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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_________________________________________________________ 
FORM 10-Q
_________________________________________________________ 
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 2020
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from             to            
Commission file number: 1-11718
_________________________________________________________ 
EQUITY LIFESTYLE PROPERTIES, INC.
(Exact Name of Registrant as Specified in Its Charter)
_________________________________________________________ 
Maryland
 
 
 
36-3857664
(State or other jurisdiction of incorporation)
 
 
(IRS Employer Identification Number)
Two North Riverside Plaza, Suite 800
 
Chicago,
Illinois
 
60606
(Address of Principal Executive Offices)
 
 
 
(Zip Code)

( 312 ) 279-1400
Registrant's telephone number, including area code
Securities registered pursuant to Section 12(b) of the Act:
 
 
 
Title of each class
Trading Symbol(s)
Name of each exchange on which registered
Common Stock, $0.01 Par Value
ELS
New York Stock Exchange
_________________________________________________________ 
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.     Yes        No  
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).     Yes        No  
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and "emerging growth company" in Rule 12b-2 of the Exchange Act. (Check one):
Large accelerated filer
Accelerated filer
Non-accelerated filer
Smaller reporting company
 
 
Emerging growth company
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
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes         No  
Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date: 182,146,987 shares of Common Stock as of April 23, 2020 .
 



Equity LifeStyle Properties, Inc.
Table of Contents
 
 
 
Page
Item 1.
Financial Statements (unaudited)
 
 
Index To Financial Statements
 
 
 
 
 
 
Item 2.
Item 3.
Item 4.
Item 1.
Item 1A.
Item 2.
Item 3.
Item 4.
Item 5.
Item 6.

2


Part I – Financial Information

Item 1. Financial Statements

Equity LifeStyle Properties, Inc.
Consolidated Balance Sheets
(amounts in thousands, except share and per share data)
 
As of
 
As of
 
March 31, 2020
 
December 31, 2019

(unaudited)
 
 
Assets
 
 
 
Investment in real estate:
 
 
 
Land
$
1,526,225

 
$
1,525,407

Land improvements
3,362,287

 
3,336,070

Buildings and other depreciable property
892,816

 
881,572

 
5,781,328

 
5,743,049

Accumulated depreciation
( 1,812,822
)
 
( 1,776,224
)
Net investment in real estate
3,968,506

 
3,966,825

Cash and restricted cash
96,921

 
28,860

Notes receivable, net
35,227

 
37,558

Investment in unconsolidated joint ventures
20,130

 
20,074

Deferred commission expense
41,230

 
41,149

Other assets, net
50,450

 
56,809

Total Assets
$
4,212,464

 
$
4,151,275

 
 
 
 
Liabilities and Equity
 
 
 
Liabilities:
 
 
 
Mortgage notes payable, net
$
2,260,819

 
$
2,049,509

Term loan, net
199,030

 
198,949

Unsecured line of credit

 
160,000

Accounts payable and other liabilities
124,396

 
124,665

Deferred revenue – upfront payments from membership upgrade sales
129,356

 
126,814

Deferred revenue – annual membership subscriptions
12,319

 
10,599

Accrued interest payable
8,627

 
8,639

Rents and other customer payments received in advance and security deposits
91,152

 
91,234

Distributions payable
65,858

 
58,978

Total Liabilities
2,891,557

 
2,829,387

Equity:
 
 
 
Stockholders' Equity:
 
 
 
Preferred stock, $0.01 par value, 10,000,000 shares authorized as of March 31, 2020 and December 31, 2019; none issued and outstanding.

 

Common stock, $0.01 par value, 400,000,000 shares authorized as of March 31, 2020 and December 31, 2019; 182,144,559 and 182,089,595 shares issued and outstanding as of March 31, 2020 and December 31, 2019, respectively.
1,812

 
1,812

Paid-in capital
1,402,514

 
1,402,696

Distributions in excess of accumulated earnings
( 153,703
)
 
( 154,318
)
Accumulated other comprehensive income (loss)
( 1,713
)
 
( 380
)
Total Stockholders’ Equity
1,248,910

 
1,249,810

Non-controlling interests – Common OP Units
71,997

 
72,078

Total Equity
1,320,907

 
1,321,888

Total Liabilities and Equity
$
4,212,464

 
$
4,151,275












The accompanying notes are an integral part of the consolidated financial statements.

