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

EQUITY LIFESTYLE PROPERTIES, INC.

(Exact name of registrant as specified in its charter)

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

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

(312) 279-1400
(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 January 25, 2010, Equity LifeStyle Properties, Inc. (the “Company”) issued a news release announcing its results of operations for the quarter and year ended December 31, 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 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. The Company preliminarily projects its net income per share (fully diluted) and funds from operations per share (fully diluted) for the quarter ending March 31, 2010 to be $0.41 — $0.51 and $0.98 — $1.08, 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 January 25, 2010, “ELS Reports Fourth 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: January 26, 2010

Exhibit 99.1

News Release

CONTACT:		Michael Berman		FOR IMMEDIATE RELEASE
		(312) 279-1496		January 25, 2010

ELS REPORTS FOURTH QUARTER RESULTS
Strong 2009 Core Performance; Maintains 2010 FFO Guidance Range

          CHICAGO, IL – January 25, 2010 – Equity LifeStyle Properties, Inc. (NYSE: ELS) (the “Company”) today announced results for the quarter and year ended December 31, 2009.

     a) Financial Results

          For the fourth quarter 2009, Funds From Operations (“FFO”) were $27.7 million, or $0.79 per share on a fully-diluted basis, compared to $20.6 million, or $0.67 per share on a fully-diluted basis for the same period in 2008. For the year ended December 31, 2009, FFO was $118.1 million, or $3.58 per share on a fully-diluted basis, compared to $97.6 million, or $3.20 per share on a fully-diluted basis for the same period in 2008.

          Net income available to common stockholders totaled $6.3 million, or $0.21 per share on a fully-diluted basis for the quarter ended December 31, 2009. This compares to net income available to common stockholders of $0.0 million, or $0.00 per share on a fully-diluted basis for the same period in 2008. Net income available to common stockholders totaled $34.0 million, or $1.22 per share on a fully-diluted basis for the year ended December 31, 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 year ended December 31, 2008.

          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

          Fourth quarter 2009 property operating revenues were $115.0 million, compared to $110.3 million in the fourth quarter of 2008. Our property operating revenues for the year ended December 31, 2009 were $479.3 million, compared to $419.3 million for the year ended December 31, 2008.

          For the quarter ended December 31, 2009, our Core property operating revenues increased approximately 3.7 percent and Core property operating expenses decreased approximately 0.1 percent, resulting in an increase of approximately 7.0 percent to income from Core property operations over the quarter ended December 31, 2008. For the year ended December 31, 2009, our Core property operating revenues increased approximately 2.9 percent and Core property operating expenses decreased approximately 1.2 percent, resulting in an increase of approximately 6.5 percent to income from Core property operations over the year ended December 31, 2008.

          For the quarter ended December 31, 2009, the Company had 34 new home sales (including nine third-party dealer sales); a 38.2 percent decrease as compared to the quarter ended December 31, 2008. Gross

revenues from home sales were $2.1 million for the quarter ended December 31, 2009, compared to $3.6 million for the quarter ended December 31, 2008. Net loss from home sales and other was ($0.2) million for the quarter ended December 31, 2009, compared to a net loss from home sales and other of ($3.0) million for the same period last year. For the year ended December 31, 2009, the Company had 113 new home sales (including 28 third-party dealer sales), a 70.1 percent decrease compared to the same period in 2008. Gross revenues from home sales were $7.1 million for the year ended December 31, 2009, compared to $21.8 million for the same period in 2008. Net income from home sales and other was $0.8 million for the year ended December 31, 2009 compared to a net loss from home sales and other of ($5.7) million for the year ended December 31, 2008.

     c) 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 5.93 percent per annum. Our unsecured lines of credit currently have an availability of $370.0 million. Interest coverage was approximately 2.4 times in the quarter ended December 31, 2009.

          During the quarter ended December 31, 2009, the Company closed on approximately $12 million of financing on one manufactured home property with an interest rate of 6.93 percent per annum, maturing in 2019. The Company also paid off four maturing mortgages totaling approximately $26.2 million, with a weighted average interest rate of 8.46 percent per annum.

          During the first half of 2010, the Company expects to close on approximately $64.2 million of financing on three manufactured home communities at a weighted average interest rate of 6.92 percent per annum, maturing in 10 years. We have locked rate with Fannie Mae on these loans. There can be no assurance such financings will occur or as to the timing and terms of such anticipated financing.

