Exhibit 99.1
Exhibit 99.1
Equity LifeStyle Properties
Our Story
• | | One of the nation’s largest real estate networks with 382 properties containing over 141,200 sites in 32 states and British Columbia |
Own the land
Low maintenance costs/customer turnover costs
Lease developed sites
• | | High-quality real estate locations |
More than 80 properties with lake, river or ocean frontage
More than 100 properties within 10 miles of coastal United States
Property locations are strongly correlated with population migration
Property locations in retirement and vacation destinations
• | | Stable, predictable financial performance and fundamentals |
Balance sheet flexibility
• | | In business for more than 40 years |
Property Locations
WA ME
ND
MN
OR VT
WI NY
WY 4 MI NH
ID 4
CA SD 2 2 3 MA
NV 3
RI
IN OH 7 NJ
UT CO IL
9
16 4 DE
KS WV MD
AZ MO KY
11 NM NC
TN
MS
TX AL GA
LA
FL 8
17
10
37
14 3
14
10
Steady, Predictable Revenue Streams
Property/Site composition
• | | 201 manufactured/resort home communities |
71,500 sites
69,700 25,600 Annuals Seasonal 10,600 9,400 Transient sites 24,100 Membership
Property Operating
Revenue Buckets
Transient 4.7%
Seasonal 3.3%
All Annual Revenue = 92%
Note:
1) Property revenue buckets reflect Company’s estimated 2014 property operating revenues, derivable from our guidance furnished with the SEC as Exhibit 99.1 to the Form 8-K filed on October 21, 2014 (“ELS Reports Third Quarter Results”).
Our Lifestyle Options
• | | Customers own the units they place on our sites |
Manufactured homes
Resort cottages (park models)
Recreational vehicles
• | | We offer a lifestyle and a variety of product options to meet our customers’ needs create relationships our customers We seek to long-term with |
RV Site
Manufactured Home
RV Resort Cottage
Favorable Customer Demographics
• | | The population of people age 55 and older is expected to grow 26% from 2015 to 2030 |
U.S. Population Over Age 55 (in millions)
120,000,000
100,000,000
80,000,000
60,000,000
40,000,000
20,000,000
0
2015 2020 2025 2030
New Residents
MH Average RV Average age: age: 55 62 years years
Roughly 10,000 Baby
Boomers will turn 65
every day through 2030.
Note:
Sources: US Census 2012, Acxiom 2014, Pew Research Center 2010.
Track Record
Item IPO Year—1993 2014
Properties 41 382
Sites 12,312 141,195
States 16 32
FFO Per Share (1) $0.47 $2.68
Normalized FFO Per Share (1) $0.47 $2.74
Common Stock Price (2) $6.44 $42.36
Enterprise Value (3) $296 million $6.2 billion
Dividend Paid Cumulative (4)—$17.45
Cumulative Total Return (5)—1,659%
S&P 500 Total Return (5)—583%
Note:
1) See pages 15 and 16 for the reconciliation and definition of FFO and Normalized FFO. The 1993 amount was
determined from amounts presented in the 1996 Form 10-K. The 2014 FFO Per Share and Normalized FFO Per Share
amounts are the midpoint of the estimated 2014 FFO Per Share and Normalized FFO Per Share range disclosed in our
guidance furnished with the SEC as Exhibit 99.1 to the Form 8-K filed on October 21, 2014.
2) The 1993 stock price is adjusted for the stock split; the 2014 price is the closing price
as of September 30, 2014.
3) The 2014 enterprise value is as of September 30, 2014. See page 9.
4) Source: SNL Financial. Includes dividends paid from IPO date of February 25,1993 through
September 30, 2014 and adjusted for stock splits.
5) Source: SNL Financial from IPO through September 30, 2014
(calculation assumes common dividend reinvestment). 6
10-Year Total Return Performance
Total Return Performance Since IPO
Equity Lifestyle Properties, Inc. Total Return (%) Since IPO
2,000.00
1,800.00
1,600.00
1,400.00
1,200.00
1,000.00
800.00
600.00
400.00
200.00
0.00
-200.00
ELS (+1651.81%) SNL US REIT Equity (+807.13%) S&P 500 (+571.92%)
Notes:
Source: SNL Financial
1) Total return calculation assumes dividend reinvestment.
