Equity LifeStyle Properties Non GAAP Financial Measures 72 Net Income to FFO Reconciliation (In $US millions) Computation of funds from operations: 2007 2008 2009 2010 2011 2012 (1) Net income available for common shares 32.1 18.3 34.0 38.4 22.8 47.2 Income allocated to common OP units 7.7 4.3 6.1 5.9 3.1 4.4 Series B Redeemable Preferred Stock Dividends 0.0 0.0 0.0 0.0 0.5 0.0 Right-to-use contract upfront payments, deferred, net 0.0 10.6 18.9 14.9 11.9 3.6 Right-to-use contract commissions, deferred, net 0.0 (3.6) (5.7) (5.5) (4.8) (1.4) Depreciation on real estate assets and other 63.6 66.2 69.0 68.1 80.0 100.0 Depreciation on rental homes 0.0 1.2 2.4 2.8 4.3 5.9 Amortization of in-place leases 0.0 0.0 0.0 0.0 28.5 45.1 Depreciation on unconsolidated joint ventures 1.4 1.8 1.3 1.2 1.2 0.0 (Gain) loss on real estate (12.0) 0.1 (5.5) 0.2 0.0 0.0 Funds from operations available for common shares 92.8 98.8 120.4 126.0 147.5 204.8 Note: (1) 2012 amounts are the midpoint of an estimated range. See Supplemental Package. Funds from Operations (“FFO”) is a non-GAAP financial measure. The Company believes that FFO, as defined by the Board of Governors of the National Association of Real Estate Investment Trusts (“NAREIT”), is generally an appropriate measure of performance for an equity REIT. While FFO is a relevant and widely used measure of operating performance for equity REITs, it does not represent cash flow from operations or net income as defined by GAAP, and it should not be considered as an alternative to these indicators in evaluating liquidity or operating performance. The Company defines FFO as net income, computed in accordance with GAAP, excluding gains or actual or estimated losses from sales of properties, plus real estate related depreciation and amortization, and after adjustments for unconsolidated partnerships and joint ventures. Adjustments for unconsolidated partnerships and joint ventures are calculated to reflect FFO on the same basis. The Company receives up-front non-refundable payments from the entry of right-to-use contracts. In accordance with GAAP, the upfront non-refundable payments and related commissions are deferred and amortized over the estimated customer life. Although the NAREIT definition of FFO does not address the treatment of nonrefundable right-to-use payments, the Company believes that it is appropriate to adjust for the impact of the deferral activity in its calculation of FFO. The Company believes that FFO is helpful to investors as one of several measures of the performance of an equity REIT. The Company further believes that by excluding the effect of depreciation, amortization and gains or actual or estimated losses from sales of real estate, all of which are based on historical costs and which may be of limited relevance in evaluating current performance, FFO can facilitate comparisons of operating performance between periods and among other equity REITs. The Company believes that the adjustment to FFO for the net revenue deferral of upfront non- refundable payments and expense deferral of right-to-use contract commissions also facilitates the comparison to other equity REITs. Investors should review FFO, along with GAAP net income and cash flow from operating activities, investing activities and financing activities, when evaluating an equity REIT’s operating performance. The Company computes FFO in accordance with its interpretation of standards established by NAREIT, which may not be comparable to FFO reported by other REITs that do not define the term in accordance with the current NAREIT definition or that interpret the current NAREIT definition differently than the Company does. FFO does not represent cash generated from operating activities in accordance with GAAP, nor does it represent cash available to pay distributions and should not be considered as an alternative to net income, determined in accordance with GAAP, as an indication of the Company’s financial performance, or to cash flow from operating activities, determined in accordance with GAAP, as a measure of the Company’s liquidity, nor is it indicative of funds available to fund its cash needs, including its ability to make cash distributions. | 