          The Company expects to satisfy its secured debt maturities of approximately $183 million occurring prior to December 31, 2010 with the proceeds from the financings of the three mortgages noted above and its existing cash balance, which is approximately $145 million as of December 31, 2009. The expected timing and amounts of the most significant payoffs are as follows: i) approximately $100 million in April of 2010 and ii) approximately $75 million in August of 2010.

          On December 29, 2009, a deed-in-lieu of foreclosure agreement, signed by the Company was sent to the loan servicer regarding our nonrecourse mortgage loan of approximately $3.6 million secured by Creekside. Creekside is a 165-site all-age manufactured home community located in Wyoming, Michigan that is included in our discontinued operations. The loan servicer has acknowledged receipt of our notice but has not taken any other action at this time.

     d) SEC Comment Letter

          On December 23, 2009, the Securities and Exchange Commission (“SEC”) sent us a letter with comments on our Proxy Statement and Form 10-K for the year ended December 31, 2008. The comments relate to income statement presentation, segment reporting, the transfer of inventory homes to fixed assets, revenue recognition policies related to right-to-use contracts, footnote disclosure of the Privileged Access acquisition, footnote disclosure of joint venture investments and disclosure of senior management bonus targets. We responded to the SEC’s letter on January 25, 2010.

     e) Guidance

          Guidance for 2010 FFO per share, on a fully-diluted basis, is projected to be in the range of $3.39 to $3.59 for the year ending December 31, 2010 and in the range of $0.98 to $1.08 for the quarter ending March 31, 2010. The Company estimates income from Core property operations, excluding property management expenses, is expected to grow from approximately 0.5 to 1.5 percent over 2009. Excluding property management expenses, the 2010 Core properties contributed approximately $271 million to income from property operations in 2009.

          The Company’s guidance ranges acknowledge the existence of volatile economic conditions, which may impact our current guidance assumptions. Factors impacting 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 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 304 quality properties in 27 states and British Columbia consisting of 110,364 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 January 26, 2010.

          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								Year Ended
		Dec. 31,				Dec. 31,				Dec. 31,				Dec. 31,
		2009				2008				2009				2008
Property Operations:
Community base rental income		$	63,488			$	61,815			$	253,379			$	245,833
Resort base rental income			27,056				24,903				124,822				111,876
Right-to-use annual payments			12,372				12,921				50,765				19,667
Right-to-use contracts current period, gross			5,000				5,948				21,526				10,951
Right-to-use contracts, deferred, net of prior period amortization			(4,121	)			(5,671	)			(18,882	)			(10,611	)
Utility and other income			11,230				10,411				47,685				41,633
Property operating revenues			115,025				110,327				479,295				419,349
Property operating and maintenance			42,892				42,516				180,870				152,363
Real estate taxes			7,028				6,745				31,674				29,457
Sales and marketing, gross			3,370				4,018				13,536				7,116
Sales and marketing, deferred commissions, net			(1,194	)			(2,046	)			(5,729	)			(3,644	)
Property management			8,224				8,468				33,383				25,451
Property operating expenses			60,320				59,701				253,734				210,743
Income from property operations			54,705				50,626				225,561				208,606
Home Sales Operations:
Gross revenues from home sales			2,061				3,591				7,136				21,845
Cost of home sales			(1,865	)			(5,095	)			(7,471	)			(24,069	)
Gross (loss) profit from home sales			196				(1,504	)			(335	)			(2,224	)
Brokered resale revenues, net			202				189				758				1,094
Home selling expenses			(393	)			(1,146	)			(2,383	)			(5,776	)
Ancillary services revenues, net			(170	)			(531	)			2,745				1,197
(Loss) income from home sales and other			(165	)			(2,992	)			785				(5,709	)
Other Income and Expenses:
Interest income			1,336				1,529				5,119				3,095
Income from other investments, net			1,440				608				8,168				17,006
General and administrative			(4,625	)			(5,069	)			(22,279	)			(20,617	)
Rent control initiatives			(48	)			412				(456	)			(1,555	)
Interest and related amortization			(24,243	)			(24,826	)			(98,311	)			(99,430	)
Depreciation on corporate assets			(179	)			(124	)			(1,039	)			(390	)
Depreciation on real estate and other costs			(17,107	)			(16,529	)			(69,049	)			(66,193	)
Total other expenses, net			(43,426	)			(43,999	)			(177,847	)			(168,084	)
Equity in income of unconsolidated joint ventures			289				308				2,896				3,753
Consolidated income from continuing operations			11,403				3,943				51,395				38,566
Discontinued Operations:
Discontinued operations			21				80				181				257
Gain (loss) from discontinued real estate			(37	)			1				4,685				(79	)
Income (loss) from discontinued operations			(16	)			81				4,866				178
Consolidated net income			11,387				4,024				56,261				38,744
(Income) loss allocated to non-controlling interests:
Common OP Units			(1,021	)			3				(6,113	)			(4,297	)
Perpetual OP Units			(4,039	)			(4,040	)			(16,143	)			(16,144	)
Net income (loss) available for Common Shares		$	6,327			$	(13	)		$	34,005			$	18,303
Net income per Common Share – Basic		$	0.21			$	0.00			$	1.23			$	0.75
Net income per Common Share – Fully Diluted		$	0.21			$	0.00			$	1.22			$	0.74
Average Common Shares – Basic			30,145				24,765				27,582				24,466
Average Common Shares and OP Units – Basic			35,060				30,202				32,658				30,140
Average Common Shares and OP Units – Fully Diluted			35,248				30,505				32,946				30,498