2) SNL US REIT Equity; Includes all publicly traded (NYSE, NYSE Amex, NASDAQ,
OTC BB, Pink Sheets) Equity REITs in SNL’s coverage universe.
3) Stock price date from IPO as of October 14, 2014.
Consistent Same Store NOI Growth and Outperformance
ELS positive has same maintained store quarters NOI growth since in all at least Q3 ’98.
Note:
1) Source for Same Store NOI data: Citi Investment Research, August 2014. Earliest quarter collected by Citi is third quarter of 1998. “REIT Industry” includes an index of REITs across a variety of asset classes, including regional malls, shopping centers, multifamily, student housing, manufactured homes, self storage, office, industrial, mixed office and specialty.
ELS vs. Multifamily
Same Store NOI Indexed Growth(1)
ELS rates compounded significantly outperformed Same Store NOI the REIT growth Multifamily industry since 1999
FFO Multiples ELS Multifamily (4)
1996-2001 (3) 13.2x 10.7x 2002-2012 (3) 16.8x 16.8x 2013 17.3x 17.0x
Same Store NOI Indexed Growth
170 160 150 140 130 120 110 100
1998 1999 2000 2001 2002 20032004 2005 2006 20072008200920102011 2012 2013
Multi-family Index (2) ELS Index (2)
Note:
1) Source: Citi Investment Research, March 2014. Same Store Indexed Growth assumes initial investment of $100 multiplied by the annual same store NOI growth rate.
2) Source: Citi Investment Research, March 2014. Averages equal annualized quarterly same store NOI averages collected by Citi.
3) Source: SNL Financial. Average FFO Multiple for the period calculated on trailing 12-month basis. Multiple equals stock price divided by t-12 month FFO per share.
4) The Multi-family Index FFO multiples include only US companies that report FFO.
Capital Structure
As of September 30, 2014 (in millions)
• | | Total enterprise value is $6.2 billion Debt to enterprise value is 35.6% of $400 credit million available line |
OPU’s $306.4, 4.9% Term Loan $200.0, 3.2% Preferred $136.1, 2.2%
Common(1) $3,554.2 Mortgage 57.4% Debt $2,005.9 32.3%
Note:
1) Stock price as of September 30, 2014. 9
2015 Guidance(1)
• | | Normalized FFO of $268.5 million |
$2.88—$2.98 per fully diluted share
7% growth
• | | Core NOI growth of 4.3% |
Core MH rent growth of 2.8%
Core RV revenue growth of 4.3%
• | | 2015 dividend of $1.50 per share |
15% increase over 2014
50% increase in last two years
Note:
(1) See pages 15 and 16 for the reconciliation and definition of FFO and Normalized FFO. The 2015 Normalized FFO and Core NOI growth are the mid-points of the respective estimated 2015 Normalized FFO and Core NOI growth disclosed in our guidance furnished with the SEC as Exhibit 99.1 to the Form 8-K filed on October 21, 2014.
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Safe Harbor Statement
Under the Private Securities Litigation Reform Act of 1995:
The under forward-looking the heading “Risk statements Factors” contained in our 2013 in Annual this presentation Report on Form are subject 10-K and to our certain Quarterly economic Reports risks on and Form uncertainties 10-Q for the described quarters ended We assume March no 31, obligation 2014 and to June update 30, or 2014. supplement See Form forward-looking 8-K filed October statements 21, 2014 that for become the full text untrue of our because forward-looking of subsequent statements. events. All projections are based on 2014 or 2015 budgets, reforecasts and pro forma expectations on recent investments.
Non-GAAP Financial Measures
Net Income to FFO and Normalized FFO Reconciliation (in millions)
Computation of funds from operations 2010 2011 2012 2013 2014 (1) 2015 (1)
Net income available for common shares $38.4 $22.8 $54.8 $106.9 $ 116.3 $ 136.6
Income allocated to common OP units 5.9 3.1 5.1 9.7 10.0 11.8
Series B Redeemable Preferred Stock Dividends—0.5 — —
Deferral of right-to-use contract revenue and commissions, net 9.4 7.1 3.5 3.3 3.3 4.2
Depreciation on real estate assets and other 69.3 81.2 100.0 102.7 100.6 101.7
Depreciation on rental homes 2.8 4.3 6.1 6.5 11.0 11.1
Depreciation on discontinued operations ——1.5 —
Amortization of in-place leases—28.5 45.1 1.9 4.4 3.1
(Gain) loss on real estate 0.2—(4.6) (41.5) (0.9) -
Funds from operations 126.0 147.4 210.0 191.0 244.7 268.5
Change in fair value of contingent consideration asset — (0.5) 1.4 (0.1) -
Transaction costs 0.4 18.5 0.2 2.0 1.2 -
Loss from early extinguishment of debt — 0.5 37.9 5.1 -
Goodwill impairment 3.6 — — -
Normalized funds from operations $130.0 $165.9 $210.2 $232.3 $ 250.9 $ 268.5
Note:
1) The 2014 and 2015 amounts are the midpoint of an estimate range. See our guidance furnished with the SEC as exhibit 99.1 to the Form 8-K filed on October 21, 2014.