3


Equity LifeStyle Properties, Inc.
Consolidated Statements of Income and Comprehensive Income
(amounts in thousands, except per share data (adjusted for stock split))
(unaudited)
 
Quarters Ended March 31,
 
2020

2019
Revenues:
 
 
 
Rental income
$
239,346

 
$
223,566

Annual membership subscriptions
13,073

 
12,316

Membership upgrade sales current period, gross
4,843

 
3,838

Membership upgrade sales upfront payments, deferred, net
( 2,542
)
 
( 1,771
)
Other income
11,059

 
10,370

Gross revenues from home sales
11,309

 
6,475

Brokered resale and ancillary services revenues, net
938

 
1,559

Interest income
1,807

 
1,751

Income from other investments, net
643

 
986

Total revenues
280,476

 
259,090

Expenses:
 
 
 
Property operating and maintenance
83,634

 
77,948

Real estate taxes
16,841

 
15,323

Sales and marketing, gross
3,978

 
3,409

Membership sales commissions, deferred, net
( 216
)
 
( 191
)
Property management
15,004

 
13,685

Depreciation and amortization
39,024

 
37,977

Cost of home sales
11,911

 
6,632

Home selling expenses
1,213

 
1,083

General and administrative
10,855

 
9,909

Other expenses
588

 
427

Early debt retirement
1,054

 

Interest and related amortization
26,073

 
26,393

Total expenses
209,959

 
192,595

Gain on sale of real estate, net

 
52,507

Income before equity in income of unconsolidated joint ventures
70,517

 
119,002

Equity in income of unconsolidated joint ventures
207

 
1,533

Consolidated net income
70,724

 
120,535

 
 
 
 
Income allocated to non-controlling interests – Common OP Units
( 3,849
)
 
( 7,226
)
Net income available for Common Stockholders
$
66,875

 
$
113,309

 
 
 
 
Consolidated net income
$
70,724

 
$
120,535

Other comprehensive income (loss):
 
 
 
Adjustment for fair market value of swap
( 1,333
)
 
( 931
)
Consolidated comprehensive income
69,391

 
119,604

Comprehensive income allocated to non-controlling interests – Common OP Units
( 3,776
)
 
( 7,170
)
Comprehensive income attributable to Common Stockholders
$
65,615

 
$
112,434

 
 
 
 
Earnings per Common Share – Basic
$
0.37

 
$
0.63

 
 
 
 
Earnings per Common Share – Fully Diluted
$
0.37

 
$
0.63

 
 
 
 
Weighted average Common Shares outstanding – Basic
181,729

 
179,560

Weighted average Common Shares outstanding – Fully Diluted
192,564

 
191,248





The accompanying notes are an integral part of the consolidated financial statements.

4


Equity LifeStyle Properties, Inc.
Consolidated Statements of Changes in Equity
(amounts in thousands; adjusted for stock split)
(unaudited)
 
Common Stock
 
Paid-in Capital
 
Distributions in Excess of Accumulated Earnings
 
Accumulated Other Comprehensive Income (Loss)
 
Non-controlling Interests – Common OP Units
 
Total Equity
Balance as of December 31, 2019
$
1,812

 
$
1,402,696

 
$
( 154,318
)
 
$
( 380
)
 
$
72,078

 
$
1,321,888

Cumulative effect of change in accounting principle (ASU 2016-13, Financial Instruments - Credit Losses (Topic 326))

 

 
( 3,875
)
 

 

 
( 3,875
)
Balance as of January 1, 2020
1,812

 
1,402,696

 
( 158,193
)
 
