UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934

Date of Report: October 19, 2009
(Date of earliest event reported)

EQUITY LIFESTYLE PROPERTIES, INC.

(Exact name of registrant as specified in its charter)

Maryland		1-11718		36-3857664
(State or other jurisdiction of		(Commission File No.)		(IRS Employer Identification
incorporation or organization)				Number)

Two North Riverside Plaza, Chicago, Illinois		60606
(Address of principal executive offices)		(Zip Code)

(Registrant’s telephone number, including area code)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

o     Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o     Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o     Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o     Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

 

Item 2.02		Results of Operations and Financial Condition

          On October 19, 2009, Equity LifeStyle Properties, Inc. (the “Company”) issued a news release announcing its results of operations for the quarter and nine months ended September 30, 2009. The information is furnished as Exhibit 99.1 to this report on Form 8-K. The information contained in this report on Form 8-K, including Exhibit 99.1, shall not be deemed “filed” with the Securities and Exchange Commission nor incorporated by reference in any registration statement filed by Equity LifeStyle Properties, Inc. under the Securities Act of 1933, as amended.

          The Company projects its net income per share (fully diluted) and funds from operations per share (fully diluted) for the year ending December 31, 2009 to be $1.02 - $1.12 and $3.40 - $3.50, respectively. The Company preliminarily projects its net income per share (fully diluted) and funds from operations per share (fully diluted) for the year ending December 31, 2010 to be $1.12 - $1.32 and $3.39 - $3.59, respectively.

          This current report includes certain “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. When used, words such as “anticipate,” “expect,” “believe,” “project,” “intend,” “may be” and “will be” and similar words or phrases, or the negative thereof, unless the context requires otherwise, are intended to identify forward-looking statements. These forward-looking statements are subject to numerous assumptions, risks and uncertainties, including, but not limited to:

	•		our ability to control costs, real estate market conditions, the actual rate of decline in customers, the actual use of sites by customers and our success in acquiring new customers at our Properties (including those recently acquired);
	•		our ability to maintain historical rental rates and occupancy with respect to Properties currently owned or that we may acquire;
	•		our assumptions about rental and home sales markets;
	•		in the age-qualified Properties, home sales results could be impacted by the ability of potential homebuyers to sell their existing residences as well as by financial, credit and capital markets volatility;
	•		in the all-age Properties, results from home sales and occupancy will continue to be impacted by local economic conditions, lack of affordable manufactured home financing and competition from alternative housing options including site-built single-family housing;
	•		the completion of future acquisitions, if any, and timing with respect thereto and the effective integration and successful realization of cost savings;
	•		ability to obtain financing or refinance existing debt on favorable terms or at all;
	•		the effect of interest rates;
	•		the dilutive effects of issuing additional common stock;
	•		the effect of accounting for the sale of agreements to customers representing a right-to-use the Properties previously leased by Privileged Access under Financial Accounting Standards Board Accounting Standards Codification Topic “Revenue Recognition” (prior authoritative guidance: Staff Accounting Bulletin No. 104, Revenue Recognition in Consolidated Financial Statements, Corrected); and
	•		other risks indicated from time to time in our filings with the Securities and Exchange Commission.

     These forward-looking statements are based on management’s present expectations and beliefs about future events. As with any projection or forecast, these statements are inherently susceptible to uncertainty and changes in circumstances. The Company is under no obligation to, and expressly disclaims any obligation to, update or alter its forward-looking statements whether as a result of such changes, new information, subsequent events or otherwise.

Item 9.01		Financial Statements and Exhibits

          (d) Exhibits

          The information contained in the attached exhibit is unaudited and should be read in conjunction with the Registrant’s annual and quarterly reports filed with the Securities and Exchange Commission.

Exhibit 99.1		Equity LifeStyle Properties, Inc. press release dated October 19, 2009, “ELS Reports Third Quarter Results”

SIGNATURES

          Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this Report to be signed on its behalf by the undersigned thereunto duly authorized.

