Recent Quotes View Full List My Watchlist Create Watchlist Indicators DJI Nasdaq Composite SPX Gold Crude Oil EL&P Market Index Markets Stocks ETFs Tools Overview News Currencies International Treasuries ELS Reports First Quarter Results By: Equity LifeStyle Properties, Inc. via Business Wire April 17, 2023 at 16:16 PM EDT Continued Strong Performance Equity LifeStyle Properties, Inc. (NYSE: ELS) (referred to herein as “we,” “us,” and “our”) today announced results for the quarter ended March 31, 2023. All per share results are reported on a fully diluted basis unless otherwise noted. ($ in millions, except per share data) Financial Results Q1 2023 Q1 2022 $ Change Total Revenues $ 370.0 $ 360.2 $ 9.8 Net Income available for Common Stockholders $ 82.4 $ 82.9 $ (0.5 ) Net Income per Common Share - Fully Diluted $ 0.44 $ 0.45 $ (0.01 ) Non-GAAP Financial Measures Q1 2023 Q1 2022 $ Change Funds from Operations (“FFO”) per Common Share and OP Unit - Fully Diluted $ 0.74 $ 0.72 $ 0.02 Normalized Funds from Operations (“Normalized FFO”) per Common Share and OP Unit - Fully Diluted $ 0.74 $ 0.72 $ 0.02 Property operating revenues, excluding deferrals $ 339.3 $ 322.4 $ 16.9 Income from property operations, excluding deferrals and property management $ 201.8 $ 192.6 $ 9.2 Core Portfolio Performance Q1 2023 Q1 2022 % Change Core property operating revenues, excluding deferrals $ 329.9 $ 310.2 6.4 % Core Income from property operations, excluding deferrals and property management $ 195.7 $ 185.3 5.7 % Operations Update Normalized FFO for the quarter ended March 31, 2023 was $0.74 per share, representing a 2.0% increase compared to the same period in 2022, outperforming the midpoint of our guidance expectation by $0.8 million. MH Core MH base rental income for the quarter ended March 31, 2023 increased 6.5% compared to the same period in 2022, which reflects 6.6% growth from rate increases and a decline of 0.1% from occupancy losses. Core MH homeowners increased by 30 since December 31, 2022. We sold 176 new homes during the quarter ended March 31, 2023, with an average sales price of $104,000. RV and Marina Core RV and marina base rental income for the quarter ended March 31, 2023 increased 5.5% compared to the same period in 2022. Core RV and marina annual base rental income increased 8.4% for the quarter ended March 31, 2023, compared to the same period in 2022, which reflects 8.0% growth from rate increases and 0.4% from occupancy gains. Total nights camped during the quarter ended March 31, 2023 increased approximately 1.0% compared to the same period in 2022. Property Operating Expenses Core property operating expenses for the quarter ended March 31, 2023 increased 7.4% compared to the same period in 2022. See page 8 for details of the Core property operating expenses. Core repair and maintenance expenses for the quarter ended March 31, 2023 was $21.7 million, an increase of $2.5 million compared to the same period in 2022, which includes clean-up costs following weather events across the portfolio. We completed our property and casualty insurance renewal as of April 1, 2023, and our premiums increased for the policy year April 2023 through March 2024 by approximately $12.0 million, or 58%. This increase has an unfavorable impact of approximately $2.6 million on our full year 2023 guidance. Guidance (1)(2) ($ in millions, except per share data) 2023 Second Quarter Full Year Net Income/share $0.32 to $0.38 $1.64 to $1.74 FFO/share $0.62 to $0.68 $2.79 to $2.89 Normalized FFO/share $0.62 to $0.68 $2.79 to $2.89 2022 Actual 2023 Growth Rates Core Portfolio: Second Quarter Full Year Second Quarter Full Year MH base rental income $ 155.8 $ 626.0 6.4% to 7.0% 6.3% to 7.3% RV and marina base rental income (3) $ 94.6 $ 393.4 3.6% to 4.2% 5.4% to 6.4% Property operating revenues $ 305.8 $ 1,240.2 5.5% to 6.1% 6.0% to 7.0% Property operating expenses $ 136.1 $ 526.4 10.0% to 10.6% 7.9% to 8.9% Income from property operations, excluding deferrals and property management $ 169.7 $ 713.8 1.9% to 2.5% 4.6% to 5.6% Non-Core Portfolio: 2023 Full Year Income from property operations, excluding deferrals and property management $23.1 to $27.1 Other Guidance Assumptions: 2023 Full Year Property management and general administrative $115.9 to $121.9 Debt Assumptions: Weighted average debt outstanding $3,300 to $3,500 Interest and related amortization $127.6 to $133.6 (1) Second quarter and full year 2023 guidance ranges represent a range of possible outcomes and the midpoint reflects management's estimate of the most likely outcome. Actual growth rates and per share amounts could vary materially from growth rates and per share amounts presented above if any of our assumptions, including occupancy and rate changes, our ability to manage expenses in an inflationary environment, our ability to integrate and operate recent acquisitions and costs to restore property operations and potential revenue losses following storms or other unplanned events, is incorrect. See Forward-Looking Statements in this release for additional factors impacting our 2023 guidance assumptions. (2) Guidance assumptions do not include future capital events (financing transactions, acquisitions or dispositions) or the use of free cash flow. (3) Core RV and marina annual revenue represents approximately 70.6% and 67.0% of second quarter 2023 and full year 2023 RV and marina base rental income, respectively. Core RV and marina annual revenue second quarter 2023 growth rate range is 7.9% to 8.5% and the full year 2023 growth rate range is 7.9% to 8.9%. Investment Activity In March 2023, we completed the acquisition of Red Oak Shores Campground, a 223-site RV community located in Ocean View, New Jersey for a purchase price of $9.5 million. Balance Sheet Activity In April 2023, we entered into an interest rate swap agreement with a notional amount of $200.0 million, allowing us to trade one month term SOFR indexed variable rate debt for fixed rate debt. The interest rate swap fixes the variable interest rate on our $200.0 million unsecured term loan at 4.88% per annum. As a result, our exposure to floating rate debt as a percentage of total debt is approximately 7.5%. As of March 31, 2023, approximately 6% of our total secured and unsecured debt is maturing over the next three years. About Equity LifeStyle Properties We are a self-administered, self-managed real estate investment trust (“REIT”) with headquarters in Chicago. As of April 17, 2023, we own or have an interest in 450 properties in 35 states and British Columbia consisting of 171,477 sites. For additional information, please contact our Investor Relations Department at (800) 247-5279 or at investor_relations@equitylifestyle.com. Conference Call A live audio webcast of our conference call discussing these results will take place tomorrow, Tuesday, April 18, 2023, at 10:00 a.m. Central Time. Please visit the Investor Relations section at www.equitylifestyleproperties.com for the link. A replay of the webcast will be available for two weeks at this site. Forward-Looking Statements In addition to historical information, this press release includes certain “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. When used, words such as “anticipate,” “expect,” “believe,” “project,” “intend,” “may be” and “will be” and similar words or phrases, or the negative thereof, unless the context requires otherwise, are intended to identify forward-looking statements and may include without limitation, information regarding our expectations, goals or intentions regarding the future, and the expected effect of our acquisitions. Forward-looking statements, including our guidance concerning Net Income, FFO and Normalized FFO per share data, by their nature, involve estimates, projections, goals, forecasts and assumptions and are subject to risks and uncertainties that could cause actual results or outcomes to differ materially from those expressed in a forward-looking statement due to a number of factors, which include, but are not limited to the following: (i) the mix of site usage within the portfolio; (ii) yield management on our short-term resort and marina sites; (iii) scheduled or implemented rate increases on community, resort and marina sites; (iv) scheduled or implemented rate increases in annual payments under membership subscriptions; (v) occupancy changes; (vi) our ability to attract and retain membership customers; (vii) change in customer demand regarding travel and outdoor vacation destinations; (viii) our ability to manage expenses in an inflationary environment; (ix) our ability to integrate and operate recent acquisitions in accordance with our estimates; (x) our ability to execute expansion/development opportunities in the face of supply chain delays/shortages; (xi) completion of pending transactions in their entirety and on assumed schedule; (xii) our ability to attract and retain property employees, particularly seasonal employees; (xiii) ongoing legal matters and related fees; and (xiv) costs to restore property operations and potential revenue losses following storms or other unplanned events. For further information on these and other factors that could impact us and the statements contained herein, refer to our filings with the Securities and Exchange Commission, including the “Risk Factors” and “Forward-Looking Statements” sections in our most recent Annual Report on Form 10-K and any subsequent quarterly reports on Form 10-Q. These forward-looking statements are based on management's present expectations and beliefs about future events. As with any projection or forecast, these statements are inherently susceptible to uncertainty and changes in circumstances. We are under no obligation to, and expressly disclaim any obligation to, update or alter our forward-looking statements whether as a result of such changes, new information, subsequent events or otherwise. Supplemental Financial Information Financial Highlights (In millions, except Common Shares and OP Units outstanding and per share data, unaudited) As of and for the Quarters Ended Mar 31, 2023 Dec 31, 2022 Sep 30, 2022 Jun 30, 2022 Mar 31, 2022 Operating Information Total revenues $ 370.0 $ 340.6 $ 381.0 $ 365.3 $ 360.2 Net income $ 86.5 $ 76.7 $ 70.5 $ 64.6 $ 87.1 Net income available for Common Stockholders $ 82.4 $ 73.0 $ 67.2 $ 61.5 $ 82.9 Adjusted EBITDAre (1) $ 176.7 $ 159.2 $ 166.4 $ 153.3 $ 168.4 FFO available for Common Stock and OP Unit holders (1)(2) $ 144.1 $ 126.6 $ 134.4 $ 121.6 $ 140.9 Normalized FFO available for Common Stock and OP Unit holders (1)(2) $ 144.3 $ 128.1 $ 136.8 $ 125.3 $ 141.4 Funds Available for Distribution ("FAD") for Common Stock and OP Unit holders (1)(2) $ 126.2 $ 106.9 $ 115.4 $ 103.6 $ 125.1 Common Shares and OP Units Outstanding (In thousands) and Per Share Data Common Shares and OP Units, end of the period 195,446 195,386 195,380 195,373 195,303 Weighted average Common Shares and OP Units outstanding - Fully Diluted 195,369 195,281 195,269 195,227 195,246 Net income per Common Share - Fully Diluted (3) $ 0.44 $ 0.39 $ 0.36 $ 0.33 $ 0.45 FFO per Common Share and OP Unit - Fully Diluted $ 0.74 $ 0.65 $ 0.69 $ 0.62 $ 0.72 Normalized FFO per Common Share and OP Unit - Fully Diluted $ 0.74 $ 0.66 $ 0.70 $ 0.64 $ 0.72 Dividends per Common Share $ 0.4475 $ 0.4100 $ 0.4100 $ 0.4100 $ 0.4100 Balance Sheet Total assets $ 5,519 $ 5,493 $ 5,405 $ 5,400 $ 5,265 Total liabilities $ 4,006 $ 3,975 $ 3,886 $ 3,878 $ 3,734 Market Capitalization Total debt (4) $ 3,414 $ 3,416 $ 3,329 $ 3,298 $ 3,193 Total market capitalization (5) $ 16,534 $ 16,038 $ 15,607 $ 17,066 $ 18,130 Ratios Total debt / total market capitalization 20.6 % 21.3 % 21.3 % 19.3 % 17.6 % Total debt / Adjusted EBITDAre (6) 5.2 5.3 5.2 5.3 5.2 Interest coverage (7) 5.5 5.6 5.7 5.7 5.7 Fixed charges(8) 5.4 5.6 5.6 5.6 5.6 ______________________ 1. See Non-GAAP Financial Measures Definitions and Reconciliations at the end of the supplemental financial information for definitions of Adjusted EBITDAre, FFO, Normalized FFO and FAD and a reconciliation of Consolidated net income to Adjusted EBITDAre. 2. See page 6 for a reconciliation of Net income available for Common Stockholders to Non-GAAP financial measures FFO available for Common Stock and OP Unit holders, Normalized FFO available for Common Stock and OP Unit holders and FAD for Common Stock and OP Unit holders. 3. Net income per Common Share - Fully Diluted is calculated before Income allocated to non-controlling interest - Common OP Units. 4. Excludes deferred financing costs of approximately $27.3 million as of March 31, 2023. 5. See page 14 for the calculation of market capitalization as of March 31, 2023. 6. Calculated using trailing twelve months Adjusted EBITDAre. 7. Calculated by dividing trailing twelve months Adjusted EBITDAre by the interest expense incurred during the same period. 8. See Non-GAAP Financial Measures Definitions and Reconciliations at the end of the supplemental financial information for a definition of fixed charges. This ratio is calculated by dividing trailing twelve months Adjusted EBITDAre by the sum of fixed charges and preferred stock dividends, if any, during the same period. Consolidated Balance Sheets (In thousands, except share and per share data) March 31, 2023 December 31, 2022 (unaudited) Assets Investment in real estate: Land $ 2,086,725 $ 2,084,532 Land improvements 4,170,166 4,115,439 Buildings and other depreciable property 1,197,416 1,169,590 7,454,307 7,369,561 Accumulated depreciation (2,306,538 ) (2,258,540 ) Net investment in real estate 5,147,769 5,111,021 Cash and restricted cash 30,661 22,347 Notes receivable, net 46,655 45,356 Investment in unconsolidated joint ventures 81,135 81,404 Deferred commission expense 51,090 50,441 Other assets, net 162,003 181,950 Total Assets $ 5,519,313 $ 5,492,519 Liabilities and Equity Liabilities: Mortgage notes payable, net $ 2,677,318 $ 2,693,167 Term loan, net 497,039 496,817 Unsecured line of credit 212,000 198,000 Accounts payable and other liabilities 185,126 175,148 Deferred membership revenue 204,312 197,743 Accrued interest payable 12,090 11,739 Rents and other customer payments received in advance and security deposits 130,704 122,318 Distributions payable 87,338 80,102 Total Liabilities 4,005,927 3,975,034 Equity: Preferred stock, $0.01 par value, 10,000,000 shares authorized as of March 31, 2023 and December 31, 2022; none issued and outstanding. — — Common stock, $0.01 par value, 600,000,000 shares authorized as of March 31, 2023 and December 31, 2022; 186,205,815 and 186,120,298 shares issued and outstanding as of March 31, 2023 and December 31, 2022, respectively. 1,916 1,916 Paid-in capital 1,629,866 1,628,618 Distributions in excess of accumulated earnings (205,203 ) (204,248 ) Accumulated other comprehensive income 15,141 19,119 Total Stockholders’ Equity 1,441,720 1,445,405 Non-controlling interests – Common OP Units 71,666 72,080 Total Equity 1,513,386 1,517,485 Total Liabilities and Equity $ 5,519,313 $ 5,492,519 Consolidated Statements of Income (In thousands, unaudited) Quarters Ended March 31, 2023 2022 Revenues: Rental income $ 296,451 $ 285,065 Annual membership subscriptions 15,970 15,157 Membership upgrade sales current period, gross 7,975 7,151 Membership upgrade sales upfront payments, deferred, net (4,470 ) (4,084 ) Other income 17,714 13,542 Gross revenues from home sales, brokered resales and ancillary services 32,133 39,695 Interest income 2,088 1,759 Income from other investments, net 2,091 1,904 Total revenues 369,952 360,189 Expenses: Property operating and maintenance 112,483 103,992 Real estate taxes 18,316 19,457 Sales and marketing, gross 5,517 4,914 Membership sales commissions, deferred, net (679 ) (583 ) Property management 19,464 17,871 Depreciation and amortization 50,502 49,394 Cost of home sales, brokered resales and ancillary services 23,141 30,684 Home selling expenses and ancillary operating expenses 6,924 6,481 General and administrative (1) 11,661 12,072 Casualty-related charges/(recoveries), net (2) — — Other expenses (1) 1,468 1,048 Early debt retirement — 516 Interest and related amortization 32,588 27,464 Total expenses 281,385 273,310 Loss on sale of real estate and impairment, net (2,632 ) — Income before equity in income of unconsolidated joint ventures 85,935 86,879 Equity in income of unconsolidated joint ventures 524 171 Consolidated net income 86,459 87,050 Income allocated to non-controlling interests – Common OP Units (4,088 ) (4,144 ) Net income available for Common Stockholders $ 82,371 $ 82,906 ______________________ 1. Prior period amounts have been reclassified to conform to the current period presentation. 