Equity LifeStyle Properties, Inc.
(Unaudited)

		Quarters Ended								Year Ended
Reconciliation of Net Income to FFO and FAD		Dec. 31,				Dec. 31,				Dec. 31,				Dec. 31,
(amounts in 000s, except for per share data)		2009				2008				2009				2008
Computation of funds from operations:
Net income (loss) available for Common Shares		$	6,327			$	(13	)		$	34,005			$	18,303
Income (loss) allocated to common OP Units			1,021				(3	)			6,113				4,297
Right-to-use contract sales, deferred, net (1)			4,121				5,671				18,882				10,611
Right-to-use contract commissions, deferred, net(2)			(1,194	)			(2,046	)			(5,729	)			(3,644	)
Depreciation on real estate assets and other			17,107				16,529				69,049				66,193
Depreciation on unconsolidated joint ventures			305				426				1,250				1,776
(Gain) loss on real estate			37				(1	)			(5,488	)			79
Funds from operations (FFO)		$	27,724			$	20,563			$	118,082			$	97,615
Non-revenue producing improvements to real estate			(4,699	)			(4,803	)			(17,649	)			(15,319	)
Funds available for distribution (FAD)		$	23,025			$	15,760			$	100,433			$	82,296
FFO per Common Share – Basic		$	0.79			$	0.68			$	3.62			$	3.24
FFO per Common Share – Fully Diluted		$	0.79			$	0.67			$	3.58			$	3.20
FAD per Common Share – Basic		$	0.66			$	0.52			$	3.08			$	2.73
FAD per Common Share – Fully Diluted		$	0.65			$	0.52			$	3.05			$	2.70

Income from Property Operations Detail
(Amounts in thousands)

		Equity Lifestyle								Privileged Access								Consolidated
		Quarters Ended								Quarters Ended								Quarters Ended
		Dec. 31,				Dec. 31,				Dec. 31,				Dec. 31,				Dec. 31,				Dec. 31,
		2009				2008				2009				2008(1)				2009				2008
Community base rental income		$	63,488			$	61,815			$	—			$	—			$	63,488			$	61,815
Resort base rental income			24,037				22,422				3,019				2,481				27,056				24,903
Right-to-use annual payments			—				—				12,372				12,921				12,372				12,921
Right-to-use contracts current period, gross			—				—				5,000				5,948				5,000				5,948
Utility and other income			9,883				9,020				1,347				1,391				11,230				10,411
Property operating revenues, excluding deferrals			97,408				93,257				21,738				22,741				119,146				115,998
Property operating and maintenance			32,080				31,836				10,812				10,680				42,892				42,516
Real estate taxes			6,217				5,810				811				935				7,028				6,745
Sales and marketing, gross			—				—				3,370				4,018				3,370				4,018
Property operating expenses, excluding deferrals			38,297				37,646				14,993				15,633				53,290				53,279
Income from property operations, excluding deferrals and Property management			59,111				55,611				6,745				7,108				65,856				62,719
Right-to-use contract sales deferred, net			—				—				(4,121	)			(5,671	)			(4,121	)			(5,671	)
Right-to-use contract commissions deferred net			—				—				1,194				2,046				1,194				2,046
Income from property operations, excluding Property management			59,111				55,611				3,818				3,483				62,929				59,094
Property management																			8,224				8,468
Income from property operations																		$	54,705			$	50,626