Date: October 20, 2009

Exhibit 99.1

News Release

CONTACT:		Michael Berman		FOR IMMEDIATE RELEASE
		(312) 279-1496		October 19, 2009

ELS REPORTS THIRD QUARTER RESULTS
Issues 2010 Preliminary Guidance

          CHICAGO, IL — October 19, 2009 — Equity LifeStyle Properties, Inc. (NYSE: ELS) (the “Company”) today announced results for the quarter and nine months ended September 30, 2009.

     a) Financial Results

          For the third quarter 2009, Funds From Operations (“FFO”) were $28.8 million, or $0.82 per share on a fully-diluted basis, compared to $22.7 million, or $0.74 per share on a fully-diluted basis for the same period in 2008. For the nine months ended September 30, 2009, FFO was $90.4 million, or $2.81 per share on a fully-diluted basis, compared to $77.1 million, or $2.53 per share on a fully-diluted basis for the same period in 2008.

          Net income available to common stockholders totaled $11.1 million, or $0.37 per share on a fully-diluted basis for the quarter ended September 30, 2009. This compares to net income available to common stockholders of $1.5 million, or $0.06 per share on a fully-diluted basis for the same period in 2008. Net income available to common stockholders totaled $27.7 million, or $1.02 per share on a fully-diluted basis for the nine months ended September 30, 2009. This compares to net income available to common stockholders of $18.3 million, or $0.74 per share on a fully-diluted basis for the same period in 2008.

          On June 29, 2009, the Company issued 4.6 million shares of common stock in an equity offering for approximately $146.4 million, net of offering costs. On an as adjusted basis, assuming the equity offering had not occurred, FFO per share on a fully-diluted basis would have been $0.94 and $3.28 for the quarter and nine months ended September 30, 2009, respectively. As adjusted net income available to common stockholders, assuming the equity offering did not occur, would have been $0.42 and $1.19 per share on a fully diluted basis for the quarter and nine months ended September 30, 2009, respectively.

          See the attachment to this press release for reconciliation of FFO and FFO per share to net income available to common shares and net income per common share, respectively, the most directly comparable GAAP measure.

     b) Portfolio Performance

          Third quarter 2009 property operating revenues were $123.8 million, compared to $108.3 million in the third quarter of 2008. Our property operating revenues for the nine months ended September 30, 2009 were $364.3 million, compared to $309.0 million for the nine months ended September 30, 2008.

          For the quarter ended September 30, 2009, our Core property operating revenues increased approximately 2.7 percent and Core property operating expenses decreased approximately 1.5 percent, resulting in an increase of approximately 6.5 percent to income from Core property operations over the quarter ended September 30, 2008. For the nine months ended September 30, 2009, our Core property operating revenues

increased approximately 2.7 percent and Core property operating expenses decreased approximately 1.6 percent, resulting in an increase to income from Core property operations of approximately 6.3 percent over the nine months ended September 30, 2008.

          For the quarter ended September 30, 2009, the Company had 38 new home sales (including 13 third-party dealer sales), which represents a 56.3 percent decrease as compared to the quarter ended September 30, 2008. Gross revenues from home sales were $2.1 million for the quarter ended September 30, 2009, compared to $5.3 million for the quarter ended September 30, 2008. Net income from home sales and other was $1.5 million for the quarter ended September 30, 2009, compared to a net loss from home sales and other of ($0.7) million for the same period in 2008. For the nine months ended September 30, 2009, the Company had 79 new home sales (including 19 third-party dealer sales), a 75.5 percent decrease over the same period in 2008. Gross revenues from home sales were $5.1 million for the nine months ended September 30, 2009, compared to $18.3 million for the same period in 2008. Net income from home sales and other was $1.0 million for the nine months ended September 30, 2009 compared to a net loss from home sales and other of ($2.7) million for the nine months ended September 30, 2008.

          Property management expenses were $8.7 million for the quarter ended September 30, 2009, compared to $6.4 million for the same period last year. A significant portion of the increase in property management expenses was due to the acquisition and consolidation of Privileged Access, L.P. (“Privileged Access”) and the 82 Company properties that Privileged Access had been leasing and operating prior to the Company’s acquisition of Privileged Access on August 14, 2008.

     c) Asset-related Transactions

          On July 20, 2009, the Company sold the 490-site property known as Casa Village in Billings, Montana. The buyer assumed approximately $10.6 million of mortgage indebtedness on the property.

     d) Balance Sheet

          Our average long-term secured debt balance was approximately $1.6 billion in the quarter, with a weighted average interest rate, including amortization, of approximately 6.02 percent per annum. Our unsecured debt balance currently has an availability of $370.0 million. Interest coverage was approximately 2.4 times in the quarter ended September 30, 2009.

