What changed in this filing

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Item 2. Management’s Discussion and Analysis

2021-07-27 compared with 2021-04-27 · 276 added, 116 removed, 386 unchanged (50% of the section changed)

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We are a fully integrated owner of lifestyle-oriented properties (“Properties”) consisting of property operations and home sales and rental operations primarily within manufactured home (“MH”) and recreational vehicle (“RV”) communities.

As of March 31, 2021, we owned or had an ownership interest in a portfolio of 434 Properties located throughout the United States and Canada containing 165,507 individual developed areas ("Sites").

As of June 30, 2021, we owned or had an ownership interest in a portfolio of 435 Properties located throughout the United States and Canada containing 166,188 individual developed areas (“Sites”).

These Properties are located in 33 states and British Columbia, with more than 110 Properties with lake, river or ocean frontage and more than 120 Properties within 10 miles of the coastal United States.

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

Total Sites as of March 31, 2021

Total Sites as of June 30, 2021

MH Sites 73,300

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We have implemented and may continue to implement Centers for Disease Control and Prevention (“CDC”) and local public health department guidelines and protocols for social distancing and enhanced community and office cleaning procedures.

All properties continue to be open subject to seasons of operation.

Our property offices are open to residents and customers, and we are observing social distancing along with other CDC recommended protocols.

Amenities are available to our residents and customers subject to COVID-19 related state and local guidelines.

During the first quarter of 2021, seasonal RV base rental income decreased approximately $7.2 million compared to the first quarter of 2020, primarily due to decreases in the South and West regions, as seasonal customers, in particular Canadian customers, were impacted by travel restrictions resulting from COVID-19.

Within the RV platform, we were successful in offsetting some of the decrease in our seasonal RV business with growth in our transient business during the first quarter of 2021 compared to the first quarter of 2020.

During the first quarter of 2021, we continued to see positive demand as COVID-19 cases declined and vaccine availability increased.

We continue to closely monitor cash collections as a leading indicator of the performance of our business.

As of April 15, 2021, the total collection rates from our MH and RV annual customers for the quarter ended March 31, 2021 were 98% and 99%, respectively.

We continue to follow various state and local guidelines related to rent collections and eviction proceedings.

All properties continue to be open subject to seasons of operation and state and local guidelines.

Our property offices are open to residents and customers, and we are complying with CDC recommended protocols.

We continue to see strong demand in our RV business as our customers seek safe vacation and leisure activities and value the opportunity to spend time outdoors.

During the second quarter of 2021, Core Transient RV rental income increased $14.0 million, or 180% compared to the second quarter of 2020.

Transient RV rental income for the second quarter of 2020 was negatively impacted by temporary site closures as a result of COVID-19.

As compared to the second quarter of 2019, Transient RV rental income for the second quarter of 2021 increased $7.3 million or 50%.

RV and marina rental income in our Core Portfolio for the six months ended June 30, 2021 was 10.7% higher than the six months ended June 30, 2020.

Annual and transient rental income for the six months ended June 30, 2021 increased 5.8% and 83.0%, respectively, while seasonal rental income decreased 21.7%.

The decrease in seasonal rental income was primarily due to lower seasonal RV rental income in the South and West regions during the first quarter of 2021, as seasonal customers, in particular Canadian customers, were impacted by travel restrictions resulting from COVID-19.

Management's Discussion and Analysis (continued)

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Results Overview

For the quarter ended March 31, 2021, net income available for Common Stockholders decreased $1.7 million, or $0.01 per fully diluted Common Share, to $65.2 million, or $0.36 per fully diluted Common Share, compared to $66.9 million, or $0.37 per fully diluted Common Share, for the same period in 2020.

For the quarter ended March 31, 2021, FFO available for Common Stock and Operating Partnership unit ("OP Unit") holders increased $8.3 million, or $0.05 per fully diluted Common Share, to $120.6 million, or $0.63 per fully diluted Common Share, compared to $112.3 million, or $0.58 per fully diluted Common Share, for the same period in 2020.

For the quarter ended March 31, 2021, Normalized FFO available for Common Stock and OP Unit holders increased $9.3 million, or $0.05 per fully diluted Common Share, to $122.6 million, or $0.64 per fully diluted Common Share, compared to $113.3 million, or $0.59 per fully diluted Common Share, for the same period in 2020.

For the quarter ended March 31, 2021, our Core Portfolio property operating revenues, excluding deferrals, increased 2.8% and property operating expenses, excluding deferrals and property management, increased 4.2%, from the same period in 2020, resulting in an increase in income from property operations, excluding deferrals and property management, of 1.9% compared to the same period in 2020.

For the quarter ended June 30, 2021, net income available for Common Stockholders increased $14.9 million, or $0.08 per fully diluted Common Share, to $61.1 million, or $0.33 per fully diluted Common Share, compared to $46.2 million, or $0.25 per fully diluted Common Share, for the same period in 2020.

For the six months ended June 30, 2021, net income available for Common Stockholders increased $13.2 million, or $0.07 per fully diluted Common Share, to $126.3 million, or $0.69 per fully diluted Common Share, compared to $113.1 million, or $0.62 per fully diluted Common Share, for the same period in 2020.

For the quarter ended June 30, 2021, FFO available for Common Stock and Operating Partnership unit (“OP Unit”) holders increased $28.1 million, or $0.14 per fully diluted Common Share, to $117.6 million, or $0.61 per fully diluted Common Share, compared to $89.5 million, or $0.47 per fully diluted Common Share, for the same period in 2020.

For the six months ended June 30, 2021, FFO available for Common Stock and Operating Partnership unit (“OP Unit”) holders increased $36.3 million, or $0.19 per fully diluted Common Share, to $238.1 million, or $1.24 per fully diluted Common Share, compared to $201.8 million, or $1.05 per fully diluted Common Share, for the same period in 2020.

For the quarter ended June 30, 2021, Normalized FFO available for Common Stock and OP Unit holders increased $27.4 million, or $0.14 per fully diluted Common Share, to $118.3 million, or $0.61 per fully diluted Common Share, compared to $90.9 million, or $0.47 per fully diluted Common Share, for the same period in 2020.

For the six months ended June 30, 2021, Normalized FFO available for Common Stock and OP Unit holders increased $36.6 million, or $0.19 per fully diluted Common Share, to $240.9 million, or $1.25 per fully diluted Common Share, compared to $204.3 million, or $1.06 per fully diluted Common Share, for the same period in 2020.

For the quarter ended June 30, 2021, our Core Portfolio property operating revenues, excluding deferrals, increased 14.9% and property operating expenses, excluding deferrals and property management, increased 13.9%, from the same period in 2020, resulting in an increase in income from property operations, excluding deferrals and property management, of 15.6% compared to the same period in 2020.

