SEC Filing | Equity LifeStyle Properties, Inc.

View:

els-20220930

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 September 30, 2022


☐			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: 186,111,005 shares of Common Stock as of October 18, 2022.

Equity LifeStyle Properties, Inc.

Table of Contents


		Page
Part I - Financial Information
Item 1.	Financial Statements (unaudited)
	Index To Financial Statements
	Consolidated Balance Sheets as of September 30 , 2022 and December 31, 2021	3
	Consolidated Statements of Income and Comprehensive Income for the quarters and nine months ended September 30, 2022 and 2021	4
	Consolidated Statements of Changes in Equity for the quarters and nine months ended September 30, 2022 and 2021	5
	Consolidated Statements of Cash Flows for the nine months ended September 30, 2022 and 2021	7
	Notes to Consolidated Financial Statements	9
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	21
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	42
Item 4.	Controls and Procedures	42
Part II - Other Information
Item 1.	Legal Proceedings	43
Item 1A.	Risk Factors	43
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	43
Item 3.	Defaults Upon Senior Securities	43
Item 4.	Mine Safety Disclosures	43
Item 5.	Other Information	43
Item 6.	Exhibits	43

Part I – Financial Information

Item 1. Financial Statements

Equity LifeStyle Properties, Inc.

Consolidated Balance Sheets

(amounts in thousands, except share and per share data)


	September 30, 2022		December 31, 2021
	(unaudited)
Assets
Investment in real estate:
Land	$	2,080,234	$	2,019,787
Land improvements	4,050,685		3,912,062
Buildings and other depreciable property	1,137,297		1,057,215
	7,268,216		6,989,064
Accumulated depreciation	(2,211,405)		(2,103,774)
Net investment in real estate	5,056,811		4,885,290
Cash and restricted cash	30,510		123,398
Notes receivable, net	44,653		39,955
Investment in unconsolidated joint ventures	88,352		70,312
Deferred commission expense	50,029		47,349
Other assets, net	135,091		141,567
Total Assets	$	5,405,446	$	5,307,871

Liabilities and Equity
Liabilities:
Mortgage notes payable, net	$	2,708,751	$	2,627,783
Term loan, net	496,595		297,436
Unsecured line of credit	94,984		349,000
Accounts payable and other liabilities	184,771		172,285
Deferred membership revenue	195,290		176,439
Accrued interest payable	10,317		9,293
Rents and other customer payments received in advance and security deposits	115,035		118,696
Distributions payable	80,314		70,768
Total Liabilities	3,886,057		3,821,700
Equity:
Stockholders' Equity:
Preferred stock, $0.01 par value, 10,000,000 shares authorized as of September 30, 2022 and December 31, 2021; none issued and outstanding.	—		—
Common stock, $0.01 par value, 600,000,000 shares authorized as of September 30, 2022 and December 31, 2021; 186,108,851 and 185,640,379 shares issued and outstanding as of September 30, 2022 and December 31, 2021, respectively.	1,916		1,913
Paid-in capital	1,625,751		1,593,362
Distributions in excess of accumulated earnings	(200,969)		(183,689)
Accumulated other comprehensive income	20,476		3,524
Total Stockholders’ Equity	1,447,174		1,415,110
Non-controlling interests – Common OP Units	72,215		71,061
Total Equity	1,519,389		1,486,171
Total Liabilities and Equity	$	5,405,446	$	5,307,871

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

Equity LifeStyle Properties, Inc.

Consolidated Statements of Income and Comprehensive Income

(amounts in thousands, except per share data)

(unaudited)