2. Casualty-related charges/(recoveries), net includes debris removal and cleanup costs related to Hurricane Ian of $8.5 million and insurance recovery revenue of $8.5 million for the quarter ended March 31, 2023. Non-GAAP Financial Measures This document contains certain non-GAAP measures used by management that we believe are helpful to understand our business. We believe investors should review these non-GAAP measures along with GAAP net income and cash flows from operating activities, investing activities and financing activities, when evaluating an equity REIT’s operating performance. Our definitions and calculations of these non-GAAP financial and operating measures and other terms may differ from the definitions and methodologies used by other REITs and, accordingly, may not be comparable. These non-GAAP financial and operating measures do not represent cash generated from operating activities in accordance with GAAP, nor do they represent cash available to pay distributions and should not be considered as an alternative to net income, determined in accordance with GAAP, as an indication of our financial performance, or to cash flows from operating activities, determined in accordance with GAAP, as a measure of our liquidity, nor are they indicative of funds available to fund our cash needs, including our ability to make cash distributions. For definitions and reconciliations of non-GAAP measures to our financial statements as prepared under GAAP, refer to both Reconciliation of Net Income to Non-GAAP Financial Measures on page 6 and Non-GAAP Financial Measures Definitions and Reconciliations on pages 16-18. Selected Non-GAAP Financial Measures (In millions, except per share data, unaudited) Quarter Ended March 31, 2023 Income from property operations, excluding deferrals and property management - 2023 Core (1) $ 195.7 Income from property operations, excluding deferrals and property management - Non-Core (1) 6.1 Property management and general and administrative (31.1 ) Other income and expenses (excluding transaction/pursuit costs) 6.6 Interest and related amortization (32.6 ) Gain on unconsolidated joint ventures (0.4 ) Normalized FFO available for Common Stock and OP Unit holders (2) $ 144.3 Transaction/pursuit costs (0.1 ) Lease termination expenses (0.1 ) FFO available for Common Stock and OP Unit holders (2) $ 144.1 FFO per Common Share and OP Unit - Fully Diluted $ 0.74 Normalized FFO per Common Share and OP Unit - Fully Diluted $ 0.74 Normalized FFO available for Common Stock and OP Unit holders (2) $ 144.3 Non-revenue producing improvements to real estate (18.1 ) FAD for Common Stock and OP Unit holders (2) $ 126.2 Weighted average Common Shares and OP Units - Fully Diluted 195.4 ______________________ 1. See pages 8-9 for details of the Core Income from Property Operations, excluding deferrals and property management. See page 10 for details of the Non-Core Income from Property Operations, excluding deferrals and property management. 2. See page 6 for a reconciliation of Net income available for Common Stockholders to FFO available for Common Stock and OP Unit holders, Normalized FFO available for Common Stock and OP Unit holders and FAD for Common Stock and OP Unit holders. Reconciliation of Net Income to Non-GAAP Financial Measures (In thousands, except per share data, unaudited) Quarters Ended March 31, 2023 2022 Net income available for Common Stockholders $ 82,371 $ 82,906 Income allocated to non-controlling interests – Common OP Units. 4,088 4,144 Membership upgrade sales upfront payments, deferred, net. 4,470 4,084 Membership sales commissions, deferred, net. (679 ) (583 ) Depreciation and amortization. 50,502 49,394 Depreciation on unconsolidated joint ventures. 1,135 941 Gain on unconsolidated joint ventures. (416 ) — Loss on sale of real estate and impairment, net. 2,632 — FFO available for Common Stock and OP Unit holders 144,103 140,886 Early debt retirement. — 516 Transaction/pursuit costs. 116 — Lease termination expenses. 90 — Normalized FFO available for Common Stock and OP Unit holders 144,309 141,402 Non-revenue producing improvements to real estate. (18,112 ) (16,337 ) FAD for Common Stock and OP Unit holders $ 126,197 $ 125,065 Net income available per Common Share - Basic $ 0.44 $ 0.45 Net income available per Common Share - Fully Diluted (1). $ 0.44 $ 0.45 FFO per Common Share and OP Unit - Basic $ 0.74 $ 0.72 FFO per Common Share and OP Unit - Fully Diluted $ 0.74 $ 0.72 Normalized FFO per Common Share and OP Unit - Basic $ 0.74 $ 0.73 Normalized FFO per Common Share and OP Unit - Fully Diluted $ 0.74 $ 0.72 Weighted average Common Shares outstanding - Basic. 185,900 185,690 Weighted average Common Shares and OP Units outstanding - Basic. 195,162 194,991 Weighted average Common Shares and OP Units outstanding - Fully Diluted. 195,369 195,246 ______________________ 1. Net income per fully diluted Common Share is calculated before Income allocated to non-controlling interest - Common OP Units. Consolidated Income from Property Operations (1) (In millions, except home site and occupancy figures, unaudited) Quarters Ended March 31, 2023 2022 MH base rental income (2) $ 164.6 $ 157.3 Rental home income (2) 3.9 4.0 RV and marina base rental income (2) 111.6 108.8 Annual membership subscriptions 16.0 15.2 Membership upgrade sales current period, gross 8.0 7.2 Utility and other income (2)(3) 35.2 29.9 Property operating revenues 339.3 322.4 Property operating, maintenance and real estate taxes (2) 132.0 124.9 Sales and marketing, gross 5.5 4.9 Property operating expenses 137.5 129.8 Income from property operations, excluding deferrals and property management (1) $ 201.8 $ 192.6 Manufactured home site figures and occupancy averages: Total sites 72,717 73,463 Occupied sites 68,847 69,646 Occupancy % 94.7 % 94.8 % Monthly base rent per site $ 797 $ 753 RV and marina base rental income: Annual $ 69.4 $ 64.4 Seasonal 28.0 26.6 Transient 14.2 17.8 Total RV and marina base rental income $ 111.6 $ 108.8 ______________________ 1. Excludes property management and the GAAP deferral of membership upgrade sales upfront payments and membership sales commissions, net. 2. MH base rental income, Rental home income, RV and marina base rental income and Utility income, net of bad debt expense, are presented in Rental income in the Consolidated Statements of Income on page 3. Bad debt expense is presented in Property operating, maintenance and real estate taxes in this table. 3. Includes approximately $4.0 million of business interruption income from Hurricane Ian during the quarter ended March 31, 2023. Core Income from Property Operations (1) (In millions, except home site and occupancy figures, unaudited) Quarters Ended March 31, 2023 2022 Change (2) MH base rental income $ 164.4 $ 154.4 6.5 % Rental home income 3.9 4.0 (2.4 )% RV and marina base rental income 108.4 102.7 5.5 % Annual membership subscriptions 15.8 15.1 4.7 % Membership upgrade sales current period, gross 8.0 7.0 13.7 % Utility and other income 29.4 27.0 9.4 % Property operating revenues 329.9 310.2 6.4 % Utility expense 38.3 34.2 11.8 % Payroll 28.0 25.6 9.2 % Repair & Maintenance 21.7 19.2 12.9 % Insurance and other (3) 23.0 23.0 — % Real estate taxes 17.7 18.0 (1.8 )% Sales and marketing, gross 5.5 4.9 13.3 % Property operating expenses 134.2 124.9 7.4 % Income from property operations, excluding deferrals and property management (1) $ 195.7 $ 185.3 5.7 % Occupied sites (4) 68,801 68,617 _____________________ 1. Excludes property management and the GAAP deferral of membership upgrades sales upfront payments and membership sales commissions, net. 2. Calculations prepared using actual results without rounding. 3. Includes bad debt expense for the periods presented. 4. Occupied sites are presented as of the end of the period. Occupied sites have decreased by 79 from 68,880 at December 31, 2022. Core Income from Property Operations (continued) (In millions, except home site and occupancy figures, unaudited) Quarters Ended March 31, 2023 2022 Core manufactured home site figures and occupancy averages: Total sites 72,456 72,479 Occupied sites 68,790 68,876 Occupancy % 94.9 % 95.0 % Monthly base rent per site $ 797 $ 747 Quarters Ended March 31, 2023 2022 Change (1) Core RV and marina base rental income: Annual (2) $ 67.1 $ 61.8 8.4 % Seasonal 27.4 24.5 11.9 % Transient 13.9 16.4 (14.9 )% Total Seasonal and Transient $ 41.3 $ 40.9 1.1 % Total RV and marina base rental income $ 108.4 $ 102.7 5.5 % Quarters Ended March 31, 2023 2022 Change (1) Core utility information: Income $ 17.6 $ 15.6 12.4 % Expense 38.3 34.2 11.8 % Expense, net $ 20.7 $ 18.6 11.3 % Utility Recovery Rate (3) 45.8 % 45.6 % _____________________ 1. Calculations prepared using actual results without rounding. 2. Core Annual marina base rental income represents approximately 99% of the total Core marina base rental income for all periods presented. 3. Calculated by dividing the utility income by utility expense. Non-Core Income from Property Operations (1) (In millions, unaudited) Quarter Ended March 31, 2023 MH base rental income $ 0.1 RV and marina base rental income 3.2 Annual membership subscriptions 0.2 Utility and other income 5.9 Property operating revenues 9.4 Property operating expenses (2) 3.3 Income from property operations, excluding deferrals and property management (1) $ 6.1 ______________________ 1. Excludes property management and the GAAP deferral of membership upgrade sales upfront payments and membership sales commissions, net. 2. Includes bad debt expense for the periods presented. Income from Rental Home Operations (In millions, except occupied rentals, unaudited) Quarters Ended March 31, 2023 2022 Manufactured homes: Rental operations revenues (1) $ 10.3 $ 11.3 Rental home operations expense (2) 1.0 1.4 Income from rental home operations 9.3 9.9 Depreciation on rental homes (3) 2.7 2.5 Income from rental operations, net of depreciation $ 6.6 $ 7.4 Occupied rentals: (4) New 2,389 2,908 Used 313 402 Total occupied rental sites 2,702 3,310 As of March 31, 2023 As of March 31, 2022 Cost basis in rental homes: (5) Gross Net of Depreciation Gross Net of Depreciation New $ 252.2 $ 209.7 $ 226.9 $ 192.8 Used 14.1 8.1 15.0 9.8 Total rental homes $ 266.3 $ 217.8 $ 241.9 $ 202.6 ______________________ 1. For the quarters ended March 31, 2023 and 2022, approximately $6.4 million and $7.4 million, respectively, of the rental operations revenue is included in the MH base rental income in the Core Income from Property Operations on pages 8-9. The remainder of the rental operations revenue is included in Rental home income for the quarters ended March 31, 2023 and 2022 in the Core Income from Property Operations on pages 8-9. 2. Rental home operations expense is included in Property operating, maintenance and real estate taxes in the Consolidated Income from Property Operations on page 7. Rental home operations expense is included in Insurance and other in the Core Income from Property Operations on pages 8-9. 3. Depreciation on rental homes in our Core portfolio is presented in Depreciation and amortization in the Consolidated Statements of Income on page 3. 4. Occupied rentals as of the end of the period in our Core portfolio. Included in occupied rentals as of March 31, 2022 were 210 homes rented through ECHO Financing LLC ("ECHO joint venture"). On December 22, 2022, we completed the purchase of all homes held by the ECHO joint venture. 5. Includes both occupied and unoccupied rental homes in our Core portfolio. New home cost basis does not include the costs associated with our ECHO joint venture for 2022. Total Sites and Home Sales (In thousands, except sites and home sale volumes, unaudited) Summary of Total Sites as of March 31, 2023 Sites (1) MH sites 72,700 RV sites: Annual 34,900 Seasonal 12,500 Transient 15,000 Marina slips 6,900 Membership (2) 25,800 Joint Ventures (3) 3,600 Total 171,400 Home Sales - Select Data Quarters Ended March 31, 2023 2022 Total New Home Sales Volume (4) 176 261 New Home Sales Gross Revenues (4) $ 18,314 $ 25,530 Total Used Home Sales Volume 102 72 Used Home Sales Gross Revenues $ 1,175 $ 998 Brokered Home Resales Volume 134 188 Brokered Home Resales Gross Revenues $ 675 $ 611 ______________________ 1. MH sites are generally leased on an annual basis to residents who own or lease factory-built homes, including manufactured homes. Annual RV and marina sites are leased on an annual basis to customers who generally have an RV, factory-built cottage, boat or other unit placed on the site, including those Northern properties that are open for the summer season. Seasonal RV and marina sites are leased to customers generally for one to six months. Transient RV and marina sites are leased to customers on a short-term basis. 2. Sites primarily utilized by approximately 127,700 members. Includes approximately 6,300 sites rented on an annual basis. 3. Joint ventures have approximately 2,000 annual sites and 1,600 transient sites. 4. For 2022, total new home sales volume includes 22 home sales from our ECHO joint venture. New home sales gross revenues does not include the revenues associated with the ECHO joint venture. Memberships - Select Data (Unaudited) Years Ended December 31, 2019 2020 2021 2022 Q1 2023 Member Count (1) 115,680 116,169 125,149 128,439 127,707 Thousand Trails Camping Pass (TTC) Origination 41,484 44,129 50,523 51,415 10,231 TTC Sales 19,267 20,587 23,923 23,237 4,456 RV Dealer TTC Activations 22,217 23,542 26,600 28,178 5,775 Number of annuals (2) 5,938 5,986 6,320 6,390 6,274 Number of upgrade sales (3) 2,919 3,373 4,863 4,068 882 (In thousands, unaudited) Annual membership subscriptions $ 51,015 $ 53,085 $ 58,251 $ 63,215 $ 15,970 RV base rental income from annuals $ 19,634 $ 20,761 $ 23,127 $ 25,945 $ 6,687 RV base rental income from seasonals/transients $ 20,181 $ 18,126 $ 25,562 $ 24,316 $ 2,730 Membership upgrade sales current period, gross $ 19,111 $ 21,739 $ 36,270 $ 34,661 $ 7,975 Utility and other income $ 2,422 $ 2,426 $ 2,735 $ 2,626 $ 459 ______________________ 1. Members have entered into annual subscriptions with us that entitle them to use certain properties on a continuous basis for up to 21 days. 2. Members who rent a specific site for an entire year in connection with their membership subscriptions. 3. Existing members who have upgraded memberships are eligible for enhanced benefits, including but not limited to longer stays, the ability to make earlier reservations, potential discounts on rental units, and potential access to additional properties. Upgrades require a non-refundable upfront payment. Market Capitalization (In millions, except share and OP Unit data, unaudited) Capital Structure as of March 31, 2023 Total Common Shares/Units % of Total Common Shares/Units Total % of Total % of Total Market Capitalization Secured Debt $ 2,702 79.1 % Unsecured Debt 712 20.9 % Total Debt (1) $ 3,414 100.0 % 20.6 % Common Shares 186,205,815 95.3 % OP Units 9,240,069 4.7 % Total Common Shares and OP Units 195,445,884 100.0 % Common Stock price at March 31, 2023 $ 67.13 Fair Value of Common Shares and OP Units $ 13,120 100.0 % Total Equity $ 13,120 100.0 % 79.4 % Total Market Capitalization $ 16,534 100.0 % ______________________ 1. Excludes deferred financing costs of approximately $27.3 million. Debt Maturity Schedule Debt Maturity Schedule as of March 31, 2023 (In thousands, unaudited) Year Outstanding Debt Weighted Average Interest Rate % of Total Debt Weighted Average Years to Maturity Secured Debt 2023 $ 91,550 4.90 % 2.68 % 0.27 2024 9,944 5.49 % 0.29 % 1.20 2025 92,517 3.45 % 2.71 % 2.04 2026 — — % — % — 2027 — — % — % — 2028 205,798 4.19 % 6.03 % 5.47 2029 39,114 4.10 % 1.15 % 6.26 2030 275,385 2.69 % 8.07 % 7.02 2031 257,325 2.46 % 7.54 % 8.16 2032 202,000 2.47 % 5.92 % 9.48 Thereafter 1,527,901 3.93 % 44.76 % 14.42 Total $ 2,701,534 3.71 % 79.14 % 10.9 Unsecured Term Loans 2023 $ — — % — % — 2024 — — % — % — 2025 — — % — % — 2026 300,000 1.80 % 8.79 % 3.09 2027 200,000 5.82 % 5.86 % 3.87 Thereafter — — % — % — Total $ 500,000 3.43 % 14.65 % 3.4 Total Secured and Unsecured $ 3,201,534 3.57 % 93.79 % 9.8 Line of Credit Borrowing(1) 212,000 5.77 % 6.21 % — Note Premiums and Unamortized loan costs (27,179 ) Total Debt, Net $ 3,386,355 3.83 %(2) 100 % 1. Following the interest rate swap executed in April 2023, our floating interest rate exposure is limited to line of credit borrowing. 