UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_________________________________________________________ 
FORM 10-Q
_________________________________________________________ 
☒
xQUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 2017
March 31, 2024
o☐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)
_________________________________________________________ 

Maryland36-3857664
Maryland36-3857664
(State or Other Jurisdictionother jurisdiction of
Incorporation or Organization)
incorporation)
(I.R.S.IRS Employer
Identification No.)
Number)
Two North Riverside Plaza, Suite 800 Chicago, IllinoisChicago,Illinois60606
(Address of Principal Executive Offices)(Zip Code)

(312) 279-1400
(Registrant’s Telephone Number, Including Area Code)Registrant's telephone number, including area code
Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading Symbol(s)Name of each exchange on which registered
Common Stock, $0.01 Par ValueELSNew 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  x☒    No  o☐
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted 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 and post such files).    Yes  x☒    No  o☐
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“emerging growth company"company” in Rule 12b-2 of the Exchange Act. (Check one):
Large accelerated filerx☒Accelerated filero☐
Non-accelerated filer
o  (Do not check if a smaller reporting company)
☐		Smaller reporting companyo☐
Emerging growth companyo☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act o☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes  o ☐    No  x☒
Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date:
87,836,746 186,495,861 shares of Common Stock as of October 27, 2017.
April 24, 2024.




Equity LifeStyle Properties, Inc.
Table of Contents
 
Page
Part I - Financial Information
Item 1.Financial Statements (unaudited)
Index To Financial Statements
3
4
65
76
98
Item 2.
2018
Item 3.
3630
Item 4.
3630
Part II - Other Information
Item 1.
3731
Item 1A.
3731
Item 2.
3731
Item 3.
3731
Item 4.
3731
Item 5.
3731
Item 6.
3832
2




Part I – Financial Information


Item 1. Financial Statements

Equity LifeStyle Properties, Inc.
Consolidated Balance Sheets
As of September 30, 2017 and December 31, 2016
(amounts in thousands, except share and per share data)

March 31, 2024December 31, 2023
(unaudited)
Assets
Investment in real estate:
Land$2,088,657 $2,088,657 
Land improvements4,435,288 4,380,649 
Buildings and other depreciable property1,229,374 1,236,985 
7,753,319 7,706,291 
Accumulated depreciation(2,497,039)(2,448,876)
Net investment in real estate5,256,280 5,257,415 
Cash and restricted cash47,281 29,937 
Notes receivable, net49,346 49,937 
Investment in unconsolidated joint ventures84,989 85,304 
Deferred commission expense54,024 53,641 
Other assets, net138,314 137,499 
Total Assets$5,630,234 $5,613,733 
Liabilities and Equity
Liabilities:
Mortgage notes payable, net$2,974,728 $2,989,959 
Term loans, net497,875 497,648 
Unsecured line of credit6,000 31,000 
Accounts payable and other liabilities171,061 151,567 
Deferred membership revenue223,470 218,337 
Accrued interest payable12,543 12,657 
Rents and other customer payments received in advance and security deposits131,547 126,451 
Distributions payable93,264 87,493 
Total Liabilities4,110,488 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 capital1,644,410 1,644,319 
Distributions in excess of accumulated earnings(202,721)(223,576)
Accumulated other comprehensive income5,280 6,061 
Total Stockholders’ Equity1,448,886 1,428,721 
Non-controlling interests – Common OP Units70,860 69,900 
Total Equity1,519,746 1,498,621 
Total Liabilities and Equity$5,630,234 $5,613,733 

 September 30,
2017		 December 31,
2016
 (unaudited) 
Assets   
Investment in real estate:   
Land$1,167,620
 $1,163,987
Land improvements2,940,500
 2,893,759
Buildings and other depreciable property647,513
 627,590
 4,755,633
 4,685,336
Accumulated depreciation(1,488,722) (1,399,531)
Net investment in real estate3,266,911
 3,285,805
Cash77,395
 56,340
Notes receivable, net49,284
 34,520
Investment in unconsolidated joint ventures52,966
 19,369
Deferred commission expense31,608
 31,375
Escrow deposits, goodwill, and other assets, net47,683
 51,578
Total Assets$3,525,847
 $3,478,987
Liabilities and Equity   
Liabilities:   
Mortgage notes payable, net$1,981,604
 $1,891,900
Term loan199,534
 199,379
Accrued expenses and accounts payable106,688
 89,864
Deferred revenue – upfront payments from right-to-use contracts85,254
 81,484
Deferred revenue – right-to-use annual payments10,513
 9,817
Accrued interest payable7,969
 8,379
Rents and other customer payments received in advance and security deposits73,609
 76,906
Distributions payable45,501
 39,411
Total Liabilities2,510,672
 2,397,140
Equity:   
Stockholders’ Equity:   
Preferred stock, $0.01 par value, 10,000,000 shares authorized as of September 30, 2017 and 9,945,539 shares authorized as of December 31, 2016; none issued and outstanding.—
 —
6.75% Series C Cumulative Redeemable Perpetual Preferred Stock, $0.01 par value, no shares authorized as of September 30, 2017 and 54,461 shares authorized as of December 31, 2016; none issued and outstanding as of September 30, 2017 and 54,458 shares issued and outstanding as of December 31, 2016.—
 136,144
Common stock, $0.01 par value, 200,000,000 shares authorized as of September 30, 2017 and December 31, 2016; 87,499,669 and 85,529,386 shares issued and outstanding as of September 30, 2017 and December 31, 2016, respectively872
 854
Paid-in capital1,164,658
 1,103,048
Distributions in excess of accumulated earnings(213,771) (231,276)
Accumulated other comprehensive (loss)—
 (227)
Total Stockholders’ Equity951,759
 1,008,543
Non-controlling interests – Common OP Units63,416
 73,304
Total Equity1,015,175
 1,081,847
Total Liabilities and Equity$3,525,847
 $3,478,987





















The accompanying notes are an integral part of these Consolidated Financial Statements.the consolidated financial statements.

3

Equity LifeStyle Properties, Inc.
Consolidated Statements of Income and Comprehensive Income
For the Quarters Ended and Nine Months Ended September 30, 2017 and 2016
(amounts in thousands, except per share data)
(unaudited)
 Quarters Ended Nine Months Ended
 September 30,
2017		 September 30,
2016		 September 30,
2017		 September 30,
2016
Revenues:       
Community base rental income$123,177
 $117,164
 $365,833
 $346,625
Rental home income3,592
 3,484
 10,829
 10,572
Resort base rental income58,471
 54,486
 169,594
 154,652
Right-to-use annual payments11,531
 11,349
 34,133
 33,590
Right-to-use contracts current period, gross4,208
 3,672
 11,212
 9,290
Right-to-use contract upfront payments, deferred, net(1,670) (1,327) (3,766) (2,427)
Utility and other income26,295
 21,174
 69,071
 61,490
Gross revenues from home sales10,012
 10,895
 24,872
 28,239
Brokered resale revenues and ancillary services revenues, net1,983
 920
 4,088
 2,736
Interest income1,974
 1,767
 5,542
 5,052
Income from other investments, net2,052
 2,581
 3,918
 6,574
Total revenues241,625
 226,165

695,326

656,393
Expenses:       
Property operating and maintenance80,164
 73,410
 221,119
 203,011
Rental home operating and maintenance1,704
 1,768
 4,912
 4,874
Real estate taxes14,006
 13,467
 41,986
 39,534
Sales and marketing, gross3,277
 3,100
 8,861
 8,524
Right-to-use contract commissions, deferred, net(176) (200) (372) (212)
Property management13,160
 11,863
 38,743
 35,670
Depreciation on real estate assets and rental homes30,493
 29,518
 90,849
 87,203
Amortization of in-place leases138
 1,376
 2,128
 2,139
Cost of home sales10,377
 10,745
 25,391
 28,507
Home selling expenses1,447
 909
 3,301
 2,548
General and administrative7,505
 7,653
 23,339
 23,315
Property rights initiatives and other, net324
 855
 814
 2,036
Interest and related amortization25,027
 25,440
 74,728
 76,635
Total expenses187,446
 179,904

535,799

513,784
Income before equity in income of unconsolidated joint ventures54,179
 46,261

159,527

142,609
Equity in income of unconsolidated joint ventures686
 496
 2,876
 2,142
Consolidated net income54,865
 46,757

162,403

144,751
        
Income allocated to non-controlling interests – Common OP Units(3,286) (3,462) (9,825) (10,770)
Series C Redeemable Perpetual preferred stock dividends and original issuance costs(3,054) (2,297) (7,667) (6,910)
Net income available for Common Stockholders$48,525
 $40,998

$144,911

$127,071
        
Consolidated net income$54,865
 $46,757
 $162,403
 $144,751
Other comprehensive income/(loss):       
Adjustment for fair market value of swap(30) 551
 227
 (93)
Consolidated comprehensive income54,835
 47,308

162,630

144,658
Comprehensive income allocated to non-controlling interests – Common OP Units(3,237) (3,505) (9,792) (10,762)
Series C Redeemable Perpetual preferred stock dividends and original issuance costs(3,054) (2,297) (7,667) (6,910)
Comprehensive income attributable to Common Stockholders$48,544
 $41,506

$145,171

$126,986










The accompanying notes are an integral part of these Consolidated Financial Statements.

Equity LifeStyle Properties, Inc.
Consolidated Statements of Income and Comprehensive Income (Continued)
For the Quarters Endedand Nine Months EndedSeptember 30, 2017 and 2016
(amounts in thousands, except per share data)
(unaudited)
 Quarters Ended March 31,
20242023
Revenues:
Rental income$316,599 $296,451 
Annual membership subscriptions16,215 15,970 
Membership upgrade sales3,947 3,505 
Other income15,548 17,714 
Gross revenues from home sales, brokered resales and ancillary services30,053 32,133 
Interest income2,168 2,088 
Income from other investments, net2,038 2,091 
Total revenues386,568 369,952 
Expenses:
Property operating and maintenance114,783 112,483 
Real estate taxes20,787 18,316 
Membership sales and marketing5,297 4,838 
Property management19,710 19,464 
Depreciation and amortization51,108 50,502 
Cost of home sales, brokered resales and ancillary services21,967 23,141 
Home selling expenses and ancillary operating expenses6,147 6,924 
General and administrative11,989 11,661 
Casualty-related charges/(recoveries), net(14,843)— 
Other expenses1,331 1,468 
Interest and related amortization33,543 32,588 
Total expenses271,819 281,385 
Income before income taxes and other items114,749 88,567 
Loss on sale of real estate and impairment, net— (2,632)
Income tax benefit239 — 
Equity in income of unconsolidated joint ventures283 524 
Consolidated net income115,271 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 income114,490 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 – Basic186,287 185,900 
Weighted average Common Shares outstanding – Fully Diluted195,545 195,369 
 Quarters Ended Nine Months Ended
 September 30,
2017		 September 30,
2016		 September 30,
2017		 September 30,
2016
Earnings per Common Share – Basic:       
Net income available for Common Stockholders$0.56
 $0.48
 $1.67
 $1.50
Earnings per Common Share – Fully Diluted:       
Net income available for Common Stockholders$0.56
 $0.48
 $1.66
 $1.49
        
Distributions declared per Common Share outstanding$0.488
 $0.425
 $1.463
 $1.275
Weighted average Common Shares outstanding – basic87,037
 85,105
 86,620
 84,649
Weighted average Common Shares outstanding – fully diluted93,324
 92,910
 93,135
 92,405





























































The accompanying notes are an integral part of these Consolidated Financial Statements.the consolidated financial statements.

4

Equity LifeStyle Properties, Inc.
Consolidated StatementStatements of Changes in Equity
For the Nine Months Ended September 30, 2017
(amounts in thousands)
(unaudited)
Common StockPaid-in CapitalDistributions in Excess of Accumulated EarningsAccumulated Other Comprehensive Income (Loss)Non-controlling Interests – Common OP UnitsTotal 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 StockPaid-in CapitalDistributions in Excess of Accumulated EarningsAccumulated Other Comprehensive Income (Loss)Non-controlling interests – Common OP UnitsTotal 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 
 
Common
Stock
 
Paid-in
Capital
 
6.75%  Series C Cumulative
Redeemable
Perpetual
Preferred  Stock
 
Distributions
in Excess of
Accumulated
Earnings
 
Non-
controlling
interests –
Common OP
Units
 
Accumulated
Other
Comprehensive
Loss/(Income)
 
Total
Equity
Balance, December 31, 2016$854
 $1,103,048
 $136,144
 $(231,276) $73,304
 $(227) $1,081,847
Conversion of Common OP Units to Common Stock13
 16,429
 —
 —
 (16,442) —
 —
Issuance of Common Stock through employee stock purchase plan—
 1,615
 —
 —
 —
 —
 1,615
Issuance of Common Stock5
 42,032
 —
 —
 —
 —
 42,037
Compensation expenses related to restricted stock—
 6,813
 —
 —
 —
 —
 6,813
Adjustment for Common OP Unitholders in the Operating Partnership—
 (5,313) —
 —
 5,313
 —
 —
Adjustment for fair market value of swap—
 —
 —
 —
 —
 227
 227
Net income—
 —
 7,667
 144,911
 9,825
 —
 162,403
Distributions—
 —
 (6,910) (127,406) (8,584) —
 (142,900)
Series C Preferred stock redemption—
 —
 (136,144) —
 —
 —
 (136,144)
Series C Preferred stock original issuance costs—
 757
 (757) —
 —
 —
 —
Other—
 (723) —
 —
 —
 —
 (723)
Balance, September 30, 2017$872
 $1,164,658
 $—
 $(213,771) $63,416
 $—
 $1,015,175

























































The accompanying notes are an integral part of these Consolidated Financial Statements.the consolidated financial statements.

5

Equity LifeStyle Properties, Inc.
Consolidated Statements of Cash Flows
For the Nine Months Ended September 30, 2017 and 2016
(amounts in thousands)
(unaudited)
Quarters Ended March 31,
20242023
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 amortization52,427 51,860 
Amortization of loan costs1,286 1,208 
Debt premium amortization— (32)
Equity in income of unconsolidated joint ventures(283)(524)
Distributions of income from unconsolidated joint ventures224 174 
Proceeds from insurance claims, net(12,349)5,795 
Compensation expense related to incentive plans2,497 3,330 
Revenue recognized from membership upgrade sales upfront payments(3,947)(3,505)
Commission expense recognized related to membership sales1,108 1,095 
Deferred income tax benefit(239)— 
Changes in assets and liabilities:
Manufactured homes, net2,333 (19,574)
Notes receivable, net539 (1,345)
Deferred commission expense(1,491)(1,744)
Other assets, net11,396 5,856 
Accounts payable and other liabilities15,801 9,553 
Deferred membership revenue9,080 10,074 
Rents and other customer payments received in advance and security deposits5,095 7,668 
Net cash provided by operating activities198,748 158,980 
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 ventures1,586 1,012 
Proceeds from insurance claims, net3,158 4,070 
Capital improvements(54,706)(60,974)
Net cash used in investing activities(51,292)(66,447)
  
 September 30,
2017		 September 30,
2016
Cash Flows From Operating Activities:   
Consolidated net income$162,403
 $144,751
Adjustments to reconcile consolidated net income to net cash provided by operating activities:   
Depreciation91,781
 88,043
Amortization of in-place leases2,128
 2,139
Amortization of loan costs2,676
 2,930
Debt premium amortization(1,664) (2,633)
Equity in income of unconsolidated joint ventures(2,876) (2,142)
Distributions of income from unconsolidated joint ventures2,711
 1,417
Stock-based compensation6,813
 6,796
Revenue recognized from right-to-use contract upfront payments(7,440) (6,863)
Commission expense recognized related to right-to-use contracts3,327
 3,071
Long term incentive plan compensation1,011
 (3,390)
Recovery for uncollectible rents receivable(52) (548)
Changes in assets and liabilities:   
Notes receivable activity, net(337) 349
Deferred commission expense(3,560) (3,641)
Escrow deposits, goodwill and other assets28,985
 22,516
Accrued expenses and accounts payable11,002
 15,392
Deferred revenue – upfront payments from right-to-use contracts11,210
 9,290
Deferred revenue – right-to-use annual payments696
 700
Rents received in advance and security deposits(3,305) (3,595)
Net cash provided by operating activities305,509
 274,582
Cash Flows From Investing Activities:   
Real estate acquisition(2,163) (78,203)
Investment in unconsolidated joint ventures(33,479) (5,000)
Distributions of capital from unconsolidated joint ventures—
 4,094
Repayments of notes receivable7,643
 7,788
Issuance of notes receivable(22,297) (7,436)
Capital improvements(87,877) (87,316)
Net cash used in investing activities(138,173) (166,073)
Cash Flows From Financing Activities:   
Proceeds from stock options and employee stock purchase plan1,615
 5,931
Share based award tax withholding—
 (98)
Gross proceeds from sale of Common Stock42,037
 50,000
Distributions:   
Common Stockholders(121,114) (103,803)
Common OP Unitholders(8,786) (8,828)
Preferred Stockholders(6,910) (6,910)
Principal payments and mortgage debt payoff(60,392) (109,256)
New mortgage notes payable financing proceeds146,000
 54,450
Redemption of preferred stock(136,144) —
Debt issuance and defeasance costs(1,864) (617)
Other(723) (824)
Net cash used in financing activities(146,281) (119,955)
Net increase (decrease) in cash21,055
 (11,446)
Cash, beginning of period56,340
 80,258
Cash, end of period$77,395
 $68,812




























The accompanying notes are an integral part of these Consolidated Financial Statements.the consolidated financial statements.