For the six months ended June 30, 2021, our Core Portfolio property operating revenues, excluding deferrals, increased 8.5% and property operating expenses, excluding deferrals and property management, increased 9.1%, from the same period in 2020, resulting in an increase in income from property operations, excluding deferrals and property management, of 8.2% compared to the same period in 2020.

While we continue to focus on increasing the number of manufactured homeowners in our Core Portfolio, we also believe renting our vacant homes represents an attractive source of occupancy and an opportunity to potentially convert the renter to a new homebuyer in the future.

We continue to expect there to be fluctuations in the sources of occupancy gains depending on local market conditions, availability of vacant sites and success with converting renters to homeowners.

Our Core Portfolio average occupancy, including both homeowners and renters, in our MH communities was 95.3% for the quarter ended March 31, 2021, compared to 95.4% for the quarter ended December 31, 2020 and 95.1% for the same period in 2020.

The decrease in average occupancy from the prior quarter is due to expansion sites completed and added to our Core Portfolio during the quarter but not yet occupied as of March 31, 2021.

For the quarter ended March 31, 2021, our Core Portfolio occupancy increased by 85 sites with an increase in homeowner occupancy of 104 sites, compared to occupancy as of December 31, 2020.

By comparison, for the quarter ended March 31, 2020, our Core Portfolio occupancy increased 13 sites with an increase in homeowner occupancy of 76 sites.

In addition to higher occupancy, we have increased rental rates during the quarter ended March 31, 2021, contributing to a growth of 4.1% in MH rental income, compared to the same period in 2020.

RV and marina rental income in our Core Portfolio for the quarter ended March 31, 2021 was 5.1% lower than the same period in 2020.

Annual and transient rental income for the quarter ended March 31, 2021 increased 3.9% and 15.1%, respectively, while seasonal rental income decreased 33.8%.

Our Core Portfolio average occupancy, including both homeowners and renters, in our MH communities was 95.2% for the quarter ended June 30, 2021, compared to 95.3% for the quarter ended March 31, 2021 and 95.2% for the same period in 2020.

The decrease in average occupancy from the prior quarter is due to expansion sites completed and added to our Core Portfolio during the quarter but not yet occupied as of June 30, 2021.

For the quarter ended June 30, 2021, our Core Portfolio occupancy increased by 68 sites with an increase in homeowner occupancy of 179 sites, compared to occupancy as of March 31, 2021.

By comparison, for the quarter ended June 30, 2020, our Core Portfolio occupancy increased 90 sites with an increase in homeowner occupancy of 80 sites.

In addition to higher occupancy, we have increased rental rates during the quarter and six months ended June 30, 2021, contributing to a growth of 4.1% for each respective period in MH rental income, compared to the same period in 2020.

RV and marina rental income in our Core Portfolio for the quarter ended June 30, 2021 was 32.0% higher than the same period in 2020.

Annual, seasonal and transient rental income for the quarter ended June 30, 2021 increased 7.6%, 31.1% and 180.3%, respectively.

Annual rental income increased primarily due to rate growth, including in the Core marina portfolio.

Core annual marina revenue represents 99% of Core marina base rental income.

Transient rental income increased as we have continued to see positive demand as COVID-19 cases declined and vaccine availability increased.

We also saw an increase in transient reservations in warmer destinations due to colder than average temperatures across the U.S., especially in the North.

Seasonal rental income decreased primarily in the South and West regions, as seasonal customers, in particular Canadian customers, were impacted by travel restrictions resulting from COVID-19.

We continue to experience strong performance in our membership base within our Thousand Trails portfolio.

For the quarter ended March 31, 2021, annual membership subscriptions revenue increased 4.4% over the same period in 2020.

We sold approximately 5,300 TTC memberships during the quarter ended March 31, 2021, representing a 64% increase in sales volume compared to the same period in 2020.

We also activated approximately 6,300 TTC memberships through our RV dealer program for the quarter ended March 31, 2021.

Membership upgrade sales, gross increased $5.2 million for the quarter ended March 31, 2021 compared to the same period in 2020, driven by approximately 1,400 membership upgrade sales during the quarter.

We also experienced a 10% increase in the average sales price per upgrade sold during the first quarter of 2021 compared to the first quarter of 2020.

The increase in upgrade sales and average sales price was driven by an increase in customer demand, including a new upgrade product, Adventure, introduced during the first quarter of 2021.

Adventure was introduced in response to demand we were seeing from our current customers who were looking for longer stays and advanced

Seasonal rental income increased due to increases in all regions, primarily due to cancellations in RV reservations and site closures during the second quarter of 2020 as a result of COVID-19.

Transient rental income increased as we have continued to see positive demand as our customers seek safe vacation and leisure activities and value the opportunity to spend time outdoors.

RV and marina rental income in our Core Portfolio for

Management's Discussion and Analysis (continued)

booking windows.

the six months ended June 30, 2021 was 10.7% higher than the same period in 2020.

Annual and transient rental income for the six months ended June 30, 2021 increased 5.8% and 83.0%, respectively, while seasonal rental income decreased 21.7%.

We continue to experience strong performance in our membership base within our Thousand Trails portfolio.

For the quarter ended June 30, 2021, annual membership subscriptions revenue increased 10.1% over the same period in 2020.

We sold approximately 8,200 TTC memberships during the quarter ended June 30, 2021, representing a 41% increase in sales volume compared to the same period in 2020.

We also activated approximately 7,800 TTC memberships through our RV dealer program for the quarter ended June 30, 2021.

Membership upgrade sales, gross increased $4.2 million for the quarter ended June 30, 2021 compared to the same period in 2020, driven by approximately 1,200 membership upgrade sales during the quarter.

We also experienced a 22% increase in the average sales price per upgrade sold during the quarter ended June 30, 2021 compared to the same period June 30, 2020.

The increase in upgrade sales and average sales price was driven by an increase in customer demand, including a new upgrade product, Adventure, introduced in the first quarter of 2021.

Adventure was introduced in response to demand we were seeing from our current customers who were looking for longer stays and advanced booking windows.

We periodically introduce new upgrade products.

Based on our historical experience, during the first 60 to 90 days following a new product launch, we experience an increase in upgrade sales and thereafter the upgrade sales fall back in line with historical run rate performance.

For the six months ended June 30, 2021, we sold approximately 13,500 TTC memberships and approximately 2,600 membership upgrades, an increase in membership subscriptions and upgrade revenues of 7.2% and 94.3%, respectively, over the same period in 2020.

Demand for our homes and communities remains strong as evidenced by factors including our high occupancy levels.

