ELS - Earnings call transcript Q2 2020 | Equity LifeStyle Properties, Inc.

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Operator

Good day, everyone and thank you for joining us to discuss Equity LifeStyle Properties' Second Quarter 2020 Results.

Our featured speakers today are Marguerite Nader, our President and CEO; Paul Seavey, our Executive Vice President and CFO; and Patrick Waite, our Executive Vice President and COO. In advance on today's call, management released earnings. Today's call will consist of opening remarks and a question-and-answer session with management relating to the company's earnings release.

As a reminder, this call is being recorded. this of may the during in forward-looking discussed meaning the federal matters conference contain call statements Certain securities law. are statements uncertainties. forward-looking subject economic certain All risks to and any to The no of update statements that or subsequent company events. become obligation to assumes because untrue supplement

SEC today's measures by and to included GAAP measures and G. addition, the as call during non-GAAP in measures these filings. Marguerite At would SEC over I turn are release, historical information we comparable our call, In Reconciliations our our discuss President of will our financial time, identified to Regulation financial supplemental CEO. Nader, to earnings non-GAAP financial this like the

Marguerite Nader

joining Good today. morning for and thank us you

quarter results the second of show our strength Our continued business.

strong and operating collections, under a We've We last the the impact operate program efficiently we've put of continue our to conditions. due for with to place residents will on details our payment Approximately, XXX new saw this increased in be but more across seen new year. COVID-XX. in provide In XX%. organizations, safely to consistent Paul hardship deferral X.X% properties patterns of community. rent quarter, facing in revenue. price by able enrolled on the the sales in with home program. by We increase rental We side residents a the a volume purchase saw average moving residents decrease we the business and MH out are increased of our demand XX%

MH currently Our properties are occupied. XX%

paid an differentiator capital to is commitment have residents important Our This are times. difficult our who cash for home. generally their homeowners in communities

less of consists renters. occupancy overall X% Our than

years In term jurisdiction. activity which and and had our or are resorts revenue local impacted were comes for streams. we've by in customers. called second travel inside shelter-in-place transient of the orders, seasonal heavily XX% longer our RV the focused our the our quarter, reduced to properties an from nature RV eliminated acquisition annual business, that strategy is XX% RV revenue on buying Moving of over

Our community. roots has customer at RV generally the annual developed

protocols to family. customers controlled to would to continued in react team to to for climate new For the In of second close quarter total our the June. the accounts in grew beginning to to has changes with X.X%. were detail. transient walk the annual the customers and by a risks place transient significant an revenue in manner. employees which impressive on They’ve shelter found we We a increase to primarily quarter, orders June. well-being protect I environment. the the The high like environment entire approximately We from reservation XX% the employees, our it month revenue close adapted potential historically travel our over activity traffic primary Paul saw safety associated residents in operating traffic. numbers until in of revenue evolving and now of ELS by and will reduced turn for and regulatory and in focus with thanking to activity is the through successfully and demand in The I guests. the a of

Paul Seavey

balance second highlight and release you, our morning, financial good the the results, review and some supplemental Thank will Marguerite, information and with earnings update COVID-XX position. our I discuss everyone. included of and mentioned in topics our liquidity quarter sheet

per For $X.XX share. normalized FFO the second we quarter, reported

the $X.X disclosed in million expenses release, COVID-XX in earnings As approximately quarter. during nonrecurring our related we incurred

calculation these our have back expenses in of We added NFFO.

X.X% occupancy for rent basis from same at the driver period. in rent resort X.X% growth to X.X% occupancy Year-to-date increased and mentioned RV MH year. seasonals period annuals from X.X% base XXX, revenue by of decreased owners consists related and quarter of Our resort core since base sites essentially with the increased an to occupancy growth X% The prior the We've increased last to decreased to base annuals prior core X.X%year-to-date gains. our renters income in remarks. Core from Marguerite quarter, rate Core second the result flat XX. was of rent rental compared points Membership December rate compared rent her of compared increase approximately XXXX. XXX with from of transients the in increased XX.X% as compared quarter to the dues year. closures growth the in a XX

