UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 8-K

CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): March 9, 2012

EQUITY LIFESTYLE PROPERTIES, INC.
(Exact name of registrant as specified in its charter)

 
 	 	 	 	 	
Maryland	 	1-11718	 	36-3857664	
(State or other jurisdiction of
incorporation or organization)	 	(Commission File No.)	 	(IRS Employer
Identification Number)	
 	 	
Two North Riverside Plaza, Chicago, Illinois	 	60606	
(Address of principal executive offices)	 	(Zip Code)	
(Registrant’s telephone number, including area code) (312) 279-1400

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions ( see  General Instruction A.2. below):
 
¨	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)	
 
¨	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)	
 
¨	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))	
 
¨	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))	

 

Item 2.02	Results of Operations and Financial Condition	
Equity LifeStyle Properties, Inc. (the “Company”) hereby reconfirms previously issued guidance for its net income per share (fully diluted) and funds from operations per share (fully diluted) for the year ending December 31, 2012 to be between $0.98 and $1.18 and $4.32 and $4.52, respectively.
 
Item 7.01	Regulation FD Disclosure	
In accordance with General Instruction B.2. of Form 8-K, the following information shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that Section. Nor shall the information in this Current Report be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended. The Company disclaims any intention or obligation to update or revise this information.
On March 9, 2012, the Company issued a press release announcing that Tom Heneghan, ELS’ President and CEO, will make a presentation at the Citi 2012 Global Property CEO Conference on Tuesday, March 13, 2012 at 3:35pm Eastern Time. The press release is furnished as Exhibit 99.1 to this report on Form 8-K.
Attached as Exhibit 99.2 is an investor presentation that will be posted on the Company’s website, www.equitylifestyle.com, on March 12, 2012. Included in this presentation is a discussion of the Company’s business and certain financial information regarding 2012 guidance.
This report includes certain “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. When used, words such as “anticipate,” “expect,” “believe,” “project,” “intend,” “may be” and “will be” and similar words or phrases, or the negative thereof, unless the context requires otherwise, are intended to identify forward-looking statements and may include, without limitation, information regarding the Company’s expectations, goals or intentions regarding the future, and the expected effect of the Acquisition on the Company. These forward-looking statements are subject to numerous assumptions, risks and uncertainties, including, but not limited to:
 
 	•	 	the Company’s ability to control costs, real estate market conditions, the actual rate of decline in customers, the actual use of sites by customers and its success in acquiring new customers at its Properties (including those that it may acquire);	
 
 	•	 	the Company’s ability to maintain historical rental rates and occupancy with respect to Properties currently owned or that the Company may acquire;	
 
 	•	 	the Company’s assumptions about rental and home sales markets;	
 
 	•	 	the Company’s assumptions and guidance concerning 2012 estimated net income and funds from operations;	
 
 	•	 	in the age-qualified Properties, home sales results could be impacted by the ability of potential homebuyers to sell their existing residences as well as by financial, credit and capital markets volatility;	
 
 	•	 	results from home sales and occupancy will continue to be impacted by local economic conditions, lack of affordable manufactured home financing and competition from alternative housing options including site-built single-family housing;	
 
 	•	 	impact of government intervention to stabilize site-built single family housing and not manufactured housing;	
 
 	•	 	effective integration of the Acquisition Properties and the Company’s estimates regarding the future performance of the Acquisition Properties;	
 
 	•	 	unanticipated costs or unforeseen liabilities associated with the Acquisition;	
 
 	•	 	ability to obtain financing or refinance existing debt on favorable terms or at all;	
 
 	•	 	the effect of interest rates;	
 
 	•	 	the dilutive effects of issuing additional securities;	
 
 	•	 	the effect of accounting for the entry of contracts with customers representing a right-to-use the Properties under the Codification Topic “ Revenue Recognition; ” and	
 
 	•	 	other risks indicated from time to time in the Company’s filings with the Securities and Exchange Commission.	

These forward-looking statements are based on management’s present expectations and beliefs about future events. As with any projection or forecast, these statements are inherently susceptible to uncertainty and changes in circumstances. The Company is under no obligation to, and expressly disclaims any obligation to, update or alter its forward-looking statements whether as a result of such changes, new information, subsequent events or otherwise.
Equity LifeStyle Properties, Inc. is a fully integrated owner and operator of lifestyle-oriented properties and owns or has an interest in 382 quality properties in 32 states and British Columbia consisting of 141,132 sites. The Company is a self-administered, self-managed, real estate investment trust (REIT) with headquarters in Chicago.
 