2. Reflects effective interest rate for the quarter ended March 31, 2023, including interest associated with the line of credit and amortization of note premiums and deferred financing costs. Non-GAAP Financial Measures Definitions and Reconciliations FUNDS FROM OPERATIONS (FFO). We define FFO as net income, computed in accordance with GAAP, excluding gains or losses from sales of properties, depreciation and amortization related to real estate, impairment charges and adjustments to reflect our share of FFO of unconsolidated joint ventures. Adjustments for unconsolidated joint ventures are calculated to reflect FFO on the same basis. We compute FFO in accordance with our interpretation of standards established by the National Association of Real Estate Investment Trusts (“NAREIT”), which may not be comparable to FFO reported by other REITs that do not define the term in accordance with the current NAREIT definition or that interpret the current NAREIT definition differently than we do. We receive non-refundable upfront payments from membership upgrade contracts. In accordance with GAAP, the non-refundable upfront payments and related commissions are deferred and amortized over the estimated membership upgrade contract term. Although the NAREIT definition of FFO does not address the treatment of non-refundable upfront payments, we believe that it is appropriate to adjust for the impact of the deferral activity in our calculation of FFO. We believe FFO, as defined by the Board of Governors of NAREIT, is generally a measure of performance for an equity REIT. While FFO is a relevant and widely used measure of operating performance for equity REITs, it does not represent cash flow from operations or net income as defined by GAAP, and it should not be considered as an alternative to these indicators in evaluating liquidity or operating performance. NORMALIZED FUNDS FROM OPERATIONS (NORMALIZED FFO). We define Normalized FFO as FFO excluding non-operating income and expense items, such as gains and losses from early debt extinguishment, including prepayment penalties and defeasance costs, transaction/pursuit costs, and other miscellaneous non-comparable items. Normalized FFO presented herein is not necessarily comparable to Normalized FFO presented by other real estate companies due to the fact that not all real estate companies use the same methodology for computing this amount. FUNDS AVAILABLE FOR DISTRIBUTION (FAD). We define FAD as Normalized FFO less non-revenue producing capital expenditures. We believe that FFO, Normalized FFO and FAD are helpful to investors as supplemental measures of the performance of an equity REIT. We believe that by excluding the effect of gains or losses from sales of properties, depreciation and amortization related to real estate and impairment charges, which are based on historical costs and may be of limited relevance in evaluating current performance, FFO can facilitate comparisons of operating performance between periods and among other equity REITs. We further believe that Normalized FFO provides useful information to investors, analysts and our management because it allows them to compare our operating performance to the operating performance of other real estate companies and between periods on a consistent basis without having to account for differences not related to our normal operations. For example, we believe that excluding the early extinguishment of debt and other miscellaneous non-comparable items from FFO allows investors, analysts and our management to assess the sustainability of operating performance in future periods because these costs do not affect the future operations of the properties. In some cases, we provide information about identified non-cash components of FFO and Normalized FFO because it allows investors, analysts and our management to assess the impact of those items. INCOME FROM PROPERTY OPERATIONS, EXCLUDING DEFERRALS AND PROPERTY MANAGEMENT. We define Income from property operations, excluding deferrals and property management as rental income, membership subscriptions and upgrade sales, utility and other income less property and rental home operating and maintenance expenses, real estate taxes, sales and marketing expenses, excluding property management expenses and the impact of the GAAP deferrals of membership upgrade sales upfront payments and membership sales commissions, net. For comparative purposes, we present bad debt expense within Property operating, maintenance and real estate taxes 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. The following table reconciles Net income available for Common Stockholders to Income from property operations: Quarters Ended March 31, (amounts in thousands) 2023 2022 Net income available for Common Stockholders... $ 82,371 $ 82,906 Income allocated to non-controlling interests – Common OP Units 4,088 4,144 Equity in income of unconsolidated joint ventures (524 ) (171 ) Income before equity in income of unconsolidated joint ventures... 85,935 86,879 Loss on sale of real estate and impairment, net 2,632 — Membership upgrade sales upfront payments, deferred, net 4,470 4,084 Gross revenues from home sales, brokered resales and ancillary services. (32,133 ) (39,695 ) Interest income (2,088 ) (1,759 ) Income from other investments, net (2,091 ) (1,904 ) Membership sales commissions, deferred, net (679 ) (583 ) Property management 19,464 17,871 Depreciation and amortization 50,502 49,394 Cost of home sales, brokered resales and ancillary services. 23,141 30,684 Home selling expenses and ancillary operating expenses 6,924 6,481 General and administrative (1) 11,661 12,072 Casualty-related charges/(recoveries), net (2) — — Other expenses (1) 1,468 1,048 Early debt retirement — 516 Interest and related amortization 32,588 27,464 Income from property operations, excluding deferrals and property management... 201,794 192,552 Membership upgrade sales upfront payments, and membership sales commissions, deferred, net (3,791 ) (3,501 ) Property management (19,464 ) (17,871 ) Income from property operations $ 178,539 $ 171,180 EARNINGS BEFORE INTEREST, TAX, DEPRECIATION AND AMORTIZATION FOR REAL ESTATE (EBITDAre) AND ADJUSTED EBITDAre. We define EBITDAre as net income or loss excluding interest income and expense, income taxes, depreciation and amortization, gains or losses from sales of properties, impairments charges, and adjustments to reflect our share of EBITDAre of unconsolidated joint ventures. We compute EBITDAre in accordance with our interpretation of the standards established by NAREIT, which may not be comparable to EBITDAre 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 non-refundable upfront payments from membership upgrade contracts. In accordance with GAAP, the non-refundable upfront payments and related commissions are deferred and amortized over the estimated customer life. Although the NAREIT definition of EBITDAre does not address the treatment of non-refundable upfront payments, we believe that it is appropriate to adjust for the impact of the deferral activity in our calculation of EBITDAre. We define Adjusted EBITDAre as EBITDAre excluding non-operating income and expense items, such as gains and losses from early debt extinguishment, including prepayment penalties and defeasance costs, transaction/pursuit costs and other miscellaneous non-comparable items. We believe that EBITDAre and Adjusted EBITDAre may be useful to an investor in evaluating our operating performance and liquidity because the measures are widely used to measure the operating performance of an equity REIT. _____________________ 1. Prior period amounts have been reclassified to conform to the current period presentation. 2. Casualty-related charges/(recoveries), net includes debris removal and cleanup costs related to Hurricane Ian of $8.5 million and insurance recovery revenue of $8.5 million for the quarter ended March 31, 2023. The following table reconciles Consolidated net income to EBITDAre and Adjusted EBITDAre: Quarters Ended March 31, (amounts in thousands) 2023 2022 Consolidated net income.. $ 86,459 $ 87,050 Interest income (2,088 ) (1,759 ) Membership upgrade sales upfront payments, deferred, net 4,470 4,084 Membership sales commissions, deferred, net (679 ) (583 ) Real estate depreciation and amortization 50,502 49,394 Other depreciation and amortization 1,351 827 Interest and related amortization 32,588 27,464 Loss on sale of real estate and impairment, net 2,632 — Adjustments to our share of EBITDAre of unconsolidated joint ventures 1,307 1,456 EBITDAre 176,542 167,933 Early debt retirement — 516 Transaction/pursuit costs 116 — Lease termination expenses 90 — Adjusted EBITDAre $ 176,748 $ 168,449 CORE. The Core properties include properties we owned and operated during all of 2022 and 2023. We believe Core is a measure that is useful to investors for annual comparison as it removes the fluctuations associated with acquisitions, dispositions and significant transactions or unique situations. NON-CORE. The Non-Core properties include properties that were not owned and operated during all of 2022 and 2023. This includes, but is not limited to, three RV communities and one membership RV community acquired during 2022 and one RV community acquired during 2023. The Non-Core properties also include Fish Tale Marina, Fort Myers Beach, Gulf Air, Palm Harbour Marina, Pine Island, and Ramblers Rest. 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. NON-REVENUE PRODUCING IMPROVEMENTS. Represents capital expenditures that do not directly result in increased revenue or expense savings and are primarily comprised of common area improvements, furniture and mechanical improvements. FIXED CHARGES. Fixed charges consist of interest expense, amortization of note premiums and debt issuance costs. View source version on businesswire.com: https://www.businesswire.com/news/home/20230416005090/en/Contacts Paul Seavey (800) 247-5279 Data & News supplied by www.cloudquote.io Stock quotes supplied by Barchart Quotes delayed at least 20 minutes. By accessing this page, you agree to the following Privacy Policy and Terms and Conditions.
ELS Reports First Quarter Results By: Equity LifeStyle Properties, Inc. via Business Wire April 17, 2023 at 16:16 PM EDT Continued Strong Performance Equity LifeStyle Properties, Inc. (NYSE: ELS) (referred to herein as “we,” “us,” and “our”) today announced results for the quarter ended March 31, 2023. All per share results are reported on a fully diluted basis unless otherwise noted. ($ in millions, except per share data) Financial Results Q1 2023 Q1 2022 $ Change Total Revenues $ 370.0 $ 360.2 $ 9.8 Net Income available for Common Stockholders $ 82.4 $ 82.9 $ (0.5 ) Net Income per Common Share - Fully Diluted $ 0.44 $ 0.45 $ (0.01 ) Non-GAAP Financial Measures Q1 2023 Q1 2022 $ Change Funds from Operations (“FFO”) per Common Share and OP Unit - Fully Diluted $ 0.74 $ 0.72 $ 0.02 Normalized Funds from Operations (“Normalized FFO”) per Common Share and OP Unit - Fully Diluted $ 0.74 $ 0.72 $ 0.02 Property operating revenues, excluding deferrals $ 339.3 $ 322.4 $ 16.9 Income from property operations, excluding deferrals and property management $ 201.8 $ 192.6 $ 9.2 Core Portfolio Performance Q1 2023 Q1 2022 % Change Core property operating revenues, excluding deferrals $ 329.9 $ 310.2 6.4 % Core Income from property operations, excluding deferrals and property management $ 195.7 $ 185.3 5.7 % Operations Update Normalized FFO for the quarter ended March 31, 2023 was $0.74 per share, representing a 2.0% increase compared to the same period in 2022, outperforming the midpoint of our guidance expectation by $0.8 million. MH Core MH base rental income for the quarter ended March 31, 2023 increased 6.5% compared to the same period in 2022, which reflects 6.6% growth from rate increases and a decline of 0.1% from occupancy losses. Core MH homeowners increased by 30 since December 31, 2022. We sold 176 new homes during the quarter ended March 31, 2023, with an average sales price of $104,000. RV and Marina Core RV and marina base rental income for the quarter ended March 31, 2023 increased 5.5% compared to the same period in 2022. Core RV and marina annual base rental income increased 8.4% for the quarter ended March 31, 2023, compared to the same period in 2022, which reflects 8.0% growth from rate increases and 0.4% from occupancy gains. Total nights camped during the quarter ended March 31, 2023 increased approximately 1.0% compared to the same period in 2022. Property Operating Expenses Core property operating expenses for the quarter ended March 31, 2023 increased 7.4% compared to the same period in 2022. See page 8 for details of the Core property operating expenses. Core repair and maintenance expenses for the quarter ended March 31, 2023 was $21.7 million, an increase of $2.5 million compared to the same period in 2022, which includes clean-up costs following weather events across the portfolio. We completed our property and casualty insurance renewal as of April 1, 2023, and our premiums increased for the policy year April 2023 through March 2024 by approximately $12.0 million, or 58%. This increase has an unfavorable impact of approximately $2.6 million on our full year 2023 guidance. Guidance (1)(2) ($ in millions, except per share data) 2023 Second Quarter Full Year Net Income/share $0.32 to $0.38 $1.64 to $1.74 FFO/share $0.62 to $0.68 $2.79 to $2.89 Normalized FFO/share $0.62 to $0.68 $2.79 to $2.89 2022 Actual 2023 Growth Rates Core Portfolio: Second Quarter Full Year Second Quarter Full Year MH base rental income $ 155.8 $ 626.0 6.4% to 7.0% 6.3% to 7.3% RV and marina base rental income (3) $ 94.6 $ 393.4 3.6% to 4.2% 5.4% to 6.4% Property operating revenues $ 305.8 $ 1,240.2 5.5% to 6.1% 6.0% to 7.0% Property operating expenses $ 136.1 $ 526.4 10.0% to 10.6% 7.9% to 8.9% Income from property operations, excluding deferrals and property management $ 169.7 $ 713.8 1.9% to 2.5% 4.6% to 5.6% Non-Core Portfolio: 2023 Full Year Income from property operations, excluding deferrals and property management $23.1 to $27.1 Other Guidance Assumptions: 2023 Full Year Property management and general administrative $115.9 to $121.9 Debt Assumptions: Weighted average debt outstanding $3,300 to $3,500 Interest and related amortization $127.6 to $133.6 (1) Second quarter and full year 2023 guidance ranges represent a range of possible outcomes and the midpoint reflects management's estimate of the most likely outcome. Actual growth rates and per share amounts could vary materially from growth rates and per share amounts presented above if any of our assumptions, including occupancy and rate changes, our ability to manage expenses in an inflationary environment, our ability to integrate and operate recent acquisitions and costs to restore property operations and potential revenue losses following storms or other unplanned events, is incorrect. See Forward-Looking Statements in this release for additional factors impacting our 2023 guidance assumptions. (2) Guidance assumptions do not include future capital events (financing transactions, acquisitions or dispositions) or the use of