decrease that approximately operating XXXX. non-recurring in over approximately includes related which of in COVID-XX. in from quarter, flat second our June, suspension disclosure attribute quarter, upgrade X,XXX to of June utility and mix compared property XXXX. almost Pass the a of we income, in that pass-throughs resulting footnote for year. was we XX% sales resulting stays. XXXX. of quarter the utility RV price. were expenses. expenses Increases core property primarily experienced represents supplemental increase information This COVID-XX estate Thousand $X our increases an income to showed of changed from resulting $XXX,XXX XX% products late sold We included tax which affected significant Core financial to to in Trails were late million of well fees operation Income Sales sales the During in average Camping were package volume as for our by last real The from memberships. a compared transient net lower impact flat lower the contribution Core fees quarter increased other revenue was reduced quarter while pass-through and than of sold XX% membership related XXXX, The about sales recovery the second in states volumes offset as

non-core property by basis $XX.X our quarter. marina’s and of was the NOI the Revenues $X.X than expenses property generated property million non-core by at other basis expenses, compared Core core second increasing decline corporate million million million management properties more last for and operating and property XX the and the and total quarter and year-to-date were customers XX% assets Income revenues contribution to from of XX before XXXX portfolio last generated quarter revenues our for core in related G&A impacted Ancillary, for than and the second expenses quarter. an we quarter year. of income management increased In million year. which basis and the retail in a increased X%. were X.X%. summary, of period. NOI a operating quarter generated realized in $X.X the operations COVID-XX core XX points quarter in operating before includes net expenses COVID-XX management approximately property point in the Excluding Property property these increased less $X Core resulting NOI excluding annual portfolio expenses year-to-date $XX.X during in from points marina period. Other the restaurant operations non-core generated expenses

was joint loan Interest addition, in expense In our cost COVID-XX income supplemental period. amortization the was and $XX.X included our and earnings million of refinancing year-to-date quarter approximately million $X.X release financial We XXXX. lower, venture with the million and update related because for we recognized distribution $XX.X a the for information.

MH, open pursuant certain All RV amenities Marina to and some limited guidelines. state have access though our of to locations local are and

XXX April rent residents deferral of Through through June. assisted in was Our we rent. million program, from $X.X place of with approximately program a deferral that

applied rent charges where orders. of openings Those total assistance future be shelter- in customers were We resorts approximately annual of in-place to RV the also delayed will credits to at $XXX,XXX. form of because provided and credit certain

rent have on fees meaningful month outset collection. to July. the rate the the impact our we of have of continued experienced suspension We COVID-XX also late negative Since in pandemic, of now

consistent the with For rate XXXX. overall our second and quarter, second was the quarter of RV our MH, properties collection XX%, for TT

with month-to-date in Our June this collections July collections April, the and time are May at XXXX. consistent in

with have somewhat secured sheet. our financing MH since our X.X% markets for ten-year and range Now from rates to money. from X.XX% available and conditions XX% on RV some terms stabilized Current April Market comments XX% debt to assets for on balance call. LTV

We see High-quality, to from to be preferred High regarded. on lenders value high highly participating regarded. assets will quality lenders. be ELS highly MH continue terms strength age-qualified continues sponsor continue to and place command

July our $XX more dividend is Our than after cash million. balance funding

have capacity our line $XXX credit. unsecured million available of We from of

program months. the maturities approximately have under and million have capacity scheduled We XX our for ATM debt we $XXX next of no

We continue and of we flexibility capital balance us. importance high multiple believe sources available have to sheet we on to place

was average maturity ratio weighted and times. our our secured coverage of X.X interest times to Our debt is The X is XX.X adjusted debt RE outstanding EBITDA years.