( 380
)
 
72,078

 
1,318,013

Exchange of Common OP Units for Common Stock

 
63

 

 

 
( 63
)
 

Issuance of Common Stock through employee stock purchase plan

 
619

 

 

 

 
619

Compensation expenses related to restricted stock and stock options

 
2,964

 

 

 

 
2,964

Repurchase of Common Stock or Common OP Units

 
( 3,962
)
 

 

 

 
( 3,962
)
Adjustment for Common OP Unitholders in the Operating Partnership

 
277

 

 

 
( 277
)
 

Adjustment for fair market value of swap

 

 

 
( 1,333
)
 

 
( 1,333
)
Consolidated net income

 

 
66,875

 

 
3,849

 
70,724

Distributions

 

 
( 62,385
)
 

 
( 3,590
)
 
( 65,975
)
Other

 
( 143
)
 

 

 

 
( 143
)
Balance as of March 31, 2020
$
1,812

 
$
1,402,514

 
$
( 153,703
)
 
$
( 1,713
)
 
$
71,997

 
$
1,320,907




 
Common Stock
 
Paid-in Capital
 
Distributions in Excess of Accumulated Earnings
 
Accumulated Other Comprehensive Income (Loss)
 
Non-controlling interests – Common OP Units
 
Total Equity
Balance as of December 31, 2018
$
1,792

 
$
1,328,495

 
$
( 211,034
)
 
$
2,299

 
$
71,792

 
$
1,193,344

Exchange of Common OP Units for Common Stock

 
66

 

 

 
( 66
)
 

Issuance of Common Stock through exercise of options

 
53

 

 

 

 
53

Issuance of Common Stock through employee stock purchase plan

 
652

 

 

 

 
652

Compensation expenses related to restricted stock and stock options

 
2,420

 

 

 

 
2,420

Repurchase of Common Stock or Common OP Units

 
( 53
)
 

 

 

 
( 53
)
Adjustment for Common OP Unitholders in the Operating Partnership

 
( 56
)
 

 

 
56

 

Adjustment for fair market value of swap

 

 

 
( 931
)
 

 
( 931
)
Consolidated net income

 

 
113,309

 

 
7,226

 
120,535

Distributions

 

 
( 55,123
)
 

 
( 3,516
)
 
( 58,639
)
Other

 
( 63
)
 

 

 

 
( 63
)
Balance as of March 31, 2019
$
1,792

 
$
1,331,514

 
$
( 152,848
)
 
$
1,368

 
$
75,492

 
$
1,257,318











The accompanying notes are an integral part of the consolidated financial statements.

5


Equity LifeStyle Properties, Inc.
Consolidated Statements of Cash Flows
(amounts in thousands)
(unaudited)
 
Quarters Ended March 31,
 
2020
 
2019
Cash Flows From Operating Activities:
 
 
 
Consolidated net income
$
70,724

 
$
120,535

Adjustments to reconcile consolidated net income to net cash provided by operating activities:
 
 
 
Gain on sale of real estate, net

 
( 52,507
)
Early debt retirement
1,054

 

Depreciation and amortization
39,628

 
38,404

Amortization of loan costs
872

 
887

Debt premium amortization
( 114
)
 
( 101
)
Equity in income of unconsolidated joint ventures
( 207
)
 
( 1,533
)
Distributions of income from unconsolidated joint ventures

 
677

Proceeds from insurance claims, net
756

 
4,150

Compensation expense related to restricted stock and stock options
2,964

 
2,420

Revenue recognized from membership upgrade sales upfront payments
( 2,301
)
 
( 2,067
)
Commission expense recognized related to membership sales
940

 
938

Long-term incentive plan compensation
383

 
( 3,987
)
Changes in assets and liabilities:
 
 
 
Notes receivable, net
( 317
)
 
122

Deferred commission expense
( 1,020
)
 
( 1,035
)
Other assets, net
13,324

 
( 9,238
)
Accounts payable and other liabilities
( 2,096
)
 
