Equity Lifestyle Properties, Inc. · NYSE:ELS
Equity Lifestyle Properties — Investor Presentation (February 2008)
35 slides from Equity Lifestyle Properties's investor presentation, Feb 29, 2008
Slide 1: Equity LifeStyle Properties Executive Summary
Equity LifeStyle Properties Community Quality Stability Executive Summary February 29, 2008 (r)
Slide 2: Forward-Looking Statements
Forward-Looking Statements 2 This presentation 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 phrase
Slide 3: ELS mission statement
ELS "The premier provider of affordable, quality lifestyle housing options in the markets we operate in and to the customers we serve." 3
Slide 4: ELS: Quick Review
ELS: Quick Review One of the nation's largest real estate networks with over 300 properties containing over 112,000 sites in 28 states and British Columbia ELS leases developed sites to owners of Manufactured homes (Resort Homes) Park models (Resort Cottages) Recreational vehicles 4
Slide 5: Investment Focus
Investment Focus Primary investment is land/appreciating component of real estate Lower maintenance costs/customer turnover costs High quality real estate Major metros/high growth areas High barriers to entry Retirement and vacation destinations 5
Slide 6: Favorable Fundamentals
Favorable Fundamentals Supply - asset scarcity: supply decreasing in target markets/NIMBY Demand - favorable demographics and migration trends Florida, Arizona, California Baby Boomers 6
Slide 7: Customer Relationship
Customer Relationship Long term relationship creates stable and predictable cash flows Lifestyle focus: amenities, communities Decision drivers: location, appearance, value Attractive housing: high quality, low capital commitment, easy maintenance 7
Slide 8: Target Customer
Target Customer 78 million Baby Boomers* Current RV owners - 8.2 million** Seasonal/second homeowners - 6.8 million vacation homes*** Active adults - lifestyle homes 8 * U.S Census Bureau as of July 2005 ** 2005 University of Michigan study commissioned by the Recreational Vehicle Industry Associati
Slide 9: Boomer Curve
Boomer Curve Source: Information acquired through www.qeaa.org, 2004 9
Slide 10: Unlocking Value: Key Value Drivers
Unlocking Value Real estate Demographics Product flexibility Need for sales and marketing skills Joe McAdams / Privileged Access sales platform Synergies with ELS: it's all about the customer Conflicts of interest 10 10 Key Value Drivers
Slide 11: Structure
Structure Why lease structure? • Qualified REIT income for ELS Goal • A long term viable tenant • Benefit from value of real estate 11
Slide 12: Joe's Conflict of Interest
Joe's Conflict of Interest Economic interests on both sides 100% ownership and control of PA Can benefit economically in ways a third party could not ELS may not enforce its rights as strongly as it might otherwise Joe may benefit PA at the expense of ELS 12
Slide 13: Lease Provisions and Employment Contract
Lease Provisions and Employment Contract McAdams cannot negotiate on behalf of ELS with respect to arrangements with PA • Annual rent renewal • Limits on distributions • Limitations on amount of debt in PA 13
Slide 14: History - Joe McAdams
History - Joe McAdams Background in publishing, media, sales and marketing Sun Times Affinity Group Other 14
Slide 15: History - Joe McAdams (cont'd.)
History - Joe McAdams (cont'd.) 2004 Joins ELS Board of Directors TT sale leaseback 2005 Leaves ELS Board of Directors and forms Privileged Access to pursue flexible use products with ELS 2006 Acquires TT operations: 104,000 members Privileged Access is premier operator and market share leader in pr
Slide 16: History - Joe McAdams (cont'd.)
