Sign In  |  Register  |  About Menlo Park  |  Contact Us

Menlo Park, CA
September 01, 2020 1:28pm
7-Day Forecast | Traffic
  • Search Hotels in Menlo Park

  • CHECK-IN:
  • CHECK-OUT:
  • ROOMS:

ELS Reports Second Quarter Results

Continued Strong Performance; Guidance Increase

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, 2023. All per share results are reported on a fully diluted basis unless otherwise noted.

($ in millions, except per share data)

 

 

 

 

 

FINANCIAL RESULTS

Q2 2023

 

Q2 2022

 

$ Change

Total Revenues

$

370.0

 

$

365.3

 

$

4.7

 

Net Income available for Common Stockholders

$

62.9

 

$

61.5

 

$

1.4

 

Net Income per Common Share - Fully Diluted

$

0.34

 

$

0.33

 

$

0.01

 

 

 

 

 

 

 

NON-GAAP FINANCIAL MEASURES

Q2 2023

 

Q2 2022

 

$ Change

Funds from Operations (“FFO”) per Common Share and OP Unit - Fully Diluted

$

0.63

 

$

0.62

 

$

0.01

 

Normalized Funds from Operations (“Normalized FFO”) per Common Share and

OP Unit - Fully Diluted

$

0.66

 

$

0.64

 

$

0.02

 

Property operating revenues, excluding deferrals

$

333.3

 

$

315.8

 

$

17.5

 

Income from property operations, excluding deferrals and property management

$

184.5

 

$

174.8

 

$

9.7

 

 

 

 

 

 

 

Core Portfolio Performance

Q2 2023

 

Q2 2022

 

% Change

Core property operating revenues, excluding deferrals

$

320.6

 

$

305.3

 

 

5.0

%

Core income from property operations, excluding deferrals and property management

$

175.6

 

$

169.9

 

 

3.5

%

Operations Update

Normalized FFO for the quarter ended June 30, 2023 was $0.66 per share, representing a 3.4% increase compared to the same period in 2022, outperforming the midpoint of our guidance expectation by $3.2 million.

MH

Core MH base rental income for the quarter ended June 30, 2023 increased 6.7% compared to the same period in 2022, which reflects 7.0% growth from rate increases. We sold 226 new homes during the quarter ended June 30, 2023, with an average sales price of $102,000.

RV and Marina

Core RV and marina base rental income for the quarter ended June 30, 2023 increased 2.3% compared to the same period in 2022. Core RV and marina annual base rental income for the quarter ended June 30, 2023 increased 7.8% compared to the same period in 2022, which reflects 7.3% growth from rate increases and 0.5% from occupancy gains. Demand from customers to visit our RV and Thousand Trails properties remains strong as total site utilization throughout the portfolio is in line compared to the quarter ended June 30, 2022 and increased 8% compared to the quarter ended June 30, 2019. Core RV and marina transient base rental income for the quarter ended June 30, 2023 decreased 13.9% compared to the same period in 2022. We continue to see demand for annual sites and have increased our Core RV and marina annual site count by approximately 240 since December 31, 2022, which has reduced the number of transient sites available for use. We experienced significant weather events during the quarter ended June 30, 2023 in California, the Pacific Northwest and along the East coast that impacted our results. During the quarter ended June 30, 2023, we made a change to our Core portfolio. Refer to page 19 for properties designated as Non-Core.

Property Operating Expenses

Core property operating expenses for the quarter ended June 30, 2023 increased 7.0% compared to the same period in 2022. Property operating and maintenance expenses for the quarter ended June 30, 2023 were favorable to our guidance expectations and the variance, primarily related to utility and payroll expenses, demonstrated a strong correlation to RV locations with lower than expected Transient rent in the same period. See page 8 for details of the Core property operating expenses.

Guidance (1)(2)

 

($ in millions, except per share data)

 

 

 

 

2023

 

 

 

 

 

Third Quarter

 

Full Year

Net Income per Common Share - Fully Diluted

 

 

 

 

$0.38 to $0.44

 

$1.59 to $1.69

FFO per Common Share and OP Unit - Fully Diluted

 

 

 

 

$0.68 to $0.74

 

$2.76 to $2.86

Normalized FFO per Common Share and OP Unit - Fully Diluted

 

 

 

 

$0.68 to $0.74

 

$2.80 to $2.90

 

 

 

 

 

 

 

 

 

2022 Actual

 

2023 Growth Rates

Core Portfolio:

Third Quarter

 

Full Year

 

Third Quarter

 

Full Year

MH base rental income

$

157.0

 

$

626.0

 

6.5% to 7.1%

 

6.3% to 7.3%

RV and marina base rental income (3)

$

104.3

 

$

392.3

 

2.7% to 3.3%

 

4.1% to 5.1%

Property operating revenues

$

320.7

 

$

1,238.1

 

4.9% to 5.5%

 

5.5% to 6.5%

Property operating expenses

$

142.3

 

$

524.1

 

4.7% to 5.3%

 

6.3% to 7.3%

Income from property operations, excluding deferrals and property management

$

178.4

 

$

714.0

 

5.2% to 5.8%

 

4.9% to 5.9%

 

 

 

 

 

 

 

 

Non-Core Portfolio:

 

 

 

 

2023 Full Year

Income from property operations, excluding deferrals and property management

 

 

 

 

$22.8 to $26.8

 

 

 

 

 

 

 

 

Other Guidance Assumptions:

 

 

 

 

2023 Full Year

Property management and general administrative (4)

 

 

 

 

$120.6 to $126.6

Debt Assumptions: (5)

 

 

 

 

 

 

 

Weighted average debt outstanding

 

 

 

 

$3,375 to $3,575

Interest and related amortization

 

 

 

 

$129.0 to $135.0

(1)

Third quarter and full year 2023 guidance ranges represent a range of possible outcomes and the midpoint reflects management's estimate of the most likely outcome. Actual growth rates and per share amounts could vary materially from growth rates and per share amounts presented above if any of our assumptions, including occupancy and rate changes, our ability to manage expenses in an inflationary environment, our ability to integrate and operate recent acquisitions and costs to restore property operations and potential revenue losses following storms or other unplanned events, is incorrect. See Forward-Looking Statements in this release for additional factors impacting our 2023 guidance assumptions. See Non-GAAP Financial Measures Definitions and Reconciliations at the end of the supplemental financial information.

(2)

Guidance assumptions do not include future capital events (financing transactions, acquisitions or dispositions) subsequent to those discussed in this press release or the use of free cash flow.

(3)

Core RV and marina annual revenue represents approximately 65.8% and 67.9% of third quarter 2023 and full year 2023 RV and marina base rental income, respectively. Core RV and marina annual revenue third quarter 2023 growth rate range is 8.2% to 8.8% and the full year 2023 growth rate range is 7.8% to 8.8%.

(4)

Includes accelerated vesting of stock-based compensation expense of $6.3 million recognized during the quarter ended June 30, 2023 as a result of the passing of a member of our Board of Directors.

(5)

Includes financing transactions discussed in this press release.

Balance Sheet Activity

In June 2023, we closed on a secured refinancing transaction generating gross proceeds of $89 million (the “June 2023 financing”). The loan represents an incremental borrowing from an existing secured facility, has a fixed interest rate of 5.04% per annum and matures in 10 years.

We also locked rate on a $375 million secured financing at a weighted average interest rate of 5.05% secured by a pool of MH and RV assets. The secured financing has a weighted average term to maturity of 7.5 years. We expect to close in the third quarter of 2023.

