Continued Strong Performance; Guidance Update

CHICAGO–(BUSINESS WIRE)–Equity LifeStyle Properties, Inc. (NYSE: ELS) (referred to herein as “we,” “us,” and “our”) today announced results for the quarter and six months ended June 30, 2021. All per share results are reported on a fully diluted basis unless otherwise noted.

Financial Results for the Quarter and Six Months Ended June 30, 2021

For the quarter ended June 30, 2021, total revenues increased $63.3 million, or 24.9 percent, to $317.4 million compared to $254.1 million for the same period in 2020. For the quarter ended June 30, 2021, net income available for Common Stockholders increased $14.9 million, or $0.08 per Common Share, to $61.1 million, or $0.33 per Common Share, compared to $46.2 million, or $0.25 per Common Share, for the same period in 2020.

For the six months ended June 30, 2021, total revenues increased $78.9 million, or 14.8 percent, to $613.5 million compared to $534.6 million for the same period in 2020. For the six months ended June 30, 2021, net income available for Common Stockholders increased $13.2 million, or $0.07 per Common Share, to $126.3 million, or $0.69 per Common Share, compared to $113.1 million, or $0.62 per Common Share, for the same period in 2020.

Non-GAAP Financial Measures and Portfolio Performance

For the quarter ended June 30, 2021, Funds from Operations (“FFO”) available for Common Stock and OP Unit holders increased $28.1 million, or $0.14 per Common Share, to $117.6 million, or $0.61 per Common Share, compared to $89.5 million, or $0.47 per Common Share, for the same period in 2020. For the six months ended June 30, 2021, FFO available for Common Stock and OP Unit holders increased $36.3 million, or $0.19 per Common Share, to $238.1 million, or $1.24 per Common Share, compared to $201.8 million, or $1.05 per Common Share, for the same period in 2020.

For the quarter ended June 30, 2021, Normalized Funds from Operations (“Normalized FFO”) available for Common Stock and OP Unit holders increased $27.4 million, or $0.14 per Common Share, to $118.3 million, or $0.61 per Common Share, compared to $90.9 million, or $0.47 per Common Share, for the same period in 2020. For the six months ended June 30, 2021, Normalized FFO available for Common Stock and OP Unit holders increased $36.6 million, or $0.19 per Common Share, to $240.9 million, or $1.25 per Common Share, compared to $204.3 million, or $1.06 per Common Share, for the same period in 2020.

For the quarter ended June 30, 2021, property operating revenues, excluding deferrals, increased $48.1 million to $295.1 million, compared to $247.0 million for the same period in 2020. For the six months ended June 30, 2021, property operating revenues, excluding deferrals, increased $63.7 million to $580.4 million, compared to $516.7 million for the same period in 2020. For the quarter ended June 30, 2021, income from property operations, excluding deferrals and property management, increased $27.1 million to $166.5 million, compared to $139.4 million for the same period in 2020. For the six months ended June 30, 2021, income from property operations, excluding deferrals and property management, increased $33.5 million to $336.8 million, compared to $303.3 million for the same period in 2020.

For the quarter ended June 30, 2021, Core property operating revenues, excluding deferrals, increased approximately 14.9 percent and Core income from property operations, excluding deferrals and property management, increased approximately 15.6 percent compared to the same period in 2020. For the six months ended June 30, 2021, Core property operating revenues, excluding deferrals, increased approximately 8.5 percent and Core income from property operations, excluding deferrals and property management, increased approximately 8.2 percent compared to the same period in 2020.

Business Updates

Page 1 of this Earnings Release and Supplemental Financial Information provides an update on operations and guidance.

Investment Activity

In June 2021, we completed the acquisition of Pine Haven, a 629-site RV community located in Cape May, New Jersey, for a purchase price of $62.8 million. The acquisition was funded with the line of credit.

