (2)
|
|
$
|
437.8
|
|
|
Income from property operations - Acquisitions
|
|
3.4
|
|
|
Property management and general and administrative
|
|
(70.7
|
)
|
|
Other income and expenses
|
|
15.9
|
|
|
Financing costs and other
|
|
(117.9
|
)
|
|
Normalized FFO and FFO (3)
|
|
268.5
|
|
|
Depreciation on real estate and other
|
|
(104.8
|
)
|
|
Depreciation on rental homes
|
|
(11.1
|
)
|
|
Deferral of right-to-use contract sales revenue and commission, net
|
|
(4.2
|
)
|
|
Income allocated to OP units
|
|
(11.8
|
)
|
|
Net income available to common shares
|
|
$
|
136.6
|
|
|
|
|
|
|
|
Normalized FFO per share - fully diluted
|
|
$2.88 - $2.98
|
|
FFO per share - fully diluted
|
|
$2.88 - $2.98
|
|
Net income per common share - fully diluted (4)
|
|
$1.57 - $1.67
|
|
|
|
|
|
|
Weighted average shares outstanding - fully diluted
|
|
91.7
|
|
_____________________________________
|
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, Normalized FFO per share, FFO, FFO
per share, Net Income and Net Income per share could vary materially
from amounts presented above if any of our assumptions is incorrect.
|
|
2.
|
|
See page 17 for 2015 Core Guidance Assumptions. Amount represents
2014 income from property operations from the 2015 Core Properties
of $419.6 million multiplied by an estimated growth rate of 4.3%.
|
|
3.
|
|
See page 22 for definitions of Normalized FFO and FFO.
|
|
4.
|
|
Net income per fully diluted common share is calculated before
Income allocated to OP Units.
|
|
|
|
|
|
|
|
Preliminary 2015 Core (1)
|
|
Guidance Assumptions - Income from Property Operations
|
|
|
|
(In millions, unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
2015 Growth
|
|
|
|
Estimated 2014
|
|
Factors (2)
|
|
Community base rental income
|
|
$
|
427.0
|
|
|
2.8
|
%
|
|
Rental home income
|
|
14.8
|
|
|
(4.7
|
)%
|
|
Resort base rental income (3)
|
|
159.1
|
|
|
4.3
|
%
|
|
Right-to-use annual payments
|
|
45.1
|
|
|
0.1
|
%
|
|
Right-to-use contracts current period, gross
|
|
13.3
|
|
|
1.5
|
%
|
|
Utility and other income
|
|
69.2
|
|
|
6.3
|
%
|
|
Property operating revenues
|
|
728.5
|
|
|
3.1
|
%
|
|
|
|
|
|
|
|
|
|
Property operating, maintenance, and real estate taxes
|
|
(290.7
|
)
|
|
1.8
|
%
|
|
Rental home operating and maintenance
|
|
(7.4
|
)
|
|
(3.5
|
)%
|
|
Sales and marketing, gross
|
|
(10.8
|
)
|
|
(2.6
|
)%
|
|
Property operating expenses
|
|
(308.9
|
)
|
|
1.5
|
%
|
|
Income from property operations
|
|
$
|
419.6
|
|
|
4.3
|
%
|
|
|
|
|
|
|
|
|
|
Resort base rental income:
|
|
|
|
|
|
|
|
Annual
|
|
$
|
100.5
|
|
|
5.0
|
%
|
|
Seasonal
|
|
24.5
|
|
|
3.0
|
%
|
|
Transient
|
|
34.1
|
|
|
3.0
|
%
|
|
Total resort base rental income
|
|
$
|
159.1
|
|
|
4.3
|
%
|
_______________________________
|
1.
|
|
2015 Core properties include properties we expect to own and operate
during all of 2014 and 2015. Excludes property management expenses
and the GAAP deferral of right to use contract upfront payments and
related commissions, net.
|
|
2.
|
|
Management’s estimate of the growth of property operations in the
2015 Core Properties compared to actual 2014 performance. Represents
our estimate of the mid-point of a range of possible outcomes.