In July 2023 we repaid all debt scheduled to mature in 2023 and 2024 with proceeds from the June 2023 financing and our unsecured line of credit. Upon consummation of the $375 million secured financing, which is subject to customary closing conditions, the proceeds will be used to pay off the remaining balance on our unsecured 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 17, 2023, we own or have an interest in 450 properties in 35 states and British Columbia consisting of 171,706 sites.

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

Conference Call

A live audio webcast of our conference call discussing these results will take place tomorrow, Tuesday, July 18, 2023, at 10:00 a.m. Central Time. Please visit the Investor Relations section at www.equitylifestyleproperties.com for the link. A replay of the webcast will be available for two weeks at this site.

Forward-Looking Statements

In addition to historical information, this press release includes certain “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. When used, words such as “anticipate,” “expect,” “believe,” “project,” “intend,” “may be” and “will be” and similar words or phrases, or the negative thereof, unless the context requires otherwise, are intended to identify forward-looking statements and may include without limitation, information regarding our expectations, goals or intentions regarding the future, and the expected effect of our acquisitions. Forward-looking statements, including our guidance concerning Net Income, FFO and Normalized FFO per share data, by their nature, involve estimates, projections, goals, forecasts and assumptions and are subject to risks and uncertainties that could cause actual results or outcomes to differ materially from those expressed in a forward-looking statement due to a number of factors, which include, but are not limited to the following: (i) the mix of site usage within the portfolio; (ii) yield management on our short-term resort and marina sites; (iii) scheduled or implemented rate increases on community, resort and marina sites; (iv) scheduled or implemented rate increases in annual payments under membership subscriptions; (v) occupancy changes; (vi) our ability to attract and retain membership customers; (vii) change in customer demand regarding travel and outdoor vacation destinations; (viii) our ability to manage expenses in an inflationary environment; (ix) our ability to integrate and operate recent acquisitions in accordance with our estimates; (x) our ability to execute expansion/development opportunities in the face of supply chain delays/shortages; (xi) completion of pending transactions in their entirety and on assumed schedule; (xii) our ability to attract and retain property employees, particularly seasonal employees; (xiii) ongoing legal matters and related fees; and (xiv) costs to restore property operations and potential revenue losses following storms or other unplanned events. 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” and “Forward-Looking Statements” sections in our most recent Annual Report on Form 10-K and any 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

Financial Highlights

 

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

 

 

As of and for the Quarters Ended

 

Jun 30,

2023

Mar 31,

2023

Dec 31,

2022

Sep 30,

2022

Jun 30,

2022

Operating Information

 

 

 

 

 

Total revenues

$

370.0

 

$

370.0

 

$

340.6

 

$

381.0

 

$

365.3

 

Consolidated net income

$

66.0

 

$

86.5

 

$

76.7

 

$

70.5

 

$

64.6

 

Net income available for Common Stockholders

$

62.9

 

$

82.4

 

$

73.0

 

$

67.2

 

$

61.5

 

Adjusted EBITDAre (1)

$

162.5

 

$

176.7

 

$

159.2

 

$

166.4

 

$

153.3

 

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

$

123.4

 

$

144.1

 

$

126.6

 

$

134.4

 

$

121.6

 

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

$

129.7

 

$

144.3

 

$

128.1

 

$

136.8

 

$

125.3

 

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

$

103.1

 

$

126.2

 

$

106.9

 

$

115.4

 

$

103.6

 

 

 

 

 

 

 

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

 

 

 

 

 

Common Shares and OP Units, end of the period

 

195,514

 

 

195,446

 

 

195,386

 

 

195,380

 

 

195,373

 

Weighted average Common Shares and OP Units outstanding - Fully Diluted

 

195,430

 

 

195,369

 

 

195,281

 

 

195,269

 

 

195,227

 

Net income per Common Share - Fully Diluted (3)

$

0.34

 

$

0.44

 

$

0.39

 

$

0.36

 

$

0.33

 

FFO per Common Share and OP Unit - Fully Diluted

$

0.63

 

$

0.74

 

$

0.65

 

$

0.69

 

$

0.62

 

Normalized FFO per Common Share and OP Unit - Fully Diluted

$

0.66

 

$

0.74

 

$

0.66

 

$

0.70

 

$

0.64

 

Dividends per Common Share

$

0.4475

 

$

0.4475

 

$

0.4100

 

$

0.4100

 

$

0.4100

 

 

 

 

 

 

 

Balance Sheet

 

 

 

 

 

Total assets

$

5,586

 

$

5,519

 

$

5,493

 

$

5,405

 

$

5,400

 

Total liabilities

$

4,083

 

$

4,006

 

$

3,975

 

$

3,886

 

$

3,878

 

 

 

 

 

 

 

Market Capitalization

 

 

 

 

 

Total debt (4)

$

3,479

 

$

3,414

 

$

3,416

 

$

3,329

 

$

3,298

 

Total market capitalization (5)

$

16,557

 

$

16,534

 

$

16,038

 

$

15,607

 

$

17,066

 

 

 

 

 

 

 

Ratios

 

 

 

 

 

Total debt / total market capitalization

 

21.0

%

 

20.6

%

 

21.3

%

 

21.3

%

 

19.3

%

Total debt / Adjusted EBITDAre (6)

 

5.2

 

 

5.2

 

 

5.3

 

 

5.2

 

 

5.3

 

Interest coverage (7)

 

5.4

 

 

5.5

 

 

5.6

 

 

5.7

 

 

5.7

 

Fixed charges(8)

 

5.2

 

 

5.4

 

 

5.6

 

 

5.6

 

 

5.6

 

_____________________________
  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 6 for a reconciliation of Net income available for Common Stockholders to Non-GAAP financial measures FFO available for Common Stock and OP Unit holders, Normalized FFO available for Common Stock and OP Unit holders and FAD for Common Stock and OP Unit holders.
  3. Net income per Common Share - Fully Diluted is calculated before Income allocated to non-controlling interest - Common OP Units.
  4. Excludes deferred financing costs of approximately $28.0 million as of June 30, 2023.
  5. See page 14 for the calculation of market capitalization as of June 30, 2023.
  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, 2023

 

December 31, 2022

 

(unaudited)

 

 

Assets

 

 

 

Investment in real estate:

 

 

 

Land

$

2,088,511

 

 

$

2,084,532

 

Land improvements

 

4,237,327

 

 

 

4,115,439

 

Buildings and other depreciable property

 

1,223,492

 

 

 

1,169,590

 

 

 

7,549,330

 

 

 

7,369,561

 

Accumulated depreciation

 

(2,355,031

)

 

 

(2,258,540

)

Net investment in real estate

 

5,194,299

 

 

 

5,111,021

 

Cash and restricted cash

 

28,107

 

 

 

22,347

 

Notes receivable, net

 

47,375

 

 

 

45,356

 

Investment in unconsolidated joint ventures

 

82,423

 

 

 

81,404

 

Deferred commission expense

 

51,978

 

 

 

50,441

 

Other assets, net

 

181,805

 

 

 

181,950

 

Total Assets

$

5,585,987

 

 

$

5,492,519

 

 

 

 

 

Liabilities and Equity

 

 

 

Liabilities:

 

 

 

Mortgage notes payable, net

$

2,748,807

 

 

$

2,693,167

 

Term loan, net

 

497,195

 

 

 

496,817

 

Unsecured line of credit

 

205,000

 

 

 

198,000

 

Accounts payable and other liabilities

 

172,851

 

 

 

175,148

 

Deferred membership revenue

 

210,242

 

 

 

197,743

 

Accrued interest payable

 

12,305

 

 

 

11,739

 

Rents and other customer payments received in advance and security deposits

 

148,989

 

 

 

122,318

 

Distributions payable

 

87,486

 

 

 

80,102

 

Total Liabilities

 

4,082,875

 

 

 

3,975,034

 

Equity:

 

 

 

Preferred stock, $0.01 par value, 10,000,000 shares authorized as of June 30, 2023 and December 31, 2022; none issued and outstanding.

