SEC Filing | Equity LifeStyle Properties, Inc.

View:

Download DOC Bytes

Download PDF Bytes

Download XLS Bytes

Document

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 (Date of earliest event reported): April 22, 2019

EQUITY LIFESTYLE PROPERTIES, INC.

(Exact name of registrant as specified in its charter)



Maryland	1-11718	36-3857664
(State or other jurisdiction of incorporation)	(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))

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company o

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o

Item 2.02 Results of Operations and Financial Condition

On April 22, 2019, Equity LifeStyle Properties, Inc. (referred to herein as “we,” “us,” and “our”) issued a news release announcing our results of operations for the three months ended March 31, 2019 and detailed guidance assumptions on our projections for 2019.

The news release is furnished as Exhibit 99.1 to this report on Form 8-K. The news release was also posted on our website, www.equitylifestyleproperties.com, on April 22, 2019.

In accordance with General Instruction B.2. of Form 8-K, the information included in Items 2.02 and 9.01 of this Report on Form 8-K, including Exhibit 99.1, shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that Section, nor shall such information be deemed incorporated by reference in any registration statement filed by Equity Lifestyle Properties, Inc. under the Securities Act of 1933, as amended.

This 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 and may include, without limitation, information regarding our expectations, goals or intentions regarding the future, and the expected effect of our acquisitions. These forward-looking statements are subject to numerous assumptions, risks and uncertainties, including, but not limited to:


•	our ability to control costs and real estate market conditions, our ability to retain customers, the actual use of sites by customers and our success in acquiring new customers at our properties (including those that we may acquire);


•	our ability to maintain historical or increase future rental rates and occupancy with respect to properties currently owned or that we may acquire;


•	our ability to retain and attract customers renewing, upgrading and entering right-to-use contracts;


•	our assumptions about rental and home sales markets;


•	our assumptions and guidance concerning 2019, including estimated net income, FFO and Normalized FFO;


•	our ability to manage counterparty risk;


•	our ability to renew our insurance policies at existing rates and on consistent terms;


•	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;


•	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;


•	impact of government intervention to stabilize site-built single-family housing and not manufactured housing;


•	effective integration of recent acquisitions and our estimates regarding the future performance of recent acquisitions;


•	the completion of future transactions in their entirety, if any, and timing and effective integration with respect thereto;


•	unanticipated costs or unforeseen liabilities associated with recent acquisitions;


•	ability to obtain financing or refinance existing debt on favorable terms or at all;


•	the effect of interest rates;


•	the effect from any breach of our, or any of our vendors', data management systems;


•	the dilutive effects of issuing additional securities;


•	the outcome of pending or future lawsuits or actions brought against us, including those disclosed in our filings with the Securities and Exchange Commission; and


•	other risks indicated from time to time in our filings with the Securities and Exchange Commission.

For further information on these and other factors that could impact us and the statements contained herein, refer to our filings with the Securities and Exchange Commission, including “Risk Factors” in our most recent Annual Report on Form 10-K and subsequent quarterly reports on Form 10-Q.

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. We are under no obligation to, and expressly disclaim any obligation to, update or alter our forward-looking statements whether as a result of such changes, new information, subsequent events or otherwise.

We are a fully integrated owner and operator of lifestyle-oriented properties and own or have an interest in 412 quality properties in 33 states and British Columbia consisting of 155,133 sites. We are a self-administered, self-managed, real estate investment trust with headquarters in Chicago.

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.

99.1 Equity LifeStyle Properties, Inc. press release dated April 22, 2019, “ELS Reports First Quarter Results”

SIGNATURE

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.

EQUITY LIFESTYLE PROPERTIES, INC.

By: /s/ Paul Seavey

Paul Seavey

Executive Vice President, Chief Financial Officer and Treasurer

Date: April 23, 2019

Exhibit

N E W S R E L E A S E




CONTACT: Paul Seavey	FOR IMMEDIATE RELEASE
(800) 247-5279	April 22, 2019

ELS REPORTS FIRST QUARTER RESULTS

Continued Strong Performance

CHICAGO, IL – April 22, 2019 – Equity LifeStyle Properties, Inc. (NYSE: ELS) (referred to herein as “we,” “us,” and “our”) today announced results for the quarter ended March 31, 2019. All per share results are reported on a fully diluted basis unless otherwise noted.

Financial Results for the Quarter Ended March 31, 2019

For the quarter ended March 31, 2019, total revenues increased $13.1 million, or 5.3 percent, to $259.1 million compared to $246.0 million for the same period in 2018. For the quarter ended March 31, 2019, net income available for Common Stockholders increased $53.1 million, or $0.58 per Common Share, to $113.3 million, or $1.26 per Common Share, compared to $60.2 million, or $0.68 per Common Share, for the same period in 2018.

Non-GAAP Financial Measures and Portfolio Performance

For the quarter ended March 31, 2019, Funds from Operations (“FFO”) available for Common Stock and OP Unit holders increased $9.8 million, or $0.09 per Common Share, to $108.0 million or $1.13 per Common Share, compared to $98.2 million, or $1.04 per Common Share, for the same period in 2018.

For the quarter ended March 31, 2019, Normalized Funds from Operations (“Normalized FFO”) available for Common Stock and OP Unit holders increased $9.8 million, or $0.09 per Common Share, to $107.7 million, or $1.13 per Common Share, compared to $97.9 million, or $1.04 per Common Share, for the same period in 2018.

For the quarter ended March 31, 2019, property operating revenues, excluding deferrals, increased $16.2 million to $250.9 million compared to $234.7 million for the same period in 2018. For the quarter ended March 31, 2019, income from property operations, excluding deferrals and property management, increased $11.9 million to $153.4 million compared to $141.5 million for the same period in 2018.

For the quarter ended March 31, 2019, Core property operating revenues, excluding deferrals, increased approximately 4.0 percent and Core income from property operations, excluding deferrals and property management, increased approximately 4.9 percent compared to the same period in 2018.

Investment Activity

On March 25, 2019, we completed the acquisitions of Drummer Boy Camping Resort, a 465-site RV community located in Gettysburg, Pennsylvania, and Lake of the Woods Campground, a 303-site RV community located in Wautoma, Wisconsin, for a total purchase price of $25.4 million. These acquisitions were funded with available cash and a loan assumption of approximately $10.8 million, excluding mortgage premium of $0.4 million.

On April 10, 2019, we completed the acquisition of Round Top RV Campground, a 391-site RV community located in Gettysburg, Pennsylvania. The purchase price was approximately $12.4 million. This acquisition was funded with available cash and a loan assumption of approximately $7.8 million, excluding mortgage premium of $0.2 million.