free cash flow. (3) Core RV and marina annual revenue represents approximately 70.6% and 67.0% of second quarter 2023 and full year 2023 RV and marina base rental income, respectively. Core RV and marina annual revenue second quarter 2023 growth rate range is 7.9% to 8.5% and the full year 2023 growth rate range is 7.9% to 8.9%. Investment Activity In March 2023, we completed the acquisition of Red Oak Shores Campground, a 223-site RV community located in Ocean View, New Jersey for a purchase price of $9.5 million. Balance Sheet Activity In April 2023, we entered into an interest rate swap agreement with a notional amount of $200.0 million, allowing us to trade one month term SOFR indexed variable rate debt for fixed rate debt. The interest rate swap fixes the variable interest rate on our $200.0 million unsecured term loan at 4.88% per annum. As a result, our exposure to floating rate debt as a percentage of total debt is approximately 7.5%. As of March 31, 2023, approximately 6% of our total secured and unsecured debt is maturing over the next three years. About Equity LifeStyle Properties We are a self-administered, self-managed real estate investment trust (“REIT”) with headquarters in Chicago. As of April 17, 2023, we own or have an interest in 450 properties in 35 states and British Columbia consisting of 171,477 sites. For additional information, please contact our Investor Relations Department at (800) 247-5279 or at investor_relations@equitylifestyle.com. Conference Call A live audio webcast of our conference call discussing these results will take place tomorrow, Tuesday, April 18, 2023, at 10:00 a.m. Central Time. Please visit the Investor Relations section at www.equitylifestyleproperties.com for the link. A replay of the webcast will be available for two weeks at this site. Forward-Looking Statements In addition to historical information, this press release includes certain “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. When used, words such as “anticipate,” “expect,” “believe,” “project,” “intend,” “may be” and “will be” and similar words or phrases, or the negative thereof, unless the context requires otherwise, are intended to identify forward-looking statements and may include without limitation, information regarding our expectations, goals or intentions regarding the future, and the expected effect of our acquisitions. Forward-looking statements, including our guidance concerning Net Income, FFO and Normalized FFO per share data, by their nature, involve estimates, projections, goals, forecasts and assumptions and are subject to risks and uncertainties that could cause actual results or outcomes to differ materially from those expressed in a forward-looking statement due to a number of factors, which include, but are not limited to the following: (i) the mix of site usage within the portfolio; (ii) yield management on our short-term resort and marina sites; (iii) scheduled or implemented rate increases on community, resort and marina sites; (iv) scheduled or implemented rate increases in annual payments under membership subscriptions; (v) occupancy changes; (vi) our ability to attract and retain membership customers; (vii) change in customer demand regarding travel and outdoor vacation destinations; (viii) our ability to manage expenses in an inflationary environment; (ix) our ability to integrate and operate recent acquisitions in accordance with our estimates; (x) our ability to execute expansion/development opportunities in the face of supply chain delays/shortages; (xi) completion of pending transactions in their entirety and on assumed schedule; (xii) our ability to attract and retain property employees, particularly seasonal employees; (xiii) ongoing legal matters and related fees; and (xiv) costs to restore property operations and potential revenue losses following storms or other unplanned events. For further information on these and other factors that could impact us and the statements contained herein, refer to our filings with the Securities and Exchange Commission, including the “Risk Factors” and “Forward-Looking Statements” sections in our most recent Annual Report on Form 10-K and any subsequent quarterly reports on Form 10-Q. These forward-looking statements are based on management's present expectations and beliefs about future events. As with any projection or forecast, these statements are inherently susceptible to uncertainty and changes in circumstances. We are under no obligation to, and expressly disclaim any obligation to, update or alter our forward-looking statements whether as a result of such changes, new information, subsequent events or otherwise. Supplemental Financial Information Financial Highlights (In millions, except Common Shares and OP Units outstanding and per share data, unaudited) As of and for the Quarters Ended Mar 31, 2023 Dec 31, 2022 Sep 30, 2022 Jun 30, 2022 Mar 31, 2022 Operating Information Total revenues $ 370.0 $ 340.6 $ 381.0 $ 365.3 $ 360.2 Net income $ 86.5 $ 76.7 $ 70.5 $ 64.6 $ 87.1 Net income available for Common Stockholders $ 82.4 $ 73.0 $ 67.2 $ 61.5 $ 82.9 Adjusted EBITDAre (1) $ 176.7 $ 159.2 $ 166.4 $ 153.3 $ 168.4 FFO available for Common Stock and OP Unit holders (1)(2) $ 144.1 $ 126.6 $ 134.4 $ 121.6 $ 140.9 Normalized FFO available for Common Stock and OP Unit holders (1)(2) $ 144.3 $ 128.1 $ 136.8 $ 125.3 $ 141.4 Funds Available for Distribution ("FAD") for Common Stock and OP Unit holders (1)(2) $ 126.2 $ 106.9 $ 115.4 $ 103.6 $ 125.1 Common Shares and OP Units Outstanding (In thousands) and Per Share Data Common Shares and OP Units, end of the period 195,446 195,386 195,380 195,373 195,303 Weighted average Common Shares and OP Units outstanding - Fully Diluted 195,369 195,281 195,269 195,227 195,246 Net income per Common Share - Fully Diluted (3) $ 0.44 $ 0.39 $ 0.36 $ 0.33 $ 0.45 FFO per Common Share and OP Unit - Fully Diluted $ 0.74 $ 0.65 $ 0.69 $ 0.62 $ 0.72 Normalized FFO per Common Share and OP Unit - Fully Diluted $ 0.74 $ 0.66 $ 0.70 $ 0.64 $ 0.72 Dividends per Common Share $ 0.4475 $ 0.4100 $ 0.4100 $ 0.4100 $ 0.4100 Balance Sheet Total assets $ 5,519 $ 5,493 $ 5,405 $ 5,400 $ 5,265 Total liabilities $ 4,006 $ 3,975 $ 3,886 $ 3,878 $ 3,734 Market Capitalization Total debt (4) $ 3,414 $ 3,416 $ 3,329 $ 3,298 $ 3,193 Total market capitalization (5) $ 16,534 $ 16,038 $ 15,607 $ 17,066 $ 18,130 Ratios Total debt / total market capitalization 20.6 % 21.3 % 21.3 % 19.3 % 17.6 % Total debt / Adjusted EBITDAre (6) 5.2 5.3 5.2 5.3 5.2 Interest coverage (7) 5.5 5.6 5.7 5.7 5.7 Fixed charges(8) 5.4 5.6 5.6 5.6 5.6 ______________________ 1. See Non-GAAP Financial Measures Definitions and Reconciliations at the end of the supplemental financial information for definitions of Adjusted EBITDAre, FFO, Normalized FFO and FAD and a reconciliation of Consolidated net income to Adjusted EBITDAre. 2. See page 6 for a reconciliation of Net income available for Common Stockholders to Non-GAAP financial measures FFO available for Common Stock and OP Unit holders, Normalized FFO available for Common Stock and OP Unit holders and FAD for Common Stock and OP Unit holders. 3. Net income per Common Share - Fully Diluted is calculated before Income allocated to non-controlling interest - Common OP Units. 4. Excludes deferred financing costs of approximately $27.3 million as of March 31, 2023. 5. See page 14 for the calculation of market capitalization as of March 31, 2023. 6. Calculated using trailing twelve months Adjusted EBITDAre. 7. Calculated by dividing trailing twelve months Adjusted EBITDAre by the interest expense incurred during the same period. 8. See Non-GAAP Financial Measures Definitions and Reconciliations at the end of the supplemental financial information for a definition of fixed charges. This ratio is calculated by dividing trailing twelve months Adjusted EBITDAre by the sum of fixed charges and preferred stock dividends, if any, during the same period. Consolidated Balance Sheets (In thousands, except share and per share data) March 31, 2023 December 31, 2022 (unaudited) Assets Investment in real estate: Land $ 2,086,725 $ 2,084,532 Land improvements 4,170,166 4,115,439 Buildings and other depreciable property 1,197,416 1,169,590 7,454,307 7,369,561 Accumulated depreciation (2,306,538 ) (2,258,540 ) Net investment in real estate 5,147,769 5,111,021 Cash and restricted cash 30,661 22,347 Notes receivable, net 46,655 45,356 Investment in unconsolidated joint ventures 81,135 81,404 Deferred commission expense 51,090 50,441 Other assets, net 162,003 181,950 Total Assets $ 5,519,313 $ 5,492,519 Liabilities and Equity Liabilities: Mortgage notes payable, net $ 2,677,318 $ 2,693,167 Term loan, net 497,039 496,817 Unsecured line of credit 212,000 198,000 Accounts payable and other liabilities 185,126 175,148 Deferred membership revenue 204,312 197,743 Accrued interest payable 12,090 11,739 Rents and other customer payments received in advance and security deposits 130,704 122,318 Distributions payable 87,338 80,102 Total Liabilities 4,005,927 3,975,034 Equity: Preferred stock, $0.01 par value, 10,000,000 shares authorized as of March 31, 2023 and December 31, 2022; none issued and outstanding. — — Common stock, $0.01 par value, 600,000,000 shares authorized as of March 31, 2023 and December 31, 2022; 186,205,815 and 186,120,298 shares issued and outstanding as of March 31, 2023 and December 31, 2022, respectively. 1,916 1,916 Paid-in capital 1,629,866 1,628,618 Distributions in excess of accumulated earnings (205,203 ) (204,248 ) Accumulated other comprehensive income 15,141 19,119 Total Stockholders’ Equity 1,441,720 1,445,405 Non-controlling interests – Common OP Units 71,666 72,080 Total Equity 1,513,386 1,517,485 Total Liabilities and Equity $ 5,519,313 $ 5,492,519 Consolidated Statements of Income (In thousands, unaudited) Quarters Ended March 31, 2023 2022 Revenues: Rental income $ 296,451 $ 285,065 Annual membership subscriptions 15,970 15,157 Membership upgrade sales current period, gross 7,975 7,151 Membership upgrade sales upfront payments, deferred, net (4,470 ) (4,084 ) Other income 17,714 13,542 Gross revenues from home sales, brokered resales and ancillary services 32,133 39,695 Interest income 2,088 1,759 Income from other investments, net 2,091 1,904 Total revenues 369,952 360,189 Expenses: Property operating and maintenance 112,483 103,992 Real estate taxes 18,316 19,457 Sales and marketing, gross 5,517 4,914 Membership sales commissions, deferred, net (679 ) (583 ) Property management 19,464 17,871 Depreciation and amortization 50,502 49,394 Cost of home sales, brokered resales and ancillary services 23,141 30,684 Home selling expenses and ancillary operating expenses 6,924 6,481 General and administrative (1) 11,661 12,072 Casualty-related charges/(recoveries), net (2) — — Other expenses (1) 1,468 1,048 Early debt retirement — 516 Interest and related amortization 32,588 27,464 Total expenses 281,385 273,310 Loss on sale of real estate and impairment, net (2,632 ) — Income before equity in income of unconsolidated joint ventures 85,935 86,879 Equity in income of unconsolidated joint ventures 524 171 Consolidated net income 86,459 87,050 Income allocated to non-controlling interests – Common OP Units (4,088 ) (4,144 ) Net income available for Common Stockholders $ 82,371 $ 82,906 ______________________ 1. Prior period amounts have been reclassified to conform to the current period presentation. 2. Casualty-related charges/(recoveries), net includes debris removal and cleanup costs related to Hurricane Ian of $8.5 million and insurance recovery revenue of $8.5 million for the quarter ended March 31, 2023. Non-GAAP Financial Measures This document contains certain non-GAAP measures used by management that we believe are helpful to understand our business. We believe investors should review these non-GAAP measures along with GAAP net income and cash flows from operating activities, investing activities and financing activities, when evaluating an equity REIT’s operating performance. Our definitions and calculations of these non-GAAP financial and operating measures and other terms may differ from the definitions and methodologies used by other REITs and, accordingly, may not be comparable. These non-GAAP financial and operating measures do not represent cash generated from operating activities in accordance with GAAP, nor do they represent cash available to pay distributions and should not be considered as an alternative to net income, determined in accordance with GAAP, as an indication of our financial performance, or to cash flows from operating activities, determined in accordance with GAAP, as a measure of our liquidity, nor are they indicative of funds available to fund our cash needs, including our ability to make cash distributions. For definitions and reconciliations of non-GAAP measures to our financial statements as prepared under GAAP, refer to both Reconciliation of Net Income to Non-GAAP Financial Measures on page 6 and Non-GAAP Financial Measures Definitions and Reconciliations on pages 16-18. Selected Non-GAAP Financial Measures (In millions, except per share data, unaudited) Quarter Ended March 31, 2023 Income from property operations, excluding deferrals and property management - 2023 Core (1) $ 195.7 Income from property operations, excluding deferrals and property management - Non-Core (1) 6.1 Property management and general and administrative (31.1 ) Other income and expenses (excluding transaction/pursuit costs) 6.6 Interest and related amortization (32.6 ) Gain on unconsolidated joint ventures (0.4 ) Normalized FFO available for Common Stock and OP Unit holders (2) $ 144.3 Transaction/pursuit costs (0.1 ) Lease termination expenses (0.1 ) FFO available for Common Stock and OP Unit holders (2) $ 144.1 FFO per Common Share and OP Unit - Fully Diluted $ 0.74 Normalized FFO per Common Share and OP Unit - Fully Diluted $ 0.74 Normalized FFO available for Common Stock and OP Unit holders (2) $ 144.3 Non-revenue producing improvements to real estate (18.1 ) FAD for Common Stock and OP Unit holders (2) $ 126.2 Weighted average Common Shares and OP Units - Fully Diluted 195.4 ______________________ 1. See pages 8-9 for details of the Core Income from Property Operations, excluding deferrals and property management. See page 10 for details of the Non-Core Income from Property Operations, excluding deferrals and property management. 2. See page 6 for a reconciliation of Net income available for Common Stockholders to FFO available for Common Stock and OP Unit holders, Normalized FFO available for Common Stock and OP Unit holders and FAD for Common Stock and OP Unit holders. Reconciliation of Net Income to Non-GAAP Financial Measures (In thousands, except per share data, unaudited) Quarters Ended March 31, 2023 2022 Net income available for Common Stockholders $ 82,371 $ 82,906 Income allocated to non-controlling interests – Common OP Units. 4,088 4,144 Membership upgrade sales upfront payments, deferred, net. 4,470 4,084 Membership sales commissions, deferred, net. (679 ) (583 ) Depreciation and amortization. 50,502 49,394 Depreciation on unconsolidated joint ventures. 1,135 941 Gain on unconsolidated joint ventures. (416 ) — Loss on sale of real estate and impairment, net. 2,632 — FFO available for Common Stock and OP Unit holders 144,103 140,886 Early debt retirement. — 516 Transaction/pursuit costs. 116 — Lease termination expenses. 90 — Normalized FFO available for Common Stock and OP Unit holders 144,309 141,402 Non-revenue producing improvements to real estate. (18,112 ) (16,337 ) FAD for Common Stock and OP Unit holders $ 126,197 $ 125,065 Net income available per Common Share - Basic $ 0.44 $ 0.45 Net income available per Common Share - Fully Diluted (1). $ 0.44 $ 0.45 FFO per Common Share and OP Unit - Basic $ 0.74 $ 0.72 FFO per Common Share and OP Unit - Fully Diluted $ 0.74 $ 0.72 Normalized FFO per Common Share and OP Unit - Basic $ 0.74 $ 0.73 Normalized FFO per Common Share and OP Unit - Fully Diluted $ 0.74 $ 0.72 Weighted average Common Shares outstanding - Basic. 