SEC Filing | Equity LifeStyle Properties, Inc.

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els-20240331

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, 2024


☐			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: 186,495,861 shares of Common Stock as of April 24, 2024.

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 March 31 , 202 4 and December 31, 202 3	3
	Consolidated Statements of Income and Comprehensive Income for the quarters ended March 31 , 202 4 and 202 3	4
	Consolidated Statements of Changes in Equity for the quarters ended March 31 , 202 4 and 202 3	5
	Consolidated Statements of Cash Flows for the quarters ended March 31 , 202 4 and 202 3	6
	Notes to Consolidated Financial Statements	8
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	18
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	30
Item 4.	Controls and Procedures	30
Part II - Other Information
Item 1.	Legal Proceedings	31
Item 1A.	Risk Factors	31
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	31
Item 3.	Defaults Upon Senior Securities	31
Item 4.	Mine Safety Disclosures	31
Item 5.	Other Information	31
Item 6.	Exhibits	32

Part I – Financial Information

Item 1. Financial Statements

Equity LifeStyle Properties, Inc.

Consolidated Balance Sheets

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


	March 31, 2024		December 31, 2023
	(unaudited)
Assets
Investment in real estate:
Land	$	2,088,657	$	2,088,657
Land improvements	4,435,288		4,380,649
Buildings and other depreciable property	1,229,374		1,236,985
	7,753,319		7,706,291
Accumulated depreciation	(2,497,039)		(2,448,876)
Net investment in real estate	5,256,280		5,257,415
Cash and restricted cash	47,281		29,937
Notes receivable, net	49,346		49,937
Investment in unconsolidated joint ventures	84,989		85,304
Deferred commission expense	54,024		53,641
Other assets, net	138,314		137,499
Total Assets	$	5,630,234	$	5,613,733

Liabilities and Equity
Liabilities:
Mortgage notes payable, net	$	2,974,728	$	2,989,959
Term loans, net	497,875		497,648
Unsecured line of credit	6,000		31,000
Accounts payable and other liabilities	171,061		151,567
Deferred membership revenue	223,470		218,337
Accrued interest payable	12,543		12,657
Rents and other customer payments received in advance and security deposits	131,547		126,451
Distributions payable	93,264		87,493
Total Liabilities	4,110,488		4,115,112
Equity:
Stockholders' Equity:
Preferred stock, $0.01 par value, 10,000,000 shares authorized as of March 31, 2024 and December 31, 2023; none issued and outstanding.	—		—
Common stock, $0.01 par value, 600,000,000 shares authorized as of March 31, 2024 and December 31, 2023; 186,493,598 and 186,426,281 shares issued and outstanding as of March 31, 2024 and December 31, 2023, respectively.	1,917		1,917
Paid-in capital	1,644,410		1,644,319
Distributions in excess of accumulated earnings	(202,721)		(223,576)
Accumulated other comprehensive income	5,280		6,061
Total Stockholders’ Equity	1,448,886		1,428,721
Non-controlling interests – Common OP Units	70,860		69,900
Total Equity	1,519,746		1,498,621
Total Liabilities and Equity	$	5,630,234	$	5,613,733

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 March 31,
	2024		2023
Revenues:
Rental income	$	316,599	$	296,451
Annual membership subscriptions	16,215		15,970
Membership upgrade sales	3,947		3,505

Other income	15,548		17,714
Gross revenues from home sales, brokered resales and ancillary services	30,053		32,133
Interest income	2,168		2,088
Income from other investments, net	2,038		2,091
Total revenues	386,568		369,952
Expenses:
Property operating and maintenance	114,783		112,483
Real estate taxes	20,787		18,316
Membership sales and marketing	5,297		4,838

Property management	19,710		19,464
Depreciation and amortization	51,108		50,502
Cost of home sales, brokered resales and ancillary services	21,967		23,141
Home selling expenses and ancillary operating expenses	6,147		6,924
General and administrative	11,989		11,661
Casualty-related charges/(recoveries), net	(14,843)		—
Other expenses	1,331		1,468

Interest and related amortization	33,543		32,588
Total expenses	271,819		281,385
Income before income taxes and other items	114,749		88,567
Loss on sale of real estate and impairment, net	—		(2,632)
Income tax benefit	239		—

Equity in income of unconsolidated joint ventures	283		524
Consolidated net income	115,271		86,459

Income allocated to non-controlling interests – Common OP Units	(5,366)		(4,088)

Net income available for Common Stockholders	$	109,905	$	82,371

Consolidated net income	$	115,271	$	86,459
Other comprehensive income (loss):
Adjustment for fair market value of swaps	(781)		(3,978)
Consolidated comprehensive income	114,490		82,481
Comprehensive income allocated to non-controlling interests – Common OP Units	(5,329)		(3,899)

Comprehensive income attributable to Common Stockholders	$	109,161	$	78,582

Earnings per Common Share – Basic	$	0.59	$	0.44

Earnings per Common Share – Fully Diluted	$	0.59	$	0.44

Weighted average Common Shares outstanding – Basic	186,287		185,900
Weighted average Common Shares outstanding – Fully Diluted	195,545		195,369

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		Distributions in Excess of Accumulated Earnings		Accumulated Other Comprehensive Income (Loss)		Non-controlling Interests – Common OP Units		Total Equity
Balance as of December 31, 2023	$	1,917	$	1,644,319	$	(223,576)	$	6,061	$	69,900	$	1,498,621


Issuance of Common Stock through employee stock purchase plan	—		382		—		—		—		382

Compensation expenses related to restricted stock and stock options	—		1,716		—		—		—		1,716
Repurchase of Common Stock or Common OP Units	—		(1,908)		—		—		—		(1,908)
Adjustment for Common OP Unitholders in the Operating Partnership	—		58		—		—		(58)		—
Adjustment for fair market value of swap	—		—		—		(781)		—		(781)
Consolidated net income	—		—		109,905		—		5,366		115,271
Distributions	—		—		(89,050)		—		(4,348)		(93,398)
Other	—		(157)		—		—		—		(157)
Balance as of March 31, 2024	$	1,917	$	1,644,410	$	(202,721)	$	5,280	$	70,860	$	1,519,746


	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, 2022	$	1,916	$	1,628,618	$	(204,248)	$	19,119	$	72,080	$	1,517,485
Exchange of Common OP Units for Common Stock	—		198		—		—		(198)		—

Issuance of Common Stock through employee stock purchase plan	—		363		—		—		—		363

Compensation expenses related to restricted stock and stock options	—		2,549		—		—		—		2,549
Repurchase of Common Stock or Common OP Units	—		(1,932)		—		—		—		(1,932)
Adjustment for Common OP Unitholders in the Operating Partnership	—		168		—		—		(168)		—
Adjustment for fair market value of swap	—		—		—		(3,978)		—		(3,978)
Consolidated net income	—		—		82,371		—		4,088		86,459
Distributions	—		—		(83,326)		—		(4,136)		(87,462)
Other	—		(98)		—		—		—		(98)
Balance as of March 31, 2023	$	1,916	$	1,629,866	$	(205,203)	$	15,141	$	71,666	$	1,513,386

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)


	Quarters Ended March 31,
	2024		2023
Cash Flows From Operating Activities:
Consolidated net income	$	115,271	$	86,459
Adjustments to reconcile consolidated net income to net cash provided by operating activities:
Loss on sale of real estate and impairment, net	—		2,632

Depreciation and amortization	52,427		51,860
Amortization of loan costs	1,286		1,208
Debt premium amortization	—		(32)
Equity in income of unconsolidated joint ventures	(283)		(524)
Distributions of income from unconsolidated joint ventures	224		174
Proceeds from insurance claims, net	(12,349)		5,795
Compensation expense related to incentive plans	2,497		3,330
Revenue recognized from membership upgrade sales upfront payments	(3,947)		(3,505)
Commission expense recognized related to membership sales	1,108		1,095
Deferred income tax benefit	(239)		—
Changes in assets and liabilities:
Manufactured homes, net	2,333		(19,574)

Notes receivable, net	539		(1,345)
Deferred commission expense	(1,491)		(1,744)
Other assets, net	11,396		5,856
Accounts payable and other liabilities	15,801		9,553
Deferred membership revenue	9,080		10,074
Rents and other customer payments received in advance and security deposits	5,095		7,668
Net cash provided by operating activities	198,748		158,980
Cash Flows From Investing Activities:
Real estate acquisitions, net	—		(8,803)

Investment in unconsolidated joint ventures	(1,330)		(1,752)
Distributions of capital from unconsolidated joint ventures	1,586		1,012
Proceeds from insurance claims, net	3,158		4,070


Capital improvements	(54,706)		(60,974)
Net cash used in investing activities	(51,292)		(66,447)

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)


	Quarters Ended March 31,
	2024		2023
Cash Flows From Financing Activities:
Proceeds from stock options and employee stock purchase plan	382		363

Distributions:
Common Stockholders	(83,426)		(76,309)
Common OP Unitholders	(4,074)		(3,799)


Share based award tax withholding payments	(1,908)		(1,932)
Principal payments and mortgage debt repayment	(15,929)		(16,443)



Line of credit repayment	(158,000)		(104,000)
Line of credit proceeds	133,000		118,000

Other	(157)		(99)
Net cash used in financing activities	(130,112)		(84,219)
Net increase in cash and restricted cash	17,344		8,314
Cash and restricted cash, beginning of period	29,937		22,347
Cash and restricted cash, end of period	$	47,281	$	30,661


	Quarters Ended March 31,
	2024		2023
Supplemental Information:
Cash paid for interest, net	$	33,630	$	31,630
Cash paid for the purchase of manufactured homes	$	12,927	$	35,481

Real estate acquisitions:
Investment in real estate	$	—	$	(9,535)


Other assets, net	—		14





Rents and other customer payments received in advance and security deposits	—		718
Real estate acquisitions, net	$	—	$	(8,803)

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 provide our customers the opportunity to place manufactured homes and cottages, RVs and/or boats 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 95.3% interest as of March 31, 2024. 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, 2023.