About Equity LifeStyle Properties

We are a self-administered, self-managed real estate investment trust (“REIT”) with headquarters in Chicago. As of July 19, 2021, we own or have an interest in 435 quality properties in 33 states and British Columbia consisting of 166,188 sites.

For additional information, please contact our Investor Relations Department at (800) 247-5279 or at [email protected].

Conference Call

A live webcast of our conference call discussing these results will take place tomorrow, Tuesday, July 20, 2021, at 10:00 a.m. Central Time. Please visit the Investor Relations section at www.equitylifestyleproperties.com for the link. A replay of the webcast will be available for two weeks at this site.

Forward-Looking Statements

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

• our ability to control costs and real estate market conditions, our ability to retain customers, the actual use of sites by customers and our success in acquiring new customers at our properties (including those that we may acquire);
• our ability to maintain historical or increase future rental rates and occupancy with respect to properties currently owned or that we may acquire;
• our ability to attract and retain customers entering, renewing and upgrading membership subscriptions;
• our assumptions about rental and home sales markets;
• our assumptions and guidance concerning 2021 growth rates and Net Income and Normalized FFO per share data;
• our ability to manage counterparty risk;
• our ability to renew our insurance policies at existing rates and on consistent terms;
• 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;
• our 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 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.

Our guidance acknowledges the existence of volatile economic conditions, which may impact our current guidance assumptions. Factors impacting 2021 guidance include, but are not limited to the following: (i) the mix of site usage within the portfolio; (ii) yield management on our short-term resort and marina sites; (iii) scheduled or implemented rate increases on community, resort and marina sites; (iv) scheduled or implemented rate increases in annual payments under membership subscriptions; (v) occupancy changes; (vi) our ability to attract and retain membership customers; (vii) 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 addition, these forward-looking statements, including our 2021 guidance are subject to risks related to the COVID-19 pandemic, many of which are unknown, including the duration of the pandemic, the extent of the adverse health impact on the general population and on our residents, customers, and employees in particular, its impact on the employment rate and the economy, the extent and impact of governmental responses, and the impact of operational changes we have implemented and may implement in response to the pandemic.

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

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

Supplemental Financial Information

Operations and Guidance Update

We have continued our strong performance in 2021, as marked by these key operational and financial accomplishments:

• Normalized FFO per common share on a fully diluted basis was $0.61 for the quarter ended June 30, 2021, 30% higher than the quarter ended June 30, 2020 and 28% higher than the quarter ended June 30, 2019.
• Core Portfolio generated growth of 16% in income from property operations, excluding deferrals and property management, for the second quarter of 2021 compared to the second quarter of 2020.
• MH occupancy within our Core Portfolio increased by 68 sites from March 31, 2021.
• Membership sales and expenses, consisting of membership upgrade sales and expenses, as well as commissions on camping and Trails Collection passes, contributed $2.9 million for the quarter ended June 30, 2021, an increase of $2.1 million, or 277%, compared to the second quarter of 2020.
• All properties continue to be open subject to seasons of operation and state and local guidelines.
• Core Transient RV base rental income for the 4th of July holiday weekend grew 21% over 2019.

3rd Quarter and 2021 Full Year Guidance (1)
		3rd Quarter		Full Year
Core MH rate growth		4.2%		4.2%
Core RV Annual rate growth		4.8%		4.1%
Core Income from property operations, excluding deferrals and property management growth rate(2)		8.7% to 9.3%		7.4% to 8.4%
Net Income/share		$0.33 to $0.39		$1.35 to $1.45
Normalized FFO/share		$0.59 to $0.65		$2.42 to $2.52

______________________
(1)		Core MH and RV Annual rate growth estimates for 2021 represent management’s estimate of the most likely outcome. Third quarter and full year 2021 guidance ranges represent a range of possible outcomes and the midpoint reflects management’s estimate of the most likely outcome. Actual growth rates and per share amounts could vary materially from growth rates and per share amounts presented above if any of our assumptions, including occupancy and rate changes, our ability to integrate and operate recent acquisitions and costs to restore property operations and potential revenue losses following storms or other unplanned events, is incorrect. See Forward-Looking Statements in this release for additional factors impacting our 2021 guidance assumptions.
(2)		Third quarter 2021 includes a projected increase of approximately $3.5 million in Core RV transient base rental income compared to the third quarter of 2020.