 

 

 

 

 

Common stock, $0.01 par value, 600,000,000 shares authorized as of June 30, 2023 and December 31, 2022; 186,273,876 and 186,120,298 shares issued and outstanding as of June 30, 2023 and December 31, 2022, respectively.

 

1,916

 

 

 

1,916

 

Paid-in capital

 

1,638,354

 

 

 

1,628,618

 

Distributions in excess of accumulated earnings

 

(225,640

)

 

 

(204,248

)

Accumulated other comprehensive income

 

17,327

 

 

 

19,119

 

Total Stockholders’ Equity

 

1,431,957

 

 

 

1,445,405

 

Non-controlling interests – Common OP Units

 

71,155

 

 

 

72,080

 

Total Equity

 

1,503,112

 

 

 

1,517,485

 

Total Liabilities and Equity

$

5,585,987

 

 

$

5,492,519

 

Consolidated Statements of Income

(In thousands, unaudited)

 

Quarters Ended June 30,

 

Six Months Ended June 30,

 

2023

 

2022

 

2023

 

2022

Revenues:

 

 

 

 

 

 

 

Rental income

$

288,655

 

 

$

275,330

 

 

$

585,106

 

 

$

560,395

 

Annual membership subscriptions

 

16,189

 

 

 

15,592

 

 

 

32,159

 

 

 

30,749

 

Membership upgrade sales (1)

 

3,614

 

 

 

3,168

 

 

 

7,119

 

 

 

6,235

 

Other income

 

17,911

 

 

 

14,195

 

 

 

35,625

 

 

 

27,736

 

Gross revenues from home sales, brokered resales and ancillary services

 

38,913

 

 

 

52,681

 

 

 

71,046

 

 

 

92,390

 

Interest income

 

2,259

 

 

 

1,722

 

 

 

4,347

 

 

 

3,481

 

Income from other investments, net

 

2,473

 

 

 

2,617

 

 

 

4,564

 

 

 

4,521

 

Total revenues

 

370,014

 

 

 

365,305

 

 

 

739,966

 

 

 

725,507

 

 

 

 

 

 

 

 

 

Expenses:

 

 

 

 

 

 

 

Property operating and maintenance

 

122,214

 

 

 

114,307

 

 

 

234,697

 

 

 

218,299

 

Real estate taxes

 

18,832

 

 

 

19,182

 

 

 

37,148

 

 

 

38,639

 

Membership sales and marketing (2)

 

5,521

 

 

 

5,452

 

 

 

10,359

 

 

 

9,783

 

Property management

 

19,359

 

 

 

19,099

 

 

 

38,823

 

 

 

36,970

 

Depreciation and amortization

 

51,464

 

 

 

50,796

 

 

 

101,966

 

 

 

100,190

 

Cost of home sales, brokered resales and ancillary services

 

29,268

 

 

 

40,971

 

 

 

52,409

 

 

 

71,670

 

Home selling expenses and ancillary operating expenses

 

7,170

 

 

 

7,584

 

 

 

14,094

 

 

 

14,066

 

General and administrative (3)(4)

 

16,607

 

 

 

11,679

 

 

 

28,268

 

 

 

23,750

 

Casualty-related charges/(recoveries), net (5)

 

 

 

 

 

 

 

 

 

 

 

Other expenses (4)

 

1,381

 

 

 

4,205

 

 

 

2,849

 

 

 

5,251

 

Early debt retirement

 

 

 

 

640

 

 

 

 

 

 

1,156

 

Interest and related amortization

 

33,122

 

 

 

28,053

 

 

 

65,710

 

 

 

55,517

 

Total expenses

 

304,938

 

 

 

301,968

 

 

 

586,323

 

 

 

575,291

 

Loss on sale of real estate and impairment, net

 

 

 

 

 

 

 

(2,632

)

 

 

 

Income before equity in income of unconsolidated joint ventures

 

65,076

 

 

 

63,337

 

 

 

151,011

 

 

 

150,216

 

Equity in income of unconsolidated joint ventures

 

973

 

 

 

1,253

 

 

 

1,497

 

 

 

1,424

 

Consolidated net income

 

66,049

 

 

 

64,590

 

 

 

152,508

 

 

 

151,640

 

 

 

 

 

 

 

 

 

Income allocated to non-controlling interests – Common OP Units

 

(3,121

)

 

 

(3,073

)

 

 

(7,209

)

 

 

(7,217

)

Redeemable perpetual preferred stock dividends

 

(8

)

 

 

(8

)

 

 

(8

)

 

 

(8

)

Net income available for Common Stockholders

$

62,920

 

 

$

61,509

 

 

$

145,291

 

 

$

144,415

 

________________________________
  1. Membership upgrade sales revenue is net of deferrals of $5.7 million and $6.4 million for the quarters ended June 30, 2023 and June 30, 2022, respectively, and $10.1 million and $10.5 million for the six months ended June 30, 2023 and June 30, 2022, respectively.
  2. Membership sales and marketing expense is net of sales commission deferrals of $0.9 million and $1.0 million for the quarters ended June 30, 2023 and June 30, 2022, respectively, and $1.6 million and $1.5 million for the six months ended June 30, 2023 and June 30, 2022, respectively.
  3. Includes accelerated vesting of stock-based compensation expense of $6.3 million recognized during the quarter and six months ended June 30, 2023 as a result of the passing of a member of our Board of Directors.
  4. Prior period amounts have been reclassified to conform to the current period presentation.
  5. Casualty-related charges/(recoveries), net for the quarter ended June 30, 2023 includes debris removal and cleanup costs related to Hurricane Ian of $1.8 million and insurance recovery revenue of $1.8 million. Casualty-related charges/(recoveries), net for the six months ended June 30, 2023 includes debris removal and cleanup costs related to Hurricane Ian of $10.3 million and insurance recovery revenue of $10.3 million.

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 6 and Non-GAAP Financial Measures Definitions and Reconciliations on pages 16-19.

Selected Non-GAAP Financial Measures

(In millions, except per share data, unaudited)

 

Quarter Ended

 

June 30, 2023

Income from property operations, excluding deferrals and property management - 2023 Core (1)

$

175.6

 

Income from property operations, excluding deferrals and property management - Non-Core (1)

 

9.0

 

Property management and general and administrative

 

(36.0

)

Other income and expenses

 

14.2

 

Interest and related amortization

 

(33.1

)

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

$

129.7

 

Accelerated vesting of stock-based compensation expense(3)

 

(6.3

)

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

$

123.4

 

 

 

FFO per Common Share and OP Unit - Fully Diluted

$

0.63

 

Normalized FFO per Common Share and OP Unit - Fully Diluted

$

0.66

 

 

 

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

$

129.7

 

Non-revenue producing improvements to real estate

 

(26.6

)

FAD for Common Stock and OP Unit holders (2)

$

103.1

 

 

 

Weighted average Common Shares and OP Units - Fully Diluted

 

195.4

 

______________________________________
  1. See pages 8-9 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 page 6 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.
  3. Represents accelerated vesting of stock-based compensation expense of $6.3 million recognized during the quarter ended June 30, 2023 as a result of the passing of a member of our Board of Directors.