Item 9.01	Financial Statements and Exhibits	
        (d) Exhibits

        Exhibit 99.1	  	Equity LifeStyle Properties, Inc. Press Release dated March 9, 2012, “ELS Presentation at Citi CEO Conference”	
 	 	
        Exhibit 99.2	  	Investor Presentation	

 	

SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 	 	 	 	EQUITY LIFESTYLE PROPERTIES, INC.	
 	 	 	 	
Date: March 12, 2012	 	 	 	By:	 	/s/ Marguerite Nader	
 	 	 	 	 	 	Marguerite Nader	
 	 	 	 	 	 	Executive Vice President and
Chief Financial Officer	

Exhibit 99.1

 	  	        N EWS    R ELEASE	

CONTACT: Marguerite Nader	  	              FOR IMMEDIATE RELEASE	
(800) 247-5279	  	              March 9, 2012	
ELS PRESENTATION AT CITI CEO CONFERENCE
CHICAGO, IL – March 9, 2012 – Equity LifeStyle Properties, Inc. (NYSE: ELS) today announced that the Company will make a presentation at the Citi 2012 Global Property CEO Conference on Tuesday, March 13, 2012. Tom Heneghan, ELS’ President and CEO, will conduct a roundtable presentation at 3:35pm Eastern time. The live presentation can be accessed via teleconference at (877) 211-0500 using passcode: 7494482. International callers should dial (201) 984-1145 using passcode: 7494482. This will be a listen only broadcast. A replay of the presentation will not be available.
This press release includes certain “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. When used, words such as “anticipate,” “expect,” “believe,” “project,” “intend,” “may be” and “will be” and similar words or phrases, or the negative thereof, unless the context requires otherwise, are intended to identify forward-looking statements and may include, without limitation, information regarding the Company’s expectations, goals or intentions regarding the future, and the expected effect of the Acquisition on the Company. These forward-looking statements are subject to numerous assumptions, risks and uncertainties, including, but not limited to:
 
 	•	 	the Company’s ability to control costs, real estate market conditions, the actual rate of decline in customers, the actual use of sites by customers and its success in acquiring new customers at its Properties (including those that it may acquire);	
 
 	•	 	the Company’s ability to maintain historical rental rates and occupancy with respect to Properties currently owned or that the Company may acquire;	
 
 	•	 	the Company’s assumptions about rental and home sales markets;	
 
 	•	 	the Company’s assumptions and guidance concerning 2012 estimated net income and funds from operations;	
 
 	•	 	in the age-qualified Properties, home sales results could be impacted by the ability of potential homebuyers to sell their existing residences as well as by financial, credit and capital markets volatility;	
 
 	•	 	results from home sales and occupancy will continue to be impacted by local economic conditions, lack of affordable manufactured home financing and competition from alternative housing options including site-built single-family housing;	
 
 	•	 	impact of government intervention to stabilize site-built single family housing and not manufactured housing;	

 	•	 	effective integration of the Acquisition Properties and the Company’s estimates regarding the future performance of the Acquisition Properties;	
 
 	•	 	unanticipated costs or unforeseen liabilities associated with the Acquisition;	
 
 	•	 	ability to obtain financing or refinance existing debt on favorable terms or at all;	
 
 	•	 	the effect of interest rates;	
 
 	•	 	the dilutive effects of issuing additional securities;	
 
 	•	 	the effect of accounting for the entry of contracts with customers representing a right-to-use the Properties under the Codification Topic “ Revenue Recognition; ” and	
 
 	•	 	other risks indicated from time to time in the Company’s filings with the Securities and Exchange Commission.	
These forward-looking statements are based on management’s present expectations and beliefs about future events. As with any projection or forecast, these statements are inherently susceptible to uncertainty and changes in circumstances. The Company is under no obligation to, and expressly disclaims any obligation to, update or alter its forward-looking statements whether as a result of such changes, new information, subsequent events or otherwise.
Equity LifeStyle Properties, Inc. owns or has an interest in 382 quality properties in 32 states and British Columbia consisting of 141,132 sites. The Company is a self-administered, self-managed, real estate investment trust (REIT) with headquarters in Chicago.