History - Joe McAdams (cont'd.) 2006 Acquires Mid-Atlantic and Outdoor World operations adding 22 properties and 30,000 members 2007 Increases cash EBITDA from $27.7 million to $32.3 million 2008 Joins ELS as president 16
Slide 17: Scale of PA
Scale of PA* 130,000 Member families (as of 12/07) >1,900 Employees >24,000 RV sites including: >1,900 Rental units >100 Getaway cottages * Source: Privileged Access 17
Slide 18: Member Attributes
Member Attributes* Average age of member - 63 Average age of new membership buyer - 55 >90% renewal rate * Source: Privileged Access for TT customers only 18
Slide 19: ELS & PA Customers
ELS & PA Customers enjoy the highest quality RV properties across the country Resorts are located in many of the country's most desirable vacation spots In excess of 1,000,000 customer contacts Similar overall demographic profile/trends 19
Slide 20: ELS Locations
ELS Locations >75 Properties with lake, river and ocean frontage >80 Properties within 10 miles of coastal U.S. Concentrations: Florida, California, Arizona, Texas Northwest coast, Eastern seaboard, Chicago metro 20
Slide 21: Exploding Demographics
Exploding Demographics Currently over 11M Boomers are 55+ and growing 4M per year* Average life expectancy 80-83** To Boomers, RV's serve as home base to enhance ability to enjoy outdoor activities Steady RV sales in the 45-64 year old market*** 21 * Boomer Curve - page 9 ** National Center for Heal
Slide 22: Favorable Trends
Favorable Trends Outdoor recreation activity participation* • Camping > 48M • Bike riding > 35M • Boating > 29M • Fishing > 40M • Hiking > 31M Real Scarcity of RV sites • 8 million installed base of RV'ers** • Very little new capacity being developed • 1 million sites*** • Campgrounds going out of b
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Slide 24: Products
Products Whole ownership/affordable/multiple units Fractional ownership/rental pool option Memberships Pay-for-use (rentals, park pass)/initial exposure Points 24
Slide 25: Objectives
Objectives Creation of sales and marketing platform Leverage existing Privileged Access platform Lead generation and new customer acquisition Identify additional products for existing customers 25
Slide 26: Initiatives
Initiatives Pent up demand for whole ownership among PA members Lake Conroe, Lake & Shore, Orlando Open ELS resorts to PA members Tropic Winds, Lake Magic/Clerbrook, Countryside Open some PA resorts to public to generate additional income, leads Wholesale excess inventory/rallies/Good Sams 26
Slide 27: Financials
Financials
Slide 28: Total Market Capitalization
Total Market Capitalization IPO 2007* Market Capitalization $193 million $1.1 billion Preferred Units - $200 million Mortgage Notes $103 million $1.6 billion Unsecured Notes - $103 million Total Market Capitalization $296 million $3.0 billion *Assumes $45.67 closing stock price at December 31, 2007
Slide 29: REIT Industry Same Store NOI Growth
29 REIT Industry Same Store NOI Growth
Slide 30: Track Record
Track Record 1993 2007 FFO Per Share? $1.11 $3.05 Stock Price Performance? $12.88 $45.67 Dividend Paid Cumulative? $24.12 Total Return 703%? ? See page 35 for definition of FFO ? The 1993 stock price is split-adjusted; the 2007 price is the closing price as of December 31, 2007 ? Through December 31
Slide 31: 2007 Selected Financial Data
2007 Selected Financial Data? (Amounts in millions, except for per share data) First Quarter Second Quarter Third Quarter Fourth Quarter Full Year 2007 Income from Property Operations 57.4 47.0 49.3 49.2 203.0 Income from Home Sales and other 0.8 (0.4) (0.4) (1.0) (1.0) Other Income and Expenses 3.1
Slide 32: 2007 Income from Property Operations
2007 Income from Property Operations (Amounts in millions) First Quarter Second Quarter Third Quarter Fourth Quarter Full Year 2007 Property Operations for the 2008 Core?: Property Operating Revenues 100.5 90.1 93.6 90.0 374.2 Property Operating Expenses (43.1) (43.1) (44.5) (41.3) (172.0) _______ _
Slide 33: 2008 Budget - Income From Property Operations
2008 Budget - Income From Property Operations (Amounts in millions) Property Operations: 2007 2008 Growth Factor? Community Base Rental Income $236.9 Resort Base Rental Income 100.5 Utility and Other Income 36.8 __________ Property Operating Revenues $374.2 3.50 - 4.00% Property Operating Expenses (
Slide 34: 2008 Guidance - Selected Financial Data
2008 Guidance - Selected Financial Data (Amounts in millions, except for per share data) 2008 Budget? Income from Property Operations $209 Income from Home Sales and Other 0 Other Income and Expenses 8 Operating Income (EBITDA) 217 Financing Costs and Other (117) ___________ Funds from Operations (F
Slide 35: Non-GAAP financial measures definitions
In an effort to provide additional information regarding the performance of the Company, certain non-GAAP financial measures are used in this presentation. Operating Income is a non-GAAP financial measure. Operating Income is defined as net income, computed in accordance with GAAP, excluding gains o
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