About Equity LifeStyle Properties



	i

We are a self-administered, self-managed real estate investment trust (“REIT”) with headquarters in Chicago. As of April 22, 2019, we own or have an interest in 412 quality properties in 33 states and British Columbia consisting of 155,133 sites.

For additional information, please contact our Investor Relations Department at (800) 247-5279 or at investor_relations@equitylifestyle.com.

Conference Call

A live webcast of our conference call discussing these results will take place tomorrow, Tuesday, April 23, 2019, at 10:00 a.m. Central Time. Please visit the Investor Information section at www.equitylifestyleproperties.com for the link. A replay of the webcast will be available for two weeks at this site.

Reporting Calendar

Quarterly financial results and related earnings conference calls for the next three quarters are expected to occur as follows:



	Release Date	Earnings Call
Second Quarter 2019	Monday, July 22, 2019	Tuesday, July 23, 2019 10:00 a.m. CT
Third Quarter 2019	Monday, October 21, 2019	Tuesday, October 22, 2019 10:00 a.m. CT
Fourth Quarter 2019	Monday, January 27, 2020	Tuesday, January 28, 2020 10:00 a.m. CT

Forward-Looking Statements

In addition to historical information, this press 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 and may include without limitation, information regarding our expectations, goals or intentions regarding the future, and the expected effect of our acquisitions. These forward-looking statements are subject to numerous assumptions, risks and uncertainties, including, but not limited to:


•	our ability to control costs and real estate market conditions, our ability to retain customers, the actual use of sites by customers and our success in acquiring new customers at our properties (including those that we may acquire);


•	our ability to maintain historical or increase future rental rates and occupancy with respect to properties currently owned or that we may acquire;


•	our ability to retain and attract customers renewing, upgrading and entering right-to-use contracts;


•	our assumptions about rental and home sales markets;


•	our assumptions and guidance concerning 2019, including estimated net income, FFO and Normalized FFO;


•	our ability to manage counterparty risk;


•	our ability to renew our insurance policies at existing rates and on consistent terms;


•	in the age-qualified properties, home sales results could be impacted by the ability of potential home buyers to sell their existing residences as well as by financial, credit and capital markets volatility;


•	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;


•	impact of government intervention to stabilize site-built single-family housing and not manufactured housing;


•	effective integration of recent acquisitions and our estimates regarding the future performance of recent acquisitions;


•	the completion of future transactions in their entirety, if any, and timing and effective integration with respect thereto;


•	unanticipated costs or unforeseen liabilities associated with recent acquisitions;


•	ability to obtain financing or refinance existing debt on favorable terms or at all;


•	the effect of interest rates;



	ii


•	the effect from any breach of our, or any of our vendors', data management systems;


•	the dilutive effects of issuing additional securities;


•	the outcome of pending or future lawsuits or actions brought against us, including those disclosed in our filings with the Securities and Exchange Commission; and


•	other risks indicated from time to time in our filings with the Securities and Exchange Commission.

For further information on these and other factors that could impact us and the statements contained herein, refer to our filings with the Securities and Exchange Commission, including the “Risk Factors” section in our most recent Annual Report on Form 10-K and subsequent quarterly reports on Form 10-Q.



	iii



Investor Information



Equity Research Coverage⁽¹⁾
Bank of America Merrill Lynch Global Research	BMO Capital Markets	Citi Research
Jeffrey Spector/ Joshua Dennerlein	John Kim	Michael Bilerman/ Nick Joseph
646-855-1363	212-885-4115	212-816-1383
jeff.spector@baml.com	johnp.kim@bmo.com	michael.bilerman@citi.com
joshua.dennerlein@baml.com		nicholas.joseph@citi.com

Evercore ISI	Green Street Advisors	Robert W. Baird & Company
Steve Sakwa/ Samir Khanal	John Pawlowski	Drew T. Babin
212-466-5600	949-640-8780	215-553-7816
steve.sakwa@evercoreisi.com	jpawlowski@greenst.com	dbabin@rwbaird.com
samir.khanal@evercoreisi.com

Wells Fargo Securities
Todd Stender
562-637-1371
todd.stender@wellsfargo.com

______________________


1.	Any opinions, estimates or forecasts regarding our performance made by these analysts or agencies do not represent our opinions, forecasts or predictions. We do not by reference to these firms imply our endorsement of or concurrence with such information, conclusions or recommendations.



1Q 2019 Supplemental information	1	Equity LifeStyle Properties, Inc.



Financial Highlights

(In millions, except Common Stock and OP Units outstanding and per share data, unaudited)



	As of and for the Three Months Ended
	Mar 31, 2019			Dec 31, 2018			Sept 30, 2018			Jun 30, 2018			Mar 31, 2018
Operating Information
Total revenues	$	259.1		$	243.5		$	256.7		$	240.5		$	246.0
Net income	$	120.5		$	53.4		$	59.7		$	49.2		$	64.2
Net income available for Common Stockholders	$	113.3		$	50.2		$	56.1		$	46.1		$	60.2
Adjusted EBITDAre ⁽¹⁾	$	133.3		$	117.9		$	119.5		$	109.2		$	122.6
FFO available for Common Stock and OP Unit holders ⁽¹⁾⁽²⁾	$	108.0		$	90.4		$	97.7		$	85.6		$	98.2
Normalized FFO available for Common Stock and OP Unit holders ⁽¹⁾⁽²⁾	$	107.7		$	92.3		$	93.9		$	83.8		$	97.9
Funds available for distribution ("FAD") available for Common Stock and OP Unit holders ⁽¹⁾⁽²⁾	$	97.6		$	80.4		$	82.1		$	71.4		$	89.1

Common Stock and OP Units Outstanding (In thousands) and Per Share Data
Common Stock and OP Units, end of the period	95,735			95,667			95,493			94,623			94,565
Weighted average Common Stock and OP Units outstanding - Fully Diluted	95,624			95,577			95,263			94,623			94,577
Net income per Common Share - Fully Diluted⁽³⁾	$	1.26		$	0.56		$	0.63		$	0.52		$	0.68
FFO per Common Share and OP Unit - Fully Diluted	$	1.13		$	0.95		$	1.03		$	0.90		$	1.04
Normalized FFO per Common Share and OP Unit - Fully Diluted	$	1.13		$	0.97		$	0.99		$	0.89		$	1.04
Dividends per Common Share	$	0.6125		$	0.5500		$	0.5500		$	0.5500		$	0.5500

Balance Sheet
Total assets	$	4,009		$	3,926		$	3,855		$	3,700		$	3,690
Total liabilities	$	2,752		$	2,732		$	2,665		$	2,598		$	2,589

Market Capitalization
Total debt ⁽⁴⁾	$	2,372		$	2,386		$	2,318		$	2,251		$	2,264
Total market capitalization⁽⁵⁾	$	13,315		$	11,678		$	11,528		$	10,947		$	10,564

Ratios
Total debt / total market capitalization	17.8		%	20.4		%	20.1		%	20.6		%	21.4		%
Total debt / Adjusted EBITDAre ⁽⁶⁾	4.9			5.1			5.1			5.0			5.1
Interest coverage ⁽⁷⁾	4.6			4.5			4.4			4.4			4.4
Fixed charges + preferred distributions coverage ⁽⁸⁾	4.5			4.5			4.4			4.3			4.2

______________________


1.	See Non-GAAP Financial Measures Definitions and Other Terms at the end of the supplemental information for definitions of Adjusted EBITDAre, FFO, Normalized FFO and FAD and a reconciliation of Consolidated net income to Adjusted EBITDAre.