Investor Information
Equity Research Coverage (1)
Bank of America Securities		Berenberg Bank		BMO Capital Markets
Jeffrey Spector/ Joshua Dennerlein		Keegan Carl		John Kim
Citi Research		Colliers Securities		Evercore ISI
Michael Bilerman/ Nick Joseph		David Toti		Steve Sakwa/ Samir Khanal
Green Street Advisors		RBC Capital Markets		Robert W. Baird & Company
John Pawlowski		Brad Heffern		Wes Golladay
UBS		Wells Fargo Securities
Michael Goldsmith		Todd Stender

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1.		Any opinions, estimates or forecasts regarding our performance made by these analysts or agencies do not represent our opinions, forecasts or predictions. We do not, by reference to these firms, imply our endorsement of or concurrence with such information, conclusions or recommendations.

Financial Highlights
(In millions, except Common Shares and OP Units outstanding and per share data, unaudited)
		As of and for the Three Months Ended
		Jun 30, 2021				Mar 31, 2021				Dec 31, 2020				Sept 30, 2020				Jun 30, 2020
Operating Information
Total revenues		$	317.4			$	296.0			$	271.9			$	285.0			$	254.1
Net income		$	64.1			$	69.0			$	68.4			$	53.5			$	48.9
Net income available for Common Stockholders		$	61.1			$	65.2			$	64.6			$	50.6			$	46.2
Adjusted EBITDAre (1)		$	144.6			$	147.9			$	133.1			$	129.7			$	116.2
FFO available for Common Stock and OP Unit holders (1)(2)		$	117.6			$	120.6			$	108.9			$	95.8			$	89.5
Normalized FFO available for Common Stock and OP Unit holders (1)(2)		$	118.3			$	122.6			$	108.9			$	105.5			$	90.9
Funds Available for Distribution (“FAD”) for Common Stock and OP Unit holders (1)(2)		$	99.0			$	111.0			$	91.1			$	90.0			$	75.6
Common Shares and OP Units Outstanding (In thousands) and Per Share Data
Common Shares and OP Units, end of the period			192,847				192,779				192,710				192,704				192,636
Weighted average Common Shares and OP Units outstanding – Fully Diluted			192,701				192,685				192,578				192,537				192,542
Net income per Common Share – Fully Diluted (3)		$	0.33			$	0.36			$	0.35			$	0.28			$	0.25
FFO per Common Share and OP Unit – Fully Diluted		$	0.61			$	0.63			$	0.57			$	0.50			$	0.47
Normalized FFO per Common Share and OP Unit – Fully Diluted		$	0.61			$	0.64			$	0.57			$	0.55			$	0.47
Dividends per Common Share		$	0.3625			$	0.3625			$	0.3425			$	0.3425			$	0.3425
Balance Sheet
Total assets		$	4,824			$	4,786			$	4,419			$	4,260			$	4,268
Total liabilities		$	3,522			$	3,481			$	3,114			$	2,961			$	2,961
Market Capitalization
Total debt (4)		$	3,010			$	3,012			$	2,695			$	2,529			$	2,522
Total market capitalization (5)		$	17,340			$	15,280			$	14,905			$	14,342			$	14,558
Ratios
Total debt / total market capitalization			17.4	%			19.7	%			18.1	%			17.6	%			17.3	%
Total debt / Adjusted EBITDAre (6)			5.4				5.7				5.2				5.0				5.0
Interest coverage (7)			5.4				5.2				5.1				4.9				4.9
Fixed charges(8)			5.3				5.1				5.0				4.9				4.9