Exhibit 99.2

 	
Fxrwxrd-Lxoxixg Stxtxxents
Equity LifeStyle Properties ELS Investor Presentation March 12, 2012
¡Thxxe fxrxarx-loxkixg statxoeots xre bxsex ox mooogexont’s pooxent exxeoootxons axd bxlxefs abxut fuoore evoots. os wooh ooy poooection oo fooocast, toose stooooonts ooe inoooontly suoooptible to uncert000ty a000a00es i00circu00tances. T00 Co0pany i00un0er no obligation t00 a0d exp0essly 00ny obli0ation t0, 0or alter its f00w00d-loo00ng state00nts w0et0er as a re00lt 0f s0ch ch00ges, ne0 info00ation, 0even0s 00 otherw00e.

 	
 	
Forward-Looking Statements
¡This presentation 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, orthe negative thereof, unless the context requires otherwise, are intended to identify forward-looking statements and may include, without limitation, information regarding the Company’s expectations, goals or intentions regarding the future, and the expected effect of the Acquisition on the Company. These forward-looking statements are subject to numerous assumptions, risks and uncertainties, including, but not limited to:
?the Company’s ability to control costs, real estate market conditions, the actual rate of decline in customers, the actual use of sites by customers and its success in acquiring new customers at its Properties (including those that it may acquire);
?the Company’s ability to maintain historical rental rates and occupancy with respect to Properties currently owned or that the Company may acquire;
?the Company’s assumptions about rental and home sales markets;
?the Company’s assumptions and guidance concerning 2012 estimated net income and funds from operations;
?in the age-qualified Properties, home sales results could be impacted by the ability of potential homebuyers to sell their existing residences as well as by financial, credit and capital markets volatility;
?results from home sales and occupancy will continue to be impacted by local economic conditions, lack of affordable manufacturedhome financing and competition from alternative housing options, including site-built single-family housing;
?impact of government intervention to stabilize site-built single family housing and not manufactured housing;
?effective integration of the Acquisition Properties and the Company’s estimates regarding the future performance of the Acquisition Properties;
?unanticipated costs or unforeseen liabilities associated with the Acquisition;
?ability to obtain financing or refinance existing debt on favorable terms or at all;
?the effect of interest rates;
?the dilutive effects of issuing additional securities;
?the effect of accounting for the entry of contracts with customers representing a right-to-use the Properties under the Codification Topic “Revenue Recognition;” and
?other risks indicated from time to time in the Company’s filings with the Securities and Exchange Commission.
¡These forward-looking statements are based on management’s present expectations and beliefs about future events. As with any projection or forecast, these statements are inherently susceptible to uncertainty and changes in circumstances. The Company is under no obligation to, and expressly disclaims any obligation to, update or alter its forward-looking statements whether as a result of such changes, new information, subsequent events or otherwise.

 	
 	
Equity LifeStyle Properties
ELS Overview
¡One of the nation’s largest real estate networks with 382 properties containing over 141,000 sites in 32 states and British Columbia
¡ELS has a unique business model
?ELS owns the land
?Leases individual developed sites to customers
?Customers own the units they place on the sites
¡ELS site composition
?> 90% of property operating revenue is annual recurring revenue stream(1)
?75,600 manufactured or resort home sites
?65,600 RV sites for resort cottages (park models) and recreational vehicles
•Includes 46,200 sites primarily rented on an annual basis
¡ELS’s rent position is prime
¡Over 1,000,000 customer contacts
(1) Property operating revenue includes the following captions from our Consolidated Statements of Operations: community base rental income, resort base rental income, right-to-use annual payment, right-to-use contracts current period, gross and utility and other income.
3	 	

 	
 	
Equity LifeStyle PropertiesELS Key Value Drivers
¡Well Located Real Estate
?>80 properties with lake, river or ocean frontage
?>100 properties within 10 miles of coastal United States
?Property locations are strongly correlated with population migration
¡Long Term Predictable Cash Flows
¡Favorable Customer Demographics
?Baby Boomers
?Active adults and RV owners / Outdoor enthusiasts
¡Product Flexibility
?Own, rent, flexible use or right to use
4	 	

 	
 	
Equity LifeStyle PropertiesReal Estate
¡Primary investment is land/appreciating component of real estate
¡Lower maintenance costs/customer turnover costs
¡High quality real estate
?Major metros/high growth areas
?High barriers to entry
?Retirement and vacation destinations
?Asset scarcity
 