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 of ASC 842, Leases 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.

Revenue 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 March 31, 2024 and December 31, 2023, restricted cash consisted of $32.2 million and $25.7 million, respectively, primarily related to cash reserved for customer deposits and escrows for insurance and real estate taxes.

We carry comprehensive insurance coverage for losses resulting from property damage and environmental liability and business interruption claims on all of our properties. We record the estimated amount of expected insurance proceeds for property damage, clean-up costs and other losses incurred as an asset (typically a receivable from our insurance carriers) and income up to the amount of the losses incurred when receipt of insurance proceeds is deemed probable. Any amount of insurance recovery in excess of the losses incurred and any amount of insurance recovery related to business interruption are considered a gain contingency and will be recognized in the period in which the insurance proceeds are received. During the quarter ended March 31, 2024, we recognized approximately $0.5 million of expense related to debris removal and cleanup related to Hurricane Ian, and we recorded an offsetting insurance recovery revenue accrual of $0.5 million to offset the expenses incurred during the quarter. We also recorded $14.8 million of insurance recovery revenue for reimbursement of capital expenditures related to Hurricane Ian. The debris and cleanup costs and offsetting recovery accrual and reimbursement of capital expenditures are reflected in Casualty-related charges/(recoveries), net on the Consolidated Statements of Income and Comprehensive Income.

(d) New Accounting Pronouncements

In November 2023, the FASB issued Accounting Standards Update 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures (“ASU 2023-07”), which aims to improve reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses. The amendments in ASU 2023-07 do not change how a public entity identifies its operating segments, aggregates those operating segments, or applies the quantitative thresholds to determine its reportable segments. ASU 2023-07 is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024, with early adoption permitted. We are currently evaluating the impact of ASU 2023-07 on our consolidated financial statements.

In March 2024, the Securities and Exchange Commission (“SEC”) adopted final rules under SEC Release No. 33-11275, The Enhancement and Standardization of Climate-Related Disclosures for Investors, that requires registrants to provide climate-related disclosures in their annual reports and registration statements. On April 4, 2024, the SEC voluntarily stayed implementation of the final rule pending the completion of judicial review. We are currently evaluating the impact of the rule on our disclosures.

Note 3 – Leases

Lessor

The leases entered into between a 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

Equity LifeStyle Properties, Inc.

Notes to Consolidated Financial Statements

Note 3 – Leases (continued)

into consideration certain other factors. 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, 2024
2024	$	79,784
2025	103,593
2026	26,912
2027	25,354
2028	23,690
Thereafter	50,860
Total	$	310,193

Lessee

We lease land under non-cancelable operating leases at 10 Properties expiring on various dates between 2028 and 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 2033. For the quarters ended March 31, 2024 and 2023, total operating lease payments were $1.6 million and $1.5 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, 2024:


	As of March 31, 2024
(amounts in thousands)	Ground Leases		Office and Other Leases		Total
2024	$	550	$	3,202	$	3,752
2025	680		3,757		4,437
2026	684		3,393		4,077
2027	689		3,130		3,819
2028	685		2,955		3,640
Thereafter	3,840		10,744		14,584
Total undiscounted rental payments	7,128		27,181		34,309
Less imputed interest	(1,774)		(4,524)		(6,298)
Total lease liabilities	$	5,354	$	22,657	$	28,011

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 $25.8 million and $28.0 million, respectively, as of March 31, 2024. The weighted average remaining lease term for our operating leases was eight years and the weighted average incremental borrowing rate was 4.0% as of March 31, 2024.

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 $23.6 million and $25.7 million, respectively, as of December 31, 2023. The weighted average remaining lease term for our operating leases was eight years and the weighted average incremental borrowing rate was 3.9% as of December 31, 2023.

Equity LifeStyle Properties, Inc.

Notes to Consolidated Financial Statements

Note 4 – Earnings Per Common Share

The following table sets forth the computation of basic and diluted earnings per share of common stock (“Common Share”) for the quarters ended March 31, 2024 and 2023:


	Quarters Ended March 31,
(amounts in thousands, except per share data)	2024		2023
Numerators:
Net income available for Common Stockholders – Basic	$	109,905	$	82,371
Amounts allocated to non controlling interest (dilutive securities)	5,366		4,088
Net income available for Common Stockholders – Fully Diluted	$	115,271	$	86,459
Denominators:
Weighted average Common Shares outstanding – Basic	186,287		185,900
Effect of dilutive securities:
Exchange of Common OP Units for Common Shares	9,105		9,262
Stock options and restricted stock	153		207
Weighted average Common Shares outstanding – Fully Diluted	195,545		195,369

Earnings per Common Share – Basic	$	0.59	$	0.44

Earnings per Common Share – Fully Diluted	$	0.59	$	0.44

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, 2023:

Distribution Amount Per Share

For the Quarter Ended

Stockholder Record Date

Payment Date

$0.4475

March 31, 2023

April 14, 2023

$0.4475

June 30, 2023

July 14, 2023

$0.4475

September 30, 2023

September 29, 2023

October 13, 2023

$0.4475

December 31, 2023

December 29, 2023

January 12, 2024

$0.4775

March 31, 2024

March 28, 2024

April 12, 2024

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. There were no OP units exchanged for Common Stock during the quarter ended March 31, 2024 and 25,496 OP Units exchanged for an equal number of shares of Common Stock during the quarter ended March 31, 2023.

Equity Offering Program

On February 28, 2024, we entered into a new at-the-market (“ATM”) equity offering program, 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. As of March 31, 2024, the full capacity of our ATM equity offering program remained available for issuance.

Equity LifeStyle Properties, Inc.

Notes to Consolidated Financial Statements

Note 6 – Investment in Unconsolidated Joint Ventures

The following table summarizes our investments in unconsolidated joint ventures (investment and income/(loss) amounts in thousands):


						Investment as of				Income/(Loss) for the Quarters Ended
Investment	Location (a)	Number of Sites	Economic Interest (b)			March 31, 2024		December 31, 2023		March 31, 2024		March 31, 2023
Meadows	Various (2,2)	1,077	50	%		$	611	$	534	$	676	$	374
Lakeshore	Florida (3,3)	721	(c)			3,395		3,387		182		172
Voyager	Arizona (1,1)	—	—	%	(d)	—		—		—		692
ECHO JV	Various	—	50	%		2,786		2,773		13		(190)
RVC	Various	1,283	80	%	(e)	62,401		62,441		(414)		(353)
Mulberry Farms	Arizona	200	50	%		10,255		10,546		(291)		(31)
Hiawassee KOA JV	Georgia	283	50	%		5,541		5,623		117		(140)
		3,564				$	84,989	$	85,304	$	283	$	524

_____________________

(a)The number of Properties are shown parenthetically for the quarters ended March 31, 2024 and 2023, respectively.

(b)The percentages shown approximate our economic interest as of March 31, 2024. Our legal ownership interest may differ.

(c)Includes two joint ventures in which we own a 65% interest in each and the Crosswinds joint venture in which we own a 49% interest.

(d)In March 2023, we sold our 33% interest in the utility plant servicing Voyager RV Resort.

(e)Includes three joint ventures of which one joint venture owns a portfolio of seven operating RV communities and two joint ventures each own an RV property under development.

We received approximately $1.8 million and $1.2 million in distributions from our unconsolidated joint ventures for the quarters ended March 31, 2024 and 2023, respectively. Approximately $0.6 million and $0.3 million of the distributions made to us exceeded our basis in our unconsolidated joint ventures for the quarters ended March 31, 2024 and 2023, respectively, and as such, were recorded as income from unconsolidated joint ventures.

Note 7 – Borrowing Arrangements

Mortgage Notes Payable

Our mortgage notes payable are 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, 2024				As of December 31, 2023
(amounts in thousands)	Fair Value		Carrying Value		Fair Value		Carrying Value
Mortgage notes payable, excluding deferred financing costs	$	2,412,142	$	3,001,219	$	2,425,384	$	3,017,149

The weighted average interest rate on our outstanding mortgage indebtedness, including the impact of loan cost amortization on mortgage indebtedness, as of March 31, 2024, was approximately 3.9% per annum. The debt bears interest at stated rates ranging from 2.4% to 5.1% per annum and matures on various dates ranging from 2025 to 2041. The debt encumbered a total of 120 of our Properties as of both March 31, 2024 and December 31, 2023, and the gross carrying value of such Properties was approximately $3,208.4 million and $3,194.1 million, as of March 31, 2024 and December 31, 2023, respectively.

