What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2023-10-25 compared with 2023-08-03 · 128 added, 107 removed, 518 unchanged (31% of the section changed)

3 unchanged sentences

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

June 30, 2023 December 31, 2022

September 30, 2023 December 31, 2022

Investment in real estate:

22 unchanged sentences

Stockholders' Equity:

Preferred stock, $ 0.01 par value, 10,000,000 shares authorized as of June 30, 2023 and December 31, 2022;

Preferred stock, $ 0.01 par value, 10,000,000 shares authorized as of September 30, 2023 and December 31, 2022;

none issued and outstanding.

Common stock, $ 0.01 par value, 600,000,000 shares authorized as of June 30, 2023 and December 31, 2022;

186,273,876 and 186,120,298 shares issued and outstanding as of June 30, 2023 and December 31, 2022, respectively.

Common stock, $ 0.01 par value, 600,000,000 shares authorized as of September 30, 2023 and December 31, 2022;

186,390,612 and 186,120,298 shares issued and outstanding as of September 30, 2023 and December 31, 2022, respectively.

Paid-in capital 1,641,553 1,628,618

9 unchanged sentences

(amounts in thousands, except per share data)

Quarters Ended June 30, Six Months Ended June 30,

Quarters Ended September 30, Nine Months Ended September 30,

2023 2022 2023 2022

62 unchanged sentences

Balance as of June 30, 2023 $ 1,916 $ 1,638,354 $ — $ ( 225,640 ) $ 17,327 $ 71,155 $ 1,503,112

Exchange of Common OP Units for Common Stock 1 812 — — — ( 813 ) —

Issuance of Common Stock through employee stock purchase plan — 736 — — — — 736

Compensation expenses related to restricted stock and stock options — 1,799 — — — — 1,799

Adjustment for Common OP Unitholders in the Operating Partnership — ( 27 ) — — — 27 —

Adjustment for fair market value of swaps — — — — ( 1,763 ) — ( 1,763 )

Consolidated net income — — — 76,969 — 3,772 80,741

Distributions — — — ( 83,410 ) — ( 4,087 ) ( 87,497 )

Other — ( 121 ) — — — — ( 121 )

Balance as of September 30, 2023 $ 1,917 $ 1,641,553 $ — $ ( 232,081 ) $ 15,564 $ 70,054 $ 1,497,007

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

19 unchanged sentences

Balance as of June 30, 2022 $ 1,916 $ 1,622,876 $ — $ ( 191,828 ) $ 16,241 $ 72,531 $ 1,521,736

Exchange of Common OP Units for Common Stock — 203 — — — ( 203 ) —

Issuance of Common Stock through employee stock purchase plan — 458 — — — — 458

Compensation expenses related to restricted stock and stock options — 2,654 — — — — 2,654

Adjustment for Common OP Unitholders in the Operating Partnership — ( 342 ) — — — 342 —

Adjustment for fair market value of swap — — — — 4,235 — 4,235

Consolidated net income — — — 67,164 — 3,346 70,510

Distributions — — — ( 76,305 ) — ( 3,801 ) ( 80,106 )

Other — ( 98 ) — — — — ( 98 )

Balance as of September 30, 2022 $ 1,916 $ 1,625,751 $ — $ ( 200,969 ) $ 20,476 $ 72,215 $ 1,519,389

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

2 unchanged sentences

(amounts in thousands)

Six Months Ended June 30,

Nine Months Ended September 30,

Cash Flows From Operating Activities:

13 unchanged sentences

Changes in assets and liabilities:

Manufactured homes ( 30,402 ) ( 2,136 )

Manufactured homes, net ( 31,980 ) ( 6,972 )

Notes receivable, net ( 4,365 ) ( 3,954 )

16 unchanged sentences

(amounts in thousands)

Six Months Ended June 30,

Nine Months Ended September 30,

Cash Flows From Financing Activities:

17 unchanged sentences

Cash and restricted cash, end of period $ 59,680 $ 30,510

Six Months Ended June 30,

Nine Months Ended September 30,

Supplemental Information:

Cash paid for interest, net $ 97,297 $ 82,368

Cash paid for manufactured homes $ 66,562 $ 50,698

Cash paid for the purchase of manufactured homes $ 90,477 $ 82,698

Real estate acquisitions:

16 unchanged sentences

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 June 30, 2023.

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

9 unchanged sentences

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

Equity LifeStyle Properties, Inc.