185,900 185,690 Weighted average Common Shares and OP Units outstanding - Basic. 195,162 194,991 Weighted average Common Shares and OP Units outstanding - Fully Diluted. 195,369 195,246 ______________________ 1. Net income per fully diluted Common Share is calculated before Income allocated to non-controlling interest - Common OP Units. Consolidated Income from Property Operations (1) (In millions, except home site and occupancy figures, unaudited) Quarters Ended March 31, 2023 2022 MH base rental income (2) $ 164.6 $ 157.3 Rental home income (2) 3.9 4.0 RV and marina base rental income (2) 111.6 108.8 Annual membership subscriptions 16.0 15.2 Membership upgrade sales current period, gross 8.0 7.2 Utility and other income (2)(3) 35.2 29.9 Property operating revenues 339.3 322.4 Property operating, maintenance and real estate taxes (2) 132.0 124.9 Sales and marketing, gross 5.5 4.9 Property operating expenses 137.5 129.8 Income from property operations, excluding deferrals and property management (1) $ 201.8 $ 192.6 Manufactured home site figures and occupancy averages: Total sites 72,717 73,463 Occupied sites 68,847 69,646 Occupancy % 94.7 % 94.8 % Monthly base rent per site $ 797 $ 753 RV and marina base rental income: Annual $ 69.4 $ 64.4 Seasonal 28.0 26.6 Transient 14.2 17.8 Total RV and marina base rental income $ 111.6 $ 108.8 ______________________ 1. Excludes property management and the GAAP deferral of membership upgrade sales upfront payments and membership sales commissions, net. 2. MH base rental income, Rental home income, RV and marina base rental income and Utility income, net of bad debt expense, are presented in Rental income in the Consolidated Statements of Income on page 3. Bad debt expense is presented in Property operating, maintenance and real estate taxes in this table. 3. Includes approximately $4.0 million of business interruption income from Hurricane Ian during the quarter ended March 31, 2023. Core Income from Property Operations (1) (In millions, except home site and occupancy figures, unaudited) Quarters Ended March 31, 2023 2022 Change (2) MH base rental income $ 164.4 $ 154.4 6.5 % Rental home income 3.9 4.0 (2.4 )% RV and marina base rental income 108.4 102.7 5.5 % Annual membership subscriptions 15.8 15.1 4.7 % Membership upgrade sales current period, gross 8.0 7.0 13.7 % Utility and other income 29.4 27.0 9.4 % Property operating revenues 329.9 310.2 6.4 % Utility expense 38.3 34.2 11.8 % Payroll 28.0 25.6 9.2 % Repair & Maintenance 21.7 19.2 12.9 % Insurance and other (3) 23.0 23.0 — % Real estate taxes 17.7 18.0 (1.8 )% Sales and marketing, gross 5.5 4.9 13.3 % Property operating expenses 134.2 124.9 7.4 % Income from property operations, excluding deferrals and property management (1) $ 195.7 $ 185.3 5.7 % Occupied sites (4) 68,801 68,617 _____________________ 1. Excludes property management and the GAAP deferral of membership upgrades sales upfront payments and membership sales commissions, net. 2. Calculations prepared using actual results without rounding. 3. Includes bad debt expense for the periods presented. 4. Occupied sites are presented as of the end of the period. Occupied sites have decreased by 79 from 68,880 at December 31, 2022. Core Income from Property Operations (continued) (In millions, except home site and occupancy figures, unaudited) Quarters Ended March 31, 2023 2022 Core manufactured home site figures and occupancy averages: Total sites 72,456 72,479 Occupied sites 68,790 68,876 Occupancy % 94.9 % 95.0 % Monthly base rent per site $ 797 $ 747 Quarters Ended March 31, 2023 2022 Change (1) Core RV and marina base rental income: Annual (2) $ 67.1 $ 61.8 8.4 % Seasonal 27.4 24.5 11.9 % Transient 13.9 16.4 (14.9 )% Total Seasonal and Transient $ 41.3 $ 40.9 1.1 % Total RV and marina base rental income $ 108.4 $ 102.7 5.5 % Quarters Ended March 31, 2023 2022 Change (1) Core utility information: Income $ 17.6 $ 15.6 12.4 % Expense 38.3 34.2 11.8 % Expense, net $ 20.7 $ 18.6 11.3 % Utility Recovery Rate (3) 45.8 % 45.6 % _____________________ 1. Calculations prepared using actual results without rounding. 2. Core Annual marina base rental income represents approximately 99% of the total Core marina base rental income for all periods presented. 3. Calculated by dividing the utility income by utility expense. Non-Core Income from Property Operations (1) (In millions, unaudited) Quarter Ended March 31, 2023 MH base rental income $ 0.1 RV and marina base rental income 3.2 Annual membership subscriptions 0.2 Utility and other income 5.9 Property operating revenues 9.4 Property operating expenses (2) 3.3 Income from property operations, excluding deferrals and property management (1) $ 6.1 ______________________ 1. Excludes property management and the GAAP deferral of membership upgrade sales upfront payments and membership sales commissions, net. 2. Includes bad debt expense for the periods presented. Income from Rental Home Operations (In millions, except occupied rentals, unaudited) Quarters Ended March 31, 2023 2022 Manufactured homes: Rental operations revenues (1) $ 10.3 $ 11.3 Rental home operations expense (2) 1.0 1.4 Income from rental home operations 9.3 9.9 Depreciation on rental homes (3) 2.7 2.5 Income from rental operations, net of depreciation $ 6.6 $ 7.4 Occupied rentals: (4) New 2,389 2,908 Used 313 402 Total occupied rental sites 2,702 3,310 As of March 31, 2023 As of March 31, 2022 Cost basis in rental homes: (5) Gross Net of Depreciation Gross Net of Depreciation New $ 252.2 $ 209.7 $ 226.9 $ 192.8 Used 14.1 8.1 15.0 9.8 Total rental homes $ 266.3 $ 217.8 $ 241.9 $ 202.6 ______________________ 1. For the quarters ended March 31, 2023 and 2022, approximately $6.4 million and $7.4 million, respectively, of the rental operations revenue is included in the MH base rental income in the Core Income from Property Operations on pages 8-9. The remainder of the rental operations revenue is included in Rental home income for the quarters ended March 31, 2023 and 2022 in the Core Income from Property Operations on pages 8-9. 2. Rental home operations expense is included in Property operating, maintenance and real estate taxes in the Consolidated Income from Property Operations on page 7. Rental home operations expense is included in Insurance and other in the Core Income from Property Operations on pages 8-9. 3. Depreciation on rental homes in our Core portfolio is presented in Depreciation and amortization in the Consolidated Statements of Income on page 3. 4. Occupied rentals as of the end of the period in our Core portfolio. Included in occupied rentals as of March 31, 2022 were 210 homes rented through ECHO Financing LLC ("ECHO joint venture"). On December 22, 2022, we completed the purchase of all homes held by the ECHO joint venture. 5. Includes both occupied and unoccupied rental homes in our Core portfolio. New home cost basis does not include the costs associated with our ECHO joint venture for 2022. Total Sites and Home Sales (In thousands, except sites and home sale volumes, unaudited) Summary of Total Sites as of March 31, 2023 Sites (1) MH sites 72,700 RV sites: Annual 34,900 Seasonal 12,500 Transient 15,000 Marina slips 6,900 Membership (2) 25,800 Joint Ventures (3) 3,600 Total 171,400 Home Sales - Select Data Quarters Ended March 31, 2023 2022 Total New Home Sales Volume (4) 176 261 New Home Sales Gross Revenues (4) $ 18,314 $ 25,530 Total Used Home Sales Volume 102 72 Used Home Sales Gross Revenues $ 1,175 $ 998 Brokered Home Resales Volume 134 188 Brokered Home Resales Gross Revenues $ 675 $ 611 ______________________ 1. MH sites are generally leased on an annual basis to residents who own or lease factory-built homes, including manufactured homes. Annual RV and marina sites are leased on an annual basis to customers who generally have an RV, factory-built cottage, boat or other unit placed on the site, including those Northern properties that are open for the summer season. Seasonal RV and marina sites are leased to customers generally for one to six months. Transient RV and marina sites are leased to customers on a short-term basis. 2. Sites primarily utilized by approximately 127,700 members. Includes approximately 6,300 sites rented on an annual basis. 3. Joint ventures have approximately 2,000 annual sites and 1,600 transient sites. 4. For 2022, total new home sales volume includes 22 home sales from our ECHO joint venture. New home sales gross revenues does not include the revenues associated with the ECHO joint venture. Memberships - Select Data (Unaudited) Years Ended December 31, 2019 2020 2021 2022 Q1 2023 Member Count (1) 115,680 116,169 125,149 128,439 127,707 Thousand Trails Camping Pass (TTC) Origination 41,484 44,129 50,523 51,415 10,231 TTC Sales 19,267 20,587 23,923 23,237 4,456 RV Dealer TTC Activations 22,217 23,542 26,600 28,178 5,775 Number of annuals (2) 5,938 5,986 6,320 6,390 6,274 Number of upgrade sales (3) 2,919 3,373 4,863 4,068 882 (In thousands, unaudited) Annual membership subscriptions $ 51,015 $ 53,085 $ 58,251 $ 63,215 $ 15,970 RV base rental income from annuals $ 19,634 $ 20,761 $ 23,127 $ 25,945 $ 6,687 RV base rental income from seasonals/transients $ 20,181 $ 18,126 $ 25,562 $ 24,316 $ 2,730 Membership upgrade sales current period, gross $ 19,111 $ 21,739 $ 36,270 $ 34,661 $ 7,975 Utility and other income $ 2,422 $ 2,426 $ 2,735 $ 2,626 $ 459 ______________________ 1. Members have entered into annual subscriptions with us that entitle them to use certain properties on a continuous basis for up to 21 days. 2. Members who rent a specific site for an entire year in connection with their membership subscriptions. 3. Existing members who have upgraded memberships are eligible for enhanced benefits, including but not limited to longer stays, the ability to make earlier reservations, potential discounts on rental units, and potential access to additional properties. Upgrades require a non-refundable upfront payment. Market Capitalization (In millions, except share and OP Unit data, unaudited) Capital Structure as of March 31, 2023 Total Common Shares/Units % of Total Common Shares/Units Total % of Total % of Total Market Capitalization Secured Debt $ 2,702 79.1 % Unsecured Debt 712 20.9 % Total Debt (1) $ 3,414 100.0 % 20.6 % Common Shares 186,205,815 95.3 % OP Units 9,240,069 4.7 % Total Common Shares and OP Units 195,445,884 100.0 % Common Stock price at March 31, 2023 $ 67.13 Fair Value of Common Shares and OP Units $ 13,120 100.0 % Total Equity $ 13,120 100.0 % 79.4 % Total Market Capitalization $ 16,534 100.0 % ______________________ 1. Excludes deferred financing costs of approximately $27.3 million. Debt Maturity Schedule Debt Maturity Schedule as of March 31, 2023 (In thousands, unaudited) Year Outstanding Debt Weighted Average Interest Rate % of Total Debt Weighted Average Years to Maturity Secured Debt 2023 $ 91,550 4.90 % 2.68 % 0.27 2024 9,944 5.49 % 0.29 % 1.20 2025 92,517 3.45 % 2.71 % 2.04 2026 — — % — % — 2027 — — % — % — 2028 205,798 4.19 % 6.03 % 5.47 2029 39,114 4.10 % 1.15 % 6.26 2030 275,385 2.69 % 8.07 % 7.02 2031 257,325 2.46 % 7.54 % 8.16 2032 202,000 2.47 % 5.92 % 9.48 Thereafter 1,527,901 3.93 % 44.76 % 14.42 Total $ 2,701,534 3.71 % 79.14 % 10.9 Unsecured Term Loans 2023 $ — — % — % — 2024 — — % — % — 2025 — — % — % — 2026 300,000 1.80 % 8.79 % 3.09 2027 200,000 5.82 % 5.86 % 3.87 Thereafter — — % — % — Total $ 500,000 3.43 % 14.65 % 3.4 Total Secured and Unsecured $ 3,201,534 3.57 % 93.79 % 9.8 Line of Credit Borrowing(1) 212,000 5.77 % 6.21 % — Note Premiums and Unamortized loan costs (27,179 ) Total Debt, Net $ 3,386,355 3.83 %(2) 100 % 1. Following the interest rate swap executed in April 2023, our floating interest rate exposure is limited to line of credit borrowing. 2. Reflects effective interest rate for the quarter ended March 31, 2023, including interest associated with the line of credit and amortization of note premiums and deferred financing costs. Non-GAAP Financial Measures Definitions and Reconciliations FUNDS FROM OPERATIONS (FFO). We define FFO as net income, computed in accordance with GAAP, excluding gains or losses from sales of properties, depreciation and amortization related to real estate, impairment charges and adjustments to reflect our share of FFO of unconsolidated joint ventures. Adjustments for unconsolidated joint ventures are calculated to reflect FFO on the same basis. We compute FFO in accordance with our interpretation of standards established by the National Association of Real Estate Investment Trusts (“NAREIT”), which may not be comparable to FFO reported by other REITs that do not define the term in accordance with the current NAREIT definition or that interpret the current NAREIT definition differently than we do. We receive non-refundable upfront payments from membership upgrade contracts. In accordance with GAAP, the non-refundable upfront payments and related commissions are deferred and amortized over the estimated membership upgrade contract term. Although the NAREIT definition of FFO does not address the treatment of non-refundable upfront payments, we believe that it is appropriate to adjust for the impact of the deferral activity in our calculation of FFO. We believe FFO, as defined by the Board of Governors of NAREIT, is generally a measure of performance for an equity REIT. While FFO is a relevant and widely used measure of operating performance for equity REITs, it does not represent cash flow from operations or net income as defined by GAAP, and it should not be considered as an alternative to these indicators in evaluating liquidity or operating performance. NORMALIZED FUNDS FROM OPERATIONS (NORMALIZED FFO). We define Normalized FFO as FFO excluding non-operating income and expense items, such as gains and losses from early debt extinguishment, including prepayment penalties and defeasance costs, transaction/pursuit costs, and other miscellaneous non-comparable items. Normalized FFO presented herein is not necessarily comparable to Normalized FFO presented by other real estate companies due to the fact that not all real estate companies use the same methodology for computing this amount. FUNDS AVAILABLE FOR DISTRIBUTION (FAD). We define FAD as Normalized FFO less non-revenue producing capital expenditures. We believe that FFO, Normalized FFO and FAD are helpful to investors as supplemental measures of the performance of an equity REIT. We believe that by excluding the effect of gains or losses from sales of properties, depreciation and amortization related to real estate and impairment charges, which are based on historical costs and may be of limited relevance in evaluating current performance, FFO can facilitate comparisons of operating performance between periods and among other equity REITs. We further believe that Normalized FFO provides useful information to investors, analysts and our management because it allows them to compare our operating performance to the operating performance of other real estate companies and between periods on a consistent basis without having to account for differences not related to our normal operations. For example, we believe that excluding the early extinguishment of debt and other miscellaneous non-comparable items from FFO allows investors, analysts and our management to assess the sustainability of operating performance in future periods because these costs do not affect the future operations of the properties. In some cases, we provide information about identified non-cash components of FFO and Normalized FFO because it allows investors, analysts and our management to assess the impact of those items. INCOME FROM PROPERTY OPERATIONS, EXCLUDING DEFERRALS AND PROPERTY MANAGEMENT. We define Income from property operations, excluding deferrals and property management as rental income, membership subscriptions and upgrade sales, utility and other income less property and rental home operating and maintenance expenses, real estate taxes, sales and marketing expenses, excluding property management expenses and the impact of the GAAP deferrals of membership upgrade sales upfront payments and membership sales commissions, net. For comparative purposes, we present bad debt expense within Property operating, maintenance and real estate taxes 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. The following table reconciles Net income available for Common Stockholders to Income from property operations: Quarters Ended March 31, (amounts in thousands) 2023 2022 Net income available for Common Stockholders... $ 82,371 $ 82,906 Income allocated to non-controlling interests – Common OP Units 4,088 4,144 Equity in income of unconsolidated joint ventures (524 ) (171 ) Income before equity in income of unconsolidated joint ventures... 