We closed 192 new home sales during the quarter ended March 31, 2021, compared to 155 new home sales during the quarter ended March 31, 2020.

The increase in new home sales was primarily due to favorable housing trends and timing of the availability of home inventory ready for sale.

As of March 31, 2021, we had 3,905 occupied rental homes in our Core MH communities, including 295 homes rented through our ECHO JV.

Our Core Portfolio income from rental operations, net of depreciation, was $8.5 million and $7.6 million for the quarters ended March 31, 2021 and 2020, respectively.

Approximately $8.1 million and $7.8 million of rental operations revenue related to Site rental was included in MH base rental income in our Core Portfolio for the quarters ended March 31, 2021 and 2020, respectively.

Our gross investment in real estate increased $345.3 million to $6,505.7 million as of March 31, 2021 from $6,160.4 million as of December 31, 2020, primarily due to acquisitions and capital improvements during the quarter ended March 31, 2021.

The following chart lists the Properties acquired or sold from January 1, 2020 through March 31, 2021 and Sites added through expansion opportunities at our existing Properties:

We closed 295 new home sales during the quarter ended June 30, 2021, compared to 133 new home sales during the quarter ended June 30, 2020.

We closed 487 new home sales during the six months ended June 30, 2021, compared to 288 new home sales during the six months ended June 30, 2020.

The increase in new home sales was primarily due to favorable housing trends in the broader real estate market.

As of June 30, 2021, we had 3,794 occupied rental homes in our Core MH communities, including 282 homes rented through our ECHO JV.

Our Core Portfolio income from rental operations, net of depreciation, was $8.4 million and $8 million for the quarters ended June 30, 2021 and 2020, respectively.

Our Core Portfolio income from rental operations, net of depreciation, was $16.9 million and $15.5 million for the six months ended June 30, 2021 and 2020, respectively.

Approximately $16.2 million and $15.6 million of rental operations revenue related to Site rental was included in MH base rental income in our Core Portfolio for the six months ended June 30, 2021 and 2020, respectively.

Our gross investment in real estate increased $447.0 million to $6,607.4 million as of June 30, 2021 from $6,160.4 million as of December 31, 2020, primarily due to acquisitions and capital improvements during the six months ended June 30, 2021.

Management's Discussion and Analysis (continued)

The following chart lists the Properties acquired or sold from January 1, 2020 through June 30, 2021 and Sites added through expansion opportunities at our existing Properties:

Location Type of Property Transaction Date Sites

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Marina Portfolio (11 Properties) Multiple Marina February 5, 2021 4,167

Pine Haven Cape May, New Jersey RV June 3, 2021 629

Expansion Site Development:

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Sites added (reconfigured) in 2021 131

Total Sites as of March 31, 2021 (1)

Total Sites as of June 30, 2021 (1)

______________________

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A discussion of Income from property operations and Core Portfolio, FFO, Normalized FFO and Income from rental operations, net of depreciation, and a reconciliation to net income, are included below.

Management's Discussion and Analysis (continued)

Income from Property Operations and Core Portfolio

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Our Non-Core Portfolio includes all Properties that were not owned and operated during all of 2020 and 2021.

This includes, but is not limited to, one MH community, seven RV communities and one marina acquired during 2020 and one RV community and eleven marinas acquired during 2021.

This includes, but is not limited to, one MH community, seven RV communities and one marina acquired during 2020 and two RV communities and eleven marinas acquired during 2021.

Management's Discussion and Analysis (continued)

Funds from Operations ( “ FFO”) and Normalized Funds from Operations ( “ Normalized FFO”)

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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

These Non-GAAP financial and operating measures do not represent cash generated from operating activities in accordance with GAAP, nor do they represent cash available to pay distributions and should not be considered as an alternative to net income, determined in accordance with GAAP, as an indication of our financial performance, or to cash flows from operating activities, determined in accordance with GAAP, as a measure of our liquidity, nor is it indicative of funds available to fund our cash needs, including our ability to make cash distributions.

Management's Discussion and Analysis (continued)

represent cash available to pay distributions and should not be considered as an alternative to net income, determined in accordance with GAAP, as an indication of our financial performance, or to cash flows from operating activities, determined in accordance with GAAP, as a measure of our liquidity, nor is it indicative of funds available to fund our cash needs, including our ability to make cash distributions.

The following table reconciles net income available for Common Stockholders to income from property operations for the quarters ended March 31, 2021 and 2020:

Quarters Ended March 31,

The following table reconciles net income available for Common Stockholders to income from property operations for the quarters ended June 30, 2021 and 2020:

Quarters Ended June 30, Six Months Ended June 30,

(amounts in thousands)

2021 2020 2021 2020

Computation of Income from Property Operations:

Net income available for Common Stockholders $ 61,051 $ 46,187 $ 126,291 $ 113,062

Redeemable preferred stock dividends 8 8 8 8

Income allocated to non-controlling interests – Common OP Units 3,021 2,658 6,768 6,507

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Income from property operations $ 144,924 $ 122,445 $ 293,928 $ 268,983

The following table presents a calculation of FFO available for Common Stock and OP Unitholders and Normalized FFO available for Common Stock and OP Unitholders for the quarters ended March 31, 2021 and 2020:

Quarters Ended March 31,

Quarters Ended June 30, Six Months Ended June 30,

(amounts in thousands)

2021 2020 2021 2020

Computation of FFO and Normalized FFO:

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Early debt retirement 755 — 2,784 1,054

COVID-19 expenses — 1,407 — 1,446

Normalized FFO available for Common Stock and OP Unit holders $ 118,343 $ 90,953 $ 240,927 $ 204,297

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Results of Operations

This section discusses the comparison of our results of operations for the quarters ended March 31, 2021 and March 31, 2020 and our operating activities, investing activities and financing activities for the quarters ended March 31, 2021 and March 31, 2020.

For the comparison of our results of operations for the quarters ended March 31, 2020 and March 31, 2019 and discussion of our operating activities, investing activities and financing activities for the quarters ended March 31, 2020 and March 31, 2019, refer to Part I, Item 2.

Management’s Discussion and Analysis of Financial Condition and Results of Operations of the Quarterly Report on Form 10-Q for the fiscal quarter ended March 31, 2020, filed with the SEC on April 28, 2020.

Comparison of the quarter ended March 31, 2021 to the quarter ended March 31, 2020

This section discusses the comparison of our results of operations for the quarters and six months ended June 30, 2021 and June 30, 2020 and our operating activities, investing activities and financing activities for the six months ended June 30, 2021 and June 30, 2020.