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1.		See Non-GAAP Financial Measures Definitions and Reconciliations at the end of the supplemental financial information for definitions of Adjusted EBITDAre, FFO, Normalized FFO and FAD and a reconciliation of Consolidated net income to Adjusted EBITDAre.
2.		See page 8 for a reconciliation of Net income available for Common Stockholders to Non-GAAP financial measures FFO available for Common Stock and OP Unit holders, Normalized FFO available for Common Stock and OP Unit holders and FAD for Common Stock and OP Unit holders.
3.		Net income per Common Share – Fully Diluted is calculated before Income allocated to non-controlling interest – Common OP Units.
4.		Excludes deferred financing costs of approximately $30.1 million as of June 30, 2021.
5.		See page 15 for the calculation of market capitalization as of June 30, 2021.
6.		Calculated using trailing twelve months Adjusted EBITDAre.
7.		Calculated by dividing trailing twelve months Adjusted EBITDAre by the interest expense incurred during the same period.
8.		See Non-GAAP Financial Measures Definitions and Reconciliations at the end of the supplemental financial information for a definition of fixed charges. This ratio is calculated by dividing trailing twelve months Adjusted EBITDAre by the sum of fixed charges and preferred stock dividends, if any, during the same period.

Consolidated Balance Sheets
(In thousands, except share and per share data)
	June 30, 2021				December 31, 2020
	(unaudited)
Assets
Investment in real estate:
Land	$	1,877,023			$	1,676,636
Land improvements		3,702,696				3,543,479
Buildings and other depreciable property		1,027,716				940,311
		6,607,435				6,160,426
Accumulated depreciation		(2,014,797	)			(1,924,585	)
Net investment in real estate		4,592,638				4,235,841
Cash and restricted cash		44,753				24,060
Notes receivable, net		38,072				35,844
Investment in unconsolidated joint ventures		20,496				19,726
Deferred commission expense		45,288				42,472
Other assets, net		82,760				61,026
Total Assets	$	4,824,007			$	4,418,969
Liabilities and Equity
Liabilities:
Mortgage notes payable, net	$	2,621,130			$	2,444,930
Term loan, net		297,261				—
Unsecured line of credit		62,000				222,000
Accounts payable and other liabilities		164,331				129,666
Deferred membership revenue		167,631				150,692
Accrued interest payable		8,753				8,336
Rents and other customer payments received in advance and security deposits		130,903				92,587
Distributions payable		70,007				66,003
Total Liabilities		3,522,016				3,114,214
Equity:
Preferred stock, $0.01 par value, 10,000,000 shares authorized as of June 30, 2021 and December 31, 2020; none issued and outstanding.		—				—
Common stock, $0.01 par value, 600,000,000 shares authorized as of June 30, 2021 and December 31, 2020, respectively; 183,754,301 and 182,230,631 shares issued and outstanding as of June 30, 2021 and December 31, 2020, respectively.		1,827				1,813
Paid-in capital		1,424,350				1,411,397
Distributions in excess of accumulated earnings		(185,930	)			(179,523	)
Accumulated other comprehensive income (loss)		239				—
Total Stockholders’ Equity		1,240,486				1,233,687
Non-controlling interests – Common OP Units		61,505				71,068
Total Equity		1,301,991				1,304,755
Total Liabilities and Equity	$	4,824,007			$	4,418,969