Notes to Consolidated Financial Statements

Note 2 – Summary of Significant Accounting Policies

16 unchanged sentences

The estimate for credit losses is a result of our ongoing assessments and evaluations of collectability, including historical loss experience, current market conditions and future expectations in forecasting credit losses.

Equity LifeStyle Properties, Inc.

Notes to Consolidated Financial Statements

Note 2 – Summary of Significant Accounting Policies (continued)

Annual membership subscriptions and membership upgrade sales are accounted for in accordance with ASC 606 , Revenue from Contracts with Customers.

10 unchanged sentences

(b) Restricted Cash

As of June 30, 2023 and December 31, 2022, restricted cash consisted of $ 20.7 million and $ 19.7 million, respectively, primarily related to cash reserved for customer deposits and escrows for insurance and real estate taxes.

As of September 30, 2023 and December 31, 2022, restricted cash consisted of $ 21.2 million and $ 19.7 million, respectively, primarily related to cash reserved for customer deposits and escrows for insurance and real estate taxes.

4 unchanged sentences

Any amount of insurance recovery in excess of the losses incurred and any amount of insurance recovery related to business interruption are considered a gain contingency and will be recognized in the period in which the insurance proceeds are received.

During the six months ended June 30, 2023, we recognized expenses of approximately $ 10.3 million related to debris removal and

Equity LifeStyle Properties, Inc.

Notes to Consolidated Financial Statements

Note 2 – Summary of Significant Accounting Policies (continued)

cleanup related to Hurricane Ian and an offsetting insurance recovery revenue accrual of $ 10.3 million related to the expected insurance recovery as a result of Hurricane Ian which is included in Casualty-related charges/(recoveries), net in the Consolidated Statements of Income and Comprehensive Income.

During the six months ended June 30, 2023 we received insurance proceeds of approximately $ 36.6 million of which $ 8.0 million was identified as business interruption recovery revenue.

During the nine months ended September 30, 2023, we recognized expenses of approximately $ 12.1 million related to debris removal and cleanup related to Hurricane Ian and an offsetting insurance recovery revenue accrual of $ 12.1 million related to the expected insurance recovery as a result of Hurricane Ian which is included in Casualty-related charges/(recoveries), net in the Consolidated Statements of Income and Comprehensive Income.

During the nine months ended September 30, 2023, we received insurance proceeds of approximately $ 48.8 million, of which $ 9.6 million represented business interruption recovery revenue.

(e) Prior period correction

4 unchanged sentences

There was no impact to the Consolidated Statements of Income and Comprehensive Income, Consolidated Balance Sheets, or Consolidated Statements of Changes in Equity for any periods presented.

In preparing the Company’s Consolidated Statements of Cash Flows for the six months ended June 30, 2023, the Company made appropriate revisions to its Consolidated Statements of Cash Flows for historical periods for purposes of comparability to the current period.

Such changes are reflected for the six months ended June 30, 2022, included in these financial statements, and will also be reflected in the historical periods included in the Company’s subsequent quarterly and annual consolidated financial statements.

The impact of the revisions on the line items within the Consolidated Statements of Cash Flows for the six months ended previously filed in the Quarterly Report on Form 10-Q for the quarter ended June 30, 2022 is as follows (in thousands):

Six Months Ended June 30, 2022

The revisions to the Consolidated Statements of Cash Flows are reflected for the nine months ended September 30, 2022, included in these financial statements, and will also be reflected in the historical periods included in the Company’s subsequent annual consolidated financial statements.

Equity LifeStyle Properties, Inc.

Notes to Consolidated Financial Statements

Note 2 – Summary of Significant Accounting Policies (continued)

The impact of the revisions on the line items within the Consolidated Statements of Cash Flows for the nine months ended September 30, 2022 previously filed in the Quarterly Report on Form 10-Q for the quarter ended September 30, 2022 is as follows (in thousands):

Nine Months Ended September 30, 2022

Operating Activities As Reported Effect of Revision As Revised

5 unchanged sentences

Net cash used in investing activities $ ( 398,884 ) 82,698 $ ( 316,186 )

The impact of the revisions on the line items within the Consolidated Statements of Cash Flows for the years ended December 31, 2022, 2021 and 2020 previously filed in the Annual Report on Form 10-K for the year ended December 31, 2022 is as follows (in thousands):