6


Equity LifeStyle Properties, Inc.
Consolidated Statements of Cash Flows (continued)
For the Nine Months Ended September 30, 2017 and 2016
(amounts in thousands)
(unaudited)
Quarters Ended March 31,
20242023
Cash Flows From Financing Activities:
Proceeds from stock options and employee stock purchase plan382 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 proceeds133,000 118,000 
Other(157)(99)
Net cash used in financing activities(130,112)(84,219)
Net increase in cash and restricted cash17,344 8,314 
Cash and restricted cash, beginning of period29,937 22,347 
Cash and restricted cash, end of period$47,281 $30,661 
 September 30,
2017		 September 30,
2016
Supplemental Information:   
Cash paid during the period for interest$76,713
 $79,762
Capital improvements – used homes acquired by repossessions227
 485
Net repayments of notes receivable – used homes acquired by repossessions(227) (485)
Building and other depreciable property – reclassification of rental homes25,852
 26,070
Escrow deposits and other assets – reclassification of rental homes(25,852) (26,070)
    
Real estate acquisitions:   
Investment in real estate, fair value$(7,985) $(100,148)
Investment in real estate, cost(110) (2,000)
Escrow deposits and other assets—
 (20)
Debt assumed5,900
 22,010
Accrued expenses and accounts payable32
 1,955
Real estate acquisitions, net$(2,163) $(78,203)


Quarters Ended March 31,
20242023
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 these Consolidated Financial Statements.

the consolidated financial statements.
8
7


Equity LifeStyle Properties, Inc.
Notes to Consolidated Financial Statements



Note 1 – Organization and Basis of Presentation
Equity LifeStyle Properties, Inc. (“ELS”), a Maryland corporation, together with MHC Operating Limited Partnership (the “Operating Partnership”) and its other consolidated subsidiaries (“Subsidiaries”(the “Subsidiaries”), are referred to herein as “we,” “us,” and “our.” Capitalized terms used“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 not defined hereinwith 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 as definedrecognized in our Annual Report on Form 10-K (“2016 Form 10-K”) for the year ended December 31, 2016. Theseearnings.
The accompanying unaudited Consolidated Financial Statementsinterim consolidated financial statements have been prepared pursuant to Securities and Exchange Commission (“SEC”) rules and regulations.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"(“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 2016 Form 10-K.year ended December 31, 2023.
The following notesIntercompany balances and transactions have been eliminated. All adjustments to the Consolidated Financial Statements highlight significant changes to the notes included in the 2016 Form 10-Kunaudited interim consolidated financial statements are of a normal, recurring nature and, present interim disclosures as required by the SEC. The accompanying Consolidated Financial Statements reflect, in the opinion of management, all adjustments and estimatesare necessary for a fair presentation of theresults for these interim financial statements, which are of a normal, recurring nature.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)Consolidation
(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 consolidatedo not separate expenses reimbursed by our majority-owned Subsidiaries in whichcustomers (“utility recoveries”) from the associated rental income as we havemeet the abilitypractical expedient criteria of ASC 842, Leases to controlcombine the operationslease and all variable interest entities ("VIE") with respect to which we are the primary beneficiary.non-lease components. We also consolidate entities in which we have a direct or indirect controlling or voting interest. All significant intercompany balances and transactions have been eliminated in consolidation.
Effective January 1, 2016, we adopted (“ASU 2015-02”) Consolidation (Topic 810): Amendments to the Consolidation Analysis. ASU 2015-02 required us to evaluate whether we should consolidate certain legal entities. The adoption of this standard did not result in any changes to our accounting of interests in less than wholly-owned joint ventures; however, the Operating Partnership now meetsassessed the criteria as a VIE. Weand concluded that the Operating Partnership is a VIE because wetiming and pattern of transfer for rental income and the associated utility recoveries are the general partnersame and, controlling owneras 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 approximately 93.7%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 Operating Partnership and the limited partners do not have substantive kick-out or participating rights. Our sole significant asset is our investment in the Operating Partnership, and consequently, substantially all of our assets and liabilities represent those assets and liabilities of the Operating Partnership.respective lease. The Company has the power to direct the VIE's activities and the obligation to absorb itsallowance for credit losses or the right to receive its benefits, which are significantrelated to the VIE. Accordingly, wecollectability of lease receivables is presented as a reduction to Rental income. Lease receivables are the primary beneficiary and we will continue to consolidate the Operating Partnership under this new guidance.
We apply the equity method of accounting to entities in which we do not have a direct or indirect controlling interest or for variable interest entities where we are not considered the primary beneficiary, but can exercise influence over the entity with respect to its operations and major decisions.
(b)Identified Intangibles and Goodwill
As of both September 30, 2017 and December 31, 2016, the gross carrying amount of identified intangible assets and goodwill, a component of escrow deposits, goodwill and otherpresented 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 consolidated balance sheets, was approximately $12.1 million. Asongoing assessments and evaluations of both September 30, 2017collectability, including historical loss experience, current market conditions and December 31, 2016, this amount was comprised of approximately $4.3 million of identified intangible assets and approximately $7.8 million of goodwill. Accumulated amortization of identified intangible assets was approximately $2.9 million and $2.8 million as of September 30, 2017 and December 31, 2016, respectively.
As of September 30, 2017 and December 31, 2016, the gross carrying amount of in-place lease intangible assets, a component of buildings and other depreciable property on our consolidated balance sheets, was approximately $76.7 million and $76.3 million, respectively. Accumulated amortization of in-place lease intangible assets was approximately $76.4 million and $74.3 million as of September 30, 2017 and December 31, 2016, respectively.
(c)Restricted Cash
Cash as of both September 30, 2017 and December 31, 2016 included approximately $5.3 million of restricted cash for the payment of capital improvements, insurance or real estate taxes.

future expectations in forecasting credit losses.
9
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Equity LifeStyle Properties, Inc.
Notes to Consolidated Financial Statements

Note 2 – Summary of Significant Accounting Policies (continued)

(d)Fair Value of Financial Instruments
Our financial instruments include notesAnnual 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, accountsnet 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, accounts payable, other accrued expenses, interest rate swapsnet on the Consolidated Balance Sheets and mortgage notes payable. We disclose the estimated fair valueare net of our financial instruments according to a fair value hierarchy (Level 1, 2 and 3).an allowance for credit losses.
Our mortgage notes payable and term loan, excluding deferred financing costs(b)    Restricted Cash
As of approximately $18.9 million as of both September 30, 2017March 31, 2024 and December 31, 2016, had an aggregate carrying value2023, restricted cash consisted of approximately $2,200.1$32.2 million and $2,110.2$25.7 million, as of September 30, 2017respectively, primarily related to cash reserved for customer deposits and December 31, 2016, respectively,escrows for insurance and a fair value of approximately $2,225.4 millionreal estate taxes.
(c)    Insurance Recoveries
We carry comprehensive insurance coverage for losses resulting from property damage and $2,081.2 million as of September 30, 2017environmental liability and December 31, 2016, respectively. The fair value was measured using quoted prices and observable inputs from similar liabilities (Level 2). At December 31, 2016, our cash flow hedge of interest rate risk included in accrued expenses and accounts payable was measured using quoted prices and observable inputs from similar assets and liabilities (Level 2). We consider our own credit risk as well as the credit riskbusiness interruption claims on all of our counterpartiesproperties. 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 evaluatingreceipt of insurance proceeds is deemed probable. Any amount of insurance recovery in excess of the fair valuelosses incurred and any amount of our derivative. The cash flow hedge of interest rate risk expired duringinsurance 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 September 30, 2017. The fair valuesMarch 31, 2024, we recognized approximately $0.5 million of our notes receivable approximate their carrying or contract values.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 utilize Level 2recorded $14.8 million of insurance recovery revenue for reimbursement of capital expenditures related to Hurricane Ian. The debris and Level 3 inputs as partcleanup costs and offsetting recovery accrual and reimbursement of our determinationcapital expenditures are reflected in Casualty-related charges/(recoveries), net on the Consolidated Statements of the purchase price allocation for our acquisitions.Income and Comprehensive Income.
(e)New Accounting Pronouncements
(d)    New Accounting Pronouncements
In January 2017,November 2023, the FASB issued ("Accounting Standards Update 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures (“ASU 2017-01"2023-07”)Business Combinations (Topic 805): Clarifying, 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 Definition of a Business.quantitative thresholds to determine its reportable segments. ASU 2017-01 clarifies the definition of a business with the objective of adding guidance to assist entities with evaluating whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses. ASU 2017-01 will be2023-07 is effective for annual reportingfiscal years beginning after December 15, 2017. Early2023, and interim periods within fiscal years beginning after December 15, 2024, with early adoption is permitted. We are currently in the process of evaluating the potential impact if any, that the adoption of this standard may haveASU 2023-07 on our consolidated financial statementsstatements.
In March 2024, the Securities and related disclosures.
In August 2016,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 FASB issued (“ASU 2016-15”) StatementSEC voluntarily stayed implementation of Cash Flows (Topic 230). ASU 2016-15 provides guidance on how certain cash receipts and cash payments are to be presented and classified in the statementfinal rule pending the completion of cash flows. ASU 2016-15 will be effective for annual reporting periods beginning after December 15, 2017. Early adoption is permitted.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 process of evaluating the potential impact, if any, that adoption of this standard may have on our consolidated financial statements and related disclosures.
In June 2016, the FASB issued (“ASU 2016-13”) Financial Instruments - Credit Losses (Topic 326). ASU 2016-13 requires entities to measure all expected credit losses for financial assets held at the reporting date based on historical experience, current conditions, and reasonable and supportable forecasts. Entities will now use forward-looking information to better form their credit loss estimates. ASU 2016-13 also requires enhanced disclosures to help financial statement users better understand significant estimates and judgments used in estimating credit losses, as well as the credit quality and underwriting standards of an entity’s portfolio. ASU 2016-13 will be effective for annual reporting periods beginning after December 15, 2019. Early adoption is permitted. We are currently in the process of evaluating the potential impact, if any, that adoption of this standard may have on our consolidated financial statements and related disclosures.
In February 2016, the FASB issued ("ASU 2016-02") Leases. ASU 2016-02 amends the existing accounting standards for lease accounting, including requiring lessees to recognize most leases on their balance sheets and making targeted changes to lessor accounting. ASU 2016-02 requires a modified retrospective transition approach for all leases existing at, or entered into after, the date of initial application, with an option to use certain transition relief. ASU 2016-02 will continue to classify leases as either finance or operating, with classification affecting the pattern of expense recognition in the statement of income. ASU 2016-02 will be effective for annual reporting periods beginning after December 15, 2018. Early adoption is permitted. We are currently in the process of evaluating the potential impact, if any, this standard may have on our consolidated financial statements and related disclosures.
In May 2014, the FASB issued ("ASU 2014-09") Revenue from Contracts with Customers which along with related subsequent amendments will replace most existing revenue recognition guidance in GAAP. The core principle of ASU 2014-09 is that an entity should recognize revenue for the transfer of goods or services equal to the amount that it expects to be entitled to receive for those goods or services. ASU 2014-09 requires additional disclosure about the nature, amount, timing and uncertainty of revenue and cash flows arising from customer contracts, including significant judgments and changes in judgments. The new standard will be effective for the Company beginning on January 1, 2018. The standard permits the use of either the full retrospective or modified retrospective transition method.

Consumer Price Index, taking
10
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Equity LifeStyle Properties, Inc.
Notes to Consolidated Financial Statements

Note 23 – Summary of Significant Accounting PoliciesLeases (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 
2025103,593 
202626,912 
202725,354 
202823,690 
Thereafter50,860 
Total$310,193 

Lessee
We expectlease 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 adopt ASU 2014-09 on January 1, 2018 usingcalculate the modified retrospective transition method. We have determined thatlease liability for our primary sourceoperating leases as of revenue, generated through leasing arrangements, is excludedMarch 31, 2024:
As of March 31, 2024
(amounts in thousands)Ground LeasesOffice and Other LeasesTotal
2024$550 $3,202 $3,752 
2025680 3,757 4,437 
2026684 3,393 4,077 
2027689 3,130 3,819 
2028685 2,955 3,640 
Thereafter3,840 10,744 14,584 
Total undiscounted rental payments7,128 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 ASU 2014-09. We are in the process of finalizing our evaluationoperating leases, included within Other assets, net and quantifying the impact, if any, the adoption of ASU 2014-09 will have on our non-lease revenue streams, including right-to-use annual payments, right-to-use contracts, and utilityAccounts payable and other income. While we have not finalized our assessment of the impact of ASU 2014-09, basedliabilities on the analysis completedConsolidated 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.

10

Equity LifeStyle Properties, Inc.
Notes to date, we do not currently anticipate that ASU 2014-09 will have a material impact on our consolidated financial statements.Consolidated Financial Statements

Note 34 – Earnings Per Common Share
The following table sets forth the computation of basic and diluted earnings per share of common stock (“Common ShareShare”) for the quarters ended March 31, 2024 and nine months ended September 30, 2017 and 2016 (amounts in thousands, except per share data):2023:
Quarters Ended March 31,
(amounts in thousands, except per share data)20242023
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 – Basic186,287 185,900 
Effect of dilutive securities:
Exchange of Common OP Units for Common Shares9,105 9,262 
Stock options and restricted stock153 207 
Weighted average Common Shares outstanding – Fully Diluted195,545 195,369 
Earnings per Common Share – Basic$0.59 $0.44 
Earnings per Common Share – Fully Diluted$0.59 $0.44 
 Quarters Ended Nine Months Ended
 September 30, September 30,
 2017 2016 2017 2016
Numerator:       
Net Income Available for Common Stockholders:       
Net income available for Common Stockholders – basic$48,525
 $40,998
 $144,911
 $127,071
Amounts allocated to dilutive securities3,286
 3,462
 9,825
 10,770
Net income available for Common Stockholders – fully diluted$51,811
 $44,460
 $154,736
 $137,841
Denominator:       
Weighted average Common Shares outstanding – basic87,037
 85,105
 86,620
 84,649
Effect of dilutive securities:       
Conversion of Common OP Units to Common Shares5,836
 7,203
 6,100
 7,205
Stock options and restricted shares451
 602
 415
 551
Weighted average Common Shares outstanding – fully diluted93,324
 92,910
 93,135
 92,405
        
Earnings per Common Share – Basic:       
Net income available for Common Stockholders$0.56
 $0.48
 $1.67
 $1.50
        
Earnings per Common Share – Fully Diluted:       
Net income available for Common Stockholders$0.56
 $0.48
 $1.66
 $1.49
Note 45 – Common Stock and Other Equity Related Transactions
Series C Preferred Stock Redemption and Distribution Activity
The following quarterly distributions have been declared on our depositary shares (each representing 1/100 of a share of our Series C Preferred Stock) and paid to our preferred stockholders for the nine months ended September 30, 2017. On September 25, 2017, we redeemed our 6.75% Series C Preferred Stock for $138.4 million, including accrued dividends. The shares of Series C Preferred Stock that were redeemed now have the status of authorized but unissued preferred stock, without designation as to class or series.
Distribution Amount Per Share For the Quarter Ended Stockholder Record Date Payment Date
$0.421875
 March 31, 2017 March 10, 2017 March 31, 2017
$0.421875
 June 30, 2017 June 15, 2017 June 30, 2017
$0.421875
 September 30, 2017 September 15, 2017 September 25, 2017
Common Stockholder Distribution Activity
The following quarterly distributions have been declared and paid to common stockholdersCommon Stockholders and common the Operating Partnership unit (“OP Unit non-controllingUnit”) holders for the nine months ended September 30, 2017.since January 1, 2023:
Distribution Amount Per ShareFor the Quarter EndedStockholder Record DatePayment Date
$0.4475March 31, 2023March 31, 2023April 14, 2023
$0.4475June 30, 2023June 30, 2023July 14, 2023
$0.4475September 30, 2023September 29, 2023October 13, 2023
$0.4475December 31, 2023December 29, 2023January 12, 2024
$0.4775March 31, 2024March 28, 2024April 12, 2024
Distribution Amount Per Share For the Quarter Ended Stockholder Record Date Payment Date
$0.4875
 March 31, 2017 March 31, 2017 April 14, 2017
$0.4875
 June 30, 2017 June 30, 2017 July 14, 2017
$0.4875
 September 30, 2017 September 29, 2017 October 13, 2017