	Quarters Ended September 30,				Nine Months Ended September 30,
	2022		2021		2022		2021
Revenues:
Rental income	$	289,016	$	269,573	$	849,411	$	774,293
Annual membership subscriptions	16,254		15,127		47,003		43,048
Membership upgrade sales current period, gross	11,085		10,122		27,771		29,343
Membership upgrade sales upfront payments, deferred, net	(7,777)		(7,253)		(18,228)		(21,134)
Other income	15,580		12,053		43,316		36,759
Gross revenues from home sales, brokered resales and ancillary services	52,547		44,570		144,937		110,048
Interest income	1,865		1,805		5,346		5,314
Income from other investments, net	2,399		1,238		6,920		3,396
Total revenues	380,969		347,235		1,106,476		981,067
Expenses:
Property operating and maintenance	123,181		109,164		341,480		300,700
Real estate taxes	17,734		18,408		56,373		54,154
Sales and marketing, gross	7,143		6,513		18,466		18,987
Membership sales commissions, deferred, net	(1,206)		(1,468)		(2,746)		(4,405)
Property management	19,003		17,015		55,973		48,955
Depreciation and amortization	52,547		44,414		152,737		138,127
Cost of home sales, brokered resales and ancillary services	40,224		34,830		111,894		85,541
Home selling expenses and ancillary operating expenses	7,080		6,558		21,146		17,588
General and administrative	11,086		10,401		35,078		31,141
Other expenses	1,627		797		6,636		2,295
Early debt retirement	—		—		1,156		2,784
Interest and related amortization	29,759		27,361		85,276		80,767
Total expenses	308,178		273,993		883,469		776,634
Loss on sale of real estate and impairment, net	(3,747)		—		(3,747)		(59)
Income before equity in income of unconsolidated joint ventures	69,044		73,242		219,260		204,374
Equity in income of unconsolidated joint ventures	1,465		851		2,889		2,786
Consolidated net income	70,509		74,093		222,149		207,160

Income allocated to non-controlling interests – Common OP Units	(3,346)		(3,468)		(10,563)		(10,236)
Redeemable perpetual preferred stock dividends	—		—		(8)		(8)
Net income available for Common Stockholders	$	67,163	$	70,625	$	211,578	$	196,916

Consolidated net income	$	70,509	$	74,093	$	222,149	$	207,160
Other comprehensive income (loss):
Adjustment for fair market value of swap	4,235		86		16,952		325
Consolidated comprehensive income	74,744		74,179		239,101		207,485
Comprehensive income allocated to non-controlling interests – Common OP Units	(3,547)		(3,472)		(11,370)		(10,253)
Redeemable perpetual preferred stock dividends	—		—		(8)		(8)
Comprehensive income attributable to Common Stockholders	$	71,197	$	70,707	$	227,723	$	197,224

Earnings per Common Share – Basic	$	0.36	$	0.38	$	1.14	$	1.08

Earnings per Common Share – Fully Diluted	$	0.36	$	0.38	$	1.14	$	1.08

Weighted average Common Shares outstanding – Basic	185,814		183,469		185,758		182,590
Weighted average Common Shares outstanding – Fully Diluted	195,269		192,736		195,248		192,689

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

Equity LifeStyle Properties, Inc.

Consolidated Statements of Changes in Equity

(amounts in thousands)

(unaudited)


	Common Stock		Paid-in Capital		Redeemable Perpetual Preferred Stock		Distributions in Excess of Accumulated Earnings		Accumulated Other Comprehensive Income (Loss)		Non-controlling Interests – Common OP Units		Total Equity
Balance as of December 31, 2021	$	1,913	$	1,593,362	$	—	$	(183,689)	$	3,524	$	71,061	$	1,486,171
Exchange of Common OP Units for Common Stock	—		67		—		—		—		(67)		—

Issuance of Common Stock through employee stock purchase plan	—		513		—		—		—		—		513
Issuance of Common Stock	3		28,367				—		—		—		28,370
Compensation expenses related to restricted stock and stock options	—		2,590		—		—		—		—		2,590
Repurchase of Common Stock or Common OP Units	—		(3,449)		—		—		—		—		(3,449)
Adjustment for Common OP Unitholders in the Operating Partnership	—		(1,641)		—		—		—		1,641		—
Adjustment for fair market value of swap	—		—		—		—		9,924		—		9,924
Consolidated net income	—		—		—		82,906		—		4,144		87,050
Distributions	—		—		—		(76,375)		—		(3,812)		(80,187)
Other	—		(645)		—		—		—		—		(645)
Balance as of March 31, 2022	1,916		1,619,164		—		(177,158)		13,448		72,967		1,530,337


Issuance of Common Stock through employee stock purchase plan	—		1,388		—		—		—		—		1,388

Compensation expenses related to restricted stock and stock options	—		2,681		—		—		—		—		2,681

Adjustment for Common OP Unitholders in the Operating Partnership	—		(303)		—		—		—		303		—
Adjustment for fair market value of swap	—		—		—		—		2,793		—		2,793
Consolidated net income	—		—		8		61,509		—		3,073		64,590
Distributions	—		—		(8)		(76,179)		—		(3,812)		(79,999)
Other	—		(54)		—		—		—		—		(54)
Balance as of June 30, 2022	1,916		1,622,876		—		(191,828)		16,241		72,531		1,521,736
Exchange of Common OP Units for Common Stock	—		203		—		—		—		(203)		—