Year Ended December 31, 2022 Year Ended December 31, 2021 Year Ended December 31, 2020

Operating Activities As Reported Effect of Revision As Revised As Reported Effect of Revision As Revised As Reported Effect of Revision As Revised

Manufactured homes $ — ( 27,419 ) $ ( 27,419 ) $ — ( 4,963 ) $ ( 4,963 ) $ — ( 10,280 ) $ ( 10,280 )

Other assets, net $ 92,458 ( 96,103 ) $ ( 3,645 ) $ 53,913 ( 81,062 ) $ ( 27,149 ) $ 34,048 ( 38,845 ) $ ( 4,797 )

Net cash provided by operating activities $ 599,336 ( 123,522 ) $ 475,814 $ 595,052 ( 86,025 ) $ 509,027 $ 466,537 ( 49,125 ) $ 417,412

Investing Activities

Capital improvements $ ( 372,799 ) 123,522 $ ( 249,277 ) $ ( 290,290 ) 86,025 $ ( 204,265 ) $ ( 217,082 ) 49,125 $ ( 167,957 )

Net cash used in investing activities $ ( 525,589 ) 123,522 $ ( 402,067 ) $ ( 914,455 ) 86,025 $ ( 828,430 ) $ ( 450,379 ) 49,125 $ ( 401,254 )

Equity LifeStyle Properties, Inc.

Notes to Consolidated Financial Statements

Note 3 – Leases

6 unchanged sentences

(amounts in thousands)

As of June 30, 2023

As of September 30, 2023

2023 $ 31,687

1 unchanged sentence

Total $ 323,134

We lease land under non-cancelable operating leases at 10 Properties expiring on various dates between 2028 and 2054.

Equity LifeStyle Properties, Inc.

Notes to Consolidated Financial Statements

Note 3 – Leases (continued)

We lease land under non-cancelable operating leases at ten Properties expiring on various dates between 2028 and 2054.

The majority of the leases have terms requiring fixed payments plus additional rents based on a percentage of gross revenues at those Properties.

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

For the quarters ended June 30, 2023 and 2022, total operating lease payments were $ 1.7 million and $ 2.9 million, respectively.

For the six months ended June 30, 2023 and 2022, total operating least payments were $ 3.2 million and $ 5.5 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 June 30, 2023:

As of June 30, 2023

For the quarters ended September 30, 2023 and 2022, total operating lease payments were $ 1.6 million and $ 2.7 million, respectively.

For the nine months ended September 30, 2023 and 2022, total operating lease payments were $ 4.9 million and $ 8.2 million, respectively.

As of September 30, 2023

(amounts in thousands)

9 unchanged sentences

Total lease liabilities $ 5,515 $ 20,647 $ 26,162

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 $ 24.6 million and $ 26.9 million, respectively, as of June 30, 2023.

The weighted average remaining lease term for our operating leases was nine years and the weighted average incremental borrowing rate was 3.8 % at June 30, 2023.

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 $ 24.0 million and $ 26.2 million, respectively, as of September 30, 2023.

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, 2023.

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 $ 25.9 million and $ 28.0 million, respectively, as of December 31, 2022.

3 unchanged sentences

Note 4 – Earnings Per Common Share

The following table sets forth the computation of basic and diluted earnings per share of common stock (“Common Share”) for the quarters and six months ended June 30, 2023 and 2022:

Quarters Ended June 30, Six Months Ended June 30,

The following table sets forth the computation of basic and diluted earnings per share of common stock (“Common Share”) for the quarters and nine months ended September 30, 2023 and 2022:

Quarters Ended September 30, Nine Months Ended September 30,

(amounts in thousands, except per share data) 2023 2022 2023 2022

20 unchanged sentences

$ 0.4475 June 30, 2023 June 30, 2023 July 14, 2023

$ 0.4475 September 30, 2023 September 29, 2023 October 13, 2023

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 six months ended June 30, 2023 and 2022, 25,496 and 8,640 OP Units, respectively, were exchanged for an equal number of shares of Common Stock.

During the nine months ended September 30, 2023 and 2022, 131,192 and 34,680 OP Units, respectively, were exchanged for an equal number of shares of Common Stock.

Note 6 – Investment in Real Estate

1 unchanged sentence

The acquisition was accounted for as an asset acquisition under ASC 805, Business Combinations and was funded from our unsecured line of credit.

During the six months ended June 30, 2023, we recorded an impairment charge of approximately $ 2.6 million related to flooding events at certain Properties in California.