Reconciliation of Net Income to Non-GAAP Financial Measures

(In thousands, except per share data, unaudited)

 

Quarters Ended June 30,

 

Six Months Ended June 30,

 

2023

 

2022

 

2023

 

2022

Net income available for Common Stockholders

$

62,920

 

 

$

61,509

 

 

$

145,291

 

 

$

144,415

 

Income allocated to non-controlling interests – Common OP Units

 

3,121

 

 

 

3,073

 

 

 

7,209

 

 

 

7,217

 

Membership upgrade sales upfront payments, deferred, net (1)

 

5,664

 

 

 

6,367

 

 

 

10,134

 

 

 

10,451

 

Membership sales commissions, deferred, net (1)

 

(871

)

 

 

(957

)

 

 

(1,550

)

 

 

(1,540

)

Depreciation and amortization

 

51,464

 

 

 

50,796

 

 

 

101,966

 

 

 

100,190

 

Depreciation on unconsolidated joint ventures

 

1,081

 

 

 

835

 

 

 

2,216

 

 

 

1,776

 

Gain on unconsolidated joint ventures

 

 

 

 

 

 

 

(416

)

 

 

 

Loss on sale of real estate and impairment, net

 

 

 

 

 

 

 

2,632

 

 

 

 

FFO available for Common Stock and OP Unit holders

 

123,379

 

 

 

121,623

 

 

 

267,482

 

 

 

262,509

 

Accelerated vesting of stock-based compensation expense (2)

 

6,320

 

 

 

 

 

 

6,320

 

 

 

 

Early debt retirement

 

 

 

 

640

 

 

 

 

 

 

1,156

 

Transaction/pursuit costs

 

 

 

 

3,082

 

 

 

117

 

 

 

3,082

 

Lease termination expenses

 

 

 

 

 

 

 

90

 

 

 

 

Normalized FFO available for Common Stock and OP Unit holders

 

129,699

 

 

 

125,345

 

 

 

274,009

 

 

 

266,747

 

Non-revenue producing improvements to real estate

 

(26,573

)

 

 

(21,738

)

 

 

(44,685

)

 

 

(38,106

)

FAD for Common Stock and OP Unit holders

$

103,126

 

 

$

103,607

 

 

$

229,324

 

 

$

228,641

 

 

 

 

 

 

 

 

 

Net income per Common Share - Basic

$

0.34

 

 

$

0.33

 

 

$

0.78

 

 

$

0.78

 

Net income per Common Share - Fully Diluted (3)

$

0.34

 

 

$

0.33

 

 

$

0.78

 

 

$

0.78

 

 

 

 

 

 

 

 

 

FFO per Common Share and OP Unit - Basic

$

0.63

 

 

$

0.62

 

 

$

1.37

 

 

$

1.35

 

FFO per Common Share and OP Unit - Fully Diluted

$

0.63

 

 

$

0.62

 

 

$

1.37

 

 

$

1.34

 

 

 

 

 

 

 

 

 

Normalized FFO per Common Share and OP Unit - Basic

$

0.66

 

 

$

0.64

 

 

$

1.40

 

 

$

1.37

 

Normalized FFO per Common Share and OP Unit - Fully Diluted

$

0.66

 

 

$

0.64

 

 

$

1.40

 

 

$

1.37

 

 

 

 

 

 

 

 

 

Weighted average Common Shares outstanding - Basic

 

186,023

 

 

 

185,767

 

 

 

185,962

 

 

 

185,729

 

Weighted average Common Shares and OP Units outstanding - Basic

 

195,263

 

 

 

195,064

 

 

 

195,213

 

 

 

195,028

 

Weighted average Common Shares and OP Units outstanding - Fully Diluted

 

195,430

 

 

 

195,227

 

 

 

195,388

 

 

 

195,253

 

____________________________
  1. See page 13 for details of Membership upgrade sales and related commissions.
  2. Represents accelerated vesting of stock-based compensation expense of $6.3 million recognized during the quarter and six months ended June 30, 2023 as a result of the passing of a member of our Board of Directors.
  3. Net income per Common Share - Fully Diluted 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 June 30,

 

Six Months Ended June 30,

 

2023

 

2022

 

2023

 

2022

MH base rental income (2)

$

166.4

 

 

$

158.7

 

 

$

331.0

 

 

$

316.0

 

Rental home income (2)

 

3.7

 

 

 

3.8

 

 

 

7.6

 

 

 

7.8

 

RV and marina base rental income (2)

 

101.9

 

 

 

98.3

 

 

 

213.5

 

 

 

207.1

 

Annual membership subscriptions

 

16.2

 

 

 

15.6

 

 

 

32.1

 

 

 

30.7

 

Membership upgrade sales current period, gross (3)

 

9.3

 

 

 

9.5

 

 

 

17.2

 

 

 

16.7

 

Utility and other income (2)(4)

 

35.8

 

 

 

29.9

 

 

 

71.2

 

 

 

59.9

 

Property operating revenues

 

333.3

 

 

 

315.8

 

 

 

672.6

 

 

 

638.2

 

 

 

 

 

 

 

 

 

Property operating, maintenance and real estate taxes (2)

 

142.4

 

 

 

134.6

 

 

 

274.3

 

 

 

259.6

 

Membership sales and marketing, gross (3)

 

6.4

 

 

 

6.4

 

 

 

11.9

 

 

 

11.3

 

Property operating expenses

 

148.8

 

 

 

141.0

 

 

 

286.2

 

 

 

270.9

 

Income from property operations, excluding deferrals and property management (1)

$

184.5

 

 

$

174.8

 

 

$

386.4

 

 

$

367.3

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Manufactured home site figures and occupancy averages:

 

 

 

 

 

 

 

Total sites

 

72,729

 

 

 

73,442

 

 

 

72,723

 

 

 

73,505

 

Occupied sites

 

68,792

 

 

 

69,693

 

 

 

68,820

 

 

 

69,723

 

Occupancy %

 

94.6

%

 

 

94.9

%

 

 

94.6

%

 

 

94.9

%

Monthly base rent per site

$

806

 

 

$

759

 

 

$

802

 

 

$

756

 

 

 

 

 

 

 

 

 

RV and marina base rental income:

 

 

 

 

 

 

 

Annual

$

72.7

 

 

$

66.6

 

 

$

142.1

 

 

$

131.0

 

Seasonal

 

9.5

 

 

 

9.5

 

 

 

37.4

 

 

 

36.1

 

Transient

 

19.7

 

 

 

22.2

 

 

 

34.0

 

 

 

40.0

 

Total RV and marina base rental income

$

101.9

 

 

$

98.3

 

 

$

213.5

 

 

$

207.1

 

___________________________
  1. Excludes property management and the GAAP deferral of membership upgrade sales upfront payments and membership sales commissions, net.
  2. MH base rental income, Rental home income, RV and marina base rental income and Utility income, net of bad debt expense, are presented in Rental income in the Consolidated Statements of Income on page 3. Bad debt expense is presented in Property operating, maintenance and real estate taxes in this table.
  3. See page 13 for details of Membership upgrade sales and related commissions.
  4. Includes approximately $4.0 million and $8.0 million of business interruption income from Hurricane Ian during the quarter ended June 30, 2023 and six months ended June 30, 2023, respectively.

