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Why investing in rental properties in Jacksonville, Florida, beats other comparable U.S. markets

Investors right now are scared. Recent drops in the stock market, crashes in the crypto investment world, and fears of a recession have investors searching for an asset class that will grow in the short run as well as the long run. There has never been a more important time for savvy investors to understand the major fundamentals that drive that growth. Real estate has long been considered an asset class that wins in the long run because home values appreciate over a full-market cycle (10-20….....»»

Category: topSource: bizjournalsJun 23rd, 2022

Hindsight Capital

      After a tremendous decade of above-average returns, and a spectacular two-year period of even stronger gains, the markets have entered a 6-month period of weakness and volatility. Specifically, the sell-off yesterday brought the S&P500 down 12.4% year-to-date; the small-cap Russell 2000 is off 15.8%; the Nasdaq 100 tech index is down 20.3%.1 … Read More The post Hindsight Capital appeared first on The Big Picture.       After a tremendous decade of above-average returns, and a spectacular two-year period of even stronger gains, the markets have entered a 6-month period of weakness and volatility. Specifically, the sell-off yesterday brought the S&P500 down 12.4% year-to-date; the small-cap Russell 2000 is off 15.8%; the Nasdaq 100 tech index is down 20.3%.1  Those are comparable to each indices’ drawdown from all-time highs: 12.9%, 22.6%, and 21.5% respectively. We do not know exactly what this is: Mere consolidation after those gains? Pricing in of higher rates and inflation? Perhaps even the end of the bull market that began in 2013? One thing I do know from my past experience is that right around these levels, everyone becomes an expert in what you should have done to avoid the drawdowns and capture the opportunities that are so perfectly obvious today. It is the cyclical moment of glory for “Hindsight Capital, LLC.” 2 Managers of this enterprise succeed by making substantial buys and sells with perfect insight and infallible timing. They know which sector to embrace and which to avoid; what stocks to own and which to short. Of course, real estate is part of their portfolio, as are collectible automobiles, art, NFTs, and even rare wine. Hindsight Capital sends out its employees – authorized or otherwise – to speak to the press, fund managers, RIAs, VCs, and family offices. They share their wit and wisdom, explain precisely what you got wrong, and tell you exactly what you should have done instead. They never mention “process,” do not discuss what skills they possess, or how repeatable any approach must be. Intellectually defendable philosophies are not on the agenda, nor are any unknowns, luck, or random events. Rather, they always give specific and actionable advice, albeit too late to act upon. Regardless, I am always grateful to receive their bountiful wisdom. Over the past few months, I have spoken to a variety of employees of Hindsight Capital. I am pleased to let you know they have shared the following insights: Bonds: The 30-year bull market in bonds that began in 1982 is dead! Any professional money manager who could not see this coming must be blind and/or dumb. Real Estate: Whoever sold a house or land in 2018 and 2019 was a fool, given the obvious post-pandemic rise in prices. Suburban rental demand is off the charts and the purchase demand from locked-down apartment dwellers was obvious to see (even in 2019). Tech: Of course, Tech was going to come in! It had gone too far, and for too long to not suffer a major pullback. And all of the lockdown stocks like Peleton and Netflix were toast even before the pandemic ended. Energy: It was obvious that energy demand was going much higher, and that those prices would lead the majors to have a huge rally. The Russian invasion of Ukraine was coming, if you only knew where to look. Those criticisms are dead on, with two minor issues that are hardly worth mentioning. They are included here only for the sake of completeness. The first: All of the above critiques are years old. The 30-year bond bull dating back to 1982 only gets you to 2012; we have been hearing about the death of the bull market in bonds for much longer than a full decade. All of the gains since then – both yield and principal – don’t count if you sold your Treasuries, TIPS, and high-grade Corporates a decade ago and sat in money market funds for that whole time earning 10 bps. As to real estate – if you were a leveraged (mortgaged) buyer renting out properties, you had to survive 2 years of eviction moratoriums. This means you might have been receiving little or no rental income without legal recourse to recover unpaid receivables (but you still had all of those mortgage and maintenance costs to cover). And that tech valuation criticism? It’s been consistent since (checks notes) 2010 forward. As to the WFH/lockdown stocks like Peleton – it began falling in January 2021; Netflix has been mostly flat since July 2020 before its collapse began in October. The second critique: In investing, we don’t get to operate backward, we must invest forwards. Without the benefit of knowing what already happened. We do not know what random geopolitical events will occur, what shifts will take place in sentiment, and how revenues and margins and profits will change. ALL WE HAVE IS PROCESS. If you do not have a defendable process, you are just spit-balling, speculating, guessing, dart-throwing. Rather than tell people what they should have done 6 months ago, how about sharing your brilliance with us about what we should be doing for the next 6 months? To all of the employees of Hindsight Capital, I pose the following questions: – Are you a buyer or seller of Real Estate today? Single-family homes or multi-family apartments? Which parts of the country? Rural, Suburban, or Cities? – What tech stocks are you short now? Which ones are you long? Which specific areas of tech do you like? – Cash: Do you go to cash now? For how long? When and where will you redeploy that into risk assets? – Bonds: Buyer or seller? Which ones? What duration? What credit quality? – Equity: What sectors are you buyers of? Sellers? Which stocks? – Alts/Privates: How much of this investment strategy should be part of your portfolio here? When do you get in or out? Which asset types? – Energy: How much higher is oil going? How long does the war last? When do prices come down? – Lastly, what is your basis for all of the above determinations? As much as we may all want to work with the folks at Hindsight Capital, it is not likely they will do business with you. Part of their allure is that won’t take your money, but they are all too happy to tell you how you should have invested it . . .     Previously: Judgment Under Uncertainty (March 25, 2022) Hindsight Bias Free for All (May 27, 2020) Explaining the Correction, with Perfect Hindsight (October 15, 2018) Investors and Political Pundits Fooled by Randomness (November 11, 2016)     _______ 1. I no longer understand why anyone cites the more or less irrelevant 30 stock Dow Industrials anymore. Somehow, inertia keeps us discussing this meaningless concentrated mutual fund as if it matters anymore; it doesn’t. Perhaps this is fodder for a future discussion. 2. The earliest published version of the phrase “Hindsight Capital” I could find was via my colleague John Authers, who published the phrase in a Financial Times column in 2008:  “Hindsight Capital LLC had a great 2008. It has always been successful because it uses the strategy that year in and year out is better than any other: hindsight.” Authers has revisited the topic annually ever since. The post Hindsight Capital appeared first on The Big Picture......»»

Category: blogSource: TheBigPictureApr 27th, 2022

SOUTHERN MISSOURI BANCORP REPORTS PRELIMINARY RESULTS FOR THIRD QUARTER OF FISCAL 2022; DECLARES QUARTERLY DIVIDEND OF $0.20 PER COMMON SHARE; CONFERENCE CALL SCHEDULED FOR TUESDAY, APRIL 26, AT 9:30AM CENTRAL TIME

Poplar Bluff, Missouri, April 25, 2022 (GLOBE NEWSWIRE) -- Southern Missouri Bancorp, Inc. ("Company") (NASDAQ:SMBC), the parent corporation of Southern Bank ("Bank"), today announced preliminary net income for the third quarter of fiscal 2022 of $9.4 million, a decrease of $2.1 million, or 18.4%, as compared to the same period of the prior fiscal year. The decrease was attributable to an increase in noninterest expense and provision for credit losses, partially offset by increases in net interest income and noninterest income, and by a decrease in provision for income taxes. Preliminary net income was $1.03 per fully diluted common share for the third quarter of fiscal 2022, a decrease of $.24 as compared to the $1.27 per fully diluted common share reported for the same period of the prior fiscal year. Provision for credit losses and noninterest expense were impacted by one-time charges associated with the merger of Fortune Financial Corporation ("Fortune") with and into the Company, completed in late February 2022.   Highlights for the third quarter of fiscal 2022:  The provision for credit losses (PCL) was $1.6 million in the quarter, an increase of $2.0 million as compared to a PCL recovery of $409,000 in the same period of the prior fiscal year. In the second quarter of fiscal 2022, the linked quarter, the Company did not record a PCL. Exclusive of the PCL effects of the Fortune merger, discussed in detail below, the Company would have recorded a negative PCL of approximately $468,000 in the current quarter.   Noninterest expense was up 23.9% for the quarter, as compared to the year ago period, and up 11.2% from the second quarter of fiscal 2022, the linked quarter. The current quarter included $1.1 million in charges attributable to merger and acquisition activity, primarily the Fortune merger, as compared to $205,000 in comparable charges in the linked quarter, and none in the year ago period.   Annualized return on average assets was 1.22%, while annualized return on average common equity was 11.9%, as compared to 1.71% and 16.9%, respectively, in the same quarter a year ago, and 1.69% and 16.1%, respectively, in the second quarter of fiscal 2022, the linked quarter.   Earnings per common share (diluted) were $1.03, down $.24, or 18.9%, as compared to the same quarter a year ago, and down $.32, or 23.7%, from the second quarter of fiscal 2022, the linked quarter.   Nonperforming assets were $7.1 million, or 0.22% of total assets, at March 31, 2022, as compared to $8.1 million, or 0.30% of total assets, at June 30, 2021, and $9.4 million, or 0.34% of total assets, at March 31, 2021.   Deposit balances increased by $302.7 million in the quarter, inclusive of $218.3 million attributable to the Fortune merger. Gross loan balances increased $221.6 million during the quarter, inclusive of $202.1 million attributable to the Fortune merger, and net of a decline in SBA Paycheck Protection Program (PPP) loans not attributable to Fortune of $7.3 million.   Net interest margin for the quarter was 3.48%, as compared to 3.68% reported for the year ago period, and 3.77% reported for the second quarter of fiscal 2022, the linked quarter. Net interest income resulting from accelerated accretion of deferred origination fees on PPP loans was significantly reduced as those loans being repaid through SBA forgiveness declined substantially as compared to previous quarters. Discount accretion on acquired loan portfolios was decreased in the current quarter as compared to the year ago period, and modestly increased as compared to the linked period. In addition, average interest-bearing cash and cash equivalent balances were increased 16.5% compared to the year-ago period, and increased 58.0% as compared to the linked quarter.   Noninterest income was up 8.4% for the quarter, as compared to the year ago period, and down 7.2% as compared to the second quarter of fiscal 2022, the linked quarter. Gains on sale of residential loans originated for sale into the secondary market were down 76% as compared to the year ago quarter, and were off 44% compared to the linked quarter.   Dividend Declared:  The Board of Directors, on April 19, 2022, declared a quarterly cash dividend on common stock of $0.20, payable May 31, 2022, to stockholders of record at the close of business on May 13, 2022, marking the 112th consecutive quarterly dividend since the inception of the Company. The Board of Directors and management believe the payment of a quarterly cash dividend enhances stockholder value and demonstrates our commitment to and confidence in our future prospects.   Conference Call:  The Company will host a conference call to review the information provided in this press release on Tuesday, April 26, 2022, at 9:30 a.m., central time. The call will be available live to interested parties by calling 1-844-200-6205 in the United States (Canada: 1-833-950-0062; all other locations: 1-929-526-1599). Participants should use participant access code 867380. Telephone playback will be available beginning one hour following the conclusion of the call through April 30, 2022. The playback may be accessed in the United States by dialing 1-866-813-9403 (Canada: 1-226-828-7578, UK local: 0204-525-0658, and all other locations: +44-204-525-0658), and using the conference passcode 930969.   Balance Sheet Summary:  The Company experienced balance sheet growth in the first nine months of fiscal 2022, with total assets of $3.3 billion at March 31, 2022, reflecting an increase of $563.5 million, or 20.9%, as compared to June 30, 2021. Growth primarily reflected an increase in net loans receivable combined with an increase in cash and cash equivalents. A significant portion of the Company's balance sheet growth was a result of the Fortune merger.  Cash equivalents and time deposits were a combined $253.4 million at March 31, 2022, an increase of $128.8 million, or 103.4%, as compared to June 30, 2021. The increase was primarily a result of deposit growth outpacing loan growth during the period, including net cash acquired in the Fortune merger. AFS securities were $226.4 million at March 31, 2022, an increase of $19.4 million, or 9.4%, as compared to June 30, 2021, as the Company deployed some excess liquidity into higher-yielding assets.  Loans, net of the allowance for credit losses (ACL), were $2.6 billion at March 31, 2022, an increase of $378.9 million, or 17.2%, as compared to June 30, 2021. Gross loans increased by $379.3 million, while the ACL attributable to outstanding loan balances increased by $419,000. The increase in loan balances was primarily attributable to the Fortune merger, which included loan balances recorded at a fair value of $202.1 million. Inclusive of the acquisition, the loan portfolio shows fiscal year-to-date increases in commercial and residential real estate loans, along with a modest contribution from consumer loans, partially offset by decreases in commercial loans and drawn balances on construction loans. Residential real estate loan balances increased due to growth in single and multifamily loans. Commercial real estate balances increased primarily from loans secured by nonresidential structures, along with growth in loans secured by farmland. Commercial loan balances decreased primarily due to lower balances in agricultural loans, partially offset by increased commercial and industrial lending. Company-originated PPP loan balances declined by $58.8 million during the fiscal year to date, while $2.4 million was acquired in the Fortune merger. Total remaining PPP balances at March 31, 2022, were $6.6 million, while unrecognized deferred fee income on these loans was approximately $137,000 at that date. Management hopes to receive forgiveness payments on all remaining PPP loans by our June 30 fiscal year end. Substantially all outstanding balances are from the second round of the PPP programs.  Loans anticipated to fund in the next 90 days totaled $181.9 million at March 31, 2022, as compared to $158.2 million at December 31, 2021, and $145.8 million at March 31, 2021.  Nonperforming loans were $3.9 million, or 0.15% of gross loans, at March 31, 2022, as compared to $5.9 million, or 0.26% of gross loans at June 30, 2021. The reduction in nonperforming loans was attributable primarily to the return to accrual status of one relationship secured by single-family residential rental properties, partially offset by an increase of $801,000 relating to the Fortune merger. Nonperforming assets were $7.1 million, or 0.22% of total assets, at March 31, 2022, as compared to $8.1 million, or 0.30% of total assets, at June 30, 2021. The reduction in nonperforming assets was attributable primarily to the reduction in nonperforming loans, partially offset by an increase in other real estate owned, which was attributable primarily to $1.7 million in assets acquired in the Fortune merger.  Our ACL at March 31, 2022, totaled $33.6 million, representing 1.29% of gross loans and 867% of nonperforming loans, as compared to an ACL of $33.2 million, representing 1.49% of gross loans and 566% of nonperforming loans at June 30, 2021. The ACL at March 31, 2022, also represented 1.29% of gross loans excluding PPP loans. The ACL required for purchased credit deteriorated (PCD) loans acquired in the Fortune merger was $120,000, and was funded through purchase accounting adjustments, while the ACL required for non-PCD loans acquired in the Fortune merger was $1.9 million, and was funded through a charge to PCL. The Company has estimated its expected credit losses as of March 31, 2022, under ASC 326-20, and management believes the ACL as of that date is adequate based on that estimate. There remains, however, significant uncertainty as economic activity recovers from the COVID-19 pandemic and the Federal Reserve withdraws accommodative monetary policy that was put into effect to respond to the pandemic and its economic impact. Since January, COVID-19 cases and hospitalizations have declined substantially in our market areas. Management continues to consider the potential impact of the lengthy pandemic on borrowers most affected by mitigation efforts, most notably including our borrowers in the hotel industry.  Provisions of the CARES Act and subsequent legislation allowed financial institutions the option to temporarily suspend certain requirements under U.S. GAAP related to troubled debt restructurings (TDRs) through December 31, 2021, for certain loans that were otherwise current and performing prior to the COVID-19 pandemic, but for which borrowers experienced or expected difficulties due to the impact of the pandemic. As of December 31, 2021, there were four loans, with balances totaling approximately $23.7 million, remaining on interest-only payment modifications, and not reported as TDRs based on this temporary option provided under the legislation. For those borrowers whose payment terms had not yet returned to the original terms under their loan agreements, the Company had classified the credits as a "special mention" status credit as of December 31, 2021. Since that date, one of these loans totaling $9.1 million has returned to regular principal and interest payments, but remains a "special mention" credit. The other three loans, totaling $14.9 million, have not returned to principal and interest payments as of March 31, 2022, and have been adversely classified as "substandard" credits, but have not been designated as TDRs pending negotiation of a final restructuring modification.  Total liabilities were $2.9 billion at March 31, 2022, an increase of $521.7 million, or 21.6%, as compared to June 30, 2021.  Deposits were $2.9 billion at March 31, 2022, an increase of $524.1 million, or 22.5%, as compared to June 30, 2021. This increase was attributable in part to the February 2022 Fortune merger, providing $218.3 million in deposits at fair value, including $13.6 million in brokered time deposits and $10.9 million in public unit deposits. Additionally, we closed a branch acquisition in December 2021, through which the Company acquired the former Cairo, Illinois, location of the First National Bank (Fulda, SD), and its related deposits of $28.5 million at fair value, including $15.4 million in public unit deposits. Inclusive of the merger and acquisition, the deposit portfolio saw fiscal year-to-date increases in interest-bearing transaction accounts, non-interest bearing transaction accounts, certificates of deposit, money market deposit accounts, and savings accounts. The increase was inclusive of a $131.5 million increase in public unit funds, and a $5.9 million increase in brokered deposits. Public unit funds totaled $458.0 million at March 31, 2022, primarily in nonmaturity deposits, while brokered deposits totaled $30.9 million, also primarily in nonmaturity deposits. The Company's customers have held unusually high balances on deposit during recent periods. The Company expects that some of the higher-than-normal balances may dissipate over the course of calendar year 2022, but public unit balances, which historically have seen seasonal declines in the June and September quarters, are expected to continue to increase in the current calendar year. The average loan-to-deposit ratio for the third quarter of fiscal 2022 was 91.3%, as compared to 92.4% for the same period of the prior fiscal year.  FHLB advances were $42.9 million at March 31, 2022, a decrease of $14.6 million, or 25.4%, as compared to June 30, 2021, as the Company utilized cash to repay maturing term advances, partially offset by the assumption, at fair value, of $9.7 million in term advances in the Fortune merger.  The Company's stockholders' equity was $325.2 million at March 31, 2022, an increase of $41.7 million, or 14.7%, as compared to June 30, 2021. The increase was attributable primarily to $22.9 million in equity issued to Fortune shareholders, as well as earnings retained after cash dividends paid, partially offset by a $9.4 million reduction in accumulated other comprehensive income as the market value of the Company's investments declined as market interest rates increased, and by $1.2 million utilized for repurchases of 26,607 shares of the Company's common stock during the first nine months of the fiscal year, at an average price of $44.15.   Quarterly Income Statement Summary:  The Company's net interest income for the three-month period ended March 31, 2022, was $25.1 million, an increase of $2.0 million, or 8.5%, as compared to the same period of the prior fiscal year. The increase was attributable to a 14.8% increase in the average balance of interest-earning assets, partially offset by a decrease in net interest margin to 3.48% in the current three-month period, from 3.68% in the same period a year ago. As PPP loan forgiveness declined, the Company's accretion of interest income from deferred origination fees on these loans was reduced to $180,000 in the current quarter, which added four basis points to the net interest margin, as compared to $1.2 million in the same quarter a year ago, which added 18 basis points to the net interest margin in that period. In the linked quarter, ended December 31, 2021, accelerated recognition of deferred PPP origination fees totaled $890,000, adding 13 basis points to the net interest margin. The remaining balance of deferred origination fees is significantly less than the amount accreted in recent quarters.  Loan discount accretion and deposit premium amortization related to the Company's August 2014 acquisition of Peoples Bank of the Ozarks, the June 2017 acquisition of Capaha Bank, the February 2018 acquisition of Southern Missouri Bank of Marshfield, the November 2018 acquisition of First Commercial Bank, the May 2020 acquisition of Central Federal Savings & Loan Association, and the February 2022 merger of Fortune with the Company resulted in $448,000 in net interest income for the three-month period ended March 31, 2022, as compared to $614,000 in net interest income for the same period a year ago. The Company generally expects this component of net interest income to decline over time, although volatility may occur to the extent we have periodic resolutions of specific loans. Combined, this component of net interest income contributed six basis points to net interest margin in the three-month period ended March 31, 2022, as compared to a contribution of 10 basis points in the same period of the prior fiscal year, and a six basis point contribution in the linked quarter, ended December 31, 2021, when net interest margin was 3.77%.  The Company recorded a PCL of $1.6 million in the three-month period ended March 31, 2022, as compared to a negative PCL of $409,000 in the same period of the prior fiscal year. The allowance for credit losses (ACL) required for purchased credit deteriorated (PCD) loans acquired in the Fortune merger was $120,000, and was funded through purchase accounting adjustments, while the ACL required for non-PCD loans acquired in the Fortune merger was $1.9 million, and was funded through a charge to provision for credit losses (PCL). Additionally, the allowance for off-balance sheet credit exposures was increased by $120,000 due to the Fortune merger and funded through a charge to PCL. Exclusive of the charges required as a result of the Fortune merger, the Company would have recorded a negative PCL of approximately $468,000 in the current quarter. The Company assesses that the economic outlook has modestly improved as compared to the assessment as of June 30, 2021, though uncertainty remains as noted in our discussion of the ACL, above. As a percentage of average loans outstanding, the Company recorded net charge offs of 0.01% (annualized) during the current period. During the same period of the prior fiscal year, the Company recorded net charge offs of 0.05% (annualized), while the negative PCL represented a recovery of 0.08% (annualized).  The Company's noninterest income for the three-month period ended March 31, 2022, was $4.9 million, an increase of $380,000, or 8.4%, as compared to the same period of the prior fiscal year. In the current period, increases in other noninterest income, other loan fees, and deposit account service charges were partially offset by reduced gains realized on the sale of residential real estate loans originated for that purpose and loan servicing fees. Other income improved primarily from wealth management and insurance agency production, boosted in part by a non-recurring payment of $152,000 to assist in bringing on new advisors from the Fortune merger. Other loan fees increased on increased applications and prepayment charges. Deposit service charges increased primarily due to an increase in NSF activity as compared to the year ago period. Origination of residential real estate loans for sale on the secondary market was down 71.4% as compared to the year ago period, as both refinancing and purchase activity declined, resulting in a decrease in both gains on sale of these loans and recognition of new mortgage servicing rights.  Noninterest expense for the three-month period ended March 31, 2022, was $16.8 million, an increase of $3.2 million, or 23.9%, as compared to the same period of the prior fiscal year. The increase included $1.1 million in charges related to merger and acquisition activity, which was primarily attributable to data processing, compensation, and legal fees. In total, the increase in noninterest expense was attributable primarily to compensation and benefits, data processing expenses, occupancy expenses, and other noninterest expenses. The increase in compensation and benefits as compared to the prior year period primarily reflected increases in compensation and benefits over the prior year, one-time compensation attributable to the Fortune merger, increased headcount for part of the current quarter resulting from the merger, and a modest trend increase in legacy employee headcount. Compensation adjustments which took effect in January 2022 were, as expected, above the previous trend. Data processing expenses increased primarily as a result of data conversion charges associated with the Fortune merger. Occupancy expenses increased due to remodeled and relocated facilities, facilities added through the Fortune merger, a de novo facility, new ATM and ITM installations and other equipment purchases, and charges for maintenance of facilities and grounds. Other noninterest expenses increased due to miscellaneous merger-related expenses, expenses related to loan originations, and expenses related to employee travel and training.  The efficiency ratio for the three-month period ended March 31, 2022, was 55.8%, as compared to 49.0% in the same period of the prior fiscal year, with the change attributable primarily to the current period's increase in noninterest expense, partially offset by increases in net interest income and noninterest income.  The income tax provision for the three-month period ended March 31, 2022, was $2.4 million, a decrease of $738,000, or 23.8% as compared to the same period of the prior fiscal year. This was primarily the result of the decline in pre-tax income, coupled with a decrease in the effective tax rate to 20.1%, as compared to 21.3% in the same period a year ago. The decrease in the effective tax rate was attributed to the reduction in pre-tax income, while tax-advantaged investments remained relatively steady.   Forward-Looking Information:  Except for the historical information contained herein, the matters discussed in this press release may be deemed to be forward-looking statements that are subject to known and unknown risks, uncertainties, and other factors that could cause the actual results to differ materially from the forward-looking statements, including: potential adverse impacts to the economic conditions in the Company's local market areas, other markets where the Company has lending relationships, or other aspects of the Company's business operations or financial markets, generally, resulting from the ongoing COVID-19 pandemic and any governmental or societal responses thereto; expected cost savings, synergies and other benefits from our merger and acquisition activities might not be realized to the extent anticipated, within the anticipated time frames, or at all, and costs or difficulties relating to integration matters, including but not limited to customer and employee retention, might be greater than expected; the strength of the United States economy in general and the strength of the local economies in which we conduct operations; fluctuations in interest rates and in real estate values; monetary and fiscal policies of the FRB and the U.S. Government and other governmental initiatives affecting the financial services industry; the risks of lending and investing activities, including changes in the level and direction of loan delinquencies and write-offs and changes in estimates of the adequacy of the allowance for credit losses; our ability to access cost-effective funding; the timely development of and acceptance of our new products and services and the perceived overall value of these products and services by users, including the features, pricing and quality compared to competitors' products and services; fluctuations in real estate values and both residential and commercial real estate markets, as well as agricultural business conditions; demand for loans and deposits; legislative or regulatory changes that adversely affect our business; changes in accounting principles, policies, or guidelines; results of regulatory examinations, including the possibility that a regulator may, among other things, require an increase in our reserve for loan losses or write-down of assets; the impact of technological changes; and our success at managing the risks involved in the foregoing. Any forward-looking statements are based upon management's beliefs and assumptions at the time they are made. We undertake no obligation to publicly update or revise any forward-looking statements or to update the reasons why actual results could differ from those contained in such statements, whether as a result of new information, future events or otherwise. In light of these risks, uncertainties and assumptions, the forward-looking statements discussed might not occur, and you should not put undue reliance on any forward-looking statements. Southern Missouri Bancorp, Inc. UNAUDITED CONDENSED CONSOLIDATED FINANCIAL INFORMATION                                   Summary Balance Sheet Data as of:   Mar. 31,   Dec. 31,   Sep. 30,   June 30,   Mar. 31,   (dollars in thousands, except per share data)   2022   2021    2021    2021    2021                                      Cash equivalents and time deposits   $ 253,412     $ 185,483     $ 112,382     $ 124,571     $ 237,873     Available for sale (AFS) securities     226,391       206,583       209,409       207,020       190,409     FHLB/FRB membership stock     11,116       10,152       10,456       10,904       11,181     Loans receivable, gross     2,612,747       2,391,114       2,282,021       2,233,466       2,170,112     Allowance for credit losses     33,641       32,529       32,543       33,222       35,227     Loans receivable, net     2,579,106       2,358,585       2,249,478       2,200,244       2,134,885     Bank-owned life insurance     48,387       44,382       44,099       43,817       43,539     Intangible assets     35,568       21,157       20,868       21,218       21,168     Premises and equipment     72,253       65,074       65,253       64,077       63,908     Other assets     37,785       27,647       26,596       28,679       29,094     Total assets   $ 3,264,018     $ 2,919,063     $ 2,738,541     $ 2,700,530     $ 2,732,057                                       Interest-bearing deposits   $ 2,407,462     $ 2,147,842     $ 1,985,316     $ 1,972,384     $ 1,981,345     Noninterest-bearing deposits     447,444       404,410       386,379       358,419       387,416     FHLB advances     42,941       36,512       46,522       57,529       62,781     Other liabilities     17,971       13,394       11,796       13,532       12,358     Subordinated debt     23,043       15,294       15,268       15,243       15,218     Total liabilities     2,938,861       2,617,452       2,445,281       2,417,107       2,459,118                                       Total stockholders' equity     325,157       301,611       293,260       283,423       272,939                          .....»»

