ELS Reports Fourth Quarter Results
Continued Strong Performance
Equity LifeStyle Properties, Inc. (NYSE: ELS) (referred to herein as “we,” “us,” and “our”) today announced results for the
quarter and year ended December 31, 2018. All per share results are reported on a fully diluted basis unless otherwise
noted.
Financial Results for the Quarter and Year Ended December 31, 2018
For the quarter ended December 31, 2018, total revenues increased $13.5 million, or 5.9 percent, to $243.5 million compared
to $230.0 million for the same period in 2017. Net income available for Common Stockholders for the quarter ended December 31,
2018 increased $5.2 million, or $0.05 per Common Share, to $50.2 million, or $0.56 per Common Share, compared to $45.0 million, or
$0.51 per Common Share, for the same period in 2017.
For the year ended December 31, 2018, total revenues increased $61.4 million, or 6.6 percent, to $986.7 million compared to
$925.3 million for the same period in 2017. Net income available for Common Stockholders for the year ended December 31, 2018
increased $22.7 million, or $0.21 per Common Share, to $212.6 million, or $2.38 per Common Share, compared to $189.9 million, or
$2.17 per Common Share, for the same period in 2017.
Non-GAAP Financial Measures and Portfolio Performance
For the quarter ended December 31, 2018, Funds from Operations (“FFO”) available for Common Stock and OP Unit holders
increased $11.0 million, or $0.11 per Common Share, to $90.4 million, or $0.95 per Common Share, compared to $79.4 million, or
$0.84 per Common Share, for the same period in 2017. For the year ended December 31, 2018, FFO available for Common Stock and
OP Unit holders increased $40.3 million, or $0.36 per Common Share, to $372.0 million, or $3.91 per Common Share, compared to
$331.7 million, or $3.55 per Common Share, for the same period in 2017.
For the quarter ended December 31, 2018, Normalized Funds from Operations (“Normalized FFO”) available for Common Stock and
OP Unit holders increased $9.7 million, or $0.09 per Common Share, to $92.3 million, or $0.97 per Common Share, compared to $82.6
million, or $0.88 per Common Share, for the same period in 2017. For the year ended December 31, 2018, Normalized FFO
available for Common Stock and OP Unit holders increased $32.0 million, or $0.27 per Common Share, to $367.9 million, or $3.87 per
Common Share, compared to $335.9 million, or $3.60 per Common Share, for the same period in 2017.
For the quarter ended December 31, 2018, property operating revenues, excluding deferrals, increased $16.9 million to
$232.2 million compared to $215.3 million for the same period in 2017. For the year ended December 31, 2018, property
operating revenues, excluding deferrals, increased $60.1 million to $936.0 million compared to $875.9 million for the same period
in 2017. For the quarter ended December 31, 2018, income from property operations, excluding deferrals and property
management, increased $13.8 million to $138.8 million compared to $125.0 million for the same period in 2017. For the year ended
December 31, 2018, income from property operations, excluding deferrals and property management, increased $38.9 million to
$547.7 million compared to $508.8 million for the same period in 2017.
For the quarter ended December 31, 2018, Core property operating revenues, excluding deferrals, increased approximately 4.5
percent and Core income from property operations, excluding deferrals and property management, increased approximately 6.3 percent
compared to the same period in 2017. For the year ended December 31, 2018, Core property operating revenues, excluding
deferrals, increased approximately 4.8 percent and Core income from property operations, excluding deferrals and property
management, increased approximately 5.2 percent compared to the same period in 2017.
Investment Activity
On November 20, 2018, we completed the acquisition of Timber Creek, a 364-site RV Resort in Westerly, Rhode Island. The purchase
price was $21.1 million and was funded with available cash and proceeds from debt financing transactions that closed during the
quarter.
On December 13, 2018, we completed the acquisition of Palm Lake, a 915-site manufactured home community in Riviera Beach,
Florida. The purchase price was $73.5 million and was funded with available cash and proceeds from debt financing transactions that
closed during the quarter.
On December 20, 2018, we completed the acquisition of King Nummy, a 313-site RV resort in Cape May Court House, New Jersey. The
purchase price was $7.6 million and was funded with available cash and proceeds from debt financing transactions that closed during
the quarter.
On January 23, 2019, we closed on the sale of five all-age manufactured home communities located in Indiana and Michigan,
collectively containing approximately 1,463 sites, for $89.7 million.
Balance Sheet Activity
During the quarter ended December 31, 2018, we closed on two financing transactions generating gross proceeds of $357.8 million.
One transaction was a $250.6 million credit facility with Fannie Mae, secured by seven manufactured home communities, which has a
weighted average interest rate of 4.29% per annum and a weighted average maturity of 12.6 years. Another transaction was a $107.2
million loan from Lincoln Financial Group, secured by five manufactured home communities, which has an interest rate of 4.10% per
annum and a maturity of 20 years. The net proceeds from the transactions were primarily used for acquisitions and repayments of
$196.8 million of other loans maturing in 2018 and 2019, with a weighted average interest rate of 6.29% per annum.
About Equity LifeStyle Properties
We are a self-administered, self-managed real estate investment trust (“REIT”) with headquarters in Chicago. As of
January 28, 2019, we own or have an interest in 409 quality properties in 33 states and British Columbia consisting of 153,984
sites.
Previously, when we posted investor presentations on our website, we also electronically furnished investor presentations with
the Securities and Exchange Commission as exhibits to Current Reports on Form 8-K. Although we may furnish certain of our investor
presentations as exhibits to Current Reports on Form 8-K, our future investor presentations may only be available on our website.
Investors should periodically review our website for any such future presentations. For additional information, please contact our
Investor Relations Department at (800) 247-5279 or at investor_relations@equitylifestyle.com.
Conference Call
A live webcast of our conference call discussing these results will take place tomorrow, Tuesday, January 29, 2019, at
10:00 a.m. Central Time. Please visit the Investor Information section at
www.equitylifestyleproperties.com for the link. A replay of the webcast will be available for two weeks at this site.
Reporting Calendar
Quarterly financial results and related earnings conference calls for the next three quarters are expected to occur as
follows:
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Release Date |
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Earnings Call |
| First Quarter 2019 |
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Monday, April 22, 2019 |
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Tuesday, April 23, 2019 10:00 a.m. CT
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| Second Quarter 2019 |
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Monday, July 22, 2019 |
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Tuesday, July 23, 2019 10:00 a.m. CT |
| Third Quarter 2019 |
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Monday, October 21, 2019 |
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Tuesday, October 22, 2019 10:00 a.m. CT |
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Forward-Looking Statements
In addition to historical information, this press release includes certain “forward-looking statements” within the meaning of
the Private Securities Litigation Reform Act of 1995. When used, words such as "anticipate," "expect," "believe," "project,"
"intend," "may be" and "will be" and similar words or phrases, or the negative thereof, unless the context requires otherwise, are
intended to identify forward-looking statements and may include without limitation, information regarding our expectations, goals
or intentions regarding the future, and the expected effect of our acquisitions. These forward-looking statements are subject to
numerous assumptions, risks and uncertainties, including, but not limited to:
- our ability to control costs and real estate market conditions, our ability to retain customers, the
actual use of sites by customers and our success in acquiring new customers at our properties (including those that we may
acquire);
- our ability to maintain historical or increase future rental rates and occupancy with respect to
properties currently owned or that we may acquire;
- our ability to retain and attract customers renewing, upgrading and entering right-to-use
contracts;
- our assumptions about rental and home sales markets;
- our assumptions and guidance concerning 2019, including estimated net income, FFO and Normalized
FFO;
- our ability to manage counterparty risk;
- our ability to renew our insurance policies at existing rates and on consistent terms;
- in the age-qualified properties, home sales results could be impacted by the ability of potential
home buyers to sell their existing residences as well as by financial, credit and capital markets volatility;
- results from home sales and occupancy will continue to be impacted by local economic conditions, lack
of affordable manufactured home financing and competition from alternative housing options including site-built single-family
housing;
- impact of government intervention to stabilize site-built single-family housing and not manufactured
housing;
- effective integration of recent acquisitions and our estimates regarding the future performance of
recent acquisitions;
- the completion of future transactions in their entirety, if any, and timing and effective integration
with respect thereto;
- unanticipated costs or unforeseen liabilities associated with recent acquisitions;
- ability to obtain financing or refinance existing debt on favorable terms or at all;
- the effect of interest rates;
- the effect from any breach of our, or any of our vendors', data management systems;
- the dilutive effects of issuing additional securities;
- the effect of changes in accounting for Leases set forth under the Codification Topic
"Leases";
- the outcome of pending or future lawsuits or actions brought against us, including those disclosed in
our filings with the Securities and Exchange Commission; and
- other risks indicated from time to time in our filings with the Securities and Exchange
Commission.
For further information on these and other factors that could impact us and the statements contained herein, refer to our
filings with the Securities and Exchange Commission, including “Risk Factors” in our most recent Annual Report on Form 10-K
and subsequent quarterly reports on Form 10-Q.
These forward-looking statements are based on management's present expectations and beliefs about future events. As with any
projection or forecast, these statements are inherently susceptible to uncertainty and changes in circumstances. We are under no
obligation to, and expressly disclaim any obligation to, update or alter our forward-looking statements whether as a result of such
changes, new information, subsequent events or otherwise.