Calculations prepared using actual results without rounding. Actual
growth 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.
|
|
|
|
|
|
Right-To-Use Memberships - Select Data
|
|
|
|
(In thousands, except member count, number of Zone Park Passes,
number of annuals and number of upgrades, unaudited)
|
|
|
|
|
|
|
|
|
|
Year Ended December 31,
|
|
|
|
2011
|
|
|
2012
|
|
|
2013
|
|
|
2014 (1)
|
|
2015 (1)
|
|
Member Count (2)
|
|
99,567
|
|
|
|
96,687
|
|
|
|
98,277
|
|
|
|
96,650
|
|
|
96,500
|
|
Right-to-use annual payments (3)
|
|
$
|
49,122
|
|
|
|
$
|
47,662
|
|
|
|
$
|
47,967
|
|
|
|
$
|
45,100
|
|
|
$
|
45,200
|
|
Zone Park Pass (ZPP) Origination (4)
|
|
7,404
|
|
|
|
10,198
|
|
|
|
15,607
|
|
|
|
18,000
|
|
|
20,500
|
|
ZPP Sales
|
|
7,404
|
|
|
|
8,909
|
|
|
|
9,289
|
|
|
|
9,700
|
|
|
11,000
|
|
RV Dealer ZPP Activations
|
|
—
|
|
|
|
1,289
|
|
|
|
6,318
|
|
|
|
8,300
|
|
|
9,500
|
|
Number of annuals (5)
|
|
3,555
|
|
|
|
4,280
|
|
|
|
4,830
|
|
|
|
5,085
|
|
|
5,325
|
|
Resort base rental income from annuals
|
|
$
|
8,069
|
|
|
|
$
|
9,585
|
|
|
|
$
|
11,148
|
|
|
|
$
|
12,500
|
|
|
$
|
13,550
|
|
Number of upgrades (6)
|
|
3,930
|
|
|
|
3,069
|
|
|
|
2,999
|
|
|
|
3,100
|
|
|
3,150
|
|
Upgrade contract initiations (7)
|
|
$
|
17,663
|
|
|
|
$
|
13,431
|
|
|
|
$
|
13,142
|
|
|
|
$
|
13,300
|
|
|
$
|
13,500
|
|
Resort base rental income from seasonals/transients
|
|
$
|
10,852
|
|
|
|
$
|
11,042
|
|
|
|
$
|
12,692
|
|
|
|
$
|
13,600
|
|
|
$
|
14,800
|
|
Utility and other income
|
|
$
|
2,444
|
|
|
|
$
|
2,407
|
|
|
|
$
|
2,293
|
|
|
|
$
|
2,400
|
|
|
$
|
2,500
|
________________________________
|
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
are 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.
|
|
The year ended December 31, 2012 and the year ending December 31,
2013, includes $0.1 million and $2.1 million, respectively, of
revenue recognized related to our right-to-use annual memberships
activated through our dealer program. During the third quarter of
2013, we changed the accounting treatment of revenues and expenses
associated with the RV dealer program to recognize as revenue only
the cash received from members generated by the program.
|
|
4.
|
|
ZPPs allow access to any of five geographic areas in the United
States.
|
|
5.
|
|
Members who rent a specific site for an entire year in connection
with their right to use contract.
|
|
6.
|
|
Existing customers that have upgraded agreements are eligible for
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.
|
|
7.
|
|
Revenues associated with contract upgrades, included in Right-to-use
contracts current period, gross, on our Consolidated Income
Statement on page 5.