Now, questions. we would for Jonathan? it up like open to

Operator

John [Operator Instructions] from Our Capital first the comes BMO line from Markets. question of Kim

question please. Your

John Kim

Thanks. morning. Good

quarter strong the just guidance far collection didn't and parts are year? a as rate why You Can you almost fully your for reinstitute earnings open. you the now as discuss had RV

Marguerite Nader

Sure, John.

advance in know of So, every start we year, well know, issue you the you as the year. at guidance

the guidance the But when feel it clarity good in, to range to environment, environment. strength was the to release this first prudent certain historically think into and really in that respect assumptions been on the It true feel go the at that shown with very did that we provided our during the time And to I specifically the health more forward. appreciate making We provide. that that with a focused and pandemic. the regulatory among going really we've wait there has uncertainty guidance. business reissue is we're investors about we

revenue more to the line during MH items remarkably but times, decision our RV Our revenue have and guidance. wait our reissuing transient to into annual moving revenue that they're and on more like forecast difficult really with performed seasonal well pieces tough and these of part factored

John Kim

based the into of factor much stimulus unemployment concerns on expiring benefits government’s How decision in additional this decision did of all? the as well that your and was

Marguerite Nader

the wasn't you I I -- cover well, No, decision factor. really of kind I the really at good high collections, drivers just end -- there really the that seasonal was as wasn't our think occupancy platform a MH transient mean, and you've the with of sales that so I know in great rates, what seen what

John Kim

are wondering notice quarter you that continued if MH, or increases just -- Okay. And rents? then that's you of in if has I'm if rent suspended increasing last

Marguerite Nader

reinstating to talked and that investor we did we in presentation we John do if the fact you in Yeah, our June. the June June about that end at fact had refer of were them

we So to and up rent increases, of notices very suspension June. the grief April for there catch a was effectively month on May but had of in those those

John Kim

Great. Okay. you. Thank

Marguerite Nader

Thanks, John.

Operator

Thank you.

from the Our Khanal comes line Samir next of from Evercore. question

please. question Your

Samir Khanal

seeing ups in seen the notable properties We've any in those of reports changes of Arizona about properties? sort the of you're the talk some you Florida, California. news maybe changes or in Can even fires trends flare

Marguerite Nader

season, our there there. Yeah. RV are our -- -- really annuals us RV -- busy In know you those -- annual now not as you our so MH and we our properties have right that for in in the

know changes you quarter. it's a impacting into busy the that as reservations then that towards of that how not not and third -- that time currently. towards how how it's I We're season and how that So impacts the you looking -- us so how changes over not certainly -- touched and the virus and are fourth know and on impacts seasonal that's transient what --

Samir Khanal

know is today you is And in XX terms RVs sort on market kind my X the there it's out you Okay. on I months? you're just here guess of sort the one-off the or second virus of opportunities expectation of in other you to what a just of that portfolios seeing the our MH, general I side then guess next of know know acquisition kind question of whether side, in and

Marguerite Nader

communities there in there’s close Yeah. new any I mean think I we -- the quarter. didn't on

you diligence due the of kind you are are and the -- are on selling. there in to in some There have expressed are But in not -- timing happening kind where not We we're I people transactions know now we are in see we'll which transactions happening some are that space MH the -- market are in. of I that the think closing. necessarily certainly deals of that are there's deals all interested age on that the coming update interested

with the I know and anything of necessarily with past I'm think do right, where the having that's you that pandemic. kind not the timing consistent is it's to just years with -- the

Operator

Thank you.

from line Street Pawlowski the next Green Advisors. question of Our comes from John

question, please. Your

John Pawlowski

my taking for question. Thanks Hey.

of curious closure RV the demand or extended, being back to end into this is year? indications Just able the around seasonal states traffic the on early down? risks the closed come uncertainty Any US-Canada border being that intend of to in the to impacting come being southern kind or your snowbird of down

Marguerite Nader

Sure.

overview just So Canadian let -- me Canada give little a our you of our customers.

customers -- those basically about XX% our of think It’s represents year Canadian us and about I I of And Canadian and of the Arizona year Canadian than stay is that full in the more X% In portion of half revenue overall is of our $XX the and a largest first Florida So revenue. Texas. think million with little total annual. half revenue. the

accrued. I model So has on south. is approximately that's do of and customer the have RV XX% We kind already annual of RV collected think their the site already it's park in

we're kind now dealing around the of and the then just uncertainty on travel. that -- the So seasonal with

we’ll something And border so it's until end I was something watching. I closure on don't have it of was that the that -- August. think we're the or it's August XX believe the clarity extended to border

But So that into fact see we're to something it's it’s we'll and something really year closely. paying December that and we're and and watching that that January February. next attention in

John Pawlowski

refunds place still closed pro-rated the risk to as rent in side borders annual the on that the a of rent the annual well right? be would in if are then understand I and terms But -- homes individuals but bucket Right.