Unsecured Debt

We previously entered into a Third Amended and Restated Credit Agreement (“Credit Agreement”), pursuant to which we have access to a $500.0 million line of credit (“LOC”) and a $300.0 million senior unsecured term loan (the “$300 million Term Loan”). We have the option to increase the borrowing capacity of the LOC by $200.0 million, subject to certain conditions. The LOC bears interest at a rate of SOFR plus 0.10% plus 1.25% to 1.65% and requires an annual facility fee of 0.20% to 0.35% and matures on April 18, 2025. The $300 million Term Loan has an interest rate of SOFR plus 0.10% plus 1.40% to 1.95% per annum. For both the LOC and the $300 million Term Loan, the spread over SOFR is variable based on leverage throughout the respective loan terms.

Equity LifeStyle Properties, Inc.

Notes to Consolidated Financial Statements

Note 7 – Borrowing Arrangements (continued)

During the year ended December 31, 2022, we entered into a $200.0 million senior unsecured term loan agreement (the “200.0 million Term Loan”). The maturity date is January 21, 2027, with an interest rate of SOFR plus 0.10% plus 1.20% to 1.70%, depending on leverage levels.

The LOC had a balance of $6.0 million and $31.0 million outstanding as of March 31, 2024 and December 31, 2023, respectively. As of March 31, 2024, our LOC had a remaining borrowing capacity of $493.9 million.

As of March 31, 2024, we were in compliance in all material respects with the covenants in all our borrowing arrangements.

Note 8 – Derivative Instruments and Hedging

Cash Flow Hedges of Interest Rate Risk

We record all derivatives at fair value. Our objective in utilizing interest rate derivatives is to add stability to our interest expense and to manage our exposure to interest rate movements. We do not enter into derivatives for speculative purposes.

In March 2021, we entered into a Swap Agreement (the “2021 Swap”), with a notional amount of $300.0 million allowing us to trade the variable interest rate associated with our $300.0 million Term Loan for a fixed interest rate. In March 2023, we amended the 2021 Swap agreement to reflect the change in the $300.0 million Term Loan interest rate benchmark from LIBOR to SOFR (see Note 7. Borrowing Arrangements). The 2021 Swap had a fixed interest rate of 0.41% per annum. The 2021 Swap matured on March 25, 2024.

In April 2023, we entered into a Swap Agreement (the “2023 Swap”) with a notional amount of $200.0 million allowing us to trade the variable interest rate associated with our $200.0 million Term Loan for a fixed interest rate. The 2023 Swap has a fixed interest rate of 3.68% per annum and matures on January 21, 2027. Based on the leverage as of March 31, 2024, our spread over SOFR was 1.20% resulting in an estimated all-in interest rate of 4.88% per annum.

In April 2024, we entered into new swap agreements. See Note 13. Subsequent Events for additional information.

Our derivative financial instruments are classified as Level 2 in the fair value hierarchy. The following table presents the fair value of our derivative financial instruments:


		As of March 31,		As of December 31,
(amounts in thousands)	Balance Sheet Location	2024		2023
Interest Rate Swaps	Other assets, net	$	5,280	$	6,061

The following table presents the effect of our derivative financial instrument on the Consolidated Statements of Income and Comprehensive Income:


Derivatives in Cash Flow Hedging Relationship	Amount of (gain)/loss recognized in OCI on derivative for the quarters ended March 31,				Location of (gain)/ loss reclassified from Accumulated OCI into income	Amount of (gain)/loss reclassified from Accumulated OCI into income for the quarters ended March 31,
(amounts in thousands)	2024		2023		(amounts in thousands)	2024		2023
Interest Rate Swaps	$	(4,057)	$	523	Interest Expense	$	(4,838)	$	(3,455)

During the next twelve months, we estimate that $2.6 million will be reclassified from Accumulated other comprehensive income (loss) as a decrease to interest expense. This estimate may be subject to change as the underlying SOFR changes. We determined that no adjustment was necessary for non-performance risk on our derivative obligation. As of March 31, 2024, we had not posted any collateral related to the 2023 Swap.

Equity LifeStyle Properties, Inc.

Notes to Consolidated Financial Statements

Note 9 - Deferred Revenue from Membership Upgrade Sales and Deferred Commission Expense

The components of the change in deferred revenue from membership upgrades and deferred commission expense were as follows:


(amounts in thousands)	Quarter Ended March 31, 2024		Quarter Ended March 31, 2023
Deferred revenue - upfront payments from membership upgrade sales, beginning	$	206,625	$	185,660
Membership upgrade sales	7,543		7,975
Revenue recognized from membership upgrade sales upfront payments	(3,947)		(3,505)
Net increase in deferred revenue - upfront payments from membership grade sales	3,596		4,470
Deferred revenue - upfront payments from membership upgrade sales, ending (a)	$	210,221	$	190,130

Deferred commission expense, beginning	$	53,641	$	50,441
Deferred commission expense	1,491		1,744
Commission expense recognized	(1,108)		(1,095)
Net increase in deferred commission expense	383		649
Deferred commission expense, ending	$	54,024	$	51,090

_____________________

(a)Included in Deferred membership revenue on the Consolidated Balance Sheets.

Note 10 – Equity Incentive Awards

Our 2014 Equity Incentive Plan (the “2014 Plan”) was adopted by the Board of Directors on March 11, 2014 and approved by our stockholders on May 13, 2014.

During the quarter ended March 31, 2024, 90,378 shares of restricted stock were awarded to certain members of our management team. Of these shares, 50% are time-based awards, vesting in equal installments over a three-year period on February 4, 2025, February 3, 2026 and February 7, 2027, respectively, and have a grant date fair value of $3.0 million. The remaining 50% are performance-based awards vesting in equal installments on February 4, 2025, February 3, 2026 and February 7, 2027, respectively, upon meeting performance conditions as established by the Compensation Committee in the year of the vesting period. They are valued using the closing price at the grant date when all the key terms and conditions are known to all parties. The 15,062 shares of restricted stock subject to 2024 performance goals have a grant date fair value of $1.0 million.

Stock-based compensation expense, reported in General and administrative expense on the Consolidated Statements of Income and Comprehensive Income, was $1.7 million and $2.5 million for the quarters ended March 31, 2024 and 2023, respectively.

Note 11 – Commitments and Contingencies

We are involved in various legal and regulatory proceedings (“Proceedings”) arising in the ordinary course of business. The Proceedings include, but are not limited to, legal claims made by employees, vendors and customers, and notices, consent decrees, information requests, additional permit requirements and other similar enforcement actions by governmental agencies relating to our utility infrastructure, including water and wastewater treatment plants and other waste treatment facilities and electrical systems. Additionally, in the ordinary course of business, our operations are subject to audit by various taxing authorities. Management believes these Proceedings taken together do not represent a material liability. In addition, to the extent any such Proceedings or audits relate to newly acquired Properties, we consider any potential indemnification obligations of sellers in our favor.

Beginning on August 31, 2023 through October 12, 2023, certain private party plaintiffs filed several putative class actions in the U.S. District Court for the Northern District of Illinois, Eastern Division, against Datacomp Appraisal Systems, Inc. (“Datacomp”) and several owner/operators of manufactured housing communities, including ELS (the “Datacomp Litigation”), alleging that the community owner/operators used JLT Market Reports produced by Datacomp to conspire to raise

Equity LifeStyle Properties, Inc.

Notes to Consolidated Financial Statements

Note 11 - Commitments and Contingencies (continued)

manufactured home lot rents in violation of Section 1 of the Sherman Act. ELS purchased Datacomp in connection with the MHVillage/Datacomp acquisition during the year ended December 31, 2021. On December 15, 2023, the plaintiffs filed an amended consolidated complaint captioned, In re Manufactured Home Lot Rents Antitrust Litigation, No. 1:23-cv-6715. Plaintiffs seek both injunctive relief and monetary damages, including attorneys’ fees. The defendants filed a motion to dismiss on January 29, 2024.

We believe that the Datacomp Litigation is without merit, and we intend to vigorously defend our interests in this matter. As of March 31, 2024, we have not made an accrual, as we are unable to predict the outcome of this matter or reasonably estimate any possible loss.

Note 12 - Reportable Segments

We have identified two reportable segments: (i) Property Operations and (ii) Home Sales and Rentals Operations. The Property Operations segment owns and operates land lease Properties and the Home Sales and Rentals Operations segment purchases, sells and leases homes at the Properties. The distribution of the Properties throughout the United States reflects our belief that geographic diversification helps insulate the portfolio from regional economic influences.

All revenues were from external customers and there is no customer who contributed 10% or more of our total revenues during the quarters ended March 31, 2024 or 2023.