Core Income from Property Operations (1)

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

 

Quarters Ended June 30,

 

Six Months Ended June 30,

 

2023

 

2022

 

Change (2)

 

2023

 

2022

 

Change (2)

MH base rental income

$

166.3

 

$

155.8

 

6.7

%

 

$

330.7

 

$

310.2

 

6.6

%

Rental home income

 

3.7

 

 

3.8

 

(2.9

)%

 

 

7.5

 

 

7.8

 

(2.6

)%

RV and marina base rental income

 

96.5

 

 

94.2

 

2.3

%

 

 

204.8

 

 

196.8

 

4.1

%

Annual membership subscriptions

 

15.9

 

 

15.2

 

4.7

%

 

 

31.5

 

 

30.1

 

4.8

%

Membership upgrade sales current period, gross

 

9.0

 

 

9.3

 

(2.8

)%

 

 

16.9

 

 

16.2

 

4.2

%

Utility and other income

 

29.2

 

 

27.0

 

8.6

%

 

 

58.7

 

 

53.9

 

9.0

%

Property operating revenues

 

320.6

 

 

305.3

 

5.0

%

 

 

650.1

 

 

615.0

 

5.7

%

 

 

 

 

 

 

 

 

 

 

 

 

Utility expense

 

36.3

 

 

34.2

 

6.2

%

 

 

74.5

 

 

68.4

 

8.9

%

Payroll

 

30.7

 

 

29.7

 

3.3

%

 

 

58.5

 

 

55.1

 

6.2

%

Repair & maintenance

 

26.2

 

 

24.0

 

8.9

%

 

 

47.9

 

 

43.1

 

11.0

%

Insurance and other (3)

 

27.3

 

 

23.6

 

15.5

%

 

 

50.0

 

 

46.5

 

7.4

%

Real estate taxes

 

18.2

 

 

17.5

 

4.2

%

 

 

35.9

 

 

35.4

 

1.2

%

Membership sales and marketing, gross

 

6.3

 

 

6.3

 

(0.9

)%

 

 

11.8

 

 

11.2

 

5.3

%

Property operating expenses

 

145.0

 

 

135.3

 

7.0

%

 

 

278.6

 

 

259.7

 

7.2

%

Income from property operations, excluding deferrals and property management (1)

$

175.6

 

$

169.9

 

3.5

%

 

$

371.5

 

$

355.2

 

4.6

%

 

 

 

 

 

 

 

 

 

 

 

 

Occupied sites (4)

 

68,778

 

 

68,992

 

 

 

 

 

 

 

 

__________________________________
  1. Excludes property management and the GAAP deferral of membership upgrades sales upfront payments and membership sales commissions, net.
  2. Calculations prepared using actual results without rounding.
  3. Includes bad debt expense for the periods presented.
  4. Occupied sites are presented as of the end of the period.

Core Income from Property Operations (continued)

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

 

Quarters Ended June 30,

 

Six Months Ended June 30,

 

2023

 

2022

 

Change (1)

 

2023

 

2022

 

Change (1)

Core manufactured home site figures and occupancy averages:

 

 

 

 

 

 

 

 

 

 

 

Total sites

 

72,468

 

 

 

72,458

 

 

 

 

 

72,462

 

 

 

72,521

 

 

 

Occupied sites

 

68,734

 

 

 

68,915

 

 

 

 

 

68,762

 

 

 

68,948

 

 

 

Occupancy %

 

94.8

%

 

 

95.1

%

 

 

 

 

94.9

%

 

 

95.1

%

 

 

Monthly base rent per site

$

806

 

 

$

753

 

 

 

 

$

801

 

 

$

750

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Core RV and marina base rental income:

 

 

 

 

 

 

 

 

 

 

 

Annual (2)

$

69.1

 

 

$

64.0

 

 

7.8

%

 

$

136.1

 

 

$

125.8

 

 

8.1

%

Seasonal

 

9.1

 

 

 

9.0

 

 

1.6

%

 

 

36.5

 

 

 

33.3

 

 

9.2

%

Transient

 

18.3

 

 

 

21.3

 

 

(13.9

)%

 

 

32.3

 

 

 

37.6

 

 

(14.2

)%

Total Seasonal and Transient

$

27.4

 

 

$

30.3

 

 

(9.3

)%

 

$

68.8

 

 

$

70.9

 

 

(3.2

)%

Total RV and marina base rental income

$

96.5

 

 

$

94.3

 

 

2.3

%

 

$

204.9

 

 

$

196.7

 

 

4.1

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Core utility information:

 

 

 

 

 

 

 

 

 

 

 

Income

$

16.4

 

 

$

15.0

 

 

9.6

%

 

$

34.0

 

 

$

30.6

 

 

11.1

%

Expense

 

36.3

 

 

 

34.1

 

 

6.2

%

 

 

74.6

 

 

 

68.4

 

 

9.1

%

Expense, net

$

19.9

 

 

$

19.1

 

 

4.2

%

 

$

40.6

 

 

$

37.8

 

 

7.4

%

 

 

 

 

 

 

 

 

 

 

 

 

Utility recovery rate (3)

 

45.2

%

 

 

44.0

%

 

 

 

 

45.6

%

 

 

44.7

%

 

 

___________________________
  1. Calculations prepared using actual results without rounding.
  2. Core Annual marina base rental income represents approximately 99% of the total Core marina base rental income for all periods presented.
  3. Calculated by dividing the utility income by utility expense.

Non-Core Income from Property Operations (1)

 

(In millions, unaudited)

 

Quarter Ended

 

Six Months Ended

 

June 30, 2023

 

June 30, 2023

MH base rental income

$

0.2

 

$

0.3

RV and marina base rental income

 

5.4

 

 

8.7

Annual membership subscriptions

 

0.3

 

 

0.7

Utility and other income

 

6.6

 

 

12.5

Membership upgrade sales current period, gross

 

0.3

 

 

0.3

Property operating revenues

 

12.8

 

 

22.5

 

 

 

 

Property operating expenses (2)

 

3.8

 

 

7.6

Income from property operations, excluding deferrals and property management (1)

$

9.0

 

$

14.9

 

 

 

 

________________________________

 

 

 

  1. Excludes property management and the GAAP deferral of membership upgrade sales upfront payments and membership sales commissions, net.
  2. Includes bad debt expense for the periods presented.

