Equity Lifestyle Properties Posts First Quarter Growth
CHICAGO – Equity LifeStyle Properties, Inc. (NYSE: ELS) today announced results for the quarter ended March 31, 2023. All per share results are reported on a fully diluted basis unless otherwise noted.
|
($ in millions, except per share data) |
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Financial Results |
Q1 2023 |
Q1 2022 |
$ Change |
||||||
|
Total Revenues |
$ |
370.0 |
$ |
360.2 |
$ |
9.8 |
|||
|
Net Income available for Common Stockholders |
$ |
82.4 |
$ |
82.9 |
$ |
(0.5) |
|||
|
Net Income per Common Share – Fully Diluted |
$ |
0.44 |
$ |
0.45 |
$ |
(0.01) |
|||
|
Non-GAAP Financial Measures |
Q1 2023 |
Q1 2022 |
$ Change |
||||||
|
Funds from Operations (“FFO”) per Common Share and OP Unit – Fully Diluted |
$ |
0.74 |
$ |
0.72 |
$ |
0.02 |
|||
|
Normalized Funds from Operations (“Normalized FFO”) per Common Share and OP Unit – Fully Diluted |
$ |
0.74 |
$ |
0.72 |
$ |
0.02 |
|||
|
Property operating revenues, excluding deferrals |
$ |
339.3 |
$ |
322.4 |
$ |
16.9 |
|||
|
Income from property operations, excluding deferrals and property management |
$ |
201.8 |
$ |
192.6 |
$ |
9.2 |
|||
|
Core Portfolio Performance |
Q1 2023 |
Q1 2022 |
% Change |
||||||
|
Core property operating revenues, excluding deferrals |
$ |
329.9 |
$ |
310.2 |
6.4 |
% |
|||
|
Core Income from property operations, excluding deferrals and property management |
$ |
195.7 |
$ |
185.3 |
5.7 |
% |
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Operations Update
Normalized FFO for the quarter ended March 31, 2023 was $0.74 per share, representing a 2.0% increase compared to the same period in 2022, outperforming the midpoint of our guidance expectation by $0.8 million.
MH
Core MH base rental income for the quarter ended March 31, 2023 increased 6.5% compared to the same period in 2022, which reflects 6.6% growth from rate increases and a decline of 0.1% from occupancy losses. Core MH homeowners increased by 30 since December 31, 2022. We sold 176 new homes during the quarter ended March 31, 2023, with an average sales price of $104,000.
RV and Marina
Core RV and marina base rental income for the quarter ended March 31, 2023 increased 5.5% compared to the same period in 2022. Core RV and marina annual base rental income increased 8.4% for the quarter ended March 31, 2023, compared to the same period in 2022, which reflects 8.0% growth from rate increases and 0.4% from occupancy gains. Total nights camped during the quarter ended March 31, 2023 increased approximately 1.0% compared to the same period in 2022.
Property Operating Expenses
Core property operating expenses for the quarter ended March 31, 2023 increased 7.4% compared to the same period in 2022. See page 8 for details of the Core property operating expenses. Core repair and maintenance expenses for the quarter ended March 31, 2023 was $21.7 million, an increase of $2.5 million compared to the same period in 2022, which includes clean-up costs following weather events across the portfolio.
We completed our property and casualty insurance renewal as of April 1, 2023, and our premiums increased for the policy year April 2023 through March 2024 by approximately $12.0 million, or 58%. This increase has an unfavorable impact of approximately $2.6 million on our full year 2023 guidance.
Guidance (1)(2)
|
($ in millions, except per share data) |
2023 |
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|
Second |
Full |
||||||||
|
Net Income/share |
$0.32 to $0.38 |
$1.64 to $1.74 |
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|
FFO/share |
$0.62 to $0.68 |
$2.79 to $2.89 |
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|
Normalized FFO/share |
$0.62 to $0.68 |
$2.79 to $2.89 |
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|
2022 Actual |
2023 Growth Rates |
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|
Core Portfolio: |
Second |
Full |
Second |
Full |
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|
MH base rental income |
$ |
155.8 |
$ |
626.0 |
6.4% to 7.0% |
6.3% to 7.3% |
|||
|
RV and marina base rental income (3) |
$ |
94.6 |
$ |
393.4 |
3.6% to 4.2% |
5.4% to 6.4% |
|||
|
Property operating revenues |
$ |
305.8 |
$ |
1,240.2 |
5.5% to 6.1% |
6.0% to 7.0% |
|||
|
Property operating expenses |
$ |
136.1 |
$ |
526.4 |
10.0% to 10.6% |
7.9% to 8.9% |
|||
|
Income from property operations, excluding deferrals and property management |
$ |
169.7 |
$ |
713.8 |
1.9% to 2.5% |
4.6% to 5.6% |
|||
|
Non-Core Portfolio: |
2023 Full Year |
||||||||
|
Income from property operations, excluding deferrals and property management |
$23.1 to $27.1 |
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|
Other Guidance Assumptions: |
2023 Full Year |
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|
Property management and general administrative |
$115.9 to $121.9 |
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|
Debt Assumptions: |
|||||||||
|
Weighted average debt outstanding |
$3,300 to $3,500 |
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|
Interest and related amortization |
$127.6 to $133.6 |
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(1) |
Second 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. |
|
(2) |
Guidance assumptions do not include future capital events (financing transactions, acquisitions or dispositions) or the use of free cash flow. |
|
(3) |
Core RV and marina annual revenue represents approximately 70.6% and 67.0% of second quarter 2023 and full year 2023 RV and marina base rental income, respectively. Core RV and marina annual revenue second quarter 2023 growth rate range is 7.9% to 8.5% and the full year 2023 growth rate range is 7.9% to 8.9%. |
Investment Activity
In March 2023, we completed the acquisition of Red Oak Shores Campground, a 223-site RV community located in Ocean View, New Jersey for a purchase price of $9.5 million.
Balance Sheet Activity
In April 2023, we entered into an interest rate swap agreement with a notional amount of $200.0 million, allowing us to trade one month term SOFR indexed variable rate debt for fixed rate debt. The interest rate swap fixes the variable interest rate on our $200.0 million unsecured term loan at 4.88% per annum. As a result, our exposure to floating rate debt as a percentage of total debt is approximately 7.5%.
As of March 31, 2023, approximately 6% of our total secured and unsecured debt is maturing over the next three years.
About Equity LifeStyle Properties
We are a self-administered, self-managed real estate investment trust (“REIT”) with headquarters in Chicago. As of April 17, 2023, we own or have an interest in 450 properties in 35 states and British Columbia consisting of 171,477 sites.
For additional information, please contact our Investor Relations Department at (800) 247-5279 or at [email protected].
Conference Call
A live audio webcast of our conference call discussing these results will take place tomorrow, Tuesday, April 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.
Source: https://rvbusiness.com/equity-lifestyle-properties-posts-first-quarter-growth/