Issuance of Common Stock through employee stock purchase plan	—		458		—		—		—		—		458

Compensation expenses related to restricted stock and stock options	—		2,654		—		—		—		—		2,654

Adjustment for Common OP Unitholders in the Operating Partnership	—		(342)		—		—		—		342		—
Adjustment for fair market value of swap	—		—		—		—		4,235		—		4,235
Consolidated net income	—		—		—		67,164		—		3,346		70,510
Distributions	—		—		—		(76,305)		—		(3,801)		(80,106)
Other	—		(98)		—		—		—		—		(98)
Balance as of September 30, 2022	$	1,916	$	1,625,751	$	—	$	(200,969)	$	20,476	$	72,215	$	1,519,389

Equity LifeStyle Properties, Inc.

Consolidated Statements of Changes in Equity

(amounts in thousands)

(unaudited)


	Common Stock		Paid-in Capital		Redeemable Perpetual Preferred Stock		Distributions in Excess of Accumulated Earnings		Accumulated Other Comprehensive Income (Loss)		Non-controlling interests – Common OP Units		Total Equity
Balance as of December 31, 2020	$	1,813	$	1,411,397	$	—	$	(179,523)	$	—	$	71,068	$	1,304,755
Exchange of Common OP Units for Common Stock	—		58		—		—		—		(58)		—

Issuance of Common Stock through employee stock purchase plan	—		732		—		—		—		—		732

Compensation expenses related to restricted stock and stock options	—		2,556		—		—		—		—		2,556
Repurchase of Common Stock or Common OP Units	—		(2,814)		—		—		—		—		(2,814)

Adjustment for fair market value of swap	—		—		—		—		129		—		129
Consolidated net income	—		—		—		65,240		—		3,747		68,987
Distributions	—		—		—		(66,087)		—		(3,796)		(69,883)
Other	—		(116)		—		—		—		—		(116)
Balance as of March 31, 2021	1,813		1,411,813		—		(180,370)		129		70,961		1,304,346
Exchange of Common OP Units for Common Stock	14		9,310		—		—		—		(9,324)		—

Issuance of Common Stock through employee stock purchase plan	—		605		—		—		—		—		605

Compensation expenses related to restricted stock and stock options	—		2,821		—		—		—		—		2,821

Adjustment for Common OP Unitholders in the Operating Partnership	—		(143)		—		—		—		143		—
Adjustment for fair market value of swap	—		—		—		—		110		—		110
Consolidated net income	—		—		8		61,051		—		3,021		64,080
Distributions	—		—		(8)		(66,611)		—		(3,296)		(69,915)
Other	—		(56)		—		—		—		—		(56)
Balance as of June 30, 2021	1,827		1,424,350		—		(185,930)		239		61,505		1,301,991
Exchange of Common OP Units for Common Stock	1		438		—		—		—		(439)		—

Issuance of Common Stock through employee stock purchase plan	—		379		—		—		—		—		379

Compensation expenses related to restricted stock and stock options	—		2,774		—		—		—		—		2,774

Adjustment for Common OP Unitholders in the Operating Partnership	—		(142)		—		—		—		142		—
Adjustment for fair market value of swap	—		—		—		—		86		—		86
Consolidated net income	—		—		—		70,625		—		3,468		74,093
Distributions	—		—		—		(66,636)		—		(3,272)		(69,908)
Other	—		(193)		—		—		—		—		(193)
Balance as of September 30, 2021	$	1,828	$	1,427,606	$	—	$	(181,941)	$	325	$	61,404	$	1,309,222

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

Equity LifeStyle Properties, Inc.