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Any opinions, estimates or forecasts regarding our performance made by these analysts
or agencies do not represent our opinions, estimates or forecasts. We do not by reference to these firms imply our endorsement
of or concurrence with such information, conclusions or recommendations. |
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Financial Highlights
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(In millions, except Common Stock and OP Units outstanding and per share data,
unaudited)
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As of and for the Three Months Ended |
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Dec 31, |
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Sept 30, |
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Jun 30, |
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Mar 31, |
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Dec 31, |
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2018 |
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2018 |
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2018 |
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2018 |
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2017 |
| Operating Information |
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| Total revenues |
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$ |
243.5 |
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$ |
256.7 |
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$ |
240.5 |
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$ |
246.0 |
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$ |
230.0 |
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| Net income |
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$ |
53.4 |
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$ |
59.7 |
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$ |
49.2 |
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$ |
64.2 |
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$ |
48.0 |
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| Net income available for Common Stockholders |
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$ |
50.2 |
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$ |
56.1 |
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$ |
46.1 |
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$ |
60.2 |
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$ |
45.0 |
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| Adjusted EBITDA (1) |
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$ |
117.3 |
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$ |
118.9 |
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$ |
108.6 |
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$ |
122.0 |
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$ |
106.7 |
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| FFO available for Common Stock and OP Unit holders (1)(2) |
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$ |
90.4 |
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$ |
97.7 |
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$ |
85.6 |
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$ |
98.2 |
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$ |
79.4 |
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| Normalized FFO available for Common Stock and OP Unit holders (1)(2) |
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$ |
92.3 |
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$ |
93.9 |
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$ |
83.8 |
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$ |
97.9 |
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$ |
82.6 |
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| Funds available for distribution ("FAD") available for Common Stock and OP Unit
holders (1)(2) |
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$ |
80.4 |
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$ |
82.1 |
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$ |
71.4 |
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$ |
89.1 |
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$ |
72.6 |
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Common Stock Outstanding (In thousands)
and Per Share Data
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| Common Stock and OP Units, end of the period |
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95,667 |
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95,493 |
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94,623 |
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94,565 |
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94,420 |
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| Weighted average Common Stock and OP Units outstanding - Fully Diluted |
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95,577 |
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95,263 |
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94,623 |
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94,577 |
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94,295 |
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| Net income per Common Share - Fully Diluted (3) |
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$ |
0.56 |
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$ |
0.63 |
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$ |
0.52 |
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$ |
0.68 |
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$ |
0.51 |
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| FFO per Common Share and OP Unit - Fully Diluted |
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$ |
0.95 |
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$ |
1.03 |
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$ |
0.90 |
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$ |
1.04 |
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$ |
0.84 |
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| Normalized FFO per Common Share and OP Unit - Fully Diluted |
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$ |
0.97 |
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$ |
0.99 |
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$ |
0.89 |
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$ |
1.04 |
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$ |
0.88 |
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| Dividends per Common Share |
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$ |
0.550 |
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$ |
0.550 |
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$ |
0.550 |
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$ |
0.550 |
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$ |
0.488 |
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| Balance Sheet |
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| Total assets |
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$ |
3,926 |
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$ |
3,855 |
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$ |
3,700 |
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$ |
3,690 |
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$ |
3,610 |
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| Total liabilities |
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$ |
2,732 |
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$ |
2,665 |
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$ |
2,598 |
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$ |
2,589 |
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$ |
2,510 |
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| Market Capitalization |
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| Total debt (4) |
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$ |
2,386 |
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$ |
2,318 |
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$ |
2,251 |
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$ |
2,264 |
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$ |
2,224 |
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| Total market capitalization (5) |
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$ |
11,678 |
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$ |
11,528 |
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$ |
10,947 |
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$ |
10,564 |
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$ |
10,629 |
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| Ratios |
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| Total debt / total market capitalization |
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20.4 |
% |
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20.1 |
% |
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20.6 |
% |
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21.4 |
% |
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20.9 |
% |
| Total debt / Adjusted EBITDA (6) |
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5.1 |
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5.1 |
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5.0 |
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5.1 |
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5.1 |
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| Interest coverage (7) |
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4.5 |
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4.4 |
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4.4 |
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4.4 |
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4.4 |
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| Fixed charges + preferred distributions coverage (8) |
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4.4 |
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4.4 |
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4.3 |
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4.2 |
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4.1 |
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| ______________________ |
| 1. |
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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. |
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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. |
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Net income per fully diluted Common Share is calculated before Income allocated to
non-controlling interest- Common OP Units. |
| 4. |
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Excludes deferred financing costs of approximately $26.4 million. |
| 5. |
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See page 16 for market capitalization as of December 31, 2018. |
| 6. |
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Calculated using trailing twelve months Adjusted EBITDA. |
| 7. |
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Interest coverage is calculated by dividing trailing twelve months Adjusted EBITDA by
the interest expense incurred during the same period. |
| 8. |
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See Non-GAAP Financial Measures Definitions and Other Terms at the end of the
supplemental information for a definition of fixed charges. This ratio is calculated by dividing trailing twelve months
Adjusted EBITDA by the sum of fixed charges and preferred stock dividends during the same period. |