2.	See page 7 for a reconciliation of Net income available for Common Stockholders to Non-GAAP financial measures FFO available for Common Stock and OP Unit holders, Normalized FFO available for Common Stock and OP Unit holders and FAD available for Common Stock and OP Unit holders.


3.	Net income per Common Share - Fully Diluted is calculated before Income allocated to non-controlling interest - Common OP Units.


4.	Excludes deferred financing costs of approximately $25.9 million as of March 31, 2019.


5.	See page 16 for market capitalization as of March 31, 2019.


6.	Calculated using trailing twelve months Adjusted EBITDAre.


7.	Calculated by dividing trailing twelve months Adjusted EBITDAre by the interest expense incurred during the same period.


8.	See Non-GAAP Financial Measures Definitions and Other Terms at the end of the supplemental information for a definition of fixed charges. This ratio is calculated by dividing trailing twelve months Adjusted EBITDAre by the sum of fixed charges and preferred stock dividends during the same period.



1Q 2019 Supplemental information	2	Equity LifeStyle Properties, Inc.



Consolidated Balance Sheets

(In thousands, except share and per share data)



	March 31, 2019			December 31, 2018
	(unaudited)
Assets
Investment in real estate:
Land	$	1,412,050		$	1,408,832
Land improvements	3,184,597			3,143,745
Buildings and other depreciable property	747,268			720,900
	5,343,915			5,273,477
Accumulated depreciation	(1,668,008		)	(1,631,888		)
Net investment in real estate	3,675,907			3,641,589
Cash and restricted cash	144,222			68,974
Notes receivable, net	34,811			35,041
Investment in unconsolidated joint ventures	58,465			57,755
Deferred commission expense	40,405			40,308
Other assets, net	55,067			46,227
Assets held for sale, net	—			35,914
Total Assets	$	4,008,877		$	3,925,808
Liabilities and Equity
Liabilities:
Mortgage notes payable, net	$	2,147,490		$	2,149,726
Term loan, net	198,706			198,626
Accounts payable and other liabilities	120,298			102,854
Deferred revenue – upfront payments from right-to-use contracts	118,134			116,363
Deferred revenue – right-to-use annual payments	13,046			10,055
Accrued interest payable	8,729			8,759
Rents and other customer payments received in advance and security deposits	86,519			81,114
Distributions payable	58,637			52,617
Liabilities related to assets held for sale	—			12,350
Total Liabilities	2,751,559			2,732,464
Equity:
Stockholders’ Equity:
Preferred stock, $0.01 par value, 10,000,000 shares authorized as of March 31, 2019 and December 31, 2018; none issued and outstanding.	—			—
Common stock, $0.01 par value, 200,000,000 shares authorized as of March 31, 2019 and December 31, 2018; 89,996,134 and 89,921,018 shares issued and outstanding as of March 31, 2019 and December 31, 2018, respectively.	896			896
Paid-in capital	1,332,410			1,329,391
Distributions in excess of accumulated earnings	(152,848		)	(211,034		)
Accumulated other comprehensive income	1,368			2,299
Total Stockholders’ Equity	1,181,826			1,121,552
Non-controlling interests – Common OP Units	75,492			71,792
Total Equity	1,257,318			1,193,344
Total Liabilities and Equity	$	4,008,877		$	3,925,808



1Q 2019 Supplemental information	3	Equity LifeStyle Properties, Inc.



Consolidated Income Statements

(In thousands, unaudited)



	Quarters Ended March 31,
	2019			2018
Revenues:
Rental income	$	223,566		$	206,993
Right-to-use annual payments	12,316			11,519
Right-to-use contracts current period, gross	3,838			3,162
Right-to-use contract upfront payments, deferred, net	(1,771		)	(1,285		)
Other income	10,370			13,036
Gross revenues from home sales	6,475			8,309
Brokered resale and ancillary services revenues, net	1,559			1,401
Interest income	1,751			1,950
Income from other investments, net	986			940
Total revenues	259,090			246,025

Expenses:
Property operating and maintenance	77,948			76,332
Real estate taxes	15,323			14,135
Sales and marketing, gross	3,409			2,812
Right-to-use contract commissions, deferred, net	(191		)	(24		)
Property management	13,685			13,681
Depreciation and amortization	37,977			32,374
Cost of home sales	6,632			8,574
Home selling expenses	1,083			1,075
General and administrative	9,909			8,038
Other expenses	427			343
Interest and related amortization	26,393			25,703
Total expenses	192,595			183,043
Gain on sale of real estate, net	52,507			—
Income before equity in income of unconsolidated joint ventures	119,002			62,982
Equity in income of unconsolidated joint ventures	1,533			1,195
Consolidated net income	120,535			64,177

Income allocated to non-controlling interest - Common OP Units	(7,226		)	(3,955		)
Net income available for Common Stockholders	$	113,309		$	60,222



1Q 2019 Supplemental information	4	Equity LifeStyle Properties, Inc.

Non-GAAP Financial Measures



1Q 2019 Supplemental information	5	Equity LifeStyle Properties, Inc.