20,402

Deferred revenue – upfront payments from membership upgrade sales
4,843

 
3,838

Deferred revenue – annual membership subscriptions
1,720

 
2,991

Rents and other customer payments received in advance and security deposits
( 261
)
 
3,202

Net cash provided by operating activities
130,892

 
128,098

Cash Flows From Investing Activities:
 
 
 
Real estate acquisitions, net
( 1,352
)
 
( 13,012
)
Proceeds from disposition of properties, net

 
77,746

Distributions of capital from unconsolidated joint ventures
150

 
58

Proceeds from insurance claims

 
761

Capital improvements
( 48,959
)
 
( 52,441
)
Net cash provided by (used in) investing activities
( 50,161
)
 
13,112

























The accompanying notes are an integral part of the consolidated financial statements.

6



Equity LifeStyle Properties, Inc.
Consolidated Statements of Cash Flows (continued)
(amounts in thousands)
(unaudited)

 
Quarters Ended March 31,
 
2020
 
2019
Cash Flows From Financing Activities:
 
 
 
Proceeds from stock options and employee stock purchase plan
619

 
652

Distributions:
 
 
 
Common Stockholders
( 55,765
)
 
( 49,457
)
Common OP Unitholders
( 3,213
)
 
( 3,161
)
Share based award tax withholding payments
( 3,962
)
 

Principal payments and mortgage debt repayment
( 61,791
)
 
( 13,683
)
Mortgage notes payable financing proceeds
275,385

 

Line of Credit repayment
( 222,500
)
 

Line of Credit proceeds
62,500

 

Debt issuance and defeasance costs
( 3,800
)
 
( 250
)
Other
( 143
)
 
( 63
)
Net cash used in financing activities
( 12,670
)
 
( 65,962
)
Net increase (decrease) in cash and restricted cash
68,061

 
75,248

Cash and restricted cash, beginning of period
28,860

 
68,974

Cash and restricted cash, end of period
$
96,921

 
$
144,222


 
Quarters Ended March 31,
 
2020
 
2019
Supplemental Information:
 
 
 
Cash paid for interest
$
25,518

 
$
25,729

Net investment in real estate – reclassification of rental homes
$
9,319

 
$
5,520

Other assets, net – reclassification of rental homes
$
( 9,319
)
 
$
( 5,520
)
 
 
 
 
Real estate acquisitions:
 
 
 
Investment in real estate
$
( 1,531
)
 
$
( 25,797
)
Debt assumed

 
11,208

Other liabilities
179

 
1,577

Real estate acquisitions, net
$
( 1,352
)
 
$
( 13,012
)
 
 
 
 
Real estate dispositions:
 
 
 
Investment in real estate
$

 
$
35,572

Notes receivable, net

 
295

Other assets, net

 
97

Mortgage notes payable, net

 
( 11,175
)
Other liabilities

 
450

Gain on sale of real estate, net

 
52,507

Real estate dispositions, net
$

 
$
77,746















The accompanying notes are an integral part of the consolidated financial statements.