          During the quarter ended September 30, 2009, the Company closed on approximately $21.1 million of financings on two manufactured home properties with a weighted average interest rate of 6.25 percent per annum, maturing in 2019. The Company also paid off twelve maturing mortgages totaling approximately $47.9 million, with a weighted average interest rate of 7.94 percent per annum.

          During the fourth quarter of 2009 and the second quarter of 2010, the Company expects to close on approximately $74 million of financing on four manufactured home properties at a weighted average interest rate of 6.96 percent per annum, maturing in 10 years. We have locked rate with Fannie Mae on these loans. There can be no assurance if such financings will occur or as to the timing and terms of our anticipated financing.

          The Company expects to satisfy its secured debt maturities occurring prior to December 31, 2010 with the proceeds from the four financings noted above and its existing cash balance, which is approximately $160 million as of September 30, 2009. The expected timing and amounts of the most significant payoffs are as

follows: i) approximately $32 million during the fourth quarter of 2009, ii) approximately $100 million in April of 2010, and iii) approximately $76 million in August of 2010.

     e) Guidance

          ELS management projects 2009 FFO per share, on a fully-diluted basis, to be in the range of $0.60 to $0.70 for the quarter ending December 31, 2009.

          Preliminary guidance for 2010 FFO per share, on a fully-diluted basis, is projected to be in the range of $3.39 to $3.59 and is based on the following assumptions provided below. The following are based on current projections, make no assumptions regarding free cash flow and are forward-looking:

	•		Core property operating revenue for 2010 is expected to grow at approximately 1.0 to 1.5 percent over 2009, assuming stable occupancy. The 2010 Core properties are expected to earn approximately $493.5 million in property operating revenues in 2009. The 2010 Core properties will include the 82 Privileged Access properties the Company started operating on August 14, 2008.
	•		Income from Core property operations, excluding property management expenses, is expected to grow at approximately 1.0 to 2.0 percent over 2009. Excluding property management expenses, the 2010 Core properties are expected to contribute approximately $268.5 million to income from property operations in 2009.
	•		Non-Core properties are expected to contribute approximately $1.8 million to income from property operations in 2010.
	•		Property management and corporate general and administrative expenses are expected to be approximately $55 million in 2010.
	•		Other income, including sales operations, interest income, other corporate income and depreciation, rent control initiatives and income from joint ventures (before related depreciation expense), is expected to be approximately $11 million in 2010.
	•		Interest and related amortization expense and payments to perpetual preferred OP Unit holders is expected to be approximately $107 million in 2010.

          The Company’s guidance ranges acknowledge the existence of volatile economic conditions, which may impact our current guidance assumptions. Factors impacting 2009 and 2010 guidance include (i) the mix of site usage within the portfolio; (ii) yield management on our short-term resort sites; (iii) scheduled or implemented rate increases on community and resort sites; (iv) scheduled or implemented rate increases of annual payments under right-to-use contracts; (v) occupancy changes; and (vi) our ability to retain and attract customers renewing or purchasing right-to-use contracts. Results for 2009 and 2010 also may be impacted by, among other things, (i) continued competitive housing options and new home sales initiatives impacting occupancy levels at certain properties; (ii) variability in income from home sales operations, including anticipated expansion projects; (iii) potential effects of uncontrollable factors such as environmental remediation costs and hurricanes; (iv) potential acquisitions, investments and dispositions; (v) mortgage debt maturing during 2010; (vi) changes in interest rates; and (vii) continued initiatives regarding rent control legislation in California and related legal fees. Quarter-to-quarter results during the year are impacted by the seasonality at certain of the properties.

          Equity LifeStyle Properties, Inc. owns or has an interest in 307 quality properties in 27 states and British Columbia consisting of 110,363 sites. The Company is a self-administered, self-managed, real estate investment trust (REIT) with headquarters in Chicago.