Consolidated Statements of Cash Flows

(amounts in thousands)

(unaudited)


	Nine Months Ended September 30,
	2022		2021
Cash Flows From Operating Activities:
Consolidated net income	$	222,149	$	207,160
Adjustments to reconcile consolidated net income to net cash provided by operating activities:
Loss on sale of real estate and impairment, net	3,747		59
Early debt retirement	1,156		2,784
Depreciation and amortization	156,074		140,336
Amortization of loan costs	3,631		3,505
Debt premium amortization	(145)		(243)
Equity in income of unconsolidated joint ventures	(2,889)		(2,786)
Distributions of income from unconsolidated joint ventures	340		52
Proceeds from insurance claims, net	(457)		589
Compensation expense related to incentive plans	5,367		9,434
Revenue recognized from membership upgrade sales upfront payments	(9,544)		(8,208)
Commission expense recognized related to membership sales	3,089		2,843

Changes in assets and liabilities:
Notes receivable, net	(3,954)		(4,129)
Deferred commission expense	(5,769)		(7,119)
Other assets, net	75,428		24,616
Accounts payable and other liabilities	15,475		47,520
Deferred membership revenue	28,080		30,738
Rents and other customer payments received in advance and security deposits	(3,957)		6,456
Net cash provided by operating activities	487,821		453,607
Cash Flows From Investing Activities:
Real estate acquisitions, net	(119,255)		(477,785)
Proceeds from disposition of properties, net	—		(7)
Investment in unconsolidated joint ventures	(16,022)		(493)
Distributions of capital from unconsolidated joint ventures	3,602		2,320
Proceeds from insurance claims	1,405		2,048


Capital improvements	(268,614)		(204,037)
Net cash used in investing activities	(398,884)		(677,954)

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

Equity LifeStyle Properties, Inc.

Consolidated Statements of Cash Flows (continued)

(amounts in thousands)

(unaudited)


	Nine Months Ended September 30,
	2022		2021
Cash Flows From Financing Activities:
Proceeds from stock options and employee stock purchase plan	2,359		1,717
Gross proceeds from the issuance of common stock	28,370		—
Distributions:
Common Stockholders	(219,854)		(195,112)
Common OP Unitholders	(10,997)		(10,681)
Preferred Stockholders	(8)		(8)

Share based award tax withholding payments	(3,449)		(2,814)
Principal payments and mortgage debt repayment	(119,608)		(108,968)
Mortgage notes payable financing proceeds	200,000		270,016
Term loan repayment	—		(300,000)
Term loan proceeds	200,000		600,000
Line of Credit repayment	(495,016)		(379,500)
Line of Credit proceeds	241,000		377,500
Debt issuance and defeasance costs	(3,826)		(11,225)
Other	(796)		(366)
Net cash (used in) provided by financing activities	(181,825)		240,559
Net (decrease) increase in cash and restricted cash	(92,888)		16,212
Cash and restricted cash, beginning of year	123,398		24,060
Cash and restricted cash, end of period	$	30,510	$	40,272


	Nine Months Ended September 30,
	2022		2021
Supplemental Information:
Cash paid for interest, net	$	82,368	$	77,377
Net investment in real estate – reclassification of rental homes	$	75,726	$	55,355
Other assets, net – reclassification of rental homes	$	(75,726)	$	(55,355)

Real estate acquisitions:
Investment in real estate	$	(119,796)	$	(494,342)
Notes receivable, net	(772)		—

Other assets, net	—		(2,815)


Deferred revenue - sale of right-to-use contracts	315		—
Accrued expenses and accounts payable	—		8,432
Other liabilities	702		—
Rents and other customer payments received in advance and security deposits	296		10,940
Real estate acquisitions, net	$	(119,255)	$	(477,785)

Real estate dispositions:
Investment in real estate	$	—	$	52




Loss on sale of real estate, net	—		(59)
Real estate dispositions, net	$	—	$	(7)

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

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 of lifestyle-oriented properties (“Properties”) consisting of property operations and home sales and rental operations primarily within manufactured home (“MH”) and recreational vehicle (“RV”) communities and marinas. We have a unique business model where we own the land which we lease to customers who own manufactured homes and cottages, RVs and/or boats 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 95.3% interest as of September 30, 2022. 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, 2021.

Intercompany balances and transactions have been eliminated. All adjustments to the unaudited 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. Certain prior period amounts have been reclassified on our unaudited interim consolidated financial statements to conform with current year presentation.