85,935 86,879 Loss on sale of real estate and impairment, net 2,632 — Membership upgrade sales upfront payments, deferred, net 4,470 4,084 Gross revenues from home sales, brokered resales and ancillary services. (32,133 ) (39,695 ) Interest income (2,088 ) (1,759 ) Income from other investments, net (2,091 ) (1,904 ) Membership sales commissions, deferred, net (679 ) (583 ) Property management 19,464 17,871 Depreciation and amortization 50,502 49,394 Cost of home sales, brokered resales and ancillary services. 23,141 30,684 Home selling expenses and ancillary operating expenses 6,924 6,481 General and administrative (1) 11,661 12,072 Casualty-related charges/(recoveries), net (2) — — Other expenses (1) 1,468 1,048 Early debt retirement — 516 Interest and related amortization 32,588 27,464 Income from property operations, excluding deferrals and property management... 201,794 192,552 Membership upgrade sales upfront payments, and membership sales commissions, deferred, net (3,791 ) (3,501 ) Property management (19,464 ) (17,871 ) Income from property operations $ 178,539 $ 171,180 EARNINGS BEFORE INTEREST, TAX, DEPRECIATION AND AMORTIZATION FOR REAL ESTATE (EBITDAre) AND ADJUSTED EBITDAre. We define EBITDAre as net income or loss excluding interest income and expense, income taxes, depreciation and amortization, gains or losses from sales of properties, impairments charges, and adjustments to reflect our share of EBITDAre of unconsolidated joint ventures. We compute EBITDAre in accordance with our interpretation of the standards established by NAREIT, which may not be comparable to EBITDAre 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 non-refundable upfront payments from membership upgrade contracts. In accordance with GAAP, the non-refundable upfront payments and related commissions are deferred and amortized over the estimated customer life. Although the NAREIT definition of EBITDAre does not address the treatment of non-refundable upfront payments, we believe that it is appropriate to adjust for the impact of the deferral activity in our calculation of EBITDAre. We define Adjusted EBITDAre as EBITDAre excluding non-operating income and expense items, such as gains and losses from early debt extinguishment, including prepayment penalties and defeasance costs, transaction/pursuit costs and other miscellaneous non-comparable items. We believe that EBITDAre and Adjusted EBITDAre may be useful to an investor in evaluating our operating performance and liquidity because the measures are widely used to measure the operating performance of an equity REIT. _____________________ 1. Prior period amounts have been reclassified to conform to the current period presentation. 2. Casualty-related charges/(recoveries), net includes debris removal and cleanup costs related to Hurricane Ian of $8.5 million and insurance recovery revenue of $8.5 million for the quarter ended March 31, 2023. The following table reconciles Consolidated net income to EBITDAre and Adjusted EBITDAre: Quarters Ended March 31, (amounts in thousands) 2023 2022 Consolidated net income.. $ 86,459 $ 87,050 Interest income (2,088 ) (1,759 ) Membership upgrade sales upfront payments, deferred, net 4,470 4,084 Membership sales commissions, deferred, net (679 ) (583 ) Real estate depreciation and amortization 50,502 49,394 Other depreciation and amortization 1,351 827 Interest and related amortization 32,588 27,464 Loss on sale of real estate and impairment, net 2,632 — Adjustments to our share of EBITDAre of unconsolidated joint ventures 1,307 1,456 EBITDAre 176,542 167,933 Early debt retirement — 516 Transaction/pursuit costs 116 — Lease termination expenses 90 — Adjusted EBITDAre $ 176,748 $ 168,449 CORE. The Core properties include properties we owned and operated during all of 2022 and 2023. We believe Core is a measure that is useful to investors for annual comparison as it removes the fluctuations associated with acquisitions, dispositions and significant transactions or unique situations. NON-CORE. The Non-Core properties include properties that were not owned and operated during all of 2022 and 2023. This includes, but is not limited to, three RV communities and one membership RV community acquired during 2022 and one RV community acquired during 2023. The Non-Core properties also include Fish Tale Marina, Fort Myers Beach, Gulf Air, Palm Harbour Marina, Pine Island, and Ramblers Rest. 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. NON-REVENUE PRODUCING IMPROVEMENTS. Represents capital expenditures that do not directly result in increased revenue or expense savings and are primarily comprised of common area improvements, furniture and mechanical improvements. FIXED CHARGES. Fixed charges consist of interest expense, amortization of note premiums and debt issuance costs. View source version on businesswire.com: https://www.businesswire.com/news/home/20230416005090/en/Contacts Paul Seavey (800) 247-5279
Equity LifeStyle Properties, Inc. (NYSE: ELS) (referred to herein as “we,” “us,” and “our”) today announced results for the quarter ended March 31, 2023. All per share results are reported on a fully diluted basis unless otherwise noted. ($ in millions, except per share data) Financial Results Q1 2023 Q1 2022 $ Change Total Revenues $ 370.0 $ 360.2 $ 9.8 Net Income available for Common Stockholders $ 82.4 $ 82.9 $ (0.5 ) Net Income per Common Share - Fully Diluted $ 0.44 $ 0.45 $ (0.01 ) Non-GAAP Financial Measures Q1 2023 Q1 2022 $ Change Funds from Operations (“FFO”) per Common Share and OP Unit - Fully Diluted $ 0.74 $ 0.72 $ 0.02 Normalized Funds from Operations (“Normalized FFO”) per Common Share and OP Unit - Fully Diluted $ 0.74 $ 0.72 $ 0.02 Property operating revenues, excluding deferrals $ 339.3 $ 322.4 $ 16.9 Income from property operations, excluding deferrals and property management $ 201.8 $ 192.6 $ 9.2 Core Portfolio Performance Q1 2023 Q1 2022 % Change Core property operating revenues, excluding deferrals $ 329.9 $ 310.2 6.4 % Core Income from property operations, excluding deferrals and property management $ 195.7 $ 185.3 5.7 % Operations Update Normalized FFO for the quarter ended March 31, 2023 was $0.74 per share, representing a 2.0% increase compared to the same period in 2022, outperforming the midpoint of our guidance expectation by $0.8 million. MH Core MH base rental income for the quarter ended March 31, 2023 increased 6.5% compared to the same period in 2022, which reflects 6.6% growth from rate increases and a decline of 0.1% from occupancy losses. Core MH homeowners increased by 30 since December 31, 2022. We sold 176 new homes during the quarter ended March 31, 2023, with an average sales price of $104,000. RV and Marina Core RV and marina base rental income for the quarter ended March 31, 2023 increased 5.5% compared to the same period in 2022. Core RV and marina annual base rental income increased 8.4% for the quarter ended March 31, 2023, compared to the same period in 2022, which reflects 8.0% growth from rate increases and 0.4% from occupancy gains. Total nights camped during the quarter ended March 31, 2023 increased approximately 1.0% compared to the same period in 2022. Property Operating Expenses Core property operating expenses for the quarter ended March 31, 2023 increased 7.4% compared to the same period in 2022. See page 8 for details of the Core property operating expenses. Core repair and maintenance expenses for the quarter ended March 31, 2023 was $21.7 million, an increase of $2.5 million compared to the same period in 2022, which includes clean-up costs following weather events across the portfolio. We completed our property and casualty insurance renewal as of April 1, 2023, and our premiums increased for the policy year April 2023 through March 2024 by approximately $12.0 million, or 58%. This increase has an unfavorable impact of approximately $2.6 million on our full year 2023 guidance. Guidance (1)(2) ($ in millions, except per share data) 2023 Second Quarter Full Year Net Income/share $0.32 to $0.38 $1.64 to $1.74 FFO/share $0.62 to $0.68 $2.79 to $2.89 Normalized FFO/share $0.62 to $0.68 $2.79 to $2.89 2022 Actual 2023 Growth Rates Core Portfolio: Second Quarter Full Year Second Quarter Full Year MH base rental income $ 155.8 $ 626.0 6.4% to 7.0% 6.3% to 7.3% RV and marina base rental income (3) $ 94.6 $ 393.4 3.6% to 4.2% 5.4% to 6.4% Property operating revenues $ 305.8 $ 1,240.2 5.5% to 6.1% 6.0% to 7.0% Property operating expenses $ 136.1 $ 526.4 10.0% to 10.6% 7.9% to 8.9% Income from property operations, excluding deferrals and property management $ 169.7 $ 713.8 1.9% to 2.5% 4.6% to 5.6% Non-Core Portfolio: 2023 Full Year Income from property operations, excluding deferrals and property management $23.1 to $27.1 Other Guidance Assumptions: 2023 Full Year Property management and general administrative $115.9 to $121.9 Debt Assumptions: Weighted average debt outstanding $3,300 to $3,500 Interest and related amortization $127.6 to $133.6 (1) Second quarter and full year 2023 guidance ranges represent a range of possible outcomes and the midpoint reflects management's estimate of the most likely outcome. Actual growth rates and per share amounts could vary materially from growth rates and per share amounts presented above if any of our assumptions, including occupancy and rate changes, our ability to manage expenses in an inflationary environment, our ability to integrate and operate recent acquisitions and costs to restore property operations and potential revenue losses following storms or other unplanned events, is incorrect. See Forward-Looking Statements in this release for additional factors impacting our 2023 guidance assumptions. (2) Guidance assumptions do not include future capital events (financing transactions, acquisitions or dispositions) or the use of free cash flow. (3) Core RV and marina annual revenue represents approximately 70.6% and 67.0% of second quarter 2023 and full year 2023 RV and marina base rental income, respectively. Core RV and marina annual revenue second quarter 2023 growth rate range is 7.9% to 8.5% and the full year 2023 growth rate range is 7.9% to 8.9%. Investment Activity In March 2023, we completed the acquisition of Red Oak Shores Campground, a 223-site RV community located in Ocean View, New Jersey for a purchase price of $9.5 million. Balance Sheet Activity In April 2023, we entered into an interest rate swap agreement with a notional amount of $200.0 million, allowing us to trade one month term SOFR indexed variable rate debt for fixed rate debt. The interest rate swap fixes the variable interest rate on our $200.0 million unsecured term loan at 4.88% per annum. As a result, our exposure to floating rate debt as a percentage of total debt is approximately 7.5%. As of March 31, 2023, approximately 6% of our total secured and unsecured debt is maturing over the next three years. About Equity LifeStyle Properties We are a self-administered, self-managed real estate investment trust (“REIT”) with headquarters in Chicago. As of April 17, 2023, we own or have an interest in 450 properties in 35 states and British Columbia consisting of 171,477 sites. For additional information, please contact our Investor Relations Department at (800) 247-5279 or at investor_relations@equitylifestyle.com. Conference Call A live audio webcast of our conference call discussing these results will take place tomorrow, Tuesday, April 18, 2023, at 10:00 a.m. Central Time. Please visit the Investor Relations section at www.equitylifestyleproperties.com for the link. A replay of the webcast will be available for two weeks at this site. Forward-Looking Statements In addition to historical information, this press release includes certain “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. When used, words such as “anticipate,” “expect,” “believe,” “project,” “intend,” “may be” and “will be” and similar words or phrases, or the negative thereof, unless the context requires otherwise, are intended to identify forward-looking statements and may include without limitation, information regarding our expectations, goals or intentions regarding the future, and the expected effect of our acquisitions. Forward-looking statements, including our guidance concerning Net Income, FFO and Normalized FFO per share data, by their nature, involve estimates, projections, goals, forecasts and assumptions and are subject to risks and uncertainties that could cause actual results or outcomes to differ materially from those expressed in a forward-looking statement due to a number of factors, which include, but are not limited to the following: (i) the mix of site usage within the portfolio; (ii) yield management on our short-term resort and marina sites; (iii) scheduled or implemented rate increases on community, resort and marina sites; (iv) scheduled or implemented rate increases in annual payments under membership subscriptions; (v) occupancy changes; (vi) our ability to attract and retain membership customers; (vii) change in customer demand regarding travel and outdoor vacation destinations; (viii) our ability to manage expenses in an inflationary environment; (ix) our ability to integrate and operate recent acquisitions in accordance with our estimates; (x) our ability to execute expansion/development opportunities in the face of supply chain delays/shortages; (xi) completion of pending transactions in their entirety and on assumed schedule; (xii) our ability to attract and retain property employees, particularly seasonal employees; (xiii) ongoing legal matters and related fees; and (xiv) costs to restore property operations and potential revenue losses following storms or other unplanned events. For further information on these and other factors that could impact us and the statements contained herein, refer to our filings with the Securities and Exchange Commission, including the “Risk Factors” and “Forward-Looking Statements” sections in our most recent Annual Report on Form 10-K and any subsequent quarterly reports on Form 10-Q. These forward-looking statements are based on management's present expectations and beliefs about future events. As with any projection or forecast, these statements are inherently susceptible to uncertainty and changes in circumstances. We are under no obligation to, and expressly disclaim any obligation to, update or alter our forward-looking statements whether as a result of such changes, new information, subsequent events or otherwise. Supplemental Financial Information Financial Highlights (In millions, except Common Shares and OP Units outstanding and per share data, unaudited) As of and for the Quarters Ended Mar 31, 2023 Dec 31, 2022 Sep 30, 2022 Jun 30, 2022 Mar 31, 2022 Operating Information Total revenues $ 370.0 $ 340.6 $ 381.0 $ 365.3 $ 360.2 Net income $ 86.5 $ 76.7 $ 70.5 $ 64.6 $ 87.1 Net income available for Common Stockholders $ 82.4 $ 73.0 $ 67.2 $ 61.5 $ 82.9 Adjusted EBITDAre (1) $ 176.7 $ 159.2 $ 166.4 $ 153.3 $ 168.4 FFO available for Common Stock and OP Unit holders (1)(2) $ 144.1 $ 126.6 $ 134.4 $ 121.6 $ 140.9 Normalized FFO available for Common Stock and OP Unit holders (1)(2) $ 144.3 $ 128.1 $ 136.8 $ 125.3 $ 141.4 Funds Available for Distribution ("FAD") for Common Stock and OP Unit holders (1)(2) $ 126.2 $ 106.9 $ 115.4 $ 103.6 $ 125.1 Common Shares and OP Units Outstanding (In thousands) and Per Share Data Common Shares and OP Units, end of the period 195,446 195,386 195,380 195,373 195,303 Weighted average Common Shares and OP Units outstanding - Fully Diluted 195,369 195,281 195,269 195,227 195,246 Net income per Common Share - Fully Diluted (3) $ 0.44 $ 0.39 $ 0.36 $ 0.33 $ 0.45 FFO per Common Share and OP Unit - Fully Diluted $ 0.74 $ 0.65 $ 0.69 $ 0.62 $ 0.72 Normalized FFO per Common Share and OP Unit - Fully Diluted $ 0.74 $ 0.66 $ 0.70 $ 0.64 $ 0.72 Dividends per Common Share $ 0.4475 $ 0.4100 $ 0.4100 $ 0.4100 $ 0.4100 Balance Sheet Total assets $ 5,519 $ 5,493 $ 5,405 $ 5,400 $ 5,265 Total liabilities $ 4,006 $ 3,975 $ 3,886 $ 3,878 $ 3,734 Market Capitalization Total debt (4) $ 3,414 $ 3,416 $ 3,329 $ 3,298 $ 3,193 Total market capitalization (5) $ 16,534 $ 16,038 $ 15,607 $ 17,066 $ 18,130 Ratios Total debt / total market capitalization 20.6 % 21.3 % 21.3 % 19.3 % 17.6 % Total debt / Adjusted EBITDAre (6) 5.2 5.3 5.2 5.3 5.2 Interest coverage (7) 5.5 5.6 5.7 5.7 5.7 Fixed charges(8) 5.4 5.6 5.6 5.6 5.6 ______________________ 1. See Non-GAAP Financial Measures Definitions and Reconciliations at the end of the supplemental financial information for definitions of Adjusted EBITDAre, FFO, Normalized FFO and FAD and a reconciliation of Consolidated net income to Adjusted EBITDAre. 