Home Sales and Rental Home Operations

(In thousands, except home sale volumes and occupied rentals, unaudited)

 

 

 

 

 

 

 

 

Home Sales - Select Data

Quarters Ended June 30,

 

Six Months Ended June 30,

 

2023

 

2022

 

2023

 

2022

Total new home sales volume (1)

 

226

 

 

365

 

 

402

 

 

626

New home sales gross revenues (1)

$

23,038

 

$

33,848

 

$

41,352

 

$

59,378

 

 

 

 

 

 

 

 

Total used home sales volume

 

66

 

 

97

 

 

168

 

 

169

Used home sales gross revenues

$

1,034

 

$

1,367

 

$

2,209

 

$

2,364

 

 

 

 

 

 

 

 

Brokered home resales volume

 

201

 

 

263

 

 

335

 

 

451

Brokered home resales gross revenues

$

876

 

$

1,049

 

$

1,551

 

$

1,660

Rental Homes - Select Data

Quarters Ended June 30,

 

Six Months Ended June 30,

 

2023

 

2022

 

2023

 

2022

 

 

 

 

 

 

 

 

Rental operations revenues (2)

$

9,827

 

$

10,868

 

$

20,085

 

$

22,216

Rental home operations expense (3)

 

1,158

 

 

1,220

 

 

2,117

 

 

2,611

Depreciation on rental homes (4)

 

2,802

 

 

2,500

 

 

5,549

 

 

5,017

 

 

 

 

 

 

 

 

Occupied rentals: (5)

 

 

 

 

 

 

 

New

 

2,236

 

 

2,742

 

 

 

 

Used

 

292

 

 

375

 

 

 

 

Total occupied rental sites

 

2,528

 

 

3,117

 

 

 

 

 

As of June 30, 2023

 

As of June 30, 2022

Cost basis in rental homes: (6)

Gross

 

Net of Depreciation

 

Gross

 

Net of Depreciation

New

$

257,978

 

$

215,087

 

$

221,251

 

$

191,048

Used

 

13,491

 

 

7,806

 

 

14,571

 

 

7,673

Total rental homes

$

271,469

 

$

222,893

 

$

235,822

 

$

198,721

_________________________
  1. For 2022, total new home sales volume includes 29 home sales from our ECHO Financing LLC ("ECHO joint venture"). New home sales gross revenues does not include the revenues associated with the ECHO joint venture.
  2. For the quarters ended June 30, 2023 and 2022, approximately $6.1 million and $7.1 million, respectively, of the rental operations revenue is included in the MH base rental income in the Core Income from Property Operations on pages 8-9. The remainder of the rental operations revenue for the quarters ended June 30, 2023 and 2022 is included in Rental home income in the Core Income from Property Operations on pages 8-9.
  3. Rental home operations expense is included in Property operating, maintenance and real estate taxes in the Consolidated Income from Property Operations on page 7. Rental home operations expense is included in Insurance and other in the Core Income from Property Operations on pages 8-9.
  4. Depreciation on rental homes in our Core portfolio is presented in Depreciation and amortization in the Consolidated Statements of Income on page 3.
  5. Occupied rentals as of the end of the period in our Core portfolio. Included in occupied rentals as of June 30, 2022 were 185 homes rented through our ECHO joint venture. On December 22, 2022, we completed the purchase of all homes held by the ECHO joint venture.
  6. Includes both occupied and unoccupied rental homes in our Core portfolio. New home cost basis does not include the costs associated with our ECHO joint venture for 2022.

Total Sites

(Unaudited)

Summary of Total Sites as of June 30, 2023

 

 

Sites (1)

MH sites

72,700

RV sites:

 

Annual

35,300

Seasonal

12,500

Transient

14,900

Marina slips

6,900

Membership (2)

25,800

Joint Ventures (3)

3,600

Total

171,700

____________________________
  1. MH sites are generally leased on an annual basis to residents who own or lease factory-built homes, including manufactured homes. Annual RV and marina sites are leased on an annual basis to customers who generally have an RV, factory-built cottage, boat or other unit placed on the site, including those Northern properties that are open for the summer season. Seasonal RV and marina sites are leased to customers generally for one to six months. Transient RV and marina sites are leased to customers on a short-term basis.
  2. Sites primarily utilized by approximately 126,900 members. Includes approximately 6,200 sites rented on an annual basis.
  3. Joint ventures have approximately 2,000 annual sites and 1,600 transient.

Memberships - Select Data

(Unaudited)

 

Years Ended December 31,

 

 

 

2019

 

2020

 

2021

 

2022

 

Six Months Ended June 30, 2023

Member Count (1)

 

115,680

 

 

116,169

 

 

125,149

 

 

128,439

 

 

126,945

Thousand Trails Camping Pass (TTC) Origination

 

41,484

 

 

44,129

 

 

50,523

 

 

51,415

 

 

24,576

TTC Sales

 

19,267

 

 

20,587

 

 

23,923

 

 

23,237

 

 

11,294

RV Dealer TTC Activations

 

22,217

 

 

23,542

 

 

26,600

 

 

28,178

 

 

13,282

Number of annuals (2)

 

5,938

 

 

5,986

 

 

6,320

 

 

6,390

 

 

6,175

Number of upgrade sales (3)

 

2,919

 

 

3,373

 

 

4,863

 

 

4,068

 

 

1,877

 

 

 

 

 

 

 

 

 

 

(In thousands, unaudited)

 

 

 

 

 

 

 

 

 

Annual membership subscriptions

$

51,015

 

$

53,085

 

$

58,251

 

$

63,215

 

$

32,159

RV base rental income from annuals

$

19,634

 

$

20,761

 

$

23,127

 

$

25,945

 

$

13,578

RV base rental income from seasonals/transients

$

20,181

 

$

18,126

 

$

25,562

 

$

24,316

 

$

8,507

Membership upgrade sales current period, gross

$

19,111

 

$

21,739

 

$

36,270

 

$

34,661

 

$

17,253

Utility and other income

$

2,422

 

$

2,426

 

$

2,735

 

$

2,626

 

$

1,129

 

 

 

 

 

 

 

 

 

 

Membership Upgrade Sales Activity

Quarters Ended June 30,

 

Six Months Ended June 30,

 

 

2023

 

 

 

2022

 

 

 

2023

 

 

 

2022

 

Membership upgrade sales current period, gross

$

9,278

 

 

$

9,535

 

 

$

17,253

 

 

$

16,686

 

Membership upgrade sales upfront payments, deferred, net

 

(5,664

)

 

 

(6,367

)

 

 

(10,134

)

 

 

(10,451

)

Membership upgrade sales

$

3,614

 

 

$

3,168

 

 

$

7,119

 

 

$

6,235

 

 

 

 

 

 

 

 

 

Membership sales and marketing, gross

$

(6,392

)

 

$

(6,409

)

 

$

(11,909

)

 

$

(11,323

)

Membership sales commissions, deferred, net

 

871

 

 

 

957

 

 

 

1,550

 

 

1,540

 

Membership sales and marketing

$

(5,521

)

 

$

(5,452

)

 

$

(10,359

)

 

$

(9,783

)

________________________________
  1. Members who have entered into annual subscriptions with us that entitle them to use certain properties on a continuous basis for up to 21 days.
  2. Members who rent a specific site for an entire year in connection with their membership subscriptions.
  3. Existing members who have upgraded memberships are eligible for enhanced benefits, including but not limited to longer stays, the ability to make earlier reservations, potential discounts on rental units, and potential access to additional properties. Upgrades require a non-refundable upfront payment.