          A live webcast of Equity LifeStyle Properties, Inc.’s conference call discussing these results will be available via the Company’s website in the Investor Info section at www.equitylifestyle.com at 10:00 a.m. Central time on October 20, 2009.

          This news release includes certain “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. When used, words such as “anticipate,” “expect,” “believe,” “project,” “intend,” “may be” and “will be” and similar words or phrases, or the negative thereof, unless the context requires otherwise, are intended to identify forward-looking statements. These forward-looking statements are subject to numerous assumptions, risks and uncertainties, including, but not limited to:

	•		our ability to control costs, real estate market conditions, the actual rate of decline in customers, the actual use of sites by customers and our success in acquiring new customers at our Properties (including those recently acquired);
	•		our ability to maintain historical rental rates and occupancy with respect to Properties currently owned or that we may acquire;
	•		our assumptions about rental and home sales markets;
	•		in the age-qualified Properties, home sales results could be impacted by the ability of potential homebuyers to sell their existing residences as well as by financial, credit and capital markets volatility;
	•		in the all-age Properties, results from home sales and occupancy will continue to be impacted by local economic conditions, lack of affordable manufactured home financing and competition from alternative housing options including site-built single-family housing;
	•		the completion of future acquisitions, if any, and timing with respect thereto and the effective integration and successful realization of cost savings;
	•		ability to obtain financing or refinance existing debt on favorable terms or at all;
	•		the effect of interest rates;
	•		the dilutive effects of issuing additional common stock;
	•		the effect of accounting for the sale of agreements to customers representing a right-to-use the Properties previously leased by Privileged Access under Financial Accounting Standards Board Accounting Standards Codification Topic “Revenue Recognition” (prior authoritative guidance: Staff Accounting Bulletin No. 104, Revenue Recognition in Consolidated Financial Statements, Corrected); and
	•		other risks indicated from time to time in our filings with the Securities and Exchange Commission.

          These forward-looking statements are based on management’s present expectations and beliefs about future events. As with any projection or forecast, these statements are inherently susceptible to uncertainty and changes in circumstances. The Company is under no obligation to, and expressly disclaims any obligation to, update or alter its forward-looking statements whether as a result of such changes, new information, subsequent events or otherwise.

          Tables follow:

Equity LifeStyle Properties, Inc.
Selected Financial Data
(Unaudited)
(Amounts in thousands except for per share data)

