ELS Reports Third Quarter Results

Strong Operating Performance

CHICAGO–(BUSINESS WIRE)–Equity LifeStyle Properties, Inc. (NYSE: ELS) (referred to herein as “we,” “us,” and “our”) today announced results for the quarter and nine months ended September 30, 2020.

All Common Stock and OP Units as well as per share results reflect the two for one stock split that was completed on October 15, 2019. Additionally, all per share results are reported on a fully diluted basis unless otherwise noted.

Financial Results for the Quarter and Nine Months Ended September 30, 2020

For the quarter ended September 30, 2020, total revenues increased $13.8 million, or 5.1 percent, to $285.0 million compared to $271.2 million for the same period in 2019. For the quarter ended September 30, 2020, net income available for Common Stockholders decreased $13.9 million, or $0.07 per Common Share, to $50.6 million, or $0.28 per Common Share, compared to $64.5 million, or $0.35 per Common Share, for the same period in 2019.

For the nine months ended September 30, 2020, total revenues increased $41.0 million, or 5.3 percent, to $819.6 million compared to $778.6 million for the same period in 2019. For the nine months ended September 30, 2020, net income available for Common Stockholders decreased $60.6 million, or $0.34 per Common Share, to $163.6 million, or $0.90 per Common Share, compared to $224.2 million, or $1.24 per Common Share, for the same period in 2019. The financial results for 2019 included a gain of $52.5 million on the sale of five all-age MH communities.

Non-GAAP Financial Measures and Portfolio Performance

For the quarter ended September 30, 2020, Funds from Operations (“FFO”) available for Common Stock and OP Unit holders decreased $12.8 million, or $0.06 per Common Share, to $95.8 million, or $0.50 per Common Share, compared to $108.6 million, or $0.56 per Common Share, for the same period in 2019. For the nine months ended September 30, 2020, FFO available for Common Stock and OP Unit holders decreased $8.8 million, or $0.05 per Common Share, to $297.6 million, or $1.55 per Common Share, compared to $306.4 million, or $1.60 per Common Share, for the same period in 2019.

For the quarter ended September 30, 2020, Normalized Funds from Operations (“Normalized FFO”) available for Common Stock and OP Unit holders increased $2.8 million, or $0.02 per Common Share, to $105.5 million, or $0.55 per Common Share, compared to $102.7 million, or $0.53 per Common Share, for the same period in 2019. For the nine months ended September 30, 2020, Normalized FFO available for Common Stock and OP Unit holders increased $7.5 million, or $0.03 per Common Share, to $309.8 million, or $1.61 per Common Share, compared to $302.3 million, or $1.58 per Common Share, for the same period in 2019.

For the quarter ended September 30, 2020, property operating revenues, excluding deferrals, increased $16.7 million to $272.9 million compared to $256.2 million for the same period in 2019. For the nine months ended September 30, 2020, property operating revenues, excluding deferrals, increased $41.7 million to $789.5 million compared to $747.8 million for the same period in 2019. For the quarter ended September 30, 2020, income from property operations, excluding deferrals and property management, increased $5.3 million to $150.6 million compared to $145.3 million for the same period in 2019. For the nine months ended September 30, 2020, income from property operations, excluding deferrals and property management, increased $19.5 million to $453.9 million compared to $434.4 million for the same period in 2019.

For the quarter ended September 30, 2020, Core property operating revenues, excluding deferrals, increased approximately 4.9 percent and Core income from property operations, excluding deferrals and property management, increased approximately 1.8 percent compared to the same period in 2019. For the nine months ended September 30, 2020, Core property operating revenues, excluding deferrals, increased approximately 3.7 percent and Core income from property operations, excluding deferrals and property management, increased approximately 2.7 percent compared to the same period in 2019.

Business Updates

Page 1 of this Earnings Release and Supplemental Financial Information provides an operations update.

Balance Sheet Activity

During the quarter ended September 30, 2020, we closed on a financing transaction with Fannie Mae generating gross proceeds of $386.9 million. The loan is secured by ten manufactured home (“MH”) communities and consists of two tranches with a weighted average interest rate of 2.55% per annum and a weighted average maturity of 13.4 years. The net proceeds from the transaction were primarily used to repay our $200.0 million unsecured term loan scheduled to mature in 2023 and secured loans scheduled to mature in 2021. We incurred early debt retirement costs of $9.7 million related to these financing transactions.

Investment Activity

In October 2020, we completed the acquisition of Marina Dunes RV Park, an 89-site RV community located in Marina, California, and we completed the acquisition of Acorn Campground, a 323-site RV community in Green Creek, New Jersey. The total aggregate purchase price for these properties was $36.0 million, which was funded with available cash.