Category: earningsSource: benzingaApr 25th, 2022

Vail Resorts Reports Fiscal 2021 Fourth Quarter and Full Year Results, Provides Fiscal 2022 Outlook, Announces Transformational Capital Plan and Declares Dividend

BROOMFIELD, Colo., Sept. 23, 2021 /PRNewswire/ -- Vail Resorts, Inc. (NYSE:MTN) today reported results for the fourth quarter and fiscal year ended July 31, 2021, which were negatively impacted by COVID-19 and related limitations and restrictions, and reported results of season-to-date season pass sales. Vail Resorts also provided its outlook for the fiscal year ending July 31, 2022, announced a one-time transformational capital plan for calendar year 2022, and declared a dividend payable in October 2021. Highlights Net income attributable to Vail Resorts, Inc. was $127.9 million for fiscal 2021, an increase of 29.4% compared to fiscal 2020. Fiscal 2021 was negatively impacted by COVID-19 and related limitations and restrictions, including the early closure of Whistler Blackcomb on March 30, 2021 and "stay at home" orders and periodic resort closures impacting our Australian ski areas. The prior year period was negatively impacted by the early closure of the Company's North American destination mountain resorts and regional ski areas on March 15, 2020 due to COVID-19 (the "Resort Closures"). Resort Reported EBITDA was $544.7 million for fiscal 2021, an increase of 8.2% compared to fiscal 2020. Fiscal 2021 was negatively impacted by COVID-19 and related limitations and restrictions. The prior year period was primarily impacted by the Resort Closures, which included the resulting deferral of approximately $120.9 million of pass product revenue and $2.9 million of related deferred costs from fiscal 2020 to fiscal 2021 as a result of pass holder credits offered to 2019/2020 North American pass product holders. Pass product sales through September 17, 2021 for the upcoming 2021/2022 North American ski season increased approximately 42% in units and approximately 17% in sales dollars as compared to the period in the prior year through September 18, 2020, without deducting for the value of any redeemed credits provided to certain North American pass product holders in the prior period. To provide a comparison to the season pass results released on June 7, 2021, pass product sales through September 17, 2021 increased approximately 67% in units and approximately 45% in sales dollars as compared to the period through September 20, 2019, with pass product sales adjusted to include Peak Resorts pass sales in both periods. Pass product sales are adjusted to eliminate the impact of foreign currency by applying an exchange rate of $0.79 between the Canadian dollar and U.S. dollar in all periods for Whistler Blackcomb pass sales. The Company issued its fiscal 2022 guidance range and expects Resort Reported EBITDA to be between $785 million and $835 million. The guidance includes an expectation that Resort Reported EBITDA for the first quarter of fiscal 2022 will be between negative $118 million and negative $106 million, which includes the negative impact from COVID-19 resort closures in Australia. Fiscal 2022 guidance assumes, among other assumptions described below, no material impacts associated with COVID-19 for the 2021/2022 North American ski season or the 2022 Australian ski season, other than an expected slower recovery for international visitation and group/conference business. The Company continues to maintain significant liquidity with $1.2 billion of cash on hand as of July 31, 2021 and $613 million of availability under our U.S. and Whistler Blackcomb revolving credit facilities. The Company declared a cash dividend of $0.88 per share payable in October 2021 and plans to exit the temporary waiver period under the Vail Holdings, Inc. revolving credit facility ("VHI Credit Agreement") effective October 31, 2021. The Company announced a transformational $315 million to $325 million capital plan for calendar year 2022 focused on the addition and/or upgrade of 19 new chairlifts and other improvements to enhance the guest experience ahead of the 2022/2023 North American ski season. Commenting on the Company's fiscal 2021 results, Rob Katz, Chief Executive Officer, said, "Given the continued challenges associated with COVID-19, we are pleased with our operating results for the year. Our results highlighted our data-driven marketing capabilities, the value of our pass products, the resiliency of demand for the experiences we offer throughout our network of world-class resorts and our disciplined cost controls. "Results continued to improve as the 2020/2021 North American ski season progressed, primarily as a result of stronger destination visitation at our Colorado and Utah resorts. Excluding Peak Resorts, total skier visitation at our U.S. destination mountain resorts and regional ski areas for fiscal 2021 was only down 6% compared to fiscal 2019. Whistler Blackcomb's performance was disproportionately negatively impacted due to the closure of the Canadian border to international guests, including guests from the U.S., and the resort closing earlier than expected on March 30, 2021 following a provincial health order issued by the government of British Columbia. Whistler Blackcomb's total skier visitation for fiscal 2021 declined 51% compared to fiscal 2019. Our ancillary lines of business were more significantly and negatively impacted by COVID-19 related capacity constraints and limitations throughout the 2020/2021 North American ski season. We generated Resort Reported EBITDA margin of 28.5% driven by our disciplined cost controls as well as a higher proportion of lift revenue relative to ancillary lines of business compared to prior periods." Regarding the Company's fiscal 2021 fourth quarter results, Katz said, "We are pleased with the strong demand across our North American summer operations during the fourth quarter, which exceeded our expectations and which we believe highlights our guests' continued affinity for outdoor experiences. In Australia, we experienced strong demand trends at the beginning of the 2021 Australian ski season. However, subsequent COVID-19 related stay-at-home orders and temporary resort closures negatively impacted financial results for the fourth quarter by approximately $8 million relative to our guidance expectations issued on June 7, 2021. Fourth quarter results were also negatively impacted relative to our June 7, 2021 guidance by a one-time $13.2 million charge for a contingent obligation with respect to certain litigation matters." Katz continued, "We remain focused on our disciplined approach to capital allocation, prioritizing our investments in our people, as well as high-return capital projects, strategic acquisition opportunities, and returning capital to shareholders. Our liquidity position remains strong, and we are confident in the free cash flow generation and stability of our business model. Our total cash and revolver availability as of July 31, 2021 was approximately $1.9 billion, with $1.2 billion of cash on hand, $418 million of revolver availability under the VHI Credit Agreement, and $195 million of revolver availability under the Whistler Blackcomb Credit Agreement. As of July 31, 2021, our Net Debt was 3.0 times trailing twelve months Total Reported EBITDA. Given our strong balance sheet and outlook, we are pleased to announce that the Company plans to exit the temporary waiver period under the VHI Credit Agreement effective October 31, 2021, declared a cash dividend of $0.88 per share payable in October 2021, and announced a transformational $315 million to $325 million capital plan for calendar year 2022 to add or upgrade 19 new chairlifts and make other investments to enhance the guest experience and are expected to generate strong returns for our shareholders." Operating Results A more complete discussion of our operating results can be found within the Management's Discussion and Analysis of Financial Condition and Results of Operations section of the Company's Form 10-K for the fiscal year ended July 31, 2021, which was filed today with the Securities and Exchange Commission. The discussion of operating results below compares the results for the fiscal year ended July 31, 2021 to the fiscal year ended July 31, 2020, unless otherwise noted. The following are segment highlights: Mountain Segment Total lift revenue increased $163.5 million, or 17.9%, to $1,076.6 million primarily due to strong North American pass sales growth for the 2020/2021 ski season, including the deferral impact of the pass holder credits offered to 2019/2020 North American pass product holders from fiscal 2020 to fiscal 2021 as a result of the Resort Closures, partially offset by a decrease in non-pass visitation due to limitations and restrictions on our North American operations due to the impacts of COVID-19, which disproportionately impacted Whistler Blackcomb. Ski school revenue decreased $44.9 million, or 23.7%, dining revenue decreased $70.4 million, or 43.8%, and retail/rental revenue decreased $42.3 million, or 15.7%, each primarily as a result of by COVID-19 related capacity limitations and restrictions in the current year, partially offset by the Company operating for the full U.S. ski season in the current year as compared to the impact of the Resort Closures in the prior year. Operating expense decreased $65.9 million, or 5.4%, which was primarily attributable to cost discipline efforts in the current year associated with lower levels of operations and limitations, restrictions and closures of resort operations resulting from COVID-19. Mountain Reported EBITDA increased $50.3 million, or 10.1%, which includes $20.3 million of stock-based compensation for fiscal 2021 compared to $17.4 million in the prior year. Lodging Segment Lodging segment net revenue (excluding payroll cost reimbursements) decreased $26.4 million, or 11.1%, primarily due to operational restrictions and limitations of our North American lodging properties in the current year as a result of the ongoing impacts of COVID-19, partially offset by stronger summer demand in the U.S. during the fourth quarter of fiscal 2021. Lodging Reported EBITDA decreased $9.0 million, which includes $3.8 million of stock-based compensation expense in fiscal 2021 compared to $3.4 million of stock-based compensation expense in fiscal 2020. Resort - Combination of Mountain and Lodging Segments Resort net revenue was $1,907.9 million for fiscal 2021, a decrease of $50.9 million, or 2.6%, compared to resort net revenue of $1,958.9 million for fiscal 2020. Fiscal 2021 revenue included approximately $12 million of favorability from currency translation, which the Company calculated on a constant currency basis by applying current period foreign exchange rates to the prior period results. Resort Reported EBITDA was $544.7 million for fiscal 2021, an increase of $41.3 million, or 8.2%, compared to fiscal 2020. Fiscal 2021 includes the impact from the deferral of $118 million of pass product revenue and related deferred costs from fiscal 2020 to fiscal 2021 as a result of credits offered to 2020/2021 North American pass product holders, a one-time $13.2 million charge for a contingent obligation with respect to certain litigation matters, and approximately $2 million of favorability from currency translation from Whistler Blackcomb, which the Company calculated on a constant currency basis by applying current period foreign exchange rates to prior period results. Total Performance Total net revenue decreased $54.0 million, or 2.7%, to $1,909.7 million. Net income attributable to Vail Resorts, Inc. was $127.9 million, or $3.13 per diluted share, for fiscal 2021 compared to net income attributable to Vail Resorts, Inc. of $98.8 million, or $2.42 per diluted share, in fiscal 2020. Net income attributable to Vail Resorts, Inc. for fiscal 2021 and fiscal 2020 included tax benefits of approximately $17.9 million and $8.0 million, respectively, related to employee exercises of equity awards (primarily related to the CEO's exercise of SARs). Additionally, fiscal 2021 net income attributable to Vail Resorts, Inc. included approximately $3 million of unfavorability from currency translation, which the Company calculated by applying current period foreign exchange rates to the prior period results. Season Pass Sales Commenting on the Company's season pass sales for the upcoming 2021/2022 North American ski season, Katz said, "We are very pleased with the results of our season pass sales to date, which continue to demonstrate the strength of our data-driven marketing initiatives and the compelling value proposition of our pass products, driven in part by the 20% reduction in all pass prices for the upcoming season. Pass product sales through September 17, 2021 for the upcoming 2021/2022 North American ski season increased approximately 42% in units and approximately 17% in sales dollars as compared to the period in the prior year through September 18, 2020, without deducting for the value of any redeemed credits provided to certain North American pass holders in the prior period. To provide a comparison to the season pass results released on June 7, 2021, pass product sales through September 17, 2021 for the upcoming 2021/2022 North American ski season increased approximately 67% in units and approximately 45% in sales dollars as compared to sales for the 2019/2020 North American ski season through September 20, 2019, with pass product sales adjusted to include Peak Resorts pass sales in both periods. Pass product sales are adjusted to eliminate the impact of foreign currency by applying an exchange rate of $0.79 between the Canadian dollar and U.S. dollar in all periods for Whistler Blackcomb pass sales." Katz continued, "We saw strong unit growth from renewing pass holders and significantly stronger unit growth from new pass holders, which include guests in our database who previously purchased lift tickets or passes but did not buy a pass in the previous season and guests who are completely new to our database. Our strongest unit growth was from our destination markets, including the Northeast, and we also had very strong growth across our local markets. The majority of our absolute unit growth came from our core Epic and Epic Local pass products and we also saw even higher percentage growth from our Epic Day Pass products. Compared to the period ended September 18, 2020, effective pass price decreased 17%, despite the 20% price decrease we implemented this year and the significant growth of our lower priced Epic Day Pass products, which continue to represent an increasing portion of our total advance commitment product sales. "We are very pleased with the performance of our pass product sales efforts to date, which exceeded our original expectations for the impact of the 20% price reduction, particularly in the growth of new pass holders and in the trade up we are seeing from pass holders into higher priced products. As we enter the final period for pass product sales, we feel good about the current trends we are seeing. However, it is important to point out that we know a portion of the growth we have seen to date represents certain pass product holders purchasing their pass earlier in the selling season than in the prior year period and we saw strong growth in the late fall in the prior year period due to concerns around COVID-19, including questions about resort access as a result of our mountain access reservation system. Given these factors and the other changing economic and COVID-related dynamics, it is difficult to provide specific guidance on our final growth rates, which may decline from the rates we reported today." Capital Investments Commenting on the Company's capital investments, Katz said, "As previously announced, we are on track to complete several signature investments in advance of the 2021/2022 North American ski season. In Colorado, we are completing a 250 acre lift-served terrain expansion in the signature McCoy Park area of Beaver Creek, further differentiating the resort's high-end, family focused experience. We are also adding a new four-person high speed lift at Breckenridge to serve the popular Peak 7, replacing the Peru lift at Keystone with a six-person high speed chairlift, and replacing the Peachtree lift at Crested Butte with a new three-person fixed-grip lift. At Okemo, we are completing a transformational investment including upgrading the Quantum lift to replace the Green Ridge three-person fixed-grip chairlift. In addition to the transformational investments that will greatly improve uplift capacity, we are continuing to invest in company-wide technology enhancements, including investing in a number of upgrades to bring a best-in-class approach to how we service our guests through these channels. "We are encouraged by the outlook for our long-term growth and the financial stability we have created. The success of our advance commitment strategy, the expansion of our network and our focus on creating an outstanding guest experience remain at the forefront of our efforts. Toward that end, we are launching an ambitious capital investment plan for calendar year 2022 across our resorts to significantly increase lift capacity and enhance the guest experience as we drive increased loyalty from our guests and continuously improve the value proposition of our advance commitment products. These investments are also expected to drive strong financial returns for our shareholders. The plan includes the installation of 19 new or replacement lifts across 14 of our resorts that collectively will increase lift capacity in those lift locations by more than 60% and a transformational lift-served terrain expansion at Keystone, as well as additional projects that will be announced in December 2021 and March 2022. All of the projects in the plan are subject to regulatory approvals. "We expect our capital plan for calendar year 2022 will be approximately $315 million to $325 million, excluding any real estate related capital or reimbursable investments. This is approximately $150 million above our typical annual capital plan, based on inflation and previous additions for acquisitions, and includes approximately $20 million of incremental spending to complete the one-time capital plans associated with the Peak Resorts and Triple Peaks acquisitions. Given our recent financings and strong liquidity, the outlook for our business driven by the growth of our advance commitment strategy, and the tax benefit in 2022 from additional accelerated depreciation on U.S. investments, we believe this is the right time for our Company to make a significant investment in the guest experience at our resorts and expect this one-time increase in discretionary investments will drive an attractive return for our shareholders. Additional details associated with our calendar year 2022 capital plan can be found in our capital press release issued on September 23, 2021. We also intend to return our capital spending to our typical long-term plan in our calendar year 2023 capital plan, with the potential for reduced spending given the number of projects we would complete in calendar year 2022. We will be providing further detail on our calendar year 2022 capital plan in December 2021." Return of Capital Commenting on the Company's return of capital, Katz said, "The Company plans to exit the waiver period under the VHI Credit Agreement effective October 31, 2021, reinstating the required quarterly compliance with our financial maintenance covenants beginning with the first quarter of fiscal year 2022. We are also pleased to announce that the Board of Directors has reinstated our quarterly dividend by declaring a cash dividend on Vail Resorts' common stock of $0.88 per share, payable on October 22, 2021 to shareholders of record on October 5, 2021. This dividend payment equates to 50% of pre-pandemic levels and reflects our continued confidence in the strong free cash flow generation and stability of our business model despite the ongoing risks associated with COVID-19. Our Board of Directors will continue to closely monitor the economic and public health outlook on a quarterly basis to assess the level of our quarterly dividend going forward." Guidance Commenting on guidance for fiscal 2022, Katz said, "As we head into fiscal 2022, we are encouraged by the robust demand from our guests, the strength of our advance commitment product sales and our continued focus on enhancing the guest experience while maintaining our cost discipline. Our guidance for net income attributable to Vail Resorts, Inc. is estimated to be between $278 million and $349 million for fiscal 2022. We estimate Resort Reported EBITDA for fiscal 2022 will be between $785 million and $835 million. We estimate Resort EBITDA Margin for fiscal 2022 to be approximately 32.1%, using the midpoint of the guidance range, which is negatively impacted as a result of COVID-19 impacts associated with Australia in the first quarter of fiscal 2022 and the anticipated slower recovery in international visitation and group/conference business. We estimate Real Estate Reported EBITDA for fiscal 2022 to be between negative $6 million and $0 million. The guidance assumes normal weather conditions, a continuation of the current economic environment and no material impacts associated with COVID-19 for the 2021/2022 North American ski season or the 2022 Australian ski season other than an expected slower recovery for international visitation, which is expected to have a disproportionate impact at Whistler Blackcomb, and group/conference business, which is expected to have a disproportionate impact in our Lodging segment. At Whistler Blackcomb, we estimate the upcoming winter season will generate approximately $27 million lower Resort Reported EBITDA relative to the comparable period in fiscal 2019, primarily driven by the anticipated reduction in international visitation. "Fiscal 2022 guidance includes an expectation that the first quarter of fiscal 2022 will generate net loss attributable to Vail Resorts, Inc. between $156 million and $136 million and Resort Reported EBITDA between negative $118 million and negative $106 million. We estimate the negative impacts of COVID-19 in Australia and the associated limitations and restrictions, including the current lockdowns, will have a negative Resort Reported EBITDA impact of approximately $41 million in the first quarter of fiscal 2022 as compared to the first quarter of fiscal 2020. "There continues to be uncertainty regarding the ultimate impact of COVID-19 on our business results in fiscal year 2022, including any response to changing COVID-19 guidance and regulations by the various governmental bodies that regulate our operations and resort communities, as well as changes in consumer behavior resulting from COVID-19, which are not factored into the guidance and could negatively impact it. The guidance assumes an exchange rate of $0.80 between the Canadian Dollar and U.S. Dollar related to the operations of Whistler Blackcomb in Canada and an exchange rate of $0.74 between the Australian Dollar and U.S. Dollar related to the operations of Perisher, Falls Creek and Hotham in Australia." The following table reflects the forecasted guidance range for the Company's fiscal 2022 first quarter ending October 31, 2021 and full year ending July 31, 2022, for Reported EBITDA (after stock-based compensation expense) and reconciles net (loss) income attributable to Vail Resorts, Inc. guidance to such Reported EBITDA guidance. Fiscal 2022 Guidance Fiscal 2022 Guidance (In thousands) (In thousands) For the Three Months Ending For the Year Ending October 31, 2021 (6) July 31, 2022 (6) Low End High End Low End High End Range Range Range Range Net (loss) income attributable to Vail Resorts, Inc. $ (156,000) $ (136,000) $ 278,000 $ 349,000 Net (loss) income attributable to noncontrolling interests (3,000) (7,000) 24,000 18,000 Net (loss) income (159,000) (143,000) 302,000 367,000 (Benefit) provision for income taxes (1) (60,000) (54,000) 82,000 100,000 (Loss) income before income taxes (219,000) (197,000) 384,000 467,000 Depreciation and amortization 63,000 61,000 250,000 238,000 Interest expense, net 41,000 38,000 150,000 142,000 Other (2) (5,000) (8,000) (5,000) (12,000) Total Reported EBITDA $ (120,000) $ (106,000) $ 779,000 $ 835,000 Mountain Reported EBITDA (3) $ (122,000) $ (110,000) $ 766,000 $ 814,000 Lodging Reported EBITDA (4) 3,000 5,000 16,000 24,000 Resort Reported EBITDA (5) (118,000) (106,000) 785,000 835,000 Real Estate Reported EBITDA (2,000) — (6,000) — Total Reported EBITDA $ (120,000) $ (106,000) $ 779,000 $ 835,000 (1) The (benefit) provision for income taxes may be impacted by excess tax benefits primarily resulting from vesting and exercises of equity awards. Our estimated (benefit) provision for income taxes does not include the impact, if any, of unknown future exercises of employee equity awards, which could have a material impact given that a significant portion of our awards are in-the-money. (2) Our guidance includes certain known changes in the fair value of the contingent consideration based solely on the passage of time and resulting impact on present value. Guidance excludes any change based upon, among other things, financial projections including long-term growth rates for Park City, which such change may be material. Separately, the intercompany loan associated with the Whistler Blackcomb transaction requires foreign currency remeasurement to Canadian dollars, the functional currency of Whistler Blackcomb. Our guidance excludes any forward looking change related to foreign currency gains or losses on the intercompany loans, which such change may be material. (3) Mountain Reported EBITDA also includes approximately $5 million and $21 million of stock-based compensation for the three months ending October 31, 2021 and the year ending July 31, 2022, respectively. (4) Lodging Reported EBITDA also includes approximately $1 million and $4 million of stock-based compensation for the three months ending October 31, 2021 and the year ending July 31, 2022, respectively. (5) The Company provides Reported EBITDA ranges for the Mountain and Lodging segments, as well as for the two combined. The low and high of the expected ranges provided for the Mountain and Lodging segments, while possible, do not sum to the high or low end of the Resort Reported EBITDA range provided because we do not expect or assume that we will hit the low or high end of both ranges. (6) Guidance estimates are predicated on an exchange rate of $0.80 between the Canadian Dollar and U.S. Dollar, related to the operations of Whistler Blackcomb in Canada and an exchange rate of $0.74 between the Australian Dollar and U.S. Dollar, related to the operations of our Australian ski areas. Earnings Conference Call The Company will conduct a conference call today at 5:00 p.m. eastern time to discuss the financial results. The call will be webcast and can be accessed at www.vailresorts.com in the Investor Relations section, or dial (888) 204-4368 (U.S. and Canada) or (323) 994-2093 (international). A replay of the conference call will be available two hours following the conclusion of the conference call through October 7, 2021, at 8:00 p.m. eastern time. To access the replay, dial (888) 203-1112 (U.S. and Canada) or (719) 457-0820 (international), pass code 8866986. The conference call will also be archived at www.vailresorts.com. About Vail Resorts, Inc. (NYSE:MTN) Vail Resorts, Inc., through its subsidiaries, is the leading global mountain resort operator. Vail Resorts' subsidiaries operate 37 destination mountain resorts and regional ski areas, including Vail, Beaver Creek, Breckenridge, Keystone and Crested Butte in Colorado; Park City in Utah; Heavenly, Northstar and Kirkwood in the Lake Tahoe area of California and Nevada; Whistler Blackcomb in British Columbia, Canada; Perisher, Falls Creek and Hotham in Australia; Stowe, Mount Snow, and Okemo in Vermont; Hunter Mountain in New York; Mount Sunapee, Attitash, Wildcat and Crotched in New Hampshire; Stevens Pass in Washington; Liberty, Roundtop, Whitetail, Jack Frost and Big Boulder in Pennsylvania; Alpine Valley, Boston Mills, Brandywine and Mad River in Ohio; Hidden Valley and Snow Creek in Missouri; Wilmot in Wisconsin; Afton Alps in Minnesota; Mt. Brighton in Michigan; and Paoli Peaks in Indiana. Vail Resorts owns and/or manages a collection of casually elegant hotels under the RockResorts brand, as well as the Grand Teton Lodge Company in Jackson Hole, Wyoming. Vail Resorts Development Company is the real estate planning and development subsidiary of Vail Resorts, Inc. Vail Resorts is a publicly held company traded on the New York Stock Exchange (NYSE:MTN). The Vail Resorts company website is www.vailresorts.com and consumer website is www.snow.com. Forward-Looking Statements Certain statements discussed in this press release and on the conference call, other than statements of historical information, are forward-looking statements within the meaning of the federal securities laws, including the statements regarding fiscal 2022 and the first quarter of fiscal 2022 performance (including the assumptions related thereto), including our expected net income and Resort Reported EBITDA; our expectations regarding our liquidity; the effects of the COVID-19 pandemic on, among other things, our operations; expectations related to our season pass products; our expectations regarding our ancillary lines of business; the payment of dividends and our expectations regarding electing out of the temporary waiver period under the VHI Credit Agreement; and our calendar year 2022 and calendar year 2023 capital plan and expectations related thereto. Readers are cautioned not to place undue reliance on ...Full story available on Benzinga.com.....»»

Category: earningsSource: benzingaSep 23rd, 2021

Las Vegas Developer Expands into Texas with 152-Unit Property Acquisition

Camino Verde Group, a Las Vegas-based real estate investment and development firm, recently acquired the Antigua Village Apartments, soon to be rebranded as Apex Apartments, in Fort Worth, Texas. The acquisition was represented by Global Real Estate Investors (GREA) and is a joint venture with Bakerson, an Arizona-based real estate... The post Las Vegas Developer Expands into Texas with 152-Unit Property Acquisition appeared first on Real Estate Weekly. Camino Verde Group, a Las Vegas-based real estate investment and development firm, recently acquired the Antigua Village Apartments, soon to be rebranded as Apex Apartments, in Fort Worth, Texas. The acquisition was represented by Global Real Estate Investors (GREA) and is a joint venture with Bakerson, an Arizona-based real estate investment and capital management firm. This marks the firm’s first property in Texas to further expand its portfolio within the high growth southern states.  “This acquisition fits into our core value of targeting investments with low volatility and high returns, not just economic, but also those outcomes that benefit the broader community stakeholders,” said Mike Ballard, co-founder and managing director of Camino Verde Group. “In a market undergoing substantial redevelopment, we identified an opportunity to provide quality housing to attract renters as this neighborhood transforms.” The Apex Apartments are centrally located within the Stop Six submarket, a central part of the Stop Six Choice Neighborhood Initiative that was implemented in 2020.  The city is investing heavily in the area to create a safe, convenient and more sustainable community. Once the six-phase project is completed, the area will include a total of $345 million in developments with recreation, health, education, residential and commercial properties.  The Apex Apartments are comprised of 10 two-story buildings on a 7.33-acre lot in the Metro Fort Worth area. The fifth largest city in Texas, Fort Worth is home to almost eight million residents, making it the fastest growing Metropolitan Statistical Area (MSA) in the country. The greater Dallas-Fort Worth area also has over 5.4 million square feet of projects under construction, including Museum Place, Texas A&M University’s Fort Worth Research Center and more.  “Based on the current market trends and data, Fort Worth is seeing rapid growth across all industries, which is resulting in a strong demand for multifamily housing,” said Ballard, who oversees the firm’s acquisitions. “Our proposed plan of improvements will make this already attractive property standout to the increasing demographic in need of upgraded rental housing in the Stop Six submarket.”  Camino Verde Group plans to upgrade existing features throughout the 152-unit property with high-quality finishes and appliances, including new cabinetry, granite countertops and backsplashes, vinyl plank flooring and individual air conditioning and heating in each unit. Built in 1968, the gated community offers one, two and three-bedroom units, on-site property management, a business center and expansive playground areas. Apex Apartments are located at 5320 E Rosedale Street, just six miles from downtown and walking distance from Plaza Park. The property is also near a variety of entertainment, dining, retail, businesses, office space and other daily amenities. “Acquiring properties in prime locations strategically aligns with our investment strategy as we continue developing our portfolio in new markets,” said Ballard. Directly adjacent to the property is Cowan Place, a 174-unit senior living community currently undergoing development as part of the neighborhood’s transformation initiative. Once completed, it will feature four-stories offering one and two-bedroom apartments for residents 62 and older and a variety of amenities, including rooms for a library and theater, fitness studio, salon, billiards, crafts, and other space for private meetings with health care professionals. Through the remaining five phases of the initiative, the city plans to create a new 1,000-unit urban village that will offer an updated commercial district while serving as a walkable community hub.  The post Las Vegas Developer Expands into Texas with 152-Unit Property Acquisition appeared first on Real Estate Weekly......»»