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Consolidated Balance Sheets
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(In thousands, except share and per share data)
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December 31, 2018 |
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December 31, 2017 |
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(unaudited) |
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| Assets |
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| Investment in real estate: |
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| Land |
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$ |
1,408,832 |
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$ |
1,221,375 |
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| Land improvements |
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3,143,745 |
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3,045,221 |
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| Buildings and other depreciable property |
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720,900 |
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649,217 |
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5,273,477 |
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4,915,813 |
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| Accumulated depreciation |
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(1,631,888 |
) |
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(1,516,694 |
) |
| Net investment in real estate |
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3,641,589 |
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3,399,119 |
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| Cash and restricted cash |
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60,542 |
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31,085 |
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| Notes receivable, net |
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35,041 |
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49,477 |
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| Investment in unconsolidated joint ventures |
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57,755 |
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53,080 |
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| Deferred commission expense |
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40,308 |
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31,443 |
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| Escrow deposits, goodwill and other assets, net |
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54,659 |
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45,828 |
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| Assets held for sale, net |
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35,914 |
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— |
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| Total Assets |
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$ |
3,925,808 |
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$ |
3,610,032 |
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| Liabilities and Equity |
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| Liabilities: |
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| Mortgage notes payable |
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$ |
2,149,726 |
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$ |
1,971,715 |
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| Term loan |
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198,626 |
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198,302 |
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| Unsecured line of credit |
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— |
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30,000 |
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| Accrued expenses and accounts payable |
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102,854 |
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|
80,744 |
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| Deferred revenue – upfront payments from right-to-use contracts |
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116,363 |
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|
85,596 |
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| Deferred revenue – right-to-use annual payments |
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|
10,055 |
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|
9,932 |
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| Accrued interest payable |
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|
8,759 |
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|
8,387 |
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| Rents and other customer payments received in advance and security deposits |
|
|
81,114 |
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|
79,267 |
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| Distributions payable |
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|
52,617 |
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|
46,047 |
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| Liabilities related to assets held for sale |
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|
12,350 |
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— |
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| Total Liabilities |
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2,732,464 |
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|
2,509,990 |
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| Equity: |
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| Stockholders’ Equity: |
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| Preferred stock, $0.01 par value, 10,000,000 shares authorized as of December 31,
2018 and December 31, 2017; none issued and outstanding. |
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— |
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— |
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| Common stock, $0.01 par value, 200,000,000 shares authorized as of December 31, 2018
and December 31, 2017; 89,921,018 and 88,585,160 shares issued and outstanding as of December 31, 2018 and December 31, 2017,
respectively. |
|
|
896 |
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|
883 |
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| Paid-in capital |
|
|
1,329,391 |
|
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|
1,242,109 |
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| Distributions in excess of accumulated earnings |
|
|
(211,034 |
) |
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(211,980 |
) |
| Accumulated other comprehensive income |
|
|
2,299 |
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|
942 |
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| Total Stockholders’ Equity |
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|
1,121,552 |
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|
1,031,954 |
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| Non-controlling interests – Common OP Units |
|
|
71,792 |
|
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|
68,088 |
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| Total Equity |
|
|
1,193,344 |
|
|
|
1,100,042 |
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| Total Liabilities and Equity |
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$ |
3,925,808 |
|
|
|
$ |
3,610,032 |
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Consolidated Income Statements
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(In thousands, unaudited)
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Quarters Ended December 31, |
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Years Ended December 31, |
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2018 |
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2017 |
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2018 |
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2017 |
| Revenues: |
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|
| Community base rental income |
|
|
$ |
132,188 |
|
|
|
$ |
123,780 |
|
|
|
$ |
518,252 |
|
|
|
$ |
489,613 |
|
| Rental home income |
|
|
3,746 |
|
|
|
3,515 |
|
|
|
14,329 |
|
|
|
14,344 |
|
| Resort base rental income |
|
|
56,070 |
|
|
|
49,212 |
|
|
|
239,906 |
|
|
|
218,806 |
|
| Right-to-use annual payments |
|
|
12,162 |
|
|
|
11,665 |
|
|
|
47,778 |
|
|
|
45,798 |
|
| Right-to-use contracts current period, gross |
|
|
3,222 |
|
|
|
2,920 |
|
|
|
15,191 |
|
|
|
14,132 |
|
| Right-to-use contract upfront payments, deferred, net |
|
|
(1,191 |
) |
|
|
(342 |
) |
|
|
(7,380 |
) |
|
|
(4,108 |
) |
| Utility and other income |
|
|
24,804 |
|
|
|
24,181 |
|
|
|
100,562 |
|
|
|
93,252 |
|
| Gross revenues from home sales |
|
|
9,311 |
|
|
|
11,430 |
|
|
|
36,064 |
|
|
|
36,302 |
|
| Brokered resale and ancillary services revenues, net |
|
|
204 |
|
|
|
(290 |
) |
|
|
3,584 |
|
|
|
3,798 |
|
| Interest income |
|
|
1,867 |
|
|
|
2,038 |
|
|
|
7,525 |
|
|
|
7,580 |
|
| Income from other investments, net |
|
|
1,068 |
|
|
|
1,877 |
|
|
|
10,842 |
|
|
|
5,795 |
|
| Total revenues |
|
|
243,451 |
|
|
|
229,986 |
|
|
|
986,653 |
|
|
|
925,312 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
| Property operating and maintenance |
|
|
73,559 |
|
|
|
73,000 |
|
|
|
313,003 |
|
|
|
294,119 |
|
| Rental home operating and maintenance |
|
|
1,879 |
|
|
|
1,698 |
|
|
|
6,836 |
|
|
|
6,610 |
|
| Real estate taxes |
|
|
15,077 |
|
|
|
13,024 |
|
|
|
55,892 |
|
|
|
55,010 |
|
| Sales and marketing, gross |
|
|
2,857 |
|
|
|
2,577 |
|
|
|
12,542 |
|
|
|
11,438 |
|
| Right-to-use contract commissions, deferred, net |
|
|
(69 |
) |
|
|
18 |
|
|
|
(813 |
) |
|
|
(354 |
) |
| Property management |
|
|
12,994 |
|
|
|
12,509 |
|
|
|
53,736 |
|
|
|
51,252 |
|
| Depreciation on real estate assets and rental homes |
|
|
33,392 |
|
|
|
30,606 |
|
|
|
130,022 |
|
|
|
121,455 |
|
| Amortization of in-place leases |
|
|
2,118 |
|
|
|
103 |
|
|
|
7,187 |
|
|
|
2,231 |
|
| Cost of home sales |
|
|
9,527 |
|
|
|
11,122 |
|
|
|
37,475 |
|
|
|
36,513 |
|
| Home selling expenses |
|
|
946 |
|
|
|
885 |
|
|
|
4,095 |
|
|
|
4,186 |
|
| General and administrative |
|
|
11,161 |
|
|
|
8,398 |
|
|
|
37,684 |
|
|
|
31,737 |
|
| Other expenses |
|
|
387 |
|
|
|
334 |
|
|
|
1,483 |
|
|
|
1,148 |
|
| Early debt retirement |
|
|
1,071 |
|
|
|
2,785 |
|
|
|
1,071 |
|
|
|
2,785 |
|
| Interest and related amortization |
|
|
26,515 |
|
|
|
25,842 |
|
|
|
104,993 |
|
|
|
100,570 |
|
| Total expenses |
|
|
191,414 |
|
|
|
182,901 |
|
|
|
765,206 |
|
|
|
718,700 |
|
| Income before equity in income of unconsolidated joint ventures |
|
|
52,037 |
|
|
|
47,085 |
|
|
|
221,447 |
|
|
|
206,612 |
|
| Equity in income of unconsolidated joint ventures |
|
|
1,343 |
|
|
|
889 |
|
|
|
4,939 |
|
|
|
3,765 |
|
| Consolidated net income |
|
|
53,380 |
|
|
|
47,974 |
|
|
|
226,386 |
|
|
|
210,377 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Income allocated to non-controlling interest-Common OP Units |
|
|
(3,206 |
) |
|
|
(2,963 |
) |
|
|
(13,774 |
) |
|
|
(12,788 |
) |
| Redeemable perpetual preferred stock dividends and original issuance
costs |
|
|
(8 |
) |
|
|
(18 |
) |
|
|
(16 |
) |
|
|
(7,685 |
) |
| Net income available for Common Stockholders |
|
|
$ |
50,166 |
|
|
|
$ |
44,993 |
|
|
|
$ |
212,596 |
|
|
|
$ |