The following tables summarize our segment financial information for the quarters ended March 31, 2024 and 2023:

Quarter Ended March 31, 2024


(amounts in thousands)	Property Operations		Home Sales and Rentals Operations		Consolidated
Operations revenues	$	359,736	$	22,626	$	382,362
Operations expenses	(169,405)		(19,286)		(188,691)
Income from segment operations	190,331		3,340		193,671
Interest income	1,686		443		2,129
Depreciation and amortization	(48,540)		(2,568)		(51,108)

Income from operations	$	143,477	$	1,215	$	144,692
Reconciliation to consolidated net income:
Corporate interest income					39
Income from other investments, net					2,038
General and administrative					(11,989)
Casualty-related charges/(recoveries), net					14,843
Other expenses					(1,331)
Interest and related amortization					(33,543)
Income tax benefit					239
Equity in income of unconsolidated joint ventures					283

Consolidated net income					$	115,271

Total assets	$	5,366,765	$	263,469	$	5,630,234
Capital improvements	$	51,408	$	3,298	$	54,706

Equity LifeStyle Properties, Inc.

Notes to Consolidated Financial Statements

Note 12 – Reportable Segments (continued)

Quarter Ended March 31, 2023


(amounts in thousands)	Property Operations		Home Sales and Rentals Operations		Consolidated
Operations revenues	$	341,737	$	24,036	$	365,773
Operations expenses	(165,023)		(20,143)		(185,166)
Income from segment operations	176,714		3,893		180,607
Interest income	1,566		514		2,080
Depreciation and amortization	(47,755)		(2,747)		(50,502)
Loss on sale of real estate and impairment, net	(2,632)		—		(2,632)
Income from operations	$	127,893	$	1,660	$	129,553
Reconciliation to consolidated net income:
Corporate interest income					8
Income from other investments, net					2,091
General and administrative					(11,661)
Other expenses					(1,468)
Interest and related amortization					(32,588)
Equity in income of unconsolidated joint ventures					524

Consolidated net income					$	86,459

Total assets	$	5,239,891	$	279,422	$	5,519,313
Capital improvements	$	51,412	$	9,562	$	60,974

The following table summarizes our financial information for the Property Operations segment for the quarters ended March 31, 2024 and 2023:


	Quarters Ended March 31,
(amounts in thousands)	2024		2023
Revenues:
Rental income	$	313,083	$	292,579
Annual membership subscriptions	16,215		15,970
Membership upgrade sales	3,947		3,505
Other income	15,548		17,714
Gross revenues from ancillary services	10,943		11,969
Total property operations revenues	359,736		341,737
Expenses:
Property operating and maintenance	113,405		111,524
Real estate taxes	20,787		18,316
Membership sales and marketing	5,297		4,838

Cost of ancillary services	5,493		5,297
Ancillary operating expenses	4,713		5,584
Property management	19,710		19,464
Total property operations expenses	169,405		165,023
Income from property operations segment	$	190,331	$	176,714

Equity LifeStyle Properties, Inc.

Notes to Consolidated Financial Statements

Note 12 – Reportable Segments (continued)

The following table summarizes our financial information for the Home Sales and Rentals Operations segment for the quarters ended March 31, 2024 and 2023:


	Quarters Ended March 31,
(amounts in thousands)	2024		2023
Revenues:
Rental income (1)	$	3,516	$	3,872
Gross revenue from home sales and brokered resales	19,110		20,164
Total revenues	22,626		24,036
Expenses:
Rental home operating and maintenance	1,378		959
Cost of home sales and brokered resales	16,474		17,844
Home selling expenses	1,434		1,340
Total expenses	19,286		20,143
Income from home sales and rentals operations segment	$	3,340	$	3,893

______________________

(1)Rental income within Home Sales and Rentals Operations does not include base rent related to the rental home Sites. Base rent is included within property operations.

Note 13 – Subsequent Events

On April 1, 2024, we entered into three Swap Agreements (“2024 Swaps”) with an aggregate notional value of $300.0 million allowing us to trade the variable interest rate associated with our $300.0 million Term Loan (see Note 7. Borrowing Arrangements) for a fixed interest rate. The 2024 Swaps have a weighted average fixed interest rate of 4.65% per annum and mature on April 17, 2026. Based on the leverage as of March 31, 2024, our spread over SOFR was 1.40%, resulting in an estimated weighted average all-in fixed interest rate of 6.05% per annum.

Equity LifeStyle Properties, Inc.

Notes to Consolidated Financial Statements

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following discussion and analysis should be read in conjunction with the consolidated financial statements and accompanying notes thereto included in this Quarterly Report on Form 10-Q and in our Annual Report on Form 10-K for the year ended December 31, 2023 (“2023 Form 10-K”), as well as information in Part II. Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations in our 2023 Form 10-K.

Overview and Outlook

We are a self-administered and self-managed real estate investment trust (“REIT”) with headquarters in Chicago, Illinois. 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. As of March 31, 2024, we owned or had an ownership interest in a portfolio of 451 Properties located throughout the United States and Canada containing 172,464 individual developed areas (“Sites”). These Properties are located in 35 states and British Columbia, with more than 110 Properties with lake, river or ocean frontage and more than 120 Properties within ten miles of the coastal United States.

We invest in properties in sought-after locations near retirement and vacation destinations and urban areas across the United States with a focus on delivering an exceptional experience to our residents and guests that results in delivery of value to stockholders. Our business model is intended to provide an opportunity for increased cash flows and appreciation in value. We seek growth in earnings, Funds from Operations (“FFO”), Normalized Funds from Operations (“Normalized FFO”) and cash flows by enhancing the profitability and operation of our Properties and investments. We accomplish this by attracting and retaining high quality customers to our Properties, who take pride in our Properties and in their homes and efficiently managing our Properties by increasing occupancy, maintaining competitive market rents and controlling expenses. We also actively pursue opportunities that fit our acquisition criteria and are currently engaged in various stages of negotiations relating to the possible acquisition of additional properties.

We believe the demand from baby boomers for MH and RV communities will continue to be strong over the long term. It is estimated that approximately 10,000 baby boomers are turning 65 daily through 2029. These individuals, seeking an active lifestyle, will continue to drive the market for second-home sales as vacation properties, investment opportunities or retirement retreats. We expect it is likely that over the next decade, we will continue to see high levels of second-home sales and that manufactured homes and cottages in our Properties will continue to provide a viable second-home alternative to site-built homes. We also believe the Millennial and Generation Z demographic will contribute to our future long-term customer pipeline. After conducting a comprehensive study of RV ownership, according to the Recreational Vehicle Industry Association (“RVIA”), data suggested that RV sales are expected to benefit from an increase in demand from those born in the United States from 1980 to 2003, or Millennials and Generation Z, over the coming years. We believe the demand from baby boomers and these younger generations will continue to outpace supply for MH and RV communities. The entitlement process to develop new MH and RV communities is extremely restrictive. As a result, there have been limited new communities developed in our target geographic markets.

We generate the majority of our revenues from customers renting our Sites or entering into right-to-use contracts, also known as membership subscriptions, which provide them access to specific Properties for limited stays. 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. The revenue from seasonal and transient Sites is generally higher during the first and third quarters. We consider the transient revenue stream to be our most volatile as it is subject to weather conditions and other factors affecting the marginal RV customer’s vacation and travel preferences. We also generate revenue from customers renting our marina dry storage. Additionally, we have interests in joint venture Properties for which revenue is classified as Equity in income from unconsolidated joint ventures on the Consolidated Statements of Income and Comprehensive Income.

Management's Discussion and Analysis (continued)

The following table shows the breakdown of our Sites by type (amounts are approximate):


						Total Sites as of March 31, 2024
MH Sites						73,000
RV Sites:
Annual						34,900
Seasonal						11,800
Transient						16,300
Marina Slips						6,900
Membership (1)						26,000
Joint Ventures (2)						3,600
Total						172,500

_________________________

(1)Primarily utilized to service approximately 118,900 members. Includes approximately 6,100 Sites rented on an annual basis.

(2)Includes approximately 2,000 annual Sites and 1,600 transient Sites.

In our Home Sales and Rentals Operations business, our revenue streams include home sales, home rentals and brokerage services and ancillary activities. We generate revenue through home sales and rental operations by selling or leasing manufactured homes and cottages that are located in Properties owned and managed by us. We believe renting our vacant homes represents an attractive source of occupancy and an opportunity to convert the renter to a homebuyer in the future. Additionally, home sale brokerage services are offered to our residents who may choose to sell their homes rather than relocate them when moving from a Property. At certain Properties, we operate ancillary facilities, such as golf courses, pro shops, stores and restaurants.

In the manufactured housing industry, options for home financing, also known as chattel financing, are limited. Chattel financing options available today include community owner-funded programs or third-party lender programs that provide subsidized financing to customers and often require the community owner to guarantee customer defaults. Third-party lender programs have stringent underwriting criteria, sizable down payment requirements, short term loan amortization and high interest rates. We have a limited program under which we purchase loans made by an unaffiliated lender to homebuyers at our Properties.