Note 2 – Summary of Significant Accounting Policies

(a) Revenue Recognition

Our revenue streams are predominantly derived from customers renting our Sites or entering into membership subscriptions. Leases with customers renting our Sites are accounted for as operating leases. The rental income associated with these leases is accounted for in accordance with the Accounting Standards Codification (“ASC”) 842, Leases, and is recognized over the term of the respective 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. RV and marina Sites are leased to those who generally have an RV, factory-built cottage, boat or other unit placed on the site, including those customers renting marina dry storage slips. Annual Sites are leased on an annual basis, including those Northern Properties that are open for the summer season. Seasonal Sites are leased to customers generally for one to six months. Transient Sites are leased to customers on a short-term basis. We do not separate expenses reimbursed by our customers (“utility recoveries”) from the associated rental income as we meet the practical expedient criteria to combine the lease and non-lease components. We assessed the criteria and concluded that the timing and pattern of transfer for rental income and the associated utility recoveries are the same and, as our leases qualify as operating leases, we account for and present rental income and utility recoveries as a single component under Rental income in our Consolidated Statements of Income and Comprehensive Income. In addition, customers may lease homes that are located in our communities. These leases are accounted for as operating leases. Rental income derived from customers leasing homes is also accounted for in accordance with ASC 842, Leases and is recognized over the term of the respective lease. The allowance for credit losses related to the collectability of lease receivables is presented as a reduction to Rental income. Lease receivables are presented within Other assets, net on the Consolidated Balance Sheets and are net of an allowance for credit losses. The estimate for credit losses is a result of our ongoing assessments and evaluations of collectability, including historical loss experience, current market conditions and future expectations in forecasting credit losses.

Equity LifeStyle Properties, Inc.

Notes to Consolidated Financial Statements

Note 2 – Summary of Significant Accounting Policies (continued)

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. We have a limited program under which we purchase loans made by an unaffiliated lender to homebuyers at our Properties. 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.

(b) Restricted Cash

As of September 30, 2022 and December 31, 2021, restricted cash consisted of $23.2 million and $29.3 million, respectively, primarily related to cash reserved for customer deposits and escrows for insurance and real estate taxes.

Note 3 – Leases

Lessor

The leases entered into between the customer and us for 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 September 30, 2022
2022	$	42,224
2023	170,732
2024	105,054
2025	40,852
2026	21,909
Thereafter	67,992
Total	$	448,763

Lessee

We lease land under non-cancelable operating leases at 10 Properties expiring at various dates between 2028 and 2054. The Westwinds ground leases expired August 31, 2022, for additional information see Part I. Item 1. Financial Statements —Note 11. Commitments and Contingencies. 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 2032. For the quarters ended September 30, 2022 and 2021, total operating lease payments were $2.7 million and $2.9 million, respectively. For the nine months ended September 30, 2022 and 2021, total operating lease payments were $8.2 million and $8.0 million, respectively.

Equity LifeStyle Properties, Inc.

Notes to Consolidated Financial Statements

Note 3 – Leases (continued)

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 September 30, 2022:


	As of September 30, 2022
(amounts in thousands)	Ground Leases		Office and Other Leases		Total
2022	$	145	$	1,728	$	1,873
2023	626		3,523		4,149
2024	632		3,097		3,729
2025	637		2,763		3,400
2026	615		2,543		3,158
Thereafter	4,325		13,140		17,465
Total undiscounted rental payments	6,980		26,794		33,774
Less imputed interest	(1,705)		(4,137)		(5,842)
Total lease liabilities	$	5,275	$	22,657	$	27,932

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 $25.9 million and $27.9 million, respectively, as of September 30, 2022. The weighted average remaining lease term for our operating leases was nine years and the weighted average incremental borrowing rate was 3.7% at September 30, 2022.

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 $30.3 million and $30.7 million, respectively, as of December 31, 2021. The weighted average remaining lease term for our operating leases was seven years and the weighted average incremental borrowing rate was 3.8% at December 31, 2021.

Note 4 – Earnings Per Common Share

The following table sets forth the computation of basic and diluted earnings per share of common stock for the quarters and nine months ended September 30, 2022 and 2021:


	Quarters Ended September 30,				Nine Months Ended September 30,
(amounts in thousands, except per share data)	2022		2021		2022		2021
Numerators:
Net income available for Common Stockholders – Basic	$	67,163	$	70,625	$	211,578	$	196,916
Amounts allocated to non controlling interest (dilutive securities)	3,346		3,468		10,563		10,236
Net income available for Common Stockholders – Fully Diluted	$	70,509	$	74,093	$	222,141	$	207,152
Denominators:
Weighted average Common Shares outstanding – Basic	185,814		183,469		185,758		182,590
Effect of dilutive securities:
Exchange of Common OP Units for Common Shares	9,288		9,056		9,295		9,888
Stock options and restricted stock	167		211		195		211
Weighted average Common Shares outstanding – Fully Diluted	195,269		192,736		195,248		192,689

Earnings per Common Share – Basic	$	0.36	$	0.38	$	1.14	$	1.08

Earnings per Common Share – Fully Diluted	$	0.36	$	0.38	$	1.14	$	1.08

Note 5 – Common Stock and Other Equity Related Transactions

Common Stockholder Distribution Activity

The following quarterly distributions have been declared and paid to Common Stockholders and the Operating Partnership unit (“OP Unit”) holders since January 1, 2021.