5	 	

 	
 	
Equity LifeStyle Properties
ELS LifeStyle and Activities
¡Recreation
?Golf, softball, fishing, tennis, swimming, lawn bowling/bocce
¡Arts
?Concerts, shows, art fairs, crafts
¡Education
?Seminars, One Day University
¡Volunteerism
?Consider Others, fund raising
6	 	

 	
 	
Equity LifeStyle Properties
Customer Demographics
10 20 30 40 50 60 70 80 2010 2015 2020 70 to 74 65 to 69 60 to 64 55 to 59 AGE U.S. Population Over Age of 55 (1)(in millions) Customer Retention Strategy Notes:1) Sources: U.S. Census Bureau, 2008.
¡Lifestyle focus
?Amenities / social activities
?Communities
¡Attractive housing
?High quality
?Low capital commitment
?Easy maintenance
¡Long Term Multi-Phase Relationship
?Camping ?RV ?Cottage ?Resort Home
?Flexible use to multi-use / locations
?High repeat and referral
¡Long term relationship creates stable and predictable cash flows
Notes: 1) Sources: U.S. Census Bureau, 2008.
 
7	 	

 	
 	
Fxrwxrd-Lxoxixg Stxtxxents
Eq768uity 67867LifeStyle 678678Pro70perti678es E000LS I00nvesto0rese0000nta0o00n Ma00rch 1002,0 002012
¡Thxxe fxrxarx-loxkixg statxoeots xre bxsex ox mooogexont’s pooxent exxeoootxons axd bxlxefs abxut fuoore evoots. os wooh ooy poooection oo fooocast, toose stooooonts ooe inoooontly suoooptible to uncert000ty a000a00es i00circu00tances. T00 Co0pany i00un0er no obligation t00 a0d exp0essly 00ny obli0ation t0, 0or alter its f00w00d-loo00ng state00nts w0et0er as a re00lt 0f s0ch ch00ges, ne0 info00ation, 0even0s 00 otherw00e.
Equity LifeStyle Properties Business Model –Summary
¡Robust model
?Ability to adapt to changing environment
?Ability to react to acquisition opportunities
?Financial flexibility
 
8	 	

 	
 	
Equity LifeStyle Properties
9
Consistent Same Store NOI Growth and Out performance Notes: Source: Citi Investment Research, November 2011.
(1)”REIT Industry” includes an index of REITs across a variety of asset classes, including regional malls, shopping centers, multi family, student housing, manufactured homes, self storage, office, industrial, mixed office and specialty.
ELS has consistently outperformed the REIT industry and has maintained positive same store NOI growth every quarter since Q3’98
-3.5%
-3.0%-2.5%-2.0%-1.5%-1.0%-0.5%0.0%0.5%1.0%1.5%2.0%2.5%
3.0%
3.5%
4.0%
4.5%
5.0%5.5%6.0%6.5%7.0%7.5%8.0%8.5%9.0%9.5%10.0%3Q98
4Q98
1Q99
2Q99
3Q99
4Q991Q002Q003Q004Q001Q012Q013Q014Q011Q022Q023Q02
4Q02
1Q03
2Q03
3Q03
4Q031Q042Q043Q044Q041Q052Q053Q054Q051Q062Q063Q06
4Q06
1Q07
2Q07
3Q07
4Q071Q082Q083Q084Q081Q092Q093Q094Q091Q102Q103Q10
4Q10
1Q11
2Q11
3Q11
4Q11REIT Industry (1)ELSIndustry Average -2.3%
(1)ELS Average -3.8%
ELS has consistently outperformed the REIT industry and has maintained positivesame store NOI growth every quarter since Q3’98
Notes:Source: CitiInvestment Research, November 2011.
(1)”REIT Industry” includes an index of REITs across a variety of asset classes, including regional malls, shopping centers, multi family, student housing, manufactured homes, self storage, office, industrial, mixed office and specialty.
9

 	
 	