2. See page 6 for a reconciliation of Net income available for Common Stockholders to Non-GAAP financial measures FFO available for Common Stock and OP Unit holders, Normalized FFO available for Common Stock and OP Unit holders and FAD for Common Stock and OP Unit holders. 3. Net income per Common Share - Fully Diluted is calculated before Income allocated to non-controlling interest - Common OP Units. 4. Excludes deferred financing costs of approximately $27.3 million as of March 31, 2023. 5. See page 14 for the calculation of market capitalization as of March 31, 2023. 6. Calculated using trailing twelve months Adjusted EBITDAre. 7. Calculated by dividing trailing twelve months Adjusted EBITDAre by the interest expense incurred during the same period. 8. See Non-GAAP Financial Measures Definitions and Reconciliations at the end of the supplemental financial information for a definition of fixed charges. This ratio is calculated by dividing trailing twelve months Adjusted EBITDAre by the sum of fixed charges and preferred stock dividends, if any, during the same period. Consolidated Balance Sheets (In thousands, except share and per share data) March 31, 2023 December 31, 2022 (unaudited) Assets Investment in real estate: Land $ 2,086,725 $ 2,084,532 Land improvements 4,170,166 4,115,439 Buildings and other depreciable property 1,197,416 1,169,590 7,454,307 7,369,561 Accumulated depreciation (2,306,538 ) (2,258,540 ) Net investment in real estate 5,147,769 5,111,021 Cash and restricted cash 30,661 22,347 Notes receivable, net 46,655 45,356 Investment in unconsolidated joint ventures 81,135 81,404 Deferred commission expense 51,090 50,441 Other assets, net 162,003 181,950 Total Assets $ 5,519,313 $ 5,492,519 Liabilities and Equity Liabilities: Mortgage notes payable, net $ 2,677,318 $ 2,693,167 Term loan, net 497,039 496,817 Unsecured line of credit 212,000 198,000 Accounts payable and other liabilities 185,126 175,148 Deferred membership revenue 204,312 197,743 Accrued interest payable 12,090 11,739 Rents and other customer payments received in advance and security deposits 130,704 122,318 Distributions payable 87,338 80,102 Total Liabilities 4,005,927 3,975,034 Equity: Preferred stock, $0.01 par value, 10,000,000 shares authorized as of March 31, 2023 and December 31, 2022; none issued and outstanding. — — Common stock, $0.01 par value, 600,000,000 shares authorized as of March 31, 2023 and December 31, 2022; 186,205,815 and 186,120,298 shares issued and outstanding as of March 31, 2023 and December 31, 2022, respectively. 1,916 1,916 Paid-in capital 1,629,866 1,628,618 Distributions in excess of accumulated earnings (205,203 ) (204,248 ) Accumulated other comprehensive income 15,141 19,119 Total Stockholders’ Equity 1,441,720 1,445,405 Non-controlling interests – Common OP Units 71,666 72,080 Total Equity 1,513,386 1,517,485 Total Liabilities and Equity $ 5,519,313 $ 5,492,519 Consolidated Statements of Income (In thousands, unaudited) Quarters Ended March 31, 2023 2022 Revenues: Rental income $ 296,451 $ 285,065 Annual membership subscriptions 15,970 15,157 Membership upgrade sales current period, gross 7,975 7,151 Membership upgrade sales upfront payments, deferred, net (4,470 ) (4,084 ) Other income 17,714 13,542 Gross revenues from home sales, brokered resales and ancillary services 32,133 39,695 Interest income 2,088 1,759 Income from other investments, net 2,091 1,904 Total revenues 369,952 360,189 Expenses: Property operating and maintenance 112,483 103,992 Real estate taxes 18,316 19,457 Sales and marketing, gross 5,517 4,914 Membership sales commissions, deferred, net (679 ) (583 ) Property management 19,464 17,871 Depreciation and amortization 50,502 49,394 Cost of home sales, brokered resales and ancillary services 23,141 30,684 Home selling expenses and ancillary operating expenses 6,924 6,481 General and administrative (1) 11,661 12,072 Casualty-related charges/(recoveries), net (2) — — Other expenses (1) 1,468 1,048 Early debt retirement — 516 Interest and related amortization 32,588 27,464 Total expenses 281,385 273,310 Loss on sale of real estate and impairment, net (2,632 ) — Income before equity in income of unconsolidated joint ventures 85,935 86,879 Equity in income of unconsolidated joint ventures 524 171 Consolidated net income 86,459 87,050 Income allocated to non-controlling interests – Common OP Units (4,088 ) (4,144 ) Net income available for Common Stockholders $ 82,371 $ 82,906 ______________________ 1. Prior period amounts have been reclassified to conform to the current period presentation. 2. Casualty-related charges/(recoveries), net includes debris removal and cleanup costs related to Hurricane Ian of $8.5 million and insurance recovery revenue of $8.5 million for the quarter ended March 31, 2023. Non-GAAP Financial Measures This document contains certain non-GAAP measures used by management that we believe are helpful to understand our business. We believe investors should review these non-GAAP measures along with GAAP net income and cash flows from operating activities, investing activities and financing activities, when evaluating an equity REIT’s operating performance. Our definitions and calculations of these non-GAAP financial and operating measures and other terms may differ from the definitions and methodologies used by other REITs and, accordingly, may not be comparable. These non-GAAP financial and operating measures do not represent cash generated from operating activities in accordance with GAAP, nor do they represent cash available to pay distributions and should not be considered as an alternative to net income, determined in accordance with GAAP, as an indication of our financial performance, or to cash flows from operating activities, determined in accordance with GAAP, as a measure of our liquidity, nor are they indicative of funds available to fund our cash needs, including our ability to make cash distributions. For definitions and reconciliations of non-GAAP measures to our financial statements as prepared under GAAP, refer to both Reconciliation of Net Income to Non-GAAP Financial Measures on page 6 and Non-GAAP Financial Measures Definitions and Reconciliations on pages 16-18. Selected Non-GAAP Financial Measures (In millions, except per share data, unaudited) Quarter Ended March 31, 2023 Income from property operations, excluding deferrals and property management - 2023 Core (1) $ 195.7 Income from property operations, excluding deferrals and property management - Non-Core (1) 6.1 Property management and general and administrative (31.1 ) Other income and expenses (excluding transaction/pursuit costs) 6.6 Interest and related amortization (32.6 ) Gain on unconsolidated joint ventures (0.4 ) Normalized FFO available for Common Stock and OP Unit holders (2) $ 144.3 Transaction/pursuit costs (0.1 ) Lease termination expenses (0.1 ) FFO available for Common Stock and OP Unit holders (2) $ 144.1 FFO per Common Share and OP Unit - Fully Diluted $ 0.74 Normalized FFO per Common Share and OP Unit - Fully Diluted $ 0.74 Normalized FFO available for Common Stock and OP Unit holders (2) $ 144.3 Non-revenue producing improvements to real estate (18.1 ) FAD for Common Stock and OP Unit holders (2) $ 126.2 Weighted average Common Shares and OP Units - Fully Diluted 195.4 ______________________ 1. See pages 8-9 for details of the Core Income from Property Operations, excluding deferrals and property management. See page 10 for details of the Non-Core Income from Property Operations, excluding deferrals and property management. 2. See page 6 for a reconciliation of Net income available for Common Stockholders to FFO available for Common Stock and OP Unit holders, Normalized FFO available for Common Stock and OP Unit holders and FAD for Common Stock and OP Unit holders. Reconciliation of Net Income to Non-GAAP Financial Measures (In thousands, except per share data, unaudited) Quarters Ended March 31, 2023 2022 Net income available for Common Stockholders $ 82,371 $ 82,906 Income allocated to non-controlling interests – Common OP Units. 4,088 4,144 Membership upgrade sales upfront payments, deferred, net. 4,470 4,084 Membership sales commissions, deferred, net. (679 ) (583 ) Depreciation and amortization. 50,502 49,394 Depreciation on unconsolidated joint ventures. 1,135 941 Gain on unconsolidated joint ventures. (416 ) — Loss on sale of real estate and impairment, net. 2,632 — FFO available for Common Stock and OP Unit holders 144,103 140,886 Early debt retirement. — 516 Transaction/pursuit costs. 116 — Lease termination expenses. 90 — Normalized FFO available for Common Stock and OP Unit holders 144,309 141,402 Non-revenue producing improvements to real estate. (18,112 ) (16,337 ) FAD for Common Stock and OP Unit holders $ 126,197 $ 125,065 Net income available per Common Share - Basic $ 0.44 $ 0.45 Net income available per Common Share - Fully Diluted (1). $ 0.44 $ 0.45 FFO per Common Share and OP Unit - Basic $ 0.74 $ 0.72 FFO per Common Share and OP Unit - Fully Diluted $ 0.74 $ 0.72 Normalized FFO per Common Share and OP Unit - Basic $ 0.74 $ 0.73 Normalized FFO per Common Share and OP Unit - Fully Diluted $ 0.74 $ 0.72 Weighted average Common Shares outstanding - Basic. 185,900 185,690 Weighted average Common Shares and OP Units outstanding - Basic. 195,162 194,991 Weighted average Common Shares and OP Units outstanding - Fully Diluted. 195,369 195,246 ______________________ 1. Net income per fully diluted Common Share is calculated before Income allocated to non-controlling interest - Common OP Units. Consolidated Income from Property Operations (1) (In millions, except home site and occupancy figures, unaudited) Quarters Ended March 31, 2023 2022 MH base rental income (2) $ 164.6 $ 157.3 Rental home income (2) 3.9 4.0 RV and marina base rental income (2) 111.6 108.8 Annual membership subscriptions 16.0 15.2 Membership upgrade sales current period, gross 8.0 7.2 Utility and other income (2)(3) 35.2 29.9 Property operating revenues 339.3 322.4 Property operating, maintenance and real estate taxes (2) 132.0 124.9 Sales and marketing, gross 5.5 4.9 Property operating expenses 137.5 129.8 Income from property operations, excluding deferrals and property management (1) $ 201.8 $ 192.6 Manufactured home site figures and occupancy averages: Total sites 72,717 73,463 Occupied sites 68,847 69,646 Occupancy % 94.7 % 94.8 % Monthly base rent per site $ 797 $ 753 RV and marina base rental income: Annual $ 69.4 $ 64.4 Seasonal 28.0 26.6 Transient 14.2 17.8 Total RV and marina base rental income $ 111.6 $ 108.8 ______________________ 1. Excludes property management and the GAAP deferral of membership upgrade sales upfront payments and membership sales commissions, net. 2. MH base rental income, Rental home income, RV and marina base rental income and Utility income, net of bad debt expense, are presented in Rental income in the Consolidated Statements of Income on page 3. Bad debt expense is presented in Property operating, maintenance and real estate taxes in this table. 3. Includes approximately $4.0 million of business interruption income from Hurricane Ian during the quarter ended March 31, 2023. Core Income from Property Operations (1) (In millions, except home site and occupancy figures, unaudited) Quarters Ended March 31, 2023 2022 Change (2) MH base rental income $ 164.4 $ 154.4 6.5 % Rental home income 3.9 4.0 (2.4 )% RV and marina base rental income 108.4 102.7 5.5 % Annual membership subscriptions 15.8 15.1 4.7 % Membership upgrade sales current period, gross 8.0 7.0 13.7 % Utility and other income 29.4 27.0 9.4 % Property operating revenues 329.9 310.2 6.4 % Utility expense 38.3 34.2 11.8 % Payroll 28.0 25.6 9.2 % Repair & Maintenance 21.7 19.2 12.9 % Insurance and other (3) 23.0 23.0 — % Real estate taxes 17.7 18.0 (1.8 )% Sales and marketing, gross 5.5 4.9 13.3 % Property operating expenses 134.2 124.9 7.4 % Income from property operations, excluding deferrals and property management (1) $ 195.7 $ 185.3 5.7 % Occupied sites (4) 68,801 68,617 _____________________ 1. Excludes property management and the GAAP deferral of membership upgrades sales upfront payments and membership sales commissions, net. 2. Calculations prepared using actual results without rounding. 3. Includes bad debt expense for the periods presented. 4. Occupied sites are presented as of the end of the period. Occupied sites have decreased by 79 from 68,880 at December 31, 2022. Core Income from Property Operations (continued) (In millions, except home site and occupancy figures, unaudited) Quarters Ended March 31, 2023 2022 Core manufactured home site figures and occupancy averages: Total sites 72,456 72,479 Occupied sites 68,790 68,876 Occupancy % 94.9 % 95.0 % Monthly base rent per site $ 797 $ 747 Quarters Ended March 31, 2023 2022 Change (1) Core RV and marina base rental income: Annual (2) $ 67.1 $ 61.8 8.4 % Seasonal 27.4 24.5 11.9 % Transient 13.9 16.4 (14.9 )% Total Seasonal and Transient $ 41.3 $ 40.9 1.1 % Total RV and marina base rental income $ 108.4 $ 102.7 5.5 % Quarters Ended March 31, 2023 2022 Change (1) Core utility information: Income $ 17.6 $ 15.6 12.4 % Expense 38.3 34.2 11.8 % Expense, net $ 20.7 $ 18.6 11.3 % Utility Recovery Rate (3) 45.8 % 45.6 % _____________________ 1. Calculations prepared using actual results without rounding. 2. Core Annual marina base rental income represents approximately 99% of the total Core marina base rental income for all periods presented. 3. Calculated by dividing the utility income by utility expense. Non-Core Income from Property Operations (1) (In millions, unaudited) Quarter Ended March 31, 2023 MH base rental income $ 0.1 RV and marina base rental income 3.2 Annual membership subscriptions 0.2 Utility and other income 5.9 Property operating revenues 9.4 Property operating expenses (2) 3.3 Income from property operations, excluding deferrals and property management (1) $ 6.1 ______________________ 1. Excludes property management and the GAAP deferral of membership upgrade sales upfront payments and membership sales commissions, net. 2. Includes bad debt expense for the periods presented. Income from Rental Home Operations (In millions, except occupied rentals, unaudited) Quarters Ended March 31, 2023 2022 Manufactured homes: Rental operations revenues (1) $ 10.3 $ 11.3 Rental home operations expense (2) 1.0 1.4 Income from rental home operations 9.3 9.9 Depreciation on rental homes (3) 2.7 2.5 Income from rental operations, net of depreciation $ 6.6 $ 7.4 Occupied rentals: (4) New 2,389 2,908 Used 313 402 Total occupied rental sites 2,702 3,310 As of March 31, 2023 As of March 31, 2022 Cost basis in rental homes: (5) Gross Net of Depreciation Gross Net of Depreciation New $ 252.2 $ 209.7 $ 226.9 $ 192.8 Used 14.1 8.1 15.0 9.8 Total rental homes $ 266.3 $ 217.8 $ 241.9 $ 202.6 ______________________ 1. For the quarters ended March 31, 2023 and 2022, approximately $6.4 million and $7.4 million, respectively, of the rental operations revenue is included in the MH base rental income in the Core Income from Property Operations on pages 8-9. The remainder of the rental operations revenue is included in Rental home income for the quarters ended March 31, 2023 and 2022 in the Core Income from Property Operations on pages 8-9. 