Non-GAAP Financial Measures
Funds from Operations (“FFO”) is a non-GAAP financial measure. We believe FFO, as defined by the Board of Governors of the National Association of Real Estate Investment Trusts (“NAREIT”), is generally an appropriate measure of performance for an equity REIT. While FFO is a relevant and widely used measure of operating performance for equity REITs, it does not represent cash flow from operations or net income as defined by GAAP, and it should not be considered as an alternative to these indicators in evaluating liquidity or operating performance.
We define FFO as net income, computed in accordance with GAAP, excluding gains and actual or estimated losses from sales of properties, plus real estate related depreciation and amortization, impairments, if any, and after adjustments for unconsolidated partnerships and joint ventures. Adjustments for unconsolidated partnerships and joint ventures are calculated to reflect FFO on the same basis. We receive up-front non-refundable payments from the entry of right-to-use contracts. In accordance with GAAP, the up-front non-refundable payments and related commissions are deferred and amortized over the estimated customer life. Although the NAREIT definition of FFO does not address the treatment of non-refundable right-to-use payments, we believe that it is appropriate to adjust for the impact of the deferral activity in our calculation of FFO.
Normalized Funds from Operations (“Normalized FFO”) is a non-GAAP measure. We define Normalized FFO as FFO excluding the following non-operating income and expense items: a) the financial impact of contingent consideration; b) gains and losses from early debt extinguishment, including prepayment penalties and defeasance costs; c) property acquisition and other transaction costs related to mergers and acquisitions; and d) other miscellaneous non-comparable items.
We believe that FFO and Normalized FFO are helpful to investors as supplemental measures of the performance of an equity REIT. We believe that by excluding the effect of depreciation, amortization and actual or estimated gains or losses from sales of real estate, all of which are based on historical costs and which may be of limited relevance in evaluating current performance, FFO can facilitate comparisons of operating performance between periods and among other equity REITs. We further believe that Normalized FFO provides useful information to investors, analysts and our management because it allows them to compare our operating performance to the operating performance of other real estate companies and between periods on a consistent basis without having to account for differences not related to our operations. For example, we believe that excluding the early extinguishment of debt, property acquisition and other transaction costs related to mergers and acquisitions and the change in fair value of our contingent consideration asset from Normalized FFO allows investors, analysts and our management to assess the sustainability of operating performance in future periods because these costs do not affect the future operations of the properties. In some cases, we provide information about identified non-cash components of FFO and Normalized FFO because it allows investors, analysts and our management to assess the impact of those items.
Investors should review FFO and Normalized FFO along with GAAP net income and cash flow from operating activities, investing activities and financing activities, when evaluating an equity REIT’s operating performance. We compute FFO in accordance with our interpretation of standards established by NAREIT, which may not be comparable to FFO reported by other REITs that do not define the term in accordance with the current NAREIT definition or that interpret the current NAREIT definition differently than we do. Normalized FFO presented herein is not necessarily comparable to normalized FFO presented by other real estate companies due to the fact that not all real estate companies use the same methodology for computing this amount. FFO and Normalized FFO do not represent cash generated from operating activities in accordance with GAAP, nor do they represent cash available to pay distributions and should not be considered as an alternative to net income, determined in accordance with GAAP, as an indication of our financial performance, or to cash flow from operating activities, determined in accordance with GAAP, as a measure of our liquidity, nor is it indicative of funds available to fund our cash needs, including our ability to make cash distributions.
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Equity LifeStyle Properties
Two North Riverside Plaza, Chicago, Illinois 60606 800-247-5279 | www.EquityLifeStyle.com