		Quarters Ended								Nine Months Ended
		September 30,				September 30,				September 30,				September 30,
		2009				2008				2009				2008
Property Operations:
Community base rental income		$	63,389			$	61,554			$	189,891			$	184,018
Resort base rental income			34,561				29,343				97,766				86,973
Right-to-use annual payments			12,796				6,746				38,393				6,746
Right-to-use contracts current period, gross			5,080				5,003				16,526				5,003
Right-to-use contracts current period, deferred, net of prior period amortization			(4,327	)			(4,940	)			(14,761	)			(4,940	)
Utility and other income			12,331				10,572				36,455				31,222
Property operating revenues			123,830				108,278				364,270				309,022
Property operating and maintenance			50,409				42,148				137,978				109,847
Real estate taxes			7,955				7,794				24,646				22,712
Sales and marketing, gross			3,422				3,098				10,166				3,098
Sales and marketing, deferred commissions, net			(1,410	)			(1,598	)			(4,535	)			(1,598	)
Property management			8,725				6,446				25,159				16,983
Property operating expenses			69,101				57,888				193,414				151,042
Income from property operations			54,729				50,390				170,856				157,980
Home Sales Operations:
Gross revenues from home sales			2,127				5,260				5,075				18,254
Cost of inventory home sales			(1,842	)			(5,365	)			(5,606	)			(18,974	)
Gross profit (loss) from home sales			285				(105	)			(531	)			(720	)
Brokered resale revenues, net			171				237				556				905
Home selling expenses			(278	)			(1,482	)			(1,990	)			(4,630	)
Ancillary services revenues, net			1,341				607				2,915				1,728
Income (loss) from home sales and other			1,519				(743	)			950				(2,717	)
Other Income and Expenses:
Interest income			1,177				885				3,783				1,566
Income from other investments, net			2,339				2,783				6,728				16,398
General and administrative			(5,281	)			(5,315	)			(17,654	)			(15,548	)
Rent control initiatives			(93	)			(102	)			(408	)			(1,967	)
Interest and related amortization			(24,492	)			(24,930	)			(74,068	)			(74,604	)
Depreciation on corporate assets			(458	)			(84	)			(860	)			(266	)
Depreciation on real estate and other costs			(17,400	)			(17,132	)			(51,942	)			(49,664	)
Total other expenses, net			(44,208	)			(43,895	)			(134,421	)			(124,085	)
Equity in income of unconsolidated joint ventures			229				62				2,607				3,445
Consolidated income from continuing operations			12,269				5,814				39,992				34,623
Discontinued operations:
Discontinued operations			(53	)			32				160				177
Gain (loss) from discontinued real estate			4,743				—				4,723				(80	)
Income from discontinued operations			4,690				32				4,883				97
Consolidated net income		$	16,959			$	5,846			$	44,875			$	34,720
Income allocated to non-controlling interests:
Common OP Units			(1,797	)			(332	)			(5,092	)			(4,300	)
Perpetual OP Units			(4,031	)			(4,032	)			(12,104	)			(12,104	)
Net income available for Common Shares		$	11,131			$	1,482			$	27,679			$	18,316
Net income per Common Share — Basic		$	0.37			$	0.06			$	1.04			$	0.75
Net income per Common Share — Fully Diluted		$	0.37			$	0.06			$	1.02			$	0.74
Average Common Shares — Basic			29,993				24,527				26,719				24,366
Average Common Shares and OP Units — Basic			34,958				30,181				31,848				30,119
Average Common Shares and OP Units — Fully Diluted			35,242				30,572				32,168				30,504

Equity LifeStyle Properties, Inc.
(Unaudited)

		Quarters Ended								Nine Months Ended
Reconciliation of Net Income to FFO and FAD		September 30,				September 30,				September 30,				September 30,
(amounts in 000s, except for per share data)		2009				2008				2009				2008
Computation of funds from operations:
Net income		$	11,131			$	1,482			$	27,679			$	18,316
Income allocated to common OP Units			1,797				332				5,092				4,300
Right-to-use contract sales, deferred, net (1)			4,327				4,940				14,761				4,940
Right-to-use contract commissions, deferred, net(2)			(1,410	)			(1,598	)			(4,535	)			(1,598	)
Depreciation on real estate assets and other			17,400				17,132				51,942				49,664
Depreciation on unconsolidated joint ventures			305				446				945				1,349
(Gain) loss on real estate			(4,743	)			—				(5,526	)			80
Funds from operations (FFO)		$	28,807			$	22,734			$	90,358			$	77,051
Non-revenue producing improvements to real estate			(4,888	)			(5,229	)			(12,950	)			(10,516	)
Funds available for distribution (FAD)		$	23,919			$	17,505			$	77,408			$	66,535
FFO per Common Share — Basic		$	0.82			$	0.75			$	2.84			$	2.56
FFO per Common Share — Fully Diluted		$	0.82			$	0.74			$	2.81			$	2.53
FAD per Common Share — Basic		$	0.68			$	0.58			$	2.43			$	2.21
FAD per Common Share — Fully Diluted		$	0.68			$	0.57			$	2.41			$	2.18

Income from Property Operations Detail
(Amounts in thousands)