For the comparison of our results of operations for the quarters and six months ended June 30, 2020 and June 30, 2019 and discussion of our operating activities, investing activities and financing activities for the six months ended June 30, 2020 and June 30, 2019, refer to Part I, Item 2.

Management’s Discussion and Analysis of Financial Condition and Results of Operations of the Quarterly Report on Form 10-Q for the fiscal quarter ended June 30, 2020, filed with the SEC on July 28, 2020.

Comparison of the quarter ended June 30, 2021 to the quarter ended June 30, 2020

Income from Property Operations

The following table summarizes certain financial and statistical data for our Core Portfolio and total portfolio for the quarters ended March 31, 2021 and March 31, 2020:

The following table summarizes certain financial and statistical data for our Core Portfolio and total portfolio for the quarters ended June 30, 2021 and June 30, 2020:

Core Portfolio Total Portfolio

Quarters Ended March 31, Quarters Ended March 31,

Quarters Ended June 30, Quarters Ended June 30,

(amounts in thousands) 2021 2020 Variance %

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(3) See Non-GAAP Financial Measures section of the Management Discussion and Analysis for definitions and reconciliations of these Non-GAAP measures to Net Income available for Common Shareholders.

Total portfolio income from property operations for 2021 increased $2.5 million, or 1.7%, from 2020, driven by an increase of $3.4 million from our Non-Core Portfolio, partially offset by a decrease of $0.9 million, or 0.6%, from our Core Portfolio.

The increase in income from property operations from our Non-Core Portfolio was attributed to income from properties acquired in the fourth quarter of 2020 and the first quarter of 2021.

The decrease in income from property operations from our Core Portfolio was primarily due to lower seasonal RV base rental income and lower utility and other income, as well as higher property operating and maintenance expenses, partially offset by higher MH base rental income.

Total portfolio income from property operations for 2021 increased $22.5 million, or 18.4%, from 2020, driven by an an increase of $17.1 million, or 14.0%, from our Core Portfolio and an increase of $5.4 million from our Non-Core Portfolio.

The increase in income from property operations from our Core Portfolio was primarily due to higher property operating revenues, excluding deferrals primarily from increased RV and marina and MH base rental income, partially offset by an increase in property operating expenses, excluding deferrals and property management.

The increase in income from property operations from our Non-Core Portfolio was attributed to income from properties acquired in the fourth quarter of 2020 and the first and second quarters of 2021.

Management's Discussion and Analysis (continued)

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The average monthly base rental income per Site in our Core Portfolio increased to approximately $721 in 2021 from approximately $693 in 2020.

The average occupancy for our Core Portfolio increased to 95.3% in 2021 from 95.1% in 2020.

The average occupancy for our Core Portfolio was 95.2% for both the quarters ended June 30, 2021 and June 30, 2020.

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

Core Portfolio Total Portfolio

Quarters Ended March 31, Quarters Ended March 31,

Quarters Ended June 30, Quarters Ended June 30,

(amounts in thousands) 2021 2020 Variance %

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RV and marina base rental income $ 79,352 $ 60,107 $ 19,245 32.0 % $ 89,008 $ 60,107 $ 28,901 48.1 %

RV and marina base rental income in our Core Portfolio for 2021 decreased $4.1 million, or 5.1%, from 2020 primarily due to a decrease in seasonal RV rental income in the South and West regions, as seasonal customers, in particular Canadian customers, were impacted by travel restrictions resulting from COVID-19.

Partially offsetting the seasonal RV rental income decrease were increases in Annual rental income of $1.9 million, or 3.9%, primarily driven by rate growth, and transient rental income of $1.7 million, or 15.1%, as we have continued to see positive transient demand as COVID-19 cases declined and vaccine availability increased.

We also saw an increase in transient reservations in warmer destinations due to colder than average temperatures across the U.S., especially in the North.

RV and marina base rental income in our Core Portfolio for 2021 increased by $19.2 million, or 32.0%, from 2020 primarily due to increases in Transient RV and marina base rental income of $14.0 million or 180.3%, Annual RV and marina base rental income of $3.6 million or 7.6% and Seasonal RV and marina base rental income of $1.6 million or 31.1%.

Transient and Seasonal RV and marina base rental income increased across all regions, primarily due to cancellations in RV reservations and site closures during the second quarter of 2020 as a result of COVID-19.

In addition, we continue to see positive Transient demand as our customers seek safe vacation and leisure activities and value the opportunity to spend time outdoors.

The increase in Annual rental income is attributable to both rate and occupancy, driven by occupancy gains in the North and Northeast regions.

Membership upgrade sales, gross for 2021 increased $4.2 million, or 82.4%, from 2020.

The increase in membership upgrade sales was due to approximately 1,200 upgrade sales in 2021, compared to 800 in 2020, an increase of 49%.

We also experienced a 10% increase in the average sales price per upgrade sold during the first quarter of 2021, compared to the first quarter of 2020.

We also experienced a 22% increase in the average sales price per upgrade sold during the second quarter of 2021, compared to the second quarter of 2020.

The increase in upgrade sales and average sales price was driven by an increase in customer demand, including a new upgrade product, Adventure, introduced during the first quarter of 2021.

Utility and other income in our Core Portfolio for 2021 decreased $1.2 million, or 4.7%, from 2020.

The decrease was primarily due to lower laundromat income and lower utility income driven by lower electric usage due to lower RV seasonal occupancy as a result of COVID-19 travel restrictions.

Utility and other income in our Core Portfolio for 2021 increased $5.1 million, or 22.9%, from 2020.

The increase was primarily due to an increase in other property income of $3.7 million and an increase in utility income of $1.2 million.

The increase in other property income was primarily due to insurance recovery revenue of $2.4 million related to Hurricane Hanna recorded during the second quarter of 2021 and an increase in late fees due to the suspension of late fees in 2020 as a result of COVID-19.

The increase in utility income was primarily due to an increase in electric income.

Property Operating Expenses

Property operating expenses, excluding deferrals and property management, in our Core Portfolio for 2021 increased $4.4 million, or 4.2%, from 2020, driven by increases in gross sales and marketing expenses of $2.2 million, primarily due to an increase in membership upgrade sales during the first quarter of 2021 compared to the first quarter 2020, and property operating and maintenance expenses of $2.1 million.

Core property operating and maintenance expenses were higher in 2021 primarily due to increases in insurance expense, utility expenses and repairs and maintenance expenses.

The increase in insurance expense was due to higher premiums for our property and casualty insurance policies as compared to the first quarter of 2020.

The increase in utility expenses was due to higher trash and water expenses due to higher rates.

The increase in repairs and maintenance expenses was primarily due to higher lawn and common area maintenance due to higher landscaping, snow removal and tree trimming costs.