Category: realestateSource: realestateweeklyJun 16th, 2022

Outside-the-Box Ideas in Housing: Buy Back and Rent

Editor’s Note: This is the final part in a three-part series on local innovations focused on affordability and community development. Read part one here and part two here. Often in the housing industry, people get caught looking up. Expecting the next big thing or the solution to long-standing problems to come from a national think-tank,… The post Outside-the-Box Ideas in Housing: Buy Back and Rent appeared first on RISMedia. Editor’s Note: This is the final part in a three-part series on local innovations focused on affordability and community development. Read part one here and part two here. Often in the housing industry, people get caught looking up. Expecting the next big thing or the solution to long-standing problems to come from a national think-tank, a big conglomerate or an established thought leader is not misguided—a lot of world-changing ideas do, of course, originate from these spheres. At the same time, it is easy to miss spectacularly innovative new ideas or approaches simply because they come from elsewhere—from small markets, from outsiders and from different disciplines. As the entire industry buckles under the weight of a long-simmering crisis of both affordability and lack of inventory, it is possible real estate will claw its way back up through methods and approaches already practiced. It is also possible that, high in the upper echelons of the C-suite, experienced executives and academics are concocting the eventual solutions that will address longer-term problems in real estate like the racial homeownership gap, pessimism around affordability, entry-level new home construction and gentrification. But it is also possible these ideas are germinating at the grass-roots level, driven by innovators who have found new ways to view housing unencumbered by the burdens of convention and preconception, drawing on resources or expertise not endemic to industry thinking. With how local real estate is, it seems even more likely that great change might grow from the bottom up rather than top-down. Almost always starting small, these ideas have the chance to grow and spark real and foundation change in how we think about housing: Buy back (and rent) the block Bonita Harrison is a broker living and working in the West Woodlawn neighborhood on the South Side of Chicago. Like so many who come from tight-knit communities, Harrison says she always has cared deeply about the neighborhood she grew up in, still populated by friends, neighbors and family, and she has worked hard to reinvest there With how hard it is to find affordable housing, and with how undervalued Black neighborhoods remain after decades of bias and redlining, the challenge of finding ways to create new housing attainable by residents of that neighborhood is never easy. In this case, it required banding together with four other like-minded Black real estate professionals from the area to come up with an innovative path to homeownership. “When we talk about wealth creation for the Black community, how does that look?” she asks. “We want to make sure we can retain as many people as we can and ensure that their equity position can grow.” Harrison and the other developers—all experienced brokers owning their own businesses, but working in tandem—came up with a specific way that they could create housing to serve locals. Acquiring a dozen abandoned properties from the local land bank, they designed a three-unit structure that would have similar design elements, all renovated and put together by local Black craftspeople. The idea, Harrison says, is that a neighborhood resident will be able to qualify for a mortgage using supplemental rental income from the other two units, competing with the “gentrifying population” who often quickly snatch up housing and drive up rents and prices. These new buildings will also add two more quality rental units to the neighborhood, with a landlord living in the same building who (ideally) knows them and understands their needs. “The government will come in and demolish the houses that you have, blocks and blocks of vacant lots and dilapidated housing,” she says. “What we’re trying to do is fill those vacant lots with properties so that more of the community can come up…and what that does is increase the market value of those properties and bring equity to our community.” Though this approach—purchasing a property using rental income from another unit—is not a new idea. But having developers who are natural competitors coming together and working hard to keep all the money in their community is unique, according to Harrison. It is especially notable in an area like Woodlawn that is still sunk deep in poverty and neglect, she adds, where morale is low and other developers are not investing. “When you’re of the community like we are, we see the needs,” she says. Before Harrison’s group came together, another more established group had seen success at rehabbing and selling homes to Woodlawn residents. Bill Eager, Vice President of Real Estate Development for national non-profit Preservation of Affordable Housing (POAH), led a significant push that renovated and sold 44 homes in Woodlawn at affordable prices, when the market was “softer” than it is now. POAH’s efforts, which are likely going to be revived to some degree later this year, Eager says, used a mix of local, federal and state grant monies to fix up distressed properties and sell them to residents. They depended on word-of-mouth and local community groups to get the word out. POAH was also able to offer down payment assistance, though with rising home prices Eager says a revival of the program is going to be difficult. “The biggest obstacle right now is just the sheer cost of developing,” he said. “And construction costs are so high, it’s really hard to bring things in at a level that is kind of affordable for a moderate income household.” POAH has considered $15,000 to $50,000 for closing cost and downpayment assistance, but Eager admitted that might not be enough in the current housing market. “I’m not sure how much help $15,000 is going to be right now, but that’s kind of the range we’ve been thinking about,” he says. Eager says he is aware of the “buy the block” effort by Harrison and the other developers, applauding it even though POAH is not formally involved at this point. That project came together almost spontaneously, with Harrison saying she only knew the other developers informally before this recent collaboration. “We would see each other in Home Depot, we would see each other in passing,” she remembers. An initial conversation helped them all understand how much of an impact they individually had all made on the area, Harrison adds, and after that the need to work together seemed obvious. “If we concentrate our impact, it would make more sense…we made it cohesive, we’re going to go out and spread,” Harrison explains. She describes just how powerful this effort is in changing the trajectory of a neighborhood, raising property values across the board and really changing the attitude, perception and habits of people who live and work there. Designing the buildings with similar aesthetics, and placing them strategically can rapidly accelerate the kind of positive change the developers hope to create, she says. In fact, Harrison says other developers have approached her since the project was announced, and there is a “Phase 2” in the works which includes the nearby commercial corridor—something that will become very important as more people become upwardly mobile in the area. She says they have also been in touch with local government officials, with the most urgent need being “affordable capital” to expand the effort. “We are okay with doing it ourselves, but give us some access to capital that we can utilize, makes sense for the project,” Harrison asks. But it is really that sense of community, Harrison emphasizes, that makes this project both unique and attainable—something she hopes is replicated in other areas of the country by folks who come to understand that cooperation and understanding can truly make a difference for a neighborhood. “We’re going through our network and saying, ‘Hey, let’s do this ourselves,’” she says. ‘We really want to be able to do it ourselves, just because of what it means for us, and what it means for the culture and the community.” The post Outside-the-Box Ideas in Housing: Buy Back and Rent appeared first on RISMedia......»»

Category: realestateSource: rismediaJun 10th, 2022

Vail Resorts Reports Fiscal 2022 Third Quarter Results, Early Season Pass Sales Results, and Provides Updated Fiscal 2022 Outlook

BROOMFIELD, Colo., June 9, 2022 /PRNewswire/ -- Vail Resorts, Inc. (NYSE:MTN) today reported results for the third quarter of fiscal 2022 ended April 30, 2022, which were negatively impacted by COVID-19 and related limitations and restrictions, and reported results of its early season pass sales for the 2022/2023 North American ski season. Highlights Net income attributable to Vail Resorts, Inc. was $372.6 million for the third fiscal quarter of 2022 compared to net income attributable to Vail Resorts, Inc. of $274.6 million in the same period in the prior year. The increase is primarily due to the greater impact of COVID-19 and related limitations and restrictions on results in the prior year. Resort Reported EBITDA was $610.5 million for the third fiscal quarter of 2022, compared to Resort Reported EBITDA of $462.2 million for the third fiscal quarter of 2021. The increase is primarily due to the greater impact of COVID-19 and related limitations and restrictions on results in the prior year. The Company updated its fiscal 2022 guidance range and is now expecting Resort Reported EBITDA to be between $828 million and $842 million. The guidance range includes an estimated $16 million of Resort Reported EBITDA from the recently acquired operations of Seven Springs, Hidden Valley and Laurel Mountain resorts (together, the "Seven Springs Resorts") for the period from the transaction closing on December 31, 2021 through the end of the fiscal year, partially offset by $7 million of acquisition and integration related expenses associated with the Seven Springs Resorts transaction and the expected acquisition of Andermatt-Sedrun Sport AG ("Andermatt-Sedrun"). Pass product sales through May 31, 2022 for the upcoming 2022/2023 North American ski season increased approximately 9% in units and approximately 11% in sales dollars as compared to the period in the prior year through June 1, 2021. Pass product sales are adjusted to include pass sales for the Seven Springs Resorts in both periods and to eliminate the impact of foreign currency by applying an exchange rate of $0.79 between the Canadian dollar and U.S. dollar in both periods for Whistler Blackcomb pass sales. The Company declared a quarterly cash dividend of $1.91 per share of Vail Resorts' common stock that will be payable on July 12, 2022 to shareholders of record as of June 27, 2022 and repurchased 303,143 shares at an average price of $246.33 for a total of approximately $74.7 million from the beginning of the Company's third quarter of fiscal 2022 through June 8, 2022. Commenting on the Company's fiscal 2022 third quarter results, Kirsten Lynch, Chief Executive Officer, said, "We are pleased with our overall results for the quarter and for the 2021/2022 North American ski season. As expected, results for the quarter significantly outperformed results from the prior year primarily due to the greater impact of COVID-19 and related limitations and restrictions on results in the prior year period. "This year, challenging early season conditions persisted through the holiday period, but our results were strong from January through the remainder of the season. Our strong season pass sales heading into the 2021/2022 season are the foundation of our advance commitment strategy, creating stability for the Company through variable weather and other challenges. This past season, approximately 72% of all Vail Resorts 2021/2022 North American skier visitation was on a pass product, excluding employee and complimentary visitation, which compares to approximately 60% and approximately 51% for the 2018/2019 and 2014/2015 North American ski seasons, respectively. We had particularly strong destination visitation this year, which was further supported by lift ticket sales at our Colorado and Utah resorts that exceeded our expectations through the spring. Our recent results at Whistler Blackcomb were also stronger than expected due to the easing of travel restrictions in Canada in late February. Recent performance at our eastern U.S. ski areas was in-line with our expectations while our Tahoe resorts were impacted by challenging spring conditions, resulting in performance below our expectations. Throughout the season, our ancillary businesses continued to be capacity constrained by staffing, and in the case of dining, by operational restrictions associated with COVID-19. Overall, our results throughout the 2021/2022 North American ski season highlight the stability resulting from our advance commitment pass products in a season with challenging early season conditions, staffing challenges and COVID-19 impacts, and demonstrate our strong operational execution following the holiday period through the end of the season. We are very pleased to see the growth in visitation this season, and in particular that it primarily occurred during off peak periods. The trend towards off-peak visitation growth continued throughout the ski season this year. For the season-to-date period ended April 30, 2022, compared to the season-to-date period ended May 5, 2019, visitation on weekday and non-holiday periods increased approximately 8% while visitation on weekend and holiday periods decreased approximately 3%, excluding Peak Resorts visitation in both periods. We believe this trend is driven by the growth in pass sales as pass holders tend to spread their visitation more across the season, and, with the increase in flexible and remote work, we expect this trend to continue. Further, the growth in non-peak periods was broad based across our resorts. Despite the growth in overall visits this past season, very few of our resorts even approached their historical maximum daily visitation, as our resorts averaged only 1 day this season exceeding 95% of their historical peak daily visitation and only 6 resorts had more than 1 day above that level, excluding the recently acquired Seven Springs Resorts. All of this highlights that there is considerable opportunity to continue to grow the overall industry and skier visits outside of peak periods, and that it is critical that we continue to invest in people and infrastructure to continue to improve the employee and guest experience throughout the season. Commenting on fiscal 2022 guidance, Lynch said, "Based on the strong finish to the season, particularly driven by destination guest visitation and lift ticket sales in Colorado, Utah and Whistler Blackcomb that exceeded our expectations, we now expect net income attributable to Vail Resorts, Inc. for fiscal 2022 to be between $314 million and $348 million, and Resort Reported EBITDA for fiscal 2022 to be between $828 million and $842 million. The guidance range includes an estimated $16 million of Resort Reported EBITDA for the Seven Springs Resorts for the period from the transaction closing on December 31, 2021 through the end of the fiscal year, partially offset by $7 million of acquisition and integration related expenses associated with the Seven Springs Resorts transaction and the expected acquisition of Andermatt-Sedrun." Andermatt-Sedrun Sport AG As previously announced on March 28, 2022, the Company entered into an agreement to purchase a majority stake in Andermatt-Sedrun from Andermatt Swiss Alps AG ("ASA"), marking the Company's first strategic investment in, and opportunity to operate, a ski resort in Europe. Andermatt-Sedrun is a renowned destination ski resort in Central Switzerland, located less than 90 minutes from three of Switzerland's major metropolitan areas (Zurich, Lucerne and Lugano) and approximately two hours from Milan, Italy. Upon the closing of the acquisition, the Company will acquire a 55% ownership stake in Andermatt-Sedrun, which controls and operates all of the resort's mountain and ski-related assets, including lifts, most of the restaurants and a ski school operation. ASA will retain a 40% ownership stake in Andermatt-Sedrun, with a group of existing shareholders comprising the remaining 5% ownership. Vail Resorts' CHF 149 million investment is comprised of a CHF 110 million investment into Andermatt-Sedrun for use in capital investments to enhance the guest experience on the mountain and CHF 39 million, which will be paid to ASA and fully reinvested into the real estate developments in the base area. Vail Resorts will assume operating and marketing responsibility for Andermatt-Sedrun, with ASA and local stakeholders continuing as key members of the board of directors. The transaction is expected to close prior to the 2022/2023 ski season, subject to certain third-party consents. Vail Resorts plans to include unlimited and unrestricted access to Andermatt-Sedrun on the 2022/2023 Epic Pass. Epic Day Pass holders with All Resorts Access will be able to use any of their days at Andermatt-Sedrun, and Epic Local Pass holders will receive five days of unrestricted access to the resort. All pass access is subject to the timing of the transaction closing. Operating Results A more complete discussion of our operating results can be found within the Management's Discussion and Analysis of Financial Condition and Results of Operations section of the Company's Form 10-Q for the third fiscal quarter ended April 30, 2022, which was filed today with the Securities and Exchange Commission. The following are segment highlights: Mountain Segment Total lift revenue increased $137.0 million, or 23.7%, compared to the same period in the prior year, to $714.7 million for the three months ended April 30, 2022, primarily due to increased pass product sales for the 2021/2022 North American ski season, as well as an increase in non-pass lift ticket purchases. Ski school revenue increased $40.5 million, or 50.4%, dining revenue increased $33.8 million, or 73.6% and retail/rental revenue increased $35.2 million, or 38.6%, each primarily due to fewer COVID-19 related limitations and restrictions on our North American winter operations as compared to the prior year, as well as an increase in demand over the prior year. Operating expense increased $115.0 million, or 30.7%, which was primarily attributable to increased variable expenses associated with increases in revenue, and the impact of cost discipline efforts in the prior year associated with lower levels of operations, including limitations, restrictions and closures resulting from COVID-19. Mountain Reported EBITDA increased $139.1 million, or 30.4%, for the third quarter compared to the same period in the prior year, which includes $5.1 million of stock-based compensation expense for both the three months ended April 30, 2022 and 2021. Lodging Segment Lodging segment net revenue (excluding payroll cost reimbursements) for the three months ended April 30, 2022 increased $30.8 million, or 54.6%, as compared to the same period in the prior year, primarily as a result of fewer COVID-19 related limitations and restrictions as compared to the prior year, as well as an increase in demand and average daily rates compared to the prior year. Lodging Reported EBITDA for the three months ended April 30, 2022 increased $9.2 million, or 173.1%, for the third quarter compared to the same period in the prior year, which includes $0.9 million and $1.0 million of stock-based compensation expense for the three months ended April 30, 2022 and 2021, respectively. Resort - Combination of Mountain and Lodging Segments Resort net revenue increased $288.3 million, or 32.5%, compared to the same period in the prior year, to $1,176.5 million for the three months ended April 30, 2022. Resort Reported EBITDA was $610.5 million for the three months ended April 30, 2022, an increase of $148.3 million, or 32.1%, compared to the same period in the prior year, which includes acquisition and integration related expenses, as well as expenses associated with the expected acquisition of Andermatt-Sedrun, of $1.0 million, which are both recorded within Mountain other operating expense. Total Performance Total net revenue increased $287.6 million, or 32.3%, compared to the same period in the prior year, to $1,176.7 million for the three months ended April 30, 2022. Net income attributable to Vail Resorts, Inc. was $372.6 million, or $9.16 per diluted share, for the third quarter of fiscal 2022 compared to net income attributable to Vail Resorts, Inc. of $274.6 million, or $6.72 per diluted share, in the third fiscal quarter of the prior year. Additionally, fiscal 2022 third quarter net income included the after-tax effect of acquisition and integration related expenses, as well as costs associated with the expected acquisition of Andermatt-Sedrun, which combined were approximately $0.8 million. Return of Capital Commenting on capital allocation, Lynch said, "Our balance sheet and liquidity position remain strong. Our total cash and revolver availability as of April 30, 2022 was approximately $2.0 billion, with $1.4 billion of cash on hand, $417 million of U.S. revolver availability under the Vail Holdings Credit Agreement and $212 million of revolver availability under the Whistler Credit Agreement. As of April 30, 2022, our Net Debt was 1.7 times trailing twelve months Total Reported EBITDA. The Company declared a quarterly cash dividend of $1.91 per share of Vail Resorts' common stock that will be payable on July 12, 2022 to shareholders of record as of June 27, 2022. A Canadian dollar equivalent dividend on the exchangeable shares of Whistler Blackcomb Holdings Inc. will be payable on July 12, 2022 to shareholders of record as of June 27, 2022. The exchangeable shares were issued to certain Canadian persons in connection with our acquisition of Whistler Blackcomb Holdings Inc. Additionally, from the beginning of the Company's third quarter of fiscal 2022 through June 8, 2022, the Company repurchased 303,143 shares at an average price of $246.33 for a total of approximately $74.7 million. We intend to maintain an opportunistic approach to share repurchases. We will continue to be disciplined stewards of our capital and remain committed to continuous investment in our people, strategic, high-return capital projects, strategic acquisition opportunities and returning capital to our shareholders through our quarterly dividend and share repurchase programs." Commitment to our Employees and Guests Commenting on the Company's investments for the 2022/2023 ski season, Lynch said, "As we turn our attention to the 2022/2023 ski season and beyond, the Company is making its largest ever investment in both its employees and its resorts, to ensure we continue to deliver our Company mission of an Experience of a Lifetime. The experience of our employees and guests is the core of our business model, and the Company intends to use its financial resources and the stability it has created through its pass program to continue to aggressively reinvest to deliver that experience. We believe our business model allows us to make these investments and achieve our short and long-term financial growth objectives. "For our employees, we are investing approximately $175 million in incremental expected labor expense, including inflationary adjustments, in fiscal 2023 compared to fiscal 2022 to support our employees and return our resorts to normal staffing levels. The investment includes increasing the minimum hourly wage offered across all 37 of our North American resorts to $20 per hour for all U.S. employees and C$20 per hour for all Canadian employees, and increases for hourly employees with adjustments for leadership and career stage differentials. Roles that have specific experiences or certification as prerequisites, such as entry-level patrol, commercial drivers, and maintenance technicians will start at $21 per hour. Tipped employees will be guaranteed a minimum of $20 per hour. The wage investment represents an average wage increase of nearly 30% across hourly employees in North America. Additionally, the Company will be launching a new seasonal frontline leadership development program with the goal of supporting our seasonal frontline team members' leadership development and ability to build a career at Vail Resorts. The Company will be assessing targeted increases, beyond inflation, for our salaried employees and will be making a significant investment in our human resource department to ensure the right level of employee support, development and recruiting. We believe talent is our most important asset and our employees are our strategic priority at all levels of the Company, and our employee investments are intended to help us achieve normal staffing levels that, in turn, deliver an outstanding guest experience. Additional information on the employee investments and anticipated financial impacts are available in our March 2022 investor presentation available on our Investor Relations website. "In addition, Vail Resorts has made a commitment to affordable housing in our mountain communities. Affordable housing is a national and a mountain community crisis. As previously announced, we are investing in four projects to provide accessible and affordable housing for our employees at Park City Mountain in Utah, Whistler Blackcomb in British Columbia, Vail Mountain in Colorado, and Okemo Mountain Resort in Vermont. Collectively, the four investments would provide new affordable housing to more than 875 Vail Resorts employees, marking a more than 10% increase in affordable employee housing offered by the Company across its resorts. We believe it is time for us, and our communities, to make affordable housing a top priority and accelerate the processes to ensure we bring these affordable housing opportunities to fruition." Regarding calendar year 2022 capital expenditures, Lynch said, "We remain dedicated to delivering an exceptional guest experience and will continue to prioritize reinvesting in the experience at our resorts. We are committed to consistently increasing capacity through lift, terrain and food and beverage expansion projects and are making a significant one-time incremental investment this year to accelerate that strategy with our ambitious capital investment plan for calendar year 2022 of approximately $315 million to $325 million across our resorts, excluding one-time investments related to integration activities, employee housing development projects and real estate related projects. The plan includes approximately $180 million for the installation of 21 new or replacement lifts across 14 of our resorts and a transformational lift-served terrain expansion at Keystone. In addition to the two brand new lift configurations at Vail and Keystone, the replacement lifts will collectively increase lift capacity at those lift locations by more than 45%. Projects in the plan are subject to regulatory approvals and, assuming timely approvals, are currently expected to be completed in time for the 2022/2023 North American winter season. "The core capital plan is approximately $150 million above our typical annual capital plan, based on inflation and previous additions for acquisitions. We plan to spend approximately $9 million on integration activities related to the recently acquired Seven Springs Resorts. Including one-time investments related to integration activities and $3 million associated with real estate related projects, our total capital plan is expected to be approximately $327 million to $337 million. Including our calendar year 2022 capital plan, Vail Resorts will have invested over $2 billion in capital since launching the Epic Pass, increasing capacity, improving the guest experience and creating an integrated resort network." Regarding calendar year 2023 capital expenditures, Lynch said, "In addition to this year's significant capacity expanding investments, planning is already underway for our calendar year 2023 capital plan, and we are pleased to announce the first projects from that plan, with additional calendar year 2023 investments and upgrades to be announced in the coming quarters. At Breckenridge, we plan to upgrade the Peak 8 base area to enhance the beginner and children's experience and increase uphill capacity from this popular base area. The investment plan will include a new four-person high speed 5-Chair to replace the existing two-person fixed-grip lift and will include significant improvements, including new teaching terrain and a transport carpet from the base, to make the beginner experience more accessible. At Stevens Pass, we are planning to replace the two-person fixed-grip Kehr's Chair lift with a new four-person lift, which will improve out-of-base capacity and guest experience. At Attitash, we plan to replace the three-person fixed-grip Summit Triple lift with a new four-person high speed lift, increasing uphill capacity and reducing guests' time on the longest lift at the resort. These lift projects are subject to regulatory approvals and are currently expected to be completed in time for the 2023/2024 North American winter season." Season Pass Sales Commenting on the Company's season pass sales for the upcoming 2022/2023 North American ski season, Lynch said, "Following a rapid acceleration of growth in our advance commitment strategy over the last two years that nearly doubled the number of our guests in advance commitment products, we are very pleased with the results for our spring season pass sales to date with strong unit growth over the record pass sales results we saw last spring, validating the compelling network of resorts, guest experience and value provided for our guests. Pass product sales through May 31, 2022 for the upcoming 2022/2023 North American ski season increased approximately 9% in units and approximately 11% in sales dollars as compared to the period in the prior year through June 1, 2021. Pass product sales are adjusted to include pass sales for the Seven Springs Resorts in both periods and to eliminate the impact of foreign currency by applying an exchange rate of $0.79 between the Canadian dollar and U.S. dollar in both periods for Whistler Blackcomb pass sales." Lynch continued, "Relative to season to date pass product sales for the 2021/2022 season through June 1, 2021, we saw strong unit growth with our renewing pass holders. Our strongest unit growth was in our destination markets as travel continues to rebound following the impacts from COVID-19, and we saw more moderated unit sales across our local markets where pass penetration is already higher. Our Epic Day Pass products continue to drive our strongest product growth as we attract lower frequency guests into advance commitment products as first time pass holders and with the 2022/23 launch of a new tier of products with access to select regional and local resorts. Pass sales dollars are benefiting from the 7.5% price increase relative to the 2021/2022 season, largely offset by the impact of the growth of Epic Day Pass products, including our new lower priced Epic Day Pass offerings. Following the strong trade-up results last year, we are pleased that we achieved neutral net migration among renewing pass holders in our spring pass sales. We have the majority of our pass selling season ahead of us, and, as more guests purchase passes in the spring, we believe the full year unit and sales growth rate will be lower than our spring growth rate. We will provide more information about our pass sales results in our September 2022 earnings release." Regarding Epic Australia Pass sales, Lynch commented, "We are very pleased with ongoing sales of the Epic Australia Pass, which end on June 15, 2022. Unit sales are up approximately 28% through May 31, 2022, as compared to the comparable period through June 1, 2021, as we continue to benefit from the acquisition of Falls Creek and Hotham in 2019." Updated Outlook Net income attributable to Vail Resorts, Inc. is expected to be between $314 million and $348 million for fiscal 2022. Resort Reported EBITDA is expected to be between $828 million and $842 million for fiscal 2022, which includes an estimated $16 million of Resort Reported EBITDA for the Seven Springs Resorts for the period from the transaction closing on December 31, 2021 through the end of the fiscal year, partially offset by $7 million of acquisition and integration related expenses associated with the Seven Springs Resorts transaction and the expected acquisition of Andermatt-Sedrun. Our guidance includes estimated acquisition related expenses specific to the expected acquisition of Andermatt-Sedrun, but does not include any estimate for the closing costs, operating results or integration expense associated with the Andermatt-Sedrun acquisition, which is expected to close later in calendar year 2022. Resort EBITDA Margin is expected to be approximately 33.0% in fiscal 2022 at the midpoint of our guidance range. In addition to the above, the updated outlook for fiscal year 2022 assumes normal conditions and operations throughout the Australian ski season and North American summer season, both of which begin in our fourth quarter, and no incremental travel or operating restrictions associated with COVID-19 that could negatively impact our results. The guidance also assumes an exchange rate of $0.79 between the Canadian Dollar and U.S. Dollar related to the operations of Whistler Blackcomb in Canada and an exchange rate of $0.74 between the Australian Dollar and U.S. Dollar related to the operations of Perisher, Falls Creek and Hotham in Australia. The following table reflects the forecasted guidance range for the Company's fiscal year ending July 31, 2022, for Reported EBITDA (after stock-based compensation expense) and reconciles such Reported EBITDA guidance to net income attributable to Vail Resorts, Inc. Fiscal 2022 Guidance (In thousands) For the Year Ending July 31, 2022 (6) Low End High End Range Range Net income attributable to Vail Resorts, Inc. $                314,000 $                348,000 Net income attributable to noncontrolling interests 24,000 18,000 Net income 338,000 366,000 Provision for income taxes (1) 70,000 76,000 Income before provision for income taxes 408,000 442,000 Depreciation and amortization 253,000 249,000 Interest expense, net 150,000 146,000 Other (2) 12,000 5,000      Total Reported EBITDA $                823,000 $                842,000 Mountain Reported EBITDA (3) $                797,000 $                811,000 Lodging Reported EBITDA (4) 30,000 33,000      Resort Reported EBITDA (5) 828,000 842,000 Real Estate Reported EBITDA (5,000) —      Total Reported EBITDA $                823,000 $                842,000 (1) The provision for income taxes may be impacted by excess tax benefits primarily resulting from vesting and exercises of equity awards. Our estimated provision for income taxes does not include the impact, if any, of unknown future exercises of employee equity awards, which could have a material impact given that a significant portion of our awards are in-the-money. (2) Our guidance includes certain known changes in the fair value of the contingent consideration based solely on the passage of time and resulting impact on present value. Guidance excludes any change based upon, among other things, financial projections including long-term growth rates for Park City, which such change may be material. Separately, the intercompany loan associated with the Whistler Blackcomb transaction requires foreign currency remeasurement to Canadian dollars, the functional currency of Whistler Blackcomb. Our guidance excludes any forward looking change related to foreign currency gains or losses on the intercompany loans, which such change may be material. (3) Mountain Reported EBITDA also includes approximately $21 million of stock-based compensation. (4) Lodging Reported EBITDA also includes approximately $4 million of stock-based compensation. (5) The Company provides Reported EBITDA ranges for the Mountain and Lodging segments, as well as for the two combined. The low and high of the expected ranges provided for the Mountain and Lodging segments, while possible, do not sum to the high or low end of the Resort Reported EBITDA range provided because we do not expect or assume that we will hit the low or high end of both ranges. (6) Guidance estimates are predicated on an exchange rate of $0.79 between the Canadian Dollar and U.S. Dollar, related to the operations of Whistler Blackcomb in Canada and an exchange rate of $0.74 between the Australian Dollar and U.S. Dollar, related to the operations of our Australian ski areas.   Earnings Conference Call The Company will conduct a conference call today at 5:00 p.m. eastern time to discuss the financial results. The call will be webcast and can be accessed at www.vailresorts.com in the Investor Relations section, or dial (800) 289-0720 (U.S. and Canada) or (323) 701-0160 (international). A replay of the conference call will be available two hours following the conclusion of the conference call through June 23, 2022, at 8:00 p.m. eastern time. To access the replay, dial (888) 203-1112 (U.S. and Canada) or (719) 457-0820 (international), pass code 8537966. The conference call will also be archived at www.vailresorts.com. About Vail Resorts, Inc. (NYSE:MTN) Vail Resorts, Inc., through its subsidiaries, is the leading global mountain resort operator. Vail Resorts' subsidiaries operate 40 destination mountain resorts and regional ski areas, including Vail, Beaver Creek, Breckenridge, Keystone and Crested Butte in Colorado; Park City in Utah; Heavenly, Northstar and Kirkwood in the Lake Tahoe area of California and Nevada; Whistler Blackcomb in British Columbia, Canada; Perisher, Falls Creek and Hotham in Australia; Stowe, Mount Snow, Okemo in Vermont; Hunter Mountain in New York; Mount Sunapee, Attitash, Wildcat and Crotched in New Hampshire; Stevens Pass in Washington; Seven Springs, Hidden Valley, Laurel Mountain, Liberty, Roundtop, Whitetail, Jack Frost and Big Boulder in Pennsylvania; Alpine Valley, Boston Mills, Brandywine and Mad River in Ohio; Hidden Valley and Snow Creek in Missouri; Wilmot in Wisconsin; Afton Alps in Minnesota; Mt. Brighton in Michigan; and Paoli Peaks in Indiana. Vail Resorts owns and/or manages a collection of casually elegant hotels under the Rock Resorts brand, as well as the Grand Teton Lodge Company in Jackson Hole, Wyo. Vail Resorts Development Company is the real estate planning and development subsidiary of Vail Resorts, Inc. Vail Resorts is a publicly held company traded on the New York Stock Exchange (NYSE:MTN). The Vail Resorts company website is www.vailresorts.com and consumer website is www.snow.com. Forward-Looking Statements Except for any historical information contained herein, the matters discussed in this press release and on the conference call contain certain forward-looking statements within the meaning of the federal securities laws. These statements relate to analyses and other information available as of the date hereof, which are based on forecasts of future results and estimates of amounts not yet determinable. These statements also relate to our contemplated future prospects, developments and business strategies. These forward-looking statements are identified by their use of terms and phrases such as anticipate," "believe," "could," "estimate," "expect," "intend," "may," "plan," "predict," "project," "will" and similar terms and phrases, including references to assumptions. Such statements include statements regarding fiscal 2022 performance (including the assumptions related thereto), including our expected net income, Resort Reported EBITDA and margin; our expectations regarding our liquidity; the effects of the COVID-19 pandemic on, among other things, our operations; expectations related to our season pass sales and products; our expectations related to customer demand and lift ticket sales for the remainder of the 2021/2022 North American ski season; our expectations regarding our ancillary lines of business; expectations regarding the payment of dividends and share repurchases; our planned wage increases; our pursuit of affordable employee housing; our calendar year 2022 and 2023 capital plans and expectations related thereto, including timing and our ability to obtain any required regulatory approvals; and the expected estimated incremental annual EBITDA and capital expenditures related to our recent acquisitions of the Seven Springs Resorts and expected acquisition of Andermatt-Sedrun. Although we believe that our plans, intentions and expectations reflected in or suggested by such forward-looking statements are reasonable, we cannot assure you that such plans, intentions or expectations will be achieved. Important factors that could cause actual results to differ materially from our forward-looking statements include, but are not limited to the ultimate duration of COVID-19 and its short-term and long-term impacts on consumer behaviors, the economy generally, and our business and results of operations, including the ultimate amount of refunds that we would be required to refund to our pass product holders for qualifying circumstances under our Epic Coverage program; the willingness of our guests to travel due to terrorism, the uncertainty of military conflicts or outbreaks of contagious ...Full story available on Benzinga.com.....»»