Selected Non-GAAP Financial Measures

(In millions, except per share data, unaudited)



	Quarter Ended
	March 31, 2019
Income from property operations, excluding deferrals and property management - 2019 Core ⁽¹⁾	$	145.8
Income from property operations, excluding deferrals and property management - Non-Core ⁽¹⁾	7.6
Property management and general and administrative	(23.6		)
Other income and expenses	4.3
Interest and related amortization	(26.4		)
Normalized FFO available for Common Stock and OP Unit holders⁽²⁾	107.7
Insurance proceeds due to catastrophic weather event ⁽³⁾	0.3
FFO available for Common Stock and OP Unit holders ⁽²⁾	$	108.0

Normalized FFO per Common Share and OP Unit - Fully Diluted	$	1.13
FFO per Common Share and OP Unit - Fully Diluted	$	1.13


Normalized FFO available for Common Stock and OP Unit holders ⁽²⁾	$	107.7
Non-revenue producing improvements to real estate ⁽²⁾	(10.1		)
FAD available for Common Stock and OP Unit holders ⁽²⁾	$	97.6

Weighted average Common Stock and OP Units - Fully Diluted	95.6

__________________

See Non-GAAP Financial Measures Definitions and Other Terms at the end of the supplemental information for definitions of Income from property operations, excluding deferrals and property management, Core, Non-Core, and a reconciliation of Net income available for Common Stockholders to Income from property operations, excluding deferrals and property management. See page 9 for details of the Core Income from Property Operations, excluding deferrals and property management. See page 10 for details of the Non-Core Income from Property Operations, excluding deferrals and property management.

See Non-GAAP Financial Measures Definitions and Other Terms at the end of the supplemental information for definitions of FFO, Normalized FFO, FAD and Non-revenue producing improvements to real estate. See page 7 for a reconciliation of Net income available for Common Stockholders to FFO available for Common Stock and OP Unit holders, Normalized FFO available for Common Stock and OP Unit holders and FAD available for Common Stock and OP Unit holders.


3.	Represents insurance recovery revenue from reimbursement for capital expenditures related to Hurricane Irma.



1Q 2019 Supplemental information	6	Equity LifeStyle Properties, Inc.



Reconciliation of Net Income to Non-GAAP Financial Measures

(In thousands, except per share data, unaudited)



	Quarters Ended March 31,
	2019			2018
Net income available for Common Stockholders	$	113,309		$	60,222
Income allocated to Common OP Units	7,226			3,955
Right-to-use contract upfront payments, deferred, net	1,771			1,285
Right-to-use contract commissions, deferred, net	(191		)	(24		)
Depreciation and amortization	37,977			32,374
Depreciation on unconsolidated joint ventures	433			373
Gain on sale of real estate, net	(52,507		)	—
FFO available for Common Stock and OP Unit holders ⁽¹⁾	108,018			98,185
Insurance proceeds due to catastrophic weather event and other, net ⁽²⁾	(349		)	(286		)
Normalized FFO available for Common Stock and OP Unit holders ⁽¹⁾	107,669			97,899
Non-revenue producing improvements to real estate ⁽¹⁾	(10,064		)	(8,764		)
FAD available for Common Stock and OP Unit holders⁽¹⁾	$	97,605		$	89,135

Net income available per Common Share - Basic	$	1.26		$	0.68
Net income available per Common Share - Fully Diluted ⁽³⁾	$	1.26		$	0.68

FFO per Common Share and OP Unit-Basic	$	1.13		$	1.04
FFO per Common Share and OP Unit-Fully Diluted	$	1.13		$	1.04

Normalized FFO per Common Share and OP Unit-Basic	$	1.13		$	1.04
Normalized FFO per Common Share and OP Unit-Fully Diluted	$	1.13		$	1.04

Average Common Stock - Basic	89,780			88,524
Average Common Stock and OP Units - Basic	95,521			94,352
Average Common Stock and OP Units - Fully Diluted	95,624			94,577

___________________________


1.	See Non-GAAP Financial Measures Definitions and Other Terms at the end of the supplemental information for definitions of FFO, Normalized FFO, FAD and Non-revenue producing improvements to real estate.


2.	Represents insurance recovery revenue from reimbursement for capital expenditures related to Hurricane Irma.


3.	Net income per fully diluted Common Share is calculated before Income allocated to non-controlling interest - Common OP Units.



1Q 2019 Supplemental information	7	Equity LifeStyle Properties, Inc.



Consolidated Income from Property Operations ⁽¹⁾

(In millions, except home site and occupancy figures, unaudited)



	Quarters Ended March 31,
	2019			2018
Community base rental income ⁽²⁾	$	135.3		$	126.7
Rental home income	3.6			3.5
Resort base rental income ⁽³⁾	72.1			64.3
Right-to-use annual payments	12.3			11.5
Right-to-use contracts current period, gross	3.8			3.2
Utility and other income ⁽⁴⁾	23.8			25.5
Property operating revenues	250.9			234.7

Property operating, maintenance and real estate taxes ⁽⁵⁾	92.9			89.0
Rental home operating and maintenance	1.2			1.4
Sales and marketing, gross	3.4			2.8
Property operating expenses	97.5			93.2
Income from property operations, excluding deferrals and property management ⁽¹⁾	$	153.4		$	141.5

Manufactured home site figures and occupancy averages:
Total sites	72,370			71,328
Occupied sites	68,590			67,372
Occupancy %	94.8		%	94.5		%
Monthly base rent per site	$	657		$	626

Resort base rental income:
Annual	$	39.0		$	35.2
Seasonal	21.1			19.0
Transient	12.0			10.1
Total resort base rental income	$	72.1		$	64.3

_________________________

Excludes property management and the GAAP deferral of right-to-use contract upfront payments and related commissions, net. See page 4 for the Consolidated Income Statements and see Non-GAAP Financial Measures Definitions and Other Terms at the end of the supplemental information for the definition and reconciliation of Income from property operations, excluding deferrals and property management to Net income available for Common Stockholders.


2.	See the manufactured home site figures and occupancy averages included below within this table.


3.	See resort base rental income detail included below within this table.


4.	Utility and other income includes Hurricane Irma insurance recovery revenues of $0.6 million, which we have identified as business interruption related to Non-Core properties for the quarter ended March 31, 2019 and $3.5 million, including $1.0 million which we have identified as business interruption related to Non-Core properties, for the quarter ended March 31, 2018.


5.	Property operating, maintenance and real estate taxes includes bad debt expense for the quarters ended March 31, 2019 and 2018. Property operating, maintenance and real estate taxes includes debris removal and cleanup costs related to Hurricane Irma of $2.4 million for the quarter ended March 31, 2018.



1Q 2019 Supplemental information	8	Equity LifeStyle Properties, Inc.