Marguerite Nader

kind haven't you customer I in right they’d mean some be cases or now. yet there in, at now Arizona Florida of is right pointthere are We this gotten know the in

So, yet. you unlike And properties. This know it not certainly in the as not we access John you have we something properties. people certainly the same to access is these so discuss it's people there that able can not not our were North we with open not something have to and was, properties to discuss to customers remember couldn't something,

John Pawlowski

RV Could reservation your Okay. share shaking July one if out ago? the I in year apologize from opening last is Well, trends the remarks. a missed pace I this how me, versus in you

Marguerite Nader

I’m I so, Sure. to. happy share didn't mean it I

items parameters July think of the already. we've know I'm about to July kind So, is represented providing with relative year. I the not on some which last result what seen today’s in and month the you I XX% in but to seeing trending which couple of what third quarter want not Not, think put on I just third, line XXXX, future that and in to guidance, a touch we're that is

sales RV increased increase last tracking since from dealer camping pass we're our a activations in of So, June we've about seen XX%. program year, beginning XX%. June the an then, in of RV online And our our dealer XXX%. leads And they increased then

pretty some So that of of really demand we've significant pretty, start kind indicators June. seen since the

Operator

you. Thank

from America. Bank from line of comes the question Joshua next Our Dennerlein of

please. question, Your

Joshua Dennerlein

on can on through on May just a the transient. us like RV indicators side the on you Internet? follow-up John’s that maybe there question seeing Any bookings provide color forward you're come on the

Marguerite Nader

Sure. last weeks, I think to the -- we've significant channels. we've seen seen I booking mean, five or we've over four increases seen our

I four three increase the over some I think a last cases or XXX% weeks. think in

surrounding but are in we're full of that -- are in problematic. area -- some revenue able also we with as that and along we locations at those to that new is the seeing that some we to offsetting operate Now, operate records, are -- some cancellations capacity, you were of where know some able attractions

but kind that but So, seeing are so that that indicators demand -- we're of the some seeing. there, -- those the we’re issues -- seeing some -- we're we’re

Joshua Dennerlein

down? until COVID the Thanks. at costs Okay. had in think the is then, quarter million. now continue past was into I rate that does that pandemic’s kind throttle the you through And that going elevated run kind travel or of a of of quarter to second third it $X over us there Is from or

Marguerite Nader

Yeah.

to related COVID we the million expenses I we focused impacted correct time the the really COVID. what guidance base. operations core highlighted hard time of appreciation to very non-recurring between represent property and employee of million, really closely the think around a program, one-time -- what development on as our the at $X.X costs protocols well to Those differentiate property SEC around the $X the worked And as the this expense very of team disclosure off bonuses. which the of the total related employee

of rate. run excuse that’s really So indicative me of, not

meaning so that we Those and in separated are included cost Now, or cleaning, as the associated excluded expenses. supplies weren't COVID expenses incremental with our incurred related forth. and

project will difficult of experience forth. on and to by the bit those the at moment timing a driven primarily go at of a of the of opening it forward be basis, lot little property, is so amenities the kind what because the the So

Joshua Dennerlein

the of see, you disclose didn’t I Did that, of supplies Okay. that increased that us level kind somewhere, to tell. the --

Marguerite Nader

did we a No not of was significant dollars the in hundred a separately that. not It’s thousand quarter. amount. disclose It couple

Operator

you. Thank

Milligan Baird. comes question RJ of from next Our from the line

please. Your question

RJ Milligan

wanted I bit little color more on the morning. if Good increases. Hey. rent you a could

catch guys them a June You of that reinstated end there you and be up. that at the would mentioned

outsize third the that you're does imply that So see quarter from increases? to going growth

Marguerite Nader

outsize We see growth. won't

the think about impact call point, impact that The way points continued suspension doing year, in on XX of April end would rent growth. extent be framed that to the would been I basis it the the the basis about the the XX the we in through was it just have math.

being couple growth. that I basis think just about those on for months that changes impact re-suspension XX to points the

RJ Milligan

helpful. That's That's Thanks. have. Okay. all I

Marguerite Nader

Thanks, RJ.