189,904 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP Financial Measures
|
|
|
|
|
Selected Non-GAAP Financial Measures
|
|
|
|
|
|
(In millions, except per share data, unaudited)
|
|
|
|
|
|
|
|
Quarter Ended |
|
|
|
December 31, 2018 |
| Income from property operations, excluding deferrals and property management - 2018
Core (1) |
|
|
$ |
133.5 |
|
| Income from property operations, excluding deferrals and property management -
Non-Core (1) |
|
|
5.3 |
|
| Property management and general and administrative |
|
|
(22.6 |
) |
| Other income and expenses |
|
|
2.6 |
|
| Interest and related amortization |
|
|
(26.5 |
) |
| Normalized FFO available for Common Stock and OP Unit holders (2) |
|
|
92.3 |
|
| Early debt retirement |
|
|
(1.1 |
) |
| Insurance proceeds due to catastrophic weather event and other, net
(3) |
|
|
(0.8 |
) |
| FFO available for Common Stock and OP Unit holders (2) |
|
|
$ |
90.4 |
|
|
|
|
|
| Normalized FFO per Common Share and OP Unit - Fully Diluted |
|
|
$ |
0.97 |
|
| FFO per Common Share and OP Unit - Fully Diluted |
|
|
$ |
0.95 |
|
|
|
|
|
|
|
|
|
| Normalized FFO available for Common Stock and OP Unit holders (2) |
|
|
$ |
92.3 |
|
| Non-revenue producing improvements to real estate (2) |
|
|
(11.9 |
) |
| FAD available for Common Stock and OP Unit holders (2) |
|
|
$ |
80.4 |
|
|
|
|
|
| Weighted average Common Stock and OP Units - Fully Diluted |
|
|
95.6 |
|
|
|
|
|
|
|
|
|
| __________________ |
| 1. |
|
See Non-GAAP Financial Measures Definitions and Other Terms at the end of the
supplemental information for definitions of Income from property operations, excluding deferrals and property management, Core,
Non-Core, and a reconciliation of Net income available for Common Stockholders to Income from property operations, excluding
deferrals and property management. See page 9 for details of the Core Income from Property Operations, excluding deferrals and
property management. See page 10 for details of the Non-Core Income from Property Operations, excluding deferrals and property
management. |
| 2. |
|
See Non-GAAP Financial Measures Definitions and Other Terms at the end of the
supplemental information for definitions of FFO, Normalized FFO, FAD and Non-revenue producing improvements to real estate. See
page 7 for a reconciliation of Net income available for Common Stockholders to FFO available for Common Stock and OP Unit
holders, Normalized FFO available for Common Stock and OP Unit holders and FAD available for Common Stock and OP Unit
holders. |
| 3. |
|
Includes $1.6 million related to settlement of a previously disclosed civil
investigation by certain California district attorneys and $0.8 million insurance recovery revenue from reimbursement for
capital expenditures related to Hurricane Irma. |
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of Net Income to Non-GAAP Financial Measures
|
|
|
|
|
|
|
|
|
(In thousands, except per share data, unaudited)
|
|
|
|
|
|
|
|
|
|
|
Quarters Ended December 31, |
|
|
Years Ended December 31, |
|
|
|
2018 |
|
|
2017 |
|
|
2018 |
|
|
2017 |
| Net income available for Common Stockholders |
|
|
$ |
50,166 |
|
|
|
$ |
44,993 |
|
|
|
$ |
212,596 |
|
|
|
$ |
189,904 |
|
| Income allocated to Common OP Units |
|
|
3,206 |
|
|
|
2,963 |
|
|
|
13,774 |
|
|
|
12,788 |
|
| Right-to-use contract upfront payments, deferred, net (1) |
|
|
1,191 |
|
|
|
342 |
|
|
|
7,380 |
|
|
|
4,108 |
|
| Right-to-use contract commissions, deferred, net (2) |
|
|
(69 |
) |
|
|
18 |
|
|
|
(813 |
) |
|
|
(354 |
) |
| Depreciation on real estate assets |
|
|
30,905 |
|
|
|
28,075 |
|
|
|
120,212 |
|
|
|
111,014 |
|
| Depreciation on rental homes |
|
|
2,487 |
|
|
|
2,531 |
|
|
|
9,810 |
|
|
|
10,441 |
|
| Amortization of in-place leases |
|
|
2,118 |
|
|
|
103 |
|
|
|
7,187 |
|
|
|
2,231 |
|
| Depreciation on unconsolidated joint ventures |
|
|
426 |
|
|
|
362 |
|
|
|
1,816 |
|
|
|
1,533 |
|
| FFO available for Common Stock and OP Unit holders (3) |
|
|
90,430 |
|
|
|
79,387 |
|
|
|
371,962 |
|
|
|
331,665 |
|
| Insurance proceeds due to catastrophic weather event and other, net
(4) |
|
|
800 |
|
|
|
— |
|
|
|
(5,125 |
) |
|
|
757 |
|
| Early debt retirement |
|
|
1,071 |
|
|
|
2,785 |
|
|
|
1,071 |
|
|
|
2,785 |
|
| Transaction costs |
|
|
— |
|
|
|
400 |
|
|
|
— |
|
|
|
724 |
|
| Normalized FFO available for Common Stock and OP Unit holders
(3) |
|
|
92,301 |
|
|
|
82,572 |
|
|
|
367,908 |
|
|
|
335,931 |
|
| Non-revenue producing improvements to real estate (3) |
|
|
(11,864 |
) |
|
|
(10,010 |
) |
|
|
(44,829 |
) |
|
|
(39,833 |
) |
| FAD available for Common Stock and OP Unit holders (3) |
|
|
$ |
80,437 |
|
|
|
$ |
72,562 |
|
|
|
$ |
323,079 |
|
|
|
$ |
296,098 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Net income available per Common Share - Basic |
|
|
$ |
0.56 |
|
|
|
$ |
0.51 |
|
|
|
$ |
2.39 |
|
|
|
$ |
2.18 |
|
| Net income available per Common Share - Fully Diluted (5) |
|
|
$ |
0.56 |
|
|
|
$ |
0.51 |
|
|
|
$ |
2.38 |
|
|
|
$ |
2.17 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| FFO per Common Share and OP Unit-Basic |
|
|
$ |
0.95 |
|
|
|
$ |
0.85 |
|
|
|
$ |
3.93 |
|
|
|
$ |
3.57 |
|
| FFO per Common Share and OP Unit-Fully Diluted |
|
|
$ |
0.95 |
|
|
|
$ |
0.84 |
|
|
|
$ |
3.91 |
|
|
|
$ |
3.55 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Normalized FFO per Common Share and OP Unit-Basic |
|
|
$ |
0.97 |
|
|
|
$ |
0.88 |
|
|
|
$ |
3.88 |
|
|
|
$ |
3.61 |
|
| Normalized FFO per Common Share and OP Unit-Fully Diluted |
|
|
$ |
0.97 |
|
|
|
$ |
0.88 |
|
|
|
$ |
3.87 |
|
|
|
$ |
3.60 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Average Common Stock - Basic |
|
|
89,570 |
|
|
|
88,115 |
|
|
|
88,964 |
|
|
|
86,997 |
|
| Average Common Stock and OP Units - Basic |
|
|
95,316 |
|
|
|
93,949 |
|
|
|
94,757 |
|
|
|
93,030 |
|
| Average Common Stock and OP Units - Fully Diluted |
|
|
95,577 |
|
|
|
94,295 |
|
|
|
95,055 |
|
|
|
93,425 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ___________________________ |
| 1. |
|
|
The Company adopted ASU 2014-09, Revenue from Contracts with Customers, and all
related amendments, effective January 1, 2018. Upon adoption, right-to-use nonrefundable upfront payments are recognized on a
straight-line basis over 20 years to reflect our current estimated customer life for the majority of our upgrade contracts. The
amount shown represents the deferral of a substantial portion of current period upgrade sales, offset by amortization of prior
period sales. |
| 2. |
|
|
The deferred commissions are amortized using the same method as used for the related
non-refundable upfront payments from the entry of right-to-use contracts and upgrade sales. The amount shown represents the
deferral of a substantial portion of current period commissions on those contracts, offset by the amortization of prior period
commissions. |
| 3. |
|
|
See Non-GAAP Financial Measures Definitions and Other Terms at the end of the
supplemental information for definitions of FFO, Normalized FFO, FAD and Non-revenue producing improvements to real
estate. |
| 4. |
|
|
Includes $0.8 million and $6.7 million of insurance recovery revenue from
reimbursement for capital expenditures related to Hurricane Irma for the quarter and year ended December 31, 2018,
respectively, and $1.6 million related to settlement of a previously disclosed civil investigation by certain California
district attorneys for the quarter and year ended December 31, 2018. |
| 5. |
|
|
Net income per fully diluted Common Share is calculated before Income allocated to
non-controlling interest- Common OP Units. |
|
|
|
|
|
|
|
|
|
|
|
|
Consolidated Income from Property Operations (1)
|
|
|
|
|
|
|
|
|
(In millions, except home site and occupancy figures, unaudited)
|
|
|
|
|
|
|
|
|
|
|
Quarters Ended December 31, |
|
|
Years Ended December 31, |
|
|
|
2018 |
|
|
2017 |
|
|
2018 |
|
|
2017 |
| Community base rental income (2) |
|
|
$ |
132.2 |
|
|
|
$ |
123.8 |
|
|
|
$ |
518.2 |
|
|
|
$ |
489.6 |
|
| Rental home income |
|
|
3.7 |
|
|
|
3.5 |
|
|
|
14.3 |
|
|
|
14.3 |
|
| Resort base rental income (3) |
|
|
56.1 |
|
|
|
49.2 |
|
|
|
239.9 |
|
|
|
218.8 |
|
| Right-to-use annual payments |
|
|
12.2 |
|
|
|
11.7 |
|
|
|
47.8 |
|
|
|
45.8 |
|
| Right-to-use contracts current period, gross |
|
|
3.2 |
|
|
|
2.9 |
|
|
|
15.2 |
|
|
|
14.1 |
|
| Utility and other income (4) |
|
|
24.8 |
|
|
|
24.2 |
|
|
|
100.6 |
|
|
|
93.3 |
|
| Property operating revenues |
|
|
232.2 |
|
|
|
215.3 |
|
|
|
936.0 |
|
|
|
875.9 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Property operating, maintenance and real estate taxes (5) |
|
|
88.6 |
|
|
|
86.0 |
|
|
|
368.9 |
|
|
|
349.1 |
|
| Rental home operating and maintenance |
|
|
1.9 |
|
|
|
1.7 |
|
|
|
6.9 |
|
|
|
6.6 |
|
| Sales and marketing, gross |
|
|
2.9 |
|
|
|
2.6 |
|
|
|
12.5 |
|
|
|
11.4 |
|
| Property operating expenses |
|
|
93.4 |
|
|
|
90.3 |
|
|
|
388.3 |
|
|
|
367.1 |
|
| Income from property operations, excluding deferrals and property
management (1) |
|
|
$ |
138.8 |
|
|
|
$ |
125.0 |
|
|
|
$ |
547.7 |
|
|
|
$ |
508.8 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Manufactured home site figures and occupancy averages: |
|
|
|
|
|
|
|
|
|
|
|
|
| Total sites |
|
|
72,735 |
|
|
|
71,109 |
|
|
|
72,020 |
|
|
|
71,064 |
|
| Occupied sites |
|
|
68,906 |
|
|
|
67,098 |
|
|
|
68,120 |
|
|
|
66,894 |
|
| Occupancy % |
|
|
94.7 |
% |
|
|
94.4 |
% |
|
|
94.6 |
% |
|
|
94.1 |
% |
| Monthly base rent per site |
|
|
$ |
639 |
|
|
|
$ |
615 |
|
|
|
$ |
634 |
|
|
|
$ |
610 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Resort base rental income: |
|
|
|
|
|
|
|
|
|
|
|
|
| Annual |
|
|
$ |
38.9 |
|
|
|
$ |
34.6 |
|
|
|
$ |
148.1 |
|
|
|
133.2 |
|
| Seasonal |
|
|
8.6 |
|
|
|
7.8 |
|
|
|
37.7 |
|
|
|
36.2 |
|
| Transient |
|
|
8.6 |
|
|
|
6.8 |
|
|
|
54.1 |
|
|
|
49.4 |
|
| Total resort base rental income |
|
|
$ |
56.1 |
|
|
|
$ |
49.2 |
|
|
|
$ |
239.9 |
|
|
|
$ |
218.8 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
| _________________________ |
| 1. |
|
|
Excludes property management and the GAAP deferral of right-to-use contract upfront
payments and related commissions, net. See page 4 for the Consolidated Income Statements and see Non-GAAP Financial Measures
Definitions and Other Terms at the end of the supplemental information for the definition and reconciliation of Income from
property operations, excluding deferrals and property management to Net income available to Common Stockholders. |
| 2. |
|
|
See the manufactured home site figures and occupancy averages below within this
table. |
| 3. |
|
|
See resort base rental income detail included below within this table. |
| 4. |
|
|
Utility and other income includes Hurricane Irma insurance recovery revenues of $1.2
million and $7.7 million, including $1.2 million and $4.9 million, which we have identified as business interruption, for the
quarter and year ended December 31, 2018, respectively. Utility and other income includes Hurricane Irma insurance recovery
revenues of $4.1 million and $7.2 million for the quarter and year ended December 31, 2017, respectively. |
| 5. |
|
|
Property operating, maintenance and real estate taxes includes debris removal and
cleanup costs related to Hurricane Irma of $2.6 million for the year ended December 31, 2018 and $4.2 million and $7.5 million
for the quarter and year ended December 31, 2017, respectively. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Core Income from Property Operations (1)
|
|
|
|
|
|
|
|
|
|
|
(In millions, except home site and occupancy figures, unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
Quarters Ended December 31, |
