EXHIBIT 99.1
CONTACT: Michael Berman FOR IMMEDIATE RELEASE
(312) 279-1496 July 18, 2005
NEW HOME SALES INCREASE OVER 50 PERCENT
ELS ISSUES PRELIMINARY GUIDANCE FOR 2006
Equity LifeStyle Properties, Inc. announced results for the quarter and
six months ended June 30, 2005.
a) Financial Results
For the second quarter of 2005, Funds From Operations (FFO) were $17.3
million or $0.58 per share on a fully diluted basis, compared to $12.9 million
or $0.44 per fully diluted share for the same period in 2004. For the six months
ended June 30, 2005, FFO were $42.7 million or $1.42 per share on a fully
diluted basis, compared to $28.4 million or $0.99 per fully diluted share for
the same period in 2004.
Net income available to common stockholders totaled $2.5 million or
$0.11 per fully diluted share for the quarter ended June 30, 2005. This compares
to net income available to common stockholders of $0.5 million or $0.02 per
fully diluted share for the second quarter of 2004. Net income available to
common stockholders totaled $11.2 million or $0.48 per fully diluted share for
the six months ended June 30, 2005. This compares to net income available to
common stockholders of $5.0 million or $0.21 per fully diluted share for the six
months ended June 30, 2004. See the attachment to this press release for
reconciliation of FFO and FFO per share to net income and net income per share,
respectively, the most directly comparable GAAP measures.
b) Portfolio Performance
Second quarter 2005 property operating revenues were $74.8 million,
compared to $70.4 million in the second quarter of 2004. Property operating
revenues for the six months ended June 30, 2005 were $159.6 million, compared to
$138.2 million for the same period in 2004.
For the three months ended June 30, 2005, our Core(1) property
operating revenues increased 3.7 percent, while expenses increased 6.0 percent
over the same period in 2004. Net Core operating income increased over 2 percent
over the same period last year. For the six months ended June 30, 2005, our Core
property operating revenues increased 3.6 percent, while expenses increased 6.0
percent and net Core
- --------
(1) Properties owned in both periods of comparison.
property operating income increased 2.0 percent over the same period last year.
The performance of our 15 Core resort properties reflects the results of Sunbelt
destinations, which historically have a relatively slow second quarter. On a
year-to-date basis, our Core resort net operating income increased 8.5 percent
on a 3.9 percent increase in revenues.
For the quarter ended June 30, 2005, the Company had 186 new home
sales, a 56 percent increase over the quarter ended June 30, 2004. Gross
revenues from home sales were approximately $17.5 million for the quarter ended
June 30, 2005, compared to approximately $10.7 million for the quarter ended
June 30, 2004. For the six months ended June 30, 2005, the Company had 313 new
home sales, a 48 percent increase over the same period in 2004. Gross revenues
from home sales were approximately $27.7 million for the six months ended June
30, 2005, compared to approximately $18.1 million for the same period in 2004.
Our ancillary income increased from $1.6 million to $2.5 million on a
year-to-date basis.
The combination of general administrative costs and Rent Control
Initiatives increased from $2.7 million for the quarter ended June 30, 2004 to
approximately $3.9 million for the quarter ended June 30, 2005. On a
year-to-date basis, these costs increased from $5.5 million to $7.3 million. The
increases are a result of higher payroll costs related to increased staffing in
connection with acquisitions, the changing regulatory environment and legal
costs associated with our Rent Control Initiatives and other defense costs.
c) Acquisitions
Our 2004 acquisitions contributed $0.14 per share of fully diluted FFO
in the second quarter of 2005 compared to $0.03 per share of fully diluted FFO
in the second quarter of 2004. For the six months ended June 30, 2005, our 2004
acquisitions contributed $0.50 per share of fully diluted FFO compared to $0.11
per share of fully diluted FFO for the same period in 2004. Income from the
Thousand Trails portfolio continues to contribute FFO of approximately $2
million or $0.07 per fully diluted share per quarter.