Category: earningsSource: benzingaJun 9th, 2022

Pre-Construction vs. Resale: The Best Real Estate Investment

There are many different options for investing in the real estate market. You can invest in pre-construction properties, existing properties, or even REITs. So, which is the best option? That depends on your situation and goals. This blog post will compare and contrast pre-construction vs. resale investments and help you decide which is the best […] There are many different options for investing in the real estate market. You can invest in pre-construction properties, existing properties, or even REITs. So, which is the best option? That depends on your situation and goals. This blog post will compare and contrast pre-construction vs. resale investments and help you decide which is the best for you! Pre-Construction Pros Customization One of the benefits of investing in a pre-construction property is that you often have the opportunity to customize your unit. Customization allows you to choose your finishes, fixtures, and even layout in some cases. It will cost you extra, but this is a great benefit if you want to put your personal touch on your investment, like removing a wall, making room for a home theater, or your home gym equipment. .first{clear:both;margin-left:0}.one-third{width:31.034482758621%;float:left;margin-left:3.448275862069%}.two-thirds{width:65.51724137931%;float:left}form.ebook-styles .af-element input{border:0;border-radius:0;padding:8px}form.ebook-styles .af-element{width:220px;float:left}form.ebook-styles .af-element.buttonContainer{width:115px;float:left;margin-left: 6px;}form.ebook-styles .af-element.buttonContainer input.submit{width:115px;padding:10px 6px 8px;text-transform:uppercase;border-radius:0;border:0;font-size:15px}form.ebook-styles .af-body.af-standards input.submit{width:115px}form.ebook-styles .af-element.privacyPolicy{width:100%;font-size:12px;margin:10px auto 0}form.ebook-styles .af-element.privacyPolicy p{font-size:11px;margin-bottom:0}form.ebook-styles .af-body input.text{height:40px;padding:2px 10px !important} form.ebook-styles .error, form.ebook-styles #error { color:#d00; } form.ebook-styles .formfields h1, form.ebook-styles .formfields #mg-logo, form.ebook-styles .formfields #mg-footer { display: none; } form.ebook-styles .formfields { font-size: 12px; } form.ebook-styles .formfields p { margin: 4px 0; } Get The Full Ray Dalio Series in PDF Get the entire 10-part series on Ray Dalio in PDF. Save it to your desktop, read it on your tablet, or email to your colleagues (function($) {window.fnames = new Array(); window.ftypes = new Array();fnames[0]='EMAIL';ftypes[0]='email';}(jQuery));var $mcj = jQuery.noConflict(true); Q1 2022 hedge fund letters, conferences and more Lock-in Today’s Pricing As a real estate investor, you want to realize the maximum possible gain on your investment. Another benefit of investing in pre-construction is that you can lock in today’s pricing without owing mortgage payments until the build is completed. If you have done your research and are investing in an area slated for growth, there is the potential for significant appreciation when your home is ready. Note that prices in the real estate market are constantly changing, and appreciation is never guaranteed. The assumption is that by locking in today’s lower price in a growth market, you can be reasonably sure that your investment will be worth at least the same amount (if not more) when the property is completed. Low Upfront Investment Pre-construction projects require a minimum down payment upfront, and regular installments are usually phased in over 1 to 2 years. The full payment is due at closing once the property is ready to move in. As a result, even if you can’t afford the full purchase price or a mortgage today, you can invest with a portion of the down payment amount for now. Then you have a significant amount of time to plan your finances, generate additional income, boost your savings and pay installments. Minimal Maintenance Costs at the Beginning When you invest in an existing property, you are often responsible for all maintenance and repair costs. However, when you invest in a pre-construction property, the developer is typically responsible for these costs during the warranty period. New construction will typically require less maintenance than older housing even after the warranty period. Can Assign Before Taking Possession If you invest in a pre-construction property, you often have the option to assign your unit before taking possession. Assignment means that you can sell your purchase contract to another buyer for a profit. Selling the purchase contract before the construction is complete is a great way to make money if you are not ready to be a landlord. If you are planning to assign, read your purchase agreement to ensure that your builder allows assignment and whether there are any restrictions. Most builders want a set percentage of the units to be sold before allowing assignment and charge an assignment fee to offset the legal work associated with transferring the contract. Pre-Construction Cons Waiting Required for Completion One of the downsides of investing in a pre-construction property is waiting for the property to be complete. The construction can often take years! Waiting can be a long and frustrating process, especially if there are delays. If your main investment goal is to generate cash flow from rent, construction delays can set you back by a year or more. Builder May Charge Future Pricing As explained above, one of the benefits of purchasing pre-construction is to take advantage of the spread between today’s pricing versus future pricing. In some high-demand markets, builders are increasingly plugging this gap and are charging future prices at the time of signing. As a real estate investor, make sure you do your research to understand market pricing norms. If your goal is to benefit from appreciation, you may be better off purchasing a resale property instead of investing in a pre-construction. Can’t See the Finished Product Another downside of investing in a pre-construction property is that you can’t see the finished product. You get to choose your finishings, paint color, flooring, etc. before construction begins, but if you don’t like the finished product, you’re responsible for it. Build quality also varies from builder to builder. In case of build defects, there is a warranty period for the builder to address it, but builders have the leeway to change room dimensions, fittings, and other supplies as needed. Therefore, it is essential to select a builder with a good reputation. Can’t Back Out After Signing Once you sign a contract for a pre-construction property, you are usually stuck with it. What does this mean for you? If you change your mind or the market changes in the 3 to 4 years it takes to build, you could be stuck with a property worth less than what you paid. Builder May Not Finish Believe it or not, most pre-construction contracts include an option for the builder to cancel the project for various reasons. If the builder can not obtain enough financing, or if the market conditions are no longer favorable, the project can be canceled or delayed for an extended time. In the event of a cancellation, most contracts include terms to return your down-payment amount to you. While you likely won’t lose your deposit, your investment does not accrue any appreciation during this time. If the cancellation occurs two or three years into the project, the market prices could be well above what you previously paid for the canceled property. Resale Pros Can See What You’re Buying One significant advantage is seeing precisely what you are buying upfront. There are no surprises with an existing home as to what the final product will look like and how much space you will have. Immediate Occupancy The main benefit of investing in a resale property is that you don’t have to wait for the property to be complete. You can move in right away or start generating rental income immediately! Immediate possession is music to an investor’s ears. Leverage for Additional Liquidity Sooner As you make mortgage payments sooner on your resale property, you can build up considerable equity in the time it would have taken a pre-construction property to be completed. You can then refinance your mortgage sooner and use the equity in your house to invest in more properties or other investments. Resale Cons As-is Condition Most often, the best deals on resale properties include a fair amount of renovation. Even if the property isn’t run down and you want to make any changes or customization to the property, it will require additional investment. Need Money Right Away for Down Payment Down payment for a pre-construction property can be spread out over several months or years. When investing in resale properties, you need to pay the down payment at closing. Arranging for a hefty sum of cash can be difficult if you are not prepared or do not have the funds readily available. Mortgage Starts Immediately With a resale property, your mortgage payments start as of the closing date. If you need some time to do renovations or modifications to maximize your rental income, you will have to add the cost of your mortgage payments and interest to the project cost. Conclusion When it comes to real estate investment, there are pros and cons to pre-construction and resale properties. You must research and weigh your options before deciding. Both types of investments have the potential to make you money, but you must choose the option that is right for you! About the Author Ash & Pri are the founders of AshandPri.com, where they empower readers to make smart money decisions across all aspects of life. After achieving their FIRE goals in their 30s, they launched their blogging business in late 2021 and scaled it up quickly to generate a consistent income within a few months. You can find their expert financial advice & tips featured on sites like Forbes, GoBankingRates, Apartment Therapy, MSN, and more. Updated on Jun 9, 2022, 1:48 pm (function() { var sc = document.createElement("script"); sc.type = "text/javascript"; sc.async = true;sc.src = "//mixi.media/data/js/95481.js"; sc.charset = "utf-8";var s = document.getElementsByTagName("script")[0]; s.parentNode.insertBefore(sc, s); }()); window._F20 = window._F20 || []; _F20.push({container: 'F20WidgetContainer', placement: '', count: 3}); _F20.push({finish: true});.....»»

Category: blogSource: valuewalkJun 9th, 2022

How Web3 Is Transforming The Real Estate Market

The advent of Web 3.0–a new era of the Internet which uses blockchain technology to transform how information is stored, shared, and owned–is one of the most exciting technological prospects of our time. Where some skeptics believe that a less centralized internet poses a threat to privacy and even security, those of us who welcome […] The advent of Web 3.0–a new era of the Internet which uses blockchain technology to transform how information is stored, shared, and owned–is one of the most exciting technological prospects of our time. Where some skeptics believe that a less centralized internet poses a threat to privacy and even security, those of us who welcome the Web3 era believe that it will make for a truly democratic web that counteracts the problem of identity theft with encrypted wallets, allows freedom of speech for everybody, and gives its users a voice on their favorite networks. .first{clear:both;margin-left:0}.one-third{width:31.034482758621%;float:left;margin-left:3.448275862069%}.two-thirds{width:65.51724137931%;float:left}form.ebook-styles .af-element input{border:0;border-radius:0;padding:8px}form.ebook-styles .af-element{width:220px;float:left}form.ebook-styles .af-element.buttonContainer{width:115px;float:left;margin-left: 6px;}form.ebook-styles .af-element.buttonContainer input.submit{width:115px;padding:10px 6px 8px;text-transform:uppercase;border-radius:0;border:0;font-size:15px}form.ebook-styles .af-body.af-standards input.submit{width:115px}form.ebook-styles .af-element.privacyPolicy{width:100%;font-size:12px;margin:10px auto 0}form.ebook-styles .af-element.privacyPolicy p{font-size:11px;margin-bottom:0}form.ebook-styles .af-body input.text{height:40px;padding:2px 10px !important} form.ebook-styles .error, form.ebook-styles #error { color:#d00; } form.ebook-styles .formfields h1, form.ebook-styles .formfields #mg-logo, form.ebook-styles .formfields #mg-footer { display: none; } form.ebook-styles .formfields { font-size: 12px; } form.ebook-styles .formfields p { margin: 4px 0; } Get The Full Ray Dalio Series in PDF Get the entire 10-part series on Ray Dalio in PDF. Save it to your desktop, read it on your tablet, or email to your colleagues (function($) {window.fnames = new Array(); window.ftypes = new Array();fnames[0]='EMAIL';ftypes[0]='email';}(jQuery));var $mcj = jQuery.noConflict(true); Q1 2022 hedge fund letters, conferences and more Regardless of where one stands on Web3, its relevance to the real estate market can be a difficult thing to wrap one’s head around. While the connection between something as intangible as bitcoin and as solid as a home might not seem clear at first, Web3 is poised to have profound impacts on the way we purchase and invest in real estate. Below are five of the major opportunities that Web3 offers the forward-thinking real estate investor. NFTs Lead The Way Owning real estate is more popular than ever in the U.S., with demand outpacing supply in many markets. Web3 allows for an even broader range of investors to enter the market–for example, those who lack the capital necessary to make a down payment and those who don’t have the time to wait around for a mortgage or the completion of a liquidation process–to make these transactions, using unique digital tiles called non-fungible tokens (NFTs). Best-known for their use in the acquisition of digital music and art, NFTs have since developed into profoundly multifaceted tools. According to ButterflyMX, $690 million worth of real estate was tokenized in 2020, a number that skyrocketed to $14.3 billion in 2021. Proprietary technology that includes a legal framework and allows NFTs to stand in for property ownership has also been developed, enabling purchase records to be lodged on blockchain along with legal documents. These systems make use of triple-ledger accounting, which registers a property’s buyer and seller while securing signatures from both parties. This is an extraordinarily simple and effective system for proving ownership. What was once an arduous task that could take weeks can now be completed almost instantaneously. In the process, it cuts costs and allows buyers to purchase property more quickly than ever. DeFi Subverts The Norm Decentralized finance (DeFi) avoids the bureaucratic processes of traditional banks and makes investing less clunky by means of linked smart contracts, oracles and blockchains. Automated workflows oversee its financial decisions, rather than individuals; a smart contract monitors the money coming in, the money going out, and adjusts to changes in the marketplace. Mortgages can be facilitated quickly and painlessly. Where the ownership of properties is shared, NFTs can be used to obtain mortgages from lending platforms. However, investors will need to stay well-informed when it comes to regulations, which may change over time as this form of investment becomes more popular. They should also hire a legal expert who has expertise in blockchain technology to assist them in such transactions. Younger generations of potential buyers, who’ve grown up online and use the web as their go-to marketplace, will likely find purchasing real estate online using DeFi, cryptocurrency, or fiat currency perfectly intuitive. This group also represents a new, powerful brand of investor overall, prepared to take big risks in expectation of even bigger rewards. DeFi’s ability to facilitate nimble, transparent transactions will help them make their mark in this space. Real Estate Investing For Everyone Reliance on DeFi may make some people nervous, but intrepid realtors recognize the potential of this system’s efficiency and transparency. Turning real estate into tokens allows investors to use concrete assets to create readily liquefiable portfolios on blockchain. It also opens up the world of real estate investment to less wealthy individuals. This is because tokenizing assets–in this case, property--makes fractional investing possible. As 101 Blockchains put it, fractional ownership tokenization is like a “crowdfunding platform for real estate,” and as of early 2022, was less fraught with regulatory issues than Entire Asset (EA) tokenization. An individual who might never be able to afford to buy an investment property apartment for $250,000, for example, might be able to afford a fraction of that amount, entitling him or her to a fraction of its ownership, which he or she could trade for an equivalent fraction of another property at any time. One AI platform allows multiple investors to purchase a fraction of turnkey rental properties for as little as $50 apiece. This expedited process also enables homeowners to use NFTs to sell portions of their own home equity to others, so buyers can invest in that property’s potential for appreciation. Believe In Bitcoin The controversy surrounding bitcoin and other cryptocurrencies makes some wary of using them. However, those who see their potential are finding innovative ways to leverage cryptocurrencies to transform their financial operations. United Wholesale Mortgage, for example, recently launched a pilot program where it will allow crypto to be used by its customers, starting with bitcoin but potentially including Ethereum. Bitcoin-based 30-year crypto mortgages are also now in the works. Some fintech companies are addressing the issue of price volatility with an interest rate based on a ratio of cryptocurrency value to loan amount, with a margin call issued if the ratio hits below a certain percentage, such as 65%. If it drops to 30%, the assets are liquidated and their value stored in USD. It’s also crucial to note that transactions involving cryptocurrencies need not be fully cryptocurrency-based. While some transactions can be done entirely using cryptocurrency, investors and sellers alike may want to use or receive cash for part of the payment. It’s important to be aware that government agencies and third parties involved in any given deal may require cash payments for their services. A Marketplace Of Equals As soon as NFTs became capable of representing real estate properties, it was inevitable that a booming marketplace for NFT-based transactions would spring up, allowing those who already own property to sell a portion of it to free up funds, possibly to invest elsewhere. This marketplace provides all the necessary paperwork to create an NFT for a property. Likewise, those who choose to invest can profit in a fractionalized way from the appreciation realized by the properties they purchase. This is a new model for building a real estate portfolio, available to people at a wide range of income levels. So, bring on Web3: savvy real estate investors are ready and willing to explore this vibrant, modern way of doing business. Updated on Jun 9, 2022, 2:04 pm (function() { var sc = document.createElement("script"); sc.type = "text/javascript"; sc.async = true;sc.src = "//mixi.media/data/js/95481.js"; sc.charset = "utf-8";var s = document.getElementsByTagName("script")[0]; s.parentNode.insertBefore(sc, s); }()); window._F20 = window._F20 || []; _F20.push({container: 'F20WidgetContainer', placement: '', count: 3}); _F20.push({finish: true});.....»»

Category: blogSource: valuewalkJun 9th, 2022

Bull of the Day: Occidental Petroleum Corp. (OXY)

This 'Strong Buy' stock has been a substantial beneficiary from the energy surge over the past year. Occidental Petroleum Corporation OXY, a Zacks Rank #1 (Strong Buy) stock, has been a substantial beneficiary from the energy surge over the past year. The company sports a ‘B’ rating for our Zacks Growth Style Score, indicating a strong likelihood that the stock continues to propel higher on the heels of strong earnings and sales growth.Occidental Petroleum is vastly outperforming the market this year and looks to build on the recent momentum. After becoming extremely undervalued back when the coronavirus outbreak initially struck, the stock has surged more than 700% since the pandemic-induced market plunge back in March of 2020 and continues to make a series of new 52-week highs.OXY is a component of the Zacks Oil and Gas – Integrated – United States industry, which ranks in the top 10% out of approximately 250 industry groups. Because it is ranked in the top half of all Zacks Ranked Industries, we expect this group to outperform over the next 3 to 6 months. This industry has risen nearly 70% year-to-date while the market has been in correction mode.Quantitative research studies have shown that approximately half of a stock’s future price appreciation can be attributed to its industry grouping. By targeting stocks located within leading industries, we can dramatically improve our odds of success. Also note the favorable characteristics for this industry below:Image Source: Zacks Investment ResearchCompany Description Occidental Petroleum is engaged in the acquisition and exploration of oil and gas properties globally. The company develops and produces oil and condensate, natural gas liquids, and natural gas, in addition to transporting and storing carbon dioxide. OXY also produces a variety of basic chemicals, petrochemicals, and polymers. Occidental Petroleum was founded in 1920 and is headquartered in Houston, TX.Recent Earnings and Future EstimatesOXY has surpassed earnings estimates in each of the past four quarters, delivering an average earnings surprise of 26.17%. The energy provider most recently reported first-quarter EPS earlier this month of $2.12, a 7.61% surprise over the $1.97 consensus estimate. Revenues of $8.53 billion also surpassed estimates by 7.2% and improved 55.7% versus the same quarter in the prior year.The company has been on the receiving end of several positive earnings estimate revisions as of late. For the current quarter, analysts have revised EPS estimates upward by 112.98 % in the past 60 days. The Q2 Zacks Consensus Estimate now stands at $2.79, reflecting an astounding 771.88% growth rate relative to Q2 of last year.It’s a similar story when we zoom out and view full-year figures. Analysts have increased their 2022 EPS estimates by 88.43% in the past 60 days. The Zacks Consensus Estimate is now $9.93, translating to potential growth of 289.41% versus last year. Revenues are anticipated to rise 41.88% to $37.34 billion. Clearly, the sales and earnings trends point to continued growth for OXY.Charting the CourseOXY is showing signs of relative strength and has advanced over 145% this year alone. The stock is hitting a series of new 52-week highs, serving as a sign of strength and indicating that institutional buying remains solid.Only stocks that are in extremely powerful uptrends are able to weather bear markets and corrections so gracefully. This is the kind of stock we want to include in our portfolio – one with both strong fundamentals as well as technicals. The stock has trended very well over the last 12 months, and we can see below that the 200-day moving average (blue line) served as support throughout the majority of last year.Image Source: StockChartsThe moving average line is sloping up and the stock continues to surge. Cautious investors may feel hesitant about investing in a stock that has come this far, but the fact is this elite company is still outperforming.Other Factors to ConsiderDespite the remarkable run, OXY remains relatively undervalued and underappreciated as we can see below:Image Source: Zacks Investment ResearchEmpirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions. And as we know, Occidental Petroleum has seen a recent batch of positive revisions. As long as this trend remains intact (and OXY continues to post earnings beats), the stock should continue its bullish run this year.Bottom LineWith a robust earnings history and an improving future outlook, Occidental Petroleum represents a great opportunity. The Zacks Rank #1 (Strong Buy) stock is a compelling investment with an attractive valuation and strong price momentum.Solid institutional buying and a high-performing industry group should continue to provide a tailwind for the stock price. Recent positive earnings estimate revisions will help to provide a cushion during any potential market decline. If you’re looking for a way to diversify your portfolio, make sure to put OXY on your shortlist. Zacks Names "Single Best Pick to Double" From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all. It’s a little-known chemical company that’s up 65% over last year, yet still dirt cheap. With unrelenting demand, soaring 2022 earnings estimates, and $1.5 billion for repurchasing shares, retail investors could jump in at any time. This company could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in little more than 9 months and NVIDIA which boomed +175.9% in one year.Free: See Our Top Stock and 4 Runners Up >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Occidental Petroleum Corporation (OXY): Free Stock Analysis Report To read this article on Zacks.com click here......»»