In addition to net income computed in accordance with U.S. Generally Accepted Accounting Principles (“GAAP”), we assess and measure our overall financial and operating performance using certain Non-GAAP supplemental measures, which include: (i) FFO, (ii) Normalized FFO, (iii) Income from property operations, (iv) Income from property operations, excluding property management, and (v) Core Portfolio income from property operations, excluding property management (operating results for Properties owned and operated in both periods under comparison). We use these measures internally to evaluate the operating performance of our portfolio and provide a basis for comparison with other real estate companies. Definitions and reconciliations of these measures to the most comparable GAAP measures are included below in this discussion.

Results Overview

For the quarter ended March 31, 2024, net income available for Common Stockholders increased $27.5 million to $109.9 million, or $0.59 per fully diluted Common Share, compared to $82.4 million, or $0.44 per fully diluted Common Share, for the same period in 2023.

For the quarter ended March 31, 2024, FFO available for Common Stock and Operating Partnership unit (“OP Unit”) holders increased $27.1 million, or $0.14 per fully diluted Common Share, to $167.4 million, or $0.86 per fully diluted Common Share, compared to $140.3 million, or $0.72 per fully diluted Common Share, for the same period in 2023.

For the quarter ended March 31, 2024, Normalized FFO available for Common Stock and OP Unit holders increased $12.2 million, or $0.06 per fully diluted Common Share, to $152.7 million, or $0.78 per fully diluted Common Share, compared to $140.5 million, or $0.72 per fully diluted Common Share, for the same period in 2023.

For the quarter ended March 31, 2024, our Core Portfolio property operating revenues increased 5.8% and property operating expenses, excluding property management, increased 3.9%, from the same period in 2023, resulting in an increase in income from property operations, excluding property management, of 7.1%, compared to the same period in 2023.

Management's Discussion and Analysis (continued)

We continue to focus on the quality of occupancy growth by increasing the number of manufactured homeowners in our Core Portfolio. Our Core Portfolio average occupancy includes both homeowners and renters in our MH communities and was 94.9% for each of the quarters ended March 31, 2024, December 31, 2023 and March 31, 2023. For the quarter ended March 31, 2024, our Core Portfolio occupancy increased by 19 sites, which included an increase in homeowner occupancy of 123 sites and a decrease in rental occupancy of 104 compared to December 31, 2023. While we continue to focus on increasing the number of manufactured homeowners in our Core Portfolio, we also believe renting our vacant homes represents an attractive source of occupancy and an opportunity to potentially convert the renter to a new homebuyer in the future. We continue to expect there to be fluctuations in the sources of occupancy depending on local market conditions, availability of vacant sites and success with converting renters to homeowners. As of March 31, 2024, we had 2,158 occupied rental homes in our Core MH communities.

RV and marina base rental income in our Core Portfolio increased 5.8% for the quarter ended March 31, 2024, compared to the same period in 2023 driven primarily by an increase in Annual RV rental income. Core RV and marina base rental income from annuals represents 63.2% of total Core RV and marina base rental income and increased 8.0% for the quarter ended March 31, 2024, compared to the same period in 2023 due to an 8.7% increase in rate, offset by a 0.7% decrease in occupancy. Core seasonal and transient RV and marina base rental income increased 2.4% and 1.4%, respectively for the quarter ended March 31, 2024, compared to the same period in 2023 due to higher demand, particularly in our Florida portfolio.

Demand for our homes and communities remains strong as evidenced by factors including our high occupancy levels. We closed 191 new home sales during the quarter ended March 31, 2024, compared to 176 new home sales during the quarter ended March 31, 2023, an increase of 8.5%. The increase in new home sales during the quarter ended March 31, 2024 was primarily in the Florida and Arizona markets.

Our gross investment in real estate increased $47.0 million to $7,753.3 million as of March 31, 2024 from $7,706.3 million as of December 31, 2023, primarily due to capital improvements during the quarter ended March 31, 2024.

The following chart lists the Properties acquired from January 1, 2023 through March 31, 2024 and Sites added through expansion opportunities at our existing Properties:

Location

Type of Property

Transaction Date

Sites

Total Sites as of January 1, 2023 (1)

171,200

Acquisition Properties:

Red Oak Shores Campground

Ocean View, New Jersey

March 28, 2023

223

Expansion Site Development:

Sites added (reconfigured) in 2023

994

Total Sites as of March 31, 2024 (1)

172,500

______________________

(1)Sites are approximate.

Non-GAAP Financial Measures

Management’s discussion and analysis of financial condition and results of operations include certain Non-GAAP financial measures that in management’s view of the business are meaningful as they allow investors the ability to understand key operating details of our business both with and without regard to certain accounting conventions or items that may not always be indicative of recurring annual cash flows of the portfolio. These Non-GAAP financial measures as determined and presented by us may not be comparable to similarly titled measures reported by other companies, and include income from property operations and Core Portfolio, FFO and Normalized FFO.

We believe investors should review Income from property operations and Core Portfolio, FFO and Normalized FFO, along with GAAP net income and cash flow from operating activities, investing activities and financing activities, when evaluating an equity REIT’s operating performance. A discussion of Income from property operations and Core Portfolio, FFO and Normalized FFO, and a reconciliation to net income are included below.

Management's Discussion and Analysis (continued)

Income from Property Operations and Core Portfolio

We use income from property operations, income from property operations, excluding property management, and Core Portfolio income from property operations, excluding property management, as alternative measures to evaluate the operating results of our Properties. Income from property operations represents rental income, membership subscriptions and upgrade sales, utility and other income less property and rental home operating and maintenance expenses, real estate taxes, membership sales and marketing expenses and property management expenses. Income from property operations, excluding property management, represents income from property operations excluding property management expenses. Property management represents the expenses associated with indirect costs such as off-site payroll and certain administrative and professional expenses. We believe exclusion of property management expenses is helpful to investors and analysts as a measure of the operating results of our properties, excluding items that are not directly related to the operation of the properties. For comparative purposes, we present bad debt expense within Property operating and maintenance 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 properties.

Our Core Portfolio consists of our Properties owned and operated during all of 2023 and 2024. Core Portfolio income from property operations, excluding property management, is useful to investors for annual comparison as it removes the fluctuations associated with acquisitions, dispositions and significant transactions or unique situations. Our Non-Core Portfolio includes all Properties that were not owned and operated during all of 2023 and 2024, including six properties in Florida impacted by Hurricane Ian and two properties in California that were impacted by storm and flooding events.

FFO and Normalized 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 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.

We define Normalized FFO as FFO excluding non-operating income and expense items, such as gains and losses from early debt extinguishment, including prepayment penalties, defeasance costs, transaction/pursuit costs and other, and 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.

We believe that FFO and Normalized FFO 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 and 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 normal operations. For example, we believe that excluding the early extinguishment of debt and other miscellaneous non-comparable items from 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.

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 flows 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.

Management's Discussion and Analysis (continued)

The following table reconciles net income available for Common Stockholders to income from property operations for the quarters ended March 31, 2024 and 2023:


	Quarters Ended March 31,
(amounts in thousands)	2024		2023
Computation of Income from Property Operations:
Net income available for Common Stockholders	$	109,905	$	82,371

Income allocated to non-controlling interests – Common OP Units	5,366		4,088
Consolidated net income	115,271		86,459
Equity in income of unconsolidated joint ventures	(283)		(524)
Income tax benefit	(239)		—
(Gain)/Loss on sale of real estate and impairment, net	—		2,632
Gross revenues from home sales, brokered resales and ancillary services	(30,053)		(32,133)
Interest income	(2,168)		(2,088)
Income from other investments, net	(2,038)		(2,091)
Property management	19,710		19,464
Depreciation and amortization	51,108		50,502
Cost of home sales, brokered resales and ancillary services	21,967		23,141
Home selling expenses and ancillary operating expenses	6,147		6,924
General and administrative	11,989		11,661
Casualty-related charges/(recoveries), net (1)	(14,843)		—
Other expenses	1,331		1,468

Interest and related amortization	33,543		32,588
Income from property operations, excluding property management	211,442		198,003
Property management	(19,710)		(19,464)
Income from property operations	$	191,732	$	178,539

_____________________

(1)Represents insurance recovery revenue for reimbursement of capital expenditures related to Hurricane Ian.

The following table presents a calculation of FFO available for Common Stock and OP Unitholders and Normalized FFO available for Common Stock and OP Unitholders for the quarters ended March 31, 2024 and 2023:


	Quarters Ended March 31,
(amounts in thousands)	2024		2023
Computation of FFO and Normalized FFO:
Net income available for Common Stockholders	$	109,905	$	82,371
Income allocated to non-controlling interests – Common OP Units	5,366		4,088
Depreciation and amortization	51,108		50,502
Depreciation on unconsolidated joint ventures	1,051		1,135
Gain on unconsolidated joint ventures	—		(416)
Loss on sale of real estate and impairment, net	—		2,632
FFO available for Common Stock and OP Unit holders	167,430		140,312
Deferred income tax benefit	(239)		—

Transaction/pursuit costs and other (1)	383		206

Insurance proceeds due to catastrophic weather event (2)	(14,843)		—


Normalized FFO available for Common Stock and OP Unit holders	$	152,731	$	140,518
Weighted average Common Shares outstanding – Fully Diluted	195,545		195,369

_____________________

(1)Prior period amounts have been reclassified to conform to the current period presentation.