7


Equity LifeStyle Properties, Inc.
Notes to Consolidated Financial Statements


Note 1 – Organization and Basis of Presentation
Equity LifeStyle Properties, Inc. ("ELS"), a Maryland corporation, together with MHC Operating Limited Partnership (the "Operating Partnership") and its other consolidated subsidiaries (the "Subsidiaries"), are referred to herein as "we," "us," and "our." We are a fully integrated owner and operator of lifestyle-oriented properties ("Properties") consisting primarily of manufactured home ("MH") and recreational vehicle ("RV") communities. We provide our customers the opportunity to place manufactured homes, cottages or RVs on our Properties either on a long-term or short-term basis. Our customers may lease individual developed areas ("Sites") or enter into right-to-use contracts, also known as membership subscriptions, which provide them access to specific Properties for limited stays.
Our Properties are owned primarily by the Operating Partnership and managed internally by affiliates of the Operating Partnership. ELS is the sole general partner of the Operating Partnership, has exclusive responsibility and discretion in management and control of the Operating Partnership and held a 94.6 % interest as of March 31, 2020 . As the general partner with control, ELS is the primary beneficiary of, and therefore consolidates, the Operating Partnership.
Equity method of accounting is applied to entities in which ELS does not have a controlling interest or for variable interest entities in which ELS is not considered the primary beneficiary, but with respect to which it can exercise significant influence over operations and major decisions. Our exposure to losses associated with unconsolidated joint ventures is primarily limited to the carrying value of these investments. Accordingly, distributions from a joint venture in excess of our carrying value are recognized in earnings.
The accompanying unaudited interim consolidated financial statements have been prepared pursuant to Securities and Exchange Commission (“SEC”) rules and regulations for Quarterly Reports on Form 10-Q. Accordingly, they do not include all of the information and note disclosures required by U.S. Generally Accepted Accounting Principles ("GAAP") for complete financial statements and should be read in conjunction with the consolidated financial statements and notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2019 .
Intercompany balances and transactions have been eliminated. All adjustments to the interim consolidated financial statements are of a normal, recurring nature and, in the opinion of management, are necessary for a fair presentation of results for these interim periods. Revenues and expenses are subject to seasonal fluctuations and accordingly, quarterly interim results may not be indicative of full year results.
On October 15, 2019, we effected a two -for-one stock split of our common stock. Pursuant to the anti-dilution provision in the Operating Partnership's Agreement of Limited Partnership, the stock split also effected a two-for one split of the outstanding Operating Partnership units ("OP units"). All shares of common stock and OP units and per share data in the consolidated financial statements and accompanying notes, for all periods presented, have been adjusted to reflect the stock split.

Note 2 – Summary of Significant Accounting Policies
(a)
Recently Adopted Accounting Pronouncements

On January 1, 2020, we prospectively adopted FASB ("ASU 2018-15") Intangibles - Goodwill and Other - Internal-Use Software (ASC 350-40), Customer's Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract . ASU 2018-15 provides guidance on accounting for fees paid when the arrangement includes a software license and aligns the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing costs to develop or obtain internal-use software. The adoption of this guidance did not have a material impact on our consolidated financial statements.
On January 1, 2020 we adopted FASB (“ASU 2016-13”) Financial Instruments - Credit Losses (Topic 326) using the modified retrospective approach. ASU 2016-13 requires entities to measure all expected credit losses for financial assets held at the reporting date based on historical experience, current conditions, and reasonable and supportable forecasts. Entities should use forward-looking information to better form their credit loss estimates. 
We are exposed to credit losses primarily through sales of annual membership subscriptions and membership upgrades and home sales. We have developed an allowance for credit losses, which represents an estimate of expected losses over the remaining contractual life of our receivables considering current market conditions and estimates for forecasts when appropriate. The estimate

8


Equity LifeStyle Properties, Inc.
Notes to Consolidated Financial Statements

Note 2 – Summary of Significant Accounting Policies (continued)

is a result of our ongoing assessments and evaluations of collectability, historical loss experience and future expectations in estimating credit losses in each of our receivable portfolios. We recognized a cumulative-effect adjustment of $ 3.9 million , which decreased opening retained earnings as of January 1, 2020.
The cumulative-effect adjustment resulting from the adoption of ASU 2016-13 as of January 1, 2020 was as follows:
Balance net of allowance
Balance Sheet Location
 
Balance at December 31, 2019
 
Adjustment due to ASU 2016-13 Adoption
 
Balance at January 1, 2020
 
Balance at
March 31, 2020
(amounts in thousands)
 
 
 
 
 
 
 
 
 
Annual membership subscriptions
Other assets, net
 
$
2,394

 
$
( 1,361
)
 
$
1,033

 
$
1,232

Membership upgrades
Notes receivable, net
 
$
25,236

 
$
( 2,514
)
 
$
22,722

 
$
23,149


(b)
Revenue Recognition
Rental income is accounted for in accordance with the ASC 842, Leases , and is recognized over the term of the respective lease or the length of a customer's stay. Utility recoveries are presented within Rental income on the Consolidated Statements of Income and Comprehensive Income. Expected credit losses related to the collectability of lease receivables are presented as a reduction to Rental Income. Lease receivables are presented within Other assets, net on the Consolidated Balance Sheets and are net of expected credit losses. See Note 3. Leases for additional information.