Consolidated Income Statements
(In thousands, unaudited)
		Quarters Ended June 30,								Six Months Ended June 30,
		2021				2020				2021				2020
Revenues:
Rental income		$	255,698			$	217,963			$	504,720			$	457,309
Annual membership subscriptions			14,267				12,961				27,921				26,034
Membership upgrade sales current period, gross			9,207				5,048				19,221				9,891
Membership upgrade sales upfront payments, deferred, net			(6,454	)			(2,666	)			(13,881	)			(5,208	)
Other income			14,185				9,680				24,706				20,739
Gross revenues from home sales			24,427				8,866				39,647				20,175
Brokered resale and ancillary services revenues, net			3,129				(575	)			5,466				363
Interest income			1,742				1,791				3,509				3,598
Income from other investments, net			1,222				1,022				2,158				1,665
Total revenues			317,423				254,090				613,467				534,566
Expenses:
Property operating and maintenance			102,663				85,265				191,536				168,899
Real estate taxes			17,896				16,668				35,746				33,509
Sales and marketing, gross			6,298				4,276				12,474				8,254
Membership sales commissions, deferred, net			(1,438	)			(481	)			(2,937	)			(697	)
Property management			16,560				14,813				31,940				29,817
Depreciation and amortization			48,316				38,332				93,714				77,356
Cost of home sales			23,856				8,850				38,724				20,761
Home selling expenses			1,346				1,081				2,652				2,294
General and administrative			10,228				10,609				20,740				21,464
Other expenses			800				639				1,498				1,227
Early debt retirement			755				—				2,784				1,054
Interest and related amortization			27,131				26,249				53,406				52,322
Total expenses			254,411				206,301				482,277				416,260
Loss on sale of real estate, net			—				—				(59	)			—
Income before equity in income of unconsolidated joint ventures			63,012				47,789				131,131				118,306
Equity in income of unconsolidated joint ventures			1,068				1,064				1,936				1,271
Consolidated net income			64,080				48,853				133,067				119,577
Income allocated to non-controlling interests – Common OP Units			(3,021	)			(2,658	)			(6,768	)			(6,507	)
Redeemable perpetual preferred stock dividends			(8	)			(8	)			(8	)			(8	)
Net income available for Common Stockholders		$	61,051			$	46,187			$	126,291			$	113,062

Non-GAAP Financial Measures

This document contains certain non-GAAP measures used by management that we believe are helpful to understand our business. We believe investors should review these non-GAAP measures along with GAAP net income and cash flows 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 flows from operating activities, determined in accordance with GAAP, as a measure of our liquidity, nor are they indicative of funds available to fund our cash needs, including our ability to make cash distributions. For definitions and reconciliations of non-GAAP measures to our financial statements as prepared under GAAP, refer to both Reconciliation of Net Income to Non-GAAP Financial Measures on page 8 and Non-GAAP Financial Measures Definitions and Reconciliations on pages 17 – 19.

Selected Non-GAAP Financial Measures
(In millions, except per share data, unaudited)
	Quarter Ended
	June 30, 2021
Income from property operations, excluding deferrals and property management – 2021 Core (1)	$	161.3
Income from property operations, excluding deferrals and property management – Non-Core (1)		5.2
Property management and general and administrative		(26.8	)
Other income and expenses		5.7
Interest and related amortization		(27.1	)
Normalized FFO available for Common Stock and OP Unit holders (2)	$	118.3
Early debt retirement		(0.7	)
FFO available for Common Stock and OP Unit holders (2)	$	117.6
FFO per Common Share and OP Unit – Fully Diluted	$	0.61
Normalized FFO per Common Share and OP Unit – Fully Diluted	$	0.61
Normalized FFO available for Common Stock and OP Unit holders (2)	$	118.3
Non-revenue producing improvements to real estate		(19.3	)
FAD for Common Stock and OP Unit holders (2)	$	99.0
Weighted average Common Shares and OP Units – Fully Diluted		192.7

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1.		See page 10 for details of the Core Income from Property Operations, excluding deferrals and property management. See page 11 for details of the Non-Core Income from Property Operations, excluding deferrals and property management.
2.		See page 8 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 for Common Stock and OP Unit holders.

Contacts

Paul Seavey

(800) 247-5279

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Source: https://www.fintechnews.org/els-reports-second-quarter-results/