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Equity LifeStyle Properties, Inc.
Notes to Consolidated Financial Statements
Note 4 – Common Stock and Other Equity Related Transactions (continued)




Notes to Consolidated Financial Statements

Note 5 – Investment in Joint Ventures (continued)

On May 4, 2015, we extended our at-the-market (“ATM”) offering program by entering into new separate equity distribution agreements with certain sales agents, pursuant to which we may sell, from time-to-time, shares of our Common Stock, par value $0.01 per share, having an aggregate offering price of up to $125.0 million. The following table presents the shares that were issued under the ATM equity offering program during the nine months ended September 30, 2017 and nine months ended September 30, 2016 (amounts in thousands, except stock data):
  Nine Months Ended
  September 30, 2017 September 30, 2016
Shares of Common Stock sold 484,913
 683,548
Weighted average price $86.69
 $73.15
Total gross proceeds 
 $42,037
 $50,000
Commissions paid to sales agents $526
 $657
As of September 30, 2017, approximately $33.0 million of Common Stock remained available for issuance under the ATM equity offering program.
ConversionsExchanges
Subject to certain limitations, holders of Common Operating Partnership units ("OP units")Unit holders can request an exchange of any or all of their OP unitsUnits for shares of Common Stock at any time. Upon receipt of such a request, we may, in lieu of issuing shares of Common Stock, cause the Operating Partnership to pay cash. During the nine months ended September 30, 2017, 1,335,247There were no OP units wereexchanged 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.Stock during the quarter ended March 31, 2023.
Note 5 – Real Estate AcquisitionsEquity Offering Program
On May 10, 2017,February 28, 2024, we completed the acquisitionentered into a new at-the-market (“ATM”) equity offering program, pursuant to which we may sell, from time-to-time, shares of Paradise Park Largo, a 108-site manufactured home community located in Largo, Florida. The purchaseour common stock, par value $0.01 per share, having an aggregate offering price of approximately $8.0 million was funded withup to $500.0 million. As of March 31, 2024, the full capacity of our ATM equity offering program remained available cash and an assumed loan. The $5.9 million loan has an interest rate of 4.6% that matures in 2040.for issuance.
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Equity LifeStyle Properties, Inc.
Notes to Consolidated Financial Statements


Note 6 – Investment in Unconsolidated Joint Ventures
On August 8, 2017, we contributed approximately $30.0 million to acquire a 49% interest in Florida Atlantic Holding, LLC ("Loggerhead"). Loggerhead owns a portfolio of 11 marinas located in Florida. The contribution was funded by net proceeds from sales of common stock under our ATM equity offering program. Our ownership interest in Loggerhead is accounted for under the equity method of accounting.
On June 15, 2017, we entered into a joint venture agreement to purchase Crosswinds Mobile Home Park, a 376-site manufactured home community located in St. Petersburg, Florida. The purchase price of the Property was $18.4 million. We contributed $2.2 million for a 49% equity interest in the joint venture. The joint venture is accounted for under the equity method of accounting. As part of the transaction, we issued a short term loan of $13.8 million to the joint venture. The loan bears interest at 5% per annum, can be repaid with no penalty prior to maturity and matures on December 12, 2017.







12

Equity LifeStyle Properties, Inc.
Notes to Consolidated Financial Statements
Note 6 – Investment in Unconsolidated Joint Ventures (continued)



The following table summarizes our investmentinvestments in unconsolidated joint ventures (investment and income/(loss) amounts in thousands with thethousands):
    Investment as ofIncome/(Loss) for the Quarters Ended
Investment
Location (a)
 Number of Sites
Economic
Interest (b)
March 31, 2024December 31, 2023March 31, 2024March 31, 2023
MeadowsVarious (2,2)1,077 50 %$611 $534 $676 $374 
LakeshoreFlorida (3,3)721 (c)3,395 3,387 182 172 
VoyagerArizona (1,1)— — %(d)— — — 692 
ECHO JVVarious— 50 %2,786 2,773 13 (190)
RVCVarious1,283 80 %(e)62,401 62,441 (414)(353)
Mulberry FarmsArizona200 50 %10,255 10,546 (291)(31)
Hiawassee KOA JVGeorgia283 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 September 30, 2017March 31, 2024. Our legal ownership interest may differ.
(c)Includes two joint ventures in which we own a 65% interest in each and December 31, 2016):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.
         Investment as of 
Joint Venture Income/(Loss) for the
Nine Months Ended
Investment Location 
 Number of 
Sites (d)
 
Economic
Interest (a)
  September 30,
2017		 December 31,
2016		 September 30,
2017		 September 30,
2016
Meadows Various (2,2) 1,077
 50%  $170
 $510
 $1,610
 $1,026
Lakeshore Florida (3,2) 720
 (b)
  2,170
 56
 10
 250
Voyager Arizona (1,1) 1,801
 50%
(c) 
 3,455
 3,376
 795
 902
Loggerhead Florida 2,343
 49%  31,646
 —
 230
 —
ECHO JV Various —
 50%  15,525
 15,427
 231
 (36)
    5,941
    $52,966
 $19,369
 $2,876
 $2,142
(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.
_____________________
(a)The percentages shown approximate our economic interest as of September 30, 2017. Our legal ownership interest may differ.
(b)Includes two joint ventures in which we own a 65% interest and Crosswinds joint venture in which we own a 49% interest.
(c)Voyager joint venture primarily consists of a 50% interest in Voyager RV Resort and 33% interest in the utility plant servicing the Property.
(d)Loggerhead sites represent slip count.
We received approximately $2.7$1.8 million and $5.5$1.2 million in distributions from theseour unconsolidated joint ventures for the nine monthsquarters ended September 30, 2017March 31, 2024 and 2016,2023, respectively. Approximately $0.1$0.6 million and $0.6$0.3 million of the distributions made to us exceeded our basis in our unconsolidated joint ventures for the quarterquarters ended March 31, 2024 and nine months ended September 30, 2017,2023, respectively, and as such, were recorded as income from unconsolidated joint ventures. None of the distributions made to us exceeded our basis in joint ventures for the quarter and nine months ended September 30, 2016.

Note 7 – Borrowing Arrangements
Mortgage Notes Payable
AsOur mortgage notes payable are classified as Level 2 in the fair value hierarchy. The following table presents the fair value of September 30, 2017 and December 31, 2016, we had outstandingour mortgage indebtedness of approximately $1,981.6 million and $1,891.9 million, respectively, net of deferred financing costs.notes payable:
As of March 31, 2024As of December 31, 2023
(amounts in thousands)Fair ValueCarrying ValueFair ValueCarrying 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 premium/discount amortization and loan cost amortization on mortgage indebtedness, for the nine months ended September 30, 2017as of March 31, 2024, was approximately 4.8%3.9% per annum. The debt bears interest at stated rates ranging from 3.5%2.4% to 8.9%5.1% per annum and matures on various dates ranging from 20182025 to 2041. The debt encumbered a total of 128 and 126120 of our Properties as of September 30, 2017both March 31, 2024 and December 31, 2016, respectively,2023, and the gross carrying value of such Properties was approximately $2,396.2$3,208.4 million and $2,296.6$3,194.1 million, as of September 30, 2017March 31, 2024 and December 31, 2016,2023, respectively.
During the quarter ended September 30, 2017, weUnsecured Debt
We previously entered into three new loans, each secureda 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 a manufactured home community, totaling $146.0 million.$200.0 million, subject to certain conditions. The loans haveLOC bears interest at a stated interest rate of 4.07%SOFR plus 0.10% plus 1.25% to 1.65% and mature in 2037.
During the quarter ended September 30, 2017, we also paid off one maturing mortgage loanrequires an annual facility fee of $6.90.20% to 0.35% and matures on April 18, 2025. The $300 million with a weighted average interest rate of 6.47% per annum, secured by one manufactured home community.
In connection with the Paradise Park Largo acquisition during the quarter ended June 30, 2017, we assumed approximately $5.9 million of mortgage debt secured by the manufactured home community withTerm Loan has an interest rate of 4.6% that matures in 2040.
DuringSOFR plus 0.10% plus 1.40% to 1.95% per annum. For both the quarter ended March 31, 2017, we paid off one maturing mortgageLOC and the $300 million Term Loan, the spread over SOFR is variable based on leverage throughout the respective loan of approximately $21.1 million, with a weighted average interest rate of 5.76% per annum, secured by one manufactured home community.
As of September 30, 2017, we are in compliance in all material respects with the covenants in our borrowing arrangements.

terms.
13
12


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 Location20242023
Interest Rate SwapsOther assets, net$5,280 $6,061 
The following table presents the effect of our derivative financial instrument on the Consolidated Statements of Income and Comprehensive Income:
Derivatives in Cash Flow Hedging RelationshipAmount of (gain)/loss recognized
in OCI on derivative
for the quarters ended March 31,		Location of (gain)/ loss reclassified from
Accumulated OCI into income		Amount of (gain)/loss reclassified from
Accumulated OCI into income
for the quarters ended March 31,
(amounts in thousands)20242023(amounts in thousands)20242023
Interest Rate Swaps$(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.





13

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, 2024Quarter Ended March 31, 2023
Deferred revenue - upfront payments from membership upgrade sales, beginning$206,625 $185,660 
Membership upgrade sales7,543 7,975 
Revenue recognized from membership upgrade sales upfront payments(3,947)(3,505)
Net increase in deferred revenue - upfront payments from membership grade sales3,596 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 expense1,491 1,744 
Commission expense recognized(1,108)(1,095)
Net increase in deferred commission expense383 649 
Deferred commission expense, ending$54,024 $51,090 
_____________________
(a)Included in Deferred membership revenue on the Consolidated Balance Sheets.

Note 810 – Equity Incentive Awards
Stock-based compensation expense, reported in general and administrative on the Consolidated Statements of Income and Comprehensive Income, for the quarters ended September 30, 2017 and 2016 was approximately $2.6 million and $2.4 million, respectively, and for both the nine months ended September 30, 2017 and 2016 was approximately $6.8 million.
Our 2014 Equity Incentive Plan (the “2014 Plan”) was adopted by ourthe Board of Directors on March 11, 2014 and approved by our stockholders on May 13, 2014. Pursuant to
During the 2014 Plan, our officers, directors, employees and consultants may be awarded (i)quarter ended March 31, 2024, 90,378 shares of common stock (“Restricted Stock”), (ii) options to acquire shares of common stock (“Options”), including non-qualified stock options and incentive stock options within the meaning of Section 422 of the Internal Revenue Code, and (iii) other forms of equity awards, subject to conditions and restrictions determined by the Compensation, Nominating, and Corporate Governance Committee of our Board of Directors (the “Compensation Committee”). The Compensation Committee will determine the vesting schedule, if any, of each Restricted Stock Grant or Option and the term of each Option, which term shall not exceed ten years from the date of grant. Shares that do not vest are forfeited. Dividends paid on restricted stock are not returnable, even if the underlying stock does not entirely vest. A maximum of 3,750,000 shares of common stock were originally available for grant under the 2014 Plan. As of September 30, 2017, 3,126,885 shares remained available for grant.
Grants under the 2014 Plan are approved by the Compensation Committee, which determines the individuals eligible to receive awards, the types of awards, and the terms, conditions and restrictions applicable to any award, except grants to directors which are approved by the Board of Directors.
On May 2, 2017, we awarded certain members of our Board of Directors 55,238 shares of Restricted Stock at a fair market value of approximately $4.5 million and Options to purchase 6,930 shares of common stock with an exercise price of $81.15 per share. The shares of common stock covered by these awards are subject to multiple tranches that vest between November 2, 2017 and May 2, 2020.
On February 1, 2017, we awarded 75,000 shares of Restricted Stock at a fair market value of approximately $5.4 million to certain members of our senior management for their serviceteam. Of these shares, 50% are time-based awards, vesting in 2017. These restricted stock grants will vestequal installments over a three-year period on December 31, 2017.
TheFebruary 4, 2025, February 3, 2026 and February 7, 2027, respectively, and have a grant date fair market value of our restricted stock grants was determined$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 share price at the grant date when all the key terms and conditions are known to all parties. The 15,062 shares of our commonrestricted 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 dateConsolidated Statements of Income and Comprehensive Income, was $1.7 million and $2.5 million for the shares were issuedquarters ended March 31, 2024 and is recorded as compensation expense and paid in capital over the vesting period.2023, respectively.

Note 911 – Commitments and Contingencies
Hurricane Irma
Based on our assessment and available information as of the quarter ended September 30, 2017, we recognized expense of $3.7 million during the quarter and nine months ended September 30, 2017 related to property damage and restoration work that had been reasonably estimated and/or completed to date at our Florida properties as a result of Hurricane Irma. Based on our evaluation of these costs and our review of the potential insurance claim and our estimate of the related deductible, we recorded a revenue accrual of $3.5 million during the quarter and nine months ended September 30, 2017. As of September 30, 2017, while we expect additional amounts to be identified in the future, we cannot estimate the total expenses or recoveries related to Hurricane Irma.
California Rent Control Litigation
As part of our effort to realize the value of our Properties subject to rent control, we previously initiated lawsuits against certain localities in California with the goal of achieving a level of regulatory fairness in California's rent control jurisdictions, and in particular those jurisdictions that prohibit increasing rents to market upon turnover. Such regulations allow tenants to sell their homes for a price that includes a premium above the intrinsic value of the homes. The premium represents the value of the future discounted rent-controlled rents, which is fully capitalized into the prices of the homes sold. In our view, such regulations result in a transfer to the tenants of the value of our land, which would otherwise be reflected in market rents. We have discovered through the litigation process that certain municipalities considered condemning our Properties at values well below the value of the underlying land. In our view, a failure to articulate market rents for Sites governed by restrictive rent control would put us at risk for condemnation or eminent domain proceedings based on artificially reduced rents. Such a physical taking, should it occur, could represent substantial lost value to stockholders. We are cognizant of the need for affordable housing in the jurisdictions, but assert that restrictive rent regulation does not promote this purpose because tenants pay to their sellers as part of the purchase price

14

Equity LifeStyle Properties, Inc.
Notes to Consolidated Financial Statements
Note 9 – Commitments and Contingencies (continued)


of the home all the future rent savings that are expected to result from the rent control regulations, eliminating any supposed improvement in the affordability of housing. In a more well-balanced regulatory environment, we would receive market rents that would eliminate the price premium for homes, which would trade at or near their intrinsic value. Such efforts have included the following matters:
We sued the City of San Rafael on October 13, 2000 in the U.S. District Court for the Northern District of California, challenging its rent control ordinance on constitutional grounds. While the District Court found the rent control ordinance unconstitutional, the United States Court of Appeals for the Ninth Circuit reversed the District Court and ruled that the ordinance had not unconstitutionally taken our property. On September 3, 2013, we filed a petition for review by the U.S. Supreme Court, which was denied.
On January 31, 2012, we sued the City of Santee in the United States District for the Southern District of California challenging its rent control ordinance on constitutional grounds. On September 26, 2013, we entered a settlement agreement with the City pursuant to which we are able to increase Site rents at the Meadowbrook community through January 1, 2034 as follows: (a) a one-time 2.5% rent increase on all Sites in January 2014; plus (b) annual rent increases of 100% of the consumer price index (CPI) beginning in 2014; and (c) a 10% increase in the rent on a site upon turnover of that site. Absent the settlement, the rent control ordinance limited us to annual rent increases of at most 70% of CPI with no increases on turnover of a site.