In October 2020, we also completed the acquisitions of two development properties, The Resort at Tranquility Lake, a planned 500-site RV community located in Cape Coral, Florida and Bayport, a planned 900-site RV community located in Jamaica, Virginia, for a total aggregate purchase price of $16.3 million. These acquisitions were funded with available cash.

As part of our strategy to expand owned communities with additional developed sites, in September and October 2020, we completed the acquisitions of five parcels of land adjacent to four of our properties for a total aggregate purchase price of $6.4 million, which was funded with available cash.

About Equity LifeStyle Properties

We are a self-administered, self-managed real estate investment trust (“REIT”) with headquarters in Chicago. As of October 19, 2020, we own or have an interest in 415 quality properties in 33 states and British Columbia consisting of 157,690 sites.

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

Conference Call

A live webcast of our conference call discussing these results will take place tomorrow, Tuesday, October 20, 2020, 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. These forward-looking statements are subject to numerous assumptions, risks and uncertainties, including, but not limited to:

• our ability to control costs and real estate market conditions, our ability to retain customers, the actual use of sites by customers and our success in acquiring new customers at our properties (including those that we may acquire);
• our ability to maintain historical or increase future rental rates and occupancy with respect to properties currently owned or that we may acquire;
• our ability to attract and retain customers entering, renewing and upgrading membership subscriptions;
• our assumptions about rental and home sales markets;
• our assumptions and guidance concerning 2021Core MH and Core RV annual rate growth;
• our ability to manage counterparty risk;
• our ability to renew our insurance policies at existing rates and on consistent terms;
• in the age-qualified properties, home sales results could be impacted by the ability of potential home buyers to sell their existing residences as well as by financial, credit and capital markets volatility;
• 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;
• impact of government intervention to stabilize site-built single-family housing and not manufactured housing;
• effective integration of recent acquisitions and our estimates regarding the future performance of recent acquisitions;
• the completion of future transactions in their entirety, if any, and timing and effective integration with respect thereto;
• unanticipated costs or unforeseen liabilities associated with recent acquisitions;
• our ability to obtain financing or refinance existing debt on favorable terms or at all;
• the effect of interest rates;
• the effect from any breach of our, or any of our vendors’, data management systems;
• the dilutive effects of issuing additional securities;
• the outcome of pending or future lawsuits or actions brought against us, including those disclosed in our filings with the Securities and Exchange Commission; and
• other risks indicated from time to time in our filings with the Securities and Exchange Commission.

In addition, these forward-looking statements and our preliminary guidance on Core MH and Core RV annual rate growth are subject to risks related to the COVID-19 pandemic, many of which are unknown, including the duration of the pandemic, the extent of the adverse health impact on the general population and on our residents, customers, and employees in particular, its impact on the employment rate and the economy, the extent and impact of governmental responses, and the impact of operational changes we have implemented and may implement in response to the pandemic.

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” section in our most recent Annual Report on Form 10-K and 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

Operations Update

• All properties continue to be open subject to state and local guidelines.
  • Some of the amenities at certain properties remain closed at this time due to state and local guidelines.
  • All RV properties continue to be open to transient customers.

• Hurricanes Hanna and Isaias made landfall during the third quarter of 2020 and impacted some of our communities in Texas, North Carolina, Delaware, New Jersey and Pennsylvania. The affected properties resumed operations shortly after the storms passed. Our current aggregate property damage estimate is approximately $9.0 million. During the quarter ended September 30, 2020, we recorded expenses of $2.8 million with offsetting insurance recovery revenue of $2.3 million.

Preliminary 2021 rent rate growth assumptions

• By October month-end we will have sent 2021 rent increase notices to 48% of our MH residents. The average rent increase of these notices support our preliminary expectations for 2021 Core MH rate growth of 4.0%.⁽¹⁾
  
  

• We have set RV annual rates for the 2021 season for 90% of our annual sites. These rates support our preliminary expectations for 2021 Core RV annual rate growth of 4.0%. ⁽¹⁾
  
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^{1. Actual results may differ. See Forward Looking Statements for risks that may impact our actual results.}

^{1. Any opinions, estimates or forecasts regarding our performance made by these analysts or agencies do not represent our opinions, forecasts or predictions. We do not by reference to these firms imply our endorsement of or concurrence with such information, conclusions or recommendations.}

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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 8 and Non-GAAP Financial Measures Definitions and Reconciliations on pages 17 – 19.

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Contacts

Paul Seavey

(800) 247-5279

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