Category: topSource: zacksMay 31st, 2022

South Florida Is Experiencing An Industrial Boom Unlike Any Other

South Florida Is Experiencing An Industrial Boom Unlike Any Other By Matthew Rotolante of Wealth Management As a fourth-generation South Florida native in a family that has actively participated in the market for nearly a century, I have first-hand knowledge of the roller coaster nature of the region’s real estate cycles.  South Florida’s current industrial real estate boom is not the first of its kind, but it might be the most impervious to broader cycle downshifts than any comparable periods in the region’s history. In the 1920’s, “Binder Boy” salesmen traded properties as many as four or five times in a single day with the promise of sunshine and riches fueling a prodigious bubble that was traumatically popped in 1926 by the last major hurricane to hit downtown Miami. A hurricane might not even be enough slow down today’s South Florida real estate juggernaut, however. Despite over 8 million sq. ft. of new construction deliveries throughout 2021 and more delivering in 2022, South Florida’s rapid absorption has continued to leave vacancies at an all-time low of just 3 percent, compared with a national average of 4.3 percent, according to Lee & Associates National Quarterly Market Report. Rental rates have also seen a steady increase year-over-year, with the average for the South Florida tri-county area at $11.54 per sq. ft. per year. Several Miami submarkets are even seeing rates as high as $18 per sq. ft., especially for smaller flex product. Few U.S. markets benefited more from the pandemic. With a business- and tax-friendly regulatory environment and a temperate climate that didn’t favor a virus to begin with, Florida (and more specifically South Florida) has enjoyed a covetous position in the national marketplace and came out of the pandemic shining.  From multifamily to shopping centers, office buildings and land, property values are surging. However, industrial is the sector giving “irrational exuberance” a new definition. Or is it? Are the recent double-digit rates of inflation enjoyed by industrial land and warehouse based on pure speculation, or are the participants in this asset class paying record-breaking prices based on solid fundamentals? Let’s consider this further. Concepts such as supply and demand and price elasticity (or inelasticity) state that if there is ample demand with little supply, and if demand continues to grow while supply dwindles, then scarcity will drive prices skyward. Is South Florida industrial real estate easily substituted? Is it readily increased? Will the demand for it diminish over time? The answer to the above questions is a resounding no. Industrial real estate is not easily substituted nor readily increased. It is essential to the storing, distributing and manufacturing of goods. While over the last 20 years retail has been substituted by e-commerce’s pervasive form of direct to home delivery, the warehouses from where those goods are delivered have benefitted. We have also seen office be substituted in part by the work-from-home remote trend made essential by the pandemic. In short, while other asset classes, such as retail and office, have been easily substituted, industrial cannot be easily substituted. Industrial can be increased, but not easily. Industrial parks are noisy and heavily trafficked by large, fume-emitting vehicles. They can be tall, but not nearly as tall as a condo tower or office building. They also tend to be near major highways, airports and seaports. Sometimes, they store hazardous materials that are harmful to the environment or unsightly equipment. These challenges mean that any homeowners who get to vote on zoning changes for adjacent land will not willingly vote in favor of the industrial zoning classification. Second, because industrial is typically a single-story building (although vertical warehousing is starting to be introduced to the market) it is difficult to create significantly more storage square footage by going up.    Most U.S. counties and cities were master-planned at least 30 to 40 years ago or more, and often this planning did not properly contemplate the future demand for industrial real estate, leaving existing industrial inventory lacking. Furthermore, a large amount of industrial real estate, due to the fact that its rental rates per square foot are still commensurately much lower than office, retail and residential real estate, has been converted to these other uses that don’t face the NIMBY (Not In My Back Yard) hurdle. In markets like Atlanta, Dallas, Phoenix or another ‘hub and spoke’ area with a core downtown and suburbs and highway veins and loops on the outside, it is easy to acquire a block of land further away from the core and rezone it before the NIMBY’s arrive. Many failed malls are also being converted to industrial use as a way of repurposing these grand, abandoned goliaths of eras past. However, South Florida does not have any abandoned malls, and its geography is not hub and spoke, but more like a banana sitting on a coral ridge that is surrounded by the Atlantic Ocean to the east and south and the Everglades to the west. That leaves the north to expand into. Two decades ago, only the land adjacent to major population centers, airports and seaports was in high demand. Today, we are seeing developers and companies venturing as far north as St. Lucie County. This area was considered no man’s land in years past, without an international airport, seaport or many major employers. However, we now see major Fortune 500 companies deciding to locate in parks here due to the lower rents and land prices and lower cost of living for their employees. In summary, South Florida is a land-constrained market that is even more scarce in industrial land, with high demand leading pricing to double over the last two years. Developers, and the region’s commercial real estate industry at large, will have to come together and identify creative solutions to accommodate the unprecedented demand. Tyler Durden Thu, 04/21/2022 - 18:20.....»»

Category: smallbizSource: nytApr 21st, 2022

Power Broker Strategies: Real Estate Leaders Share Insights for the Year Ahead

Coming off the red-hot real estate market of 2021, Power Brokers are regrouping and preparing for what lies ahead, unpredictable as that may be. Their outlook and their approach are grounded in market realities and the proven methods that have carried their firms through many a challenge. Here, Power Brokers provide insights on the biggest […] The post Power Broker Strategies: Real Estate Leaders Share Insights for the Year Ahead appeared first on RISMedia. Coming off the red-hot real estate market of 2021, Power Brokers are regrouping and preparing for what lies ahead, unpredictable as that may be. Their outlook and their approach are grounded in market realities and the proven methods that have carried their firms through many a challenge. Here, Power Brokers provide insights on the biggest issues at hand—from inventory to inflation—and the strategies they’re deploying to ensure another successful year in 2022…no matter how the next chapter unfolds. Participants: Carol Bulman, CEO & Chairman of the Board, Jack Conway Dan Forsman, President & CEO, Berkshire Hathaway HomeServices Georgia Properties Joe Gazzo, Regional VP and Broker, Coldwell Banker Schmidt Realty Rick Haase, President, United Real Estate Felicia Hengle, President of Ohio Operations, Coldwell Banker Schmidt Realty Dan Kruse, CEO/Owner, CENTURY 21 Affiliated Teresa Overcash, Broker/Owner, Realty ONE Group Results Mike Prodehl, CEO, Coldwell Banker Real Estate Group Jessica Smith, Executive Vice President, Briggs Freeman Sotheby’s International Realty Todd Sumney, Chief Industry Officer, HomeSmart International How have the effects of 2021 impacted business in 2022? Mike Prodehl: The events of 2021 will continue to have a moderate impact on our market. The most pressing concern continues to be the scarcity of inventory with no end in sight. Rising rates may limit the buyer pool somewhat, but hopefully they will also get some people who have postponed plans off the fence. Inflation and other economic concerns may rattle consumer confidence, but the cost to rent will continue to compel people into homeownership. The continued pandemic has had much less impact on our markets than the inventory crisis. Jessica Smith: The continued pandemic has limited our large group gatherings, but it has not limited our agents from doing their job or reaching new heights. Texas continues to draw new corporations and transferees, keeping the housing demand strong. Since a large percentage of buyers are from out of state, the inventory has and will be our biggest challenge this year. Felicia Hengle: I’ve always been one to see the glass as half-full, maintaining a positive outlook as much as possible. Somehow through the pandemic, which we have all had to face in not only our personal lives but our business as well, I still believe that there is that silver lining. In the meantime, we’re all in it together, and there will always be enough business to go around. Competition and trying times are not necessarily a bad thing, but what’s most important is that we stay true to ourselves and never lose sight of why we got into the business in the first place. It’s all about relationships. How are you planning for the possible effects of inflation and rising interest rates on the housing market? Dan Kruse: It’s clear that we’re in a rising rate environment. The big question is how high will rates get due to the pressures of inflation? As a company, we are talking about this new environment and preparing our agents for the consumer discussion. With that said, we believe that even in a rising rate environment, buyer demand will continue to be strong, and we won’t see a major disruption in our industry over the short-term. Rick Haase: We have a very robust process for developing our annual operating plan—which, of course, takes a serious and exhaustive look at sales and financial forecasting. We are fortunate to have industry and non-industry veterans alike, each having seen these business cycles before. The causes for the cycles vary widely, but the core processes of strong fiscal management are well in place, and have been for some time. Everyone speaks of expense controls, and while we obviously know how to manage that area, we are excited to continue implementing our marketshare growth strategies. Dan Forsman: We are much more resilient than we once were after two years of pandemic and uncertainty. We now have a contingency plan that’s been on the shelf in the event that sales stall or a negative situation occurs. We’ve always done a good job of controlling our costs, and we’re leaning heavily into what most consumers want, which is one-stop shopping. We’re doing everything we can to support core services. Carol Bulman: We are focused on educating our agents on what’s happening in the market at all times, and with the support of our mortgage company, Conway Financial Services, we provide real-time information and tools for our agents to be prepared for any market. As always, we will face this new challenge by arming our agents with data and strategies to speak directly to their clients and show them what is really happening in the market and how it affects them. This will cause a shift in buyer demand and seller opportunity, but it will bring about a more normal balance, which might be healthy for both agents and clients alike. Felicia Hengle: I’ve always believed that there are two aspects of our business that everyone should be able to articulate. First is the ability to gain credibility in all that we do, and secondly, the ability to create urgency. Inflation and rising interest rates, especially rising interest rates, give us that ability to create urgency. Those buyers and sellers who are on the fence as to whether they should make the move or not can now see the writing on the wall…now may be that time. Unfortunately, those who sit on the side of caution may elect to stay put and ride things out. What strategies have you put in place to counter the inventory shortage? Rick Haase: The question at a macro level is not, “Will there be enough inventory?” There will be plenty of inventory, although at lower levels for sure. The proper question for us is, “How will we make sure that our brokers and agents are prepared to gain share of the market?” So we have been driving more marketing, technology and education services, including accelerating the advancement of our cloud-based productivity platform. In transitioning markets, it becomes even more important to have efficient and effective systems in place. We are fortunate that these elements have resided in our business model and brokerage network since inception. Todd Sumney: The inventory shortage is really an “active inventory shortage.” As soon as a home hits the market, it goes under contract or inactive quickly; therefore, the usual “active inventory” is low. The overall transactions for the year are still projected to be well over 5 million units. The trick is to be one of the agents involved in those transactions, so we launched some extensive agent training specifically around creating inventory and winning listings—and the results were astounding. We taught agents many different ways to create inventory through mini comparative market analyses, neighborhood reports, neighborhood farming, video marketing, texting, social media and more. Teresa Overcash: While inventory is low, we have partnered with an in-house builder who can create new homes for our buyers caught in bidding wars. We are also opening up a luxury division this year and encouraging our investors to purchase multifamily/rental properties so that we have many great options for frustrated buyers who want to buy but are tired of the bidding wars. We also make sure to educate the buyer that even though prices are higher than average, the interest rates more than make up for the price increase over a 30-year mortgage loan. Joe Gazzo: These truly are unprecedented times we are experiencing, and while we all may be experiencing the same storm, we are not all in the same boat. Those that continue to work their databases are the ones who will have the edge and find themselves with the ability to remain successful. We have platforms designed for such activities, along with other tools our agents can utilize to keep them up front and engaged during these challenging times. We actively focus on farming, builders, mining for listings and going back to basics with “just solds” and social media messaging for sellers who want to know what their home may be valued at in today’s market. Carol Bulman: As a firm, we believe this is a business of action. Through the teachings of Ninja Selling, we keep daily activities for success front and center for our agents. This week (at press time), we are providing a 30-minute workshop each day on ways to revisit members of our sphere. In addition, we provide consistent training on how to make buyers’ offers most attractive and win more on that side. Dan Kruse: This has been an ongoing issue in our industry for years now. I’m not sure there’s a magic bullet to this challenge, however, we’re coaching our agents around the real estate basics: prospecting, winning listing appointments and offering a value package. Companies like Compass and eXp are putting up big numbers this year. Are ‘disruptor’ firms a concern for you—and, if so, how are you creating a competitive advantage? Felicia Hengle: I’m not quite sure if the word is “concerned,” but we always try to stay on top of not only companies entering our market, but the latest trends as well. Cloud brokerages, such as eXp, benefited to a certain degree from the pandemic because of agents who no longer felt the need to go to the office. Erring on the side of caution, they chose to work remotely. Our contention, while we continue to monitor the real estate landscape, is to continue to stay focused on what has made us successful: pouring into our agents, giving them the support they need to be successful and the tools to aid both their buyers and sellers. We continue to focus on our differentiators so that the agents know they are a part of a company that is on the cutting edge and one that can help them build a viable, sustainable business. Dan Kruse: We’ve seen a number of “disruptors” or new models come into the real estate space over the last few years; this is not uncommon in a growing marketplace. Although some of these companies have some new structures, such as private equity backing or being publicly traded, the concept of these structures is not that different from others. We’re an industry where, at the heart, we service clients in making the best possible real estate decisions. That concept has not changed, so I would say our competitive advantage continues to be our outstanding customer service, systems and coaching, and years of experience. Carol Bulman: In our market, we are the disruptor with a new brand and bringing a new HQ building with state-of-the-art technology online. No one in the area has invested in these tools locally, and we’re facing a huge spotlight right now as we lead in these areas. I’m very proud of the work my team has done to make this all possible. Rick Haase: I think in 2020 we were the fastest-growing real estate firm in the nation, outperforming the market gains by a long margin. When the industry numbers are in for 2021, I believe our growth rate will actually increase year-over-year. So in short, we are the disruptor, and we believe passionately that our growth is actually in the most sustainable model. We’re not building on fleeting advantages like others, but on rock-solid foundational business principles. We’re profitable, our agents are winning more business and our brokerages are gaining agents as well; we’re scaling, and our enterprise value is growing exponentially, not declining.   How have you changed up your approach to recruiting and retention in the midst of trying times for real estate agents? Dan Forsman: The first “R” in recruiting is retention. We’ve stayed very focused on meeting the needs of agents, talking to our top agents and growing our middle tier. Because of that, I think we’ve been most fortunate in the “turnover wars.” I think culture wins, and we’ve got a strong culture of giving, growing and going to the next level in our company. It doesn’t mean eXp and Compass aren’t attracting people, they just don’t seem to be keeping people. I’m talking to more agents about coming back from Compass than ever before. There’s always that threat, but we’re focused on growing what we’ve got, retaining what we have and attracting new talent to the company. Dan Kruse: Building our organization around outstanding real estate professionals has always been one of the keys to our success. We continue our recruiting strategy around building great professionals and coaching them on how to succeed in a changing real estate environment. I think the biggest challenge is helping our newer agents find success early in their career, which can be challenging in a competitive market with low inventory. We’re proud of the number of successful first- and second-year agents we’ve seen grow this past year. Joe Gazzo: From a retention standpoint, staying connected with our agents is paramount, especially during the times we’ve all experienced over the past few years. With offices opening up again, experiencing a bit of normalcy is a welcome thing to say the least, and having such engagement stands only as a reminder as to one of the reasons they joined our company. We are concentrating on live training and events to foster collaboration and synergy to remind our agents of the culture that attracted them to us in the first place. Felicia Hengle: From a recruiting standpoint, it boils down to a number of things, and not necessarily strictly the commissions. It’s articulating our value proposition, stressing our core values and giving them the support they need to be successful while fulfilling what’s most important to them. Our management team offers years of experience, and what comes with such experience is the ability to help weather the storm during such trying times. We also rely on our agents to be our raving fans and help us to tell our story while out in the marketplace. Rick Haase: We are simply re-doubling our efforts to get our story out. As we demonstrate the incredible opportunity within our systems to help agents win business and brokerages to manage their operations, it is reaping great rewards. We keep as a guiding principle that our efforts are all about increasing our agents’ and brokers’ financial trajectory. Recruiting with a discounted stock purchase program or paying agents in shares to help recruit when those shares lose 50%, 60%, even 75% of their value isn’t much of a net-worth growth plan, and agents are figuring that out pretty quickly. We are investing even more in training, education and development, communications, broker outreach, agent marketing and technology services and lead generation in the coming year with great efficiency. Maria Patterson is RISMedia’s executive editor. Email her your real estate news ideas to maria@rismedia.com. The post Power Broker Strategies: Real Estate Leaders Share Insights for the Year Ahead appeared first on RISMedia......»»

Category: realestateSource: rismediaApr 15th, 2022

Here"s How Much You"d Have If You Invested $1000 in Prologis a Decade Ago

Holding on to popular or trending stocks for the long-term can make your portfolio a winner. For most investors, how much a stock's price changes over time is important. This factor can impact your investment portfolio as well as help you compare investment results across sectors and industries.Another thing that can drive investing is the fear of missing out, or FOMO. This particularly applies to tech giants and popular consumer-facing stocks.What if you'd invested in Prologis (PLD) ten years ago? It may not have been easy to hold on to PLD for all that time, but if you did, how much would your investment be worth today?Prologis' Business In-DepthWith that in mind, let's take a look at Prologis' main business drivers. Prologis Inc. is a leading industrial real estate investment trust (REIT) that acquires, develops, operates and manages industrial real estate space in the Americas, Asia and Europe. The company principally targets investments in distribution facilities for customers who are engaged in global trade and depend on efficient movement of goods through the global supply chain.As of Dec 31, 2021, Prologis owned or had investments in properties and development projects aggregating around 1.0 billion square feet of space in 19 countries, either on a wholly owned basis or through co-investment ventures. Modern distribution facilities are being leased by the company to around 5,800 customers. These customers belong to two main categories: business-to-business and retail/online fulfillment.The company has been actively banking on its growth opportunities through acquisitions and developments. Since the ProLogis–AMB merger in 2011 through year-end 2020, this industrial REIT has accomplished investment transactions aggregating more than $131.4 billion across 30 global markets. These investments comprise a wide array, including the largest M&A transactions in the real estate sector as well as individual off-market deals of less than $5 million.In February 2020, the company accomplished the $13-billion acquisition of Liberty Property Trust, strengthening its presence in target regions, such as Chicago, Lehigh Valley, New Jersey, Houston, Central PA and Southern California.In 2021, the company’s share of building acquisitions amounted to $901 million, with a weighted average stabilized cap rate of 4.6%. Development stabilization aggregated $2.5 billion, while development starts totaled $3.6 billion, with 46.5% being build-to-suit.Note**: All EPS numbers presented in this report represent funds from operations (FFO) per share. FFO, a widely used metric to gauge the performance of REITs, is obtained after adding depreciation and amortization and other non-cash expenses to net income.Bottom LineAnyone can invest, but building a successful investment portfolio takes a combination of a few things: research, patience, and a little bit of risk. So, if you had invested in Prologis a decade ago, you're probably feeling pretty good about your investment today.A $1000 investment made in March 2012 would be worth $4,383.72, or a gain of 338.37%, as of March 17, 2022, according to our calculations. This return excludes dividends but includes price appreciation.The S&P 500 rose 210.35% and the price of gold increased 11.60% over the same time frame in comparison.Analysts are anticipating more upside for PLD. Shares of Prologis have outperformed the industry in the past six months, while the estimate revision trend for 2022 funds from operations (FFO) per share indicates an optimistic outlook. This REIT announced a hike in the quarterly common stock dividend. Its results in recent quarters reflect low vacancies and increasing rental revenues. Amid an e-commerce boom, growth in industries and companies making efforts to improve supply-chain efficiencies, demand for logistics infrastructure and efficient distribution networks has been shooting up. Along with the fast adoption of e-commerce, logistics real estate is anticipated to gain from a rise in inventory levels. Given Prologis’ capacity to offer high-quality facilities in key markets and robust balance-sheet strength, it is poised to bank on these trends despite rising supply in some markets. Over the past four weeks, shares have rallied 7.06%, and there have been 8 higher earnings estimate revisions in the past two months for fiscal 2022 compared to none lower. The consensus estimate has moved up as well. 7 Best Stocks for the Next 30 Days Just released: Experts distill 7 elite stocks from the current list of 220 Zacks Rank #1 Strong Buys. They deem these tickers "Most Likely for Early Price Pops." Since 1988, the full list has beaten the market more than 2X over with an average gain of +25.4% per year. So be sure to give these hand-picked 7 your immediate attention. See them now >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Prologis, Inc. (PLD): Free Stock Analysis Report To read this article on Zacks.com click here. Zacks Investment Research.....»»

Category: topSource: zacksMar 17th, 2022

Nexus Industrial REIT Announces Full Year 2021 and Fourth Quarter Results and March Distribution

TORONTO and MONTREAL, March 15, 2022 (GLOBE NEWSWIRE) -- Nexus Industrial REIT (the "REIT") (TSX:NXR) announced today its results for the year and quarter ended December 31, 2021. Highlights Graduated to the Toronto Stock Exchange in Q1 2021, increased market capitalization from $265 million at December 31, 2020 to $971 million at December 31, 2021 and increased total assets by $948 million in 2021 to $1.7 billion. Successfully completed a $148.3 million bought deal financing on November 22, 2021, completed $295.3 million of bought deal equity offerings in 2021. Completed a total of $416 million of industrial property acquisitions during Q4 2021 and $674 million in 2021; increasing NOI from industrial properties to approximately 81% of Q4 NOI. Subsequent to December 31, 2021, the REIT has completed a total of $236.5 million of industrial acquisitions. The REIT's acquisition pipeline continues to be very strong. On November 22, 2021, an Ontario retail property purchased for $6.6 million was sold for gross proceeds of $11.0 million. Occupancy of 96% at December 31, 2021, was up from 95% at September 30, 2021 and 93% at December 31, 2020. YTD 2021 net operating income of $56 million increased $16.7 million or 42.6% as compared to 2020 net operating income of $39.2 million. Q4 2021 net operating income of $19.1 million increased by $9.4 million or 97% as compared to Q4 2020 net operating income of $9.7 million and by $5.0 million or 35% as compared to Q3 2021 net operating income of $14.1 million. Q4 2021 Same Property NOI(1) of $9.7 million increased by $0.2 million or 1.7% as compared to Q4 2020. Same property NOI for the year ended December 31, 2021 decreased by $0.3 million or 0.9% as compared to the prior year. The decrease is primarily attributable to a 25,000 square foot industrial vacancy in Calgary. YTD 2021 Normalized FFO(1) per unit of $0.770, as compared to $0.860 for 2020; Q4 2021 Normalized FFO per unit of $0.194, as compared to $0.191 for Q3 2021 and $0.206 for Q4 2020. YTD 2021 Normalized AFFO(1) per unit of $0.692, as compared to $0.771 for 2020; Q4 2021 Normalized AFFO per unit of $0.173, as compared to $0.174 for Q3 2021 and $0.185 for Q4 2020. YTD 2021 Normalized AFFO payout ratio(1) of 94.7% compared to 82.4% for 2020; Q4 2021 Normalized AFFO payout ratio of 96.5%, as compared to 95.9% for Q3 2021 and 86.1% for Q4 2020. Ended 2021 with $82.3 million of cash and full availability of $45.5 million on revolving Credit Facilities. Weighted average interest rate on mortgages payable decreased to 3.28% at December 31, 2021 from 3.49% at September 30, 2021 and 3.66% at December 31, 2020. At the same time, the weighted average term to maturity increased to 6.61 years at December 31, 2021 from 3.95 years at September 30, 2021 and 3.95 years at December 31, 2020. NAV(1) per unit of $12.18 at December 31, 2021 as compared to $11.55 at September 30, 2021 and $10.15 at December 31, 2020. Management of the REIT will host a conference call on Wednesday March 16th at 11AM EST to review results and operations. (1) Non-IFRS Financial Measure "2021 was a banner year for Nexus." commented Kelly Hanczyk, the REIT's Chief Executive Officer. "We successfully accessed the capital markets three times in 2021 to fuel the rapid growth of the REIT. We have both grown our market capitalization and high graded our industrial portfolio and have executed on our strategy of becoming a pure play industrial REIT. We continued to deploy capital in the first quarter of 2022, closing on acquisitions of 9 properties in 6 transactions for an aggregate purchase price of $236.5 million while maintaining liquidity to continue to acquire. We've had a strong start to 2022, and we are hopeful that 2022 will be as successful a year as 2021. Same property NOI was up Q4 year over year, demonstrating strong operational performance, and we are seeing opportunities for NOI growth in the London portfolio acquired in 2021 beginning to materialize. We have approximately 345,000 square feet expiring this year in the London Market where we will see considerable growth in rent. In 2022, we will explore opportunities to add GLA at several of the properties we recently acquired." Summary of Results Included in the tables that follow and elsewhere in this news release are non-IFRS financial measures that should not be construed as an alternative to net income / loss, cash from operating activities or other measures of financial performance calculated in accordance with IFRS and may not be comparable to similar measures as reported by other issuers. Certain additional disclosures for these non-IFRS financial measures have been incorporated by reference and can be found on page 3 in the REIT's Management's Discussion and Analysis for the year ended December 31, 2021, available on SEDAR at www.sedar.com and on the REIT's website under Investor Relations. See Appendix A of this earnings release for a reconciliation of the non-IFRS financial measures to the primary financial statement measures. (In thousands of Canadian dollars) Three Months ended December 31, Year ended December 31,   2021 2020 2021 2020 Financial Results $ $ $ $           Property revenues 27,537 15,648 83,559 61,386 Net operating income (NOI) 19,071 9,698 55,952 39,227 Net income 44,760 9,831 93,539 35,235 (In thousands of Canadian dollars, except per unit amounts) Three Months endedDecember 31, Year ended December 31,   2021   2020   2021   2020   Financial Highlights $   $   $   $             Funds from operations (FFO) (1) 14,079   6,613   39,658   27,458   Normalized FFO (1) (2) 13,288   6,992   39,954   28,263   Adjusted funds from operations (AFFO) (1) 12,619   5,909   35,646   24,522   Normalized AFFO (1) (2) 11,828   6,288   35,942   25,327   Same Property NOI (1) 9,736   9,574   36,734   37,058   Distributions declared (3) 11,419   5,414   34,025   20,865             Weighted average units outstanding (000s) - basic (4) 68,508   34,015   51,914   32,858   Weighted average units outstanding (000s) - diluted (4) 68,695   34,037   52,066   32,880             Per unit amounts:         Distributions per unit - basic (3) (4) 0.167   0.159   0.655   0.635   FFO per unit - basic (1) (4) 0.206   0.194   0.764   0.836   Normalized FFO per unit - basic (1) (2) (4) 0.194   0.206   0.770   0.860   AFFO per unit - basic (1) (4) 0.184   0.174   0.687   0.746   Normalized AFFO per unit - basic (1) (2) (4) 0.173   0.185   0.692   0.771             NAV per unit (1) 12.18   10.15   12.18   10.15             Normalized AFFO payout ratio - basic (1) (2) (3) 96.5 % 86.1 % 94.7 % 82.4 % Debt to total assets ratio 41.0 % 48.2 % 41.0 % 48.2 % (1) Non-IFRS Financial Measure     (2) See Appendix A – Non-IFRS Financial Measures     (3) Includes distributions payable to holders of Class B LP Units which are accounted for as interest expense in the consolidated financial statements.     (4) Weighted average number of units includes the Class B LP Units. For the three months ended December 31, 2021, NOI of $19.1 million was $9.4 million higher than Q4 2020 NOI of $9.7 million. Acquisitions generated incremental NOI of $8.9 million in Q4 2021 as compared to Q4 2020. Q4 2021 Same Property NOI increased $0.2 million over Q4 2020 primarily due to rental steps and favourable new and renewal leasing at certain of the REIT's industrial properties. Straight-line rents also contributed $0.3 million to the increase over the prior year period. Occupancy remained strong at 96% at December 31, 2021 compared to 95% at September 30, 2021 and 93% at December 31, 2020. For the year ended December 31, 2021, NOI of $56.0 million was $16.7 million higher than the prior year NOI of $39.2 million. Acquisitions generated incremental NOI of $17.1 million for the year. Same Property NOI for ...Full story available on Benzinga.com.....»»