Fxrwxrd-Lxoxixg Stxtxxents
E000ty Life00yle Prop00ties E00 Inve00or Presen00tion M0rch 10, 20000
¡Thxxe fxrxarx-loxkixg statxoeots xre bxsex ox mooogexont’s pooxent exxeoootxons axd bxlxefs abxut fuoore evoots. os wooh ooy poooection oo fooocast, toose stooooonts ooe inoooontly suoooptible to uncert000ty a000a00es i00circu00tances. T00 Co0pany i00un0er no obligation t00 a0d exp0essly 00ny obli0ation t0, 0or alter its f00w00d-loo00ng state00nts w0et0er as a re00lt 0f s0ch ch00ges, ne0 info00ation, 0even0s 00 otherw00e.
Equity LifeStyle Properties 10
2011 Acquisition Overview

 	
 	
Equity LifeStyle Properties
2011 Acquisition Overview
¡$1.4 billion acquisition of 75 properties, financed as follows:
?$200millionequitytoseller
?Over$500millionassumedmortgagedebtwithaweightedaverageinterestrateof5.6%andaweightedaveragematurityof6years
?~$344millionJune2011publicequityoffering
?$400millionnewdebt(1)
Notes:
1)Includes the incurrence of new debt including (i) a $200mm unsecured 6-year term loan at an expected all-in interest rate of 3.26% per annum that was closed on July 1, 2011 (ii) a $100mm 10-year mortgage financing at an interest rate of approximately 5.03% per annum that we closed on August 9, 2011 and iii) $100mm 10-year mortgagefinancing at an interest rate of approximately 5.00% per annum that we closed on September 15, 2011.
11

 	
 	
Fxrwxrd-Lxoxixg Stxtxxents
Eq000y Life000le Prop00ties E00 Inv00
¡Thxxe fxrxarx-loxkixg statxoeots xre bxsex ox mooogexont’s pooxent exxeoootxons axd bxlxefs abxut fuoore evoots. os wooh ooy poooection oo fooocast, toose stooooonts ooe inoooontly suoooptible to uncert000ty a000a00es i00circu00tances. T00 Co0pany i00un0er no obligation t00 a0d exp0essly 00ny obli0ation t0, 0or alter its f00w00d-loo00ng state00nts w0et0er as a re00lt 0f s0ch ch00ges, ne0 info00ation, 0even0s 00 otherw00e.
Equity LifeStyle Properties
12
Significant Overlap in Core Geographies

 	
 	
Equity LifeStyle Properties
2012 Guidance -Selected Financial Data (1)
TheCompany’sguidanceacknowledgestheexistenceofvolatileeconomicconditions,whichmayimpactourcurrentguidanceassumptions.Factorsimpacting2012guidanceinclude,butarenotlimitedtothefollowing:(i)the mix of site usage within the portfolio;(ii) yield management on our short-term resort sites;(iii) schedule do implemented rate increases on community and resort sites;(iv)scheduledorimplementedrateincreasesofannualpaymentsunderright-to-usecontracts,(v) occupancy changes;(vi)ourabilitytoretainandattractcustomersrenewingorenteringright-to-usecontracts,(vii)performanceofthechattelloanspurchasedbyusinconnectionwiththeAcquisition,and(viii)ourabilitytointegrateandoperatetheAcquisitionPropertiesinaccordancewithourestimates.
(In $US Millions, except per share data, unaudited)
(In $US Millions, except per share data, unaudited)
Year Ended December 31, 2012
Income from Property Operations -2012 Core (2) $288.8
Income from Property Operations -2011 Acquisition properties 101.3
Property Management and general and administrative (64.9)
Other Income and Expenses 17.3
Financing Costs and Other (141.4)
Funds from Operations (FFO) (3) $201.1
Depreciation on Real Estate and Other (99.6)
Amortization of In-Place Leases (45.3)
Deferral of right-to-use contract sales revenue and commission, net (4) (7.1)
Income Allocated to OP Units (4.4)
Net Income Available to Common Shares $44.7
Net Income Per Common Share -Fully Diluted $0.98 -$1.18
FFO Per Share -Fully Diluted $4.32 –$4.52
Weighted Average Shares Outstanding -Fully Diluted 45.5
Year Ended December 31, 2012
Income from Property Operations -2012 Core (2) $288.8
Income from Property Operations -2011 Acquisition properties 101.3
Property Management and general and administrative (64.9)
Other Income and Expenses 17.3
Financing Costs and Other (141.4)
Funds from Operations (FFO) (3) $201.1
Depreciation on Real Estate and Other (99.6)
Amortization of In-Place Leases (45.3)
Deferral of right-to-use contract sales revenue and commission, net (4) (7.1)
Income Allocated to OP Units (4.4)
Net Income Available to Common Shares $44.7
Net Income Per Common Share -Fully Diluted $0.98 -$1.18
FFO Per Share -Fully Diluted $4.32 –$4.52
Weighted Average Shares Outstanding -Fully Diluted 45.5
13