Settlement of California Lawsuits
On January 18, 2017, we entered into agreements pursuant to which we agreed to settle three California lawsuits related to our California Hawaiian property in San Jose, our Monte del Lago property in Castroville and our Santiago Estates property in Sylmar. Each of the three plaintiff groups was represented by the same law firm and alleged that the Company failed to properly maintain the respective properties. The settlement agreements provided for $9.9 million to be paid to settle the California Hawaiian matter, $1.5 million to be paid to settle the Monte del Lago matter and $1.9 million to be paid to settle the Santiago Estates matter. As a result, a litigation settlement payable was recorded in Accrued expenses and accounts payable as of December 31, 2016. In addition, an insurance receivable was recorded in escrow deposits, goodwill and other assets, net as of December 31, 2016, resulting in a net settlement of approximately $2.4 million reflected as a component of property rights initiatives and other, net on the consolidated statement of income for the year ended December 31, 2016. During the quarter ended March 31, 2017, the settlements were finalized, the settlement payments were made and the insurance payments were received. These settlements resolved all pending matters brought by plaintiffs’ counsel against us or any of our affiliates. Pursuant to the settlement agreements, all plaintiffs provided full releases to each of the defendants and their affiliates including with respect to the claims alleged in the lawsuits, and each of the lawsuits and related appeals were dismissed with prejudice. The settlements do not constitute an admission of liability by us or any of our affiliates and were made to avoid the costs, risks and uncertainties inherent in litigation.

Civil Investigation by Certain California District Attorneys
In November 2014, we received a civil investigative subpoena from the office of the District Attorney for Monterey County, California ("MCDA"), seeking information relating to, among other items, statewide compliance with asbestos and hazardous waste regulations dating back to 2005 primarily in connection with demolition and renovation projects performed by third-party contractors at our California Properties. We responded by providing the information required by the subpoena.
On October 20, 2015, we attended a meeting with representatives of the MCDA and certain other District Attorneys' offices at which the MCDA reviewed the preliminary results of their investigation including, among other things, (i) alleged violations of asbestos and related regulations associated with approximately 200 historical demolition and renovation projects in California; (ii) potential exposure to civil penalties and unpaid fees; and (iii) next steps with respect to a negotiated resolution of the alleged violations. No legal proceedings have been instituted to date and we are involved in settlement discussions with the District Attorneys' offices. We continue to assess the allegations and the underlying facts, and at this time we are unable to predict the outcome of the investigation or reasonably estimate any possible loss.
Other
In addition to legal matters discussed above, we are involved in various other legal and regulatory proceedings ("Other Proceedings"(“Proceedings”) arising in the ordinary course of business. The Other Proceedings include, but are not limited to, legal claims made by employees, vendors and customers, and notices, consent decrees, information requests, and 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.

15

Equity LifeStyle Properties, Inc.
Notes to Consolidated Financial Statements
Note 9 – Commitments and Contingencies (continued)


Management believes these Other Proceedings taken together do not represent a material liability. In addition, to the extent any such proceedingsProceedings 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
14

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 10 –12 - Reportable Segments
We have identified two reportable segments which are: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 arewere from external customers and there is no customer who contributed 10% or more of our total revenues during the quarters and nine months ended September 30, 2017March 31, 2024 or 2016.2023.
The following tables summarize our segment financial information for the quarters ended March 31, 2024 and nine months ended September 30, 2017 and 2016 (amounts in thousands):2023:
Quarter EndedSeptember 30, 2017
March 31, 2024
Property
Operations
 
Home Sales
and Rentals
Operations
 Consolidated
(amounts in thousands)(amounts in thousands)Property
Operations		Home Sales
and Rentals
Operations		Consolidated
Operations revenues$223,184
 $14,415
 $237,599
Operations expenses(110,431) (13,528) (123,959)
Income from segment operations112,753
 887
 113,640
Interest income773
 1,042
 1,815
Depreciation on real estate assets and rental homes(27,879) (2,614) (30,493)
Amortization of in-place leases(138) —
 (138)
Income (loss) from operations$85,509
 $(685) $84,824
Reconciliation to Consolidated net income:     
Depreciation and amortization
Income from operations
Income from operations
Income from operations
Reconciliation to consolidated net income:
Corporate interest income
Corporate interest income
Corporate interest income    159
Income from other investments, net    2,052
General and administrative    (7,505)
Property rights initiatives and other    (324)
Casualty-related charges/(recoveries), net
Other expenses
Interest and related amortization    (25,027)
Income tax benefit
Equity in income of unconsolidated joint ventures    686
Consolidated net income
Consolidated net income
Consolidated net income    $54,865
     
Total assets$3,298,122
 $227,725
 $3,525,847
Total assets
Total assets
Capital improvements







16
15


Equity LifeStyle Properties, Inc.
Notes to Consolidated Financial Statements

Note 1012 – Reportable Segments (continued)




Quarter EndedSeptember 30, 2016
March 31, 2023
Property
Operations
 
Home Sales
and Rentals
Operations
 Consolidated
(amounts in thousands)(amounts in thousands)Property
Operations		Home Sales
and Rentals
Operations		Consolidated
Operations revenues$207,162
 $14,655
 $221,817
Operations expenses(101,640) (13,422) (115,062)
Income from segment operations105,522
 1,233
 106,755
Interest income711
 1,056
 1,767
Depreciation on real estate assets and rental homes(26,804) (2,714) (29,518)
Amortization of in-place leases(1,376) —
 (1,376)
Income (loss) from operations$78,053
 $(425) $77,628
Reconciliation to Consolidated net income:     
Depreciation and amortization
Loss on sale of real estate and impairment, net
Income from operations
Reconciliation to consolidated net income:
Corporate interest income
Corporate interest income
Corporate interest income    —
Income from other investments, net    2,581
General and administrative    (7,653)
Property rights initiatives and other    (855)
Other expenses
Interest and related amortization    (25,440)
Equity in income of unconsolidated joint ventures    496
Consolidated net income
Consolidated net income
Consolidated net income    $46,757
     
Total assets$3,238,699
 $231,684
 $3,470,383
Total assets
Total assets
Capital improvements



Nine Months EndedSeptember 30, 2017
 
Property
Operations
 
Home Sales
and Rentals
Operations
 Consolidated
Operations revenues$648,766
 $37,100
 $685,866
Operations expenses(310,337) (33,604) (343,941)
Income from segment operations338,429
 3,496
 341,925
Interest income2,256
 3,122
 5,378
Depreciation on real estate assets and rental homes(82,939) (7,910) (90,849)
Amortization of in-place leases(2,128) —
 (2,128)
Income (loss) from operations$255,618
 $(1,292) $254,326
Reconciliation to Consolidated net income:     
Corporate interest income    164
Income from other investments, net    3,918
General and administrative    (23,339)
Property rights initiatives and other    (814)
Interest and related amortization    (74,728)
Equity in income of unconsolidated joint ventures    2,876
Consolidated net income    $162,403
      
Total assets$3,298,122
 $227,725
 $3,525,847
Capital improvements$52,040
 $35,837
 $87,877

17

Equity LifeStyle Properties, Inc.
Notes to Consolidated Financial Statements
Note 10 – Reportable Segments (continued)


Nine Months Ended September 30, 2016
 
Property
Operations
 
Home Sales
and Rentals
Operations
 Consolidated
Operations revenues$605,072
 $39,695
 $644,767
Operations expenses(286,527) (35,929) (322,456)
Income from segment operations318,545
 3,766
 322,311
Interest income2,164
 2,841
 5,005
Depreciation on real estate assets and rental homes(79,086) (8,117) (87,203)
Amortization of in-place leases(2,139) —
 (2,139)
Income (loss) from operations$239,484
 $(1,510) $237,974
Reconciliation to Consolidated net income:     
Corporate interest income    47
Income from other investments, net    6,574
General and administrative    (23,315)
Property rights initiatives and other    (2,036)
Interest and related amortization    (76,635)
Equity in income of unconsolidated joint ventures    2,142
Consolidated net income    $144,751
      
Total assets$3,238,699
 $231,684
 $3,470,383
Capital improvements$38,758
 $48,558
 $87,316

The following table summarizes our financial information for the Property Operations segment for the quarters ended March 31, 2024 and nine months ended September 30, 2017 and 2016 (amounts in thousands):    2023:
 Quarters Ended March 31,
(amounts in thousands)20242023
Revenues:
Rental income$313,083 $292,579 
Annual membership subscriptions16,215 15,970 
Membership upgrade sales3,947 3,505 
Other income15,548 17,714 
Gross revenues from ancillary services10,943 11,969 
Total property operations revenues359,736 341,737 
Expenses:
Property operating and maintenance113,405 111,524 
Real estate taxes20,787 18,316 
Membership sales and marketing5,297 4,838 
Cost of ancillary services5,493 5,297 
Ancillary operating expenses4,713 5,584 
Property management19,710 19,464 
Total property operations expenses169,405 165,023 
Income from property operations segment$190,331 $176,714 










16
 Quarters Ended Nine Months Ended
 September 30,
2017		 September 30,
2016		 September 30,
2017		 September 30,
2016
Revenues:       
Community base rental income$123,177
 $117,164
 $365,833
 $346,625
Resort base rental income58,471
 54,486
 169,594
 154,652
Right-to-use annual payments11,531
 11,349
 34,133
 33,590
Right-to-use contracts current period, gross4,208
 3,672
 11,212
 9,290
Right-to-use contract upfront payments, deferred, net(1,670) (1,327) (3,766) (2,427)
Utility and other income26,295
 21,174
 69,071
 61,490
Ancillary services revenues, net1,172
 644
 2,689
 1,852
Total property operations revenues223,184
 207,162
 648,766
 605,072
Expenses:       
Property operating and maintenance80,164
 73,410
 221,119
 203,011
Real estate taxes14,006
 13,467
 41,986
 39,534
Sales and marketing, gross3,277
 3,100
 8,861
 8,524
Right-to-use contract commissions, deferred, net(176) (200) (372) (212)
Property management13,160
 11,863
 38,743
 35,670
Total property operations expenses110,431
 101,640
 310,337
 286,527
Income from property operations segment$112,753
 $105,522
 $338,429
 $318,545







18


Equity LifeStyle Properties, Inc.
Notes to Consolidated Financial Statements

Note 1012 – 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 nine months ended September 30, 2017 and 2016 (amounts in thousands):2023:
Quarters Ended Nine Months Ended
September 30,
2017		 September 30,
2016		 September 30,
2017		 September 30,
2016
(amounts in thousands)
(amounts in thousands)
(amounts in thousands)
Revenues:       
Gross revenue from home sales$10,012
 $10,895
 $24,872
 $28,239
Brokered resale revenues, net337
 276
 925
 884
Rental home income (a)
3,592
 3,484
 10,829
 10,572
Ancillary services revenues, net474
 —
 474
 —
Revenues:
Revenues:
Rental income (1)
Rental income (1)
Rental income (1)
Gross revenue from home sales and brokered resales
Gross revenue from home sales and brokered resales
Gross revenue from home sales and brokered resales
Total revenues
Total revenues
Total revenues14,415
 14,655
 37,100
 39,695
Expenses:       
Cost of home sales10,377
 10,745
 25,391
 28,507
Expenses:
Expenses:
Rental home operating and maintenance
Rental home operating and maintenance
Rental home operating and maintenance
Cost of home sales and brokered resales
Cost of home sales and brokered resales
Cost of home sales and brokered resales
Home selling expenses1,447
 909
 3,301
 2,548
Rental home operating and maintenance1,704
 1,768
 4,912
 4,874
Home selling expenses
Home selling expenses
Total expenses
Total expenses
Total expenses13,528
 13,422
 33,604
 35,929
Income from home sales and rentals operations segment$887
 $1,233
 $3,496
 $3,766
Income from home sales and rentals operations segment
Income from home sales and rentals operations segment
______________________
(a)
Segment information does not include Site rental income included in Community base rental income.

(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 11 -13 – Subsequent Events
During October 2017, we sold 336,290 shares of common stock as part of the ATM equity offering program at a weighted average price of $85.13, resulting in net cash proceeds of $28.3 million. Our Board of Directors has approved a new ATM equity offering program having an aggregate offering price of up to $200.0 million.
On October 16, 2017,April 1, 2024, we entered into a $204three Swap Agreements (“2024 Swaps”) with an aggregate notional value of $300.0 million secured facilityallowing us to trade the variable interest rate associated with Fannie Mae, maturing in 2037 and bearingour $300.0 million Term Loan (see Note 7. Borrowing Arrangements) for a 3.97% fixed interest rate. The loan is secured by five manufactured home communities. We used the proceeds to pay, in full, $194.2 million of loans that would2024 Swaps have matured in 2018. We incurred approximately $2.2 million in prepayment penalties associated with the debt repayment.
On October 27, 2017, we entered into a Second Amended and Restated Credit Agreement (the “Second Amended and Restated Credit Agreement”) by and among us, MHC Operating Limited Partnership, Wells Fargo Bank, National Association, as Administrative Agent (the “Administrative Agent”) and other lenders named therein, which amends and restates the terms of the obligations owed by us under the Amended, Restated and Consolidated Credit Agreement dated as of July 17, 2014 pursuant to which we have access to a $400 million unsecured line of credit (the “LOC”) and the $200 million senior unsecured term loan facility (the “Term Loan”). The LOC maturity date was extended to October 27, 2021, and this term can be extended an additional year in two six month increments, subject to certain conditions. The LOC bears interest at a rate of LIBOR plus 1.10% to 1.55% and requires an annual facility fee of 0.15% to 0.35%. 
We also extended the term of our Term Loan. The Term Loan now matures on April 27, 2023 and has anweighted average fixed interest rate of LIBOR plus 1.20% to 1.90%4.65% per annum. For bothannum and mature on April 17, 2026. Based on the LOC and Term Loan, theleverage as of March 31, 2024, our spread over LIBOR is variable based on leverage throughout the respective loan terms. We incurred commitment and arrangement feesSOFR was 1.40%, resulting in an estimated weighted average all-in fixed interest rate of approximately $3.6 million6.05% per annum.

17
Equity LifeStyle Properties, Inc.
Notes to enter into the Second Amended and Restated Credit Agreement.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 Statementsconsolidated financial statements and related Notesaccompanying notes thereto included elsewhere in this Quarterly Report on Form 10-Q and in our Annual Report on Form 10-K for the year ended December 31, 2016, and with the2023 (“2023 Form 10-K”), as well as information under the heading "Management'sin Part II. Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations"Operations in our Annual Report on2023 Form 10-K for the year ended December 31, 2016.10-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 and operator of lifestyle-oriented properties (“Properties”) consisting of property operations and home sales and rental operations primarily ofwithin manufactured home ("MH"(“MH”) and recreational vehicle (“RV”) communities and recreational vehicle ("RV") resorts and campgrounds.marinas. As of September 30, 2017,March 31, 2024, we owned or had an ownership interest in a portfolio of 404451 Properties located throughout the United States and Canada containing 149,448 Sites.172,464 individual developed areas (“Sites”). These propertiesProperties are located in 3235 states and British Columbia, with more than 90110 Properties with lake, river or ocean frontage and more than 100120 Properties within 10ten 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 referred toalso known as membership products)subscriptions, which provide our customersthem access to specific Properties for limited stays. Our MH community Sites are generally leased on an annual basis to residents who own or lease factory-built homes, including manufactured homes. Annual RV and annual RV resortmarina Sites are leased on an annual basis.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'scustomer’s vacation and travel preferences. Sites designated as right-to-use Sites are primarily utilized to service the approximately 106,900We also generate revenue from customers who have entered into right-to-use contracts (otherwise referred to as "memberships") and who pay annual membership dues.

We alsorenting 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 inon the Consolidated Statements of Income and Comprehensive Income. During the quarter, we contributed approximately $30.0 million to acquire a 49% interest in Florida Atlantic Holding, LLC ("Loggerhead"). Loggerhead owns a portfolio of 11 marinas located in Florida.






18
Management's Discussion and Analysis (continued)
The following table shows the breakdown of our Sites by type are as follows (amounts are approximate):
Total Sites as of September 30, 2017March 31, 2024
CommunityMH Sites71,10073,000 
ResortRV Sites:
Annual26,60034,900 
Seasonal11,20011,800 
Transient10,50016,300 
Marina Slips6,900 
Right-to-useMembership (1)
24,10026,000 
Joint Ventures (2)
5,9003,600 
Total149,400172,500 
_________________________ 
(1)
Includes approximately 5,700 Sites rented on an annual basis.
(2)
Joint ventures have approximately 2,700 annual Sites, 400 seasonal Sites, and 500 transient Sites and includes approximately 2,300 marina slips.

