What changed in this filing

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Item 1. Financial Statements

2022-04-27 compared with 2021-10-26 · 118 added, 254 removed, 407 unchanged (48% of the section changed)

3 unchanged sentences

(amounts in thousands, except share and per share data)

September 30, 2021 December 31, 2020

March 31, 2022 December 31, 2021

Investment in real estate:

22 unchanged sentences

Stockholders' Equity:

Preferred stock, $ 0.01 par value, 10,000,000 shares authorized as of September 30, 2021 and December 31, 2020;

Preferred stock, $ 0.01 par value, 10,000,000 shares authorized as of March 31, 2022 and December 31, 2021;

none issued and outstanding.

Common stock, $ 0.01 par value, 600,000,000 and shares authorized as of September 30, 2021 and December 31, 2020;

183,824,165 and 182,230,631 shares issued and outstanding as of September 30, 2021, and December 31, 2020, respectively.

Common stock, $ 0.01 par value, 600,000,000 shares authorized as of March 31, 2022 and December 31, 2021;

186,006,354 and 185,640,379 shares issued and outstanding as of March 31, 2022, and December 31, 2021, respectively.

Paid-in capital 1,619,164 1,593,362

Distributions in excess of accumulated earnings ( 177,158 ) ( 183,689 )

Accumulated other comprehensive income (loss) 325 —

Accumulated other comprehensive income 13,448 3,524

Total Stockholders’ Equity 1,457,370 1,415,110

6 unchanged sentences

(amounts in thousands, except per share data)

Quarters Ended September 30, Nine Months Ended September 30,

2021 2020 2021 2020

Quarters Ended March 31,

Rental income $ 285,065 $ 249,022

3 unchanged sentences

Other income 13,542 10,521

Gross revenues from home sales 27,276 13,070 66,923 33,245

Brokered resale and ancillary services revenues, net 2,956 1,648 8,422 2,011

Gross revenues from home sales, brokered resales and ancillary services 39,695 25,160

Interest income 1,759 1,767

7 unchanged sentences

Depreciation and amortization 49,394 45,398

Cost of home sales 25,847 12,866 64,571 33,627

Home selling expenses 1,203 1,241 3,855 3,535

Cost of home sales, brokered resales and ancillary services 30,684 18,836

Home selling expenses and ancillary operating expenses 6,481 4,941

General and administrative 12,297 10,512

8 unchanged sentences

Income allocated to non-controlling interests – Common OP Units ( 4,144 ) ( 3,747 )

Redeemable perpetual preferred stock dividends — — ( 8 ) ( 8 )

Net income available for Common Stockholders $ 82,906 $ 65,240

4 unchanged sentences

Comprehensive income allocated to non-controlling interests – Common OP Units ( 4,616 ) ( 3,754 )

Redeemable perpetual preferred stock dividends 0 0 ( 8 ) ( 8 )

Comprehensive income attributable to Common Stockholders $ 92,358 $ 65,362

7 unchanged sentences

(amounts in thousands)

Common Stock Paid-in Capital Redeemable Perpetual Preferred Stock Distributions in Excess of Accumulated Earnings Accumulated Other Comprehensive Income (Loss) Non-controlling Interests – Common OP Units Total Equity

Common Stock Paid-in Capital Distributions in Excess of Accumulated Earnings Accumulated Other Comprehensive Income (Loss) Non-controlling Interests – Common OP Units Total Equity

Balance as of December 31, 2021 $ 1,913 $ 1,593,362 $ ( 183,689 ) $ 3,524 $ 71,061 $ 1,486,171

1 unchanged sentence

Issuance of Common Stock through employee stock purchase plan — 513 — — — 513

Issuance of Common Stock 3 28,367 — — — 28,370

Compensation expenses related to restricted stock and stock options — 2,590 — — — 2,590

Repurchase of Common Stock or Common OP Units — ( 3,449 ) — — — ( 3,449 )

Adjustment for fair market value of swap — — — — 129 — 129

Consolidated net income — — — 65,240 — 3,747 68,987

Distributions — — — ( 66,087 ) — ( 3,796 ) ( 69,883 )

Other — ( 116 ) — — — — ( 116 )

Balance as of March 31, 2021 1,813 1,411,813 — ( 180,370 ) 129 70,961 1,304,346

Exchange of Common OP Units for Common Stock 14 9,310 — — — ( 9,324 ) —

Issuance of Common Stock through employee stock purchase plan — 605 — — — — 605

Compensation expenses related to restricted stock and stock options — 2,821 — — — — 2,821

Adjustment for Common OP Unitholders in the Operating Partnership — ( 1,641 ) — — 1,641 —

3 unchanged sentences

Other — ( 645 ) — — — ( 645 )

Balance as of June 30, 2021 1,827 1,424,350 — ( 185,930 ) 239 61,505 1,301,991

Exchange of Common OP Units for Common Stock 1 438 — — — ( 439 ) —

Issuance of Common Stock through employee stock purchase plan — 379 — — — — 379

Compensation expenses related to restricted stock and stock options — 2,774 — — — — 2,774

Adjustment for Common OP Unitholders in the Operating Partnership — ( 142 ) — — — 142 —

Adjustment for fair market value of swap — — — — 86 — 86

Consolidated net income — — — 70,625 — 3,468 74,093

Distributions — — — ( 66,636 ) — ( 3,272 ) ( 69,908 )

Other — ( 193 ) — — — — ( 193 )

Balance as of September 30, 2021 $ 1,828 $ 1,427,606 $ — $ ( 181,941 ) $ 325 $ 61,404 $ 1,309,222

The accompanying notes are an integral part of the consolidated financial statements.

