Equity Lifestyle Properties Inc. Reports Operating Results (10-Q)

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May 06, 2010
Equity Lifestyle Properties Inc. (ELS, Financial) filed Quarterly Report for the period ended 2010-03-31.

Equity Lifestyle Properties Inc. has a market cap of $1.66 billion; its shares were traded at around $54.56 with and P/S ratio of 3.5. The dividend yield of Equity Lifestyle Properties Inc. stocks is 2.2%. Equity Lifestyle Properties Inc. had an annual average earning growth of 2.5% over the past 10 years.ELS is in the portfolios of Manning & Napier Advisors, Inc, Jim Simons of Renaissance Technologies LLC, George Soros of Soros Fund Management LLC, Steven Cohen of SAC Capital Advisors.

Highlight of Business Operations:

Our home sales volumes and gross profits have been declining since 2005. We believe that the disruption in the site-built housing market may be contributing to the decline in our home sales operations as potential customers are not able to sell their existing site-built homes as well as increased price sensitivity for seasonal and second homebuyers. We believe that our potential customers are also having difficulty obtaining financing on resort homes, resort cottages and RV purchases. There are few options for potential customers who seek to obtain manufactured home financing. The options that are available currently require at least a 5% down payment and interest rates ranging from approximately 8% to 13%. This is in contrast to purchasers of site-built homes, who own the underlying land and that may benefit from various government stimulus packages designed to keep interest rates and down payments low. The continued decline in homes sales activity resulted in our decision to significantly reduce our new homes sales operation during the last couple of months of 2008 and until such time as new home sales markets improve. We believe that renting our vacant new homes may represent an attractive source of occupancy and potentially convert to a new homebuyer in the future. We are also focusing on smaller, more energy efficient and more affordable homes in our manufactured home Properties. We also believe that some customers capable of purchasing are opting instead to rent due to the current economic environment.

The 1.2% increase in the Core Portfolio property operating revenues primarily reflects: (i) a 2.3% increase in rates in our community base rental income offset by a 0.3% decrease in occupancy (ii) a 3.3% increase in revenues for our resort base income comprised of an increase in annual and seasonal revenue offset by decreases in transient resort revenue and (iii) a 5.5% decrease in right-to-use annual payments due to net member attrition.

The 2.1% increase in property operating expenses in the Core Portfolio is primarily due to a 3.0% increase in property operating and maintenance expenses which includes increases in repair and maintenance expenses, payroll expenses and utility expenses.

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