Core Income from Property Operations ⁽¹⁾

(In millions, except home site and occupancy figures, unaudited)



	Quarters Ended March 31,
	2019			2018			Change ⁽²⁾
Community base rental income ⁽³⁾	$	131.0		$	124.8		5.0	%
Rental home income	3.5			3.2			8.0	%
Resort base rental income ⁽⁴⁾	65.9			63.3			4.2	%
Right-to-use annual payments	12.3			11.5			6.9	%
Right-to-use contracts current period, gross	3.8			3.2			21.4	%
Utility and other income ⁽⁵⁾	22.7			24.1			(6.0	)%
Property operating revenues	239.2			230.1			4.0	%

Property operating, maintenance and real estate taxes ⁽⁶⁾	88.8			86.9			2.2	%
Rental home operating and maintenance	1.2			1.4			(13.1	)%
Sales and marketing, gross	3.4			2.8			21.4	%
Property operating expenses	93.4			91.1			2.6	%
Income from property operations, excluding deferrals and property management ⁽¹⁾	$	145.8		$	139.0		4.9	%
Occupied sites ⁽⁷⁾	66,389			66,030

Core manufactured home site figures and occupancy averages:
Total sites	69,573			69,519
Occupied sites	66,295			65,926
Occupancy %	95.3		%	94.8		%
Monthly base rent per site	$	659		$	631

Resort base rental income:
Annual	$	37.3		$	35.2		6.1	%
Seasonal	19.2			18.7			2.8	%
Transient	9.4			9.4			(0.3	)%
Total resort base rental income	$	65.9		$	63.3		4.2	%

___________________________


1.	Excludes property management and the GAAP deferral of right-to-use contract upfront payments and related commissions, net. See Non-GAAP Financial Measures Definitions and Other Terms at the end of the supplemental information for definitions of Income from property operations, excluding deferrals and property management, and Core.


2.	Calculations prepared using actual results without rounding.


3.	See the Core manufactured home site figures and occupancy averages included below within this table.


4.	See Core resort base rental income detail included below within this table.


5.	Utility and other income includes Hurricane Irma insurance recovery revenues of $2.2 million for the quarter ended March 31, 2018.


6.	Property operating, maintenance and real estate taxes includes bad debt expense for the quarters ended March 31, 2019 and 2018. Property operating, maintenance and real estate taxes includes debris removal and cleanup costs related to Hurricane Irma of $2.2 million for the quarter ended March 31, 2018.


7.	Occupied sites are presented as of the end of the period. Occupied sites have increased by 78 from 66,311 at December 31, 2018.



1Q 2019 Supplemental information	9	Equity LifeStyle Properties, Inc.



Non-Core Income from Property Operations ⁽¹⁾

(In millions, unaudited)



	Quarter Ended
	March 31, 2019
Community base rental income	$	4.3
Rental home income	0.1
Resort base rental income	6.2
Utility and other income ⁽²⁾	1.1
Property operating revenues	11.7

Property operating expenses ⁽³⁾	4.1
Income from property operations, excluding deferrals and property management ⁽¹⁾	$	7.6

______________________


1.	Excludes property management and the GAAP deferral of right-to-use contract upfront payments and related commissions, net. See Non-GAAP Financial Measures Definitions and Other Terms at the end of the supplemental information for definitions of Income from property operations, excluding deferrals and property management, and Non-Core.


2.	Utility and other income includes Hurricane Irma insurance recovery revenues of $0.6 million, which we have identified as business interruption for the quarter ended March 31, 2019.


3.	Property operating, maintenance and real estate taxes includes bad debt expense for the quarters ended March 31, 2019 and 2018.



1Q 2019 Supplemental information	10	Equity LifeStyle Properties, Inc.



Income from Rental Home Operations

(In millions, except occupied rentals, unaudited)



	Quarters Ended March 31,
	2019		2018
Manufactured homes:
Rental operations revenues ⁽¹⁾	$	11.2	$	11.1
Rental operations expense	1.2		1.4
Income from rental operations	10.0		9.7
Depreciation on rental homes ⁽²⁾	2.4		2.4
Income from rental operations, net of depreciation ⁽³⁾	$	7.6	$	7.3

Occupied rentals:⁽⁴⁾
New	2,860		2,529
Used	1,106		1,569
Total occupied rental sites	3,966		4,098



	As of March 31, 2019				As of March 31, 2018
Cost basis in rental homes: ⁽⁵⁾	Gross		Net of Depreciation		Gross		Net of Depreciation
New	$	171.7	$	141.0	$	131.4	$	104.4
Used	27.3		12.7		36.1		18.7
Total rental homes	$	199.0	$	153.7	$	167.5	$	123.1

__________________________

For the quarters ended March 31, 2019 and 2018, approximately $7.7 million and $7.9 million, respectively, of the rental operations revenue are included in the Community base rental income in the Core Income from Property Operations on page 9. The remainder of the rental operations revenue is included in Rental home income for the quarters ended March 31, 2019 and 2018 in the Core Income from Property Operations on page 9.


2.	Depreciation on rental homes in our Core portfolio is included in Depreciation and amortization in the Consolidated Income Statements on page 4.


3.	See Non-GAAP Financial Measures Definitions and Other Terms at the end of the supplemental information for the definition of Income from rental operations, net of depreciation.


4.	Occupied rentals as of the end of the period in our Core portfolio. Included in the quarters ended March 31, 2019 and 2018 were 290 and 276 homes rented through our ECHO joint venture, respectively. For the quarters ended March 31, 2019 and 2018, the rental home investment associated with our ECHO joint venture totaled approximately $10.5 million and $9.4 million, respectively.


5.	Includes both occupied and unoccupied rental homes in our Core portfolio. New home cost basis does not include the costs associated with our ECHO joint venture. At March 31, 2019 and 2018, our investment in the ECHO joint venture was approximately $16.4 million and $15.8 million, respectively.



1Q 2019 Supplemental information	11	Equity LifeStyle Properties, Inc.



Total Sites and Home Sales

(In thousands, except sites and home sale volumes, unaudited)



Summary of Total Sites as of March 31, 2019
	Sites
Community sites	71,900
Resort sites:
Annuals	29,500
Seasonal	11,300
Transient	11,800
Right-to-use Membership⁽¹⁾	24,300
Joint Ventures ⁽²⁾	5,900
Total	154,700



Home Sales - Select Data
	Quarters Ended March 31,
	2019		2018
Total New Home Sales Volume ⁽³⁾	91		130
New Home Sales Volume - ECHO joint venture	13		18
New Home Sales Gross Revenues ⁽³⁾	$	4,564	$	6,736

Total Used Home Sales Volume	219		241
Used Home Sales Gross Revenues	$	1,911	$	1,573

Brokered Home Resales Volume	168		193
Brokered Home Resale Revenues, net	$	278	$	282

__________________________


1.	Sites primarily utilized by approximately 112,400 members. Includes approximately 5,900 sites rented on an annual basis.


2.	Joint ventures have approximately 2,700 annual Sites, 400 seasonal Sites, 500 transient Sites and includes approximately 2,300 marina slips.