		Equity LifeStyle								Privileged Access								Consolidated
		Quarters Ended								Quarters Ended								Quarters Ended
		Sept. 30,				Sept. 30,				Sept. 30,				Sept. 30,				Sept. 30,				Sept. 30,
		2009				2008				2009				2008				2009				2008
Community base rental income		$	63,389			$	61,554			$	—			$	—			$	63,389			$	61,554
Resort base rental income			28,346				26,938				6,215				2,405				34,561				29,343
Right-to-use annual payments			—				—				12,796				6,746				12,796				6,746
Right-to-use contracts current period, gross			—				—				5,080				5,003				5,080				5,003
Utility and other income			10,259				9,751				2,072				821				12,331				10,572
Property operating revenues excluding deferrals			101,994				98,243				26,163				14,975				128,157				113,218
Property operating and maintenance			34,933				35,193				15,476				6,955				50,409				42,148
Real estate taxes			7,052				7,382				903				412				7,955				7,794
Sales and marketing, gross			—				—				3,422				3,098				3,422				3,098
Property operating expenses excluding deferrals			41,985				42,575				19,801				10,465				61,786				53,040
Income from property operations, excluding deferrals and Property management			60,009				55,668				6,362				4,510				66,371				60,178
Right-to-use contract sales deferred, net			—				—				(4,327	)			(4,940	)			(4,327	)			(4,940	)
Right-to-use contract commissions deferred net			—				—				1,410				1,598				1,410				1,598
Income from property operations, excluding Property management			60,009				55,668				3,445				1,168				63,454				56,836
Property management																			8,725				6,446
Income from property operations																		$	54,729			$	50,390

Equity LifeStyle Properties, Inc.
(Unaudited)

Income from Property Operations Detail
(Amounts in thousands)

		Equity LifeStyle								Privileged Access								Consolidated
		Nine Months Ended								Nine Months Ended								Nine Months Ended
		Sept. 30,				Sept. 30,				Sept. 30,				Sept. 30,				Sept. 30,				Sept. 30,
		2009				2008				2009				2008				2009				2008
Community base rental income		$	189,891			$	184,018			$	—			$	—			$	189,891			$	184,018
Resort base rental income			84,714				84,568				13,052				2,405				97,766				86,973
Right-to-use annual payments			—				—				38,393				6,746				38,393				6,746
Right-to-use contracts current period, gross			—				—				16,526				5,003				16,526				5,003
Utility and other income			31,992				30,401				4,463				821				36,455				31,222
Property operating revenues excluding deferrals			306,597				298,987				72,434				14,975				379,031				313,962
Property operating and maintenance			100,299				102,892				37,679				6,955				137,978				109,847
Real estate taxes			21,908				22,300				2,738				412				24,646				22,712
Sales and marketing, gross			—				—				10,166				3,098				10,166				3,098
Property operating expenses excluding deferrals			122,207				125,192				50,583				10,465				172,790				135,657
Income from property operations, excluding deferrals and Property management			184,390				173,795				21,851				4,510				206,241				178,305
Right-to-use contract sales deferred, net			—				—				(14,761	)			(4,940	)			(14,761	)			(4,940	)
Right-to-use contract commissions deferred net			—				—				4,535				1,598				4,535				1,598
Income from property operations, excluding Property management			184,390				173,795				11,625				1,168				196,015				174,963
Property management																			25,159				16,983
Income from property operations																		$	170,856			$	157,980

		As of				As of
		September 30,				December 31,
Total Common Shares and OP Units Outstanding:		2009				2008
Total Common Shares Outstanding			30,361,634				25,051,322
Total Common OP Units Outstanding			4,920,540				5,366,741

		September 30,				December 31,
		2009				2008
Selected Balance Sheet Data:		(amounts in 000s)				(amounts in 000s)
Total real estate, net		$	1,917,232			$	1,929,788
Cash and cash equivalents		$	160,178			$	45,312
Total assets		$	2,198,033			$	2,091,647
Mortgage notes payable		$	1,568,185			$	1,569,403
Unsecured debt		$	—			$	93,000
Total liabilities		$	1,740,552			$	1,795,413
Perpetual Preferred OP Units		$	200,000			$	200,000
Total equity		$	257,482			$	92,234

Equity LifeStyle Properties, Inc.
(Unaudited)

Summary of Total Sites as of September 30, 2009:

		Sites
Community sites (1)			44,400
Resort sites:
Annuals			20,700
Seasonal			8,900
Transient			8,900
Membership (2)			24,300
Joint Ventures (3)			3,100
			110,300

		Quarters Ended								Nine Months Ended
Manufactured Home Site Figures and		Sept. 30,				Sept. 30,				Sept. 30,				Sept. 30,
Occupancy Averages: (1)		2009				2008				2009				2008
Total Sites			44,230				44,202				44,231				44,174
Occupied Sites			39,849				39,934				39,924				39,949
Occupancy %			90.1	%			90.3	%			90.3	%			90.4	%
Monthly Base Rent Per Site		$	530			$	514			$	528			$	512
Core (2) Monthly Base Rent Per Site		$	530			$	514			$	528			$	512