During the nine months ended September 30, 2023, we recorded impairment charges of approximately $ 3.6 million primarily related to flooding events at certain Properties in California.

Equity LifeStyle Properties, Inc.

1 unchanged sentence

Note 7 – Investments in Unconsolidated Joint Ventures

The following table summarizes our investments in unconsolidated joint ventures (investment amounts in thousands with the number of Properties shown parenthetically as of June 30, 2023 and December 31, 2022 , respectively):

Investment as of Income/(Loss) for the Six Months Ended

The following table summarizes our investments in unconsolidated joint ventures (investment and income/(loss) amounts in thousands with the number of Properties shown parenthetically as of September 30, 2023 and December 31, 2022 , respectively):

Investment as of Income/(Loss) for the Nine Months Ended

Investment Location Number of Sites Economic

June 30, 2023 December 31, 2022 June 30, 2023 June 30, 2022

September 30, 2023 December 31, 2022 September 30, 2023 September 30, 2022

Meadows Various (2,2) 1,077 50 % $ 407 $ 158 $ 1,649 $ 1,850

8 unchanged sentences

_____________________

(a) The percentages shown approximate our economic interest as of June 30, 2023.

(a) The percentages shown approximate our economic interest as of September 30, 2023.

Our legal ownership interest may differ.

2 unchanged sentences

(d) Includes three joint ventures of which one joint venture owns a portfolio of seven operating RV communities and two joint ventures each own an RV property under development.

We received approximately $ 3.6 million and $ 2.0 million in distributions from our unconsolidated joint ventures for the six months ended June 30, 2023 and 2022, respectively.

Approximately $ 1.1 million and $ 0.8 million of the distributions made to us exceeded our basis in our unconsolidated joint ventures for the six months ended June 30, 2023 and 2022, respectively, and as such, were recorded as income from unconsolidated joint ventures.

We received approximately $ 4.9 million and $ 3.9 million in distributions from our unconsolidated joint ventures for the nine months ended September 30, 2023 and 2022, respectively.

Approximately $ 1.4 million and $ 1.7 million of the distributions made to us exceeded our basis in our unconsolidated joint ventures for the nine months ended September 30, 2023 and 2022, 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 June 30, 2023 As of December 31, 2022

As of September 30, 2023 As of December 31, 2022

(amounts in thousands)

1 unchanged sentence

Mortgage notes payable, excluding deferred financing costs $ 2,116,027 $ 3,032,920 $ 2,043,412 $ 2,718,114

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 June 30, 2023, was approximately 3.6 % per annum.

The debt bears interest at stated rates ranging from 2.4 % to 5.1 % per annum and matures on various dates ranging from 2025 to 2041.

The debt encumbered a total of 114 of our Properties as of June 30, 2023 and December 31, 2022, and the gross carrying value of such Properties was approximately $ 2,914.6 million and $ 2,868.3 million, as of June 30, 2023 and December 31, 2022, respectively.

The debt encumbered a total of 120 and 114 of our Properties as of September 30, 2023 and December 31, 2022, respectively, and the gross carrying value of such Properties was approximately $ 3,167.2 million and $ 2,868.3 million, as of September 30, 2023 and December 31, 2022, respectively.

During the quarter ended June 30, 2023, we closed on a secured financing transaction generating gross proceeds of $ 89.0 million.

The loan represents an incremental borrowing from an existing secured facility, has a fixed interest rate of 5.04 % per annum and matures in ten years .

During the quarter ended September 30, 2023, we closed on three secured financing transactions generating gross proceeds of $ 375.0 million.

The loans are secured by 20 MH and RV properties, have a weighted average fixed interest rate of 5.05 % per annum and a weighted average maturity of approximately eight years .

Equity LifeStyle Properties, Inc.

Notes to Consolidated Financial Statements

Note 8 – Borrowing Arrangements (continued)

During the quarter ended September 30, 2023, proceeds from the four secured financing transactions were used to repay $ 100.4 million of principal on three mortgage loans that were due to mature in 2023 and 2024 and the remaining outstanding balance on our unsecured line of credit (the “LOC”).

The repaid mortgage loans had a weighted average fixed interest rate of 4.94 % per annum and were secured by 14 MH and RV properties.

Unsecured Debt

We previously entered into a Third Amended and Restated Credit Agreement (“Credit Agreement”), 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 “$ 300 million Term Loan”).