Equity LifeStyle Properties, Inc.

Consolidated Statements of Changes in Equity

(amounts in thousands)

Balance as of March 31, 2022 $ 1,916 $ 1,619,164 $ ( 177,158 ) $ 13,448 $ 72,967 $ 1,530,337

Common Stock Paid-in Capital Distributions in Excess of Accumulated Earnings Accumulated Other Comprehensive Income (Loss) Non-controlling interests – Common OP Units Total Equity

Balance as of December 31, 2020 $ 1,813 $ 1,411,397 $ ( 179,523 ) $ — $ 71,068 $ 1,304,755

Cumulative effect of change in accounting principle (ASU 2016-13, Financial Instruments - Credit Losses (Topic 326)) — — — ( 3,875 ) — — ( 3,875 )

Balance as of January 1, 2020 1,812 1,402,696 — ( 158,193 ) ( 380 ) 72,078 1,318,013

Exchange of Common OP Units for Common Stock — 58 — — ( 58 ) —

2 unchanged sentences

Repurchase of Common Stock or Common OP Units — ( 2,814 ) — — — ( 2,814 )

Adjustment for Common OP Unitholders in the Operating Partnership — 277 — — — ( 277 ) —

Adjustment for fair market value of swap — — — 129 — 129

3 unchanged sentences

Balance as of March 31, 2021 $ 1,813 $ 1,411,813 $ ( 180,370 ) $ 129 $ 70,961 $ 1,304,346

Issuance of Common Stock through employee stock purchase plan — 531 — — — — 531

Compensation expenses related to restricted stock and stock options — 2,669 — — — — 2,669

Adjustment for Common OP Unitholders in the Operating Partnership — 193 — — — ( 193 ) —

Adjustment for fair market value of swap — — — — 552 — 552

Consolidated net income — — 8 46,187 — 2,658 48,853

Distributions — — ( 8 ) ( 62,387 ) — ( 3,591 ) ( 65,986 )

Other — ( 143 ) — — — — ( 143 )

Balance as of June 30, 2020 1,812 1,405,764 — ( 169,903 ) ( 1,161 ) 70,871 1,307,383

Issuance of Common Stock through employee stock purchase plan — 528 — — — — 528

Compensation expenses related to restricted stock and stock options — 2,878 — — — — 2,878

Adjustment for Common OP Unitholders in the Operating Partnership — ( 592 ) — — — 592 —

Adjustment for fair market value of swap — — — — 1,161 — 1,161

Consolidated net income — — — 50,560 — 2,908 53,468

Distributions — — — ( 62,411 ) — ( 3,590 ) ( 66,001 )

Other — ( 325 ) — — — — ( 325 )

Balance as of September 30, 2020 $ 1,812 $ 1,408,253 $ — $ ( 181,754 ) $ — $ 70,781 $ 1,299,092

The accompanying notes are an integral part of the consolidated financial statements.

2 unchanged sentences

(amounts in thousands)

Nine Months Ended September 30,

Quarters Ended March 31,

Cash Flows From Operating Activities:

7 unchanged sentences

Equity in income of unconsolidated joint ventures ( 171 ) ( 868 )

Distributions of income from unconsolidated joint ventures 52 84

Proceeds from insurance claims, net 59 2,343

22 unchanged sentences

(amounts in thousands)

Nine Months Ended September 30,

Quarters Ended March 31,

Cash Flows From Financing Activities:

Proceeds from stock options and employee stock purchase plan 513 732

Gross proceeds from the issuance of common stock 28,370 —

Distributions:

1 unchanged sentence

Common OP Unitholders ( 3,373 ) ( 3,589 )

Preferred Stockholders ( 8 ) ( 8 )

Share based award tax withholding payments ( 3,449 ) ( 2,814 )

1 unchanged sentence

Mortgage notes payable financing proceeds — 270,000

Term loan repayment ( 300,000 ) —

Term loan proceeds 200,000 300,000

3 unchanged sentences

Other ( 644 ) ( 116 )

Net cash provided by (used in) financing activities 240,559 ( 113,981 )

Net increase in cash and restricted cash 16,212 85,358

Cash and restricted cash, beginning of period 24,060 28,860

Net cash (used in) provided by financing activities ( 157,427 ) 245,790

Net (decrease) increase in cash and restricted cash ( 85,278 ) 67,468

Cash and restricted cash, beginning of year 123,398 24,060

Cash and restricted cash, end of period $ 38,120 $ 91,528

Nine Months Ended September 30,

Quarters Ended March 31,

Supplemental Information:

4 unchanged sentences

Investment in real estate $ ( 15,075 ) $ ( 303,292 )

Notes receivable, net ( 772 ) —

Other assets, net — ( 2,781 )

Deferred revenue - sale of right-to-use contracts 315 —

Accrued expenses and accounts payable — 1,251

Other liabilities 79 —

Rents and other customer payments received in advance and security deposits 51 9,223

10 unchanged sentences

(“ELS”), a Maryland corporation, together with MHC Operating Limited Partnership (the “Operating Partnership”) and its other consolidated subsidiaries (the “Subsidiaries”), are referred to herein as “we,” “us,” and “our”.