|
|
|
|
|
|
|
Balance Sheet
|
|
|
|
(In thousands, except share and per share data)
|
|
|
|
|
|
|
|
September 30,
2014
|
|
December 31,
2013
|
|
|
(unaudited)
|
|
|
Assets
|
|
|
|
|
|
|
Investment in real estate:
|
|
|
|
|
|
|
Land
|
$
|
1,068,236
|
|
|
$
|
1,025,246
|
|
|
Land improvements
|
2,706,662
|
|
|
2,667,213
|
|
|
Buildings and other depreciable property
|
551,522
|
|
|
535,647
|
|
|
|
4,326,420
|
|
|
4,228,106
|
|
|
Accumulated depreciation
|
(1,143,800
|
)
|
|
(1,058,540
|
)
|
|
Net investment in real estate
|
3,182,620
|
|
|
3,169,566
|
|
|
Cash
|
109,144
|
|
|
58,427
|
|
|
Notes receivable, net
|
38,051
|
|
|
42,990
|
|
|
Investment in joint ventures
|
15,414
|
|
|
11,583
|
|
|
Deferred financing costs, net
|
22,676
|
|
|
19,873
|
|
|
Deferred commission expense
|
27,885
|
|
|
25,251
|
|
|
Escrow deposits, goodwill, and other assets, net
|
55,358
|
|
|
64,619
|
|
|
Total Assets
|
$
|
3,451,148
|
|
|
$
|
3,392,309
|
|
|
Liabilities and Equity
|
|
|
|
|
|
|
Liabilities:
|
|
|
|
|
|
|
Mortgage notes payable
|
$
|
2,005,942
|
|
|
$
|
1,992,368
|
|
|
Term loan
|
200,000
|
|
|
200,000
|
|
|
Unsecured lines of credit
|
—
|
|
|
—
|
|
|
Accrued payroll and other operating expenses
|
85,879
|
|
|
65,157
|
|
|
Deferred revenue – upfront payments from right-to-use contracts
|
72,976
|
|
|
68,673
|
|
|
Deferred revenue – right-to-use annual payments
|
10,762
|
|
|
11,136
|
|
|
Accrued interest payable
|
8,865
|
|
|
9,416
|
|
|
Rents and other customer payments received in advance and security
deposits
|
60,560
|
|
|
59,601
|
|
|
Distributions payable
|
29,620
|
|
|
22,753
|
|
|
Total Liabilities
|
2,474,604
|
|
|
2,429,104
|
|
|
Equity:
|
|
|
|
|
|
|
Stockholders’ Equity:
|
|
|
|
|
|
|
Preferred stock, $0.01 par value 9,945,539 shares authorized as of
September 30, 2014 and December 31, 2013; none issued and
outstanding as of September 30, 2014 and December 31, 2013. As of
September 30, 2014 and December 31, 2013, includes 125 shares 6%
Series D Cumulative Preferred stock and 250 shares 18.75% Series E
Cumulative Preferred stock; both issued and outstanding
|
—
|
|
|
—
|
|
|
6.75% Series C Cumulative Redeemable Perpetual Preferred Stock,
$0.01 par value, 54,461 shares authorized and 54,458 issued and
outstanding as of September 30, 2014 and December 31, 2013 at
liquidation value
|
136,144
|
|
|
136,144
|
|
|
Common stock, $0.01 par value 200,000,000 shares authorized as of
September 30, 2014 and December 31, 2013; 83,905,662 and 83,313,677
shares issued and outstanding as of September 30, 2014 and December
31, 2013, respectively
|
838
|
|
|
834
|
|
|
Paid-in capital
|
1,028,912
|
|
|
1,021,365
|
|
|
Distributions in excess of accumulated earnings
|
(256,340
|
)
|
|
(264,083
|
)
|
|
Accumulated other comprehensive gain (loss)
|
141
|
|
|
(927
|
)
|
|
Total Stockholders’ Equity
|
909,695
|
|
|
893,333
|
|
|
Non-controlling interests – Common OP Units
|
66,849
|
|
|
69,872
|
|
|
Total Equity
|
976,544
|
|
|
963,205
|
|
|
Total Liabilities and Equity
|
$
|
3,451,148
|
|
|
$
|
3,392,309
|
|
|
|
|
|
|
Debt Maturity Schedule & Summary
|
|
|
|
Secured Debt Maturity Schedule as of September 30, 2014
|
|
(In thousands, unaudited)
|
|
|
|
|
|
Year
|
|
Amount
|
|
2014
|
|
—
|
|
2015
|
|
284,194
|
|
2016
|
|
223,223
|
|
2017
|
|
39,576
|
|
2018
|
|
207,684
|
|
2019
|
|
209,138
|
|
2020
|
|
126,722
|
|
2021+
|
|
900,758
|
|
Total (1)
|
|
$
|
1,991,295
|
|
|
|
|
|
|
|
|
|
Debt Summary as of September 30, 2014
|
|
(In millions, except weighted average interest and average years
to maturity, unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
Secured
|
|
Unsecured
|
|
|
|
|
|
Weighted
|
|
Average
|
|
|
|
Weighted
|
|
Average
|
|
|
|
Weighted
|
|
Average
|
|
|
|
|
|
Average
|
|
Years to
|
|
|
|
Average
|
|
Years to
|
|
|
|
Average
|
|
Years to
|
|
|
|
Balance
|
|
Interest (2)
|
|
Maturity
|
|
Balance
|
|
Interest (2)
|
|
Maturity
|
|
Balance
|
|
Interest (2)
|
|
Maturity
|
|
Consolidated Debt
|
|
$
|
2,206
|
|
|
5.0
|
%
|
|
7.4
|
|
$
|
2,006
|
|
|
5.2
|
%
|
|
7.8
|
|
|
$200
|
|
2.8
|
%
|
|
2.8
|
____________________________
|
1.