Market Capitalization

(In millions, except share and OP Unit data, unaudited)

Capital Structure as of June 30, 2023

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total

Common Shares/Units

 

% of Total

Common Shares/Units

 

Total

 

% of Total

 

% of Total

Market Capitalization

 

 

 

 

 

 

 

 

 

 

Secured Debt

 

 

 

 

$

2,774

 

79.7

%

 

 

Unsecured Debt

 

 

 

 

 

705

 

20.3

%

 

 

Total Debt (1)

 

 

 

 

$

3,479

 

100.0

%

 

21.0

%

 

 

 

 

 

 

 

 

 

 

Common Shares

 

186,273,876

 

95.3

%

 

 

 

 

 

 

OP Units

 

9,240,069

 

4.7

%

 

 

 

 

 

 

Total Common Shares and OP Units

 

195,513,945

 

100.0

%

 

 

 

 

 

 

Common Stock price at June 30, 2023

$

66.89

 

 

 

 

 

 

 

 

Fair Value of Common Shares and OP Units

 

 

 

 

$

13,078

 

100.0

%

 

 

Total Equity

 

 

 

 

$

13,078

 

100.0

%

 

79.0

%

 

 

 

 

 

 

 

 

 

 

Total Market Capitalization

 

 

 

 

$

16,557

 

 

 

100.0

%

________________________

1. Excludes deferred financing costs of approximately $28.0 million.

Debt Maturity Schedule

Debt Maturity Schedule as of June 30, 2023

(In thousands, unaudited)

Year

Outstanding

Debt

 

Weighted

Average

Interest Rate

 

% of Total Debt

 

Weighted

Average

Years to

Maturity

 

 

 

 

 

 

 

 

Secured Debt

 

 

 

 

 

 

 

2023

$

90,597

 

 

4.88

%

 

2.60

%

 

0.02

2024

 

9,887

 

 

5.49

%

 

0.28

%

 

0.95

2025

 

91,841

 

 

3.45

%

 

2.64

%

 

1.79

2026

 

 

 

%

 

%

 

2027

 

 

 

%

 

%

 

2028

 

204,491

 

 

4.19

%

 

5.88

%

 

5.22

2029

 

38,905

 

 

4.10

%

 

1.12

%

 

6.01

2030

 

275,385

 

 

2.69

%

 

7.92

%

 

6.77

2031

 

255,210

 

 

2.46

%

 

7.34

%

 

7.91

2032

 

202,000

 

 

2.47

%

 

5.81

%

 

9.22

Thereafter

 

1,605,601

 

 

3.99

%

 

46.15

%

 

13.93

Total

$

2,773,917

 

 

3.64

%

 

79.74

%

 

10.7

 

 

 

 

 

 

 

 

Unsecured Term Loans

 

 

 

 

 

 

 

2023

$

 

 

%

 

%

 

2024

 

 

 

%

 

%

 

2025

 

 

 

%

 

%

 

2026

 

300,000

 

 

1.81

%

 

8.62

%

 

2.84

2027

 

200,000

 

 

4.88

%

 

5.75

%

 

3.61

Thereafter

 

 

 

%

 

%

 

Total

$

500,000

 

 

3.04

%

 

14.37

%

 

3.2

 

 

 

 

 

 

 

 

Total Secured and Unsecured

$

3,273,917

 

 

3.55

%

 

94.11

%

 

9.5

 

 

 

 

 

 

 

 

Line of Credit Borrowing (1)

 

205,000

 

 

6.29

%

 

5.89

%

 

 

 

 

 

 

 

 

 

Note Premiums and Unamortized loan costs

 

(27,915

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total Debt, Net

$

3,451,002

 

 

3.92% (2)

 

100

%

 

 

 

 

 

 

 

 

 

 

______________________
  1. Our floating interest rate exposure is limited to line of credit borrowing.
  2. Reflects effective interest rate for the quarter ended June 30, 2023, including interest associated with the line of credit and amortization of note premiums and deferred financing costs.

Non-GAAP Financial Measures Definitions and Reconciliations

FUNDS FROM OPERATIONS (FFO). We define FFO as net income, computed in accordance with GAAP, excluding gains or losses from sales of properties, depreciation and amortization related to real estate, impairment charges and adjustments to reflect our share of FFO of unconsolidated joint ventures. Adjustments for unconsolidated 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 non-refundable upfront payments from membership upgrade contracts. In accordance with GAAP, the non-refundable upfront payments and related commissions are deferred and amortized over the estimated membership upgrade contract term. Although the NAREIT definition of FFO does not address the treatment of non-refundable upfront 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 non-operating income and expense items, such as gains and losses from early debt extinguishment, including prepayment penalties and defeasance costs, transaction/pursuit costs, and 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 gains or losses from sales of properties, depreciation and amortization related to real estate and impairment charges, which are based on historical costs and 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 normal operations. For example, we believe that excluding the early extinguishment of debt and other miscellaneous non-comparable items from 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, membership subscriptions and upgrade sales, utility and other income less property and rental home operating and maintenance expenses, real estate taxes, sales and marketing expenses, excluding property management expenses and the impact of GAAP deferrals of membership upgrade sales upfront payments and membership sales commissions, net. Property management represents the expenses associated with indirect costs such as off-site payroll and certain administrative and professional expenses. We believe exclusion of property management expenses is helpful to investors and analysts as a measure of the operating results of our properties, excluding items that are not directly related to the operation of the properties. For comparative purposes, we present bad debt expense within Property operating, maintenance and real estate taxes in the current and prior periods. We believe that this Non-GAAP financial measure is helpful to investors and analysts as a measure of the operating results of our properties.

The following table reconciles Net income available for Common Stockholders to Income from property operations:

 

Quarters Ended June 30,

 

Six Months Ended June 30,

(amounts in thousands)

2023

 

2022

 

2023

 

2022

Net income available for Common Stockholders

$

62,920

 

 

$

61,509

 

 

$

145,291

 

 

$

144,415

 

Redeemable perpetual preferred stock dividends

 

8

 

 

 

8

 

 

 

8

 

 

 

8

 

Income allocated to non-controlling interests – Common OP Units

 

3,121

 

 

 

3,073

 

 

 

7,209

 

 

 

7,217

 

Equity in income of unconsolidated joint ventures

 

(973

)

 

 

(1,253

)

 

 

(1,497

)

 

 

(1,424

)

Income before equity in income of unconsolidated joint ventures

 

65,076

 

 

 

63,337

 

 

 

151,011

 

 

 

150,216

 

Loss on sale of real estate and impairment, net

 

 

 

 

 

 

 

2,632

 

 

 

 

Membership upgrade sales upfront payments, deferred, net

 

5,664

 

 

 

6,367

 

 

 

10,134

 

 

 

10,451

 

Gross revenues from home sales, brokered resales and ancillary services

 

(38,913

)

 

 

(52,681

)

 

 

(71,046

)

 

 

(92,390

)

Interest income

 

(2,259

)

 

 

(1,722

)

 

 

(4,347

)

 

 

(3,481

)

Income from other investments, net

 

(2,473

)

 

 

(2,617

)

 

 

(4,564

)

 

 

(4,521

)

Membership sales commissions, deferred, net

 

(871

)

 

 

(957

)

 

 

(1,550

)

 

 

(1,540

)

Property management

 

19,359

 

 

 

19,099

 

 

 

38,823

 

 

 

36,970

 

Depreciation and amortization

 

51,464

 

 

 

50,796

 

 

 

101,966

 

 

 

100,190

 

Cost of home sales, brokered resales and ancillary services

 

29,268

 

 

 

40,971

 

 

 

52,409

 

 

 

71,670

 

Home selling expenses and ancillary operating expenses

 

7,170

 

 

 

7,584

 

 

 

14,094

 

 

 

14,066

 

General and administrative (1)(2)

 

16,607

 

 

 

11,679

 

 

 

28,268

 

 

 

23,750

 

Casualty-related charges/(recoveries), net (3)

 

 

 

 

 

 

 

 

 

 

 

Other expenses (1)

 

1,381

 

 

 

4,205

 

 

 

2,849

 

 

 

5,251

 

Early debt retirement

 

 

 

 

640

 

 

 

 

 

 

1,156

 

Interest and related amortization

 

33,122

 

 

 

28,053

 

 

 

65,710

 