Property operating expenses, excluding deferrals and property management, in our Core Portfolio for 2021 increased $15.0 million, or 13.9%, from 2020, driven by increases in property operating and maintenance expenses of $12.6 million and gross sales and marketing expenses of $2.0 million.

Core property operating and maintenance expenses were higher in 2021 primarily due to increases in utility expenses of $4.5 million, repairs and maintenance expenses of $2.7 million and property payroll of $2.2 million.

The increase in gross sales and marketing expense is primarily due to an increase in membership upgrade sales during the second quarter of 2021 compared to the second quarter 2020.

Management's Discussion and Analysis (continued)

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

Quarters Ended March 31,

Quarters Ended June 30,

(amounts in thousands, except home sales volumes) 2021 2020 Variance %

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(2) Total new home sales volume includes home sales from our ECHO JV.

The income from home sales and other operations was $1.4 million for the first quarter of 2021, compared to a loss of $0.9 million in the first quarter of 2020.

The increase in income from home sales and other operations was due to an increase in ancillary services revenues, net, higher gross profit from new home sales and lower loss from used home sales.

The increase in ancillary services revenues, net was primarily due to our Non-Core Portfolio.

The income from home sales and other operations was $2.4 million for the second quarter of 2021, compared to a loss of $1.6 million in the second quarter of 2020.

The increase in income from home sales and other operations was primarily due to an increase in ancillary services revenues, net, due to increased revenue from restaurants, stores and activities across the portfolio that were closed last year as a result of COVID-19 and an increase in non-core marina ancillary revenues, net.

Income from home sales and other operations also increased due to an increase in gross profit from new home sales due to an increase of 162 new homes sales during the second quarter of 2021 compared to the second quarter of 2020 primarily due to favorable housing trends in the broader real estate market.

Management's Discussion and Analysis (continued)

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

Quarters Ended March 31,

Quarters Ended June 30,

(amounts in thousands, except rental unit volumes)

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(1) Consists of Site rental income and home rental income.

Approximately $8.1 million and $7.8 million for the quarters ended March 31, 2021 and March 31, 2020, respectively, of Site rental income is included in MH base rental income in the Core Portfolio Income from Property Operations table.

Approximately $8.1 million and $7.8 million for the quarters ended June 30, 2021 and June 30, 2020, respectively, of Site rental income is included in MH base rental income in the Core Portfolio Income from Property Operations table.

The remainder of home rental income is included in rental home income in our Core Portfolio Income from Property Operations table.

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(3) New home cost basis does not include the costs associated with our ECHO JV.

Our investment in the ECHO JV was $17.5 million and $17.0 million as of March 31, 2021 and March 31, 2020, respectively.

(4) Includes 295 and 286 homes rented through our ECHO JV as of March 31, 2021 and 2020, respectively.

Income from rental operations, net of depreciation, was $0.9 million higher during the first quarter of 2021, compared to the first quarter of 2020, primarily due to an increase in the number of occupied new rental homes which command a higher rental rate than occupied used homes.

Our investment in the ECHO JV was $17.7 million and $17.1 million as of June 30, 2021 and June 30, 2020, respectively.

(4) Includes 282 and 283 homes rented through our ECHO JV as of June 30, 2021 and 2020, respectively.

Income from rental operations, net of depreciation, was $0.4 million higher during the second quarter of 2021, compared to the second quarter of 2020, primarily due to an increase in the number of occupied new rental homes which command a higher rental rate than occupied used homes.

Other Income and Expenses

The following table summarizes other income and expenses, net:

Quarters Ended March 31,

Quarters Ended June 30,

(amounts in thousands, expenses shown as negative)

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Total other income and expenses, net $ (84,266) $ (73,016) $ (11,250) (15.4) %

Total other income and expenses, net increased $7.1 million in 2021 compared to 2020, primarily due to higher depreciation and amortization and higher early debt retirement costs.

The increase in depreciation and amortization is due to depreciation on Non-core properties acquired in the fourth quarter of 2020 and the first quarter of 2021.

The increase in early debt retirement is due to higher debt repayment costs in 2021 compared to 2020.

Total other income and expenses, net increased $11.3 million in 2021 compared to 2020, primarily due to higher depreciation and amortization, higher interest and related amortization, and early debt retirement costs incurred during the second quarter of 2021.

The increase in depreciation and amortization is due to depreciation on Non-core properties acquired in the fourth quarter of 2020, and the first and second quarters of 2021.

The increase in interest and related amortization is due to higher debt levels than the same period in 2021.

Management's Discussion and Analysis (continued)

Comparison of the Six Months Ended June 30, 2021 to the Six Months Ended June 30, 2020

Income from Property Operations

The following table summarizes certain financial and statistical data for the Core Portfolio and the total portfolio for the six months ended June 30, 2021 and 2020.

Core Portfolio Total Portfolio

Six Months Ended June 30, Six Months Ended June 30,

(amounts in thousands) 2021 2020 Variance %

Change 2021 2020 Variance %

MH base rental income (1)

$ 297,278 $ 283,938 $ 13,340 4.7 % $ 299,119 $ 283,978 $ 15,141 5.3 %

Rental home income (1)

8,554 8,060 494 6.1 % 8,571 8,060 511 6.3 %

RV and marina base rental income (1)

156,318 141,167 15,151 10.7 % 172,596 141,167 31,429 22.3 %

Annual membership subscriptions 27,917 26,033 1,884 7.2 % 27,921 26,034 1,887 7.2 %

Membership upgrade sales current period, gross 19,221 9,891 9,330 94.3 % 19,221 9,891 9,330 94.3 %

Utility and other income (1)

51,488 47,564 3,924 8.2 % 52,923 47,562 5,361 11.3 %

Property operating revenues, excluding deferrals 560,776 516,653 44,123 8.5 % 580,351 516,692 63,659 12.3 %

Property operating and maintenance (1)(2)

183,477 168,832 14,645 8.7 % 192,764 169,030 23,734 14.0 %

Real estate taxes 34,028 33,450 578 1.7 % 35,746 33,509 2,237 6.7 %

Rental home operating and maintenance 2,509 2,582 (73) (2.8) % 2,555 2,588 (33) (1.3) %

Sales and marketing, gross 12,471 8,255 4,216 51.1 % 12,474 8,254 4,220 51.1 %

Property operating expenses, excluding deferrals and property management 232,485 213,119 19,366 9.1 % 243,539 213,381 30,158 14.1 %

Income from property operations, excluding deferrals and property management (3)

328,291 303,534 24,757 8.2 % 336,812 303,311 33,501 11.0 %

Property management 31,930 29,817 2,113 7.1 % 31,940 29,817 2,123 7.1 %

Income from property operations, excluding deferrals (3)

296,361 273,717 22,644 8.3 % 304,872 273,494 31,378 11.5 %

Membership upgrade sales upfront payments and membership sales commission, deferred, net 10,944 4,511 6,433 142.6 % 10,944 4,511 6,433 142.6 %

Income from property operations (3)

$ 285,417 $ 269,206 $ 16,211 6.0 % $ 293,928 $ 268,983 $ 24,945 9.3 %

__________________________

(1) Rental income consists of the following total portfolio income items:

1) MH base rental income, 2) Rental home income, 3) RV and marina base rental income and 4) Utility income, which is calculated by subtracting Other income on the Consolidated Statements of Income and Comprehensive Income from Utility and other income in this table.