3.	Total new home sales volume includes home sales from our ECHO joint venture. New home sales gross revenues does not include the revenues associated with our ECHO joint venture.



1Q 2019 Supplemental information	12	Equity LifeStyle Properties, Inc.



2019 Guidance - Selected Financial Data ⁽¹⁾

Our guidance acknowledges the existence of volatile economic conditions, which may impact our current guidance assumptions. Factors impacting 2019 guidance include, but are not limited to the following: (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 in annual payments under right-to-use contracts; (v) occupancy changes; (vi) our ability to retain and attract customers renewing or entering right-to-use contracts; (vii) our ability to integrate and operate recent acquisitions in accordance with our estimates; (viii) completion of pending transactions in their entirety and on assumed schedule; (ix) ongoing legal matters and related fees; and (x) costs to restore property operations and potential revenue losses following storms or other unplanned events.

(In millions, except per share data, unaudited)



	Quarter Ending			Year Ending
	June 30, 2019			December 31, 2019
Income from property operations, excluding deferrals and property management - Core ⁽²⁾	$	130.2		$	555.6
Income from property operations - Non-Core⁽³⁾	4.1			20.9
Property management and general and administrative	(22.7		)	(90.3		)
Other income and expenses	3.2			16.8
Interest and related amortization	(26.6		)	(106.1		)
Normalized FFO available for Common Stock and OP Unit holders ⁽⁴⁾	88.2			396.9
Early debt retirement on unconsolidated joint venture	—			(0.4		)
Insurance proceeds due to catastrophic weather event ⁽⁵⁾	—			0.3
FFO available for Common Stock and OP Unit holders ⁽⁴⁾	88.2			396.8
Depreciation and amortization	(38.1		)	(147.4		)
Deferral of right-to-use contract sales revenue and commission, net	(1.7		)	(7.0		)
Gain on sale of real estate, net	—			52.5
Income allocated to non-controlling interest-Common OP Units	(2.9		)	(17.6		)
Net income available for Common Stockholders	$	45.5		$	277.3


Net income per Common Share - Fully Diluted ⁽⁶⁾	$0.47 - $0.53			$3.03 - $3.13
FFO per Common Share and OP Unit - Fully Diluted	$0.89 - $0.95			$4.09 - $4.19
Normalized FFO per Common Share and OP Unit - Fully Diluted	$0.89 - $0.95			$4.10 - $4.20

Weighted average Common Stock outstanding - Fully Diluted	95.8			95.7

_____________________________________

Each line item represents the mid-point of a range of possible outcomes and reflects management’s estimate of the most likely outcome. Actual Normalized FFO available for Common Stock and OP Unit holders, Normalized FFO per Common Share and OP Unit, FFO available for Common Stock and OP Unit holders, FFO per Common Share and OP Unit, Net income available for Common Stockholders and Net income per Common Share could vary materially from amounts presented above if any of our assumptions is incorrect.


2.	See page 14 for 2019 Core Guidance Assumptions. Amount represents 2018 Income from property operations, excluding deferrals and property management, from the 2019 Core properties of $125.0 million multiplied by an estimated growth rate of 4.1% and $530.9 million multiplied by an estimated growth rate of 4.6% for the quarter ending June 30, 2019 and year ending December 31, 2019, respectively.


3.	See page 14 for the 2019 Assumptions regarding the Non-Core Properties.


4.	See Non-GAAP Financial Measures Definitions and Other Terms at the end of the supplemental information for definitions of Normalized FFO and FFO.


5.	Includes insurance recovery revenue from reimbursement for capital expenditures related to Hurricane Irma.


6.	Net income per Common Share - Fully Diluted is calculated before Income allocated to non-controlling interest- Common OP Units.



1Q 2019 Supplemental information	13	Equity LifeStyle Properties, Inc.



2019 Core Guidance Assumptions ⁽¹⁾

(In millions, unaudited)



	Quarter Ended		Second Quarter 2019		Year Ended		2019
	June 30, 2018		Growth Factors ⁽²⁾		December 31, 2018		Growth Factors ⁽²⁾
Community base rental income	$	125.9	4.9	%	$	505.3	4.8	%
Rental home income	3.3		7.1	%	13.1		7.3	%
Resort base rental income ⁽³⁾	54.0		5.1	%	233.4		4.8	%
Right-to-use annual payments	11.9		4.0	%	47.8		3.7	%
Right-to-use contracts current period, gross	3.9		7.8	%	15.2		8.2	%
Utility and other income	21.8		1.2	%	93.5		(5.6	)%
Property operating revenues	220.8		4.6	%	908.3		3.7	%

Property operating, maintenance, and real estate taxes	91.0		5.2	%	358.4		2.6	%
Rental home operating and maintenance	1.5		(11.0	)%	6.5		(15.1	)%
Sales and marketing, gross	3.3		15.2	%	12.5		8.4	%
Property operating expenses	95.8		5.2	%	377.4		2.5	%
Income from property operations, excluding deferrals and property management	$	125.0	4.1	%	$	530.9	4.6	%

Resort base rental income:
Annual	$	36.2	5.8	%	$	145.7	5.5	%
Seasonal	4.9		3.0	%	36.3		3.0	%
Transient	12.9		4.0	%	51.4		4.0	%
Total resort base rental income	$	54.0	5.1	%	$	233.4	4.8	%



2019 Assumptions Regarding Non-Core Properties ⁽¹⁾

(In millions, unaudited)



	Quarter Ending		Year Ending
	June 30, 2019 ⁽⁴⁾		December 31, 2019 ⁽⁴⁾
Community base rental income	$	3.8	$	15.9
Rental home income	—		0.1
Resort base rental income	4.9		21.1
Utility and other income	0.5		2.6
Property operating revenues	9.2		39.7

Property operating, maintenance, and real estate taxes	5.1		18.8
Property operating expenses	5.1		18.8
Income from property operations, excluding deferrals and property management	$	4.1	$	20.9

_____________________________________


1.	See Non-GAAP Financial Measures Definitions and Other Terms at the end of the supplemental information for definitions of Core and Non-Core.


2.	Management’s estimate of the growth of property operations in the 2019 Core Properties compared to actual 2018 performance. Represents our estimate of the mid-point of a range of possible outcomes. Calculations prepared using actual results without rounding. Actual growth for Core properties could vary materially from amounts presented above if any of our assumptions is incorrect.


3.	See Resort base rental income detail included below within this table.


4.	Each line item represents our estimate of the mid-point of a possible range of outcomes and reflects management’s best estimate of the most likely outcome for the Non-Core properties. Actual income from property operations for Non-Core properties could vary materially from amounts presented above if any of our assumptions is incorrect.