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

We provide our customers the opportunity to place manufactured homes, cottages or RVs on our Properties either on a long-term or short-term basis.

We have a unique business model where we own the land which we lease to customers who own manufactured homes and cottages, RVs and/or boats either on a long-term or short-term basis.

Our customers may lease individual developed areas (“Sites”) or enter into right-to-use contracts, also known as membership subscriptions, which provide them access to specific Properties for limited stays.

Our Properties are owned primarily by the Operating Partnership and managed internally by affiliates of the Operating Partnership.

ELS is the sole general partner of the Operating Partnership, has exclusive responsibility and discretion in management and control of the Operating Partnership and held a 95.3 % interest as of September 30, 2021.

ELS is the sole general partner of the Operating Partnership, has exclusive responsibility and discretion in management and control of the Operating Partnership and held a 95.2 % interest as of March 31, 2022.

As the general partner with control, ELS is the primary beneficiary of, and therefore consolidates, the Operating Partnership.

6 unchanged sentences

Intercompany balances and transactions have been eliminated.

All adjustments to the interim consolidated financial statements are of a normal, recurring nature and, in the opinion of management, are necessary for a fair presentation of results for these interim periods.

All adjustments to the unaudited interim consolidated financial statements are of a normal, recurring nature and, in the opinion of management, are necessary for a fair presentation of results for these interim periods.

Revenues and expenses are subject to seasonal fluctuations and accordingly, quarterly interim results may not be indicative of full year results.

Certain prior period amounts have been reclassified on our unaudited interim consolidated financial statements to conform with current year presentation.

Note 2 – Summary of Significant Accounting Policies

2 unchanged sentences

Leases with customers renting our Sites are accounted for as operating leases.

The rental income associated with these leases is accounted for in accordance with ASC 842, Leases, and is recognized over the term of the respective lease or the length of a customer's stay.

The rental income associated with these leases is accounted for in accordance with the Accounting Standards Codification (“ASC”) 842, Leases, and is recognized over the term of the respective lease or the length of a customer’s stay.

MH Sites are generally leased on an annual basis to residents who own or lease factory-built homes, including manufactured homes.

26 unchanged sentences

(b) Restricted Cash

As of September 30, 2021 and December 31, 2020, restricted cash consists of $ 31.7 million and $ 24.1 million, respectively, primarily related to cash reserved for customer deposits and escrows for insurance and real estate taxes.

In March 2020, the FASB issued ASU No.

2020-04, Reference Rate Reform - Facilitation of the Effects of Reference Rate Reform on Financial Reporting , which provides temporary optional expedients and exceptions to the existing guidance on contract modifications and hedge accounting to ease the financial reporting burdens of the expected market transition from the London Interbank Offered Rate (“LIBOR”) and other interbank offered rates to alternative reference rates, such as the Secured Overnight Financing Rate (“SOFR”).

The guidance in ASU 2020-04 is optional, effective immediately, and may be elected over time as reference rate reform activities occur generally through December 31, 2022.

We continue to evaluate the impact of this guidance and we do not expect the adoption of this guidance to have a material impact on our consolidated financial statements.

As of March 31, 2022 and December 31, 2021, restricted cash consists of $ 29.3 million for each period, primarily related to cash reserved for customer deposits and escrows for insurance and real estate taxes.

Note 3 – Leases

6 unchanged sentences

(amounts in thousands)

As of September 30, 2021

As of March 31, 2022

2022 $ 119,123

1 unchanged sentence

Total $ 508,154

Equity LifeStyle Properties, Inc.

Notes to Consolidated Financial Statements

Note 3 – Leases (continued)

We lease land under non-cancelable operating leases at 14 Properties expiring at various dates between 2022 and 2054.

1 unchanged sentence

We also have other operating leases, primarily office space, expiring at various dates through 2032.

For the quarters ended September 30, 2021 and 2020, total operating lease payments were $ 2.9 million and $ 2.5 million, respectively.

For the nine months ended September 30, 2021 and 2020, total operating lease payments were $ 8.0 million and $ 7.3 million, respectively.

The following table summarizes our minimum future rental payments, excluding variable costs, which are discounted by our incremental borrowing rate to calculate the lease liability for our operating leases as of September 30, 2021:

As of September 30, 2021

For the quarters ended March 31, 2022 and 2021, total operating lease payments were $ 2.6 million and $ 2.5 million, respectively.

Equity LifeStyle Properties, Inc.

Notes to Consolidated Financial Statements

Note 3 – Leases (continued)

As of March 31, 2022

(amounts in thousands)

9 unchanged sentences

Total lease liabilities $ 6,157 $ 23,532 $ 29,689

Right-of-use (“ROU”) assets and lease liabilities from our operating leases, included within Other assets, net and Accounts payable and other liabilities on the Consolidated Balance Sheets, were $ 23.7 million and $ 25.7 million, respectively, as of September 30, 2021.

The weighted average remaining lease term for our operating leases was nine years and the weighted average incremental borrowing rate was 3.8 % at September 30, 2021.

Right-of-use (“ROU”) assets and lease liabilities from our operating leases, included within Other assets, net and Accounts payable and other liabilities on the Consolidated Balance Sheets, were $ 27.8 million and $ 29.7 million, respectively, as of March 31, 2022.