|
|
Years Ended December 31, |
|
|
|
2018 |
|
|
2017 |
|
|
Change (2) |
|
|
2018 |
|
|
2017 |
|
|
Change (2) |
| Community base rental income (3) |
|
|
$ |
129.3 |
|
|
|
$ |
123.6 |
|
|
|
4.6 |
% |
|
|
$ |
511.4 |
|
|
|
$ |
489.1 |
|
|
|
4.6 |
% |
| Rental home income |
|
|
3.7 |
|
|
|
3.5 |
|
|
|
6.6 |
% |
|
|
14.3 |
|
|
|
14.3 |
|
|
|
(0.1 |
)% |
| Resort base rental income (4) |
|
|
51.6 |
|
|
|
48.6 |
|
|
|
6.2 |
% |
|
|
225.4 |
|
|
|
211.1 |
|
|
|
6.8 |
% |
| Right-to-use annual payments |
|
|
12.2 |
|
|
|
11.7 |
|
|
|
4.1 |
% |
|
|
47.8 |
|
|
|
45.8 |
|
|
|
4.3 |
% |
| Right-to-use contracts current period, gross |
|
|
3.2 |
|
|
|
2.9 |
|
|
|
10.3 |
% |
|
|
15.2 |
|
|
|
14.1 |
|
|
|
7.5 |
% |
| Utility and other income (5) |
|
|
23.3 |
|
|
|
23.4 |
|
|
|
(0.3 |
)% |
|
|
93.8 |
|
|
|
92.0 |
|
|
|
1.9 |
% |
| Property operating revenues |
|
|
223.3 |
|
|
|
213.7 |
|
|
|
4.5 |
% |
|
|
907.9 |
|
|
|
866.4 |
|
|
|
4.8 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Property operating, maintenance and real estate taxes (6) |
|
|
85.1 |
|
|
|
83.9 |
|
|
|
1.5 |
% |
|
|
357.1 |
|
|
|
342.8 |
|
|
|
4.1 |
% |
| Rental home operating and maintenance |
|
|
1.9 |
|
|
|
1.7 |
|
|
|
10.7 |
% |
|
|
6.8 |
|
|
|
6.6 |
|
|
|
3.4 |
% |
| Sales and marketing, gross |
|
|
2.8 |
|
|
|
2.6 |
|
|
|
10.7 |
% |
|
|
12.5 |
|
|
|
11.5 |
|
|
|
9.6 |
% |
| Property operating expenses |
|
|
89.8 |
|
|
|
88.2 |
|
|
|
1.9 |
% |
|
|
376.4 |
|
|
|
360.9 |
|
|
|
4.3 |
% |
| Income from property operations, excluding deferrals and property
management (1) |
|
|
$ |
133.5 |
|
|
|
$ |
125.5 |
|
|
|
6.3 |
% |
|
|
$ |
531.5 |
|
|
|
$ |
505.5 |
|
|
|
5.2 |
% |
| Occupied sites (7) |
|
|
67,472 |
|
|
|
67,093 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Core manufactured home site figures and occupancy averages: |
|
|
|
|
|
|
|
|
|
|
|
|
| Total sites |
|
|
70,928 |
|
|
|
70,873 |
|
|
|
|
|
|
|
70,908 |
|
|
|
70,873 |
|
|
|
|
|
| Occupied sites |
|
|
67,349 |
|
|
|
66,991 |
|
|
|
|
|
|
|
67,180 |
|
|
|
66,832 |
|
|
|
|
|
| Occupancy % |
|
|
95.0 |
% |
|
|
94.5 |
% |
|
|
|
|
|
|
94.7 |
% |
|
|
94.3 |
% |
|
|
|
|
| Monthly base rent per site |
|
|
$ |
640 |
|
|
|
$ |
615 |
|
|
|
|
|
|
|
$ |
634 |
|
|
|
$ |
610 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Resort base rental income: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Annual |
|
|
$ |
36.3 |
|
|
|
$ |
34.1 |
|
|
|
6.5 |
% |
|
|
$ |
140.5 |
|
|
|
$ |
131.7 |
|
|
|
6.6 |
% |
| Seasonal |
|
|
8.2 |
|
|
|
7.8 |
|
|
|
5.0 |
% |
|
|
36.2 |
|
|
|
33.6 |
|
|
|
7.8 |
% |
| Transient |
|
|
7.1 |
|
|
|
6.7 |
|
|
|
6.3 |
% |
|
|
48.7 |
|
|
|
45.8 |
|
|
|
6.6 |
% |
| Total resort base rental income |
|
|
$ |
51.6 |
|
|
|
$ |
48.6 |
|
|
|
6.2 |
% |
|
|
$ |
225.4 |
|
|
|
$ |
211.1 |
|
|
|
6.8 |
% |
|
|
|
|
| ___________________________ |
| 1. |
|
|
Excludes property management and the GAAP deferral of right-to-use contract upfront
payments and related commissions, net. See Non-GAAP Financial Measures Definitions and Other Terms at the end of the
supplemental information for definitions of Income from property operations, excluding deferrals and property management, and
Core. |
| 2. |
|
|
Calculations prepared using actual results without rounding. |
| 3. |
|
|
See the Core manufactured home site figures and occupancy averages included below
within this table. |
| 4. |
|
|
See resort base rental income detail included below within this table. |
| 5. |
|
|
Utility and other income includes Hurricane Irma insurance recovery revenues of $2.4
million for the year ended December 31, 2018 and $3.4 million and $6.4 million for the quarter and year ended December 31,
2017, respectively. |
| 6. |
|
|
Property operating, maintenance and real estate taxes includes debris removal and
cleanup costs related to Hurricane Irma of $2.2 million for the year ended December 31, 2018 and $3.4 million and $6.7 million
for the quarter and year ended December 31, 2017, respectively. |
| 7. |
|
|
Occupied sites are presented as of the end of the period. Occupied sites increased by
379 from 67,093 at December 31, 2017. |
|
|
|
|
|
|
|
|
|
|
|
|
Non-Core Income from Property Operations (1)
|
|
|
|
|
|
|
|
|
(In millions, unaudited)
|
|
|
|
|
|
|
|
|
|
|
Quarter Ended |
|
|
Year Ended |
|
|
|
December 31, 2018 |
|
|
December 31, 2018 |
| Community base rental income |
|
|
$ |
2.9 |
|
|
|
$ |
6.8 |
| Resort base rental income |
|
|
4.4 |
|
|
|
14.5 |
| Utility income and other property income (2) |
|
|
1.5 |
|
|
|
6.8 |
| Property operating revenues |
|
|
8.8 |
|
|
|
28.1 |
|
|
|
|
|
|
|
| Property operating expenses |
|
|
3.5 |
|
|
|
11.9 |
| Income from property operations, excluding deferrals and property
management (1) |
|
|
$ |
5.3 |
|
|
|
$ |
16.2 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ______________________ |
| 1. |
|
|
Excludes property management and the GAAP deferral of right-to-use contract upfront
payments and related commissions, net. See Non-GAAP Financial Measures Definitions and Other Terms at the end of the
supplemental information for definitions of Income from property operations, excluding deferrals and property management, and
Non-Core. |
| 2. |
|
|
Utility and other property includes Hurricane Irma insurance recovery revenues of
$1.2 million and $5.3 million, which we have identified as business interruption for the quarter and year ended December 31,
2018, respectively. |
|
|
|
|
|
|
|
|
|
|
|
|
Income from Rental Home Operations
|
|
|
|
|
|
|
|
|
(In millions, except occupied rentals, unaudited)
|
|
|
|
|
|
|
|
|
|
|
Quarters ended December 31, |
|
|
Years Ended December 31, |
|
|
|
2018 |
|
|
2017 |
|
|
2018 |
|
|
2017 |
| Manufactured homes: |
|
|
|
|
|
|
|
|
|
|
|
|
| Rental operations revenues (1) |
|
|
$ |
11.8 |
|
|
|
$ |
11.8 |
|
|
|
$ |
46.9 |
|
|
|
$ |
48.9 |
| Rental operations expense |
|
|
1.9 |
|
|
|
1.7 |
|
|
|
6.8 |
|
|
|
6.6 |
| Income from rental operations |
|
|
9.9 |
|
|
|
10.1 |
|
|
|
40.1 |
|
|
|
42.3 |
| Depreciation on rental homes (2) |
|
|
2.5 |
|
|
|
2.5 |
|
|
|
9.8 |
|
|
|
10.4 |
| Income from rental operations, net of depreciation (3) |
|
|
$ |
7.4 |
|
|
|
$ |
7.6 |
|
|
|
$ |
30.3 |
|
|
|
$ |
31.9 |
|
|
|
|
|
|
|
|
|
|
|
|
|
| Occupied rentals: (4) |
|
|
|
|
|
|
|
|
|
|
|
|
| New |
|
|
2,835 |
|
|
|
2,533 |
|
|
|
|
|
|
|
| Used |
|
|
1,406 |
|
|
|
1,884 |
|
|
|
|
|
|
|
| Total occupied rental sites |
|
|
4,241 |
|
|
|
4,417 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As of December 31, 2018 |
|
|
As of December 31, 2017 |
|
|
|
|
|
|
Net of |
|
|
|
|
|
Net of |
| Cost basis in rental homes: ((5)) |
|
|
Gross |
|
|
Depreciation |
|
|
Gross |
|
|
Depreciation |
| New |
|
|
$ |
166.5 |
|
|
|
$ |
136.3 |
|
|
|
$ |
132.5 |
|
|
|
$ |
105.8 |
| Used |
|
|
33.9 |
|
|
|
15.8 |
|
|
|
43.4 |
|
|
|
23.8 |
| Total rental homes |
|
|
$ |
200.4 |
|
|
|
$ |
152.1 |
|
|
|
$ |
175.9 |
|
|
|
$ |
129.6 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| __________________________ |
| 1. |
|
|
For the quarters ended December 31, 2018 and 2017, approximately $8.0 million and
$8.3 million, respectively, of the rental operations revenue are included in Community base rental income in the Consolidated
Income from Property Operations table on page 8. For the year ended December 31, 2018 and 2017, approximately $32.6 million and
$34.6 million, respectively, of the rental operations revenue are included in Community base rental income in the Consolidated
Income from Property Operations table on page 8. The remainder of the rental operations revenue is included in Rental home
income for the quarters and year ended December 31, 2018 and 2017 in the Consolidated Income from Property Operations table on
page 8. |
| 2. |
|
|
Included in Depreciation on real estate and rental homes in the Consolidated
Statements of Income and Comprehensive Income. |
| 3. |
|
|
See Non-GAAP Financial Measures Definitions and Other Terms at the end of the
supplemental information for the definition of Income from rental operations, net of depreciation. |
| 4. |
|
|
Occupied rentals as of the end of the period in our Core portfolio. Included in the
quarters ended December 31, 2018 and 2017 are 279 and 268 homes rented through our ECHO joint venture, respectively. For the
year ended December 31, 2018 and 2017, the rental home investment associated with our ECHO joint venture totals approximately
$9.8 million and $9.1 million, respectively. |
| 5. |
|
|
Includes both occupied and unoccupied rental homes. New home cost basis did not
include the costs associated with our ECHO joint venture. At December 31, 2018 and 2017, our investment in the ECHO joint
venture was approximately $16.2 million and $15.6 million, respectively. |
|
|
|
|
|
|
|
|
Total Sites and Home Sales
|
|
|
|
|
(In thousands, except sites and home sale volumes, unaudited)
|
|
|
|
| Summary of Total Sites as of December 31, 2018 |
|
|
|
|
Sites |
| Community sites |
|
73,300 |
| Resort sites: |
|
|
| Annuals |
|
29,100 |
| Seasonal |
|
11,300 |
| Transient |
|
11,500 |
| Membership (1) |
|
24,300 |
| Joint Ventures (2) |
|
5,900 |
| Total |
|
155,400 |
|
|
|
|
|
|
| Home Sales - Select Data |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Quarters Ended |
|
|
Years Ended |
|
|
|
December 31, |
|
|
December 31, |
|
|
|
2018 |
|
|
2017 |
|
|
2018 |
|
|
2017 |
| Total New Home Sales Volume (3) |
|
|
139 |
|
|
|
184 |
|
|
|
556 |
|
|
|
597 |
| New Home Sales Volume - ECHO joint venture |
|
|
26 |
|
|
|
32 |
|
|
|
100 |
|
|
|
158 |
| New Home Sales Gross Revenues (3) |
|
|
$ |
7,190 |
|
|
|
$ |
9,035 |
|
|
|
$ |
27,833 |
|
|
|
$ |
25,759 |
|
|
|
|
|
|
|
|
|
|
|
|
|
| Total Used Home Sales Volume |
|
|
249 |
|
|
|
326 |
|
|
|
1,091 |
|
|
|
1,280 |
| Used Home Sales Gross Revenues |
|
|
$ |
2,121 |
|
|
|
$ |
2,395 |
|
|
|
$ |
8,231 |
|
|
|
$ |
10,543 |
|
|
|
|
|
|
|
|
|
|
|
|
|
| Brokered Home Resales Volume |
|
|
175 |
|
|
|
221 |
|
|
|
852 |
|
|
|
880 |
| Brokered Home Resale Revenues, net |
|
|
$ |
281 |
|
|
|
$ |
310 |
|
|
|
$ |
1,290 |
|
|
|
$ |
1,235 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
| __________________________ |
| 1. |
|
|
Sites primarily utilized by approximately 111,100 members. Includes approximately
5,900 sites rented on an annual basis. |
| 2. |
|
|
Joint ventures have approximately 2,700 annual Sites, 400 seasonal Sites, 500
transient Sites and includes approximately 2,300 marina slips. |
| 3. |
|
|
Total new home sales volume includes home sales from our ECHO joint venture. New home
sales gross revenues does not include the revenues associated with our ECHO joint venture. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2019 Guidance - Selected Financial Data (1)
|
|
|
|
|
|
|
|
|
|
|
Our guidance acknowledges the existence of volatile economic conditions, which may impact our
current guidance assumptions. Factors impacting 2019 guidance include, but are not limited to the following: (i)
the mix of site usage within the portfolio; (ii) yield management on our short-term resort sites; (iii) scheduled or
implemented rate increases on community and resort sites; (iv) scheduled or implemented rate increases in annual payments
under right-to-use contracts; (v) occupancy changes; (vi) our ability to retain and attract customers renewing or entering
right-to-use contracts; (vii) our ability to integrate and operate recent acquisitions in accordance with our estimates;
(viii) completion of pending transactions in their entirety and on assumed schedule; (ix) ongoing legal matters and related
fees; and (x) costs to restore property operations and potential revenue losses following storms or other unplanned
events.