Annual membership subscriptions and membership upgrade sales are accounted for in accordance with ASC 606, Revenue from Contracts with Customers. Membership subscriptions provide our customers access to specific Properties for limited stays at a specified group of Properties. Payments are deferred and recognized on a straight-line basis over the one-year period during which access to Sites at certain Properties is provided. Membership subscription receivables are presented within Other assets, net on the Consolidated Balance Sheets and are net of an allowance for credit losses. Membership upgrades grant certain additional access rights to the customer and require non-refundable upfront payments. The non-refundable upfront payments are recognized on a straight-line basis over 20 years. Financed upgrade sales (also known as contract receivables) are presented within Notes receivable, net on the Consolidated Balance Sheets and are net of an allowance for credit losses.

Income from home sales is recognized when the earnings process is complete. The earnings process is complete when the home has been delivered, the purchaser has accepted the home and title has transferred. Financed home sales (also known as chattel loans) are presented within Notes receivable, net on the Consolidated Balance Sheets and are net of an allowance for credit losses.
(c)
Restricted Cash
As of March 31, 2020 and December 31, 2019 , restricted cash consists of $ 27.6 million and $ 25.1 million , respectively, primarily related to cash reserved for customer deposits and amounts escrowed for insurance and real estate taxes.


9


Equity LifeStyle Properties, Inc.
Notes to Consolidated Financial Statements
Note 3 – Leases


Lessor
Rental income derived from customers renting our Sites is accounted for in accordance with ASC 842, Leases , and is recognized over the term of the respective operating lease or the length of a customer's stay. MH Sites are generally leased on an annual basis to residents who own or lease factory-built homes, including manufactured homes. Annual RV and marina Sites are leased on an annual basis to customers who generally have an RV, factory-built cottage, boat or other unit placed on the site, including those Northern properties that are open for the summer season. Seasonal RV and marina Sites are leased to customers generally for one to six months . Transient RV and marina Sites are leased to customers on a short-term basis. In addition, customers may lease homes that are located in our communities.
The leases entered into between the customer and us for a rental of a Site are renewable upon the consent of both parties or, in some instances, as provided by statute. Long-term leases that are non-cancelable by the tenants are in effect at certain Properties. Rental rate increases at these Properties are primarily a function of increases in the Consumer Price Index, taking into consideration certain conditions. Additionally, periodic market rate adjustments are made as deemed appropriate. In addition, certain state statutes allow entry into long-term agreements that effectively modify lease terms related to rent amounts and increases over the term of the agreements. The following table presents future minimum rents expected to be received under long-term non-cancelable tenant leases, as well as those leases that are subject to long-term agreements governing rent payments and increases:
 
(amounts in thousands)
 
As of March 31, 2020
2020
 
$
63,393

2021
 
85,220

2022
 
53,423

2023
 
20,119

2024
 
20,144

Thereafter
 
79,241

Total
 
$
321,540



Lessee
We lease land under non-cancelable operating leases at 13 Properties expiring at various dates through 2054 . The majority of the leases have terms requiring fixed payments plus additional rents based on a percentage of gross revenues at those Properties. We also have other operating leases, primarily office space, expiring at various dates through 2026 . For the quarters ended March 31, 2020 and 2019 , total operating lease payments were $ 2.4 million and $ 2.3 million , respectively.
The following table summarizes our minimum future rental payments, excluding variable costs, which are discounted by our incremental borrowing rate to calculate the lease liability for our operating leases as of March 31, 2020 :
 
