What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2024-05-01 compared with 2023-10-25 · 128 added, 234 removed, 412 unchanged (47% of the section changed)

3 unchanged sentences

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

September 30, 2023 December 31, 2022

March 31, 2024 December 31, 2023

Investment in real estate:

13 unchanged sentences

Mortgage notes payable, net $ 2,974,728 $ 2,989,959

Term loan, net 497,422 496,817

Term loans, net 497,875 497,648

Unsecured line of credit 6,000 31,000

6 unchanged sentences

Stockholders' Equity:

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

Preferred stock, $ 0.01 par value, 10,000,000 shares authorized as of March 31, 2024 and December 31, 2023;

none issued and outstanding.

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.

Common stock, $ 0.01 par value, 600,000,000 shares authorized as of March 31, 2024 and December 31, 2023;

186,493,598 and 186,426,281 shares issued and outstanding as of March 31, 2024 and December 31, 2023, respectively.

Paid-in capital 1,644,410 1,644,319

9 unchanged sentences

(amounts in thousands, except per share data)

Quarters Ended September 30, Nine Months Ended September 30,

2023 2022 2023 2022

Quarters Ended March 31,

Rental income $ 316,599 $ 296,451

16 unchanged sentences

Other expenses 1,331 1,468

Early debt retirement 68 — 68 1,156

Interest and related amortization 33,543 32,588

Total expenses 271,819 281,385

Income before income taxes and other items 114,749 88,567

Loss on sale of real estate and impairment, net — ( 2,632 )

Income before equity in income of unconsolidated joint ventures 80,080 69,044 231,091 219,260

Income tax benefit 239 —

Equity in income of unconsolidated joint ventures 283 524

1 unchanged sentence

Income allocated to non-controlling interests – Common OP Units ( 5,366 ) ( 4,088 )

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

Net income available for Common Stockholders $ 109,905 $ 82,371

4 unchanged sentences

Comprehensive income allocated to non-controlling interests – Common OP Units ( 5,329 ) ( 3,899 )

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

Comprehensive income attributable to Common Stockholders $ 109,161 $ 78,582

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, 2023 $ 1,917 $ 1,644,319 $ ( 223,576 ) $ 6,061 $ 69,900 $ 1,498,621

Exchange of Common OP Units for Common Stock — 198 — — — ( 198 ) —

Issuance of Common Stock through employee stock purchase plan — 382 — — — 382

7 unchanged sentences

Balance as of March 31, 2024 $ 1,917 $ 1,644,410 $ ( 202,721 ) $ 5,280 $ 70,860 $ 1,519,746

Issuance of Common Stock through employee stock purchase plan — 504 — — — — 504

Compensation expenses related to restricted stock and stock options — 8,584 — — — — 8,584

Adjustment for Common OP Unitholders in the Operating Partnership — ( 503 ) — — — 503 —

Adjustment for fair market value of swap — — — — 2,186 — 2,186

Consolidated net income — — 8 62,920 — 3,121 66,049

Distributions — — ( 8 ) ( 83,357 ) — ( 4,135 ) ( 87,500 )

Other — ( 97 ) — — — — ( 97 )

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

Balance as of December 31, 2022 $ 1,916 $ 1,628,618 $ ( 204,248 ) $ 19,119 $ 72,080 $ 1,517,485

1 unchanged sentence

Issuance of Common Stock through employee stock purchase plan — 363 — — — 363

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

Compensation expenses related to restricted stock and stock options — 2,549 — — — 2,549

6 unchanged sentences

Balance as of March 31, 2023 $ 1,916 $ 1,629,866 $ ( 205,203 ) $ 15,141 $ 71,666 $ 1,513,386

Issuance of Common Stock through employee stock purchase plan — 1,388 — — — — 1,388

Compensation expenses related to restricted stock and stock options — 2,681 — — — — 2,681

Adjustment for Common OP Unitholders in the Operating Partnership — ( 303 ) — — — 303 —

Adjustment for fair market value of swap — — — — 2,793 — 2,793

Consolidated net income — — 8 61,509 — 3,073 64,590

Distributions — — ( 8 ) ( 76,179 ) — ( 3,812 ) ( 79,999 )

Other — ( 54 ) — — — — ( 54 )

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)

Nine Months Ended September 30,

Quarters Ended March 31,

Cash Flows From Operating Activities:

2 unchanged sentences

Loss on sale of real estate and impairment, net — 2,632

Early debt retirement 68 1,156

Depreciation and amortization 52,427 51,860

7 unchanged sentences

Commission expense recognized related to membership sales 1,108 1,095

Deferred income tax benefit ( 239 ) —

Changes in assets and liabilities:

18 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 382 363

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

Distributions:

1 unchanged sentence

Common OP Unitholders ( 4,074 ) ( 3,799 )

Preferred Stockholders ( 8 ) ( 8 )

Share based award tax withholding payments ( 1,908 ) ( 1,932 )