 	
 	
Equity LifeStyle Properties
2012 Guidance -Footnotes
1)Eachlineitemrepresentsthemid-pointofarangeofpossibleoutcomesandreflectsmanagement’sbestestimateofthemostlikelyoutcome.ActualFFO,FFOpershare,NetIncomeandNetIncomepersharecouldvarymateriallyfromamountspresentedaboveifanyofourassumptionsareincorrect.TheFFOandNetIncomeguidanceaboveincludes$1.4millionand($0.5)million,respectively,fromoneAcquisitionpropertyinMichiganthattheCompanyhasnotacquiredto-date,thisistheonlypropertywecurrentlydonotownincludedinour2012guidanceassumptions.
2)Amountrepresentsestimated2012Coreincomefrompropertyoperationsin2011of$283.3millionmultipliedbyanestimatedgrowthrateof1.9%.
3)Seepage16fordefinitionofFFO.
4)Duetotheuncertaintimingandextentofrighttouseupfrontpaymentsandtheresultingdeferrals,actualincomecoulddiffermateriallyfromexpectednetincome.
14

 	
 	
Equity LifeStyle Properties
2012 Core Occupancy & Growth Rates
¡MH occupancy as of February 2012 YTD
?Down 19 sites compared to December 31, 2011
¡February 2012 YTD (1)as compared to February 2011 YTD:
?MH base revenue growth is up 3.0%
?Resort base revenue growth is up 3.1%
¡Right-to-use annual payments
?2012 budget is 46% earned or prepaid as of February 2012 YTD (comparable to February 2011 YTD)
 
(1)	February 2012 YTD includes one day more than February 2011 YTD due to the leap year.	
15

 	
 	
Equity LifeStyle Properties
Non GAAP Financial Measures
Funds from Operations (“FFO”) is a non-GAAP financial measure. The Company believes that FFO, as defined by the Board of Governors of the National Association of Real Estate Investment Trusts (“NAREIT”), is generally an appropriate measure of performance for an equity REIT. While FFO is a relevant and widely used measure of operating performance for equity REITs, it does not represent cash flow from operations or net income as defined by GAAP, and it should not be considered as an alternative to these indicators in evaluating liquidity or operating performance.
The Company defines FFO as net income, computed in accordance with GAAP, excluding gains or actual or estimated losses from sales of properties, plus real estate related depreciation and amortization, and after adjustments for unconsolidated partnerships and joint ventures. Adjustments for unconsolidated partnerships and joint ventures are calculated to reflect FFO on the same basis. The Company receives up-front non-refundable payments from the entry of right-to-use contracts. In accordance with GAAP, the upfront non-refundable payments and related commissions are deferred and amortized over the estimated customer life. Although the NAREIT definition of FFO does not address the treatment of nonrefundable right-to-use payments, the Company believes that it is appropriate to adjust for the impact of the deferral activity in its calculation of FFO. The Company believes that FFO is helpful to investors as one of several measures of the performance of an equity REIT. The Company further believes that by excluding the effect of depreciation, amortization and gains or actual or estimated losses from sales of real estate, all of which are based on historical costs and which may be of limited relevance in evaluating current performance, FFO can facilitate comparisons of operating performance between periods and among other equity REITs. The Company believes that the adjustment to FFO for the net revenue deferral of upfront non-refundable payments and expense deferral of right-to-use contract commissions also facilitates the comparison to other equity REITs. Investors should review FFO, along with GAAP net income and cash flow from operating activities, investing activities and financing activities, when evaluating an equity REIT’s operating performance. The Company computes FFO in accordance with its interpretation of standards established by NAREIT, which may not be comparable to FFO reported by other REITs that do not define the term in accordance with the current NAREIT definition or that interpret the current NAREIT definition differently than the Company does. FFO does not represent cash generated from operating activities in accordance with GAAP, nor does it 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 the Company’s financial performance, or to cash flow from operating activities, determined in accordance with GAAP, as a measure of the Company’s liquidity, nor is it indicative of funds available to fund its cash needs, including its ability to make cash distributions.