 
As of March 31, 2020
 
(amounts in thousands)
 
Ground Leases
 
Office and Other Leases
 
Total
 
2020
 
$
1,462

 
$
2,444

 
$
3,906

 
2021
 
1,949

 
2,602

 
4,551

 
2022
 
1,479

 
916

 
2,395

 
2023
 
534

 
687

 
1,221

 
2024
 
534

 
505

 
1,039

 
Thereafter
 
4,984

 
484

 
5,468

 
Total undiscounted rental payments
 
10,942

 
7,638

 
18,580

 
Less imputed interest
 
( 2,300
)
 
( 558
)
 
( 2,858
)
 
Total lease liabilities
 
$
8,642

 
$
7,080

 
$
15,722

 


Right-of-use ("ROU") assets and lease liabilities from our operating leases, included within Other assets, net and Accounts payable and other liabilities on the Consolidated Balance Sheets, were $ 14.7 million and $ 15.7 million , respectively, as of March

10


Equity LifeStyle Properties, Inc.
Notes to Consolidated Financial Statements
Note 3 – Leases (continued)


31, 2020 . The weighted average remaining lease term for our operating leases was seven years and the weighted average incremental borrowing rate was 4.3 % at March 31, 2020 .
ROU assets and lease liabilities from our operating leases, included within Other assets, net and Accounts payable and other liabilities on the Consolidated Balance Sheets, were $ 15.1 million and $ 16.2 million , respectively, as of December 31, 2019 . The weighted average remaining lease term for our operating leases was seven years and the weighted average incremental borrowing rate was 4.4 % at December 31, 2019 .

Note 4 – Earnings Per Common Share
The following table sets forth the computation of basic and diluted earnings per share of common stock, as adjusted for the stock split, for the quarters ended March 31, 2020 and 2019 :
 
 
Quarters Ended March 31,
(amounts in thousands, except per share data)
 
2020
 
2019
Numerators:
 
 
 
 
Net income available for Common Stockholders – Basic
 
$
66,875

 
$
113,309

Amounts allocated to dilutive securities
 
3,849

 
7,226

Net income available for Common Stockholders – Fully Diluted
 
$
70,724

 
$
120,535

Denominators:
 
 
 
 
Weighted average Common Shares outstanding – Basic
 
181,729

 
179,560

Effect of dilutive securities:
 
 
 
 
Exchange of Common OP Units for Common Shares
 
10,491

 
11,482

Stock options and restricted stock
 
344

 
206

Weighted average Common Shares outstanding – Fully Diluted
 
192,564

 
191,248

 
 
 
 
 
Earnings per Common Share – Basic
 
$
0.37

 
$
0.63

 
 
 
 
 
Earnings per Common Share – Fully Diluted
 
$
0.37

 
$
0.63

 
 
 
 
 


Note 5 – Common Stock and Other Equity Related Transactions
Two-for-One Common Stock and OP Units Split
On October 15, 2019, a two -for-one stock split of our common stock, effected by and in the form of a stock dividend, was paid to stockholders of record as of October 1, 2019. In connection with our stock split, the OP Units of our Operating Partnership were also split on a two -for-one basis.
Common Stockholder Distribution Activity
The following quarterly distributions, as adjusted for the stock split, have been declared and paid to Common Stockholders and the OP Unit holders since January 1, 2019.
Distribution Amount Per Share
 
For the Quarter Ended
 
Stockholder Record Date
 
Payment Date
$ 0.3063
 
March 31, 2019
 
March 29, 2019
 
April 12, 2019
$ 0.3063
 
June 30, 2019
 
June 28, 2019
 
July 12, 2019
$ 0.3063
 
September 30, 2019
 
September 27, 2019
 
October 11, 2019
$ 0.3063
 
December 31, 2019
 
December 27, 2019
 
January 10, 2020
$ 0.3425
 
March 31, 2020
 
March 27, 2020
 
April 10, 2020






11


Equity LifeStyle Properties, Inc.
Notes to Consolidated Financial Statements
Note 5 – Common Stock and Other Equity Related Transactions (continued)