During the quarter ended June 30, 2005, the Company invested in a joint
venture owning three properties in Bar Harbor, Maine for approximately $7
million and one property in Pacifica, California for approximately $6.5 million.
The Company continues to look at acquiring additional assets and is at
various stages of negotiations with respect to potential acquisitions.
d) Dispositions
We currently have seven family properties held for disposition, which
are in various stages of negotiations. The Company plans to reinvest its
proceeds or reduce outstanding line of credit debt with the proceeds from these
dispositions.
e) Balance Sheet
During the quarter, we added $50 million to our outstanding preferred
security with a coupon of 7.95 percent. The total amount of our preferred
security is now $200 million. We used the proceeds to pay down our line of
credit balance.
Our average long-term debt balance was $1.6 billion in the quarter
with a weighted average interest rate of approximately 6.1 percent. Our
unsecured debt balance consists of $113 million outstanding of a $120 million
term loan with a fixed interest rate of approximately 4.7 percent and $38
million outstanding on our lines of credit, which have a current availability of
$122 million. Interest coverage was approximately 1.8 times in the quarter.
The Company expects to close two secured refinancings in the third
quarter of 2005, totaling approximately $34 million with ten-year maturities and
fixed interest rates of 4.95 percent. The proceeds will be used to pay off
secured indebtedness at five other assets.
f) Guidance
ELS management continues to project fully diluted FFO per share to be
in the range of $2.44 to $2.54 for 2005. Factors impacting this guidance include
i) the mix of site usage within the Company's portfolio; ii) the Company's yield
management of its short term resort sites; iii) scheduled or implemented rate
increases; and iv) occupancy changes. Results for 2005 also may be impacted by,
among other things i) continued competitive housing options and new home sales
initiatives impacting occupancy levels at certain properties; ii) variability in
income from home sales operations, including anticipated expansion projects;
iii) potential effects of uncontrollable factors such as hurricanes; iv)
potential acquisitions, investments and dispositions; and v) Rent Control
Initiatives and other legal defense costs. Quarter-to-quarter results during the
year are impacted by seasonality at certain of the properties.
In late 2002, the Company's lawsuit against the City of San Rafael was
tried in Federal District Court. The Court delayed ruling on the matter until
certain property rights cases were decided by the United States Supreme Court.
The Company and the City of San Rafael have substantially concluded briefing on
the Supreme Court cases as requested by the Court. The Court has scheduled a
further hearing to argue the impact of the Supreme Court cases later this
summer. The Company expects a ruling sometime thereafter. The ruling in this
matter will likely impact the Company's Rent Control Initiatives during the last
half of the year.
Preliminary guidance for 2006 fully diluted FFO per share is projected
to be in the range of $2.70 to $2.80. We expect our Core portfolio to perform in
line with historical norms. We anticipate revenue growth of approximately
4 percent and expense growth reflecting the increase in the Consumer Price
Index. We anticipate our sales performance to be in line with or better than our
current year's performance. We further anticipate acquisitions to offset
dilution from our recent issuance of preferred securities.
Factors impacting this guidance include i) the mix of site usage within
the Company's portfolio; ii) the Company's yield management of its short term
resort sites; iii) scheduled or implemented rate increases;
and iv) occupancy changes. Results for 2006 also may be impacted by, among other
things i) continued competitive housing options and new home sales initiatives
impacting occupancy levels at certain properties; ii) variability in income from
home sales operations, including anticipated expansion projects; iii) potential
effects of uncontrollable factors such as hurricanes; iv) potential
acquisitions, investments and dispositions; and v) Rent Control Initiatives and
other legal defense costs. Quarter-to-quarter results during the year are
impacted by seasonality at certain of the properties.