Equity LifeStyle Properties, Inc.
(Unaudited)

Income from Property Operations Detail
(Amounts in thousands)

		Equity Lifestyle								Privileged Access								Consolidated
		Year Ended								Year Ended								Year Ended
		Dec. 31,				Dec. 31,				Dec. 31,				Dec. 31,				Dec. 31,				Dec. 31,
		2009				2008				2009				2008(1)				2009				2008
Community base rental income		$	253,379			$	245,833			$	—			$	—			$	253,379			$	245,833
Resort base rental income			108,751				106,990				16,071				4,886				124,822				111,876
Right-to-use annual payments			—				—				50,765				19,667				50,765				19,667
Right-to-use contracts current period, gross			—				—				21,526				10,951				21,526				10,951
Utility and other income			41,875				39,421				5,810				2,212				47,685				41,633
Property operating revenues, excluding deferrals			404,005				392,244				94,172				37,716				498,177				429,960
Property operating and maintenance			132,378				134,728				48,492				17,635				180,870				152,363
Real estate taxes			28,125				28,110				3,549				1,347				31,674				29,457
Sales and marketing, gross			—				—				13,536				7,116				13,536				7,116
Property operating expenses, excluding deferrals			160,503				162,838				65,577				26,098				226,080				188,936
Income from property operations, excluding deferrals and Property management			243,502				229,406				28,595				11,618				272,097				241,024
Right-to-use contract sales deferred, net			—				—				(18,882	)			(10,611	)			(18,882	)			(10,611	)
Right-to-use contract commissions deferred net			—				—				5,729				3,644				5,729				3,644
Income from property operations, excluding Property management			243,502				229,406				15,442				4,651				258,944				234,057
Property management																			33,383				25,451
Income from property operations																		$	225,561			$	208,606

		As Of				As Of
		December 31,				December 31,
		2009				2008
Total Common Shares and OP Units Outstanding:
Total Common Shares Outstanding			30,350,792				25,051,322
Total Common OP Units Outstanding			4,914,040				5,366,741

		December 31,				December 31,
		2009				2008
		(amounts in 000s)				(amounts in 000s)
Selected Balance Sheet Data:
Net investment in real estate		$	1,908,447			$	1,929,917
Cash and cash equivalents		$	145,128			$	45,312
Total assets		$	2,166,319			$	2,091,647
Mortgage notes payable		$	1,547,901			$	1,569,403
Unsecured lines of credit		$	—			$	93,000
Total liabilities		$	1,711,892			$	1,795,413
Perpetual Preferred OP Units		$	200,000			$	200,000
Total equity		$	254,427			$	96,234

Equity LifeStyle Properties, Inc.
(Unaudited)

Summary of Total Sites as of December 31, 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								Year Ended
		Dec. 31,				Dec. 31,				Dec. 31,				Dec. 31,
		2009				2008				2009				2008
Manufactured Home Site Figures and Occupancy Averages:(1)
Total Sites			44,230				44,229				44,231				44,187
Occupied Sites			39,813				39,923				39,897				39,943
Occupancy %			90.0	%			90.3	%			90.2	%			90.4	%
Monthly Base Rent Per Site		$	532			$	516			$	529			$	513
Core(2) Monthly Base Rent Per Site		$	532			$	516			$	529			$	513

		Quarters Ended								Year Ended
		Dec. 31,				Dec. 31,				Dec. 31,				Dec. 31,
		2009				2008				2009				2008
Home Sales: (1) (Dollar amounts in thousands)
New Home Sales Volume (3)			34				55				113				378
New Home Sales Gross Revenues		$	948			$	3,065			$	3,397			$	19,013
Used Home Sales Volume (4)			229				105				747				407
Used Home Sales Gross Revenues		$	1,113			$	526			$	3,739			$	2,832
Brokered Home Resale Volume			151				151				612				786
Brokered Home Resale Revenues, net		$	202			$	189			$	758			$	1,094

Equity LifeStyle Properties, Inc.
(Unaudited)

		First Quarter 2010								Full Year 2010
		Low				High				Low				High
Net Income and FFO per Common Share Guidance on a fully diluted basis (unaudited):
Projected net income (1)		$	0.41			$	0.51			$	1.12			$	1.32
Projected depreciation			0.49				0.49				1.93				1.93
Projected net deferral of right-to-use sales and commissions			0.08				0.08				0.34				0.34
Projected FFO		$	0.98			$	1.08			$	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.