Equity Offering Program
Our at-the-market (“ATM”) equity offering program allows us to sell, from time-to-time, shares of our common stock, par value $ 0.01 per share, having an aggregate offering price of up to $ 200.0 million . As of March 31, 2020 , we have $ 140.7 million of common stock available under the ATM offering program for issuance.
Exchanges
Subject to certain limitations, OP Unit holders can request an exchange of any or all of their OP Units for shares of Common Stock at any time. Upon receipt of such a request, we may, in lieu of issuing shares of Common Stock, cause the Operating Partnership to pay cash. During the quarters ended March 31, 2020 and 2019 , 9,228 and 10,650 OP Units, respectively, were exchanged for an equal number of shares of Common Stock

Note 6 – Investment in Real Estate
Acquisitions
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 .
Dispositions
On January 23, 2019 , we closed on the sale of five all-age MH communities located in Indiana and Michigan, collectively containing 1,463 sites, for $ 89.7 million and recognized a gain of $ 52.5 million , net of transaction costs, during the first quarter of 2019.

Note 7 – Investment in Unconsolidated Joint Ventures
The following table summarizes our investment in unconsolidated joint ventures (investment amounts in thousands with the number of Properties shown parenthetically as of March 31, 2020 and December 31, 2019 , respectively ) :
 
 
 
 
 
 
 
 
Investment as of
 
Income/(Loss) for
Quarters Ended
Investment
 
Location
 
 Number of Sites
 
Economic
Interest
(a)
 
March 31,
2020
 
December 31,
2019
 
March 31,
2020
 
March 31,
2019
Meadows
 
Various (2,2)
 
1,077

 
50
%
 
$
146

 
$
146

 
$

 
$
397

Lakeshore
 
Florida (3,3)
 
721

 
(b)

 
2,408

 
2,467

 
90

 
69

Voyager
 
Arizona (1,1)
 
1,801

 
50
%
(c)  
588

 
599

 
( 10
)
 
604

Loggerhead
 
Florida
 
2,343

 
%
(d)  

 

 

 
321

ECHO JV
 
Various
 

 
50
%
 
16,988

 
16,862

 
127

 
142

 
 
 
 
5,942

 
 
 
$
20,130

 
$
20,074

 
$
207

 
$
1,533

_____________________
(a)
The percentages shown approximate our economic interest as of March 31, 2020 . Our legal ownership interest may differ.
(b)
Includes two joint ventures in which we own a 65 % interest and the Crosswinds joint venture in which we own a 49 % interest.
(c)
Primarily consists of a 50 % interest in Voyager RV Resort and a 33 % interest in the utility plant servicing this Property.
(d)
On September 10, 2019, we completed the acquisition of the remaining interest in the Loggerhead joint venture. Loggerhead sites represent marina slip count.
We received approximately $ 0.2 million and $ 0.7 million in distributions from our unconsolidated joint ventures for the quarters ended March 31, 2020 and 2019 , respectively. Approximately $ 0.1 million of the distributions made to us exceeded our basis in our unconsolidated joint ventures for the quarter ended March 31, 2020 , and as such, were recorded as income from unconsolidated joint ventures. None of the distributions made to us exceeded our basis in joint ventures for the quarter ended March 31, 2019 .


12


Equity LifeStyle Properties, Inc.
Notes to Consolidated Financial Statements
Note 8 – Borrowing Arrangements

Mortgage Notes Payable
Our mortgage notes payable is classified as Level 2 in the fair value hierarchy. The following table presents the fair value of our mortgage notes payable:
 
 
As of March 31, 2020
 
As of December 31, 2019
(amounts in thousands)
 
Fair Value
 
Carrying Value
 
Fair Value
 
Carrying Value
Mortgage notes payable, excluding deferred financing costs
 
$
2,414,922