This news 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", "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. These
forward-looking statements are subject to numerous assumptions, risks and
uncertainties, including, but not limited to: in the age-qualified communities,
home sales results could be impacted by the ability of potential homebuyers to
sell their existing residences as well as by financial markets volatility; in
the all-age communities, 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; our ability to maintain rental rates and occupancy with
respect to properties currently owned or pending acquisitions; our assumptions
about rental and home sales markets; the completion of pending acquisitions and
timing with respect thereto; the effect of interest rates as well as other risks
indicated from time to time in our filings with the Securities and Exchange
Commission. 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. The Company is under no obligation to, and expressly disclaims
any obligation to, update or alter its forward-looking statements whether as a
result of such changes, new information, subsequent events or otherwise.
Equity LifeStyle Properties, Inc. owns or has an interest in 279
quality properties in 26 states and British Columbia consisting of 101,960
sites. The Company is a self-administered, self-managed, real estate investment
trust (REIT) with headquarters in Chicago.
A live webcast of the Company's conference call discussing these
results will be available via the Company's website in the Investor Info section
at www.mhchomes.com at 10:00 a.m. Central time on July 19, 2005. The conference
call will not have any prerecorded remarks and will be limited to questions and
answers from interested parties.
###
Tables follow
EQUITY LIFESTYLE PROPERTIES, INC.
SELECTED FINANCIAL DATA
(UNAUDITED)
(AMOUNTS IN THOUSANDS EXCEPT FOR PER SHARE DATA)
<Table>
<Caption>
QUARTERS ENDED SIX MONTHS ENDED
JUNE 30, JUNE 30, JUNE 30, JUNE 30,
2005 2004 2005 2004
--------- --------- --------- ---------
PROPERTY OPERATIONS:
Community base rental income......................... $ 53,041 $ 51,192 $ 105,960 $ 100,310
Resort base rental income............................ 14,862 12,951 39,109 25,293
Utility and other income............................. 6,908 6,284 14,517 12,618
--------- --------- --------- ---------
Property operating revenues....................... 74,811 70,427 159,586 138,221
Property operating and maintenance................... 24,514 23,032 50,808 43,232
Real estate taxes.................................... 6,287 5,818 12,447 11,082
Property management.................................. 3,966 3,423 7,615 6,269
--------- --------- --------- ---------
Property operating expenses....................... 34,767 32,273 70,870 60,583
--------- --------- --------- ---------
Income from property operations................... 40,044 38,154 88,716 77,638
HOME SALES OPERATIONS:
Gross revenues from inventory home sales............. 17,450 10,698 27,687 18,123
Cost of inventory home sales......................... (15,623) (9,280) (24,570) (16,128)
--------- --------- --------- ---------
Gross profit from inventory home sales............ 1,827 1,418 3,117 1,995
Brokered resale revenues, net........................ 813 595 1,417 1,085
Home selling expenses................................ (2,219) (2,185) (4,257) (4,226)
Ancillary services revenues, net..................... 376 728 2,512 1,633
--------- --------- --------- ---------
Income from home sales and other.................. 797 556 2,789 487
OTHER INCOME AND EXPENSES:
Interest income...................................... 312 314 683 767
Other corporate income............................... 4,367 334 8,428 624