(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 RentalRentals 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 Site Setmanufactured homes and cottages that are located in Properties owned and managed by us. We continue to focus on our rental operations, as we believe renting our vacant new homes may representrepresents an attractive source of occupancy and thean opportunity to convert the renter to a new homebuyer in the future. We also sell and rent homes through our joint venture, ECHO Financing, LLC (the "ECHO JV"). We provideAdditionally, home sale brokerage services are offered to our residents of our Properties who movemay choose to sell their homes rather than relocate them when moving from a Property but do not relocate their home. In addition,Property. At certain Properties, we operate ancillary activities at certain Properties,facilities, such as golf courses, pro shops, stores and restaurants.
In the manufactured housing industry, options for home financing, also known as chattel financing, options are limited. FinancingChattel financing options available today include community owner fundedowner-funded programs or third partythird-party lender programs that provide subsidized financing to customers and often require the community owner to guarantee customer defaults. Third partyThird-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 purchasers of homeshomebuyers at our Properties.

20
Management's Discussion (continued)

We invest in Properties in sought-after locations near retirement and vacation destinations and urban areas across the United States with a focus on increasing operating cash flows. We seek growth in earnings, funds from operations ("FFO") and cash flows by enhancing the profitability and operation of our Properties and investments. We seek to accomplish this by attracting high quality customers to our Properties and retaining these customers who take pride in the Property and in their homes and efficiently managing our Properties to increase operating margins by increasing occupancy, maintaining competitive market rents and controlling expenses.
We actively seek to acquire and are currently engaged in various stages of negotiations relating to the possible acquisition of additional properties, which may include contracts outstanding to acquire such properties that are subject to the satisfactory completion of our due diligence review.
In addition to Netnet income computed in accordance with GAAP,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 funds from operations ("NFFO"),FFO, (iii) Income from property operations, (iv) Income from property operations, excluding deferrals and property management, and (v) Core Portfolio income from property operations, excluding deferrals and property management (operating results for propertiesProperties owned and operated in both periods under comparison) and (vi) Income from rental operations, net of depreciation.. 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
NetFor the quarter ended March 31, 2024, net income available for Common Stockholders increased $7.5$27.5 million to $48.5 million for the quarter ended September 30, 2017, compared to $41.0 million for the quarter ended September 30, 2016. Net income available for Common Stockholders increased $17.8 million, to $144.9 million for the nine months ended September 30, 2017, compared to $127.1 million for the nine months ended September 30, 2016.
For the quarter ended September 30, 2017, Funds from Operations (“FFO”) available for Common Stock and OP Unit holders increased $7.4$109.9 million, or $0.07$0.59 per Common Share, to $84.3 million or $0.90 perfully diluted Common Share, compared to $76.9$82.4 million, or $0.83$0.44 per fully diluted Common Share, for the same period in 2016. 2023.
For the nine monthsquarter ended September 30, 2017,March 31, 2024, FFO available for Common Stock and Operating Partnership unit (“OP UnitUnit”) holders increased $21.9$27.1 million, or $0.22$0.14 per fully diluted Common Share, to $252.3$167.4 million, or $2.71$0.86 per fully diluted Common Share, compared to $230.4$140.3 million, or $2.49$0.72 per fully diluted Common Share, for the same period in 2016.2023.
For the quarter ended September 30, 2017, Normalized Funds from Operations (“Normalized FFO”) available for Common Stock and OP Unit holders increased $7.9 million, or $0.08 per Common Share, to $85.1 million, or $0.91 per Common Share, compared to $77.2 million, or $0.83 per Common Share, for the same period in 2016. For the nine months ended September 30, 2017,March 31, 2024, Normalized FFO available for Common Stock and OP Unit holders increased $22.1$12.2 million, or $0.22$0.06 per fully diluted Common Share, to $253.4$152.7 million, or $2.72$0.78 per fully diluted Common Share, compared to $231.3$140.5 million, or $2.50$0.72 per fully diluted Common Share, for the same period in 2016.2023.
For the quarter ended September 30, 2017March 31, 2024, our Core Portfolio property operating revenues in our Core Portfolio, excluding deferrals, were up 7.0%increased 5.8% and property operating expenses, in our Core Portfolio, excluding deferrals and property management, were up 6.8%increased 3.9%, from the quarter ended September 30, 2016,same period in 2023, resulting in an increase in our income from property operations, excluding deferrals and property management, of 7.2%7.1%, from the quarter ended September 30, 2016. For the nine months ended September 30, 2017 property operating revenues in our Core Portfolio, excluding deferrals, were up 5.6% and property operating expenses in our Core Portfolio, excluding deferrals and property management, were up 6.2% from the nine months ended September 30, 2016, resulting in an increase in our income from property operations excluding deferrals and property management of 5.2%, from the nine months ended September 30, 2016.
During the quarter ended September 30, 2017, Hurricane Irma made landfall in the state of Florida. Our properties were affected by flooding, wind, wind-blown debris, fallen trees and tree branches. Overall, homes in our communities held up well with most of the structural damage limited to carports, screen rooms and awnings. Structural damage to common areas was also limited. Our Florida mainland properties resumed normal operations shortly after Hurricane Irma. Two RV resorts in the Florida Keys will reopen as utility services are restored. We are in the process of estimating the financial impact of the storm on our properties and we believe we have adequate insurance, subject to deductibles, including business interruption coverage. During the quarter ended September 30, 2017, we recorded expense of $3.7 million related to property damage and restoration work that had been reasonably estimated and/or completed to date. In addition we recorded revenue of $3.5 million relatedcompared to the expected insurance recovery from this loss.

same period in 2023.
21
19
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 consists of occupied home sitesincludes both homeowners and renters in our MH communities (both homeowners and renters) and was 94.3%94.9% for each of the quarters ended March 31, 2024, December 31, 2023 and March 31, 2023. For the quarter ended September 30, 2017, compared to 94.2% for the quarter ended June 30, 2017 and 93.5% for the quarter ended September 30, 2016. During the quarter ended September 30, 2017, we increased occupancy of manufactured homes withinMarch 31, 2024, our Core Portfolio occupancy increased by 9519 sites, withwhich included an increase in homeowner occupancy of 267123 sites and a decrease in rental occupancy of 104 compared to occupancy as of June 30, 2017. By comparison, as of September 30, 2016, our Core Portfolio occupancy increased 176 sites with an increase in homeowner occupancy of 248 sites compared to occupancy at June 30, 2016.
WeDecember 31, 2023. While we continue to experience growth in revenues in our Core RV Portfolio as a resultfocus on increasing the number of our ability to increase rental rates and occupancy. RV revenuesmanufactured 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 September 30, 2017 were 5.8% higher thanMarch 31, 2024, compared to the quarter ended September 30, 2016.same period in 2023 driven primarily by an increase in Annual seasonalRV rental income. Core RV and transient revenuesmarina 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 September 30, 2017 increased 6.0%, 18.7% and 2.7%, respectively, from the quarter ended September 30, 2016. RV revenues in our Core Portfolio for the nine months ended September 30, 2017 were 5.4% higher than the nine months ended September 30, 2016. Annual, seasonal and transient revenues for the nine months ended September 30, 2017 increased 5.5%, 6.2% and 4.7%, respectively, from the nine months ended September 30, 2016.
We continueMarch 31, 2024, compared to offer the Thousand Trails Camping Pass (“TTC”) and as a customer acquisition tool we have relationships with a network of RV dealers to provide them with a free one-year TTC membership to give to their customers in connection with the purchase of an RV. During the quarter ended September 30, 2017 online TTC sales increased 52% from the quarter ended September 30, 2016. During the quarter ended September 30, 2017 we sold approximately 4,400 TTCs and activated approximately 4,900 RV dealer TTCs. For the nine months ended September 30, 2017 we sold approximately 11,700 TTCs and activated approximately 14,100 RV dealer TTCs.
We continue to build on our successful multi-channel marketing campaigns, incorporating social media and advanced marketing analytics. The demand for our product offerings is high as seen by web traffic, call center traffic, reservations and sales. We have now completed our summer marketing campaign. We focused on the 100 days of camping between Memorial Day and Labor Day and ran a social media promotion, which had a social media reach of 5.1 million as we encouraged customers to post pictures of themselves enjoying our properties. For the same period in 2016,2023 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 summer social media campaign reach was 3.7 million.Florida portfolio.
We see high demandDemand for our homes and communities.communities remains strong as evidenced by factors including our high occupancy levels. We closed 173 new home sales in the quarter ended September 30, 2017 compared to 207 during the quarter ended September 30, 2016 and 413 new home sales in the nine months ended September 30, 2017 compared to 508 during the nine months ended September 30, 2016. The191 new home sales during the quarter and nine months ended September 30, 2017 were primarily in our Florida and Colorado communities.
As of September 30, 2017, we had 4,502 occupied rental homes in our MH communities. For the quarters ended September 30, 2017 and 2016,March 31, 2024, compared to 176 new home rental program net operating income was approximately $7.9 million, net of rental asset depreciation expense of approximately $2.6 million forsales during the quarter ended September 30, 2017 and $2.7 million forMarch 31, 2023, an increase of 8.5%. The increase in new home sales during the quarter ended September 30, 2016. Approximately $8.7 millionMarch 31, 2024 was primarily in the Florida and $8.9 million of home rental operations revenue was included in community base rental income for the quarters ended September 30, 2017 and 2016, respectively. For the nine months ended September 30, 2017 and 2016, home rental program net operating income was approximately $24.3 million and $24.6 million, respectively, net of rental asset depreciation expense of approximately $7.9 million for the nine months ended September 30, 2017 and $8.0 million for the nine months ended September 30, 2016. Approximately $26.3 million and $27.0 million of home rental operations revenue was included in community base rental income for the nine months ended September 30, 2017 and nine months ended September 30, 2016, respectively.Arizona markets.
Our gross investment in real estate has increased approximately $70.3$47.0 million to $4,755.6$7,753.3 million as of September 30, 2017March 31, 2024 from $4,685.3$7,706.3 million as of December 31, 20162023, primarily due to the acquisition of Paradise Park Largocapital improvements during the second quarter of 2017 and increased capital expenditures.ended March 31, 2024.
The following chart lists both the Properties acquired or invested in from January 1, 20162023 through September 30, 2017, which represents our Non-Core Portfolio;March 31, 2024 and Sites added through expansion opportunities at our existing Properties.

22
Management's Discussion (continued)

Properties:
Location
PropertyLocationType of PropertyTransaction Date
Sites(a)
Total Sites as of January 1, 20162023 (1)
143,938
171,200
Acquisitions:Acquisition Properties:
Red Oak Shores CampgroundOcean View, New JerseyRVMarch 28, 2023223
Rose BayPort Orange, FloridaRVJanuary 27, 2016303
Portland FairviewFairview, OregonRVMay 26, 2016407
Forest Lake EstatesZephryhills, FloridaRV, MHJune 15, 20161,168
Riverside RVArcadia, FloridaRVOctober 13, 2016499
Paradise Park LargoLargo, FloridaMHMay 10, 2017108
Joint Venture:
CrosswindsSt. Petersburg, FloridaMHJune 15, 2017376
LoggerheadMultiple, FloridaMarinaAugust 8, 20172,343
Expansion Site Development and other:Development:
Net Sites added (reconfigured) in 20162023295
994
Net Sites added (reconfigured) in 201711
Total Sites as of September 30, 2017March 31, 2024 (1)
149,448
172,500
(a)Loggerhead sites represent slip count.

______________________

(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.
20
Management's Discussion and Analysis (continued)
Income from Property Operations and Core Portfolio
We use Incomeincome from property operations, and Incomeincome from property operations, excluding deferrals and property management, and Core Portfolio income from property operations, excluding deferrals and property management, as alternative measures to evaluate the operating results of our manufactured home and RV communities.Properties. Income from property operations represents rental income, membership subscriptions and upgrade sales, utility income and right-to-useother income less property and rental home operating and maintenance expenses, real estate tax,taxes, membership sales and marketing expenses and property management expenses. Income from property operations, excluding deferrals and 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 the impactcertain administrative and professional expenses. We believe exclusion of property management expenses is helpful to investors and analysts as a measure of the GAAP deferraloperating results of right-to-use contract upfront paymentsour 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 related commissions, net. 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 since December 31, 2015.during all of 2023 and 2024. Core Portfolio income from property operations, excluding deferrals and 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 (or Acquisitions) includes all Properties that were not owned and operated during 2016all of 2023 and 2017.2024, including six properties in Florida impacted by Hurricane Ian and two properties in California that were impacted by storm and flooding events.
Funds from Operations ("FFO")FFO and Normalized Funds from Operations ("NFFO")FFO
We define FFO as net income, computed in accordance with GAAP, excluding gains and actual or estimated losses from sales of properties, plus real estate related depreciation and amortization impairments, if any,related to real estate, impairment charges and after adjustments forto reflect our share of FFO of unconsolidated partnerships and joint ventures. Adjustments for unconsolidated partnerships and joint ventures are calculated to reflect FFO on the same basis. We compute FFO in accordance with our interpretation of standards established by the National Association of Real Estate Investment Trusts (“NAREIT”), which may not be comparable to FFO reported by other REITs that do not define the term in accordance with the current NAREIT definition or that interpret the current NAREIT definition differently than we do.
We receive up-front non-refundable payments frombelieve FFO, as defined by the entryBoard of right-to-use contracts. In accordance with GAAP, the upfront non-refundable paymentsGovernors of NAREIT, is generally a measure of performance for an equity REIT. While FFO is a relevant and related commissions are deferred and amortized over the estimated customer life. Although the NAREIT definitionwidely used measure of FFOoperating performance for equity REITs, it does not address the treatment of non-refundable right-to-use payments, we believe thatrepresent cash flow from operations or net income as defined by GAAP, and it is appropriateshould not be considered as an alternative to adjust for the impact of the deferral activitythese indicators in our calculation of FFO.evaluating liquidity or operating performance.
We define NFFONormalized FFO as FFO excluding the following non-operating income and expense items: a) the financial impact of contingent consideration; b)items, such as gains and losses from early debt extinguishment, including prepayment penalties, and defeasance costs; c) property acquisitioncosts, transaction/pursuit costs and other, transaction costs related to mergers and acquisitions; and d) other miscellaneous non-comparable items. NFFONormalized FFO presented herein is not necessarily comparable to NFFONormalized 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 depreciation, amortization, impairments, if any, and actual or estimated gains or losses from sales of properties, depreciation and amortization related to real estate all ofand impairment charges, 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. 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

23
Management's Discussion (continued)

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 property acquisition and other transaction costs related to mergers and acquisitionsmiscellaneous non-comparable items from NFFOFFO 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 NFFONormalized FFO because it allows investors, analysts and our management to assess the impact of those items.
Income from Rental Operations, Net of Depreciation
We use Income from rental operations, net of depreciation as an alternative measure to evaluate the operating results of our home rental program. Income from rental operations, net of depreciation, represents income from rental operations less depreciation expense on rental homes. We believe this measure is meaningful for investors as it provides a complete picture of the home rental program operating results including the impact of depreciation which affects our home rental program investment decisions.
Our definitions and calculations of these non-GAAPNon-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-GAAPNon-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 flowflows 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.
21
Management's Discussion and Analysis (continued)
The following table reconciles Netnet income available for Common Stockholders to Incomeincome from property operations for the quarters ended March 31, 2024 and nine months ended September 30, 2017 and September 30, 2016 (amounts in thousands):2023:
Quarters Ended March 31,
(amounts in thousands)20242023
Computation of Income from Property Operations:
Net income available for Common Stockholders$109,905 $82,371 
Income allocated to non-controlling interests – Common OP Units5,366 4,088 
Consolidated net income115,271 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 management19,710 19,464 
Depreciation and amortization51,108 50,502 
Cost of home sales, brokered resales and ancillary services21,967 23,141 
Home selling expenses and ancillary operating expenses6,147 6,924 
General and administrative11,989 11,661 
Casualty-related charges/(recoveries), net (1)
(14,843)— 
Other expenses1,331 1,468 
Interest and related amortization33,543 32,588 
Income from property operations, excluding property management211,442 198,003 
Property management(19,710)(19,464)
Income from property operations$191,732 $178,539 
  Quarters ended
September 30,		 Nine Months Ended
September 30,
  2017 2016 2017 2016
Computation of Income from Property Operations:        
Net income available for Common Stockholders $48,525
 $40,998
 $144,911
 $127,071
Perpetual preferred stock dividends and original issuance costs 3,054
 2,297
 7,667
 6,910
Income allocated to non-controlling interests - Common OP Units 3,286
 3,462
 9,825
 10,770
Equity in income of unconsolidated joint ventures (686) (496) (2,876) (2,142)
Income before equity in income of unconsolidated joint ventures 54,179
 46,261
 159,527
 142,609
Total other expenses, net 59,461
 60,494
 182,398
 179,702
Income/(loss) from home sales operations and other (171) (161) (268) 80
Income from property operations $113,469
 $106,594
 $341,657
 $322,391
_____________________