The weighted average remaining lease term for our operating leases was ten years and the weighted average incremental borrowing rate was 3.8 % at March 31, 2022.

ROU assets and lease liabilities from our operating leases, included within Other assets, net and Accounts payable and other liabilities on the Consolidated Balance Sheets, were $ 30.3 million and $ 30.7 million, respectively, as of December 31, 2021.

The weighted average remaining lease term for our operating leases was eight years and the weighted average incremental borrowing rate was 4.0 % at December 31, 2020.

Equity LifeStyle Properties, Inc.

Notes to Consolidated Financial Statements

The weighted average remaining lease term for our operating leases was seven years and the weighted average incremental borrowing rate was 3.8 % at December 31, 2021.

Note 4 – Earnings Per Common Share

The following table sets forth the computation of basic and diluted earnings per share of common stock for the quarters and nine months ended September 30, 2021 and 2020:

Quarters Ended September 30, Nine Months Ended September 30,

The following table sets forth the computation of basic and diluted earnings per share of common stock for the quarters ended March 31, 2022 and 2021:

Quarters Ended March 31,

(amounts in thousands, except per share data) 2022 2021

Net income available for Common Stockholders – Basic $ 82,906 $ 65,240

Amounts allocated to dilutive securities 3,468 2,908 10,236 9,415

Amounts allocated to non controlling interest (dilutive securities) 4,144 3,747

Net income available for Common Stockholders – Fully Diluted $ 87,050 $ 68,987

10 unchanged sentences

The following quarterly distributions have been declared and paid to Common Stockholders and the Operating Partnership unit (“OP Unit”) holders since January 1, 2021.

Equity LifeStyle Properties, Inc.

Notes to Consolidated Financial Statements

Note 5 – Common Stock and Other Equity Related Transactions (continued)

Distribution Amount Per Share For the Quarter Ended Stockholder Record Date Payment Date

4 unchanged sentences

$ 0.4100 March 31, 2022 March 25, 2022 April 8, 2022

$ 0.3625 June 30, 2021 June 25, 2021 July 9, 2021

$ 0.3625 September 30, 2021 September 24, 2021 October 8, 2021

Equity Offering Program

On July 30, 2020, we entered into our current at-the-market (“ATM”) equity offering program with certain sales agents, pursuant to which we may sell, from time-to-time, shares of our common stock, par value $ 0.01 per share, having an aggregate offering price of up to $ 200.0 million.

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

On February 24, 2022, we entered into our current at-the-market (“ATM”) equity offering program with certain sales agents, pursuant to which we may sell, from time-to-time, shares of our common stock, par value $ 0.01 per share, having an aggregate offering price of up to $ 500.0 million.

Prior to the new program, the aggregate offering price was up to $ 200.0 million.

As of March 31, 2022, the full capacity of our current ATM equity offering program remained available for issuance.

The following table presents the shares that were issued under our prior ATM equity offering program during the quarter ended March 31, 2022.

There was no ATM equity activity during the quarter ended March 31, 2021.

Quarter Ended March 31,

(amounts in thousands, except share data)

Shares of common stock sold 328,123

Weighted average price $ 86.46

Total gross proceeds $ 28,370

Commissions paid to sales agents $ 389

Subject to certain limitations, OP Unit holders can request an exchange of any or all of their OP Units for shares of Common Stock at any time.

Upon receipt of such a request, we may, in lieu of issuing shares of Common Stock, cause the Operating Partnership to pay cash.

During the nine months ended September 30, 2021 and 2020, 1,451,710 and 9,228 OP Units, respectively, were exchanged for an equal number of shares of Common Stock.

During the quarters ended March 31, 2022 and 2021, 8,640 and 8,560 OP Units, respectively, were exchanged for an equal number of shares of Common Stock.

Note 6 – Investment in Real Estate

On September 30, 2021, we completed the acquisition of an approximately 40 acre vacant land parcel in Nokomis, Florida, adjacent to our MH community, Lake Village, for additional expansion.

The purchase price was $ 10.4 million, which was funded with available cash.

On August 26, 2021, we acquired a portion of Pirateland Camping Resort located in Myrtle Beach, South Carolina for $ 110.8 million.

Pirateland is a 1,484 site RV community, and the ELS parcel contains 813 sites.

Pirateland, including the ELS parcel, is managed by a tenant pursuant to existing ground leases.

The ground lease with respect to the ELS parcel expires in February 2025.

The acquisition was funded with proceeds from our unsecured line of credit.

On June 3, 2021, we completed the acquisition of Pine Haven, a 629 -site RV community located in Cape May, New Jersey, for a purchase price of $ 62.8 million.

The acquisition was funded with our unsecured line of credit.

On February 5, 2021, we completed the acquisition of a portfolio of 11 marinas, containing 3,986 slips and 181 RV sites located in Florida, North Carolina, South Carolina, Kentucky and Ohio.

The purchase price of these properties was $ 262.0 million, which was funded with proceeds from the Loan as discussed in Note 8.

Borrowing Arrangements .

On January 21, 2021, we completed the acquisition of Okeechobee KOA Resort, a 740 -site RV community located in Okeechobee, Florida, for a purchase price of $ 42.2 million.

The acquisition was funded with our unsecured line of credit.

On July 31, 2020, we completed the acquisition of an 11 -acre development parcel that contained an additional 56 sites in Stella, North Carolina.