Equity in income of unconsolidated joint ventures.... 3,401 1,837 4,544 2,804
General and administrative........................... (3,835) (2,367) (6,717) (4,579)
Rent Control Initiatives............................. (43) (291) (613) (920)
--------- --------- --------- ---------
Operating income (EBITDA)......................... 45,043 38,537 97,830 76,821
Interest and related amortization.................... (25,003) (23,031) (50,002) (43,170)
Income from discontinued operations.................. 554 614 1,173 1,206
Depreciation on corporate assets..................... (223) (427) (439) (804)
Income allocated to Preferred OP Units............... (3,056) (2,821) (5,912) (5,634)
--------- --------- --------- ---------
FUNDS FROM OPERATIONS (FFO)....................... $ 17,315 $ 12,872 $ 42,650 $ 28,419
Depreciation on real estate and other costs.......... (13,761) (11,666) (27,259) (21,756)
Depreciation on unconsolidated joint ventures........ (398) (269) (824) (474)
Depreciation on discontinued operations.............. --- (345) (329) (686)
Gain on sale of properties........................... --- --- --- 638
Income allocated to Common OP Units.................. (669) (132) (3,042) (1,171)
--------- --------- --------- ---------
NET INCOME........................................ $ 2,487 $ 460 $ 11,196 $ 4,970
========= ========= ========= =========
NET INCOME PER COMMON SHARE - BASIC.................... $ 0.11 $ 0.02 $ 0.49 $ 0.22
NET INCOME PER COMMON SHARE - FULLY DILUTED............ $ 0.11 $ 0.02 $ 0.48 $ 0.21
--------- --------- --------- ---------
FFO PER COMMON SHARE - BASIC........................... $ 0.59 $ 0.45 $ 1.45 $ 1.00
FFO PER COMMON SHARE - FULLY DILUTED................... $ 0.58 $ 0.44 $ 1.42 $ 0.99
--------- --------- --------- ---------
Average Common Shares - Basic.......................... 23,042 22,737 23,008 22,706
Average Common Shares and OP Units - Basic............. 29,356 28,654 29,333 28,321
Average Common Shares and OP Units - Fully Diluted..... 29,974 29,142 29,934 28,840
--------- --------- --------- ---------
</Table>
EQUITY LIFESTYLE PROPERTIES, INC.
(UNAUDITED)
<Table>
<Caption>
AS OF AS OF
JUNE 30, DECEMBER 31,
TOTAL SHARES AND OP UNITS OUTSTANDING: 2005 2004
------------------- -------------------
Total Common Shares Outstanding................. 23,074,950 22,937,192
Total Common OP Units Outstanding............... 6,260,031 6,340,805
</Table>
<Table>
<Caption>
SELECTED BALANCE SHEET DATA: JUNE 30, DECEMBER 31,
2005 2004
(amounts in 000's) (amounts in 000's)
------------------- -------------------
Total real estate, net......................... $ 1,704,880 $ 1,712,923
Cash and cash equivalents...................... $ 7,416 $ 5,305
Total assets(1)................................ $ 1,894,806 $ 1,886,289
Mortgage notes payable......................... $ 1,412,622 $ 1,417,251
Unsecured debt................................. $ 151,000 $ 235,800
Total liabilities.............................. $ 1,637,709 $ 1,719,674
Minority interest.............................. $ 212,760 $ 134,771
Total stockholders' equity..................... $ 434,337 $ 31,844
</Table>
<Table>
<Caption>
MANUFACTURED HOME SITES AND QUARTERS ENDED SIX MONTHS ENDED
OCCUPANCY AVERAGES: JUNE 30, JUNE 30, JUNE 30, JUNE 30,
2005 2004 2005 2004
------------ ----------- ------------ -----------
Total Sites................................... 42,754 42,417 42,746 41,830
Occupied Sites................................ 38,581 38,794 38,660 38,295
Occupancy %................................... 90.2% 91.5% 90.4% 91.5%
Monthly Base Rent Per Site.................... $ 458.27 $ 439.86 $ 456.80 $ 436.57
Core(*) Monthly Base Rent Per Site............ $ 461.32 $ 436.28 $ 459.68 $ 437.11
</Table>
(*) Represents rent per site for properties owned in both periods of
comparison.