Category: earningsSource: benzingaMar 15th, 2022

Vail Resorts Reports Fiscal 2022 Second Quarter Results, Increases Quarterly Dividend, Provides Updated Fiscal 2022 Guidance and Announces Fiscal 2023 Employee Investments

BROOMFIELD, Colo., March 14, 2022 /PRNewswire/ -- Vail Resorts, Inc. (NYSE:MTN) today reported results for the second quarter of fiscal 2022 ended January 31, 2022 and provided the Company's ski season-to-date metrics through March 6, 2022, both of which were negatively impacted by COVID-19 and related limitations and restrictions. Highlights Net income attributable to Vail Resorts, Inc. was $223.4 million for the second fiscal quarter of 2022 compared to net income attributable to Vail Resorts, Inc. of $147.8 million in the same period in the prior year. The increase is primarily due to the greater impact of COVID-19 and related limitations and restrictions on results in the prior year. Net income attributable to Vail Resorts, Inc. in the second quarter of fiscal year 2020 was $206.4 million. Resort Reported EBITDA was $397.9 million for the second fiscal quarter of 2022, compared to Resort Reported EBITDA of $276.1 million for the second fiscal quarter of 2021. The increase is primarily due to the greater impact of COVID-19 and related limitations and restrictions on results in the prior year. Resort Reported EBITDA for the second quarter of fiscal year 2020 was $378.3 million. Results improved in January and February relative to results through the peak holiday period, with season-to-date total skier visits up 2.8% and total lift revenue up 10.3% through March 6, 2022 compared to the fiscal year 2020 season-to-date period through March 8, 2020. Ancillary lines of business continue to experience decreased revenue versus the comparable period in fiscal 2020, particularly in food and beverage, given the disproportionate impact related to numerous operational restrictions related to COVID-19 and staffing challenges. The Company updated its fiscal 2022 guidance range and is now expecting Resort Reported EBITDA to be between $813 million and $837 million. The guidance range includes an estimated $13 million of Resort Reported EBITDA from the recently acquired operations of Seven Springs, Hidden Valley and Laurel Mountain resorts (together, the "Seven Springs Resorts") for the period from the transaction closing on December 31, 2021 through the end of the fiscal year, partially offset by $6 million of related acquisition and integration expenses. The Company is making investments in the guest experience for fiscal 2023 by significantly increasing compensation for seasonal frontline staff. For the 2022/2023 North American ski season, the Company will be increasing its minimum wage to $20 per hour, while maintaining all career and leadership wage differentials to provide a significant increase in pay to all of its hourly employees. The Company will also be making a substantial investment in its human resource department to support a return to full staffing and deliver a better employee experience. The increase in wages and the return to normal staffing levels will represent an approximately $175 million increase in expected labor expense in fiscal 2023 compared to fiscal 2022 expected labor expense. In addition, as previously announced, the Company is investing $327 million to $337 million of capital in calendar year 2022 to expand capacity at 14 resorts with 21 new lifts and a major terrain expansion for the upcoming season. The Company's Board of Directors approved an increase in the quarterly cash dividend to $1.91 per share beginning with the dividend payable on April 14, 2022 to shareholders of record as of March 30, 2022. Unless otherwise noted, the commentary on results for the three months ended January 31, 2022 includes the results of our recent acquisition of the Seven Springs Resorts prospectively from the acquisition date of December 31, 2021. Commenting on the Company's fiscal 2022 second quarter results, Kirsten Lynch, Chief Executive Officer, said, "We are pleased with our financial performance for the quarter. Visitation trends and demand for the experience at our resorts remain encouraging, particularly with destination guests, with results improving post-holidays as conditions improved, more terrain was opened and the impact of the COVID-19 Omicron variant receded. As expected, results for the quarter significantly outperformed results from the prior year, due to the greater impact of COVID-19 and related limitations and restrictions on results in the prior year period. "The 2021/2022 North American ski season got off to a slow start. The confluence of storm cycles, staffing challenges and the spike in Omicron variant cases created challenges through the holiday period impacting our resorts' ability to fully open terrain as planned and negatively impacting the guest experience during that time. Despite numerous measures taken ahead of the season, including an investment in wages, available staffing was below targeted levels heading into the holidays, consistent with challenges faced by the broader travel and leisure industry at that time. During the holidays, COVID-19 cases associated with the Omicron variant dramatically accelerated, impacting both guest travel plans and staffing exclusions, despite having a vaccinated workforce. At some resorts, more than 10% of our employees were unable to work due to COVID-19 at one time. To address these challenges, the Company increased hourly compensation during the holidays and for the remainder of the ski season at a cost of $20 million in fiscal 2022. "Following the holiday period, the experience across our resorts improved markedly, with better snowfall, a stabilization and ultimately reduction of cases of COVID-19 and overall better staffing, allowing us to open terrain across our resorts that was close to normal levels for that time period. Throughout the quarter, we experienced relative strength in destination visitation and lift ticket sales, particularly at our western U.S. ski resorts, which exceeded our expectations in January in particular. Whistler Blackcomb was, as anticipated, disproportionately impacted by COVID-19 related travel restrictions, creating challenging results for U.S. destination and international visitation to the resort. Excluding the Seven Springs Resorts, total visitation for the quarter increased 2% compared to the second fiscal quarter of 2020. "Relative to the second fiscal quarter of 2020, our ancillary lines of business experienced revenue declines, particularly in food and beverage, which was disproportionately impacted by numerous operational restrictions associated with COVID-19 and overall staffing challenges. Resort net revenue for the second fiscal quarter of 2022 decreased 2% relative to the comparable period in fiscal year 2020, primarily as a result of the headwinds in our ancillary lines of business and approximately $33 million of pass revenue that would have been recognized in the second fiscal quarter of 2022, but was deferred to the third fiscal quarter as a result of delayed openings for a number of our resorts. Our lodging business experienced strong results during the quarter, with average daily rates ("ADR") exceeding our expectations, partially offset by lower than expected occupancy rates, particularly during the early season. "Relative to the second fiscal quarter of 2020, Resort Reported EBITDA increased 5% despite the challenging early season conditions and COVID-19 related dynamics. Resort Reported EBITDA margin for the second quarter of fiscal 2022 was 43.9%, an increase from 40.9% in the second quarter of fiscal 2020." Season-to-Date Metrics through March 6, 2022 & Interim Results Commentary The Company reported certain ski season metrics for the period from the beginning of the ski season through March 6, 2022, compared to each of the two prior year periods through March 7, 2021 and March 8, 2020, respectively. Given the significant impacts of COVID-19 in the prior year period, including significant capacity restrictions that limited skier visits and ancillary revenue, the Company is also providing metrics relative to the comparable fiscal year 2020 season-to-date period, which was prior to our announcement to close our resorts on March 15, 2020 for the remainder of the 2019/2020 season. The reported ski season metrics are for our North American destination mountain resorts and regional ski areas, and exclude the results of our recently acquired Seven Springs Resorts and our Australian ski areas in all periods. The reported ski season metrics include growth for season pass revenue based on estimated fiscal year 2022 North American season pass revenue compared to both fiscal 2021 and fiscal 2020 North American season pass revenue. The data mentioned in this release is interim period data and is subject to fiscal quarter end review and adjustments. Season-to-date through March 6, 2022, total skier visits were up 11.7% compared to the prior year season-to-date period and up 2.8% compared to the fiscal year 2020 season-to-date period. Season-to-date total lift ticket revenue, including an allocated portion of season pass revenue for each applicable period, was up 21.0% compared to the prior year season-to-date period and up 10.3% compared to the fiscal year 2020 season-to-date period. Season-to-date ski school revenue was up 60.2% and dining revenue was up 75.7% compared to the prior year season-to-date period. Relative to the comparable period in fiscal year 2020, ski school revenue and dining revenue were down 8.9% and down 27.0%, respectively. Retail/rental revenue for North American resort and ski area store locations was up 40.7% compared to the prior year season-to-date period, and down 2.8% versus the comparable season-to-date period in fiscal year 2020. Commenting on the season-to-date metrics, Lynch said, "Company performance has continued to improve throughout the post-Christmas period, with particular strength in destination visitation and lift ticket sales. Despite significant growth of our pass program this year, visitation for the season-to-date period was only modestly up 2.8% compared to fiscal 2020, given the Company's strategy to shift lift ticket guests into an advance commitment pass product. Whistler Blackcomb was negatively impacted by COVID-19 related travel restrictions, creating challenging results for U.S. destination and international visitation to the resort. The ancillary lines of business continue to experience revenue declines, particularly in food and beverage, which is disproportionately impacted by numerous operational restrictions associated with staffing and COVID-19." Lynch continued, "It is important to highlight that our season pass unit growth of 47% for fiscal year 2022 created significant revenue stability in a period with challenging early season conditions and COVID-19 impacts. The growth in pass units did not drive dramatic increases in visitation, as the Company is shifting lift ticket guests into advance commitment products. In fact, the growth we saw in visitation in the period ending March 6, 2022, compared to fiscal 2020, occurred on weekdays and non-holiday periods, which were up approximately 9% in visits, compared to weekend and holiday periods, which were approximately flat in visits. We also saw peak daily visitation at our resorts during the period, very consistent with previous years. For the season-to-date period ending March 6, 2022, 69% of our visits came from season pass holders compared to 56% of visits in the same period in fiscal year 2020. We remain committed to our strategy to move lift ticket purchasers into advance commitment products, which offers benefits to our guests, and stability to our employees, our communities and our Company. Operating Results A more complete discussion of our operating results can be found within the Management's Discussion and Analysis of Financial Condition and Results of Operations section of the Company's Form 10-Q for the second fiscal quarter ended January 31, 2022, which was filed today with the Securities and Exchange Commission. The following are segment highlights: Mountain Segment Total lift revenue increased $90.8 million, or 21.1%, compared to the same period in the prior year, to $521.6 million for the three months ended January 31, 2022, primarily due to an increase in pass product revenue and an increase in non-pass lift ticket purchases. Pass product revenue, although primarily collected prior to the ski season, is recognized in the Consolidated Condensed Statements of Operations throughout the ski season on a straight-line basis using the skiable days of the season to date relative to the total estimated skiable days of the season. Challenging early season conditions during the early portion of the 2021/2022 North American ski season resulted in delayed openings for a number of our resorts and, as a result, we expect to recognize approximately $33 million of pass revenue during the three months ending April 30, 2022 that would have otherwise been recognized during the three months ended January 31, 2022. Ski school revenue increased $35.7 million, or 63.3%, dining revenue increased $21.8 million, or 67.7%, retail/rental revenue increased $36.7 million, or 40.7%, and other revenue increased $7.4 million, or 22.7%, each primarily due to fewer COVID-19 related limitations and restrictions on our North American winter operations as compared to the prior year, as well as an increase in demand over the prior year. Operating expense increased $86.1 million, or 23.9%, which was primarily attributable to increased variable expenses associated with increases in revenue, and the impact of cost discipline efforts in the prior year associated with lower levels of operations, including limitations, restrictions and closures resulting from COVID-19. Mountain Reported EBITDA increased $106.0 million, or 37.5%, for the second quarter compared to the same period in the prior year, which includes $5.4 million of stock-based compensation expense for the three months ended January 31, 2022 compared to $5.5 million in the same period in the prior year. Lodging Segment Lodging segment net revenue (excluding payroll cost reimbursements) for the three months ended January 31, 2022 increased $29.8 million, or 73.9%, as compared to the same period in the prior year, primarily as a result of fewer COVID-19 related limitations and restrictions as compared to the prior year, as well as an increase in demand and ADR compared to the prior year. Lodging Reported EBITDA for the three months ended January 31, 2022 increased $15.8 million, or 244.6%, for the second quarter compared to the same period in the prior year, which includes $1.0 million of stock-based compensation expense for both the three months ended January 31, 2022 and 2021. Resort - Combination of Mountain and Lodging Segments Resort net revenue increased $222.0 million, or 32.4%, compared to the same period in the prior year, to $906.4 million for the three months ended January 31, 2022. Resort Reported EBITDA was $397.9 million for the three months ended January 31, 2022, an increase of $121.8 million, or 44.1%, compared to the same period in the prior year, which includes $2.6 million of acquisition and integration related expenses which are recorded within Mountain other operating expense. Total Performance Total net revenue increased $221.9 million, or 32.4%, to $906.5 million for the three months ended January 31, 2022 as compared to the same period in the prior year. Net income attributable to Vail Resorts, Inc. was $223.4 million, or $5.47 per diluted share, for the second quarter of fiscal 2022 compared to net income attributable to Vail Resorts, Inc. of $147.8 million, or $3.62 per diluted share, in the second fiscal quarter of the prior year. Additionally, fiscal 2022 second quarter net income included the after-tax effect of acquisition and integration related expenses of approximately $2.0 million. Return of Capital Commenting on capital allocation, Lynch said, "Our liquidity position remains strong. Our total cash and revolver availability as of January 31, 2022 was approximately $2.0 billion, with $1.4 billion of cash on hand, $417 million of U.S. revolver availability under the Vail Holdings Credit Agreement and $214 million of revolver availability under the Whistler Credit Agreement. As of January 31, 2022, our Net Debt was 2.1 times trailing twelve months Total Reported EBITDA. We are pleased to announce that our Board of Directors has declared a quarterly cash dividend on Vail Resorts' common stock of $1.91 per share. The dividend will be payable on April 14, 2022 to shareholders of record as of March 30, 2022. Additionally, a Canadian dollar equivalent dividend on the exchangeable shares of Whistler Blackcomb Holdings Inc. will be payable on April 14, 2022 to shareholders of record as of March 30, 2022. The exchangeable shares were issued to certain Canadian persons in connection with our acquisition of Whistler Blackcomb Holdings Inc. We will continue to be disciplined stewards of our capital and remain committed to prioritizing investments in our guest and employee experience, high-return capacity expanding capital projects, strategic acquisition opportunities and returning capital to our shareholders through our quarterly dividend and share repurchase programs." Commitment to our Employees and Guests Commenting on the Company's investments for the 2022/2023 ski season, Lynch said, "As we turn our attention to the 2022/2023 ski season and beyond, the Company will be making its largest ever investment in both its employees and its resorts, to ensure we continue to deliver our Company mission of an Experience of a Lifetime. The experience of our employees and guests is core to our business model, and the Company intends to use its financial resources and the stability it has created through its season pass program to continue to aggressively reinvest to deliver that experience. We believe our business model allows us to make these investments and achieve our short and long-term financial growth objectives." Employee Investments Commenting on the employee experience, Lynch said, "Our employees are the core of Vail Resorts' mission of creating an Experience of a Lifetime. We are pleased to announce a significant investment in our employees for next winter season, with an increase in the minimum hourly wage offered across all 37 of our North American resorts to $20 per hour for all U.S. employees and C$20 per hour for all Canadian employees, and an increase in wage rates for hourly employees as we maintain all leadership and career stage differentials. Roles that have specific experiences or certification as prerequisites, such as entry-level patrol, commercial drivers, and maintenance technicians will start at $21 per hour. Tipped employees will be guaranteed a minimum of $20 per hour. The Company will also be assessing targeted increases, beyond inflation, for our salaried employees and will be making a significant investment in our human resource department to ensure the right level of employee support, development and recruiting. Talent is our most important asset and our strategic priority at all levels of the Company and we expect these investments will be an important step to enhance the experience for our employees through increased hiring, retention and talent development. Our employee investments are intended to help us achieve normal staffing levels, and in turn, deliver an outstanding guest experience. The increase in wages and the return to normal staffing levels will represent an approximately $175 million increase in expected labor expense in fiscal 2023 compared to fiscal 2022 expected labor expense, including inflationary adjustments." Capital Investments Regarding calendar year 2022 capital expenditures, Lynch said, "We remain dedicated to delivering an exceptional guest experience and will continue to prioritize reinvesting into the experience at our resorts. We are committed to continually increasing capacity through lift, terrain and food and beverage expansion projects and are making a significant one-time incremental investment this year to accelerate that strategy. As previously announced on September 23, 2021, we are excited to be proceeding with our ambitious capital investment plan for calendar year 2022 of approximately $315 million to $325 million across our resorts, excluding one-time investments related to integration activities, employee housing development projects and real estate related projects. "The plan includes approximately $180 million for the installation of 21 new or replacement lifts across 14 of our resorts and a transformational lift-served terrain expansion at Keystone. In addition to the two brand new lift configurations at Vail and Keystone, the replacement lifts will collectively increase lift capacity at those lift locations by more than 45%. All of the projects in the plan are subject to regulatory approvals and expected to be completed in time for the 2022/2023 North American winter season.  "The core capital plan is approximately $150 million above our typical annual capital plan, based on inflation and previous additions for acquisitions, and includes approximately $20 million of incremental spending to complete the one-time capital plans associated with the Peak Resorts and Triple Peaks acquisitions and $3 million for the addition of annual capital expenditures associated with the Seven Springs Resorts.   "We continue to remain highly focused on developing and leveraging our data-driven approach to marketing and operating the business. Our planned investments include network-wide scalable technology that will enhance our analytics, e-commerce and guest engagement tools to improve our ability to target our guest outreach, personalize messages and improve conversion. We will also be investing in broader self-service capabilities to improve guests' online experience and engagement. In addition, we have announced a $4 million capital investment plan in Vail Resorts' Commitment to Zero initiative, which includes targeted investments in high efficiency snowmaking, heating and cooling infrastructure and lighting to further improve our energy efficiency and make meaningful progress toward our 2030 goal. "We plan to spend approximately $9 million on integration activities related to the recently acquired Seven Springs Resorts. Including one-time investments related to integration activities and $3 million associated with real estate related projects, our total capital plan is expected to be approximately $327 million to $337 million. Including our calendar year 2022 capital plan, Vail Resorts will have invested over $2 billion in capital since launching the Epic Pass, increasing capacity, improving the guest experience and creating an integrated resort network." Outlook Commenting on fiscal 2022 guidance, Lynch said, "Despite the challenging start to the season through the holidays, we have increased the midpoint of our Resort Reported EBITDA guidance as compared to our original guidance, demonstrating the resilience of our business model and the benefits of our advance commitment strategy. The update to guidance is primarily driven by the strong demand from destination guests at our western U.S. resorts, particularly with regard to lift ticket sales, that we expect will continue through the remainder of the season and the contribution from the Seven Springs Resorts. Additionally, our Lodging business is expected to outperform our original expectations in the remainder of the year with a strong outlook on both occupancy and ADR across our properties and the addition of the Seven Springs Resorts. The outperformance is partially offset by the challenging U.S. destination and international visitation trends at Whistler Blackcomb, the $20 million investment in front-line staff bonuses, increased wages for our summer operations and the inclusion of an estimated $6 million in acquisition and integration related expenses specific to the Seven Springs Resorts. We now expect net income attributable to Vail Resorts, Inc. for fiscal 2022 to be between $304 million and $350 million, and Resort Reported EBITDA for fiscal 2022 to be between $813 million and $837 million. We estimate Resort EBITDA Margin for fiscal 2022 to be approximately 32.9%, using the midpoint of the guidance range. The updated outlook for fiscal year 2022 assumes normal conditions and operations across our resorts for the remainder of the ski season and no incremental travel or operating restrictions associated with COVID-19 that could negatively impact our results, including for our Australian resorts in the fourth quarter. The guidance assumes an exchange rate of $0.79 between the Canadian Dollar and U.S. Dollar related to the operations of Whistler Blackcomb in Canada and an exchange rate of $0.72 between the Australian Dollar and U.S. Dollar related to the operations of Perisher, Falls Creek and Hotham in Australia." Commenting on the outlook for fiscal 2022, Lynch said, "There are a number of dynamics related to COVID-19 and unusual weather that are negatively impacting fiscal 2022 that are important to highlight as we begin to plan for fiscal 2023. All of the estimates below assume normal conditions throughout our ski seasons, continued strength in consumer demand, consistent economic dynamics relative to what exists today and no material ongoing impacts from COVID-19. Travel trends at Whistler Blackcomb, our Australian resorts and our group business were all materially, negatively impacted by COVID-19 in fiscal 2022, and early season results across our resorts were depressed with challenging snowfall and conditions. Returning to normalized levels would result in estimated incremental Resort Reported EBITDA of approximately $100 million in fiscal 2022; The Seven Springs Resorts did not have a full year of operating results, and was impacted by acquisition and integration related expenses. Full year results with no acquisition or integration related expenses would result in estimated incremental Resort Reported EBITDA of approximately $7 million in fiscal 2022; Our ancillary businesses were capacity constrained in fiscal 2022 by staffing and, in the case of dining, by operational restrictions associated with COVID-19. Returning our ancillary business to normalized levels would result in estimated incremental Resort Reported EBITDA of approximately $75 million in fiscal 2022, which includes the incremental revenue and operating expense associated with normal capacity but excludes incremental labor expense. The normalized labor expense for the ancillary businesses is included in the approximate $175 million labor investment. Offsetting the estimated $182 million of expected favorable Resort Reported EBITDA impact from returning the business to normal levels noted above relative to projected fiscal 2022 results is the approximate $175 million labor increase from fiscal 2022 to fiscal 2023 that is expected to be necessary to return the Company to normal staffing levels given the staffing shortages in fiscal 2022 and the current labor market dynamics in our resort communities. The estimates above do not take into account any fiscal 2023 projections for volume, price or expense growth, which will be evaluated and incorporated in our full year fiscal 2023 guidance that we plan to outline in September 2022. The following table reflects the forecasted guidance range for the Company's fiscal year ending July 31, 2022, for Reported EBITDA (after stock-based compensation expense) and reconciles such Reported EBITDA guidance to net income attributable to Vail Resorts, Inc. Fiscal 2022 Guidance (In thousands) For the Year Ending July 31, 2022 (6) Low End High End Range Range Net income attributable to Vail Resorts, Inc. $                304,000 $                350,000 Net income attributable to noncontrolling interests 21,000 15,000 Net income 325,000 365,000 Provision for income taxes (1) 67,000 76,000 Income before provision for income taxes 392,000 441,000 Depreciation and amortization 254,000 248,000 Interest expense, net 149,000 143,000 Other (2) 13,000 6,000 Total Reported EBITDA $                808,000 $                838,000 Mountain Reported EBITDA (3) $                783,000 $                807,000 Lodging Reported EBITDA (4) 28,000 32,000 Resort Reported EBITDA (5) 813,000 837,000 Real Estate Reported EBITDA (5,000) 1,000 Total Reported EBITDA $                808,000 $                838,000 (1) The provision for income taxes may be impacted by excess tax benefits primarily resulting from vesting and exercises of equity awards. Our estimated provision for income taxes does not include the impact, if any, of unknown future exercises of employee equity awards, which could have a material impact given that a significant portion of our awards are in-the-money. (2) Our guidance includes certain known changes in the fair value of the contingent consideration based solely on the passage of time and resulting impact on present value. Guidance excludes any change based upon, among other things, financial projections including long-term growth rates for Park City, which such change may be material. Separately, the intercompany loan associated with the Whistler Blackcomb transaction requires foreign currency remeasurement to Canadian dollars, the functional currency of Whistler Blackcomb. Our guidance excludes any forward looking change related to foreign currency gains or losses on the intercompany loans, which such change may be material. (3) Mountain Reported EBITDA also includes approximately $21 million of stock-based compensation. (4) Lodging Reported EBITDA also includes approximately $4 million of stock-based compensation. (5) The Company provides Reported EBITDA ranges for the Mountain and Lodging segments, as well as for the two combined. The low and high of the expected ranges provided for the Mountain and Lodging segments, while possible, do not sum to the high or low end of the Resort Reported EBITDA range provided because we do not expect or assume that we will hit the low or high end of both ranges. (6) Guidance estimates are predicated on an exchange rate of $0.79 between the Canadian Dollar and U.S. Dollar, related to the operations of Whistler Blackcomb in Canada and an exchange rate of $0.72 between the Australian Dollar and U.S. Dollar, related to the operations of our Australian ski areas. Earnings Conference Call The Company will conduct a conference call today at 5:00 p.m. eastern time to discuss the financial results. The call will be webcast and can be accessed at www.vailresorts.com in the Investor Relations section, or dial (800) 289-0720 (U.S. and Canada) or (323) 701-0160 (international). A replay of the conference call will be available two hours following the conclusion of the conference call through March 28, 2022, at 8:00 p.m. eastern time. To access the replay, dial (888) 203-1112 (U.S. and Canada) or (719) 457-0820 (international), pass code 9288951. The conference call will also be archived at www.vailresorts.com. About Vail Resorts, Inc. (NYSE:MTN) Vail Resorts, Inc., through its subsidiaries, is the leading global mountain resort operator. Vail Resorts' subsidiaries operate 40 destination mountain resorts and regional ski areas, including Vail, Beaver Creek,.....»»

Category: earningsSource: benzingaMar 14th, 2022

Hudson Valley Property Group Closes on $190M in Affordable Housing preservation deals for 748 NYC apartments

Today, Hudson Valley Property Group (HVPG) announced the closing of two preservation transactions across three multifamily properties – the first at Keith Plaza (2475 Southern Boulevard, Bronx, NY) and Kelly Towers (2405 Southern Boulevard, Bronx, NY), and the second at Los Tres Unidos Apartments (1680 Madison Avenue, New York, NY). HVPG will... The post Hudson Valley Property Group Closes on $190M in Affordable Housing preservation deals for 748 NYC apartments appeared first on Real Estate Weekly. Today, Hudson Valley Property Group (HVPG) announced the closing of two preservation transactions across three multifamily properties – the first at Keith Plaza (2475 Southern Boulevard, Bronx, NY) and Kelly Towers (2405 Southern Boulevard, Bronx, NY), and the second at Los Tres Unidos Apartments (1680 Madison Avenue, New York, NY). HVPG will preserve the 748 apartments at the three properties as long-term affordable housing with a total recapitalization value of $190 million. The deals include upgrades and renovations for each property and the preservation process will not displace any tenants. “In high-cost markets like New York, it is essential to ensure housing stays affordable across a broad spectrum of incomes,” said Jason Bordainick, Managing Partner and Co-Founder of HVPG.  “This ensures families can build strong, lasting communities and the city can attract and maintain the vitality and diversity that make it so special. We thank our partners at the City, as well as HDC and HPD leadership, for their continued support of our preservation efforts by providing the tools to help these homes remain high-quality, affordable housing for many years to come.” Originally acquired by HVPG and partners in 2015, Keith Plaza and Kelly Towers comprise 311 and 302 units, respectively, all originally constructed in 1975 under the Mitchell Lama Housing Program. The properties provide homes for low- and moderate-income families and seniors. The $104.9 million recapitalization enables the Hudson Valley Preservation Fund II (HVPFII), HVPG’s real estate private equity fund, to deploy equity and additional debt financing secured through the New York City Housing Development Corporation (HDC).  As a result, HVPG will be able to extend the existing affordability restrictions at the property by 15 years.  The recapitalization also allows for Phase II of the $20M+ renovation to commence.  Phase II focuses on improvements that will enhance the overall resident experience, including free WiFi and indoor and outdoor community spaces. The outdoor spaces are highlighted by a transformative landscaped terrace with lounge seating and an elevated, fresh-air activity area. Existing partners HVPG and Phoenix Realty Group (PRG) will remain in place and HVPF II will enter the new purchasing partnership. Both properties are subject to a Department of Housing and Urban Development (HUD) Section 236 Agreement, and 282 apartments at Keith Plaza are subject to a HUD Rental Assistance Program (RAP) contract. At Kelly Towers, 268 apartments benefit from tenant-based Section 8 rental assistance vouchers. “PRG, as part of its affordable housing business, is pleased to be part of the team that has both previously enhanced the properties with the Phase I improvements and plans to enhance with the Phase II improvements,” said Ron Orgel, Managing Director, Principal and co-Founder at PRG.   “The challenges of the COVID-19 pandemic have impacted all New Yorkers and together with our partners, we are excited to continue to preserve these properties, meet the needs of the residents by offering high quality, affordable housing and enhance the overall experience for the families and seniors that call Keith Plaza and Kelly Towers home.” “The recapitalization of Keith Plaza and Kelly Towers will extend affordability another 15 years, while funding important upgrades and renovations throughout both properties,” said HDC President Eric Enderlin. “This latest preservation effort reaffirms our commitment to the residents of Keith Plaza and Kelly Towers and is a victory for our city as we work to protect the affordability and quality of our Mitchell-Lama housing stock.” Los Tres Unidos Apartments (Los Tres) comprises 135 units and was originally acquired by HVPG and its partners in 2017 when one of the original owners – a local Harlem not-for-profit organization, Nuevo El Barrio para la Rehabilitacion de la Vivienda y la Economia (NERVE) – was looking for a partner with affordable housing preservation experience and capital to help them retain control of their community asset and invest further into improving the property. Now, five years later, a $85.1 million preservation deal provides long-term capital for additional property improvements, including sidewalk and ground repairs, roof replacement, and free WiFi as a property-wide tenant amenity, while preserving the affordability requirements. Existing partners HVPG, NERVE, and NCV Capital Partners will remain in place, and Nuveen, an impact investor aligned with HVPG’s mission to provide and preserve quality affordable housing, will enter the partnership, investing significant capital alongside HVPG’s fund (HVPF II) to support the long-term preservation plan. All of the apartments at Los Tres are subject to a HUD Section 8 contract and Article XI tax abatement regulatory agreement with the New York City Department of Housing Preservation and Development (HPD). “Nuveen’s business plan includes the implementation of a sustainable, social impact program for the residents of Los Tres to promote health and wellness and financial empowerment to achieve better outcomes with a focus on closing the wealth gap,” said Pamela West, Managing Director of Nuveen’s Real Estate Impact Investing group. “We strongly believe our long-term collective ownership can deliver a positive impact while preserving and maintaining quality housing for this community.”  “NERVE continues to provide low-income housing and housing preservation for our community of El Barrio/East Harlem,” added Robert Anazagasti, President and General Manager of NERVE Inc. “It took quick action and swift insight to complete the initial acquisition of Los Tres Unidos Apartments and we jumped at the opportunity to work in the instrumental partnership of HVPG,” said Keith Gordon, Managing Partner of NCV Capital Partners. “NCV Capital’s goal is to preserve the identities of these rich and historic communities and safeguard residents who rely on affordable housing from rent hikes. Through this carefully crafted team of developers and partners, we are certain these goals will be reached.”  The post Hudson Valley Property Group Closes on $190M in Affordable Housing preservation deals for 748 NYC apartments appeared first on Real Estate Weekly......»»