The difference between the sum of the total portfolio income items and Rental income on the Consolidated Statements of Income and Comprehensive Income is bad debt expense, which is presented in Property operating maintenance expense in this table.

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

(3) See Non-GAAP Financial Measures section of the Management Discussion and Analysis for definitions and reconciliation of these Non-GAAP measures to Net Income available for Common Shareholders.

Total Portfolio income from property operations for 2021 increased $24.9 million, or 9.3%, from 2020, driven by an increase of $16.2 million, or 6.0%, from our Core Portfolio and by an increase of $8.7 million from our Non-Core Portfolio.

The increase in income from property operations from our Core Portfolio was primarily due to increases in RV and marina base rental income, MH base rental income and Membership upgrade sales, gross.

The increase in income from property operations from our Non-Core Portfolio was attributed to income from properties acquired in the fourth quarter of 2020 and during the six months ended June 30, 2021.

Property Operating Revenues

MH base rental income in our Core Portfolio for 2021 increased $13.3 million, or 4.7%, from 2020, which reflects 4.1% growth from rate increases and 0.6% growth from occupancy gains.

The average monthly base rental income per Site increased to approximately $719 in 2021 from approximately $690 in 2020.

The average occupancy for the Core Portfolio was 95.3% for the six months ended June 30, 2021 compared to 95.2% for the six months ended June 30, 2020.

Management's Discussion and Analysis (continued)

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

Core Portfolio Total Portfolio

Six Months Ended June 30, Six Months Ended June 30,

(amounts in thousands)

2021 2020 Variance %

Change 2021 2020 Variance %

Annual $ 99,910 $ 94,447 $ 5,463 5.8 % $ 113,267 $ 94,447 $ 18,820 19.9 %

Seasonal 21,767 27,787 (6,020) (21.7) % 22,809 27,787 (4,978) (17.9) %

Transient 34,641 18,933 15,708 83.0 % 36,520 18,933 17,587 92.9 %

RV and marina base rental income $ 156,318 $ 141,167 $ 15,151 10.7 % $ 172,596 $ 141,167 $ 31,429 22.3 %

RV and marina base rental income in our Core Portfolio for 2021 increased $15.2 million, or 10.7%, from 2020 primarily due to increases in Transient RV and marina base rental income of $15.7 million, or 83.0% and Annual RV and marina base rental income of $5.5 million, or 5.8%, partially offset by a decrease in Seasonal RV and marina base rental income of $6.0 million, or 21.7%.

Transient RV and marina base rental income increased across all regions, primarily due to cancellations in RV reservations and site closures during the six months ended June 30, 2020 as a result of COVID-19.

In addition, we continue to see positive Transient demand as our customers seek safe vacation and leisure activities and value the opportunity to spend time outdoors.

The increase in Annual RV and marina base rental income was primarily due to growth from rate increases.

The decrease in Seasonal RV and marina base rental income was primarily due to a decrease in seasonal RV rental income in the South and West regions during the first quarter of 2021, as seasonal customers, in particular Canadian customers, were impacted by travel restrictions resulting from COVID-19.

Membership upgrade sales, gross for 2021 increased $9.3 million, or 94.3%, from 2020.

The increase in membership upgrade sales was due to approximately 2,600 upgrade sales during the six months ended June 30, 2021, compared to 1,600 during the six months ended June 30, 2020, an increase of 67%.

We also experienced a 16% increase in the average sales price per upgrade sold during the six months ended June 30, 2021, compared to the same period ended June 30, 2020.

The increase in upgrade sales and average sales price was driven by an increase in customer demand, including a new upgrade product, Adventure, introduced during the first quarter of 2021.

Utility and other income in our Core Portfolio for 2021 increased $3.9 million, or 8.2%, from 2020.

The increase was primarily due to an increase in other property income of $2.8 million and an increase in utility income of $0.9 million.

The increase in other property income was driven by insurance recovery revenue of $2.4 million related to Hurricane Hanna recorded during the second quarter of 2021 and increased late fees due to the suspension of late fees in 2020 as a result of COVID-19.

Property Operating Expenses

Property operating expenses, excluding deferrals and property management, in our Core Portfolio for 2021 increased $19.4 million, or 9.1%, from 2020, driven by increases in property operating and maintenance expenses of $14.6 million and gross sales and marketing expenses of $4.2 million.

Core property operating and maintenance expenses were higher during the six months ended June 30, 2021 compared to the six months ended June 30, 2020 primarily due to increases in utility expenses of $5.1 million, repairs and maintenance expenses of $3.3 million, property payroll expenses of $2.6 million and insurance expense of $2.0 million.

The increase in gross sales and marketing expenses was primarily due to an increase in membership upgrade sales.

Management's Discussion and Analysis (continued)

Home Sales and Rental Operations

Home Sales and Other

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

Six Months Ended June 30,

(amounts in thousands, except home sales volumes)

2021 2020 Variance %

Gross revenues from new home sales (1)

$ 37,658 $ 16,934 $ 20,724 122.4 %

Cost of new home sales (1)

35,958 16,669 19,289 115.7 %

Gross profit from new home sales 1,700 265 1,435 541.5 %

Gross revenues from used home sales 1,989 3,241 (1,252) (38.6) %

Cost of used home sales 2,766 4,092 (1,326) (32.4) %

Loss from used home sales (777) (851) 74 8.7 %

Brokered resale and ancillary services revenues, net 5,466 363 5,103 1,405.8 %

Home selling expenses 2,652 2,294 358 15.6 %

Income (loss) from home sales and other $ 3,737 $ (2,517) $ 6,254 248.5 %

Home sales volumes

Total new home sales (2)

487 288 199 69.1 %

New Home Sales Volume - ECHO JV 24 23 1 4.3 %

Used home sales 210 330 (120) (36.4) %

Brokered home resales 372 287 85 29.6 %

_________________________

(1) New home sales gross revenues and costs of new home sales do not include the revenues and costs associated with our ECHO JV.