|
|
Represents our mortgage notes payable excluding $14.6 million net
note premiums and our $200 million term loan as of September 30,
2014.
|
|
2.
|
|
Includes loan costs amortization.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Market Capitalization
|
|
|
|
|
(In millions, except share and OP Unit data, unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Capital Structure as of September 30, 2014
|
|
|
|
|
Total
|
% of Total
|
Total
|
|
% of Total
|
|
% of Total
|
|
|
|
Secured debt
|
|
|
|
|
|
$
|
2,006
|
|
90.9
|
%
|
|
|
|
|
|
|
Unsecured debt
|
|
|
|
|
|
200
|
|
9.1
|
%
|
|
|
|
|
|
|
Total debt
|
|
|
|
|
|
$
|
2,206
|
|
100.0
|
%
|
|
35.6
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common Shares
|
|
83,905,662
|
|
92.1
|
%
|
|
|
|
|
|
|
|
|
|
|
OP Units
|
|
7,232,567
|
|
7.9
|
%
|
|
|
|
|
|
|
|
|
|
|
Total Common Shares and OP Units
|
|
91,138,229
|
|
100.0
|
%
|
|
|
|
|
|
|
|
|
|
|
Common Share price
|
|
$
|
42.36
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fair value of Common Shares
|
|
|
|
|
|
$
|
3,861
|
|
96.6
|
%
|
|
|
|
|
|
|
Perpetual Preferred Equity
|
|
|
|
|
|
136
|
|
3.4
|
%
|
|
|
|
|
|
|
Total Equity
|
|
|
|
|
|
$
|
3,997
|
|
100.0
|
%
|
|
64.4
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total market capitalization
|
|
|
|
|
|
$
|
6,203
|
|
|
|
|
100.0
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Perpetual Preferred Equity as of September 30, 2014
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Annual Dividend
|
|
Series
|
|
Callable Date
|
|
|
Outstanding Shares
|
|
Liquidation Value
|
|
Per Share
|
|
Value
|
|
6.75% Series C
|
|
9/7/2017
|
|
|
54,458
|
|
$136
|
|
|
$168.75
|
|
$
|
9.2
|
|
|
|
Non-GAAP Financial Measures
|
|
|
|
Funds from Operations (“FFO”) is a non-GAAP financial
measure. We believe FFO, as defined by the Board of Governors of
the National Association of Real Estate Investment Trusts
(“NAREIT”), is generally an appropriate 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.
|
|
|
|
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 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.
|
|
|
|
Normalized Funds from Operations (“Normalized FFO”) is a
non-GAAP measure. We define Normalized FFO as FFO excluding the
following non-operating income and expense items: a) the financial
impact of contingent consideration; b) gains and losses from early
debt extinguishment, including prepayment penalties and defeasance
costs; c) property acquisition and other transaction costs related
to mergers and acquisitions; and d) other miscellaneous
non-comparable items.
|
|
|
|
We believe that FFO and Normalized FFO are helpful to investors as
supplemental measures of the performance of an equity REIT. We
believe that by excluding the effect of depreciation, amortization
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 mergers
and acquisitions and the change in fair value of our contingent
consideration asset 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.
|
|
|
|
Funds available for distribution (“FAD”) is a non-GAAP
financial measure. We define FAD as Normalized FFO less
non-revenue producing capital expenditures.
|
|
|
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Investors should review FFO, Normalized FFO and FAD, along with GAAP
net income and cash flow from operating activities, investing
activities and financing activities, when evaluating an equity
REIT’s operating performance. We compute FFO in accordance with our
interpretation of standards established by 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.
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. FFO, Normalized FFO and FAD 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.
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Copyright Business Wire 2014