We previously entered into a Third Amended and Restated Credit Agreement (“Credit Agreement”), pursuant to which we have access to a $ 500.0 million LOC and a $ 300.0 million senior unsecured term loan (the “$ 300 million Term Loan”).

On March 1, 2023, we amended the Credit Agreement to transition the LIBOR rate borrowings to Secured Overnight Financing Rate (“SOFR”) borrowings.

2 unchanged sentences

For both the LOC and the $ 300 million Term Loan, the spread over SOFR is variable based on leverage throughout the respective loan terms.

As of June 30, 2023, the Company has no remaining LIBOR based borrowings.

Equity LifeStyle Properties, Inc.

Notes to Consolidated Financial Statements

Note 8 – Borrowing Arrangements (continued)

The LOC had a balance of $ 205.0 million and $ 198.0 million outstanding as of June 30, 2023 and December 31, 2022, respectively.

As of June 30, 2023, our LOC had a remaining borrowing capacity of $ 295.0 million.

As of June 30, 2023, we were in compliance in all material respects with the covenants in all our borrowing arrangements.

As of September 30, 2023, the Company has no remaining LIBOR based borrowings.

The LOC had no outstanding balance and $ 198.0 million outstanding as of September 30, 2023 and December 31, 2022, respectively.

As of September 30, 2023, our LOC had a remaining borrowing capacity of $ 500.0 million.

As of September 30, 2023, we were in compliance in all material respects with the covenants in all our borrowing arrangements.

During the year ended December 31, 2022, we entered into a $ 200.0 million senior unsecured term loan agreement (the “$ 200 million Term Loan”).

The maturity date is January 21, 2027, with an interest rate of SOFR plus approximately 1.30 % to 1.80 %, depending on leverage levels.

In May 2023, we locked rate on a $ 375.0 million secured financing at a weighted average interest rate of 5.05 % with a weighted average term to maturity of 7.5 years.

We expect to close in the third quarter of 2023.

In June 2023, we closed on a secured financing transaction generating gross proceeds of $ 89.0 million (the “June 2023 financing”).

The loan represents an incremental borrowing from an existing secured facility, has a fixed interest rate of 5.04 % per annum and matures in 10 years.

In July 2023, we repaid all debt scheduled to mature in 2023 and 2024 with proceeds from the June 2023 financing and our unsecured line of credit.

In July 2023, we also closed on an $ 80.0 million tranche of the $ 375.0 million secured financing, and we expect to close on the remaining $ 295.0 million in the third quarter of 2023.

Note 9 – Derivative Instruments and Hedging

4 unchanged sentences

In March 2021, we entered into a Swap Agreement (the “2021 Swap”) with a notional amount of $ 300.0 million allowing us to trade the variable interest rate associated with our $ 300.0 million Term Loan for a fixed interest rate.

In March 2023, we amended the 2021 Swap agreement to reflect the change in the $ 300.0 million Term Loan interest rate benchmark from LIBOR to SOFR ( see Note 8.Borrowing arrangements ).

In March 2023, we amended the 2021 Swap agreement to reflect the change in the $ 300.0 million Term Loan interest rate benchmark from LIBOR to SOFR (see Note 8.

Borrowing Arrangements ).

The 2021 Swap has a fixed interest rate of 0.41 % per annum and matures on March 25, 2024.

Based on the leverage as of June 30, 2023, our spread over SOFR was 1.40 % resulting in an estimated all-in interest rate of 1.81 % per annum.

Based on the leverage as of September 30, 2023, our spread over SOFR was 1.40 % resulting in an estimated all-in interest rate of 1.81 % per annum.

In April 2023, we entered into a Swap Agreement (the “2023 Swap”) with a notional amount of $ 200.0 million allowing us to trade the variable interest rate associated with our $ 200.0 million Term Loan for a fixed interest rate.

The 2023 Swap has a fixed interest rate of 3.68 % per annum and matures on January 21, 2027.

Based on the leverage as of June 30, 2023, our spread over SOFR was 1.20 % resulting in an estimated all-in interest rate of 4.88 % per annum.

Based on the leverage as of September 30, 2023, our spread over SOFR was 1.20 % resulting in an estimated all-in interest rate of 4.88 % 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 June 30, As of December 31,

As of September 30, As of December 31,

(amounts in thousands) Balance Sheet Location 2023 2022

Interest Rate Swaps Other assets, net $ 15,564 $ 19,119

The following table presents the effect of our derivative financial instrument on the Consolidated Statements of Income and Comprehensive Income:

Equity LifeStyle Properties, Inc.