(2) Total new home sales volume includes home sales from our ECHO JV.

The income from home sales and other was $3.7 million for the six months ended June 30, 2021 compared to a loss of $2.5 million for the six months ended June 30, 2020.

The increase in income from home sales and other was due to an increase in ancillary services revenues, net, driven by increased revenue from restaurants, stores and activities across the portfolio primarily as a result of closures in 2020 as a result of COVID-19, an increase in non-core marina ancillary revenues, net and an increase in gross profit from new home sales as a result of an increase in the number of new homes sold.

Management's Discussion and Analysis (continued)

Rental Operations

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

Six Months Ended June 30,

(amounts in thousands, except rental unit volumes)

2021 2020 Variance %

Rental operations revenue (1)

$ 24,733 $ 23,647 $ 1,086 4.6 %

Rental home operating and maintenance expenses 2,509 2,582 (73) (2.8) %

Income from rental operations 22,224 21,065 1,159 5.5 %

Depreciation on rental homes (2)

5,305 5,525 (220) (4.0) %

Income from rental operations, net of depreciation $ 16,919 $ 15,540 $ 1,379 8.9 %

Gross investment in new manufactured home rental units (3)

$ 230,394 $ 235,516 $ (5,122) (2.2) %

Gross investment in used manufactured home rental units $ 17,732 $ 17,722 $ 10 0.1 %

Net investment in new manufactured home rental units $ 188,343 $ 202,115 $ (13,772) (6.8) %

Net investment in used manufactured home rental units $ 9,288 $ 10,430 $ (1,142) (10.9) %

Number of occupied rentals – new, end of period (4)

3,303 3,291 12 0.4 %

Number of occupied rentals – used, end of period 491 632 (141) (22.3) %

______________________

(1) Rental operations revenue consists of Site rental income and home rental income in our Core Portfolio.

Approximately $16.2 million and $15.6 million of Site rental income for the six months ended June 30, 2021 and 2020, respectively, are included in community base rental income within the Core Portfolio Income from Property Operations table.

The remainder of home rental income is included in rental home income within the Core Portfolio Income from Property Operations table.

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

(3) Includes both occupied and unoccupied rental homes in our Core Portfolio.

New home cost basis does not include the costs associated with our ECHO JV.

Our investment in the ECHO JV was $17.7 million and $17.1 million as of June 30, 2021 and 2020, respectively.

(4) Occupied rentals as of the end of the period in our Core Portfolio and includes 282 and 283 homes rented through our ECHO JV as of June 30, 2021 and 2020, respectively.

Income from rental operations, net of depreciation, was $1.4 million higher during the six months ended June 30, 2021 compared to the six months ended June 30, 2020, primarily due to an increase in the number of occupied new rental homes which command a higher rental rate than occupied used homes.

Other Income and Expenses

The following table summarizes other income and expenses, net:

Six Months Ended June 30,

(amounts in thousands, expenses shown as negative)

2021 2020 Variance %

Depreciation and amortization $ (93,714) $ (77,356) $ (16,358) (21.1) %

Interest income 3,509 3,598 (89) (2.5) %

Income from other investments, net 2,158 1,665 493 29.6 %

General and administrative (20,740) (21,464) 724 3.4 %

Other expenses (1,498) (1,227) (271) (22.1) %

Early debt retirement (2,784) (1,054) (1,730) (164.1) %

Interest and related amortization (53,406) (52,322) (1,084) (2.1) %

Total other income and expenses, net $ (166,475) $ (148,160) $ (18,315) (12.4) %

Total other income and expenses, net increased $18.3 million during the six months ended June 30, 2021 compared to the six months ended June 30, 2020, primarily due to higher depreciation and amortization and higher early debt retirement costs.

The increase in depreciation and amortization was due to depreciation on Non-Core properties acquired in the fourth quarter of 2020 and the six months ended June 30, 2021.

The increase in early debt retirement costs was due to higher debt repayment costs in 2021 compared to 2020.

Equity in income of unconsolidated joint ventures

Equity in income of unconsolidated joint ventures increased $0.7 million in 2021 compared to 2020, primarily due to an increase in distributions received in 2021 compared to 2020.

Equity in income of unconsolidated joint ventures increased $0.7 million during the six months ended June 30, 2021 compared to the six months ended June 30, 2020, primarily due to an increase in distributions received in 2021 compared to 2020.

Management's Discussion and Analysis (continued)

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Our at-the-market (“ATM”) equity offering program allows us, from time-to-time, to sell shares of our common stock, par value $0.01 per share, having an aggregate offering price up to $200.0 million.

As of March 31, 2021, the full capacity remained available for issuance.

As of March 31, 2021, we had available liquidity in the form of approximately 417.7 million shares of authorized and unissued common stock, par value $0.01 per share, and 10.0 million shares of authorized and unissued preferred stock registered for sale under the Securities Act of 1933, as amended.

During the quarter ended March 31, 2021, in conjunction with the marina portfolio acquisition as discussed in Note 6.

Investment in Real Estate , we entered into a $300.0 million senior unsecured term loan agreement ("Loan").

The maturity date was October 27, 2021 with an interest rate of LIBOR plus 1.45%.

On April 19, 2021, we closed on an amended revolving line of credit with borrowing capacity of $500.0 million and a $300.0 million term loan ("Term Loan").

As of June 30, 2021, the full capacity remained available for issuance.

As of June 30, 2021, we had available liquidity in the form of approximately 416.2 million shares of authorized and unissued common stock, par value $0.01 per share, and 10.0 million shares of authorized and unissued preferred stock registered for sale under the Securities Act of 1933, as amended.

During the six months ended June 30, 2021, we closed on an amended revolving line of credit with borrowing capacity of $500.0 million and a $300.0 million term loan (“Term Loan”).

The variable interest rate on the Term Loan is LIBOR plus 1.40%.

Pursuant to the Swap (as defined below), we have fixed the interest rate at 1.8% per annum.

We used the net proceeds from the Term Loan to repay the Loan.

Financial Statements—Note 8.

Subsequent Events for further details.

Borrowing Arrangements for further details.

We also utilize interest rate swaps to add stability to our interest expense and to manage our exposure to interest rate movements.

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The changes in the fair value of the designated derivative are recorded in accumulated other comprehensive income (loss) on the Consolidated Balance Sheets and subsequently reclassified into earnings on the Consolidated Statements of Income and Comprehensive Income in the period that the hedged forecasted transaction affects earnings.

During the quarter ended March 31, 2021, we entered into a three-year LIBOR Swap Agreement (the "Swap") allowing us to trade the variable interest rate associated with our variable rate debt for a fixed interest rate.