|
|
|
|
|
(In millions, except per share data, unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
Quarter Ending |
|
|
Year Ending |
|
|
|
March 31, 2019 |
|
|
December 31, 2019 |
| Income from property operations, excluding deferrals and property management - Core
(2) |
|
|
$ |
145.2 |
|
|
|
$ |
556.6 |
|
| Income from property operations - Non-Core (3) |
|
|
7.1
|
|
|
|
19.9 |
|
| Property management and general and administrative |
|
|
(23.2 |
) |
|
|
(91.0 |
) |
| Other income and expenses |
|
|
3.8 |
|
|
|
14.2 |
|
| Interest and related amortization |
|
|
(26.4 |
) |
|
|
(105.8 |
) |
| Normalized FFO and FFO available for Common Stock and OP Unit holders
(4) |
|
|
106.5
|
|
|
|
393.9 |
|
| Depreciation on real estate and other |
|
|
(37.1 |
) |
|
|
(138.3 |
) |
| Depreciation on rental homes |
|
|
(2.4 |
) |
|
|
(9.6 |
) |
| Deferral of right-to-use contract sales revenue and commission, net |
|
|
(1.4
|
) |
|
|
(6.4
|
) |
| Gain on sale of real estate, net |
|
|
53.2 |
|
|
|
53.2 |
|
| Income allocated to non-controlling interest-Common OP Units |
|
|
(7.1
|
) |
|
|
(17.4 |
) |
| Net income available for Common Stockholders |
|
|
$ |
111.7
|
|
|
|
$ |
275.4
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Net income per Common Share - Fully Diluted (5) |
|
|
$1.21 - $1.27
|
|
|
|
$3.01 - $3.11 |
|
| FFO per Common Share and OP Unit - Fully Diluted |
|
|
$1.08 - $1.14 |
|
|
|
$4.07 - $4.17 |
|
| Normalized FFO per Common Share and OP Unit - Fully Diluted |
|
|
$1.08 - $1.14 |
|
|
|
$4.07 - $4.17 |
|
|
|
|
|
|
|
|
|
|
| Weighted average Common Stock outstanding - Fully Diluted |
|
|
95.6 |
|
|
|
95.7 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| _____________________________________ |
| 1. |
|
|
Each line item represents the mid-point of a range of possible outcomes and reflects
management’s estimate of the most likely outcome. Actual Normalized FFO available for Common Stock and OP Unit holders,
Normalized FFO per Common Share and OP Unit, FFO available for Common Stock and OP Unit holders, FFO per Common Share and OP
Unit, Net income available for Common Stockholders and Net income per Common Share could vary materially from amounts presented
above if any of our assumptions is incorrect. |
| 2. |
|
|
See page 14 for 2019 Core Guidance Assumptions. Amount represents 2018 Income from
property operations, excluding deferrals and property management, from the 2019 Core properties of $138.9 million multiplied by
an estimated growth rate of 4.5% and $530.9 million multiplied by an estimated growth rate of 4.8% for the quarter ending March
31, 2019 and year ending December 31, 2019, respectively. |
| 3. |
|
|
See page 14 for the 2019 Assumptions regarding the Non-Core Properties. |
| 4. |
|
|
See Non-GAAP Financial Measures Definitions and Other Terms at the end of the
supplemental information for definitions of Normalized FFO and FFO. |
| 5. |
|
|
Net income per fully diluted Common Share is calculated before Income allocated to
non-controlling interest- Common OP Units. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2019 Core Guidance Assumptions (1)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(In millions, unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Quarter
Ended
|
|
|
First
Quarter 2019
|
|
|
Year Ended |
|
|
2019 |
|
|
|
March 31,
2018
|
|
|
Growth
Factors (2)
|
|
|
December 31,
2018
|
|
|
Growth
Factors (2)
|
| Community base rental income |
|
|
$ |
124.8 |
|
|
|
4.9 |
% |
|
|
$ |
505.3 |
|
|
|
4.6 |
% |
| Rental home income |
|
|
3.2 |
|
|
|
4.0 |
% |
|
|
13.1 |
|
|
|
(0.6 |
)% |
| Resort base rental income (3) |
|
|
63.3 |
|
|
|
4.6 |
% |
|
|
233.4 |
|
|
|
5.0 |
% |
| Right-to-use annual payments |
|
|
11.5 |
|
|
|
1.8 |
% |
|
|
47.8 |
|
|
|
1.5 |
% |
| Right-to-use contracts current period, gross |
|
|
3.2 |
|
|
|
(3.0 |
)% |
|
|
15.2 |
|
|
|
1.4 |
% |
| Utility and other income |
|
|
24.0 |
|
|
|
(6.4 |
)% |
|
|
93.5 |
|
|
|
(5.7 |
)% |
| Property operating revenues |
|
|
230.0 |
|
|
|
3.4 |
% |
|
|
908.3 |
|
|
|
3.3 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
| Property operating, maintenance, and real estate taxes |
|
|
86.9 |
|
|
|
1.7 |
% |
|
|
358.4 |
|
|
|
1.5 |
% |
| Rental home operating and maintenance |
|
|
1.4 |
|
|
|
(5.6 |
)% |
|
|
6.5 |
|
|
|
(13.7 |
)% |
| Sales and marketing, gross |
|
|
2.8 |
|
|
|
2.6 |
% |
|
|
12.5 |
|
|
|
0.2 |
% |
| Property operating expenses |
|
|
91.1 |
|
|
|
1.6 |
% |
|
|
377.4 |
|
|
|
1.2 |
% |
| Income from property operations, excluding deferrals and property
management |
|
|
$ |
138.9 |
|
|
|
4.5 |
% |
|
|
$ |
530.9 |
|
|
|
4.8 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
| Resort base rental income: |
|
|
|
|
|
|
|
|
|
|
|
|
| Annual |
|
|
$ |
35.2 |
|
|
|
5.9 |
% |
|
|
$ |
145.7 |
|
|
|
5.4 |
% |
| Seasonal |
|
|
18.7 |
|
|
|
3.0 |
% |
|
|
36.3 |
|
|
|
3.1 |
% |
| Transient |
|
|
9.4 |
|
|
|
3.0 |
% |
|
|
51.4 |
|
|
|
5.0 |
% |
| Total resort base rental income |
|
|
$ |
63.3 |
|
|
|
4.6 |
% |
|
|
$ |
233.4 |
|
|
|
5.0 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2019 Assumptions Regarding Non-Core Properties (1)
|
|
|
|
|
|
|
|
|
(In millions, unaudited)
|
|
|
|
|
|
|
|
|
|
|
Quarter Ending |
|
|
Year Ending |
|
|
|
March 31, 2019 (4) |
|
|
December 31, 2019 (4) |
| Community base rental income |
|
|
$ |
4.4 |
|
|
|
$ |
16.1 |
| Rental home income |
|
|
0.1 |
|
|
|
0.2 |
| Resort base rental income |
|
|
5.6 |
|
|
|
19.8
|
| Utility and other income |
|
|
1.3
|
|
|
|
2.7
|
| Property operating revenues |
|
|
11.4
|
|
|
|
38.8
|
|
|
|
|
|
|
|
| Property operating, maintenance, and real estate taxes |
|
|
4.3 |
|
|
|
18.9
|
| Property operating expenses |
|
|
4.3 |
|
|
|
18.9
|
| Income from property operations, excluding deferrals and property
management |
|
|
$ |
7.1
|
|
|
|
$ |
19.9 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| _____________________________________ |
| 1. |
|
|
See Non-GAAP Financial Measures Definitions and Other Terms at the end of the
supplemental information for definitions of Core and Non-Core. |
| 2. |
|
|
Management’s estimate of the growth of property operations in the 2019 Core
Properties compared to actual 2018 performance. Represents our estimate of the mid-point of a range of possible outcomes.