On August 27, 2020, we completed the acquisition of a 51 -acre vacant land parcel, also in Stella, North Carolina, for additional expansion.

Both parcels are adjacent to our RV community, White Oak Shores.

The total aggregate purchase price was $ 4.8 million, which was funded with available cash.

On April 21, 2020, we completed the acquisition of a 4.6 -acre vacant land parcel in North Ellenton, Florida, adjacent to our MH community, Colony Cove, for additional expansion.

The purchase price was $ 2.2 million.

On February 18, 2022, we completed the acquisition of Blue Mesa Recreational Ranch, a 385 -site membership RV community located in Gunnison, Colorado, and Pilot Knob RV Resort a 247 -site RV community located in Winterhaven, California for a combined purchase price of $ 15.9 million.

The acquisition was funded with available cash.

Equity LifeStyle Properties, Inc.

Notes to Consolidated Financial Statements

Note 7 – Investments in Unconsolidated Joint Ventures

The following table summarizes our investment in unconsolidated joint ventures (investment amounts in thousands with the number of Properties shown parenthetically as of September 30, 2021 and December 31, 2020 , respectively ) :

The following table summarizes our investment in unconsolidated joint ventures (investment amounts in thousands with the number of Properties shown parenthetically as of March 31, 2022 and December 31, 2021 , respectively):

Investment as of Income/(Loss) for

the nine months ended

the quarters ended

Investment Location Number of Sites Economic

September 30, 2021 December 31, 2020 September 30, 2021 September 30, 2020

March 31, 2022 December 31, 2021 March 31, 2022 March 31, 2021

Meadows Various (2,2) 1,077 50 % $ 60 $ — $ 260 $ 550

3 unchanged sentences

ECHO JV Various — 50 % 18,313 18,136 177 136

RVC Various 1,019 80 % 53,085 49,397 ( 421 ) —

Mulberry Farms Various — 50 % (d)

2,817 $ 79,688 $ 70,312 $ 171 $ 868

_____________________

(a) The percentages shown approximate our economic interest as of September 30, 2021.

(a) The percentages shown approximate our economic interest as of March 31, 2022.

Our legal ownership interest may differ.

(b) Includes two joint ventures in which we own a 65 % interest and the Crosswinds joint venture in which we own a 49 % interest.

(c) Primarily consists of a 50 % interest in Voyager RV Resort and a 33 % interest in the utility plant servicing this Property.

On October 14, 2021, we acquired our joint venture partner’s 50 % interest in Voyager RV Resort.

Subsequent events .

We received approximately $ 2.4 million and $ 2.4 million in distributions from our unconsolidated joint ventures for the nine months ended September 30, 2021 and 2020, respectively.

Approximately $ 2.2 million and $ 1.8 million of the distributions made to us exceeded our basis in our unconsolidated joint ventures for the nine months ended September 30, 2021 and 2020, respectively, and as such, were recorded as income from unconsolidated joint ventures.

Equity LifeStyle Properties, Inc.

Notes to Consolidated Financial Statements

(b) Includes two joint ventures in which we own a 65 % interest in each and the Crosswinds joint venture in which we own a 49 % interest.

On October 14, 2021, we completed the acquisition of the remaining 50 % interest in Voyager RV Resort.

(d) On January 18, 2022, we acquired a 50 % equity interest in an entity developing an age-restricted community in Prescott Valley, Arizona.

We received approximately $ 0.4 million and $ 0.7 million in distributions from our unconsolidated joint ventures for the quarters ended March 31, 2022 and 2021, respectively.

Approximately $ 0.3 million and $ 0.7 million of the distributions made to us exceeded our basis in our unconsolidated joint ventures for the quarters ended March 31, 2022 and 2021, respectively, and as such, were recorded as income from unconsolidated joint ventures.

Note 8 – Borrowing Arrangements

2 unchanged sentences

The following table presents the fair value of our mortgage notes payable:

As of September 30, 2021 As of December 31, 2020

As of March 31, 2022 As of December 31, 2021

(amounts in thousands)

1 unchanged sentence

Mortgage notes payable, excluding deferred financing costs $ 3,065,711 $ 2,624,409 $ 2,743,527 $ 2,654,086

The weighted average interest rate on our outstanding mortgage indebtedness, including the impact of premium/discount amortization and loan cost amortization on mortgage indebtedness, as of September 30, 2021, was approximately 3.8 % per annum.

The debt bears interest at stated rates ranging from 2.4 % to 8.9 % per annum and matures on various dates ranging from 2022 to 2041.

The debt encumbered a total of 117 and 116 of our Properties as of September 30, 2021 and December 31, 2020, respectively, and the gross carrying value of such Properties was approximately $ 2,726.0 million and $ 2,580.9 million, as of September 30, 2021 and December 31, 2020, respectively.

2021 Activity

During the quarter ended March 31, 2021, we entered into a $ 270.0 million secured financing transaction maturing in 10 years and bearing a fixed interest rate of 2.4 % per annum.

The loan is secured by two RV communities and one MH community.

The net proceeds from the transaction were used to repay $ 67.0 million of principal on two mortgage loans that were due to mature in 2022, incurring $ 1.9 million of prepayment penalties, as well as to repay a portion of the outstanding balance on our line of credit.

These mortgage loans had a weighted average interest rate of 5.1 % per annum and were secured by two RV communities.