(2)Represents insurance recovery revenue for reimbursement of capital expenditures related to Hurricane Ian.

Management's Discussion and Analysis (continued)

Results of Operations

This section discusses the comparison of our results of operations for the quarters ended March 31, 2024 and March 31, 2023 and our operating activities, investing activities and financing activities for the quarters ended March 31, 2024 and March 31, 2023. Our Core Portfolio consists of our Properties owned and operated during all of 2023 and 2024. Our Non-Core Portfolio includes all Properties that were not owned and operated during all of 2023 and 2024, including six properties in Florida impacted by Hurricane Ian and two properties in California that were impacted by storm and flooding events. For the comparison of our results of operations for the quarters ended March 31, 2023 and March 31, 2022 and discussion of our operating activities, investing activities and financing activities for the quarters ended March 31, 2023 and March 31, 2022, refer to Part I. Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations of the Quarterly Report on Form 10-Q/A for the fiscal quarter ended March 31, 2023, filed with the SEC on January 23, 2024.

Income from Property Operations

The following table summarizes certain financial and statistical data for our Core Portfolio and total portfolio:


	Core Portfolio								Total Portfolio
	Quarters Ended March 31,								Quarters Ended March 31,
(amounts in thousands)	2024		2023		Variance		% Change		2024		2023		Variance		% Change
MH base rental income (1)	$	174,939	$	164,404	$	10,535	6.4	%	$	175,105	$	164,553	$	10,552	6.4	%
Rental home income (1)	3,504		3,861		(357)		(9.2)	%	3,516		3,872		(356)		(9.2)	%
RV and marina base rental income (1)	115,628		109,340		6,288		5.8	%	120,167		111,592		8,575		7.7	%
Annual membership subscriptions	16,215		15,789		426		2.7	%	16,215		15,970		245		1.5	%
Membership upgrades sales (2)	3,947		3,466		481		13.9	%	3,947		3,505		442		12.6	%
Utility and other income (1)	31,179		29,521		1,658		5.6	%	34,778		35,331		(553)		(1.6)	%
Property operating revenues	345,412		326,381		19,031		5.8	%	353,728		334,823		18,905		5.6	%

Property operating and maintenance (1)(3)	112,204		110,362		1,842		1.7	%	114,824		112,707		2,117		1.9	%
Real estate taxes	20,417		17,856		2,561		14.3	%	20,787		18,316		2,471		13.5	%
Rental home operating and maintenance	1,369		959		410		42.8	%	1,378		959		419		43.7	%
Membership sales and marketing (4)	5,296		4,820		476		9.9	%	5,297		4,838		459		9.5	%
Property operating expenses, excluding property management	139,286		133,997		5,289		3.9	%	142,286		136,820		5,466		4.0	%
Income from property operations, excluding property management (5)	206,126		192,384		13,742		7.1	%	211,442		198,003		13,439		6.8	%
Property management	19,710		19,464		246		1.3	%	19,710		19,464		246		1.3	%
Income from property operations(5)	$	186,416	$	172,920	$	13,496	7.8	%	$	191,732	$	178,539	$	13,193	7.4	%

_____________________

(1)Rental income consists of the following total portfolio income items in this table: 1) MH base rental income, 2) Rental home income, 3) RV and marina base rental income and 4) Utility income, which is calculated by subtracting Other income on the Consolidated Statements of Income and Comprehensive Income from Utility and other income in this table. The difference between the sum of the total portfolio income items and Rental income on the Consolidated Statements of Income and Comprehensive Income is bad debt expense, which is presented in Property operating and maintenance expense in this table.

(2)Membership upgrade sales revenue is net of deferrals of $3.6 million and $4.5 million for the quarters ended March 31, 2024 and March 31, 2023, respectively.

(3)Includes bad debt expense for all periods presented.

(4)Membership sales and marketing expense is net of sales commission deferrals of $0.4 million and $0.7 million for the quarters ended March 31, 2024 and March 31, 2023, respectively.

(5)See Part I. Item 2. Management's Discussion and Analysis—Non-GAAP Financial Measures for definitions and reconciliations of these Non-GAAP measures to Net Income available for Common Shareholders.

Total portfolio income from property operations for the quarter ended March 31, 2024, increased $13.2 million, or 7.4%, from the quarter ended March 31, 2023, driven by an increase of $13.5 million, or 7.8%, from our Core Portfolio, offset by a decrease of $0.3 million from our Non-Core Portfolio. The increase in income from property operations from our Core Portfolio was primarily due to higher property operating revenues, primarily in MH base rental income, RV and marina base rental income, partially offset by an increase in real estate taxes and property operating and maintenance expenses.

Management's Discussion and Analysis (continued)

Property Operating Revenues

MH base rental income in our Core Portfolio for the quarter ended March 31, 2024 increased $10.5 million, or 6.4%, from the quarter ended March 31, 2023, which reflects 6.3% growth from rate increases and 0.1% from occupancy gains. The average monthly base rental income per Site in our Core Portfolio increased to approximately $847 for the quarter ended March 31, 2024 from approximately $797 for the quarter ended March 31, 2023. The average occupancy for our Core Portfolio was 94.9% for both the quarters ended March 31, 2024 and March 31, 2023.

RV and marina base rental income is comprised of the following:


	Core Portfolio								Total Portfolio
	Quarters Ended March 31,								Quarters Ended March 31,
(amounts in thousands)	2024		2023		Variance		% Change		2024		2023		Variance		% Change
Annual	$	73,051	$	67,624	$	5,427	8.0	%	$	75,475	$	69,401	$	6,074	8.8	%
Seasonal	28,276		27,606		670		2.4	%	29,545		27,960		1,585		5.7	%
Transient	14,301		14,110		191		1.4	%	15,147		14,231		916		6.4	%
RV and marina base rental income	$	115,628	$	109,340	$	6,288	5.8	%	$	120,167	$	111,592	$	8,575	7.7	%

RV and marina base rental income in our Core Portfolio for the quarter ended March 31, 2024 increased $6.3 million, or 5.8%, from the quarter ended March 31, 2023, driven primarily by an increase in Annual RV and marina base rental income. The increase in Annual RV and marina base rental income of 8.0% was driven by an increase in rate of 8.7%, offset by a decline of 0.7% in occupancy. The increase in Seasonal and Transient RV and marina base rental income of 2.4% and 1.4%, respectively, for the quarter ended March 31, 2024, compared to the same period in 2023, was due to higher demand, particularly in our Florida portfolio.

Utility and other income in our Core Portfolio for the quarter ended March 31, 2024 increased $1.7 million, or 5.6%, from the quarter ended March 31, 2023. The increase was primarily due to a $1.1 million and $0.6 million increase in other property income and pass-through income, respectively. The increase in other property income compared to the same period last year was mainly due to $0.8 million of amenity and other income. The increase in pass-through income was driven by increased real estate tax pass-throughs to customers.

Property Operating Expenses

Property operating expenses, excluding property management, in our Core Portfolio for the quarter ended March 31, 2024 increased $5.3 million, or 3.9%, from the quarter ended March 31, 2023, driven by increases in real estate taxes of $2.6 million and property operating and maintenance expenses of $1.8 million. Core real estate taxes were higher in 2024, primarily in the South and North regions, driven by tax increases that were effective in 2023. Property operating and maintenance expenses were higher in 2024 primarily due to an increase in insurance expense of $1.9 million due to higher insurance premiums following our property and casualty insurance renewal in the second quarter of 2023.

Management's Discussion and Analysis (continued)

Home Sales and Other

The following table summarizes certain financial and statistical data for our Home Sales and Other Operations:


	Quarters Ended March 31,
(amounts in thousands, except home sales volumes)	2024		2023		Variance		% Change
Gross revenues from new home sales	$	17,700	$	18,314	$	(614)	(3.4)	%
Cost of new home sales	15,401		16,662		(1,261)		(7.6)	%


Gross revenues from used home sales	838		1,175		(337)		(28.7)	%
Cost of used home sales	875		945		(70)		(7.4)	%


Gross revenue from brokered resales and ancillary services	11,515		12,644		(1,129)		(8.9)	%
Cost of brokered resales and ancillary services	5,691		5,534		157		2.8	%


Home selling and ancillary operating expenses	6,147		6,924		(777)		(11.2)	%



Home sales volumes
New home sales	191		176		15		8.5	%
Used home sales	54		102		(48)		(47.1)	%
Brokered home resales	109		134		(25)		(18.7)	%

Gross revenues from new home sales decreased $0.6 million and Cost of new home sales decreased $1.3 million during the quarter ended March 31, 2024, compared to the quarter ended March 31, 2023, primarily due to lower average selling prices and lower average cost of home sales, respectively.