Calculations prepared using actual results without rounding. Actual growth for Core properties could vary materially from
amounts presented above if any of our assumptions is incorrect. |
| 3. |
|
|
See Resort base rental income table included below within this table. |
| 4. |
|
|
Each line item represents our estimate of the mid-point of a possible range of
outcomes and reflects management’s best estimate of the most likely outcome for the Non-Core properties. Actual income from
property operations for Non-Core properties could vary materially from amounts presented above if any of our assumptions is
incorrect. |
|
|
|
|
|
|
|
|
|
Right-To-Use Memberships - Select Data
|
|
|
|
|
|
(Unaudited)
|
|
|
|
|
|
|
|
Year Ended December 31, |
|
|
|
2015 |
|
|
2016 |
|
|
2017 |
|
|
2018 |
|
|
2019(1)
|
| Member Count (2) |
|
|
102,413 |
|
|
|
104,728 |
|
|
|
106,456 |
|
|
|
111,094 |
|
|
|
115,000 |
| Thousand Trails Camping Pass (TTC) Origination |
|
|
25,544 |
|
|
|
29,576 |
|
|
|
31,618 |
|
|
|
37,528 |
|
|
|
38,600 |
| TTC Sales |
|
|
11,877 |
|
|
|
12,856 |
|
|
|
14,128 |
|
|
|
17,194 |
|
|
|
17,800 |
| RV Dealer TTC Activations |
|
|
13,667 |
|
|
|
16,720 |
|
|
|
17,490 |
|
|
|
20,334 |
|
|
|
20,800 |
| Number of annuals (3) |
|
|
5,470 |
|
|
|
5,756 |
|
|
|
5,843 |
|
|
|
5,888 |
|
|
|
6,000 |
| Number of upgrade sales (4) |
|
|
2,687 |
|
|
|
2,477 |
|
|
|
2,514 |
|
|
|
2,500 |
|
|
|
2,700 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| (In thousands, unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Right-to-use annual payments |
|
|
$ |
44,441 |
|
|
|
$ |
45,036 |
|
|
|
$ |
45,798 |
|
|
|
$ |
47,778 |
|
|
|
$ |
48,500 |
| Resort base rental income from annuals |
|
|
$ |
13,821 |
|
|
|
$ |
15,413 |
|
|
|
$ |
16,841 |
|
|
|
$ |
18,363 |
|
|
|
$ |
19,600 |
| Resort base rental income from seasonals/transients |
|
|
$ |
15,795 |
|
|
|
$ |
17,344 |
|
|
|
$ |
18,231 |
|
|
|
$ |
19,840 |
|
|
|
$ |
21,200 |
| Upgrade contract initiations (5) |
|
|
$ |
12,783 |
|
|
|
$ |
12,312 |
|
|
|
$ |
14,130 |
|
|
|
$ |
15,191 |
|
|
|
$ |
15,400 |
| Utility and other income |
|
|
$ |
2,430 |
|
|
|
$ |
2,442 |
|
|
|
$ |
2,254 |
|
|
|
$ |
2,410 |
|
|
|
$ |
2,300 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ________________________________ |
| 1. |
|
|
Guidance estimate. Each line item represents our estimate of the mid-point of a
possible range of outcomes and reflects management’s best estimate of the most likely outcome. Actual figures could vary
materially from amounts presented above if any of our assumptions is incorrect. |
| 2. |
|
|
Members have entered into right-to-use contracts with us that entitle them to use
certain properties on a continuous basis for up to 21 days. |
| 3. |
|
|
Members who rent a specific site for an entire year in connection with their
right-to-use contract. |
| 4. |
|
|
Existing customers who have upgraded agreements are eligible for enhanced benefits,
including but not limited to longer stays, can make earlier reservations, may receive discounts on rental units, and may have
access to additional properties. Upgrades require a non-refundable upfront payment. |
| 5. |
|
|
Revenues associated with contract upgrades, included in Right-to-use contracts
current period, gross, on our Consolidated Income Statements on page 4. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Market Capitalization
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(In millions, except share and OP Unit data, unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Capital Structure as of December 31, 2018 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
% of Total |
|
|
|
|
|
|
|
|
% of Total |
|
|
|
Total Common |
|
|
Common |
|
|
|
|
|
|
|
|
Market |
|
|
|
Stock/Units |
|
|
Stock/Units |
|
|
Total |
|
|
% of Total |
|
|
Capitalization |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Secured Debt (1) |
|
|
|
|
|
|
|
|
$ |
2,186 |
|
|
|
91.6 |
% |
|
|
|
| Unsecured Debt |
|
|
|
|
|
|
|
|
200 |
|
|
|
8.4 |
% |
|
|
|
| Total Debt (1) (2) |
|
|
|
|
|
|
|
|
$ |
2,386 |
|
|
|
100.0 |
% |
|
|
20.4 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Common Stock |
|
|
89,921,018 |
|
|
|
94.0 |
% |
|
|
|
|
|
|
|
|
|
| OP Units |
|
|
5,745,966 |
|
|
|
6.0 |
% |
|
|
|
|
|
|
|
|
|
| Total Common Stock and OP Units |
|
|
95,666,984 |
|
|
|
100.0 |
% |
|
|
|
|
|
|
|
|
|
| Common Stock price at December 31, 2018 |
|
|
$ |
97.13 |
|
|
|
|
|
|
|
|
|
|
|
|
|
| Fair Value of Common Stock and OP Units |
|
|
|
|
|
|
|
|
$ |
9,292 |
|
|
|
100.0 |
% |
|
|
|
| Total Equity |
|
|
|
|
|
|
|
|
$ |
9,292 |
|
|
|
100.0 |
% |
|
|
79.6 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Total Market Capitalization |
|
|
|
|
|
|
|
|
$ |
11,678 |
|
|
|
|
|
|
100.0 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| _________________ |
| 1. |
|
|
Secured debt includes $11.2 million presented in Liabilities related to assets held
for sale on the Consolidated Balance Sheets. |
| 2. |
|
|
Excludes deferred financing costs of approximately $26.4 million. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Debt Maturity Schedule
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Debt Maturity Schedule as of December 31, 2018
|
|
(In thousands, unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted |
|
|
|
|
|
Weighted |
|
|
|
|
|
|
|
|
Weighted |
|
|
|
|
|
|
|
Average |
|
|
|
|
|
Average |
|
|
|
|
|
% of |
|
|
Average |
|
|
|
|
Secured |
|
|
Interest |
|
|
Unsecured |
|
|
Interest |
|
|
|
|
|
Total |
|
|
Interest |
|
| Year |
|
|
Debt |
|
|
Rate |
|
|
Debt |
|
|
Rate |
|
|
Total Debt |
|
|
Debt |
|
|
Rate |
|
| 2019 |
|
|
$ |
— |
|
|
|
— |
% |
|
|
$ |
— |
|
|
|
— |
% |
|
|
$ |
— |
|
|
|
— |
% |
|
|
— |
% |
|
| 2020 |
|
|
116,975 |
|
|
|
6.14 |
% |
|
|
— |
|
|
|
— |
% |
|
|
116,975 |
|
|
|
4.90 |
% |
|
|
6.14 |
% |
|
|
2021(1)
|
|
|
183,591 |
|
|
|
5.01 |
% |
|
|
— |
|
|
|
— |
% |
|
|
183,591 |
|
|
|
7.70 |
% |
|
|
5.01 |
% |
|
| 2022 |
|
|
142,434 |
|
|
|
4.58 |
% |
|
|
— |
|
|
|
— |
% |
|
|
142,434 |
|
|
|
5.97 |
% |
|
|
4.58 |
% |
|
| 2023 |
|
|
105,799 |
|
|
|
5.07 |
% |
|
|
200,000 |
|
|
|
3.05 |
% |
|
|
305,799 |
|
|
|
12.82 |
% |
|
|
3.75 |
% |
|
| 2024 |
|
|
— |
|
|
|
— |
% |
|
|
— |
|
|
|
— |
% |
|
|
— |
|
|
|
— |
% |
|
|
— |
% |
|
| 2025 |
|
|
103,266 |
|
|
|
3.45 |
% |
|
|
— |
|
|
|
— |
% |
|
|
103,266 |
|
|
|
4.33 |
% |
|
|
3.45 |
% |
|
| 2026 |
|
|
— |
|
|
|
— |
% |
|
|
— |
|
|
|
— |
% |
|
|
— |
|
|
|
— |
% |
|
|
— |
% |
|
| 2027 |
|
|
— |
|
|
|
— |
% |
|
|
— |
|
|
|
— |
% |
|
|
— |
|
|
|
— |
% |
|
|
— |
% |
|
| 2028 |
|
|
226,185 |
|
|
|
4.19 |
% |
|
|
— |
|
|
|
— |
% |
|
|
226,185 |
|
|
|
9.48 |
% |
|
|
4.19 |
% |
|
| Thereafter |
|
|
1,306,672 |
|
|
|
4.24 |
% |
|
|
— |
|
|
|
— |
% |
|
|
1,306,672 |
|
|
|
54.79 |
% |
|
|
4.24 |
% |
|
| Total (1) |
|
|
$ |
2,184,922 |
|
|
|
4.43 |
% |
|
|
$ |
200,000 |
|
|
|
3.05 |
% |
|
|
$ |
2,384,922 |
|
|
|
100.0 |
% |
|
|
4.31 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Unsecured Line of Credit (2) |
|
|
— |
|
|
|
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Note Premiums |
|
|
994 |
|
|
|
|
|
|
— |
|
|
|
|
|
|
994 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Total Debt |
|
|
2,185,916 |
|
|
|
|
|
|
200,000 |
|
|
|
|
|
|
2,385,916 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Deferred Financing Costs (1) |
|
|
(25,015 |
) |
|
|
|
|
|
(1,374 |
) |
|
|
|
|
|
(26,389 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Total Debt, net |
|
|
$ |
2,160,901 |
|
|
|
|
|
|
$ |
198,626 |
|
|
|
|
|
|
$ |
2,359,527 |
|
|
|
|
|
|
4.45 |
% |
(3) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Average Years to Maturity |
|
|
13.8 |
|
|
|
|
|
4.4 |
|
|
|
|
|
13.0 |
|
|
|
|
|
|
|
| |
| __________________ |
| 1. |
|
|
Secured debt includes $11.2 million presented in Liabilities related to assets held
for sale on the Consolidated Balance Sheets. |
| 2. |
|
|
Reflects outstanding balance on the Line of Credit as of December 31, 2018. |
| 3. |
|
|
Reflects effective interest rate including amortization of note premiums and deferred
financing costs. |
|
|
|
|
Non-GAAP Financial Measures Definitions and Other Terms
This document contains certain Non-GAAP measures used by management that we believe are helpful in understanding our business,
as further discussed in the paragraphs below. We believe investors should review these Non-GAAP measures along with GAAP net income
and cash flow from operating activities, investing activities and financing activities, when evaluating an equity REIT’s operating
performance. Our definitions and calculations of these Non-GAAP financial and operating measures and other terms may differ from
the definitions and methodologies used by other REITs and, accordingly, may not be comparable. These Non-GAAP financial and
operating measures do not represent cash generated from operating activities in accordance with GAAP, nor do they represent cash
available to pay distributions and should not be considered as an alternative to net income, determined in accordance with GAAP, as
an indication of our financial performance, or to cash flow from operating activities, determined in accordance with GAAP, as a
measure of our liquidity, nor is it indicative of funds available to fund our cash needs, including our ability to make cash
distributions.
FUNDS FROM OPERATIONS (FFO). We define FFO as net income, computed in accordance with GAAP, excluding gains and actual or
estimated losses from sales of properties, plus real estate related depreciation and amortization, impairments, if any, and after
adjustments for unconsolidated partnerships and joint ventures. Adjustments for unconsolidated partnerships and joint ventures are
calculated to reflect FFO on the same basis. We compute FFO in accordance with our interpretation of standards established by the
National Association of Real Estate Investment Trusts (“NAREIT”), which may not be comparable to FFO reported by other REITs that
do not define the term in accordance with the current NAREIT definition or that interpret the current NAREIT definition differently
than we do. We receive up-front non-refundable payments from the entry of right-to-use contracts. In accordance with GAAP, the
upfront non-refundable payments and related commissions are deferred and amortized over the estimated customer life. Although the
NAREIT definition of FFO does not address the treatment of non-refundable right-to-use payments, we believe that it is appropriate
to adjust for the impact of the deferral activity in our calculation of FFO.
We believe FFO, as defined by the Board of Governors of NAREIT, is generally a measure of performance for an equity REIT. While
FFO is a relevant and widely used measure of operating performance for equity REITs, it does not represent cash flow from
operations or net income as defined by GAAP, and it should not be considered as an alternative to these indicators in evaluating
liquidity or operating performance.
NORMALIZED FUNDS FROM OPERATIONS (NORMALIZED FFO). We define Normalized FFO as FFO excluding the following non-operating
income and expense items: a) gains and losses from early debt extinguishment, including prepayment penalties and defeasance costs;
b) acquisition and other transaction costs related to business combinations; and c) other miscellaneous non-comparable items.
Normalized FFO presented herein is not necessarily comparable to Normalized FFO presented by other real estate companies due to the
fact that not all real estate companies use the same methodology for computing this amount.
FUNDS AVAILABLE FOR DISTRIBUTION (FAD). We define FAD as Normalized FFO less non-revenue producing capital
expenditures.