24
Management's Discussion (continued)


(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 Unit holdersUnitholders and Normalized FFO available for Common Stock and OP Unit holdersUnitholders for the quarters ended March 31, 2024 and nine months ended September 30, 2017 and September 30, 2016 (amounts in thousands):2023:
 Quarters Ended March 31,
(amounts in thousands)20242023
Computation of FFO and Normalized FFO:
Net income available for Common Stockholders$109,905 $82,371 
Income allocated to non-controlling interests – Common OP Units5,366 4,088 
Depreciation and amortization51,108 50,502 
Depreciation on unconsolidated joint ventures1,051 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 holders167,430 140,312 
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 Diluted195,545 195,369 
_____________________
(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.
22
  Quarters ended
September 30,		 Nine Months Ended
September 30,
  2017 2016 2017 2016
Computation of FFO and Normalized FFO:        
Net income available for Common Stockholders $48,525
 $40,998
 $144,911
 $127,071
Income allocated to common OP units 3,286
 3,462
 9,825
 10,770
Right-to-use contract upfront payments, deferred, net 1,670
 1,327
 3,766
 2,427
Right-to-use contract commissions, deferred, net (176) (200) (372) (212)
Depreciation on real estate assets 27,879
 26,847
 82,939
 79,218
Depreciation on rental homes 2,614
 2,671
 7,910
 7,985
Amortization of in-place leases 138
 1,376
 2,128
 2,139
Depreciation on unconsolidated joint ventures 360
 373
 1,171
 968
FFO available for Common Stock and OP Unit holders 84,296
 76,854
 252,278
 230,366
Transaction costs —
 327
 324
 925
Preferred stock original issuance costs 757
 —
 757
 —
Normalized FFO available for Common Stock and OP Unit holders $85,053
 $77,181
 $253,359
 $231,291
Weighted average Common Shares outstanding – fully diluted 93,324
 92,910
 93,135
 92,405

25
Management's Discussion and Analysis (continued)

Results of Operations

ComparisonThis section discusses the comparison of the Quarter Ended September 30, 2017 to the Quarter Ended September 30, 2016
Income from Property Operations
The following table summarizes certain financial and statistical dataour 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 the total portfolio for the quarters endedSeptember 30, 2017operated during all of 2023 and 2016 (amounts in thousands). The Core2024. Our Non-Core Portfolio in this discussion includes all Properties acquired on or before December 31, 2015 and which we havethat were not owned and operated continuously since January 1, 2016. Core Portfolio growth percentages excludeduring 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 impactcomparison of GAAP deferralsour results of upfront payments from right-to-use contractsoperations for the quarters ended March 31, 2023 and related commissions.
 Core Portfolio Total Portfolio
 2017 2016 Variance 
%
Change
 2017 2016 Variance 
%
Change
Community base rental income$121,802
 $116,052
 $5,750
 5.0 % $123,177
 $117,164
 $6,013
 5.1 %
Rental home income3,592
 3,484
 108
 3.1 % 3,592
 3,484
 108
 3.1 %
Resort base rental income56,399
 53,317
 3,082
 5.8 % 58,471
 54,486
 3,985
 7.3 %
Right-to-use annual payments11,528
 11,349
 179
 1.6 % 11,531
 11,349
 182
 1.6 %
Right-to-use contracts current period, gross4,208
 3,672
 536
 14.6 % 4,208
 3,672
 536
 14.6 %
Utility and other income25,958
 20,987
 4,971
 23.7 % 26,295
 21,174
 5,121
 24.2 %
Property operating revenues, excluding deferrals223,487
 208,861
 14,626
 7.0 % 227,274
 211,329
 15,945
 7.5 %
               

Property operating and maintenance78,376
 72,687
 5,689
 7.8 % 80,164
 73,410
 6,754
 9.2 %
Rental home operating and maintenance1,704
 1,765
 (61) (3.5)% 1,704
 1,768
 (64) (3.6)%
Real estate taxes13,525
 13,161
 364
 2.8 % 14,006
 13,467
 539
 4.0 %
Sales and marketing, gross3,277
 3,100
 177
 5.7 % 3,277
 3,100
 177
 5.7 %
Property operating expenses, excluding deferrals and Property management96,882
 90,713
 6,169
 6.8 % 99,151
 91,745
 7,406
 8.1 %
Income from property operations, excluding deferrals and Property management (1)
126,605
 118,148
 8,457
 7.2 % 128,123
 119,584
 8,539
 7.1 %
Property management13,160
 11,861
 1,299
 11.0 % 13,160
 11,863
 1,297
 10.9 %
Income from property operations, excluding deferrals (1)
113,445
 106,287
 7,158
 6.7 % 114,963
 107,721
 7,242
 6.7 %
Right-to-use contracts, deferred and sales and marketing, deferred, net1,494
 1,127
 367
 32.6 % 1,494
 1,127
 367
 32.6 %
Income from property operations (1)
$111,951
 $105,160
 $6,791
 6.5 % $113,469
 $106,594

$6,875
 6.4 %
__________________________
(1)     Non-GAAP measure, seeMarch 31, 2022 and discussion of our operating activities, investing activities and financing activities for the Results Overview section of the Managementquarters ended March 31, 2023 and March 31, 2022, refer to Part I. Item 2. Management’s Discussion and Analysis for Non-GAAPof Financial Measure DefinitionsCondition and reconciliationsResults of these non-GAAP measures to Net Income available to Common Shareholders.
Total Portfolio income from property operations, which includes Core and non-Core portfolios,Operations of the Quarterly Report on Form 10-Q/A for the fiscal quarter ended September 30, 2017 increased $6.9 million, or 6.4%, fromMarch 31, 2023, filed with the quarter ended September 30, 2016, driven by an increase of $6.8 million, or 6.5%, in our Core Portfolio income from property operations and a $0.1 million increase in our Non-Core income from property operations.
Property Operating Revenues
Community base rental income in our Core Portfolio for the quarter ended September 30, 2017 increased $5.8 million, or 5.0% from the quarter ended September 30, 2016, which reflects 4.0% growth from rate increases and approximately 1.0% growth from occupancy gains. The average monthly base rental income per Site increased to approximately $615 for the quarter ended September 30, 2017 from approximately $591 for the quarter ended September 30, 2016. The average occupancy for the Core Portfolio increased to 94.3% for the quarter ended September 30, 2017 from 93.5% for the quarter ended September 30, 2016.



26
Management's Discussion (continued)

Resort base rental income in our Core Portfolio for the quarter ended September 30, 2017 increased $3.1 million, or 5.8%, from the quarter ended September 30, 2016 primarily due to increased rates. Resort base rental income is comprised of the following (amounts in thousands):
 Core Portfolio Total Portfolio
 2017 2016 Variance 
%
Change
 2017 2016 Variance 
%
Change
Annual$32,737
 $30,874
 $1,863
 6.0% $33,647
 $31,278
 $2,369
 7.6%
Seasonal4,510
 3,799
 711
 18.7% 4,952
 4,244
 708
 16.7%
Transient19,152
 18,644
 508
 2.7% 19,872
 18,964
 908
 4.8%
Resort base rental income$56,399
 $53,317
 $3,082
 5.8% $58,471
 $54,486
 $3,985
 7.3%
Right-to-use contracts current period, gross, net of sales and marketing, gross, increased by $0.4 million, primarily as a result of an increase in the average price per upgrade sale and a higher number of upgrade sales during the quarter ended September 30, 2017 compared to the quarter ended September 30, 2016. During the quarter ended September 30, 2017 there were 757 upgrade sales with an average price per upgrade sale of $5,558. This compares to 740 upgrade sales with an average price per upgrade sale of $4,962 during the quarter ended September 30, 2016.
Utility and other income increased by $5.0 million primarily due to the Hurricane Irma insurance recovery revenue accrual of $3.1 million and insurance proceeds of $1.5 million related to prior storm events.
Property Operating Expenses

Property operating expenses, excluding deferrals and property management, in our Core Portfolio for the quarter ended September 30, 2017 increased $6.2 million, or 6.8%, from the quarter ended September 30, 2016 primarily driven by an increase in property operating and maintenance expenses of $5.7 million. The increase in property operating and maintenance expenses was primarily due to repairs and maintenance expense of $3.3 million recognized during the quarter ended September 30, 2017 for restoration work that had been reasonably estimated and/or completed to date at our Florida properties impacted by Hurricane Irma. The increase in property operating and maintenance expenses was also due to an increase in property payroll, primarily as a result of 2017 salary increases and an increase in utility expense, primarily due to increases in water and sewer expenses, which was partially offset by an increase in utility income recovery.
Home Sales and Rental Operations
Home Sales and Other
The following table summarizes certain financial and statistical data for Home Sales for the quarters ended September 30, 2017 and 2016 (amounts in thousands, except home sales volumes).
  2017 2016 Variance 
%
Change
Gross revenues from new home sales (1)
 $7,233
 $8,057
 $(824) (10.2)%
Cost of new home sales (1)
 (7,276) (7,900) 624
 7.9 %
Gross profit (loss) from new home sales (43) 157
 (200) (127.4)%
         
Gross revenues from used home sales 2,779
 2,838
 (59) (2.1)%
Cost of used home sales (3,101) (2,845) (256) (9.0)%
Loss from used home sales (322) (7) (315) (4,500.0)%
         
Brokered resale revenues and ancillary services revenues, net 1,983
 920
 1,063
 115.5 %
Home selling expenses (1,447) (909) (538) (59.2)%
Income from home sales and other $171
 $161
 $10
 6.2 %
         
Home sales volumes        
Total new home sales (2)
 173
 207
 (34) (16.4)%
 New Home Sales Volume - ECHO JV 48
 65
 (17) (26.2)%
Used home sales 331
 335
 (4) (1.2)%
Brokered home resales 239
 182
 57
 31.3 %
_________________________
(1) New home sales gross revenues and costs of new home sales does not include the revenues and costs associated with our ECHO JV.
(2) Total new home sales volume includes home sales from our ECHO JV.

27
Management's Discussion (continued)

Income from home sales and other was $0.2 million for both the quarters ended September 30, 2017 and 2016. The increase in home selling expenses was primarily due to expense of $0.4 million recorded during the quarter ended September 30, 2017 related to property damage as a result of Hurricane Irma. The expense recorded during the quarter was offset by revenue recorded of $0.4 million related to the expected insurance recovery from this loss.
Rental Operations
The following table summarizes certain financial and statistical data for manufactured home Rental Operations for the quarters ended September 30, 2017 and 2016 (amounts in thousands, except rental unit volumes).
  2017 2016 Variance 
%
Change
Manufactured homes:        
New Home $7,100
 $6,329
 $771
 12.2 %
Used Home 5,157
 6,013
 (856) (14.2)%
Rental operations revenue (1)
 12,257
 12,342
 (85) (0.7)%
Rental home operating and maintenance (1,704) (1,768) 64
 3.6 %
Income from rental operations 10,553
 10,574
 (21) (0.2)%
Depreciation on rental homes (2)
 (2,614) (2,671) 57
 2.1 %
Income from rental operations, net of depreciation $7,939
 $7,903
 $36
 0.5 %
         
Gross investment in new manufactured home rental units (3)
 $131,389
 $123,866
 $7,523
 6.1 %
Gross investment in used manufactured home rental units $44,624
 $52,628
 $(8,004) (15.2)%
         
Net investment in new manufactured home rental units $105,424
 $101,768
 $3,656
 3.6 %
Net investment in used manufactured home rental units $24,833
 $34,169
 $(9,336) (27.3)%
         
Number of occupied rentals – new, end of period (4)
 2,492
 2,316
 176
 7.6 %
Number of occupied rentals – used, end of period 2,010
 2,473
 (463) (18.7)%
______________________
(1)
Rental operations revenue consists of Site rental income and home rental income. Approximately $8.7 million and $8.9 million for the quarters ended September 30, 2017 and 2016, respectively, of Site rental income are included in Community base rental income in the Income from Property Operations table. The remainder of home rental income is included in Rental home income in the Income from Property Operations table.
(2)
Included in depreciation on real estate and other costs in the Consolidated Statements of Income and Comprehensive Income.
(3)
New home cost basis does not include the costs associated with our ECHO JV. Our investment in the ECHO JV was $15.5 million and $15.3 million as of September 30, 2017 and 2016, respectively.
(4)
Occupied rentals as of the end of the period in our Core Portfolio and includes 254 and 158 homes rented through our ECHO JV during the quarters ended September 30, 2017 and 2016, respectively.
Other Income and Expenses
The following table summarizes other income and expenses, net for the quarters endedSeptember 30, 2017 and 2016 (amounts in thousands, expenses shown as negative).
  2017 2016 Variance 
%
Change
Depreciation on real estate and rental homes $(30,493) $(29,518) $(975) (3.3)%
Amortization of in-place leases (138) (1,376) 1,238
 90.0 %
Interest income 1,974
 1,767
 207
 11.7 %
Income from other investments, net 2,052
 2,581
 (529) (20.5)%
General and administrative (excluding transaction costs) (7,505) (7,326) (179) (2.4)%
Transaction costs —
 (327) 327
 100.0 %
Property rights initiatives and other, net (324) (855) 531
 62.1 %
Interest and related amortization (25,027) (25,440) 413
 1.6 %
Total other income and expenses, net $(59,461) $(60,494) $1,033
 1.7 %

Other expenses, net decreased $1.0 million for the quarter ended September 30, 2017, compared to the quarter ended September 30, 2016. The decrease from the quarter ended September 30, 2016 was primarily due to a decrease in amortization of in-place leases, decrease in income from other investments, net, primarily due to the termination of the Tropical Palms RV ground lease in 2016 and a decrease in interest and related amortization as a result of the refinancing activities completed during 2016 (see Note 7 to the Consolidated Financial Statements for additional detail regarding borrowing arrangements). These decreases were partially offset by an increase in depreciationSEC on real estate and rental homes due to an increase in capital expenditures.

28
Management's Discussion (continued)

Comparison of the Nine Months Ended September 30, 2017 to the Nine Months Ended September 30, 2016January 23, 2024.
Income from Property Operations
The following table summarizes certain financial and statistical data for theour Core Portfolio and total portfolio:
 Core PortfolioTotal Portfolio
Quarters Ended March 31,Quarters Ended March 31,
(amounts in thousands)20242023Variance%
Change		20242023Variance%
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 subscriptions16,215 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 revenues345,412 326,381 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 taxes20,417 17,856 2,561 14.3 %20,787 18,316 2,471 13.5 %
Rental home operating and maintenance1,369 959 410 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 management139,286 133,997 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 management19,710 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 nine monthsquarters ended September 30, 2017March 31, 2024 and 2016 (amounts in thousands). The Core Portfolio in this discussion includesMarch 31, 2023, respectively.
(3)Includes bad debt expense for all Properties acquired on or before December 31, 2015periods presented.
(4)Membership sales and which we have owned and operated continuously since January 1, 2016. Core Portfolio growth percentages exclude the impactmarketing expense is net of GAAPsales commission deferrals of upfront payments from right-to-use contracts$0.4 million and related commissions.$0.7 million for the quarters ended March 31, 2024 and March 31, 2023, respectively.
 Core Portfolio Total Portfolio
 2017 2016 Variance 
%
Change
 2017 2016 Variance 
%
Change
Community base rental income$362,080
 $345,316
 $16,764
 4.9% $365,833
 $346,625
 $19,208
 5.5%
Rental home income10,829
 10,573
 256
 2.4% 10,829
 10,572
 257
 2.4%
Resort base rental income161,002
 152,697
 8,305
 5.4% 169,594
 154,652
 14,942
 9.7%
Right-to-use annual payments34,130
 33,590
 540
 1.6% 34,133
 33,590
 543
 1.6%
Right-to-use contracts current period, gross11,212
 9,290
 1,922
 20.7% 11,212
 9,290
 1,922
 20.7%
Utility and other income67,961
 61,235
 6,726
 11.0% 69,071
 61,490
 7,581
 12.3%
Property operating revenues, excluding deferrals647,214
 612,701
 34,513
 5.6% 660,672
 616,219
 44,453
 7.2%
       

        
Property operating and maintenance215,802
 201,871
 13,931
 6.9% 221,119
 203,011
 18,108
 8.9%
Rental home operating and maintenance4,912
 4,871
 41
 0.8% 4,912
 4,874
 38
 0.8%
Real estate taxes40,557
 39,118
 1,439
 3.7% 41,986
 39,534
 2,452
 6.2%
Sales and marketing, gross8,860
 8,526
 334
 3.9% 8,861
 8,524
 337
 4.0%
Property operating expenses, excluding deferrals and Property management270,131
 254,386
 15,745
 6.2% 276,878
 255,943
 20,935
 8.2%
Income from property operations, excluding deferrals and Property management (1)
377,083
 358,315
 18,768
 5.2% 383,794
 360,276
 23,518
 6.5%
Property management38,743
 35,668
 3,075
 8.6% 38,743
 35,670
 3,073
 8.6%
Income from property operations, excluding deferrals (1)
338,340
 322,647
 15,693
 4.9% 345,051
 324,606
 20,445
 6.3%
Right-to-use contracts, deferred and sales and marketing, deferred, net3,394
 2,215
 1,179
 53.2% 3,394
 2,215
 1,179
 53.2%
Income from property operations (1)
$334,946
 $320,432
 $14,514
 4.5% $341,657
 $322,391
 $19,266
 6.0%
__________________________
(1)     Non-GAAP measure, see the Results Overview section of the Management(5)See Part I. Item 2. Management's Discussion and Analysis for Analysis—Non-GAAP Financial Measure DefinitionsMeasures for definitions and reconciliations of these non-GAAPNon-GAAP measures to Net Income available tofor Common Shareholders.