1Q 2019 Supplemental information	14	Equity LifeStyle Properties, Inc.



Right-To-Use Memberships - Select Data

(Unaudited)



	Year Ended December 31,
	2015		2016		2017		2018		2019 ⁽¹⁾
Member Count ⁽²⁾	102,413		104,728		106,456		111,094		116,000
Thousand Trails Camping Pass (TTC) Origination	25,544		29,576		31,618		37,528		39,500
TTC Sales	11,877		12,856		14,128		17,194		18,200
RV Dealer TTC Activations	13,667		16,720		17,490		20,334		21,300
Number of annuals ⁽³⁾	5,470		5,756		5,843		5,888		5,900
Number of upgrade sales ⁽⁴⁾	2,687		2,477		2,514		2,500		2,800

(In thousands, unaudited)
Right-to-use annual payments	$	44,441	$	45,036	$	45,798	$	47,778	$	49,600
Resort base rental income from annuals	$	13,821	$	15,413	$	16,841	$	18,363	$	19,600
Resort base rental income from seasonals/transients	$	15,795	$	17,344	$	18,231	$	19,840	$	21,100
Upgrade contract initiations ⁽⁵⁾	$	12,783	$	12,312	$	14,130	$	15,191	$	16,400
Utility and other income	$	2,430	$	2,442	$	2,254	$	2,410	$	2,300

________________________________


1.	Guidance estimate. Each line item represents our estimate of the mid-point of a possible range of outcomes and reflects management’s best estimate of the most likely outcome. Actual figures could vary materially from amounts presented above if any of our assumptions is incorrect.


2.	Members have entered into right-to-use contracts with us that entitle them to use certain properties on a continuous basis for up to 21 days.


3.	Members who rent a specific site for an entire year in connection with their right-to-use contract.


4.	Existing customers who have upgraded agreements are eligible for enhanced benefits, including but not limited to longer stays, the ability to make earlier reservations, potential discounts on rental units, and potential access to additional properties. Upgrades require a non-refundable upfront payment.


5.	Revenues associated with contract upgrades, included in Right-to-use contracts current period, gross, on our Consolidated Income Statements on page 4.



1Q 2019 Supplemental information	15	Equity LifeStyle Properties, Inc.



Market Capitalization

(In millions, except share and OP Unit data, unaudited)



Capital Structure as of March 31, 2019

	Total Common Stock/Units		% of Total Common Stock/Units		Total		% of Total		% of Total Market Capitalization

Secured Debt					$	2,172	91.6	%
Unsecured Debt					200		8.4	%
Total Debt ⁽¹⁾					$	2,372	100.0	%	17.8	%

Common Stock	89,996,134		94.0	%
OP Units	5,739,161		6.0	%
Total Common Stock and OP Units	95,735,295		100.0	%
Common Stock price at March 31, 2019	$	114.30
Fair Value of Common Stock and OP Units					$	10,943	100.0	%
Total Equity					$	10,943	100.0	%	82.2	%

Total Market Capitalization					$	13,315			100.0	%

_________________

1. Excludes deferred financing costs of approximately $25.9 million.



1Q 2019 Supplemental information	16	Equity LifeStyle Properties, Inc.



Debt Maturity Schedule

Debt Maturity Schedule as of March 31, 2019

(In thousands, unaudited)



Year	Secured Debt			Weighted Average Interest Rate		Unsecured Debt			Weighted Average Interest Rate		Total Debt			% of Total Debt		Weighted Average Interest Rate
2019	$	—		—	%	$	—		—	%	$	—		—	%	—	%
2020	116,307			6.14	%	—			—	%	116,307			4.91	%	6.14	%
2021	171,485			5.01	%	—			—	%	171,485			7.23	%	5.01	%
2022	141,389			4.58	%	—			—	%	141,389			5.96	%	4.58	%
2023	105,044			5.06	%	200,000			3.05	%	305,044			12.87	%	3.75	%
2024	10,760			5.49	%	—			—	%	10,760			0.45	%	5.49	%
2025	102,665			3.45	%	—			—	%	102,665			4.33	%	3.45	%
2026	—			—	%	—			—	%	—			—	%	—	%
2027	—			—	%	—			—	%	—			—	%	—	%
2028	225,075			4.19	%	—			—	%	225,075			9.49	%	4.19	%
Thereafter	1,298,088			4.24	%	—			—	%	1,298,088			54.75	%	4.24	%
Total	$	2,170,813		4.43	%	$	200,000		3.05	%	$	2,370,813		100.0	%	4.31	%

Unsecured Line of Credit	—					—					—

Note Premiums	1,326					—					1,326

Total Debt	2,172,139					200,000					2,372,139

Deferred Financing Costs	(24,649		)			(1,294		)			(25,943		)

Total Debt, net	$	2,147,490				$	198,706				$	2,346,196				4.47	%	⁽¹⁾

Average Years to Maturity	13.5					4.1					12.7

__________________


1.	Reflects effective interest rate including amortization of note premiums and deferred financing costs.



1Q 2019 Supplemental information	17	Equity LifeStyle Properties, Inc.



Non-GAAP Financial Measures Definitions and Other Terms

This document contains certain Non-GAAP measures used by management that we believe are helpful in understanding our business, as further discussed in the paragraphs below. We believe investors should review these Non-GAAP measures along with GAAP net income and cash flow from operating activities, investing activities and financing activities, when evaluating an equity REIT’s operating performance. Our definitions and calculations of these Non-GAAP financial and operating measures and other terms may differ from the definitions and methodologies used by other REITs and, accordingly, may not be comparable. These Non-GAAP financial and operating measures 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.

FUNDS FROM OPERATIONS (FFO). We define FFO as net income, computed in accordance with GAAP, excluding gains or losses from sales of properties, depreciation and amortization related to real estate, impairment charges, and adjustments to reflect our share of FFO of unconsolidated joint ventures. Adjustments for unconsolidated joint ventures are calculated to reflect FFO on the same basis. We compute FFO in accordance with our interpretation of standards established by the National Association of Real Estate Investment Trusts (“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. We receive up-front non-refundable payments from the entry 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 non-refundable right-to-use payments, we believe that it is appropriate to adjust for the impact of the deferral activity in our calculation of FFO.

We believe FFO, as defined by the Board of Governors of NAREIT, is generally a 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.

NORMALIZED FUNDS FROM OPERATIONS (NORMALIZED FFO). We define Normalized FFO as FFO excluding the following non-operating income and expense items: a) gains and losses from early debt extinguishment, including prepayment penalties and defeasance costs, and b) other miscellaneous non-comparable items. Normalized FFO presented herein is not necessarily comparable to Normalized FFO presented by other real estate companies due to the fact that not all real estate companies use the same methodology for computing this amount.