Rental Operations

The following table summarizes certain financial and statistical data for our MH Rental Operations:


	Quarters Ended March 31,
(amounts in thousands, except rental unit volumes)	2024		2023		Variance		% Change
Rental operations revenue (1)	$	9,058	$	10,258	$	(1,200)	(11.7)	%
Rental home operating and maintenance expenses	1,369		959		410		42.8	%

Depreciation on rental homes (2)	2,568		2,747		(179)		(6.5)	%


Gross investment in new manufactured home rental units	$	238,963	$	252,204	$	(13,241)	(5.3)	%
Gross investment in used manufactured home rental units	$	11,744	$	14,056	$	(2,312)	(16.4)	%

Net investment in new manufactured home rental units	$	197,641	$	209,673	$	(12,032)	(5.7)	%
Net investment in used manufactured home rental units	$	7,118	$	8,094	$	(976)	(12.1)	%

Number of occupied rentals – new, end of period	1,922		2,389		(467)		(19.5)	%
Number of occupied rentals – used, end of period	236		313		(77)		(24.6)	%

______________________

(1)Consists of Site rental income and home rental income. Approximately $5.6 million and $6.4 million for the quarters ended March 31, 2024 and March 31, 2023, respectively, of Site rental income is included in MH base rental income in the Core Portfolio Income from Property Operations table. The remainder of home rental income is included in Rental home income in our Core Portfolio Income from Property Operations table.

(2)Presented in Depreciation and amortization in the Consolidated Statements of Income and Comprehensive Income.

Rental operations revenues were $1.2 million, or 11.7%, lower during the quarter ended March 31, 2024, compared to the quarter ended March 31, 2023, primarily due to a decrease in the number of occupied rentals.

Management's Discussion and Analysis (continued)

Miscellaneous Other Income and Expenses

The following table summarizes other income and expenses, net:


	Quarters Ended March 31,
(amounts in thousands, expenses shown as negative)	2024		2023		Variance		% Change
Depreciation and amortization	$	(51,108)	$	(50,502)	$	(606)	(1.2)	%
Interest income	2,168		2,088		80		3.8	%
Income from other investments, net	2,038		2,091		(53)		(2.5)	%
General and administrative	(11,989)		(11,661)		(328)		(2.8)	%
Other expenses	(1,331)		(1,468)		137		9.3	%

Interest and related amortization	(33,543)		(32,588)		(955)		(2.9)	%
Total other income and expenses, net	$	(93,765)	$	(92,040)	$	(1,725)	(1.9)	%

Total other income and expenses, net increased $1.7 million for the quarter ended March 31, 2024, compared to the quarter ended March 31, 2023, primarily due to higher interest and related amortization expense as a result of an increase in interest rates, as well as increases in depreciation and amortization and general and administrative expenses.

Casualty-related charges/(recoveries), net

During the quarters ended March 31, 2024 and March 31, 2023, we recognized expenses of approximately $0.5 million and $8.5 million, respectively, related to debris removal and cleanup costs related to Hurricane Ian and we recognized an offsetting insurance recovery revenue accrual of $0.5 million and $8.5 million, respectively, related to the expected insurance recovery. During the quarter ended March 31, 2024, we also recognized excess insurance recovery revenue of approximately $14.8 million within Casualty-related charges/(recoveries), net for reimbursement of capital expenditures. The debris and cleanup costs and offsetting recovery accrual and reimbursement of capital expenditures are reflected in Casualty-related charges/(recoveries), net on the Consolidated Statements of Income and Comprehensive Income.

Liquidity and Capital Resources

Liquidity

Our primary demands for liquidity include payment of operating expenses, dividend distributions, debt service, including principal and interest, capital improvements on Properties, home purchases and property acquisitions. We expect similar demand for liquidity will continue for the short-term and long-term. Our primary sources of cash include operating cash flows, proceeds from financings, borrowings under our unsecured line of credit (the “LOC”) and proceeds from issuance of equity and debt securities, including issuances under our ATM equity offering program (as defined below).

One of our stated objectives is to maintain financial flexibility. Achieving this objective allows us to take advantage of strategic opportunities that may arise. When investing capital, we consider all potential uses, including returning capital to our stockholders or the conditions under which we may repurchase our stock. These conditions include, but are not limited to, market price, balance sheet flexibility, alternative opportunistic capital uses and capital requirements. We believe effective management of our balance sheet, including maintaining various access points to raise capital, managing future debt maturities and borrowing at competitive rates, enables us to meet this objective. Accessing long-term low-cost secured debt continues to be our focus.

As of March 31, 2024, we had available liquidity in the form of approximately 413.5 million shares of authorized and unissued common stock, par value $0.01 per share, and 10.0 million shares of authorized and unissued preferred stock registered for sale under the Securities Act of 1933, as amended.

We also utilize interest rate swaps to add stability to our interest expense and to manage our exposure to interest rate movements. Interest rate swaps designated as cash flow hedges involve the receipt of variable amounts from a counterparty in exchange for making fixed-rate payments over the life of the agreements without exchange of the underlying notional amount. The changes in the fair value of the designated derivative are recorded in Accumulated other comprehensive income (loss) on the Consolidated Balance Sheets and subsequently reclassified into earnings on the Consolidated Statements of Income and

Management's Discussion and Analysis (continued)

Comprehensive Income in the period that the hedged forecasted transaction affects earnings. For additional information regarding our interest rate swaps, see Part I. Item 1. Financial Statements—Note 8. Derivative Instruments and Hedging and Note 13. Subsequent Events.

We expect to meet our short-term liquidity requirements, including principal payments, capital improvements and dividend distributions for the next twelve months, generally through available cash, net cash provided by operating activities, issuances of equity under our ATM equity offering program and our LOC. As of March 31, 2024, our LOC had a borrowing capacity of $493.9 million.

We expect to meet certain long-term liquidity requirements, such as scheduled debt maturities, property acquisitions and capital improvements, using long-term collateralized and uncollateralized borrowings including the existing LOC and the issuance of debt securities or the issuance of equity including under our ATM equity offering program.

The following table summarizes our cash flows activity:


	For the quarters ended March 31,
(amounts in thousands)	2024		2023
Net cash provided by operating activities	$	198,748	$	158,980
Net cash used in investing activities	(51,292)		(66,447)
Net cash used in financing activities	(130,112)		(84,219)
Net increase in cash and restricted cash	$	17,344	$	8,314

Operating Activities

Net cash provided by operating activities increased $39.8 million to $198.7 million for the quarter ended March 31, 2024 from $159.0 million for the quarter ended March 31, 2023. The increase in net cash provided by operating activities was primarily due to net increases in manufactured homes, net, accounts payable and other liabilities and other assets, net, partially offset by a reduction in proceeds from insurance claims, net.

The following table summarizes our purchase and sale activity of manufactured homes:


	For the quarters ended March 31,
(amounts in thousands)	2024		2023
Purchase of manufactured homes	$	(12,927)	$	(35,481)
Sale of manufactured homes	15,260		15,907
Manufactured homes, net	$	2,333	$	(19,574)

Investing Activities

Net cash used in investing activities decreased $15.1 million to $51.3 million for the quarter ended March 31, 2024 from $66.4 million for the quarter ended March 31, 2023. The decrease was due to a decrease in spending on acquisitions of $8.8 million, a decrease in investments in unconsolidated joint ventures of $0.4 million and a decrease in capital improvement spending of $6.3 million.

Management's Discussion and Analysis (continued)

Capital Improvements

The following table summarizes capital improvements:


	For the quarters ended March 31,
(amounts in thousands)	2024		2023
Asset preservation (1)	$	9,525	$	11,154
Improvements and renovations(2)	6,297		6,958
Property upgrades and development (3)	31,867		33,204
Site development (4)	3,298		9,562
Total property improvements	50,987		60,878
Corporate	3,719		96
Total capital improvements	$	54,706	$	60,974

______________________

(1)Includes upkeep of property infrastructure including utilities and streets and replacement of community equipment and vehicles.

(2)Includes enhancements to amenities such as buildings, common areas, swimming pools and replacement of furniture and site amenities.

(3)Includes $5.6 million of restoration and improvement capital expenditures related to Hurricane Ian for the quarter ended March 31, 2024.

(4)Includes capital expenditures to improve the infrastructure required to set manufactured homes.

Financing Activities

Net cash used in financing activities increased $45.9 million to $130.1 million for the quarter ended March 31, 2024 from $84.2 million for the quarter ended March 31, 2023. The increase was primarily due to a line of credit, net repayment of $39.0 million.

Contractual Obligations

Significant ongoing contractual obligations consist primarily of long-term borrowings, interest expense, operating leases, LOC maintenance fees and ground leases. For a summary and complete presentation and description of our ongoing commitments and contractual obligations, see Part II. Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations—Contractual Obligations in our 2023 Form 10-K.

Off-Balance Sheet Arrangements

As of March 31, 2024, we have no off-balance sheet arrangements.

Critical Accounting Policies and Estimates

Refer to Part II. Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations in our 2023 Form 10-K for a discussion of our critical accounting policies. There have been no significant changes to our critical accounting policies and estimates during the quarter ended March 31, 2024.