2020 Activity

During the quarter ended March 31, 2020, we entered into a $ 275.4 million secured credit facility with Fannie Mae, maturing in 10 years and bearing a fixed interest rate of 2.7 % per annum.

The facility is secured by eight MH and four RV communities.

We also repaid $ 48.1 million of principal on three mortgage loans that were due to mature in 2020, incurring $ 1.0 million of prepayment penalties.

These mortgage loans had a weighted average interest rate of 5.2 % per annum and were secured by three MH communities.

During the quarter ended September 30, 2020, we entered into a Secured Credit Facility with Fannie Mae for $ 386.9 million.

The loan consisted of two tranches with a weighted average interest rate of 2.55 % per annum and a weighted average maturity of 13.4 years.

The first tranche generated proceeds of $ 202.0 million with an interest rate of 2.47 % per annum and a maturity of 12 years.

The second tranche generated proceeds of $ 184.9 million with an interest rate of 2.64 % per annum and a maturity of 15 years.

The loan is secured by ten MH communities.

The net proceeds from the transaction were primarily used to repay our $ 200.0 million unsecured term loan scheduled to mature in 2023 and $ 166.8 million of secured loans scheduled to mature in 2021.

The unsecured term loan had an interest rate of LIBOR plus 1.20 % to 1.90 % per annum and, subject to certain conditions, could be prepaid at any time without premium or penalty.

In connection with the term loan, we entered into a LIBOR swap agreement allowing us to trade the variable rate of LIBOR on the term loan for a fixed interest rate of 1.85 %.

Our spread over LIBOR was 1.20 % resulting in an all-in interest rate of 3.05 % per annum.

In connection with the repayment of the unsecured term loan, we terminated the associated swap agreement as disclosed in Note 9.

Derivative Instruments and Hedging Activities.

The secured loans had a weighted average interest rate of approximately 5.0 % per annum.

As part of the repayment of the loans, we incurred early debt retirement costs of $ 8.8 million.

Third Amended and Restated Unsecured Credit Facility

During the quarter ended June 30, 2021, we entered into a Third Amended and Restated Credit Agreement (the “Third Amended and Restated Credit Agreement”) by and among us, MHC Operating Limited Partnership, Wells Fargo Bank, National Association, as Administrative Agent (the “Administrative Agent”), and the other lenders named therein, pursuant to which we have access to a $ 500.0 million unsecured line of credit (the “LOC”) and a $ 300.0 million senior unsecured term loan (the “Term Loan”).

We have the option to increase the borrowing capacity by $ 200.0 million, subject to certain conditions.

The debt encumbered a total of 114 and 117 of our Properties as of March 31, 2022 and December 31, 2021, respectively, and the gross carrying value of such Properties was approximately $ 2,811.0 million and $ 2,817.5 million, as of March 31, 2022 and December 31, 2021, respectively.

During the quarter ended March 31, 2022, we repaid $ 14.2 million of principal on two mortgage loans that were due to mature in 2022, incurring $ 0.5 million of prepayment penalties.

These mortgage loans had a weighted average interest rate of 5.25 % per annum and were secured by three RV communities.

In April 2022, we closed on a secured refinancing transaction generating gross proceeds of $ 200.0 million.

The loan is secured by one MH community, has a fixed interest rate of 3.36 % per annum and has a maturity date of May 1, 2034.

Subsequent Events for further details .

Equity LifeStyle Properties, Inc.

1 unchanged sentence

Note 8 – Borrowing Arrangements (continued)

LOC maturity date was extended to April 18, 2025, and this term can be extended two times for additional six month increments, subject to certain conditions.

The LOC bears interest at a rate of LIBOR plus 1.25 % to 1.65 % and requires an annual facility fee of 0.20 % to 0.35 %.

The Term Loan matures on April 17, 2026 and has an interest rate of LIBOR plus 1.40 % to 1.95 % per annum.

For both the LOC and Term Loan, the spread over LIBOR is variable based on leverage throughout the respective loan terms.

Unsecured Debt

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 %.

During the quarter ended June 30, 2021, in conjunction with the issuance of the Term Loan, we repaid the Loan.

The LOC had a balance of $ 220.0 million and $ 222.0 million outstanding as of September 30, 2021 and December 31, 2020, respectively.

As of September 30, 2021, our LOC had remaining borrowing capacity of $ 280.0 million.

As of September 30, 2021, we were in compliance in all material respects with the covenants in all our borrowing arrangements.

During the quarter ended March 31, 2022 we entered into a $ 200.0 million senior unsecured term loan agreement.

The maturity date is January 21, 2027, with an interest rate of Secured Overnight Financing Rate (“SOFR”) plus approximately 1.30 % to 1.80 %, depending on leverage levels.

The Line of Credit (“LOC”) had a balance of $ 69.0 million and $ 349.0 million outstanding as of March 31, 2022 and December 31, 2021, respectively.

As of March 31, 2022, our LOC had a remaining borrowing capacity of $ 431.0 million.

In conjunction with the closing of the secured refinancing transaction, we repaid the remaining balance on the LOC.

As of April 26, 2022, there is no outstanding balance on the LOC.

As of March 31, 2022, we were in compliance in all material respects with the covenants in all our borrowing arrangements.

Note 9 – Derivative Instruments and Hedging

3 unchanged sentences

We do not enter into derivatives for speculative purposes.

During the nine months ended September 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.