 

 

55,517

 

Income from property operations, excluding deferrals and property management

 

184,595

 

 

 

174,754

 

 

 

386,389

 

 

 

367,305

 

Membership upgrade sales upfront payments, and membership sales commissions, deferred, net

 

(4,793

)

 

 

(5,410

)

 

 

(8,584

)

 

 

(8,911

)

Property management

 

(19,359

)

 

 

(19,099

)

 

 

(38,823

)

 

 

(36,970

)

Income from property operations

$

160,443

 

 

$

150,245

 

 

$

338,982

 

 

$

321,424

 

EARNINGS BEFORE INTEREST, TAX, DEPRECIATION AND AMORTIZATION FOR REAL ESTATE (EBITDAre) AND ADJUSTED EBITDAre. We define EBITDAre as net income or loss excluding interest income and expense, income taxes, depreciation and amortization, gains or losses from sales of properties, impairments charges, and adjustments to reflect our share of EBITDAre of unconsolidated joint ventures. We compute EBITDAre in accordance with our interpretation of the standards established by NAREIT, which may not be comparable to EBITDAre 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 non-refundable upfront payments from membership upgrade contracts. In accordance with GAAP, the non-refundable upfront payments and related commissions are deferred and amortized over the estimated customer life. Although the NAREIT definition of EBITDAre does not address the treatment of non-refundable upfront payments, we believe that it is appropriate to adjust for the impact of the deferral activity in our calculation of EBITDAre.

_____________________

  1. Prior period amounts have been reclassified to conform to the current period presentation.
  2. Represents accelerated vesting of stock-based compensation expense of $6.3 million recognized during the quarter and six months ended June 30, 2023 as a result of the passing of a member of our Board of Directors.
  3. Casualty-related charges/(recoveries), net for the quarter ended June 30, 2023 includes debris removal and cleanup costs related to Hurricane Ian of $1.8 million and insurance recovery revenue of $1.8 million. Casualty-related charges/(recoveries), net for the six months ended June 30, 2023 includes debris removal and cleanup costs related to Hurricane Ian of $10.3 million and insurance recovery revenue of $10.3 million.

We define Adjusted EBITDAre as EBITDAre excluding non-operating income and expense items, such as gains and losses from early debt extinguishment, including prepayment penalties and defeasance costs, transaction/pursuit costs and other miscellaneous non-comparable items.

We believe that EBITDAre and Adjusted EBITDAre may be useful to an investor in evaluating our operating performance and liquidity because the measures are widely used to measure the operating performance of an equity REIT.

The following table reconciles Consolidated net income to EBITDAre and Adjusted EBITDAre:

 

Quarters Ended June 30,

 

Six Months Ended June 30,

(amounts in thousands)

2023

 

2022

 

2023

 

2022

Consolidated net income

$

66,049

 

 

$

64,590

 

 

$

152,508

 

 

$

151,640

 

Interest income

 

(2,259

)

 

 

(1,722

)

 

 

(4,347

)

 

 

(3,481

)

Membership upgrade sales upfront payments, deferred, net (1)

 

5,664

 

 

 

6,367

 

 

 

10,134

 

 

 

10,451

 

Membership sales commissions, deferred, net (1)

 

(871

)

 

 

(957

)

 

 

(1,550

)

 

 

(1,540

)

Real estate depreciation and amortization

 

51,464

 

 

 

50,796

 

 

 

101,966

 

 

 

100,190

 

Other depreciation and amortization

 

1,339

 

 

 

1,119

 

 

 

2,690

 

 

 

1,946

 

Interest and related amortization

 

33,122

 

 

 

28,053

 

 

 

65,710

 

 

 

55,517

 

Loss on sale of real estate and impairment, net

 

 

 

 

 

 

 

2,632

 

 

 

 

Adjustments to our share of EBITDAre of unconsolidated joint ventures

 

1,684

 

 

 

1,361

 

 

 

2,991

 

 

 

2,817

 

EBITDAre

 

156,192

 

 

 

149,607

 

 

 

332,734

 

 

 

317,540

 

Stock-based compensation expense

 

6,320

 

 

 

 

 

 

6,320

 

 

 

 

Early debt retirement

 

 

 

 

640

 

 

 

 

 

 

1,156

 

Transaction/pursuit costs

 

 

 

 

3,082

 

 

 

117

 

 

 

3,082

 

Lease termination expenses

 

 

 

 

 

 

 

90

 

 

 

 

Adjusted EBITDAre

$

162,512

 

 

$

153,329

 

 

$

339,261

 

 

$

321,778

 

CORE. The Core properties include properties we owned and operated during all of 2022 and 2023. 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 properties that were not owned and operated during all of 2022 and 2023. This includes, but is not limited to, three RV communities and one membership RV community acquired during 2022 and one RV community acquired during 2023. The Non-Core properties also include Fish Tale Marina, Fort Myers Beach, Gulf Air, Palm Harbour Marina, Pine Island, and Ramblers Rest. During the quarter ended June 30, 2023, we designated Rancho Oso and Turtle Beach as Non-Core properties as operations at these properties have been suspended due to storms and flooding events in California.

NON-REVENUE PRODUCING IMPROVEMENTS. Represents capital expenditures that do 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.

______________________

  1. See page 13 for details of Membership upgrade sales and related commissions.

FORWARD-LOOKING NON-GAAP MEASURES. The following table reconciles Net Income per Common Share - Fully Diluted guidance to FFO per Common Share and OP Unit - Fully Diluted guidance and Normalized FFO per Common Share and OP Unit - Fully diluted guidance:

(Unaudited)

Third Quarter 2023

 

Full Year 2023

Net income per Common Share - Fully Diluted

$0.38 to $0.44

 

$1.59 to $1.69

Membership upgrade sales deferred, net and membership sales commissions deferred, net

0.27

 

1.06

Depreciation and amortization

0.03

 

0.10

Loss on sale of real estate and impairment, net

 

0.01

FFO per Common Share and OP Unit - Fully Diluted

$0.68 to $0.74

 

$2.76 to $2.86

Normalized adjustment

 

0.04

Normalized FFO per Common Share and OP Unit - Fully Diluted

$0.68 to $0.74

 

$2.80 to $2.90

This press release includes certain forward-looking information, including Core and Non-Core Income from property operations, excluding deferrals and property management, that is not presented in accordance with GAAP. In reliance on the exception in Item 10(e)(1)(i)(B) of Regulation S-K, we do not provide a quantitative reconciliation of such forward-looking information to the most directly comparable financial measure calculated and presented in accordance with GAAP, where we are unable to provide a meaningful or accurate calculation or estimation of reconciling items and the information is not available without unreasonable effort. This includes, for example, (i) scheduled or implemented rate increases on community, resort and marina sites; (ii) scheduled or implemented rate increases in annual payments under membership subscriptions; (iii) occupancy changes; (iv) costs to restore property operations and potential revenue losses following storms or other unplanned events and (v) other nonrecurring/unplanned income or expense items, which may not be within our control, may vary between periods and cannot be reasonably predicted. These unavailable reconciling items could significantly impact our future financial results.

Contacts

Paul Seavey

(800) 247-5279

Data & News supplied by www.cloudquote.io
Stock quotes supplied by Barchart
Quotes delayed at least 20 minutes.
By accessing this page, you agree to the following
Privacy Policy and Terms and Conditions.
 
 
Copyright © 2010-2020 MenloPark.com & California Media Partners, LLC. All rights reserved.