ELS Earnings Plummet in the Third Quarter from Acquisition Expenses

Equity LifeStyle Properties, Inc. (NYSE:ELS) reported a net loss of $2.9 million for the third quarter ending on Sept. 30, 2011, which the company attributed to $32.5 million spent in acquisitions. This represents a net loss per diluted common share of $0.07, down from the previous year’s net income per diluted share of $0.37.

Funds from operation (FFO) were down 2.8% from the previous year at $31.8 million, or $0.73 per share, compared to $32.7 million, and $0.92 per share in 2010.

Excluding two transaction costs of approximately $15.2 million and $17.3 million associated with ELS’ 75-property portfolio acquisition from earlier in the year, the company says its FFO would have been $47 million in the third quarter, and $117 million for the first three quarters. Similarly, net income available to common stockholders would have been $12.4 million in the third quarter, which would have represented a 6.9% increase from the previous quarter’s $11.6 million.


In terms of portfolio performance, ELS reported revenues of $154.6 million, up 18.4% from the previous year’s third quarter operating revenues. Its quarterly expenses also rose nearly 37% compared to last year, to $160.3 million.

Since the company’s $1.43 billion acquisition of 75 manufactured home communities plus one RV resort, ELS has incurred approximately $17.3 million of transaction costs, and expects that number to increase to about $22 million by the time it closes on all the properties.

During the third quarter, ELS closed on 58 properties for approximately $1,047,000, and obtained $200 million of financing secured by 20 of the home communities and three resort properties. In October 2011, ELS closed on three more properties for $110 million.


ELS reported a cash balance of approximately $213 million at the end of the third quarter, and stated its intentions to use most of that balance to fund the remaining acquisitions during the fourth quarter.

The company  forecasts a net income of $5.6 million, or $0.14 per share, for the fourth quarter, with a projected FFO of $0.85 per share, which goes up to $0.96 per share excluding transaction costs.

For FY 2011, ELS forecasts a net income of $18.1 million, or $0.52 per share, and FFO of $3.42 per share, and $3.97 per share excluding transaction costs.

As of  October 17, 2011,  Equity LifeStyle Properties, Inc. owns or has an interest in  368 properties in 32 states and British Columbia, consisting of 136,100 sites.

View ELS’ earnings report here.

Written by Alyssa Gerace