We have 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 with a fixed interest rate of 0.39 % per annum and matures on March 25, 2024.

Based on the leverage as of September 30, 2021, our spread over LIBOR was 1.40 % resulting in an estimated all-in interest rate of 1.79 % per annum.

During the nine months ended September 30, 2020, in connection with the repayment of our $ 200.0 million unsecured term loan (See Note 8.

Borrowing Arrangements for additional information), we terminated the interest rate swap that was scheduled to mature on November 1, 2020.

As a result of the interest rate swap termination, we incurred an early termination fee of $ 0.9 million, which was recognized in the Consolidated Statements of Income and Comprehensive Income.

Based on the leverage as of March 31, 2022, our spread over LIBOR was 1.40 % resulting in an estimated all-in interest rate of 1.79 % per annum.

Our derivative financial instrument was classified as Level 2 in the fair value hierarchy.

The following table presents the fair value of our derivative financial instrument:

As of September 30, As of December 31,

As of March 31, As of December 31,

(amounts in thousands) Balance Sheet Location 2022 2021

3 unchanged sentences

in OCI on derivative

for the nine months ended September 30, Location of (gain)/ loss reclassified from

for the quarters ended March 31, Location of (gain)/ loss reclassified from

accumulated OCI into income Amount of (gain)/loss reclassified from

accumulated OCI into income

for the nine months ended September 30,

for the quarters ended March 31,

(amounts in thousands) 2022 2021 (amounts in thousands) 2022 2021

Interest Rate Swap $ ( 9,661 ) $ ( 112 ) Interest Expense $ 263 $ 17

Equity LifeStyle Properties, Inc.

Notes to Consolidated Financial Statements

Note 9 – Derivative Instruments and Hedging (continued)

During the next twelve months, we estimate that $ 4.2 million will be reclassified as a decrease to interest expense.

1 unchanged sentence

We determined that no adjustment was necessary for non-performance risk on our derivative obligation.

As of September 30, 2021, we had not posted any collateral related to this Swap.

As of March 31, 2022, we had not posted any collateral related to the Swap.

Equity LifeStyle Properties, Inc.

Notes to Consolidated Financial Statements

Note 10 – Equity Incentive Awards

5 unchanged sentences

The 13,178 shares of restricted stock subject to 2022 performance goals have a grant date fair value of $ 1.0 million.

During the quarter ended June 30, 2021, we awarded to certain members of our Board of Directors 58,192 shares of restricted stock at a fair value of approximately $ 4.0 million and options to purchase 16,185 shares of common stock with an exercise price of $ 68.74 .

These are time-based awards subject to various vesting dates between October 27, 2021 and April 27, 2023.

Stock based compensation expense, reported in General and administrative expense on the Consolidated Statements of Income and Comprehensive Income, for the quarters ended September 30, 2021 and 2020, was $ 2.8 million and $ 2.9 million, respectively, and for the nine months ended September 30, 2021 and 2020, was $ 8.2 million and $ 8.5 million, respectively.

Stock based compensation expense, reported in General and administrative expense on the Consolidated Statements of Income and Comprehensive Income, was $ 2.6 million for each of the quarters ended March 31, 2022 and 2021.

Note 11 – Commitments and Contingencies

10 unchanged sentences

The Nicholsons filed a demand for arbitration on January 28, 2020, which they subsequently amended, pursuant to which they request (i) a declaration that the Operating Partnership, as the “owner and manager” of Westwinds, is “required by the Ground Leases, and State and local law to deliver the Property free of any encumbrances or third-party claims at the expiration of the lease terms,” (ii) that the Operating Partnership anticipatorily breached the ground leases by publicly repudiating any such obligation and (iii) that the Operating Partnership is required to indemnify the Nicholsons with respect to the claims brought by the interested parties in the Superior Court proceeding.

Equity LifeStyle Properties, Inc.

Notes to Consolidated Financial Statements

Note 11 – Commitments and Contingencies (continued)

On February 3, 2020, the Nicholsons filed a motion in California Superior Court to compel arbitration and to stay the Superior Court litigation, which motion was heard on June 25, 2020.

1 unchanged sentence

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

On February 4, 2022, the California Court of Appeal affirmed the Superior Court’s order denying the Nicholsons' motion to compel arbitration.

On February 22, 2022, the Nicholsons filed a petition for rehearing, which the Court of Appeal denied on March 2, 2022.

On March 16, 2022, the Nicholsons filed a petition for review with the California Supreme Court.

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

We intend to continue to vigorously defend our interests in this matter.

As of September 30, 2021, we have not made an accrual, as we are unable to predict the outcome of this matter or reasonably estimate any possible loss.

As of March 31, 2022, we have not made an accrual, as we are unable to predict the outcome of this matter or reasonably estimate any possible loss.

Equity LifeStyle Properties, Inc.

5 unchanged sentences

The distribution of the Properties throughout the United States reflects our belief that geographic diversification helps insulate the portfolio from regional economic influences.

All revenues were from external customers and there is no customer who contributed 10% or more of our total revenues during the quarters and nine months ended September 30, 2021 or 2020.