We believe that FFO, Normalized FFO and FAD are helpful to investors as supplemental measures of the performance of an equity
REIT. We believe that by excluding the effect of depreciation, amortization, impairments, if any, and actual or estimated gains or
losses from sales of real estate, all of which are based on historical costs and which may be of limited relevance in evaluating
current performance, FFO can facilitate comparisons of operating performance between periods and among other equity REITs. We
further believe that Normalized FFO provides useful information to investors, analysts and our management because it allows them to
compare our operating performance to the operating performance of other real estate companies and between periods on a consistent
basis without having to account for differences not related to our operations. For example, we believe that excluding the early
extinguishment of debt, property acquisition and other transaction costs related to business combinations from Normalized FFO
allows investors, analysts and our management to assess the sustainability of operating performance in future periods because these
costs do not affect the future operations of the properties. In some cases, we provide information about identified non-cash
components of FFO and Normalized FFO because it allows investors, analysts and our management to assess the impact of those
items.
INCOME FROM PROPERTY OPERATIONS, EXCLUDING DEFERRALS AND PROPERTY MANAGEMENT. We define Income from property operations,
excluding deferrals and property management as rental income, utility and other income and right-to-use income less property and
rental home operating and maintenance expenses, real estate tax, sales and marketing expenses, excluding property management and
the GAAP deferral of right-to-use contract upfront payments and related commissions, net. We believe that this Non-GAAP financial
measure is helpful to investors and analysts as a measure of the operating results of our manufactured home and RV communities.
The following table reconciles Net income available for Common Stockholders to Income from property operations (amounts in
thousands):
|
|
|
|
|
|
|
|
|
|
Quarters Ended December 31, |
|
|
Years Ended December 31, |
|
|
|
2018 |
|
|
2017 |
|
|
2018 |
|
|
2017 |
| Net income available for Common Stockholders |
|
|
$ |
50,166 |
|
|
|
$ |
44,993 |
|
|
|
$ |
212,596 |
|
|
|
$ |
189,904 |
|
| Redeemable perpetual preferred stock dividends and original issuance costs |
|
|
8 |
|
|
|
18 |
|
|
|
16 |
|
|
|
7,685 |
|
| Income allocated to non-controlling interests - Common OP Units |
|
|
3,206 |
|
|
|
2,963 |
|
|
|
13,774 |
|
|
|
12,788 |
|
| Equity in income of unconsolidated joint ventures |
|
|
(1,343 |
) |
|
|
(889 |
) |
|
|
(4,939 |
) |
|
|
(3,765 |
) |
| Income before equity in income of unconsolidated joint ventures |
|
|
52,037 |
|
|
|
47,085 |
|
|
|
221,447 |
|
|
|
206,612 |
|
| Right-to-use upfront payments, deferred, net |
|
|
1,191 |
|
|
|
342 |
|
|
|
7,380 |
|
|
|
4,108 |
|
| Gross revenues from home sales |
|
|
(9,311 |
) |
|
|
(11,430 |
) |
|
|
(36,064 |
) |
|
|
(36,302 |
) |
| Brokered resale and ancillary services revenues, net |
|
|
(204 |
) |
|
|
290 |
|
|
|
(3,584 |
) |
|
|
(3,798 |
) |
| Interest income |
|
|
(1,867 |
) |
|
|
(2,038 |
) |
|
|
(7,525 |
) |
|
|
(7,580 |
) |
| Income from other investments, net |
|
|
(1,068 |
) |
|
|
(1,877 |
) |
|
|
(10,842 |
) |
|
|
(5,795 |
) |
| Right-to-use contract commissions, deferred, net |
|
|
(69 |
) |
|
|
18 |
|
|
|
(813 |
) |
|
|
(354 |
) |
| Property management |
|
|
12,994 |
|
|
|
12,509 |
|
|
|
53,736 |
|
|
|
51,252 |
|
| Depreciation on real estate and rental homes |
|
|
33,392 |
|
|
|
30,606 |
|
|
|
130,022 |
|
|
|
121,455 |
|
| Amortization of in-place leases |
|
|
2,118 |
|
|
|
103 |
|
|
|
7,187 |
|
|
|
2,231 |
|
| Cost of homes sales |
|
|
9,527 |
|
|
|
11,122 |
|
|
|
37,475 |
|
|
|
36,513 |
|
| Home selling expenses |
|
|
946 |
|
|
|
885 |
|
|
|
4,095 |
|
|
|
4,186 |
|
| General and administrative |
|
|
11,161 |
|
|
|
8,398 |
|
|
|
37,684 |
|
|
|
31,737 |
|
| Other expenses |
|
|
387 |
|
|
|
334 |
|
|
|
1,483 |
|
|
|
1,148 |
|
| Early debt retirement |
|
|
1,071 |
|
|
|
2,785 |
|
|
|
1,071 |
|
|
|
2,785 |
|
| Interest and related amortization |
|
|
26,515 |
|
|
|
25,842 |
|
|
|
104,993 |
|
|
|
100,570 |
|
| Income from property operations, excluding deferrals and property management |
|
|
138,820 |
|
|
|
124,974 |
|
|
|
547,745 |
|
|
|
508,768 |
|
| Right-to-use contracts, upfront payments and commissions, deferred, net |
|
|
(1,122 |
) |
|
|
(360 |
) |
|
|
(6,567 |
) |
|
|
(3,754 |
) |
| Property management |
|
|
(12,994 |
) |
|
|
(12,509 |
) |
|
|
(53,736 |
) |
|
|
(51,252 |
) |
| Income from property operations |
|
|
$ |
124,704 |
|
|
|
$ |
112,105 |
|
|
|
$ |
487,442 |
|
|
|
$ |
453,762 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EARNINGS BEFORE INTEREST, TAX, DEPRECIATION AND AMORTIZATION (EBITDA) AND ADJUSTED EBITDA. EBITDA is defined as net
income or loss before interest income and expense, income taxes, depreciation and amortization. We define Adjusted EBITDA as EBITDA
excluding the following non-operating income and expense items: a) gains and losses from early debt extinguishment, including
prepayment penalties and defeasance costs; b) property acquisition and other transaction costs related to business combinations; c)
GAAP deferral of right-to-use contract upfront payments and related commissions, net; d) depreciation on unconsolidated joint
ventures; e) impairments, if any; and f) other miscellaneous non-comparable items. EBITDA and Adjusted EBITDA provide us with an
understanding of one aspect of earnings before the impact of investing and financing charges. We believe that EBITDA and Adjusted
EBITDA may be useful to an investor in evaluating our operating performance and liquidity because the measures are widely used to
measure a company’s operating performance and they are used by rating agencies and other parties, including lenders, to evaluate
our creditworthiness.
The following table reconciles Consolidated net income to EBITDA and Adjusted EBITDA (amounts in thousands):
|
|
|
|
|
|
|
|
|
|
Quarters Ended December 31, |
|
|
Years Ended December 31, |
|
|
|
2018 |
|
|
2017 |
|
|
2018 |
|
|
2017 |
| Consolidated net income |
|
|
$ |
53,380 |
|
|
|
$ |
47,974 |
|
|
|
$ |
226,386 |
|
|
|
$ |
210,377 |
|
| Interest income |
|
|
(1,867 |
) |
|
|
(2,038 |
) |
|
|
(7,525 |
) |
|
|
(7,580 |
) |
| Depreciation on real estate assets and rental homes |
|
|
33,392 |
|
|
|
30,606 |
|
|
|
130,022 |
|
|
|
121,455 |
|
| Amortization of in-place leases |
|
|
2,118 |
|
|
|
103 |
|
|
|
7,187 |
|
|
|
2,231 |
|
| Depreciation on corporate assets |
|
|
387 |
|
|
|
334 |
|
|
|
1,483 |
|
|
|
1,263 |
|
| Depreciation on unconsolidated joint ventures |
|
|
426 |
|
|
|
362 |
|
|
|
1,816 |
|
|
|
1,533 |
|
| Interest and related amortization |
|
|
26,515 |
|
|
|
25,842 |
|
|
|
104,993 |
|
|
|
100,570 |
|
| EBITDA |
|
|
114,351 |
|
|
|
103,183 |
|
|
|
464,362 |
|
|
|
429,849 |
|
| Right-to-use contract upfront payments, deferred, net |
|
|
1,191 |
|
|
|
342 |
|
|
|
7,380 |
|
|
|
4,108 |
|
| Right-to-use contract commissions, deferred, net |
|
|
(69 |
) |
|
|
18 |
|
|
|
(813 |
) |
|
|
(354 |
) |
| Insurance proceeds due to catastrophic weather event and other, net |
|
|
800 |
|
|
|
— |
|
|
|
(5,125 |
) |
|
|
757 |
|
| Early debt retirement |
|
|
1,071 |
|
|
|
2,785 |
|
|
|
1,071 |
|
|
|
2,785 |
|
| Transaction costs |
|
|
— |
|
|
|
400 |
|
|
|
— |
|
|
|
724 |
|
| Adjusted EBITDA |
|
|
$ |
117,344 |
|
|
|
$ |
106,728 |
|
|
|
$ |
466,875 |
|
|
|
$ |
437,869 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CORE. The Core properties include properties we owned and operated during all of 2017 and 2018. We believe Core is a
measure that is useful to investors for annual comparison as it removes the fluctuations associated with acquisitions, dispositions
and significant transactions or unique situations.
NON-CORE. The Non-Core properties include all properties that were not owned and operated during all of 2017 and 2018.
This includes, but is not limited to, eight properties acquired during 2018, three properties acquired during 2017 and Fiesta Key
and Sunshine Key RV Resorts.
INCOME FROM RENTAL OPERATIONS, NET OF DEPRECIATION. We use Income from rental operations, net of depreciation as an
alternative measure to evaluate the operating results of our home rental program. Income from rental operations, net of
depreciation, represents income from rental operations less depreciation expense on rental homes. We believe this measure is
meaningful for investors as it provides a complete picture of the home rental program operating results including the impact of
depreciation which affects our home rental program investment decisions.
NON-REVENUE PRODUCING IMPROVEMENTS. Represents capital expenditures that will not directly result in increased revenue or
expense savings and are primarily comprised of common area improvements, furniture, and mechanical improvements.
FIXED CHARGES. Fixed charges consist of interest expense, amortization of note premiums and debt issuance costs.
Paul Seavey
(800) 247-5279
View source version on businesswire.com: https://www.businesswire.com/news/home/20190128005600/en/