Equity LifeStyle Properties, Inc.

Notes to Consolidated Financial Statements

Note 5 – Common Stock and Other Equity Related Transactions (continued)

Distribution Amount Per Share

For the Quarter Ended

Stockholder Record Date

Payment Date

$0.3625

March 31, 2021

March 26, 2021

April 9, 2021

$0.3625

June 30, 2021

June 25, 2021

July 9, 2021

$0.3625

September 30, 2021

September 24, 2021

October 8, 2021

$0.3625

December 31, 2021

January 14, 2022

$0.4100

March 31, 2022

March 25, 2022

April 8, 2022

$0.4100

June 30, 2022

June 24, 2022

July 8, 2022

$0.4100

September 30, 2022

October 14, 2022

Equity Offering Program

On February 24, 2022, we entered into our current at-the-market (“ATM”) equity offering program with certain sales agents, pursuant to which we may sell, from time-to-time, shares of our common stock, par value $0.01 per share, having an aggregate offering price of up to $500.0 million. Prior to the new program, the aggregate offering price was up to $200.0 million.

The following table presents the shares that were issued under our prior ATM equity offering program during the quarter ended March 31, 2022.


(amounts in thousands, except share data)
Shares of common stock sold	328,123
Weighted average price	$	86.46
Total gross proceeds	$	28,370
Commissions paid to sales agents	$	389

There has been no ATM activity under the current ATM equity offering program during the nine months ended September 30, 2022 and as of September 30, 2022, the full capacity remained available for issuance. There was no ATM equity activity during the nine months ended September 30, 2021.

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 nine months ended September 30, 2022 and 2021, 34,680 and 1,451,710 OP Units, respectively, were exchanged for an equal number of shares of Common Stock.

Note 6 – Investment in Real Estate

Acquisitions

2022

On February 18, 2022, we completed the acquisition of Blue Mesa Recreational Ranch, a 385-site membership RV community located in Gunnison, Colorado, and Pilot Knob RV Resort a 247-site RV community located in Winterhaven, California for a combined purchase price of $15.9 million. The acquisition was funded with available cash.

On June 1, 2022, we completed the acquisition of a nine acre vacant land parcel in Sarasota, Florida, adjacent to one of our properties, for a purchase price of $2.3 million. The acquisition was funded with available cash.

On June 15, 2022, we completed the acquisition of Holiday Trav-L-Park Resort, a 299-site oceanfront RV community located in Emerald Isle, North Carolina for a purchase price of $50.7 million. The acquisition was funded with available cash and debt financing from the unsecured line of credit.

Equity LifeStyle Properties, Inc.

Notes to Consolidated Financial Statements

Note 6 – Investment in Real Estate (continued)

On June 16, 2022, we completed the acquisition of Oceanside RV Resort, a 139-site RV community located in Oceanside, California for a total purchase price of $44.4 million. The acquisition was funded with available cash and debt financing from the unsecured line of credit.

On July 21, 2022, we completed the acquisition of an 83-acre vacant land parcel in North Fort Myers, Florida, adjacent to one of our properties, for a purchase price of $6.4 million. The acquisition was funded with available cash.

On August 9, 2022, we completed the acquisition of a 78-acre vacant land parcel in Beecher, Illinois, adjacent to one of our properties, for a purchase price of $0.9 million. The acquisition was funded with available cash.

Impairment

Hurricane Ian made landfall on the west coast of Florida on September 28, 2022. The most significant damage to our properties occurred in or near the Fort Myers area. Six of our Properties in or near this market are temporarily closed. As a result of the storm event and the damage caused, we wrote down the carrying value of certain assets at these properties by approximately $3.7 million during the quarter and nine months ended September 30, 2022, which is included in Loss on sale of real estate and impairment, net in the Consolidated Statements of Income.

Note 7 – Investments 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 September 30, 2022 and December 31, 2021, respectively):

Investment as of