FUNDS AVAILABLE FOR DISTRIBUTION (FAD). We define FAD as Normalized FFO less non-revenue producing capital expenditures.

We believe that FFO, Normalized FFO and FAD are helpful to investors as supplemental measures of the performance of an equity REIT. We believe that by excluding the effect of gains or losses from sales of properties, depreciation and amortization related to real estate, impairment charges, which are based on historical costs and may be of limited relevance in evaluating current performance, FFO can facilitate comparisons of operating performance between periods and among other equity REITs. We further believe that Normalized FFO provides useful information to investors, analysts and our management because it allows them to compare our operating performance to the operating performance of other real estate companies and between periods on a consistent basis without having to account for differences not related to our operations. For example, we believe that excluding the early extinguishment of debt, property acquisition and other transaction costs related to mergers and acquisitions from Normalized FFO allows investors, analysts and our management to assess the sustainability of operating performance in future periods because these costs do not affect the future operations of the properties. In some cases, we provide information about identified non-cash components of FFO and Normalized FFO because it allows investors, analysts and our management to assess the impact of those items.

INCOME FROM PROPERTY OPERATIONS, EXCLUDING DEFERRALS AND PROPERTY MANAGEMENT. We define Income from property operations, excluding deferrals and property management as rental income, utility and other income and right-to-use income less property and rental home operating and maintenance expenses, real estate taxes, sales and marketing expenses, excluding property management and the GAAP deferral of right-to-use contract upfront payments and related commissions, net. For comparative purposes, we present bad debt expense within Property operating, maintenance and real estate taxes in the current and prior periods. We believe that this Non-GAAP financial measure is helpful to investors and analysts as a measure of the operating results of our manufactured home and RV communities.



1Q 2019 Supplemental information	18	Equity LifeStyle Properties, Inc.

The following table reconciles Net income available for Common Stockholders to Income from property operations (amounts in thousands):



	Quarters Ended March 31,
	2019			2018
Net income available for Common Stockholders	$	113,309		$	60,222
Income allocated to non-controlling interests - Common OP Units	7,226			3,955
Equity in income of unconsolidated joint ventures	(1,533		)	(1,195		)
Income before equity in income of unconsolidated joint ventures	119,002			62,982
Gain on sale of real estate, net	(52,507		)	—
Right-to-use upfront payments, deferred, net	1,771			1,285
Gross revenues from home sales	(6,475		)	(8,309		)
Brokered resale and ancillary services revenues, net	(1,559		)	(1,401		)
Interest income	(1,751		)	(1,950		)
Income from other investments, net	(986		)	(940		)
Right-to-use contract commissions, deferred, net	(191		)	(24		)
Property management	13,685			13,681
Depreciation and amortization	37,977			32,374
Cost of homes sales	6,632			8,574
Home selling expenses	1,083			1,075
General and administrative	9,909			8,038
Other expenses	427			343
Interest and related amortization	26,393			25,703
Income from property operations, excluding deferrals and property management	153,410			141,431
Right-to-use contracts, upfront payments and commissions, deferred, net	(1,580		)	(1,261		)
Property management	(13,685		)	(13,681		)
Income from property operations	$	138,145		$	126,489

EARNINGS BEFORE INTEREST, TAX, DEPRECIATION AND AMORTIZATION FOR REAL ESTATE (EBITDAre) AND ADJUSTED EBITDAre. We define EBITDAre as net income or loss excluding interest income and expense, income taxes, depreciation and amortization, gains or losses from sales of properties, impairments charges, and adjustments to reflect our share of EBITDAre of unconsolidated joint ventures. We compute EBITDAre in accordance with our interpretation of the standards established by NAREIT, which may not be comparable to EBITDAre 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. We receive up-front non-refundable payments from the entry 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 EBITDAre does not address the treatment of non-refundable right-to-use payments, we believe that it is appropriate to adjust for the impact of the deferral activity in our calculation of EBITDAre.

We define Adjusted EBITDAre as EBITDAre excluding non-operating income and expense items such as gains and losses from early debt extinguishment, including prepayment penalties and defeasance costs, and other miscellaneous non-comparable items.

We believe that EBITDAre and Adjusted EBITDAre may be useful to an investor in evaluating our operating performance and liquidity because the measures are widely used to measure the operating performance of an equity REIT.



1Q 2019 Supplemental information	19	Equity LifeStyle Properties, Inc.

The following table reconciles Consolidated net income to EBITDAre and Adjusted EBITDAre (amounts in thousands):



	Quarters Ended March 31,
	2019			2018
Consolidated net income	$	120,535		$	64,177
Interest income	(1,751		)	(1,950		)
Right-to-use contract upfront payments, deferred, net	1,771			1,285
Right-to-use contract commissions, deferred, net	(191		)	(24		)
Real estate depreciation and amortization	37,977			32,374
Other depreciation and amortization	427			343
Interest and related amortization	26,393			25,703
Gain on sale of real estate, net	(52,507		)	—
Adjustments to our share of EBITDAre of unconsolidated joint ventures	1,001			964
EBITDAre	133,655			122,872
Insurance proceeds due to catastrophic weather event	(349		)	(286		)
Adjusted EBITDAre	$	133,306		$	122,586

CORE. The Core properties include properties we owned and operated during all of 2018 and 2019. We believe Core is a measure that is useful to investors for annual comparison as it removes the fluctuations associated with acquisitions, dispositions and significant transactions or unique situations.

NON-CORE. The Non-Core properties include all properties that were not owned and operated during all of 2018 and 2019. This includes, but is not limited to, two properties acquired during the first quarter of 2019, five properties sold during the first quarter of 2019, five properties acquired during 2018 and Fiesta Key and Sunshine Key RV Resorts.

INCOME FROM RENTAL OPERATIONS, NET OF DEPRECIATION. We use Income from rental operations, net of depreciation as an alternative measure to evaluate the operating results of our home rental program. Income from rental operations, net of depreciation, represents income from rental operations less depreciation expense on rental homes. We believe this measure is meaningful for investors as it provides a complete picture of the home rental program operating results, including the impact of depreciation, which affects our home rental program investment decisions.

NON-REVENUE PRODUCING IMPROVEMENTS. Represents capital expenditures that will not directly result in increased revenue or expense savings and are primarily comprised of common area improvements, furniture and mechanical improvements.

FIXED CHARGES. Fixed charges consist of interest expense, amortization of note premiums and debt issuance costs.



1Q 2019 Supplemental information	20	Equity LifeStyle Properties, Inc.