During the six months ended June 30, 2021, we entered into a three-year LIBOR Swap Agreement (the ”Swap”) allowing us to trade the variable interest rate associated with our variable rate debt for a fixed interest rate.

The Swap has a notional amount of $300.0 million of outstanding principal and fixes the underlying LIBOR rate at 0.39% per annum and matures on March 25, 2024.

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We expect to meet our short-term liquidity requirements, including principal payments, capital improvements and dividend distributions for the next twelve months, generally through available cash, net cash provided by operating activities and our LOC.

As of March 31, 2021, our LOC had a borrowing capacity of $350.0 million.

As of March 31, 2021, the LOC bears interest at a rate of LIBOR plus 1.10% to 1.55%, carries an annual facility fee of 0.15% to 0.35% and matures on October 27, 2021.

On April 19, 2021, we closed on an amended revolving line of credit with borrowing capacity of $500.0 million.

Financial Statements—Note 13.

Subsequent Events for further details.

As of June 30, 2021, our LOC had a borrowing capacity of $438.0 million.

As of June 30, 2021, the LOC bears interest at a rate of LIBOR plus 1.25% to 1.65%, carries an annual facility fee of 0.20% to 0.35% and matures on April 18, 2025.

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

Management's Discussion and Analysis (continued)

We continue to monitor the development and adoption of an alternative index to LIBOR to manage the transition.

Given the majority of our current debt is secured and not subject to LIBOR, we do not believe the discontinuation of LIBOR will have a significant impact on our consolidated financial statements.

The impact the COVID-19 pandemic will continue to have on our financial condition and cashflows is uncertain and is dependent upon various factors including the manner in which operations will continue at our Properties, customer payment patterns and operational decisions we have made and may make in the future in response to guidance from public authorities and/or for the health and safety of our employees, residents and guests.

Management's Discussion and Analysis (continued)

patterns and operational decisions we have made and may make in the future in response to guidance from public authorities and/or for the health and safety of our employees, residents and guests.

The following table summarizes our cash flows activity:

For the quarters ended March 31,

For the six months ended June 30,

(amounts in thousands) 2021 2020

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Operating Activities

Net cash provided by operating activities increased $42.4 million to $173.3 million for the quarter ended March 31, 2021 from $130.9 million for the quarter ended March 31, 2020.

The increase in net cash provided by operating activities was primarily due to an increase in other assets, net and accounts payable and other liabilities of $18.4 million, an increase in rents and other customer payments received in advance and security deposits of $14.0 million and higher income from property operations of $2.5 million.

Net cash provided by operating activities increased $90.2 million to $328.9 million for the quarter ended June 30, 2021 from $238.7 million for the quarter ended June 30, 2020.

The increase in net cash provided by operating activities was primarily due to an increase in other assets, net and accounts payable and other liabilities of $38.0 million, higher income from property operations of $24.9 million, an increase in rents and other customer payments received in advance and security deposits of $16.3 million and higher deferred membership revenue of $10.3 million.

Investing Activities

Net cash used in investing activities increased $301.5 million to $351.7 million for the quarter ended March 31, 2021 from $50.2 million for the quarter ended March 31, 2020.

Net cash used in investing activities increased $369.4 million to $475.2 million for the quarter ended June 30, 2021 from $105.8 million for the quarter ended June 30, 2020.

The increase was due to increased spending on acquisitions of $352.5 million along with an increase in capital improvement spending of $16.6 million.

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The following table summarizes capital improvements:

For the quarters ended March 31,

For the six months ended June 30,

(amounts in thousands) 2021 2020

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Financing Activities

Net cash provided by financing activities was $245.8 million for the quarter ended March 31, 2021.

Net cash used in financing activities was $12.7 million for the quarter ended March 31, 2020.

The increase in net cash provided by financing activities was primarily due to an increase in proceeds from the Loan of $300.0 million, partially offset by increases in mortgage debt repayments of $18.6 million and net repayments on the line of credit of $12.0 million.

Net cash provided by financing activities was $167.0 million for the quarter ended June 30, 2021.

Net cash used in financing activities was $41.8 million for the quarter ended June 30, 2020.

The increase in net cash provided by financing activities was primarily due to an increase net term loan proceeds of $300.0 million, partially offset by an increase in net repayments on the LOC of $50.0 million and an increase in mortgage debt repayments of $19.0 million.

Contractual Obligations

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For a summary and complete presentation and description of our ongoing commitments and contractual obligations, see the Contractual Obligations section of the “Management's Discussion and Analysis of Financial Condition and Results of Operations” in our 2020 Form 10-K.

Management's Discussion and Analysis (continued)

The Operating Partnership operates and manages Westwinds, a 720 site mobilehome community, and Nicholson Plaza, an adjacent shopping center, both located in San Jose, California pursuant to ground leases that expire on August 31, 2022 and do not contain extension options.

Westwinds provides affordable, rent-controlled homes to numerous residents, including families with children and residents over 65 years of age.

Westwinds provides affordable, rent-controlled homes to numerous residents, including

Management's Discussion and Analysis (continued)

families with children and residents over 65 years of age.

For the year ended December 31, 2020, Westwinds and Nicholson Plaza generated approximately $5.8 million of net operating income.

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The Nicholsons filed a notice of appeal on August 7, 2020.

The Nicholsons' claim that the Operating Partnership is required to indemnify the Nicholsons for legal fees with respect to the claims brought by third parties in the Superior Court litigation is proceeding in the arbitration.

The arbitration is stayed pursuant to an agreement between MHC and the Nicholsons.

Following the filing of our lawsuit, the City of San Jose took steps to accelerate the passage of a general plan amendment previously under review by the City to change the designation for Westwinds from its current general plan designation of Urban Residential (which would allow for higher density redevelopment), to a newly created designation of Mobile Home Park.

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In addition to requirements imposed by California state and San Jose municipal law, the change in designation requires, among other things, a further amendment to the general plan to a different land use designation by the City Council prior to any change in use.

Management's Discussion and Analysis (continued)

Off-Balance Sheet Arrangements

As of March 31, 2021, we have no off-balance sheet arrangements.

As of June 30, 2021, we have no off-balance sheet arrangements.

Management's Discussion and Analysis (continued)

Critical Accounting Policies and Estimates

Refer to the “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our 2020 Form 10-K for a discussion of our critical accounting policies.

There have been no significant changes to our critical accounting policies and estimates during the quarter ended March 31, 2021.

There have been no significant changes to our critical accounting policies and estimates during the quarter ended June 30, 2021.

Forward-Looking Statements

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 2. Management’s Discussion and Analysis