Notes to Consolidated Financial Statements

Note 9 – Derivative Instruments and Hedging (continued)

The following table presents the effect of our derivative financial instruments on the Consolidated Statements of Income and Comprehensive Income:

Derivatives in Cash Flow Hedging Relationship Amount of (gain)/loss recognized

in OCI on derivative

for the six months ended June 30, Location of (gain)/ loss reclassified from

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

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

accumulated OCI into income

for the six months ended June 30,

for the nine months ended September 30,

(amounts in thousands) 2023 2022 (amounts in thousands) 2023 2022

Interest Rate Swaps $ ( 9,364 ) $ ( 18,479 ) Interest Expense $ ( 12,919 ) $ ( 1,527 )

Equity LifeStyle Properties, Inc.

Notes to Consolidated Financial Statements

Note 9 – Derivative Instruments and Hedging (continued)

During the next twelve months, we estimate that $ 16.9 million will be reclassified as a decrease to interest expense.

During the next twelve months, we estimate that $ 10.7 million will be reclassified from accumulated other comprehensive income (loss) as a decrease to interest expense.

This estimate may be subject to change as the underlying SOFR changes.

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

As of June 30, 2023, we had not posted any collateral related to the 2021 Swap or 2023 Swap.

As of September 30, 2023, we had not posted any collateral related to the 2021 Swap or 2023 Swap.

Note 10 - Deferred Revenue from Membership Upgrade Sales and Deferred Commission Expense

1 unchanged sentence

(amounts in thousands)

Six Months Ended June 30, 2023 Six Months Ended June 30, 2022

Nine Months Ended September 30, 2023 Nine Months Ended September 30, 2022

Deferred revenue - upfront payments from membership upgrade sales, beginning $ 185,660 $ 163,957

11 unchanged sentences

(a) Included in Deferred membership revenue on the Consolidated Balance Sheets.

Equity LifeStyle Properties, Inc.

Notes to Consolidated Financial Statements

Note 11 – Equity Incentive Awards

7 unchanged sentences

These are time-based awards subject to various vesting dates between October 25, 2023 and April 24, 2026.

Stock-based compensation expense, reported in General and administrative expense on the Consolidated Statements of Income and Comprehensive Income, was $ 8.6 million and $ 2.7 million for the quarters ended June 30, 2023 and 2022, respectively, and $ 11.1 million and $ 5.3 million for the six months ended June 30, 2023 and 2022, respectively.

Stock-based compensation expense of $ 11.1 million for the six months ended June 30, 2023 includes accelerated vesting of stock-based compensation expense of $ 6.3 million recognized during the quarter ended June 30, 2023, as a result of the passing of a member of our Board of Directors.

Equity LifeStyle Properties, Inc.

Notes to Consolidated Financial Statements

Stock-based compensation expense, reported in General and administrative expense on the Consolidated Statements of Income and Comprehensive Income, was $ 1.8 million and $ 2.6 million for the quarters ended September 30, 2023 and 2022, respectively, and $ 12.9 million and $ 7.9 million for the nine months ended September 30, 2023 and 2022, respectively.

Stock-based compensation expense of $ 12.9 million for the nine months ended September 30, 2023 includes accelerated vesting of stock-based compensation expense of $ 6.3 million recognized during the quarter ended June 30, 2023, as a result of the passing of a member of our Board of Directors.

Note 12 – Commitments and Contingencies

4 unchanged sentences

In addition, to the extent any such Proceedings or audits relate to newly acquired Properties, we consider any potential indemnification obligations of sellers in our favor.

Beginning on August 31, 2023 through October 12, 2023, certain private party plaintiffs filed several putative class actions against Datacomp Appraisal Systems, Inc.

(“Datacomp”) and several owner/operators of manufactured housing communities, including ELS (the “Datacomp Litigation”), alleging that the community owner/operators used JLT Market Reports produced by Datacomp to conspire to raise manufactured home lot rents in violation of Section 1 of the Sherman Act.

ELS purchased Datacomp in connection with the MHVillage/Datacomp acquisition during the year ended December 31, 2021.

We believe that the Datacomp Litigation is without merit, and we intend to vigorously defend our interests in this matter.