Category: realestateSource: realestateweeklyMar 10th, 2022

Marriott (MAR) Boosts Luxury Collection Line-up in Australia

Marriott's (MAR) Luxury Collection Hotels & Resorts unveils its first property in Australia with the opening of The Tasman, a Luxury Collection Hotel, Hobart. Marriott International, Inc. MAR recently announced the addition of The Tasman, a Luxury Collection Hotel, Hobart in Australia, to its Luxury Collection portfolio. This marks the brand’s first property in the region.Located on the island state of Tasmania (within the restored heritage area of Parliament Square), the property comprises 152 guest rooms and suites with amenities like a fitness center, dining spaces, lounge and event spaces (of 769 square meters). The property is in proximity to several leisure attractions such as the Salamanca Markets, St. David's Park as well as the historic Sullivan's Cove.Concerning the opening, Rajeev Menon, president, Asia Pacific (excluding Greater China), Marriott, stated, "This marks a new milestone in the growth of The Luxury Collection and further diversifies our growing collection of hotels in the world's most desirable locations. We look forward to welcoming guests to experience this wonderful city."Focus on ExpansionMarriott plans to significantly expand its global portfolio of luxury and lifestyle brands. At the end of third-quarter 2021, Marriott's development pipeline totaled nearly 2,769 hotels, with approximately 477,000 rooms. Nearly 206,000 rooms were under construction. During the third quarter, the company added 114 new properties (17,456 rooms) to its worldwide lodging portfolio.Moving ahead, the company plans to open luxury hotels in iconic as well as developing destinations from Mexico to Portugal and Australia to South Korea. The hotel company is also trying to strengthen its presence outside the United States, especially in Asia, Latin America, Middle East and Africa. The company’s European pipeline has grown consistently in the recent past that is expected to continue, going forward.Price PerformanceImage Source: Zacks Investment ResearchComing to price performance, shares of Marriott have gained 18.5% in the past year compared with the industry’s 10.9% growth. The company is benefiting from its focus on expansion initiatives, digital innovation and loyalty programs. The company witnessed improved occupancies in Europe, owing to the reopening of international borders and easing of travel restrictions. Marriott is consistently trying to expand its presence worldwide and capitalize on the demand for hotels in international markets.However, a resurgence in coronavirus cases in several parts of the world might hurt the company’s performance. Although RevPAR is improving sequentially, it is still well below the pre-pandemic level. Earnings estimates for 2022 have declined in the past 30 days, depicting analysts’ concern regarding the stock’s growth potential.Zacks Rank and Stocks to ConsiderCurrently, Marriott carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 (Strong Buy) Rank stocks here.Some better-ranked stocks in the Consumer Discretionary sector include Hilton Grand Vacations Inc. HGV, Bluegreen Vacations Holding Corporation BVH and Camping World Holdings, Inc. CWH.Hilton Grand Vacations sports a Zacks Rank #1. The company has a trailing four-quarter earnings surprise of 411.1%, on average. Shares of the company have increased 45.9% so far this year.The Zacks Consensus Estimate for Hilton Grand Vacations’ current financial-year sales and earnings per share (EPS) suggests growth of 189.5% and 158.1%, respectively, from the year-ago period’s levels.Bluegreen Vacations flaunts a Zacks Rank #1. The company has a trailing four-quarter earnings surprise of 695%, on average. Shares of the company have surged 131.6% so far this year.The Zacks Consensus Estimate for Bluegreen Vacations’ current financial-year sales and EPS indicates a rise of 27.5% and 199.3%, respectively, from the year-ago period’s levels.Camping World carries a Zacks Rank #2 (Buy). The company benefits from the launch of a fresh peer-to-peer RV rental marketplace and a mobile service marketplace. It has been investing heavily in product development.Camping World has a trailing four-quarter earnings surprise of 70.9%, on average. Shares of the company have appreciated 43.2% so far this year. The Zacks Consensus Estimate for CWH’s financial-year sales and EPS suggests growth of 25.9% and 80.1%, respectively, from the year-ago period’s levels.Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Marriott International, Inc. (MAR): Free Stock Analysis Report Camping World (CWH): Free Stock Analysis Report Hilton Grand Vacations Inc. (HGV): Free Stock Analysis Report Bluegreen Vacations Holding Corporation (BVH): Free Stock Analysis Report To read this article on Zacks.com click here. Zacks Investment Research.....»»

Category: topSource: zacksDec 21st, 2021

Marriott (MAR) Plans to Expand Luxury Hotels Footprint in 2022

Marriott (MAR) is consistently trying to expand its worldwide presence and capitalize on the demand for hotels in international markets. Marriott International, Inc. MAR is committed to strengthening its position in the hospitality industry through expansion. Progressing along such line, the company announced that it expects to debut more than 30 luxury hotels in 2022.Marriot, with more than 460 landmark luxury hotels as well as resorts in 68 countries and territories, intends to expand its luxury footprint with approximately 190 properties in the development pipeline, which includes the 30 hotels anticipated to open in 2022. The company will open luxury hotels in iconic as well as developing destinations from Mexico to Portugal and Australia to South Korea.The company stated that The Ritz-Carlton brand continues to drive growth and set the standard for luxury hospitality. In 2021, the brand was introduced in Maldives, Turks & Caicos and Mexico City. In 2022, the brand is slated to expand its footprint in Arizona with The Ritz-Carlton Paradise Valley, The Palmeraie as well as in New York City. The Ritz-Carlton, Melbourne, is likely to increase in its presence in Australia.The company stated that it expects to open The St. Regis Marsa Arabia Island, The Pearl in Qatar. In 2022, St. Regis is slated to debut in Chicago. In 2021, W Hotels expanded its presence to Nashville, Osaka, Philadelphia, Melbourne, Xiamen and Rome. In 2022, W Hotel is slated to open in Algarve, Sydney, Dubai and Toronto.Chris Gabaldon, senior vice president, Luxury Brands, Marriott International, stated, “From the world's most desirable destinations to undiscovered gems, we strive to go beyond offering moments of transformation for our guests and hope to create experiences that will inspire a newfound sense of personal wellbeing and joy.”Shares of Marriott have gained 22.3% in the past year compared with the industry’s growth of 15.1%.Image Source: Zacks Investment ResearchExpansions are Major Growth DriversThe Zacks Rank #3 (Hold) company is consistently trying to expand worldwide presence and capitalize on the demand for hotels in international markets. Moving ahead, the company plans to significantly expand the global portfolio of luxury and lifestyle brands.In September, the company stated that it is planning to add more than 2,700 rooms in India, Bhutan, Bangladesh, Sri Lanka, Maldives and Nepal. Marriot, which has the largest number of rooms in South Asia, continues to anticipate robust growth with new signings.In India, Marriott is planning to open W Jaipur, JW Marriott Chennai ECR Resort & Spa, JW Marriott Agra Resort & Spa, JW Marriott Goa and JW Marriott Shimla Resort & Spa. The company's Select Brands is expecting to open Courtyard by Marriott Gorakhpur, Courtyard by Marriott Tiruchirappalli, Courtyard by Marriott Goa Arpora and Courtyard by Marriott Ranchi in the next five years. It will also debut Moxy Mumbai Andheri West in 2023.The company’s premium brands in South Asia are likely to witness growth with the opening of Katra Marriott Resort & Spa in India, the Le Meridien Kathmandu and Bhaluka Marriott Hotel in Bangladesh.At the end of third-quarter 2021, Marriott's development pipeline totaled nearly 2,769 hotels, with approximately 477,000 rooms. Nearly 206,000 rooms were under construction. During third-quarter 2021, the company added 114 new properties (17,456 rooms) to its worldwide lodging portfolio.Key PicksSome better-ranked stocks in the Consumer Discretionary sector include Hilton Grand Vacations Inc. HGV, Bluegreen Vacations Holding Corporation BVH and Camping World Holdings, Inc. CWH.Hilton Grand Vacations sports a Zacks Rank #1 (Strong Buy). The company has a trailing four-quarter earnings surprise of 411.1%, on average. Shares of the company have jumped 14% in the past three months. You can see the complete list of today’s Zacks #1 Rank stocks here.The Zacks Consensus Estimate for Hilton Grand Vacations’ current financial-year sales and earnings per share (EPS) suggests growth of 222.1% and 153%, respectively, from the year-ago period’s levels.Bluegreen Vacations flaunts a Zacks Rank #1. The company has a trailing four-quarter earnings surprise of 695%, on average. Shares of the company have surged 35.5% in the past three months.The Zacks Consensus Estimate for Bluegreen Vacations' current financial year sales and EPS indicates growth of 27.5% and 199.3%, respectively, from the year-ago period’s levels.Camping World carries a Zacks Rank #2 (Buy). The company is benefiting from the launch of a new peer-to-peer RV rental marketplace and a mobile service marketplace. It has been investing heavily in product development.Camping World has a trailing four-quarter earnings surprise of 70.9%, on average. Shares of the company have appreciated 5.4% in the past three months. The Zacks Consensus Estimate for CWH’s current financial year sales and EPS suggests a rise of 25.9% and 77.6%, respectively, from the year-ago period’s levels. 5 Stocks Set to Double Each was handpicked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2021. Previous recommendations have soared +143.0%, +175.9%, +498.3% and +673.0%. Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.Today, See These 5 Potential Home Runs >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Marriott International, Inc. (MAR): Free Stock Analysis Report Camping World (CWH): Free Stock Analysis Report Hilton Grand Vacations Inc. (HGV): Free Stock Analysis Report Bluegreen Vacations Holding Corporation (BVH): Free Stock Analysis Report To read this article on Zacks.com click here......»»

Category: topSource: zacksDec 10th, 2021

The New Roster: What’s Happening With The Major Names In Hospitality & Real Estate

It was right around this time last year when Airbnb made their debut on the public markets and started trading on the Nasdaq at a higher-than-expected $146 per share. And the last 12 months have seen no shortage of attention—whether intellectual or financial—paid toward the short-term rental space. For Airbnb, 2021 brought their ‘best quarter […] It was right around this time last year when Airbnb made their debut on the public markets and started trading on the Nasdaq at a higher-than-expected $146 per share. And the last 12 months have seen no shortage of attention—whether intellectual or financial—paid toward the short-term rental space. For Airbnb, 2021 brought their ‘best quarter ever,’ shattering revenue growth records 36% over their prior heights. High claims by Brian Chesky back in May expecting the ‘biggest travel rebound in a century’ certainly don’t seem to have been overinflated. In their most recent earnings call, Chesky cited an additional 40% increase in bookings following on the heels of Biden’s decision to resume international travel. [soros] Q3 2021 hedge fund letters, conferences and more But Airbnb isn’t the only household name that’s turning heads and making headlines in the non-traditional accommodations space. Quickly becoming one of the best post-COVID asset classes, hosts have proliferated, occupancy rates have surged, and institutional activity has begun. With more investor capital, unseen and sustained risk-reward, and new-to-market companies flocking to the short-term rental space, it’s worth taking a look back—and a look forward—on the market’s major plays. Why Zillow Offers Flopped (And What They Could’ve Done) No company, small or global, has made it to the other side of the COVID-era without pivoting in one form or another. But Zillow Group Inc (NASDAQ:Z)’s most recent pivot was a topic of attention, potentially because of what the change in direction could mean for other active investors and groups in the space. On November 2nd, Zillow announced the official closure of its iBuyer wing, which operated under the name Zillow Offers. The company spokesperson announced that by exiting Offers, the company would be eliminating 25% of its workforce, and recovering some much-needed stability on their bottom line. Zillow’s CEO, Rich Barton, was forthcoming with the flaws in the company’s ability to accurately forecast home prices. With a fast-acquired portfolio of high-cost homes, the lack of prediction caused too much volatility to the company’s balance sheet. In Q3 of 2021, Zillow’s homes segment, comprised mostly of Offers, suffered the company a $422 million loss. The home-flipping aspect of Offers ran into trouble, like the rest of the construction market, with the labor and supply constraints that remain a bottleneck in the aftermath of the pandemic. But the larger Offers failure speaks to a common investor pain point—the perceived impossibility of price forecasting among the many crosswinds of the rental real estate space. Here again, short-term rentals (STRs) have an advantage over long-lease or for-sale properties; with frequent liquidity events and a closer connection to a competitive market, earnings and occupancy for short-term rentals are far more easily quantified. Investors can now leverage a real-time Airbnb calculator to do the proper due diligence and understand the earning potential of their investment based on comparable properties. Zillow’s recent dead-end turn confirms what most investors already knew: bad investments come from bad guesses. In the short-term rental niche, there’s no longer any reason to venture a guess. Sonder and Vacasa Prepare to IPO As Zillow was announcing Offers’ closing, a handful of well-known short-term rental companies were announcing their public debuts. Sonder, a San Francisco based apartment-hotel hospitality company, delayed their plans to IPO until January of 2022. Following their decision to merge with a special purpose acquisition company (SPAC) backed by Alec Gores and Dean Metropoulus, the company has secured a valuation of $2.2 billion. Sonder’s northern neighbors, Portland-based Vacasa, is also planning a public deal that will value the company at roughly $4.5 billion following the same SPAC strategy. Having seen continuous success since their launch in 2009, the vacation rental management company is optimistic on their short-term outlook. Vacasa has projected $750 million in revenue for 2021 and a projected $1+ billion to come in 2023. Regulatory filings on both companies will prove that the storm of COVID-19 didn’t exactly pass them by unscathed, which in turn makes their impending IPO all the more notable. The confidence on the part of these companies and many others stands firm in the direction that the short-term rental approach will remain a winning strategy in the after-COVID market. With a return to international travel and an enduring preference for personalized and local accommodations, short-term rentals are capturing a great amount of traveler demand. And as more professionals continue to take work with them on the road, the following years have the potential to be the most lucrative period in STR history. On the Ground: Signs of More Institutional Activity in the New Post-COVID Niche Zillow’s tipping point and the demonstrable success of the soon-to-IPO Sonder and Vacasa are three important nodes of an ongoing conversation around the unique and reliable offerings of the STR niche. Because investors are better able to forecast and rely on returns from well-calibrated and constantly-updated consumer demand, short term rentals are bringing new strength to the already strong and traditionally low-risk investment vehicle that is real estate. And because all investors faithfully follow the yield, there’s been a resulting uptick in early institutional activity within the STR space. Halfway through the year, Ohio-based investment firm ReAlpha announced a $1.5 billion investment to buy 5,000 properties to operate as short-term rentals. The ability to make a business out of shorter stays is beginning to be considered ‘inevitable’ by experts in the space; family offices and investment groups are increasingly recognizing the promises, unwavering to date, of this new post-COVID niche. The transparency movement—making available cost-free access to real time data regarding competitive property performance—is only adding to the STR infrastructure. Tracking the key players in the space, it’s clear that the short-term rental niche is transforming into a reliable asset class, matching the offerings of traditional vehicles like yields and bonds, but with lower risk, better returns, and much better stories earned in the process. Updated on Dec 9, 2021, 1:59 pm (function() { var sc = document.createElement("script"); sc.type = "text/javascript"; sc.async = true;sc.src = "//mixi.media/data/js/95481.js"; sc.charset = "utf-8";var s = document.getElementsByTagName("script")[0]; s.parentNode.insertBefore(sc, s); }()); window._F20 = window._F20 || []; _F20.push({container: 'F20WidgetContainer', placement: '', count: 3}); _F20.push({finish: true});.....»»