Total Portfolioportfolio income from property operations which includes Core and non-Core portfolios, for the nine monthsquarter ended September 30, 2017March 31, 2024, increased $19.3$13.2 million, or 6.0%7.4%, from the nine monthsquarter ended September 30, 2016,March 31, 2023, driven by an increase of $14.5$13.5 million, or 4.5%7.8%, infrom 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 a $4.8 millionmarina base rental income, partially offset by an increase in our Non-Core income fromreal estate taxes and property operations.operating and maintenance expenses.
23
Management's Discussion and Analysis (continued)
Property Operating Revenues
CommunityMH base rental income in our Core Portfolio for the nine monthsquarter ended September 30, 2017March 31, 2024 increased $16.8$10.5 million, or 4.9%6.4%, from the nine monthsquarter ended September 30, 2016,March 31, 2023, which reflects 4.0%6.3% growth from rate increases and approximately 0.9% growth0.1% from occupancy gains. The average monthly base rental income per Site in our Core Portfolio increased to approximately $611$847 for the nine monthsquarter ended September 30, 2017March 31, 2024 from approximately $588$797 for the nine monthsquarter ended September 30, 2016.March 31, 2023. The average occupancy for theour Core Portfolio increased to 94.2%was 94.9% for both the nine monthsquarters ended September 30, 2017 from 93.3% forMarch 31, 2024 and March 31, 2023.
RV and marina base rental income is comprised of the nine months ended September 30, 2016.following:

 Core PortfolioTotal Portfolio
Quarters Ended March 31,Quarters Ended March 31,
(amounts in thousands)20242023Variance%
Change		20242023Variance%
Change
Annual$73,051 $67,624 $5,427 8.0 %$75,475 $69,401 $6,074 8.8 %
Seasonal28,276 27,606 670 2.4 %29,545 27,960 1,585 5.7 %
Transient14,301 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 %


29
Management's Discussion (continued)

ResortRV and marina base rental income in our Core Portfolio for the nine monthsquarter ended September 30, 2017March 31, 2024 increased $8.3$6.3 million, or 5.4%5.8%, from the nine monthsquarter ended September 30, 2016March 31, 2023, driven primarily due toby an increase in annual, seasonalAnnual RV and transient revenues as a result of increased rates. Resortmarina base rental income. The increase in Annual RV and marina base rental income is comprised 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 following (amounts in thousands):
 Core Portfolio Total Portfolio
 2017 2016 Variance 
%
Change
 2017 2016 Variance 
%
Change
Annual$95,860
 $90,828
 $5,032
 5.5% $98,612
 $91,648
 $6,964
 7.6%
Seasonal25,374
 23,899
 1,475
 6.2% 28,353
 24,573
 3,780
 15.4%
Transient39,768
 37,970
 1,798
 4.7% 42,629
 38,431
 4,198
 10.9%
Resort base rental income$161,002
 $152,697
 $8,305
 5.4% $169,594
 $154,652
 $14,942
 9.7%
Right-to-use contracts current period, gross, net of sales and marketing, gross, increased by $1.6 million, primarily as a result of a higher average price per upgrade sale during the nine monthsquarter ended September 30, 2017March 31, 2024, compared to the nine months ended September 30, 2016. During the nine months ended September 30, 2017 there were 2,017 upgrade sales with an average price per upgrade sale of $5,558. This comparessame period in 2023, was due to 1,892 upgrade sales with an average price per upgrade sale of $4,910 for the nine months ended September 30, 2016.higher demand, particularly in our Florida portfolio.
Utility and other income in our Core Portfolio for the quarter ended March 31, 2024 increased by $6.7$1.7 million, or 5.6%, from the quarter ended March 31, 2023. The increase was primarily due to the Hurricane Irma insurance recovery revenue accrual of $3.1a $1.1 million and insurance proceeds of $1.5$0.6 million related to prior storm events. In addition, the increase in utilityother 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 duedriven by increased real estate tax pass-throughs to an increase in utility income recovery across all utilities.customers.
Property Operating Expenses

Property operating expenses, excluding deferrals and property management, in our Core Portfolio for the nine monthsquarter ended September 30, 2017March 31, 2024 increased $15.7$5.3 million, or 6.2%3.9%, from the nine monthsquarter ended September 30, 2016. The increase wasMarch 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 property operating and maintenance expenses of $13.9 million, driven by an increase in repairs and maintenance expense, utility expense and property payroll. The increase in repairs and maintenanceinsurance expense of $5.7$1.9 million was primarily due to an expensehigher insurance premiums following our property and casualty insurance renewal in the second quarter of $3.3 million recognized during the quarter ended September 30, 2017 for restoration work that had been reasonably estimated and/or completed to date at our Florida properties impacted by Hurricane Irma2023.










24
Management's Discussion and $1.2 million of clean-up costs associated with prior storm events. The increase in utility expense was driven by increases in electric, sewer, trash and gas expenses, which was partially offset by increased utility income recovery. The increase in property payroll expense resulted from 2017 salary increases.Analysis (continued)

Home Sales and Rental Operations
Home Sales and Other
The following table summarizes certain financial and statistical data for our Home Sales for the nine months ended September 30, 2017 and 2016 (amounts in thousands, exceptOther Operations:
Quarters Ended March 31,
(amounts in thousands, except home sales volumes)20242023Variance%
Change
Gross revenues from new home sales$17,700 $18,314 $(614)(3.4)%
Cost of new home sales15,401 16,662 (1,261)(7.6)%
Gross revenues from used home sales838 1,175 (337)(28.7)%
Cost of used home sales875 945 (70)(7.4)%
Gross revenue from brokered resales and ancillary services11,515 12,644 (1,129)(8.9)%
Cost of brokered resales and ancillary services5,691 5,534 157 2.8 %
Home selling and ancillary operating expenses6,147 6,924 (777)(11.2)%
Home sales volumes
New home sales191 176 15 8.5 %
Used home sales54 102 (48)(47.1)%
Brokered home resales109 134 (25)(18.7)%
Gross revenues from new home sales volumes).
  2017 2016 Variance 
%
Change
Gross revenues from new home sales (1)
 $16,724
 $19,500
 $(2,776) (14.2)%
Cost of new home sales (1)
 (16,467) (19,598) 3,131
 16.0 %
Gross profit (loss) from new home sales 257
 (98) 355
 362.2 %
         
Gross revenues from used home sales 8,148
 8,739
 (591) (6.8)%
Cost of used home sales (8,924) (8,909) (15) (0.2)%
Loss from used home sales (776) (170) (606) (356.5)%
         
Brokered resale revenues and ancillary services revenues, net 4,088
 2,736
 1,352
 49.4 %
Home selling expenses (3,301) (2,548) (753) (29.6)%
Income (loss) from home sales and other $268
 $(80) $348
 435.0 %
         
Home sales volumes        
Total new home sales (2)
 413
 508
 (95) (18.7)%
 New Home Sales Volume - ECHO JV 126
 162
 (36) (22.2)%
Used home sales 954
 988
 (34) (3.4)%
Brokered home resales 659
 585
 74
 12.6 %
_________________________
(1) New home sales gross revenuesdecreased $0.6 million and costsCost of new home sales does not include the revenues and costs associated with our ECHO JV.
(2) Total new home sales volume includes home sales from our ECHO JV for the nine months ended September 30, 2017 and September 30, 2016, respectively.

30
Management's Discussion (continued)

The increase in income from home sales and other was primarily due to an increase in ancillary activities and an increase in the gross profit from new homes sales, partially offset by an increase in home selling expenses and an increase in the loss from used home sales. The increase in home selling expenses was primarily due to expense of $0.4decreased $1.3 million recorded during the quarter ended September 30, 2017 relatedMarch 31, 2024, compared to property damage as a result of Hurricane Irma. The expense recorded during the quarter was offset by revenue recordedended March 31, 2023, primarily due to lower average selling prices and lower average cost of $0.4 million related to the expected insurance recovery from this loss.home sales, respectively.
Rental Operations
The following table summarizes certain financial and statistical data for manufacturedour MH Rental Operations:
Quarters Ended March 31,
(amounts in thousands, except rental unit volumes)20242023Variance%
Change
Rental operations revenue (1)
$9,058 $10,258 $(1,200)(11.7)%
Rental home operating and maintenance expenses1,369 959 410 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 period1,922 2,389 (467)(19.5)%
Number of occupied rentals – used, end of period236 313 (77)(24.6)%
______________________
(1)Consists of Site rental income and home Rental Operationsrental income. Approximately $5.6 million and $6.4 million for the nine monthsquarters ended September 30, 2017March 31, 2024 and 2016 (amountsMarch 31, 2023, respectively, of Site rental income is included in thousands, exceptMH base rental unit volumes).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.
  2017 2016 Variance 
%
Change
Manufactured homes:        
New Home $20,718
 $18,802
 $1,916
 10.2 %
Used Home 16,425
 18,728
 (2,303) (12.3)%
Rental operations revenue (1)
 37,143
 37,530
 (387) (1.0)%
Rental home operating and maintenance (4,912) (4,874) (38) (0.8)%
Income from rental operations 32,231
 32,656
 (425) (1.3)%
Depreciation on rental homes (2)
 (7,910) (8,007) 97
 1.2 %
Income from rental operations, net of depreciation $24,321
 $24,649
 $(328) (1.3)%
         
Gross investment in new manufactured home rental units (3)
 $131,389
 $123,866
 $7,523
 6.1 %
Gross investment in used manufactured home rental units $44,624
 $52,628
 $(8,004) (15.2)%
         
Net investment in new manufactured home rental units $105,424
 $101,768
 $3,656
 3.6 %
Net investment in used manufactured home rental units $24,833
 $34,169
 $(9,336) (27.3)%
         
Number of occupied rentals – new, end of period (4)
 2,492
 2,316
 176
 7.6 %
Number of occupied rentals – used, end of period 2,010
 2,473
 (463) (18.7)%

______________________
(1)
Rental operations revenue consists of Site rental income and home rental income. Approximately $26.3 million and $27.0 million for the nine months ended September 30, 2017 and 2016, respectively, of Site rental income are included in Community base rental income in the Income from Property Operations table. The remainder of home rental income is included in Rental home income in the Income from Property Operations table.
(2)
Included in depreciation on real estate and other costs in the Consolidated Statements of Income and Comprehensive Income.
(3)
New home cost basis does not include the costs associated with our ECHO JV. Our investment in the ECHO JV was $15.5 million and $15.3 million as of September 30, 2017 and 2016, respectively.
(4)
Occupied rentals as of the end of the period in our Core Portfolio and includes 254 and 158 homes rented through our ECHO JV during the nine months ended September 30, 2017 and 2016, respectively.
The decrease in income from rental operations net of depreciation, wasrevenues were $1.2 million, or 11.7%, lower during the quarter ended March 31, 2024, compared to the quarter ended March 31, 2023, primarily due to a decrease in the number of used occupied rental units, partially offset by the change in the mix of occupied rentals, driven by an increased number of occupied new homes at a higher rental rate.rentals.
25
Management's Discussion and Analysis (continued)
Miscellaneous Other Income and Expenses
The following table summarizes other income and expenses, for the nine months ended September 30, 2017net:
Quarters Ended March 31,
(amounts in thousands, expenses shown as negative)20242023Variance%
Change
Depreciation and amortization$(51,108)$(50,502)$(606)(1.2)%
Interest income2,168 2,088 80 3.8 %
Income from other investments, net2,038 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 September 30, 2016 (amounts in thousands, expenses shown as negative).
  2017 2016 Variance 
%
Change
Depreciation on real estate and rental homes $(90,849) $(87,203) $(3,646) (4.2)%
Amortization of in-place leases (2,128) (2,139) 11
 0.5 %
Interest income 5,542
 5,052
 490
 9.7 %
Income from other investments, net 3,918
 6,574
 (2,656) (40.4)%
General and administrative (excluding transaction costs) (23,015) (22,390) (625) (2.8)%
Transaction costs (324) (925) 601
 65.0 %
Property rights initiatives and other (814) (2,036) 1,222
 60.0 %
Interest and related amortization (74,728) (76,635) 1,907
 2.5 %
Total other income and expenses, net $(182,398) $(179,702) $(2,696) (1.5)%

Other expenses, net increased $2.7$1.7 million for the nine monthsquarter ended September 30, 2017,March 31, 2024, compared to the nine monthsquarter ended September 30, 2016. The increase in other expenses, net from the nine months ended September 30, 2016 wasMarch 31, 2023, primarily

31
Management's Discussion (continued)

due to an increase in depreciation on real estate and rental homes, partially offset by a decrease in income from other investments, net, due to the termination of the Tropical Palms RV ground lease in 2016 and a decrease inhigher 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 refinancing activities completed during 2016 (see Note 7quarters 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 Financial Statements for additional detail regarding borrowing arrangements).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, purchasing both newProperties, home purchases and pre-owned homes, acquisitions of new Properties, and distributions.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 Lineline of Credit ("LOC"credit (the “LOC”) and proceeds from issuance of equity and debt securities.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 havebelieve 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.
On February 28, 2024, we entered into ana 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 $125.0$500.0 million. DuringAs of March 31, 2024, the quarter, we sold 484,913 sharesfull capacity of common stock as part of theour ATM equity offering program at a weighted average price of $86.69, resulting in net cash proceeds of approximately $41.5 million. As of September 30, 2017, $33.0 million of common stock remained available for issuance under the ATM equity offering program. During October 2017,issuance.
As of March 31, 2024, we sold 336,290 shares of common stock as part of the ATM equity offering program at a weighted average price of $85.13, resulting in net cash proceeds of approximately $28.3 million. Our Board of Directors has approved a new ATM equity offering program having an aggregate offering price of up to $200.0 million.
In addition, we havehad available liquidity in the form of authorized and unissued preferred stock of approximately 10.0 million shares and approximately 112.5413.5 million shares of authorized butand 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, byamended.
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 shelf registration statement which was automatically effective when filed withcounterparty in exchange for making fixed-rate payments over the SEC. Our charter allows us to issue up to 200.0 million shareslife of common stock, par value $0.01 per share, and up to 10.0 million sharesthe agreements without exchange of preferred stock, par value $0.01 per share.
One of our stated objectives is to maintain financial flexibility. Achieving this objective allows us to take advantage of strategic opportunities that may arise. We believe effective management of our balance sheet, including maintaining various access points to raise capital, manage future debt maturities and borrow at competitive rates enables us to meet this objective. We believe that as of September 30, 2017, we have sufficient liquidity,the underlying notional amount. The changes in the form of $72.1 million in available cash, net of restricted cash, and $400.0 million available on our LOC, to satisfy our near term obligations.
On October 27, 2017, we entered into a Second Amended and Restated Credit Agreement (the “Second Amended and Restated Credit Agreement”) by and among us, MHC Operating Limited Partnership, Wells Fargo Bank, National Association, as Administrative Agent (the “Administrative Agent”) and other lenders named therein, which amends and restates the termsfair value of the obligations owing by us underdesignated derivative are recorded in Accumulated other comprehensive income (loss) on the Amended, RestatedConsolidated Balance Sheets and subsequently reclassified into earnings on the Consolidated Agreement dated asStatements of July 17, 2014 pursuant to which we have access to a $400 million unsecured line of creditIncome and
26
Management's Discussion and Analysis (continued)
Comprehensive Income in the $200 million senior unsecured term loan facility. The LOC maturity date was extended to October 27, 2021, and this term can be extended anperiod that the hedged forecasted transaction affects earnings. For additional year in two six month increments, subject to certain conditions. The LOC bears interest at a rate of LIBOR plus 1.10% to 1.55% and requires an annual facility fee of 0.15% to 0.35%. We also extended the term ofinformation regarding our Term Loan, which now matures on April 27, 2023 and has an interest rate of LIBOR plus 1.20% to 1.90% per annum.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, as well as net cash provided by operating activities, and availabilityissuances of equity under our existingATM equity offering program and our LOC. We consider these resources to be adequate to meetAs of March 31, 2024, our operating requirements for capital improvements, amortizing debt and paymentLOC had a borrowing capacity of dividends and distributions.$493.9 million.
We expect to meet certain long-term liquidity requirements, such as scheduled debt maturities, property acquisitions and capital improvements, by use of our current cash balance,using long-term collateralized and uncollateralized borrowings including borrowings under the existing LOC and the issuance of debt securities or additionalthe issuance of equity securities, in addition to net cash provided by operating activities. As of September 30, 2017, we have no remaining scheduled debt maturities in 2017.
During the quarter ended September 30, 2017, we entered into three new loans, each secured by a manufactured home Property, totaling $146.0 million. The loans have a stated interest rate of 4.07% per year with 20 year maturities and 30 year principal amortization. We utilized the proceeds from these loans to redeemincluding under our Series C Preferred Stock for $136.1 million.