		Quarters Ended								Nine Months Ended
		Sept. 30,				Sept. 30,				Sept. 30,				Sept. 30,
Home Sales:(1) (Dollar amounts in thousands)		2009				2008				2009				2008
New Home Sales Volume (3)			38				87				79				323
New Home Sales Gross Revenues		$	948			$	4,207			$	2,449			$	15,948
Used Home Sales Volume (4)			263				134				518				302
Used Home Sales Gross Revenues		$	1,179			$	1,053			$	2,626			$	2,306
Brokered Home Resale Volume			140				178				461				635
Brokered Home Resale Revenues, net		$	171			$	237			$	556			$	905

Net Income and FFO per Common Share Guidance		Full Year 2009								Full Year 2010
on a fully diluted basis (unaudited):		Low				High				Low				High
Projected net income (1)		$	1.02			$	1.12			$	1.12			$	1.32
Projected depreciation			2.17				2.17				1.93				1.93
Projected (gain) loss on real estate			(.17	)			(.17	)			—				—
Projected net deferral of right-to-use sales and commissions			0.38				0.38				0.34				0.34
Projected FFO		$	3.40			$	3.50			$	3.39			$	3.59

Non-GAAP Financial Measures

          Funds from Operations (“FFO”), is a non-GAAP financial measure. The Company believes that FFO, as defined by the Board of Governors of the National Association of Real Estate Investment Trusts (“NAREIT”), is generally an appropriate measure of performance for an equity REIT. While FFO is a relevant and widely used measure of operating performance for equity REITs, it does not represent cash flow from operations or net income as defined by GAAP, and it should not be considered as an alternative to these indicators in evaluating liquidity or operating performance.

          We define FFO as net income, computed in accordance with GAAP, excluding gains or actual or estimated losses from sales of properties, plus real estate related depreciation and amortization, and after adjustments for unconsolidated partnerships and joint ventures. Adjustments for unconsolidated partnerships and joint ventures are calculated to reflect FFO on the same basis. The Company receives up-front non-refundable payments from the sale of right-to-use contracts. In accordance with GAAP, the upfront non-refundable payments and related commissions are deferred and amortized over the estimated customer life. Although the NAREIT definition of FFO does not address the treatment of nonrefundable right-to-use payments, the Company believes that it is appropriate to adjust for the impact of the deferral activity in our calculation of FFO. The Company believes that FFO is helpful to investors as one of several measures of the performance of an equity REIT. The Company further believes that by excluding the effect of depreciation, amortization and gains or actual or estimated losses from sales of real estate, all of which are based on historical costs and which may be of limited relevance in evaluating current performance, FFO can facilitate comparisons of operating performance between periods and among other equity REITs. The Company believes that the adjustment to FFO for the net revenue deferral of upfront non-refundable payments and expense deferral of right-to-use contract commissions also facilitates the comparison to other equity REITs. Investors should review FFO, along with GAAP net income and cash flow from operating activities, investing activities and financing activities, when evaluating an equity REIT’s operating performance. The Company computes FFO in accordance with our interpretation of standards established by NAREIT, which may not be comparable to FFO reported by other REITs that do not define the term in accordance with the current NAREIT definition or that interpret the current NAREIT definition differently than we do. Funds available for distribution (“FAD”) is a non-GAAP financial measure. FAD is defined as FFO less non-revenue producing capital expenditures. Investors should review FFO and FAD, along with GAAP net income and cash flow from operating activities, investing activities and financing activities, when evaluating an equity REIT’s operating performance. FFO and FAD do not represent cash generated from operating activities in accordance with GAAP, nor do they represent cash available to pay distributions and should not be considered as an alternative to net income, determined in accordance with GAAP, as an indication of our financial performance, or to cash flow from operating activities, determined in accordance with GAAP, as a measure of our liquidity, nor is it indicative of funds available to fund our cash needs, including our ability to make cash distributions.