Category: blogSource: valuewalkDec 9th, 2021

Bonhoeffer 3Q21 Commentary: Case Study – Millicom

Bonhoeffer Capital Management commentary for the third quarter ended September 2021, providing a case study for Millicom International Cellular SA (NASDAQ:TIGO). Q3 2021 hedge fund letters, conferences and more Dear Partner, The Bonhoeffer Fund returned -2.8% net of fees in the third quarter of 2021. In the same time period, the MSCI World ex-US, a […] Bonhoeffer Capital Management commentary for the third quarter ended September 2021, providing a case study for Millicom International Cellular SA (NASDAQ:TIGO). if (typeof jQuery == 'undefined') { document.write(''); } .first{clear:both;margin-left:0}.one-third{width:31.034482758621%;float:left;margin-left:3.448275862069%}.two-thirds{width:65.51724137931%;float:left}form.ebook-styles .af-element input{border:0;border-radius:0;padding:8px}form.ebook-styles .af-element{width:220px;float:left}form.ebook-styles .af-element.buttonContainer{width:115px;float:left;margin-left: 6px;}form.ebook-styles .af-element.buttonContainer input.submit{width:115px;padding:10px 6px 8px;text-transform:uppercase;border-radius:0;border:0;font-size:15px}form.ebook-styles .af-body.af-standards input.submit{width:115px}form.ebook-styles .af-element.privacyPolicy{width:100%;font-size:12px;margin:10px auto 0}form.ebook-styles .af-element.privacyPolicy p{font-size:11px;margin-bottom:0}form.ebook-styles .af-body input.text{height:40px;padding:2px 10px !important} form.ebook-styles .error, form.ebook-styles #error { color:#d00; } form.ebook-styles .formfields h1, form.ebook-styles .formfields #mg-logo, form.ebook-styles .formfields #mg-footer { display: none; } form.ebook-styles .formfields { font-size: 12px; } form.ebook-styles .formfields p { margin: 4px 0; } Get The Full Walter Schloss Series in PDF Get the entire 10-part series on Walter Schloss in PDF. Save it to your desktop, read it on your tablet, or email to your colleagues. (function($) {window.fnames = new Array(); window.ftypes = new Array();fnames[0]='EMAIL';ftypes[0]='email';}(jQuery));var $mcj = jQuery.noConflict(true); Q3 2021 hedge fund letters, conferences and more Dear Partner, The Bonhoeffer Fund returned -2.8% net of fees in the third quarter of 2021. In the same time period, the MSCI World ex-US, a broad-based index returned -0.7% and the DFA International Small Cap Value Fund, our closest benchmark, returned -2.5%. Year to date, the Bonhoeffer Fund has returned 22.9% net of fees. As of September 30, 2021, our securities have an average earnings/free cash flow yield of 14.3% and an average EV/EBITDA of 4.7. The DFA International Small Cap Value Fund had an average earnings yield of 11.1%. These multiples are lower than last quarter primarily due to increasing earnings and declining share prices. The difference between the portfolio’s market valuation and my estimate of intrinsic value is greater than 100%. I remain confident that the gap will close over time and the portfolio quality will continue to increase as we increase allocations to faster-growing firms. Bonhoeffer Fund Portfolio Overview Our investment universe has been extended beyond value-oriented special situations to include growthoriented firms using a value framework, including companies that generate growth through consolidation. There have been modest changes within the portfolio in the last quarter in line with our low historical turnover rates. We have sold Cambria Automotive which is in the process of being acquired and used the proceeds to increase our holdings in Asbury Automotive, Countryside Properties, and Millicom. As of September 30, 2021, our largest country exposures include: South Korea, United States, United Kingdom, Italy, South Africa, and Philippines. The largest industry exposures include: distribution, telecom/media, real estate/infrastructure, and consumer products. We added to some smaller positions within the portfolio and are investigating additional consolidation plays with modest valuations in industries that have nice returns on invested capital such as fiber rollouts, convenience stores, and IT services. Compound Mispricings (37% of Portfolio; Quarterly Average Performance -8%) Our Korean preferred stocks, the nonvoting share of Telecom Italia, Wilh. Wilhelmsen, and some HoldCos all feature characteristics of compound mispricings. The thesis for the closing of the voting, nonvoting, and holding company valuation gap includes evidence of better governance and liquidity. We are also looking for corporate actions such as spinoffs, sales, or holding company transactions and overall growth. Throughout the year, Net1 UEPS has been accumulating cash from the sale of its non-core assets including a Korean transaction processing network and its stake in a crypto bank. This cash, in addition to issuing some debt, was used to purchase Connect, a merchant transaction processor catering to small and medium businesses. This acquisition will complement its consumer fintech EasyPay transaction and ATM network and expand Net1 UEPS’s total addressable market to include small and midsized businesses and lead to profitability. The Korean preferred discounts in our portfolio are still large (25% to 73%). The trends of better governance and liquidity have reduced the discount in names like Samsung Electronics, and more preferred names trade at a premium to common shares. We continue to like the prospects for LG Corp preferred post LX Holdings spinoff from both a business and discount perspective. The current discount to NAV is 74% for the LG Corp preferred. In addition, this discount is based upon a base value of LG Corp with reasonable implied EV/EBITDA multiples of LG Corp subsidiaries of 4.7x for LG Electronics, 13.6x for LG Chemical (including LG’s EV battery division), and 16.7x for LG Household & Health Care. Public LBOs (37% of Portfolio; Quarterly Average Performance -1%) Our broadcast TV franchises, leasing, building products distributors, and roll-on/roll-off (RORO) shipping fall into this category. One trend I’ve noted in these firms is growth creation through acquisitions which provide synergies and operational leverage associated with vertical and horizontal consolidation and the subsequent repurchasing of shares with debt. The increased cash flow is used to pay the debt and the process is repeated. Millicom, this quarter’s case study, is a public LBO that has financed many of its investment opportunities with debt. The recently announced buyout of its Guatemalan JV partner illustrates this. The debt, when used in situations like this, has been paid down over time as Millicom generates a lot of free cash flow and can increase returns like leveraged rollups, as described below. Distribution Theme (41% of Portfolio; Quarterly Performance +3%) Our holdings in car and branded capital equipment dealerships, convenience stores, building product distributors, and capital equipment leasing firms all fall into the distribution theme. One of the main KPIs for dealerships and shopping is velocity or inventory turns. We own some of the highest-velocity dealerships in markets around the world. There have been challenges in some markets hit by COVID, like South Africa and Latin America; but there should be recovery now that vaccines have been approved and distributed. GS Retail, the second largest convenience store operator in Korea (with 14,600 convenience stores and 320 grocery stores), is the security we received for the buyout of GS Home Shopping. We have applied our growth methodology described in the last quarterly report. The following is a summary: The convenience store business is growing and consolidating worldwide. As a result of the acquisition, management is planning on using the younger customer data from GS Retail, the older customer data from GS Home Shopping, and the GS distribution network (42 logistics centers supporting convenience, grocery, and home shopping customers) to provide older and younger customers their products instore (convenience store) or next-day home delivery across Korea. Management expects 10% growth overall, composed of underlying convenience store growth of 4-5% and 5% from cross selling and digital commerce from the merger. Given the fixed costs in the convenience store network and distribution infrastructure, management expects cost synergies to generate net income margins of 5.0%. If these revenue and growth rates are realized, then a P/E closer to comparable convenience stores BGF Retail (Korea), Seven & I, and Alimentation Couche-Tard of 15-20x is not unreasonable. This range has significant upside from current P/E multiple of 5.9x and five-year forward P/E of 4.3x. Telecom/Transaction Processing Theme (36% of Portfolio; Quarterly Performance -2%) The increasing use of transaction processing in our firms’ markets and the rollout of 5G will provide growth opportunities. Given that most of these firms are holding companies and have multiple components of value (including real estate), the timeline for realization may be longer than for other firms. Telecom Italia continues to work with the Italian government and Fiber Corp to merge their telecommunications infrastructures together. Vivendi has called an emergency board meeting to ensure Telecom Italia will retain control of the combined telecommunication infrastructure after the merger. We view this action as a positive despite the decline in Telecom Italia’s share price. The updated sum-ofthe- parts analysis (as detailed in previous letters) implies an upside of 80–100%. In my opinion, much of the recent decline is due to concerns that Telecom Italia will give up control of the combined telecommunications infrastructure. Consumer Product Theme (10% of Portfolio; Quarterly Performance -7%) Our consumer product, tire, and beverage firms comprise this category. The defensive nature of these firms has led to lower-than-average performance due to the stronger performance from more recoverycorrelated names. One theme we have been examining is the increase in sales of adult products (tobacco, alcohol, and lottery) in convenience stores as other stores are removing these products from their product offerings. GS Retail is taking advantage of this trend in Korea. Real Estate/Construction Theme (23% of Portfolio; Quarterly Performance -3%) In my opinion, the pricing of our real estate holdings has been impacted by both a recession and the communist takeover in Hong Kong. The current cement and construction holdings (in US/Europe via BFS and Countryside and in Korea via Asia Cement) should do well as the world recovers from COVID shutdowns and governments start infrastructure programs. Asia Standard also declined during the quarter due to the concern over the decline in its Chinese real estate developer bond holdings. Asia Standard holds a large number of Chinese real estate developer bonds, including those of Evergrande and Kaisa. The Evergrande bonds have declined to about 20% of face value as of September 30 (they were at 40% of face value on July 31, 2021, the last market-to-market valuation date for Asia Standard’s bond portfolio) while the Kaisa bonds have declined to 85% of face value. I ran a stress test assuming a 25% decline in the bond portfolio from July 31, 2021. This is 2x the 13% decline in the portfolio from Evergrande and Kaisa bond prices between July 31, 2021, to September 30, 2021. The resulting NAV/share is $8.09 versus the $10.09 NAV as of July 31, 2021. The September 30 stock price of $0.85 is at a 91% discount to the stressed NAV and 92% to the July 31, 2021, NAV. Consolidation Frameworks In our Q1 letter, we described how we are examining growth opportunities associated with consolidation in fragmented industries. Growth from consolidation can be a resilient form of growth as it is dependent upon the availability of target firms and associated cost and revenue synergies versus overall market growth. When consolidation growth is combined with modest industry growth, some exciting growth can be realized. If the firms also exhibit operational leverage from economies of scale/scope, then the combined effect can be significant growth in earnings or free cash flows. The advantage of this type of growth is that it is realized over time and not recognized by the market in advance. This can be seen in the price charts of many of these firms moving from the lower left to the upper right over time as the growth is realized. Fragmented markets can have long runways associated with consolidation and economies of scale and scope which can lead to cash flow growth in excess of the market growth for many years. We try to identify these markets and firms that can ride the consolation wave over a long timeframe. Some of these firms have valuations reflecting some of the future growth and some have little to no premium reflecting future growth from consolidation. Currently, the internet (an innovation) is providing more consolidation via additional fragmentation of retail demand from offline, online, and omni-channel selling channels. An example is traditional auto dealers using an omni-channel sales approach and Carvana who is exclusively online. Bonhoeffer is looking for businesses that are adopting the innovation (internet distribution) which will enhance growth going forward but where it is not recognized by the market yet, as evidenced by the current stock price. Some analysts have developed useful frameworks to evaluate consolidation or serial acquirer situations. Scott Capital has developed a useful framework1 for categorizing consolidators, shown below: Scott has categorized these types of firms depending upon the level of target integration. Most of the firms we have been examining recently have been rollups (firms in the same industry) with scale-driven synergies and operational leverage. We also hold one platform (Wilh. Wilhelmsen) and one holding company (LG Corp). Another way to look at these firms is cross-sectionally based on total addressable market (TAM) size and integration of operations, as described by Canuck Analysts Substack2 below: Using this framework for our current areas of interest (rollups), I have been monitoring acquisition multiples in the car dealers (Asbury Automotive), local TV and radio firms (Gray Television), building supply distribution (Builders First Source), Latin American telecommunications (Millicom), cement firms (Asia Cement), equipment leasing firms (Ashtead), and network processing (Net 1 UEPS). In each of these segments, multiples have been modest. None of these firms have done international “diworsifying” deals to date and some have recently divested unrelated firms (Net 1 UEPS, Daelim Industrial and LG Corp). In each of these markets, the market share of the top firms is less than 10% except for GS Retail, where itself and FRB have a dominant share of 31% each, and Millicom, where it has a leading or number two position in eight of its nine markets where it competes. The small market shares provide a large runway for consolidation in its existing industry for years to come. Also, none have made international expansion into new markets outside their existing footprints. A return benchmark developed by the Canuck Analysts Substack3 is shown below: This framework, used in combination with calculating return on incremental capital, can illustrate where the invested capital returns can be modest. As an example, we will look at Asbury Automotive. Asbury’s returns on invested capital averaged 13%, and the return on equity averages 31% over the past 10 years plus an organic growth rate of 2 to 3% per year based upon US auto sales and maintenance service costs. This results in an ROIC plus ½ of annual organic growth of about 15%. The size of Asbury’s acquisitions has been about $1.4 billion over the past five years. Below is Asbury’s return on incremental invested capital over the past 10 years which has averaged in the upper teens during that period. For other serial acquirers like Ashtead, the organic growth rate is 6% and its ROICs over the past 10 years is 14% resulting in an ROIC plus ½ of annual organic growth of about 17%. The size of Ashtead’s acquisitions has been about $2.0 billion over the past five years. Conclusion As always, if you would like to discuss any of the philosophies or investments in deeper detail, then please do not hesitate to reach out. Until next quarter, thank you for your confidence in our work and have a safe and warm year-end holiday season. Warm Regards, Keith D. Smith, CFA Case Study: Millicom International Cellular SA (TIGO) Millicom International Cellular SA (NASDAQ:TIGO) provides mobile and broadband telecommunications services to consumers and businesses in Central America (Guatemala, Honduras, El Salvador, Nicaragua, Costa Rica, and Panama) and South America (Columbia, Bolivia, and Paraguay). TIGO provides legacy voice, wireless and data services, and fiber-based services to firms and individuals. Currently, TIGO has 43.1 million wireless subscribers, including 20.3 million 4G subscribers and 4.9 million home customers, including 8.4 million revenue generating units (RGUs) and 4.1 million broadband subscribers. In addition, TIGO’s network includes 5,400 points of presence and 300,000 business customers. TIGO is the number one or two broadband and wireless provider in eight of the nine markets in which TIGO competes. Recently, TIGO announced the purchase of its joint venture (JV) partner’s share of its JV in Guatemala for $2.2 billion. This transaction will be financed by debt and a shareholder friendly common stock rights offering. TIGO provides mobile money/banking services for five million customers in six countries. TIGO also has 10,000 towers and 13 data centers which can be sold and leased backed. TIGO is in the process of separating its towers and data centers (like Telefónica and América Móvil) and its mobile money/banking service to facilitate sales or investments by third parties. In 2017, TIGO sold 3,410 towers in Columbia, El Salvador, and Paraguay for $417 million or $122,287 per tower. Historically, TIGO operated in both Africa and Latin America. Over the past five years, TIGO has divested its African telecommunications assets and purchased additional assets in Latin America. TIGO’s network passes over 12.2 million homes (24% penetration of total homes) and covers 80% of mobile phones. The firm is in the midst of rolling out fiber to homes to provide broadband connectivity to Latin American customers. This rollout is being funded by cash flow from operations. The firm has been described as building a Charter Communications under a wireless Verizon umbrella. This is similar to our Consolidated Communications play with the additional benefit of having a wireless network and a mobile money business. In most countries in which TIGO operates, they have joint ventures or minority interest local partners. TIGO currently has an average high-speed internet (HSI) penetration rate (a take rate of HSI for homes passed) of about 39% across the countries it serves. This has increased by 1.4% since year-end 2020. To put this in context, most cable broadband penetrations are in the 50% plus range. In seven of the nine countries they serve, TIGO is the number one or two competitor in wireless and broadband in two-player markets (Guatemala, Honduras, El Salvador, Costa Rica, Panama, Bolivia, and Paraguay) and number three in two markets (Nicaragua and Costa Rica). The Q3 2021 mobile average revenue per RGU was $6.40 per month, and the broadband revenue per RGU was $28.10 per month. The largest shares of proportional EBITDA are from Guatemala (38%), Bolivia (11%), Paraguay (11%), Panama (10%), and Columbia (9%). In terms of regions, 70% of EBITDA is from Central America and 30% from South America. TIGO has developed a customer-focused culture at the corporate and country level using NPS as a metric which is collected and used as a management incentive to increase customer satisfaction. In addition, the countries that TIGO serves have stable currencies versus the US dollar. Since 2000, the EBITDA weighted average currency movements have been only 0.7% per year. Another positive trend is the movement of suppliers to US-based firms moving from China to a closer location with political and currency stability—Central America. If we look at the index of economic freedom for the Central American countries in which TIGO primarily operates, they have a moderately free ranking. For the subcategories most of interest to suppliers (tax burden and trade and business freedom), they all are ranked free or mostly free (highest ratings). Millicom and Fiber-optic Rollout The Latin American telecommunications services market is a local, fragmented market. Consolidation has occurred over the past 10 years amongst these local players, and the next generation of technology (fiber-optic connections) is being rolled out. Fiber-optic rollouts are generating organic growth and economies of scale with high incremental user profitability. Millicom has created economies of scale depending upon the geography of the acquired telecommunications firm. There is also the vertical integration across telecommunications services (like wireless, voice, data, cable, and hosting) in a given geography which can create additional economies of scale. With these rollouts, telecommunications companies compete with the local cable companies—and in some cases wireless providers—to provide HSI and other services to customers in their local footprints. Historically, telecommunications and cable firms have had poor customer service, as evidenced by low net promoter scores (NPSs). Keith Rabois, a founder of PayPal, has tweeted, “Formula for startup success: Find large highly fragmented industry w low NPS; vertically integrate a solution to simplify value product.” Part of simplifying the solution is providing multiple services and good customer service. The telecommunication services market fits this description. The new fiber rollouts are analogous to organic startups and thus can also be successful in the vertical integration into these markets. Business and Service Analysis One way to look at telecom business is to divide it into slowly growing (wireless) and quickly growing segments (HSI). The slower-growing wireless business is mature and is growing about 2% per year. The HSI business is growing at an 8% annual rate driven by fiber rollouts in TIGO’s countries. Millicom’s overall mix of wireless and HSI revenue is 33% HSI and 67% wireless, with 67% recurring subscription revenue (HSI and post-paid wireless) but varies by country. The current revenue growth rate is 4.3% and will increase to 5%, by the end of 10 years and the HSI/wireless mix approach 50%/50%. If we look at unit economics of the fiber rollout, it is also quite favorable. According to management, the estimated cost to pass each new customer is about $150; and the cost to connect a customer is $100. This is similar to the cost reported by Oi, a telecommunications firm rolling out a fiber-optic network in Brazil. If you have a final penetration rate of 45% using the current HSI monthly charge of $28/month, and a steady-state EBITDA margin of 45% (which management believes are both achievable at scale; the current margin is 40%), then the payback time is between six and seven years, and the unlevered IRR is 26% and a levered return of 52%. See Exhibit A for details. Latin America Broadband Telecommunications Market The broadband telecom business in Latin America is a fragmented market on an international basis and a concentrated market on a country-by-country basis. The market is a local market, so the smaller country markets only have a few competitors. This leads to less price competition for TIGO than in larger, more urban markets where there are more competitors. Gig speed internet and wireless are core infrastructure services that will be required in the internet service economy. Currently, broadband usage is growing at a 30-40%/year rate and is expected to increase going forward, as more bandwidthintensive applications are developed and rolled out over time. Since most of TIGO’s competition is from cable companies and incumbent telecom firms (that have low NPSs), TIGO has an opportunity to provide improved customer service versus the cable companies. This highlights the importance of the decentralized management system, incentivized and shareholding country managers, and including NPSs in management’s incentive compensation at the corporate and country levels. Of the other publicly traded Latin American telecommunications firms, TIGO has the largest potential to increase HSI organic revenue growth (by 8%) via a fiber rollout in its incumbent territories. This can be seen in the projections based upon the currently planned and financed fiber rollout shown in Exhibit B. The tilt toward the faster-growing Central American countries (which should get some opportunities to replace China as exporters to the US) versus the slower-growing South American countries will also add a nice tailwind. The countries TIGO services had an average real GDP growth rate of 3.2% per year over the past five years versus the overall 0.7% GDP growth rate for all of Latin America. Downside Protection TIGO has been reducing debt over the past few years with a current proportional debt/EBITDA of 2.7x and a goal of 2.0x. TIGO has a bond rating of Ba2 and yields 3.5% for five- to 10-year bonds. TIGO is in a defensive business—telecommunications services—which has a large amount of recurring revenue. HSI data revenues are increasing, while wireless revenues are increasing at a slower rate. See below for projections and Exhibit B for more detailed projections. Below is the proportional historical and projected revenue, EBITDA, and FCF since 2016 when the Guatemalan and Honduran JVs were deconsolidated. Management and Incentives One of the risks in emerging-markets investing is management, as they may have different incentives than those to which Western investors are accustomed. In this case, you have a management team based in the US (Miami) that has been historically influenced by the firm’s domicile, Sweden. TIGO is led by a former Liberty Latin America executive, Mauricio Ramos. He brings the Liberty Media playbook (a successful leveraged rollup strategy of cable-related properties and associated shareholder friendly corporate actions) to the markets that TIGO serves. TIGO is listed in Sweden and the United States and brings the corporate governance practices, capital allocation, and shareholder renumeration approaches to its operations throughout Latin America. In many countries, TIGO has local JV partners which provide TIGO with access to the local connections. TIGO has management incentives, including TIGO stock (with minimum levels for country managers) at both the corporate and country levels. The capital allocation is also done at both the corporate and country levels. This country-level capital allocation, incentives, and stock ownership is unusual for a Latin American company. The major categories of capital allocation for TIGO are: 1) purchasing minority interests from partners, 2) investing in the HSI broadband rollout described above, 3) selective acquisitions, 4) repurchasing shares, or 5) distributing dividends. Categories 1, 2, 3 and 4 have the most well-defined and highest returns and have been used by management in the past. In 2020, the CEO’s management compensation was 20% base salary and 80% incentive-based bonus, of which short-term incentive (STI) is 50% equity based (TIGO shares) and 50% cash based and long-term incentive (LTI) is 100% equity based (TIGO shares). The 2020 STI compensation was based on service revenue growth, EBITDA growth, operational cash flow growth, NPS, and other operational goals. The 2020 LTI compensation is based upon service and EBITDA growth and relative total shareholder return versus peers. The 2020 equity-based shares were issued at $38.09 per share, and the 2019 shares were issued at $42.70 per share. Overall, 700,000 shares were granted in 2020 (about 0.7% of shares outstanding per year). The management team owns 0.7% of TIGO common stock. TIGO has stock ownership guidelines of 5x the salary for the CEO, 3x for other senior managers, and 1x for country managers. Valuation The valuation of TIGO is an interesting exercise because its expected growth rate is accelerated by the fiber rollout and share buybacks described above. The implied growth using the Graham Formula, adjusted to today’s interest rates ((8.5 + 2g)*(4.4/AAA bond rate)) and the current P/E, is -1.8%, clearly implying that the market expects TIGO’s cash flows to continue to decline. Some benchmarks for growth are the projected sales growth rates of 4.5% per year (based upon the fiber rollout), an EBITDA growth rate of 6% per year, and an adjusted free cash flow growth of 12%. The question is whether this growth rate is sustainable over the next seven years. Given the key penetration, margin, investment, and timing assumptions in the projection model, I believe it is. TIGO is the only Latin American publicly traded telecom firm that has a rollout of this magnitude (adding 18% to revenue) scheduled over the next five to seven years. One firm that also has a Latin American footprint is Liberty Latin America (LILA). LILA has grown revenues and EBITDA at about 8% per year since 2015. The EBITDA margin is similar to TIGO, but historically the conversion to FCF from EBITDA was 50% less than TIGO—25% for TIGO and closer to 12% for LILA. The current FCF multiple of LILA is about 16x. If that multiple is applied to TIGO’s FCF, it yields a value of $74 per share, which I believe is a reasonable 12-month target. If, over the five to seven years, a 12% FCF growth is attained, then the earnings will be $8.19. Applying a 23.8x multiple to these earnings (implying a 4% growth rate over the subsequent seven years) means a value of $195 per share is obtained. Another way to look at valuation is on an enterprise basis. If we value TIGO on a forward EBITDA basis of 9x EBITDA (the current multiple of cable overbuilder WOW!), then the resulting value is $200 per share. If we consider both benchmarks, then a $200 price target is not unreasonable. See Exhibit B for details. This results in a five-year IRR of about 42%. In addition to the core assets, TIGO has about 10,000 towers (with an additional 2,000 under construction), 13 data centers, and a mobile banking division. According to management, these non-core assets are being prepared for either sale-leasebacks or investments by third parties. The estimated value of the towers and data centers is about $2 billion—$1.1 billion for the towers and $900 million for the data centers. The tower valuation of $1.4 billion is based upon an estimated value per tower of $120k based upon tower transaction values (TIGO’s historic transactions averaged $122k/tower and a 2021 Telxius transaction was $110k/tower, 9,300 Latin American towers for €900 million) and Telesites’s current valuation of $252k/tower times 12,000 towers. The data center valuation of $750 million is based upon an estimated value per data center of $58k which is based upon Latin American data center transactions (Anxel data centers were purchase by Equinix for $58k/center, three data centers for $175 million, and Telefónica data centers were purchased by Asterion for $58k/data center, nine data centers for €550 million) times 13 data center. Adding together the towers and data centers, the total valuation of these assets is $2.1 billion. The mobile banking division (TIGO Money) can be valued using a range of values based upon the value of African mobile banking firms and Latin American neobank firms. The mobile banking business had 5 million customers and 48 million transactions in 2020. If we use African mobile banking transactions (20 million Airtel customers were purchased for $2.6 billion and 46 million MTN customers were purchased for $5.0 billion), the average value per user is $121. If we use $121/customer times 5 million transactions, it implies a $600 million value for TIGO Money. If we use recent Latin American neobank transactions (40 million Nubank (Brazil) customers were purchased for a $30 billion valuation and 3.5 million Ualá (Argentina) customers were purchased for a $2.45 billion valuation), the average value per user is $750. If we use the midpoint of the African mobile banking and Latin American neobanks of $435, we get $435 times 5 million customers, and the resulting value is $2.2 billion. This is additional value of $2.7 to $4.2 billion ($27 to $42 per share) in addition to the core business value estimated above. So, for example, if you assume a 12% FCF growth rate and the value of non-core assets, you get a total value of $255 to $270 per share. Comparables Given the fiber rollout and the size of TIGO, the comparable firms include US and Italian small-cap telecommunications firms. One of the larger issues in Latin American firms versus developed markets is currency risk, however; as described above, TIGO’s currency risk is similar to developed markets’ risk. The following are the comparable firms in the US and Italian telecommunications markets. The smaller Italian telecom firms have smaller floats than the US firms and are majority controlled (70%+) by the original owners. There have been some private equity acquisitions in the US rural local exchange carriers (RLEC) space, namely Cincinnati Bell and Alaska Communications. These firms have a similar dynamic associated with their respective fiber rollouts, and private equity firms have invested in these firms for similar reasons that make CNSL attractive. Cincinnati Bell has been purchased by the private equity firm Macquarie Infrastructure Partners, which outbid an original offer from Brookfield Asset Management. Alaska Communications is also in the process of being purchased by ATN International and Freedom 3 Capital. The EV/EBITDA paid by these buyers was 6.5 to 6.9x EBITDA for assets with lower margins than the current price of TIGO (4.6x EBITDA). Benchmarking In comparison to other US and Italian firms, TIGO has above-average (but good) FCF ROE and a high EBITDA margin. With TIGO’s fiber rollout and customer take-up, the fixed asset turns and ROEs should increase. With these favorable operational metrics, TIGO has one of the lowest current and 2021 P/FCF ratios of either group. Risks The primary risks to achieving a target valuation of $72 per share for TIGO include: a lower-than-expected broadband penetration of fiber rollout communities; and a quicker-than-expected decline in the legacy telecom lines. Potential Upside/Catalysts The primary upsides/catalysts include: faster-than-expected penetration of uptake of broadband services; operational leverage due to economies of scale; and re-rating to reflect higher growth. Timeline/Investment Horizon The short-term target is $72, which is more than double today’s price. I think the investment thesis can play out over the next three to five years. By that time, TIGO’s net income and earnings should have appreciated by 75%, and the fair multiple could triple with a 4% increased growth rate. If that is the case, then TIGO will attain a 6.7x return to $235 over five years or 46% annualized. This is similar to a “Davis double,” where both underlying earnings increase along with the fair value multiple. Updated on Dec 1, 2021, 1:24 pm (function() { var sc = document.createElement("script"); sc.type = "text/javascript"; sc.async = true;sc.src = "//mixi.media/data/js/95481.js"; sc.charset = "utf-8";var s = document.getElementsByTagName("script")[0]; s.parentNode.insertBefore(sc, s); }()); window._F20 = window._F20 || []; _F20.push({container: 'F20WidgetContainer', placement: '', count: 3}); _F20.push({finish: true});.....»»

Category: blogSource: valuewalkDec 1st, 2021

Underwriting: The risk-assessment process used in everything from IPOs to life insurance

Underwriting is a process in which an individual or an organization takes on financial risk for a fee, typically on a loan, insurance, or investments. Each type of underwriting comes with specific risks — and underwriters generally specialize in one of several risk types.Rob Daly/Getty Underwriting is the process of taking on risk in a financial transaction, typically a loan, insurance, or investments. Underwriters assess risk, determine how much to assume, and at what price. Underwriting helps set rates for loans, premiums for insurance policies, and the cost of risk in securities markets. Visit Insider's Investing Reference library for more stories. Underwriting determines how risky a financial venture such as a loan, insurance policy, or investment is and whether to accept that risk. If the risk is considered worth taking, the underwriting process determines how much to charge."Underwriting is basically just verifying all of the information the borrower has provided on their loan application — their income, their tax returns, their bank accounts and other assets," says Mayer Dallal, managing director at Mortgage Bank of California. "[Lenders] look at debt-to-income ratio — basically, how much you owe versus how much you earn. [Lenders] also check credit scores — it's difficult to overstate the importance of a credit rating to the process. Then we get an appraisal of the property to see if the loan amount is appropriate, and do a title search to make sure there are no liens on the property."How the process of underwriting works The main goal of underwriting is to determine risk. Knowing the amount of risk involved in a financial venture allows for pricing and finally a decision to accept or reject the applicant or venture.The underwriting process varies somewhat depending on the type of underwriting being done, but in general terms here's how it works:Step 1: Review and evaluate the application or other paperwork to determine creditworthiness, medical history (life insurance), financial soundness (investment), or other other factors that vary with the type of risk.Step 2: Obtain an appraisal of property, evaluation of securities, or require a medical exam as required to help further determine risk.Step 3: Process all gathered information and make a decision to:Accept: Approval involves other decisions including loan rates, terms, premium amounts, or price to pay for securities, depending on the type of underwriting decision being made.Deny: Denial results when the various factors show unacceptable risk in the eyes of the underwriter.Pending: A decision to hold the application typically means the underwriter doesn't have enough or the right information to make a firm decision.Note: The term 'underwriting' is believed to have originated in the early days of Lloyd's of London when risk takers (underwriters) wrote their names below (under) the total amount of risk they were willing to undertake, such as a voyage of a merchant ship for example, in exchange for a specified premium.What is the role of an underwriter?The role of an underwriter is to protect the financial interests of the lender, insurer, or investor by assigning appropriate risk and compensation for assuming that risk. Underwriters work in a variety of financial industries including banking, insurance, investing, and more. In fact, anything that involves a combination of risk and money, probably has an underwriter somewhere in the process.In their role of evaluating financial risk, depending on the type of risk, underwriters investigate all financial aspects of an applicant or investment. Medical history and health come into play when someone applies for life insurance. Appraisal or evaluation is also part of the process when you are buying a house, car, boat, or even investing in real estate or a major project.Types of underwriting Each type of underwriting comes with specific risks. Underwriters generally specialize in one of several risk types.Loan underwritingIf you've ever applied for a personal, car, or home loan, you've likely heard the term "underwriting" as part of the application process.Personal and car loans, compared to mortgage loans, are relatively simple. The risk to the lender is that you will not pay back the loan. These types of loans are often underwritten using a computer and strict modeling algorithms. That is not to say they are "untouched by human hands" just that the process is not as complex as with other types of risk.Mortgage/real estate loans are more complicated, mostly because the thing you are trying to buy is more expensive and the risk to the lender is greater. As noted above, a home or other real estate loan involves a deep dive into your personal finances including income, assets, debt, and general ability to repay the loan. In addition, the asset (home/real estate) must be appraised, evaluated to make sure you are not overpaying. Other research involves making sure the seller actually owns the property, such as a title search."Many people don't realize how tricky underwriting can be for a self-employed person or an entrepreneur who's applying for a loan at a big bank," notes Dallal. He blames it on automated underwriting that looks for a W-2 and when none is found, rejects the applicant. "But there are mortgage lenders who take a more individualized approach to loan qualification, rather than the cookie-cutter approach old-school lenders use," Dallal adds, advising borrowers to seek out those lenders.Insurance underwritingInsurance underwriting involves evaluating an applicant for life or property insurance. It determines the risks of filing large or frequent claims and assessing how much coverage a person can be given, how much they should pay and how much an insurance company is likely to pay to cover the policyholder.Life insurance underwriting involves assessing the risk of the potential insurer by evaluating age, occupation, health, family medical history, lifestyle, hobbies, and other traits. Property and casualty insurance underwriting requires inspection of homes and rental properties for deterioration, crumbling foundations, damaged roof or anything that poses a risk to the insurer.Note: Before the Affordable Care Act (ACA) took effect in 2014, health insurance sold in the individual market in most states was medically underwritten to include consideration of pre-existing conditions. Since 2014, however, pre-existing conditions may no longer be considered. Health insurance must now by guaranteed issue, regardless of pre-existing condition status.Securities underwritingIn securities underwriting, the process involves the sale of stocks or bonds to investors, often in the form of Initial Public Offerings (IPOs) by an underwriter (bank). In this case the bank relies on a cadre of underwriters who help the bank assess risk, plan for, and execute the agreement to underwrite the IPO and sell securities to fund the IPO.How long does underwriting take? It should be no surprise that the amount of time it takes to underwrite a financial transaction depends on the type and complexity of the transaction. Underwriting a personal loan or even a car loan can be completed in minutes using a computer and software. Mortgages and life insurance take longer. Securities underwriting, for example for an IPO, is likely to take the longest.Personal loans or car loans often take a week or less. In some instances, underwriting and approval can be almost instantaneous, happening in minutes.Mortgages often take 30 to 45 days for full approval, although the underwriting process is only part of that timeline and is usually complete in about 72 hours after the underwriter has all the information they need.Life insurance underwriting might be one of the least predictable when it comes to a timeline. Many life insurance policies undergo underwriting and approval in as few as 24 hours. Depending on health and other issues, however, the process can take a month or more.Property and casualty insurance is typically approved as fast as a personal loan, that is in one to seven days. The effective date of insurance, however, is after your payment is received. Being approved for homeowners insurance doesn't mean you have it.Securities underwriting as part of the IPO process typically happens within the six to nine months it takes for a company to transition from private to public. Since underwriters are involved at every step in the process on behalf of the bank, their work is not complete until the IPO is complete.The financial takeawayUnderwriting is all about risk and determining the cost (value) of that risk. With a loan, the risk is whether the borrower will repay or default and the cost is the amount of interest charged. With insurance, the risk is whether too many policyholders will file claims at the same time. To mitigate that risk, the cost is the premium charged to each policyholder. With securities, the risk is that the underwritten investment will not make a profit. The cost is the difference between the amount the underwriter pays for the shares and the amount the public pays when the shares are sold.The role of underwriting and the underwriter cannot be understated. Without some assessment of risk, all financial transactions would be a matter of "guessing." Underwriting removes guesswork and replaces it with a process designed to be fair to both the lender and the borrower; the insurer and the insured; the investor and the investment.Lenders want to lend, insurers want to insure, and investors want to invest. Conversely, borrowers want to borrow, individuals want insurance, and IPOs want investors. No matter your role in any financial interaction, know that the underwriter is there to ensure fairness.IFRS: The accounting framework that sets the rules for most non-US companies' financial reportingWhat are assets? The building blocks of wealth for individuals and profits for businessesA CFP is an advisor armed with extensive education and ethical standards to help you manage your moneyWhat to know about actuaries — the professionals who predict the financial future of companies with math and scienceRead the original article on Business Insider.....»»

Category: topSource: businessinsiderNov 17th, 2021