Forward-Looking Statements

This Quarterly Report on Form 10-Q 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 attract and retain customers entering, renewing and upgrading membership subscriptions;

•our assumptions about rental and home sales markets;

•our ability to manage counterparty risk;

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

Management's Discussion and Analysis (continued)

•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, including an adequate supply of homes at reasonable costs, 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;

•impact of the COVID-19 pandemic or other highly infectious or contagious diseases on our business operations, our residents, our customers, our employees and the economy generally;

•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;

•the effect of potential damage from natural disasters, including hurricanes and other weather-related events, which could result in substantial costs to our business;

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

•the effect of inflation and 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 potential impact of, and our ability to remediate, material weaknesses in our internal control over financial reporting;

•the outcome of pending or future lawsuits or actions brought by or 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.

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.

Item 3.Quantitative and Qualitative Disclosures About Market Risk

We disclosed a quantitative and qualitative analysis regarding market risk in Part II, Item 7A. Quantitative and Qualitative Disclosures About Market Risk in our 2023 Form 10-K. There have been no material changes in the assumptions used or results obtained regarding market risk since December 31, 2023.

Item 4.Controls and Procedures

Evaluation of Disclosure Controls and Procedures

Our management, with the participation of our Chief Executive Officer (principal executive officer) and Chief Financial Officer (principal financial officer and principal accounting officer), has evaluated the effectiveness of our disclosure controls and procedures as of March 31, 2024. Based on that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were effective to give reasonable assurances to the timely collection, evaluation and disclosure of information relating to us that would potentially be subject to disclosure under the Securities and Exchange Act of 1934, as amended (the “Exchange Act”), and the rules and regulations promulgated thereunder as of March 31, 2024. Any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives.

Changes in Internal Control Over Financial Reporting

During the quarter ended March 31, 2024, there were no changes in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Part II – Other Information

Item 1.Legal Proceedings

See Part I. Item 1. Financial Statements—Note 11. Commitments and Contingencies accompanying the Consolidated Financial Statements in this Quarterly Report on Form 10-Q.

Item 1A.Risk Factors

A description of the risk factors associated with our business are discussed in Part1. Item 1A. Risk Factors in our 2023 Form 10-K. On April 1, 2024, we renewed our property and casualty insurance policies. We have updated our risk factors disclosed in Part1. Item 1A. Risk Factors in our 2023 Form 10-K with the risk factor described below.

Some Potential Losses Are Not Covered by Insurance

We carry comprehensive insurance coverage for losses resulting from property damage and environmental liability and business interruption claims on all of our Properties. In addition, we carry liability coverage for other activities not specifically related to property operations. These coverages include, but are not limited to, Directors & Officers liability, Employment Practices liability, Fiduciary liability and Cyber liability. We believe that the policy specifications and coverage limits of these policies should be adequate and appropriate given the relative risk of loss, the cost of insurance and industry practice. There are, however, certain types of losses, such as punitive damages, lease and other contract claims that generally are not insured. Should an uninsured loss or a loss in excess of coverage limits occur, we could lose all or a portion of the capital we have invested in a Property or the anticipated future revenue from a Property. In such an event, we might nevertheless remain obligated for any mortgage debt or other financial obligations related to the Property.

Our current property and casualty insurance policies with respect to our MH and RV Properties renewed on April 1, 2024. We have a $125.0 million per occurrence limit with respect to our MH and RV all-risk property insurance program, which includes $75.0 million of coverage per occurrence for named windstorms, which include, for example, hurricanes. The loss limit is subject to additional sub-limits as set forth in the policy form, including, among others, a $25.0 million aggregate loss limit for earthquake(s) in California. The deductibles for this policy primarily range from $500,000 minimum to 5% per unit of insurance for most catastrophic events. For most catastrophic events, there is an additional one-time aggregate deductible of $10.0 million, which is capped at $5.0 million per occurrence. We have separate insurance policies with respect to our marina Properties. Those casualty policies expire on November 1, 2024, and the property insurance program renewed on April 1, 2024. The marina property insurance program has a $30.0 million per occurrence limit, subject to self-insurance and a minimum deductible of $100,000 plus, for named windstorms, 5% per unit of insurance subject to a $500,000 minimum. A deductible indicates our maximum exposure, subject to policy limits and sub-limits, in the event of a loss.

Item 2.Unregistered Sales of Equity Securities and Use of Proceeds

None.

Item 3.Defaults Upon Senior Securities

None.

Item 4.Mine Safety Disclosures

None.

Item 5.Other Information

During the quarter ended March 31, 2024, none of the Company’s directors or officers adopted, terminated or modified any Rule 10b5-1 trading arrangement or non-Rule 10b5-1 trading arrangement (as such terms are defined in Item 408 of Regulation S-K of the Securities Act of 1933).

Item 6.Exhibits


31.1			Certification of Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2			Certification of Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1			Certification of Chief Financial Officer Pursuant to 18 U.S.C. Section 1350.
32.2			Certification of Chief Executive Officer Pursuant to 18 U.S.C. Section 1350.
101.INS			XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.
101.SCH			Inline XBRL Taxonomy Extension Schema Document
101.CAL			Inline XBRL Taxonomy Extension Calculation Linkbase Document
101.LAB			Inline XBRL Taxonomy Extension Label Linkbase Document
101.PRE			Inline XBRL Taxonomy Extension Presentation Linkbase Document
101.DEF			Inline XBRL Taxonomy Extension Definition Linkbase Document
104			Cover Page Interactive Data File included as Exhibit 101 (embedded within the Inline XBRL document)

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.

Date: April 30, 2024	By:	/s/ Marguerite Nader
		Marguerite Nader
		President and Chief Executive Officer
		(Principal Executive Officer)

Date: April 30, 2024	By:	/s/ Paul Seavey
		Paul Seavey
		Executive Vice President and Chief Financial Officer
		(Principal Financial and Accounting Officer)

Document

Exhibit 31.1

CERTIFICATION OF CHIEF FINANCIAL OFFICER PURSUANT TO SECTION 302 OF

THE SARBANES-OXLEY ACT OF 2002

I, Paul Seavey certify that:

1. I have reviewed this quarterly report on Form 10-Q of Equity LifeStyle Properties, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.


Date: April 30, 2024	By:	/s/ Paul Seavey
		Paul Seavey
		Executive Vice President and Chief Financial Officer

Document

Exhibit 31.2

CERTIFICATION OF CHIEF EXECUTIVE OFFICER PURSUANT TO SECTION 302 OF

THE SARBANES-OXLEY ACT OF 2002

I, Marguerite Nader, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Equity LifeStyle Properties, Inc.;

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.


Date: April 30, 2024	By:	/s/ Marguerite Nader
		Marguerite Nader
		President and Chief Executive Officer

Document

Exhibit 32.1

CERTIFICATION OF CHIEF FINANCIAL OFFICER

PURSUANT TO 18 U.S.C. SECTION 1350

In connection with the accompanying Quarterly Report on Form 10-Q of Equity LifeStyle Properties, Inc. for the quarter ended March 31, 2024 (the “Form 10-Q”), I, Paul Seavey, Executive Vice President and Chief Financial Officer of Equity LifeStyle Properties, Inc., hereby certify pursuant to 18 U.S.C. Section 1350, as adopted by Section 906 of the Sarbanes-Oxley Act of 2002, that to the best of my knowledge:

1. the Form 10-Q fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

2. the information contained in the Form 10-Q fairly presents, in all material respects, the financial condition and results of operations of Equity LifeStyle Properties, Inc.


Date: April 30, 2024	By:	/s/ Paul Seavey
		Paul Seavey
		Executive Vice President and Chief Financial Officer

A signed original of this written statement required by Section 906 has been provided to

Equity LifeStyle Properties, Inc. and will be retained by Equity LifeStyle Properties, Inc. and furnished to the Securities and Exchange Commission or its staff

upon request.

Document

Exhibit 32.2

CERTIFICATION OF CHIEF EXECUTIVE OFFICER

PURSUANT TO 18 U.S.C. SECTION 1350

In connection with the accompanying Quarterly Report on Form 10-Q of Equity LifeStyle Properties, Inc. for the quarter ended March 31, 2024 (the “Form 10-Q”), I, Marguerite Nader, President and Chief Executive Officer of Equity LifeStyle Properties, Inc., hereby certify pursuant to 18 U.S.C. Section 1350, as adopted by Section 906 of the Sarbanes-Oxley Act of 2002, that to the best of my knowledge:

1. the Form 10-Q fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

2. the information contained in the Form 10-Q fairly presents, in all material respects, the financial condition and results of operations of Equity LifeStyle Properties, Inc.


Date: April 30, 2024	By:	/s/ Marguerite Nader
		Marguerite Nader
		President and Chief Executive Officer

A signed original of this written statement required by Section 906 has been provided to

Equity LifeStyle Properties, Inc. and will be retained by Equity LifeStyle Properties, Inc. and furnished to the Securities and Exchange Commission or its staff

upon request.