2. Rental home operations expense is included in Property operating, maintenance and real estate taxes in the Consolidated Income from Property Operations on page 7. Rental home operations expense is included in Insurance and other in the Core Income from Property Operations on pages 8-9. 3. Depreciation on rental homes in our Core portfolio is presented in Depreciation and amortization in the Consolidated Statements of Income on page 3. 4. Occupied rentals as of the end of the period in our Core portfolio. Included in occupied rentals as of March 31, 2022 were 210 homes rented through ECHO Financing LLC ("ECHO joint venture"). On December 22, 2022, we completed the purchase of all homes held by the ECHO joint venture. 5. Includes both occupied and unoccupied rental homes in our Core portfolio. New home cost basis does not include the costs associated with our ECHO joint venture for 2022. Total Sites and Home Sales (In thousands, except sites and home sale volumes, unaudited) Summary of Total Sites as of March 31, 2023 Sites (1) MH sites 72,700 RV sites: Annual 34,900 Seasonal 12,500 Transient 15,000 Marina slips 6,900 Membership (2) 25,800 Joint Ventures (3) 3,600 Total 171,400 Home Sales - Select Data Quarters Ended March 31, 2023 2022 Total New Home Sales Volume (4) 176 261 New Home Sales Gross Revenues (4) $ 18,314 $ 25,530 Total Used Home Sales Volume 102 72 Used Home Sales Gross Revenues $ 1,175 $ 998 Brokered Home Resales Volume 134 188 Brokered Home Resales Gross Revenues $ 675 $ 611 ______________________ 1. MH sites are generally leased on an annual basis to residents who own or lease factory-built homes, including manufactured homes. Annual RV and marina sites are leased on an annual basis to customers who generally have an RV, factory-built cottage, boat or other unit placed on the site, including those Northern properties that are open for the summer season. Seasonal RV and marina sites are leased to customers generally for one to six months. Transient RV and marina sites are leased to customers on a short-term basis. 2. Sites primarily utilized by approximately 127,700 members. Includes approximately 6,300 sites rented on an annual basis. 3. Joint ventures have approximately 2,000 annual sites and 1,600 transient sites. 4. For 2022, total new home sales volume includes 22 home sales from our ECHO joint venture. New home sales gross revenues does not include the revenues associated with the ECHO joint venture. Memberships - Select Data (Unaudited) Years Ended December 31, 2019 2020 2021 2022 Q1 2023 Member Count (1) 115,680 116,169 125,149 128,439 127,707 Thousand Trails Camping Pass (TTC) Origination 41,484 44,129 50,523 51,415 10,231 TTC Sales 19,267 20,587 23,923 23,237 4,456 RV Dealer TTC Activations 22,217 23,542 26,600 28,178 5,775 Number of annuals (2) 5,938 5,986 6,320 6,390 6,274 Number of upgrade sales (3) 2,919 3,373 4,863 4,068 882 (In thousands, unaudited) Annual membership subscriptions $ 51,015 $ 53,085 $ 58,251 $ 63,215 $ 15,970 RV base rental income from annuals $ 19,634 $ 20,761 $ 23,127 $ 25,945 $ 6,687 RV base rental income from seasonals/transients $ 20,181 $ 18,126 $ 25,562 $ 24,316 $ 2,730 Membership upgrade sales current period, gross $ 19,111 $ 21,739 $ 36,270 $ 34,661 $ 7,975 Utility and other income $ 2,422 $ 2,426 $ 2,735 $ 2,626 $ 459 ______________________ 1. Members have entered into annual subscriptions with us that entitle them to use certain properties on a continuous basis for up to 21 days. 2. Members who rent a specific site for an entire year in connection with their membership subscriptions. 3. Existing members who have upgraded memberships are eligible for enhanced benefits, including but not limited to longer stays, the ability to make earlier reservations, potential discounts on rental units, and potential access to additional properties. Upgrades require a non-refundable upfront payment. Market Capitalization (In millions, except share and OP Unit data, unaudited) Capital Structure as of March 31, 2023 Total Common Shares/Units % of Total Common Shares/Units Total % of Total % of Total Market Capitalization Secured Debt $ 2,702 79.1 % Unsecured Debt 712 20.9 % Total Debt (1) $ 3,414 100.0 % 20.6 % Common Shares 186,205,815 95.3 % OP Units 9,240,069 4.7 % Total Common Shares and OP Units 195,445,884 100.0 % Common Stock price at March 31, 2023 $ 67.13 Fair Value of Common Shares and OP Units $ 13,120 100.0 % Total Equity $ 13,120 100.0 % 79.4 % Total Market Capitalization $ 16,534 100.0 % ______________________ 1. Excludes deferred financing costs of approximately $27.3 million. Debt Maturity Schedule Debt Maturity Schedule as of March 31, 2023 (In thousands, unaudited) Year Outstanding Debt Weighted Average Interest Rate % of Total Debt Weighted Average Years to Maturity Secured Debt 2023 $ 91,550 4.90 % 2.68 % 0.27 2024 9,944 5.49 % 0.29 % 1.20 2025 92,517 3.45 % 2.71 % 2.04 2026 — — % — % — 2027 — — % — % — 2028 205,798 4.19 % 6.03 % 5.47 2029 39,114 4.10 % 1.15 % 6.26 2030 275,385 2.69 % 8.07 % 7.02 2031 257,325 2.46 % 7.54 % 8.16 2032 202,000 2.47 % 5.92 % 9.48 Thereafter 1,527,901 3.93 % 44.76 % 14.42 Total $ 2,701,534 3.71 % 79.14 % 10.9 Unsecured Term Loans 2023 $ — — % — % — 2024 — — % — % — 2025 — — % — % — 2026 300,000 1.80 % 8.79 % 3.09 2027 200,000 5.82 % 5.86 % 3.87 Thereafter — — % — % — Total $ 500,000 3.43 % 14.65 % 3.4 Total Secured and Unsecured $ 3,201,534 3.57 % 93.79 % 9.8 Line of Credit Borrowing(1) 212,000 5.77 % 6.21 % — Note Premiums and Unamortized loan costs (27,179 ) Total Debt, Net $ 3,386,355 3.83 %(2) 100 % 1. Following the interest rate swap executed in April 2023, our floating interest rate exposure is limited to line of credit borrowing. 2. Reflects effective interest rate for the quarter ended March 31, 2023, including interest associated with the line of credit and amortization of note premiums and deferred financing costs. Non-GAAP Financial Measures Definitions and Reconciliations FUNDS FROM OPERATIONS (FFO). We define FFO as net income, computed in accordance with GAAP, excluding gains or losses from sales of properties, depreciation and amortization related to real estate, impairment charges and adjustments to reflect our share of FFO of unconsolidated joint ventures. Adjustments for unconsolidated joint ventures are calculated to reflect FFO on the same basis. We compute FFO in accordance with our interpretation of standards established by the National Association of Real Estate Investment Trusts (“NAREIT”), which may not be comparable to FFO reported by other REITs that do not define the term in accordance with the current NAREIT definition or that interpret the current NAREIT definition differently than we do. We receive non-refundable upfront payments from membership upgrade contracts. In accordance with GAAP, the non-refundable upfront payments and related commissions are deferred and amortized over the estimated membership upgrade contract term. Although the NAREIT definition of FFO does not address the treatment of non-refundable upfront payments, we believe that it is appropriate to adjust for the impact of the deferral activity in our calculation of FFO. We believe FFO, as defined by the Board of Governors of NAREIT, is generally a measure of performance for an equity REIT. While FFO is a relevant and widely used measure of operating performance for equity REITs, it does not represent cash flow from operations or net income as defined by GAAP, and it should not be considered as an alternative to these indicators in evaluating liquidity or operating performance. NORMALIZED FUNDS FROM OPERATIONS (NORMALIZED FFO). We define Normalized FFO as FFO excluding non-operating income and expense items, such as gains and losses from early debt extinguishment, including prepayment penalties and defeasance costs, transaction/pursuit costs, and other miscellaneous non-comparable items. Normalized FFO presented herein is not necessarily comparable to Normalized FFO presented by other real estate companies due to the fact that not all real estate companies use the same methodology for computing this amount. FUNDS AVAILABLE FOR DISTRIBUTION (FAD). We define FAD as Normalized FFO less non-revenue producing capital expenditures. We believe that FFO, Normalized FFO and FAD are helpful to investors as supplemental measures of the performance of an equity REIT. We believe that by excluding the effect of gains or losses from sales of properties, depreciation and amortization related to real estate and impairment charges, which are based on historical costs and may be of limited relevance in evaluating current performance, FFO can facilitate comparisons of operating performance between periods and among other equity REITs. We further believe that Normalized FFO provides useful information to investors, analysts and our management because it allows them to compare our operating performance to the operating performance of other real estate companies and between periods on a consistent basis without having to account for differences not related to our normal operations. For example, we believe that excluding the early extinguishment of debt and other miscellaneous non-comparable items from FFO allows investors, analysts and our management to assess the sustainability of operating performance in future periods because these costs do not affect the future operations of the properties. In some cases, we provide information about identified non-cash components of FFO and Normalized FFO because it allows investors, analysts and our management to assess the impact of those items. INCOME FROM PROPERTY OPERATIONS, EXCLUDING DEFERRALS AND PROPERTY MANAGEMENT. We define Income from property operations, excluding deferrals and property management as rental income, membership subscriptions and upgrade sales, utility and other income less property and rental home operating and maintenance expenses, real estate taxes, sales and marketing expenses, excluding property management expenses and the impact of the GAAP deferrals of membership upgrade sales upfront payments and membership sales commissions, net. For comparative purposes, we present bad debt expense within Property operating, maintenance and real estate taxes 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. The following table reconciles Net income available for Common Stockholders to Income from property operations: Quarters Ended March 31, (amounts in thousands) 2023 2022 Net income available for Common Stockholders... $ 82,371 $ 82,906 Income allocated to non-controlling interests – Common OP Units 4,088 4,144 Equity in income of unconsolidated joint ventures (524 ) (171 ) Income before equity in income of unconsolidated joint ventures... 85,935 86,879 Loss on sale of real estate and impairment, net 2,632 — Membership upgrade sales upfront payments, deferred, net 4,470 4,084 Gross revenues from home sales, brokered resales and ancillary services. (32,133 ) (39,695 ) Interest income (2,088 ) (1,759 ) Income from other investments, net (2,091 ) (1,904 ) Membership sales commissions, deferred, net (679 ) (583 ) Property management 19,464 17,871 Depreciation and amortization 50,502 49,394 Cost of home sales, brokered resales and ancillary services. 23,141 30,684 Home selling expenses and ancillary operating expenses 6,924 6,481 General and administrative (1) 11,661 12,072 Casualty-related charges/(recoveries), net (2) — — Other expenses (1) 1,468 1,048 Early debt retirement — 516 Interest and related amortization 32,588 27,464 Income from property operations, excluding deferrals and property management... 201,794 192,552 Membership upgrade sales upfront payments, and membership sales commissions, deferred, net (3,791 ) (3,501 ) Property management (19,464 ) (17,871 ) Income from property operations $ 178,539 $ 171,180 EARNINGS BEFORE INTEREST, TAX, DEPRECIATION AND AMORTIZATION FOR REAL ESTATE (EBITDAre) AND ADJUSTED EBITDAre. We define EBITDAre as net income or loss excluding interest income and expense, income taxes, depreciation and amortization, gains or losses from sales of properties, impairments charges, and adjustments to reflect our share of EBITDAre of unconsolidated joint ventures. We compute EBITDAre in accordance with our interpretation of the standards established by NAREIT, which may not be comparable to EBITDAre 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 non-refundable upfront payments from membership upgrade contracts. In accordance with GAAP, the non-refundable upfront payments and related commissions are deferred and amortized over the estimated customer life. Although the NAREIT definition of EBITDAre does not address the treatment of non-refundable upfront payments, we believe that it is appropriate to adjust for the impact of the deferral activity in our calculation of EBITDAre. We define Adjusted EBITDAre as EBITDAre excluding non-operating income and expense items, such as gains and losses from early debt extinguishment, including prepayment penalties and defeasance costs, transaction/pursuit costs and other miscellaneous non-comparable items. We believe that EBITDAre and Adjusted EBITDAre may be useful to an investor in evaluating our operating performance and liquidity because the measures are widely used to measure the operating performance of an equity REIT. _____________________ 1. Prior period amounts have been reclassified to conform to the current period presentation. 2. Casualty-related charges/(recoveries), net includes debris removal and cleanup costs related to Hurricane Ian of $8.5 million and insurance recovery revenue of $8.5 million for the quarter ended March 31, 2023. The following table reconciles Consolidated net income to EBITDAre and Adjusted EBITDAre: Quarters Ended March 31, (amounts in thousands) 2023 2022 Consolidated net income.. $ 86,459 $ 87,050 Interest income (2,088 ) (1,759 ) Membership upgrade sales upfront payments, deferred, net 4,470 4,084 Membership sales commissions, deferred, net (679 ) (583 ) Real estate depreciation and amortization 50,502 49,394 Other depreciation and amortization 1,351 827 Interest and related amortization 32,588 27,464 Loss on sale of real estate and impairment, net 2,632 — Adjustments to our share of EBITDAre of unconsolidated joint ventures 1,307 1,456 EBITDAre 176,542 167,933 Early debt retirement — 516 Transaction/pursuit costs 116 — Lease termination expenses 90 — Adjusted EBITDAre $ 176,748 $ 168,449 CORE. The Core properties include properties we owned and operated during all of 2022 and 2023. We believe Core is a measure that is useful to investors for annual comparison as it removes the fluctuations associated with acquisitions, dispositions and significant transactions or unique situations. NON-CORE. The Non-Core properties include properties that were not owned and operated during all of 2022 and 2023. This includes, but is not limited to, three RV communities and one membership RV community acquired during 2022 and one RV community acquired during 2023. The Non-Core properties also include Fish Tale Marina, Fort Myers Beach, Gulf Air, Palm Harbour Marina, Pine Island, and Ramblers Rest. 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. NON-REVENUE PRODUCING IMPROVEMENTS. Represents capital expenditures that do not directly result in increased revenue or expense savings and are primarily comprised of common area improvements, furniture and mechanical improvements. FIXED CHARGES. Fixed charges consist of interest expense, amortization of note premiums and debt issuance costs. View source version on businesswire.com: https://www.businesswire.com/news/home/20230416005090/en/