Operator

you. Thank

comes Our from of the Citi. question Nick Joseph next from line

Your question, please.

Nick Joseph

Thanks.

on refunds amenities be are that that local just terms Does the either question amenities all of not of if of that use? won't opened state, in the some to opened guidelines. a Just not for some or at pricing impact due

Marguerite Nader

MH and Let Nick, this then to RV. me first let me Patrick, is we’ll touch on get

any On a impacted of the not and on that's sort concession MH rents. that’s you fronts not know --

are the predominantly first of have across and and process portfolio. those portfolio side closing then our We the managed amenities on open of MH through amenities reopening the particularly

the customers our to one employees when place our safe required of another all protocols following ensure interact we I’ve we in that offices vendor national industrial our have call as masks ensure in guidelines. wear safely in specialist and to in employees and are is And a appointment another last have by the a we're cleaning you one hygiene relationship to place. know mentioned protocols have are only and with proximity that We CDC with to that our and in

side And just previous that the I were the the that were in in closed really were was across the know the closed. properties done part quarter of that campgrounds the and refunds for of driver to we’ve annuals On of mean the know you world respect with instances northern RV south. that those you that the amenities

demand right rent now, lower season are any changes. impacting and annual at not of sort the We for of seasonal payments this it’s so any of it’s a out point and then

Nick Joseph

Okay. environment. the Great. just to opportunities on that And the to there been many to then any acquisition given able storm? what of kind in Thanks. the owners second or quarter side back and been specific happened RVs was private I increased wondering disruption has or had weather

Marguerite Nader

said, a that think and I the be but think lifetime both opportunities right opportunities saw and their lifetime, I once their lot MH as good in people be people coming like in to I a in result think RV have the been and on to for know see were transient a -- is a kind just think the of because effects for time people thing the the I don't really that that couple of not and repeated. I a effect as most of weather of months seeing the business there the say I it's storm I -- able some may you cycle, just

it's that personal a would to a And so, preference now. kind I and come there more that, of opportunities result people be of willingness of know sell don’t as

Operator

Thank you.

from a John Street from Advisors. Pawlowski is line Green question up next the of Our follow

please. question Your

John Pawlowski

estate and you ground municipalities? property from the XXXX to the a less are year. municipalities about on Thanks, It's approaching Paul. conversations Curious more taxes how lens, any the impact just from with color real know in ELS this

Marguerite Nader

color. No direct

not that it know you long time of has this a time feels translates bit timing, a And know really the isn't though timeframe seeing for it payment, although -- such like don't but that You just for the I yet. -- think we're little could been not know into not hard delays that in there on going timeframe seeing long. happen us extensions you for be seeing

the way you when on the about who income time valuations that of the the typical make attachment the purpose not cycle so and it in assessors so the through And drive that results its for think any impact bill to system. that have forth does may

John Pawlowski

next, a budgets carry fill kind have chatter to There’s the in a little it, where after Okay. their sites bigger municipalities property no residential particularly call when of away? months hole can't come XX other to harder and really it the

Patrick Waite

that than through country. that I the will don't of it’s chatter, ground that louder there's has mean, been of I setting say, and they're and you the the on I it I know there’s rest type some being hear before. chatter don't now. issues time working kind -- for of obviously, California aside the been

Marguerite Nader

And at we for have pass Florida, taxes. have we John, through ability level then, also instance, to real the where of the -- our estate

a big have in it's of corporate a property. help more kind just level lot to not We the front the of it's not municipalities that so at that, transaction, kind do local of of

Operator

you. I'd conclude program. to the this of for remarks. Marguerite to Thank session the Nader program And hand further any today's question-and-answer back like does

Marguerite Nader

on Great. look Thank today. forward next us joining to you updating the you call. quarter's for We

Operator

conclude conference. program. you, participation today's and the your for gentlemen, Thank This ladies in does

may Good Day. disconnect. You now

Equity LifeStyle Properties (ELS) 21 Jul 202020 Q2 Earnings call transcript