32
Management's Discussion (continued)

On October 16, 2017, we entered into a $204 million secured facility with Fannie Mae, maturing in 2037 and bearing a 3.97% fixed interest rate. The loan is secured by five manufactured home communities. We used the proceeds to pay, in full, $194.2 million of loans that would have matured in 2018. We incurred approximately $2.2 million in prepayment penalties associated with the debt repayment.
During the nine months ended September 30, 2017 we paid off two maturing mortgage loans and assumed debt in the purchase of Paradise Park Largo. The two mortgage loans we paid off were approximately $21.1 million, with a weighted average interest rate of 5.76% per annum, and $6.9 million, with a weighted average interest rate of 6.47%. Each loan was secured by a manufactured home Property. In connection with the Paradise Park Largo acquisition during the quarter ended June 30, 2017, we assumed approximately $5.9 million of mortgage debt secured by the manufactured home community with an interest rate of 4.6% that matures in 2040.

ATM equity offering program.
The following table below summarizes our cash flow activity for the nine months ended September 30, 2017 and 2016 (amounts in thousands):flows activity:
Nine Months Ended
September 30,
2017 2016
For the quarters ended March 31,For the quarters ended March 31,
(amounts in thousands)(amounts in thousands)20242023
Net cash provided by operating activities$305,509
 $274,582
Net cash used in investing activities(138,173) (166,073)
Net cash used in financing activities(146,281) (119,955)
Net increase (decrease) in cash$21,055
 $(11,446)
Net increase in cash and restricted cash
Operating Activities
Net cash provided by operating activities increased $30.9$39.8 million to $305.5$198.7 million for the nine monthsquarter ended September 30, 2017,March 31, 2024 from $274.6$159.0 million for the nine monthsquarter ended September 30, 2016.March 31, 2023. The increase in net cash provided by operating activities was primarily due to higher income from property operations of $19.3 million, receipt of insurance proceeds of $10.8 million related to the California failure to maintain lawsuitsnet increases in manufactured homes, net, accounts payable and insurance proceeds of $1.5 million related to prior storm events,other liabilities and long term incentive plan payments of $4.3 million during the first quarter of 2016. These increases wereother assets, net, partially offset by the litigation settlement paymenta reduction in proceeds from insurance claims, net.
The following table summarizes our purchase and sale activity of $13.3 million related to the California failure to maintain lawsuits.manufactured homes:
 For the quarters ended March 31,
(amounts in thousands)20242023
Purchase of manufactured homes$(12,927)$(35,481)
Sale of manufactured homes15,260 15,907 
Manufactured homes, net$2,333 $(19,574)
Investing Activities
Net cash used in investing activities was $138.2decreased $15.1 million to $51.3 million for the nine monthsquarter ended September 30, 2017 compared to $166.1March 31, 2024 from $66.4 million for the nine monthsquarter ended September 30, 2016. The decrease in net cash used in investing activities was primarily due to (1) the acquisitions of Forest Lake Estates, Portland Fairview and Rose Bay for $78.2 million, (2) an acquisition of vacant land in Florida for $2.0 million and (3) receipt of capital distribution of $4.1 million from our Voyager JV during the nine months ended September 30, 2016.March 31, 2023. The decrease was partially offset bydue to a decrease in spending on acquisitions of $8.8 million, a decrease in investments inclusive of costs, in the Crosswinds and Loggerheadunconsolidated joint ventures of $2.3$0.4 million and $31.4 million, respectively, and a short-term loan of $13.8 million issued to the Crosswinds joint venture during the nine months ended September 30, 2017.
Capital Improvements
The table below summarizesdecrease in capital improvement activity for the nine months ended September 30, 2017 and 2016 (amounts in thousands):
 
Nine Months Ended
September 30, (1)
 2017 2016
Recurring Capital Expenditures (2)
$29,823
 $28,321
Property upgrades and site development20,931
 9,833
New home investments (3)(4)
32,724
 44,293
Used home investments (4)
3,113
 4,265
Total Property86,591
 86,712
Corporate1,286
 604
Total Capital improvements$87,877
 $87,316
______________________spending of $6.3 million.
(1) Excludes non-cash activity of approximately $0.2 million and $0.5 million of used homes acquired through foreclosure of Chattel Loans for the nine months ended September 30, 2017 and 2016, respectively.
(2) Recurring capital expenditures are primarily comprised of common area improvements, furniture, and mechanical improvements.
(3) Excludes new home investment associated with our ECHO JV.
(4) Net proceeds from new and used home sale activities are reflected within Operating Activities.






33
27
Management's Discussion and Analysis (continued)

Capital Improvements
The following table summarizes capital improvements:
For the quarters ended March 31,
(amounts in thousands)20242023
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 improvements50,987 60,878 
Corporate3,719 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 was $146.3increased $45.9 million to $130.1 million for the nine monthsquarter ended September 30, 2017 compared to net cash used in financing activities of $120.0March 31, 2024 from $84.2 million for the nine monthsquarter ended September 30, 2016.March 31, 2023. The increase in net cash used in financing activities for the nine months ended September 30, 2017 was primarily due to (1) a decrease in new mortgage debt proceeds,line of credit, net compared to the nine months ended September 30, 2016, (2) an increase in distributions to our common stockholders for the nine months ended September 30, 2017 due to an increase approved by our Boardrepayment of Directors, (3) reduced gross proceeds from the sale of common stock under our ATM equity offering program compared to the nine months ended September 30, 2016, and (4) reduced proceeds from stock options and our employee stock purchase plan.$39.0 million.
Contractual Obligations
AsSignificant ongoing contractual obligations consist primarily of September 30, 2017, we were subject to certainlong-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 payment obligations, as describedsee Part II. Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations—Contractual Obligations in the table below (amounts in thousands):our 2023 Form 10-K.
 
Total (5)
 2017 2018 2019 2020 2021 Thereafter
Long Term Borrowings (1)
$2,196,259
 $11,544
 $242,082
 $237,497
 $354,758
 $214,448
 $1,135,930
Interest Expense (2)
675,257
 25,525
 93,878
 78,862
 63,396
 55,369
 358,227
Operating Lease8,901
 547
 2,221
 2,062
 2,011
 1,711
 349
LOC Maintenance Fee (3)
644
 204
 440
 

 

 

 —
Ground Lease (4)
15,534
 496
 1,980
 1,983
 1,984
 1,987
 7,104
Total Contractual Obligations$2,896,595
 $38,316
 $340,601
 $320,404
 $422,149
 $273,515
 $1,501,610
Weighted average interest rates - Long Term Borrowings4.35% 4.66% 4.57% 4.38% 4.45% 4.36% 4.23%

(1)
Balance excludes note premiums of $3.8 million and deferred financing costs of approximately $18.9 million. Balances include debt maturing and scheduled periodic principal payments.
(2)
Amounts include interest expected to be incurred on our secured debt and Term Loan based on obligations outstanding as of September 30, 2017.
(3)
As of September 30, 2017, assumes we will not exercise our one year extension option on July 17, 2018 and assumes we will maintain our current leverage ratios as defined by the LOC.
(4)
We also lease land under non-cancelable operating leases at certain of the Properties expiring in various years from 2017 to 2054. The majority of the lease terms require twelve equal payments per year plus additional rents calculated as a percentage of gross revenues.
(5)
We do not include insurance, property taxes and cancelable contracts in the contractual obligations table.
We believe that we will be able to refinance our maturing debt obligations on a secured or unsecured basis; however, to the extent we are unable to refinance our debt as it matures, we believe that we will be able to repay such maturing debt through available cash as well as operating cash flow, asset sales and/or the proceeds from equity issuances. With respect to any refinancing of maturing debt, our future cash flow requirements could be impacted by significant changes in interest rates or other debt terms, including required amortization payments.
Inflation
Substantially all of the leases at the Properties allow for monthly or annual rent increases which provide us with the opportunity to achieve increases, where justified by the market, as each lease matures. Such types of leases generally minimize our risks of inflation. In addition, our resort Properties are not generally subject to leases and rents are established for these Sites on an annual basis. Our right-to-use contracts generally provide for an annual dues increase, but dues may be frozen under the terms of certain contracts if the customer is over 61 years of age.
Off BalanceOff-Balance Sheet Arrangements
As of September 30, 2017,March 31, 2024, we have no off balanceoff-balance sheet arrangements.
Critical Accounting Policies and Estimates
Refer to the 2016Part 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, which includes impairment of real estate assets and investments, revenue recognition and business combinations.policies. There have been no significant changes to theseour critical accounting policies and estimates during the quarter ended September 30, 2017.March 31, 2024.



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Management's Discussion (continued)

Forward LookingForward-Looking Statements
This Quarterly Report on Form 10-Q for the quarter ended September 30, 2017 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, the actual rate of decline inour 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 Propertiesproperties currently owned or that we may acquire;
•our ability to attract and retain customers entering, renewing and attract customers renewing, upgrading and entering right-to-use contracts;membership subscriptions;
•our assumptions about rental and home sales markets;
•our ability to manage counterparty risk;
in the age-qualified Properties, •our ability to renew our insurance policies at existing rates and on consistent terms;
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Management's Discussion and Analysis (continued)
•home sales results could be impacted by the ability of potential home buyershomebuyers 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 effectpotential impact of, accounting for the entry of contracts with customers representing a right-to-use the Properties under the Codification Topic "Revenue Recognition";
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'smanagement’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.

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Item 3.Quantitative and Qualitative Disclosure of Market Risk
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 on in our 2023 Form 10-K for the year ended December 31, 2016.10-K. There have been no material changes in the assumptions used or results obtained regarding market risk since December 31, 2016.2023.


Item 4.Controls and Procedures
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 September 30, 2017.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 September 30, 2017.
Notwithstanding the foregoing, a control system,March 31, 2024. Any controls and procedures, no matter how well designed and operated, can provide only reasonable not absolute, assurance that it will detect or uncover failures within us to disclose material information otherwise required to be set forth in our periodic reports.of achieving the desired control objectives.
Changes in Internal Control Over Financial Reporting

During the quarter ended September 30, 2017,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.





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Part II – Other Information


Item 1.Legal Proceedings
Item 1.Legal Proceedings
See Part I. Item 1. Financial Statements—Note 9 of11. Commitments and Contingencies accompanying the Consolidated Financial Statements contained herein.in this Quarterly Report on Form 10-Q.


Item 1A.Risk Factors
Item 1A.Risk Factors
There have been no material changes toA description of the risk factors associated with our business are discussed in “ItemPart1. Item 1A. Risk Factors”Factors in our Annual Report on2023 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 year ended December 31, 2016policy 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 Quarterly ReportMH and RV Properties renewed on Form 10-QApril 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 quarter ended March 31, 2017.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
Item 2.Unregistered Sales of Equity Securities and Use of Proceeds
None.


Item 3.Defaults Upon Senior Securities
Item 3.Defaults Upon Senior Securities
None.


Item 4.Mine Safety Disclosure
Item 4.Mine Safety Disclosures
None.


Item 5.Other Information

Item 5.Other Information
On October 27, 2017, we entered into a Second Amended and Restated Credit Agreement (the “Second Amended and Restated Credit Agreement”) by and among us, MHC Operating Limited Partnership, Wells Fargo Bank, National Association, as Administrative Agent (the “Administrative Agent”) and other lenders named therein, which amends and restatesDuring the termsquarter ended March 31, 2024, none of the obligations owing by us under the Amended, Restated and Consolidated Credit Agreement dated asCompany’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 July 17, 2014 pursuant to which we have access to a $400 million unsecured line of credit (the “LOC”) and the $200 million senior unsecured term loan facility (the “Term Loan”). We have the option to increase the borrowing capacity by $200 million, subject to certain conditions. The LOC maturity date was extended to October 27, 2021, and this term can be extended an additional year in two six month increments, subject to certain conditions. The LOC bears interest at a rate of LIBOR plus 1.10% to 1.55% and requires an annual facility fee of 0.15% to 0.35%. 

We also extended the term of our Term Loan, which now matures on April 27, 2023 and has an interest rate of LIBOR plus 1.20% to 1.90% per annum. For both the LOC and Term Loan, the spread over LIBOR is variable based on leverage throughout the respective loan terms. We incurred commitment and arrangement fees of approximately $3.6 million to enter into the Second Amended and Restated Credit Agreement.

Pursuant to a Second Amended and Restated Guaranty dated as of October 27, 2017, among us and certain of our subsidiaries and the Administrative Agent, we have guaranteed allRegulation S-K of the obligationsSecurities Act of our operating partnership under the Second Amended and Restated Credit Agreement when due, whether at stated maturity, by acceleration or otherwise.1933).


The foregoing summaries of the Second Amended and Restated Credit Agreement, the Second Amended and Restated Guaranty and the amendments to the LOC and Term Loan are qualified in their entirety by reference to the text of the Second Amended and Restated Credit Agreement and the Second Amended and Restated Guaranty, each of which is attached as Exhibit 10.1 and 10.2, respectively.


Item 6.Exhibit Index

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Item 6.Exhibits
10.131.1

10.2
Second Amended and Restated Guaranty dated as of October 27, 2017, by Equity Lifestyle Properties, Inc. in favor of Wells Fargo Bank, National Association.

31.1
Certification of Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2
32.1
32.2
101101.INSThe following materials from Equity LifeStyle Properties, Inc.’s Quarterly Report on Form 10-Q forXBRL Instance Document - the quarter ended September 30, 2017 formattedinstance document does not appear in the Interactive Data File because its XBRL (Extensible Business Reporting Language): (i) Consolidated Balance Sheets, (ii) Consolidated Statements of Income and Comprehensive Income, (iii) Consolidated Statements of Changes in Equity, (iv) Consolidated Statements of Cash Flow, and (v) Notes to Consolidated Financial Statements, filed herewith.tags are embedded within the Inline XBRL document.
101.SCHInline XBRL Taxonomy Extension Schema Document
101.CALInline XBRL Taxonomy Extension Calculation Linkbase Document
101.LABInline XBRL Taxonomy Extension Label Linkbase Document
101.PREInline XBRL Taxonomy Extension Presentation Linkbase Document
101.DEFInline XBRL Taxonomy Extension Definition Linkbase Document
104Cover Page Interactive Data File included as Exhibit 101 (embedded within the Inline XBRL document)



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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: October 31, 2017April 30, 2024By:/s/ Marguerite Nader
Marguerite Nader
President and Chief Executive Officer
(Principal Executive Officer)
Date: October 31, 2017April 30, 2024By:/s/ Paul Seavey
Paul Seavey
Executive Vice President and Chief Financial Officer and Treasurer
(Principal Financial and Accounting Officer)



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