The following tables summarize our segment financial information for the quarters and nine months ended September 30, 2021 and 2020:

Quarter Ended September 30, 2021

(amounts in thousands) Property

Operations Home Sales

Operations Consolidated

Operations revenues $ 298,099 $ 31,755 $ 329,854

Operations expenses ( 148,094 ) ( 28,588 ) ( 176,682 )

Income from segment operations 150,005 3,167 153,172

Interest income 1,320 483 1,803

Depreciation and amortization ( 41,761 ) ( 2,653 ) ( 44,414 )

Loss on sale of real estate, net — — —

Income (loss) from operations $ 109,564 $ 997 $ 110,561

Reconciliation to consolidated net income:

Corporate interest income 2

Income from other investments, net 1,238

General and administrative ( 10,401 )

Other expenses ( 797 )

Interest and related amortization ( 27,361 )

Equity in income of unconsolidated joint ventures 851

Early debt retirement —

Consolidated net income $ 74,093

Total assets $ 4,723,386 $ 258,474 $ 4,981,860

Capital improvements $ 52,146 $ 32,169 $ 84,315

Equity LifeStyle Properties, Inc.

Notes to Consolidated Financial Statements

Note 12 – Reportable Segments (continued)

Quarter Ended September 30, 2020

All revenues were from external customers and there is no customer who contributed 10% or more of our total revenues during the quarters ended March 31, 2022 or 2021.

The following tables summarize our segment financial information for the quarters ended March 31, 2022 and 2021:

Quarter Ended March 31, 2022

(amounts in thousands) Property

18 unchanged sentences

Capital improvements $ 54,990 $ 28,657 $ 83,647

Nine Months Ended September 30, 2021

Quarter Ended March 31, 2021

(amounts in thousands) Property

22 unchanged sentences

Note 12 – Reportable Segments (continued)

Nine Months Ended September 30, 2020

(amounts in thousands) Property

Operations Home Sales

Operations Consolidated

Operations revenues $ 764,913 $ 46,147 $ 811,060

Operations expenses ( 369,974 ) ( 41,468 ) ( 411,442 )

Income from segment operations 394,939 4,679 399,618

Interest income 3,240 2,148 5,388

Depreciation and amortization ( 107,709 ) ( 8,228 ) ( 115,937 )

Income (loss) from operations $ 290,470 $ ( 1,401 ) $ 289,069

Reconciliation to consolidated net income:

Corporate interest income 11

Income from other investments, net 3,093

General and administrative ( 31,156 )

Other expenses ( 1,885 )

Interest and related amortization ( 77,540 )

Equity in income of unconsolidated joint venture 2,239

Early debt retirement ( 10,786 )

Consolidated net income $ 173,045

Total assets $ 3,997,064 $ 263,349 $ 4,260,413

Capital Improvements $ 110,544 $ 44,517 $ 155,061

The following table summarizes our financial information for the Property Operations segment for the quarters and nine months ended September 30, 2021 and 2020:

Quarters Ended September 30, Nine Months Ended September 30,

The following table summarizes our financial information for the Property Operations segment for the quarters ended March 31, 2022 and 2021:

Quarters Ended March 31,

(amounts in thousands) 2022 2021

4 unchanged sentences

Other income 13,542 10,521

Ancillary services revenues, net 2,619 1,403 7,436 1,327

Gross revenues from ancillary services 12,556 9,507

Total property operations revenues 325,426 280,998

3 unchanged sentences

Membership sales commissions, deferred, net ( 583 ) ( 1,499 )

Cost of ancillary services 5,721 3,808

Ancillary operating expenses 5,018 3,635

Property management 17,871 15,380

1 unchanged sentence

Income from property operations segment $ 170,438 $ 148,018

Equity LifeStyle Properties, Inc.

Notes to Consolidated Financial Statements

Note 12 – Reportable Segments (continued)

The following table summarizes our financial information for the Home Sales and Rentals Operations segment for the quarters and nine months ended September 30, 2021 and 2020:

Quarters Ended September 30, Nine Months Ended September 30,

The following table summarizes our financial information for the Home Sales and Rentals Operations segment for the quarters ended March 31, 2022 and 2021:

Quarters Ended March 31,

(amounts in thousands) 2022 2021

1 unchanged sentence

$ 3,961 $ 4,293

Gross revenue from home sales 27,276 13,070 66,923 33,245

Brokered resale revenues, net 337 245 986 684

Ancillary services revenues, net — — — —

Gross revenue from home sales and brokered resales 27,139 15,653

Total revenues 31,100 19,946

Rental home operating and maintenance 1,402 1,243

Cost of home sales 25,847 12,866 64,571 33,627

Cost of home sales and brokered resales 24,963 15,028

Home selling expenses 1,463 1,306

5 unchanged sentences

Note 13 – Subsequent Events

On October 14, 2021, we acquired our joint venture partner’s 50 % interest in Voyager RV Resort.

The purchase price to acquire our partner’s interest consisted of debt assumption of $ 20.1 million and a $35.2 million payment primarily comprised of 427,723 Operating Partnership units issued with the remainder in cash.

Upon closing the acquisition, we became the resort’s sole owner.

Voyager, located in Tucson, AZ, is a resort with 1,801 sites of which 1,576 are RV and 225 are MH.

On April 18, 2022, we closed on a secured refinancing transaction generating gross proceeds of $ 200.0 million.

The loan is secured by one MH community, has a fixed interest rate of 3.36 % per annum and has a maturity date of May 1, 2034.

The net proceeds from the transaction were used to repay all debt scheduled to mature in 2022 and to repay amounts outstanding on the LOC.

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 1. Financial Statements