As of September 30, 2023, we have not made an accrual, as we are unable to predict the outcome of this matter or reasonably estimate any possible loss.

Note 13 - Reportable Segments

3 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 six months ended June 30, 2023 or 2022.

The following tables summarize our segment financial information for the quarters and six months ended June 30, 2023 and 2022:

Quarter Ended June 30, 2023

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, 2023 or 2022.

Equity LifeStyle Properties, Inc.

Notes to Consolidated Financial Statements

Note 13 – Reportable Segments (continued)

The following tables summarize our segment financial information for the quarters and nine months ended September 30, 2023 and 2022:

Quarter Ended September 30, 2023

(amounts in thousands) Property

6 unchanged sentences

Depreciation and amortization ( 48,242 ) ( 2,726 ) ( 50,968 )

Loss on sale of real estate and impairment, net ( 949 ) — ( 949 )

Income from operations $ 120,110 $ 2,364 $ 122,474

6 unchanged sentences

Equity in income of unconsolidated joint ventures 661

Early debt retirement ( 68 )

Consolidated net income $ 80,741

1 unchanged sentence

Capital improvements $ 79,750 $ 2,420 $ 82,170

Equity LifeStyle Properties, Inc.

Notes to Consolidated Financial Statements

Note 13 – Reportable Segments (continued)

Quarter Ended June 30, 2022

Quarter Ended September 30, 2022

(amounts in thousands) Property

6 unchanged sentences

Depreciation and amortization ( 50,026 ) ( 2,521 ) ( 52,547 )

Loss on sale of real estate and impairment, net ( 2,289 ) ( 1,458 ) ( 3,747 )

Income from operations $ 107,559 $ 1,556 $ 109,115

Reconciliation to consolidated net income:

Corporate interest income 2

Income from other investments, net 2,399

3 unchanged sentences

Equity in income of unconsolidated joint ventures 1,465

Early debt retirement ( 640 )

Consolidated net income $ 70,509

3 unchanged sentences

(1) Prior period amounts have been reclassified to conform to the current period presentation.

Six Months Ended June 30, 2023

Equity LifeStyle Properties, Inc.

Notes to Consolidated Financial Statements

Note 13 – Reportable Segments (continued)

Nine Months Ended September 30, 2023

(amounts in thousands) Property

15 unchanged sentences

Equity in income of unconsolidated joint ventures 2,158

Early debt retirement ( 68 )

Consolidated net income $ 233,249

1 unchanged sentence

Capital improvements $ 208,576 $ 22,596 $ 231,172

Equity LifeStyle Properties, Inc.

Notes to Consolidated Financial Statements

Note 13 – Reportable Segments (continued)

Six Months Ended June 30, 2022

Nine Months Ended September 30, 2022

(amounts in thousands) Property

6 unchanged sentences

Depreciation and amortization ( 145,200 ) ( 7,537 ) ( 152,737 )

Loss on sale of real estate and impairment,, net ( 2,289 ) ( 1,458 ) ( 3,747 )

Income from operations $ 334,505 $ 5,976 $ 340,481

12 unchanged sentences

(1) Prior period amounts have been reclassified to conform to the current period presentation.

The following table summarizes our financial information for the Property Operations segment for the quarters and six months ended June 30, 2023 and 2022:

Quarters Ended June 30, Six Months Ended June 30,

Equity LifeStyle Properties, Inc.

Notes to Consolidated Financial Statements

Note 13 – Reportable Segments (continued)

The following table summarizes our financial information for the Property Operations segment for the quarters and nine months ended September 30, 2023 and 2022:

Quarters Ended September 30, Nine Months Ended September 30,

(amounts in thousands) 2023 2022 2023 2022

13 unchanged sentences

Income from property operations segment $ 167,664 $ 158,433 $ 503,557 $ 477,796

Equity LifeStyle Properties, Inc.

Notes to Consolidated Financial Statements

Note 13 – Reportable Segments (continued)

The following table summarizes our financial information for the Home Sales and Rentals Operations segment for the quarters and six months ended ended June 30, 2023 and 2022:

Quarters Ended June 30, Six Months Ended June 30,

The following table summarizes our financial information for the Home Sales and Rentals Operations segment for the quarters and nine months ended September 30, 2023 and 2022:

Quarters Ended September 30, Nine Months Ended September 30,

(amounts in thousands) 2023 2022 2023 2022

14 unchanged sentences

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