<Table>
<Caption>
QUARTERS ENDED SIX MONTHS ENDED
JUNE 30, JUNE 30, JUNE 30, JUNE 30,
HOME SALES(2): 2005 2004 2005 2004
------------ ----------- ------------ -----------
New Home Sales Volume(3)...................... 186 119 313 211
New Home Sales Gross Revenues................. $ 16,253 $ 9,153 $ 25,856 $ 15,862
Used Home Sales Volume........................ 92 123 144 190
Used Home Sales Gross Revenues................ $ 1,197 $ 1,545 $ 1,831 $ 2,261
Brokered Home Resale Volume................... 439 407 812 734
Brokered Home Resale Revenues, net............ $ 813 $ 595 $ 1,417 $ 1,085
</Table>
- --------
(1) Includes hurricane related costs recoverable from insurance providers of
$7.4 million.
(2) Results of continuing sales operations.
(3) Quarter and six months ended June 30, 2005 includes four and 13 third-party
sales, respectively.
EQUITY LIFESTYLE PROPERTIES, INC.
(UNAUDITED)
<Table>
<Caption>
ANNUAL REVENUE RANGES:
Total Sites Total Sites Total Sites Approximate
(rounded to (rounded to (rounded to Annual
100's) 100's) 100's) Revenue Range (1)
-------------- ------------- ------------- --------------------
6/30/05 3/31/05 12/31/04
Community sites (2)...... 45,200 45,200 45,200 $5,400-$5,500(3)
Resort sites:
Annuals................ 13,100 13,100 13,100 $3,000-$3,200
Seasonal............... 7,600 7,600 7,200 $1,800-$1,900
Transient.............. 5,600 5,600 6,000 $2,000-$2,200
Thousand Trails........ 17,900 17,900 17,900 (4)
Joint Ventures........... 12,300 11,800 11,800 (5)
---------------- ------------- --------------
(6) 101,700 101,200 101,200
================ ============= ==============
</Table>
(1) All Ranges exclude utility and other income.
(2) Includes 2,466 sites from discontinued operations.
(3) Based on occupied sites. Average occupancy as of 12/31/04 was
approximately 90%.
(4) 17,911 sites are reserved for Thousand Trails members pursuant
to a sale-leaseback agreement with Thousand Trails Operations
Holding Company, L.P. with an annual rent of $16 million.
(5) Joint Venture income is included in Equity in income from
unconsolidated joint ventures.
(6) Does not include approximately 200 sites for San Francisco RV
purchased on June 20, 2005.
<Table>
<Caption>
FUNDS AVAILABLE FOR DISTRIBUTION (FAD): QUARTERS ENDED SIX MONTHS ENDED
JUNE 30, JUNE 30, JUNE 30, JUNE 30,
2005 2004 2005 2004
------------ ----------- ------------ -----------
Funds from operations.............................. $ 17,315 $ 12,872 $ 42,650 $ 28,419
Non-revenue producing improvements to real estate.. (3,044) (3,835) (5,333) (6,509)
------------ ----------- ------------ -----------
Funds available for distribution................. $ 14,271 $ 9,037 $ 37,317 $ 21,910
============ =========== ============ ===========
FAD per Common Share - Basic....................... $ 0.49 $ 0.32 $ 1.27 $ 0.77
FAD per Common Share - Fully Diluted............... $ 0.48 $ 0.31 $ 1.25 $ 0.76
------------ ----------- ------------ -----------
</Table>
"Funds from Operations ("FFO") is a non-GAAP financial
measure. The Company believes that FFO, as defined by the Board of
Governors of the National Association of Real Estate Investment Trusts
("NAREIT"), to be 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.
FFO is defined as net income, computed in accordance with
GAAP, excluding gains or losses from sales of properties, plus real
estate related depreciation and amortization, 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. The Company believes that FFO is helpful
to investors as one of several measures of the performance of an equity
REIT. The Company further believes that by excluding the effect of
depreciation, amortization and 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. The Company computes FFO in accordance with 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. Funds available for distribution ("FAD") is a
non-GAAP financial measure. FAD is defined as FFO less non-revenue
producing capital expenditures. Investors should review FFO and FAD,
along with GAAP net income and cash flow from operating activities,
investing activities and financing activities, when evaluating an
equity REIT's operating performance. FFO and FAD 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."