Principal payments and mortgage debt repayment ( 15,929 ) ( 16,443 )

Mortgage notes payable financing proceeds 463,753 200,000

Term loan proceeds — 200,000

Line of credit repayment ( 158,000 ) ( 104,000 )

Line of credit proceeds 133,000 118,000

Debt issuance and defeasance costs ( 5,033 ) ( 3,826 )

Other ( 157 ) ( 99 )

Net cash used in financing activities ( 130,112 ) ( 84,219 )

Net increase (decrease) in cash and restricted cash 37,333 ( 92,888 )

Net increase in cash and restricted cash 17,344 8,314

Cash and restricted cash, beginning of period 29,937 22,347

Cash and restricted cash, end of period $ 47,281 $ 30,661

Nine Months Ended September 30,

Quarters Ended March 31,

Supplemental Information:

3 unchanged sentences

Investment in real estate $ — $ ( 9,535 )

Notes receivable, net — ( 772 )

Other assets, net — 14

Deferred membership revenue — 315

Other liabilities — 702

Rents and other customer payments received in advance and security deposits — 718

10 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 September 30, 2023.

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

42 unchanged sentences

(b) Restricted Cash

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.

Certain prior period amounts have been reclassified to conform to the current year presentation.

(d) Insurance Recoveries

As of March 31, 2024 and December 31, 2023, restricted cash consisted of $ 32.2 million and $ 25.7 million, respectively, primarily related to cash reserved for customer deposits and escrows for insurance and real estate taxes.

We carry comprehensive insurance coverage for losses resulting from property damage and environmental liability and business interruption claims on all of our properties.

1 unchanged sentence

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 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

During the six months ended June 30, 2023, the Company identified and corrected an immaterial error related to the classification of cash outflows associated with the purchase of MHs in the Consolidated Statements of Cash Flows.

Previously, the Company classified these cash outflows within investing activities in the Consolidated Statements of Cash Flows to align with the balance sheet classification.

Based on the predominance principle in ASC 230-10-45-22, the Company determined that all of the cash flows associated with the purchase and sale of manufactured homes should be classified within operating activities in the Consolidated Statements of Cash Flows.

Based on an analysis of quantitative and qualitative factors in accordance with SEC Staff Accounting Bulletins 99, Materiality and 108, Considering the Effects of Prior Year Misstatements when Quantifying Misstatements in Current Year Financial Statements , the Company concluded that this error was immaterial to the Consolidated Statements of Cash Flows as presented in the Company’s previously filed Quarterly Reports on Form 10-Q and Annual Reports on Form 10-K.

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.

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

Manufactured homes $ — ( 6,972 ) $ ( 6,972 )

Other assets, net $ 75,428 ( 75,726 ) $ ( 298 )

Net cash provided by operating activities $ 487,821 ( 82,698 ) $ 405,123

Investing Activities

Capital improvements $ ( 268,614 ) 82,698 $ ( 185,916 )

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

During the quarter ended March 31, 2024, we recognized approximately $ 0.5 million of expense related to debris removal and cleanup related to Hurricane Ian, and we recorded an offsetting insurance recovery revenue accrual of $ 0.5 million to offset the expenses incurred during the quarter.

We also recorded $ 14.8 million of insurance recovery revenue for reimbursement of capital expenditures related to Hurricane Ian.

The debris and cleanup costs and offsetting recovery accrual and reimbursement of capital expenditures are reflected in Casualty-related charges/(recoveries), net on the Consolidated Statements of Income and Comprehensive Income.

(d) New Accounting Pronouncements

In November 2023, the FASB issued Accounting Standards Update 2023-07, Segment Reporting (Topic 280) :

I mprovements to Reportable Segment Disclosures (“ASU 2023-07”), which aims to improve reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses.

The amendments in ASU 2023-07 do not change how a public entity identifies its operating segments, aggregates those operating segments, or applies the quantitative thresholds to determine its reportable segments.

ASU 2023-07 is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024, with early adoption permitted.

We are currently evaluating the impact of ASU 2023-07 on our consolidated financial statements.

In March 2024, the Securities and Exchange Commission (“SEC”) adopted final rules under SEC Release No.

33-11275, The Enhancement and Standardization of Climate-Related Disclosures for Investors , that requires registrants to provide climate-related disclosures in their annual reports and registration statements.

On April 4, 2024, the SEC voluntarily stayed implementation of the final rule pending the completion of judicial review.

We are currently evaluating the impact of the rule on our disclosures.

Note 3 – Leases

1 unchanged sentence

Long-term leases that are non-cancelable by the tenants are in effect at certain Properties.

Rental rate increases at these Properties are primarily a function of increases in the Consumer Price Index, taking into consideration certain conditions.

Rental rate increases at these Properties are primarily a function of increases in the Consumer Price Index, taking

Equity LifeStyle Properties, Inc.

Notes to Consolidated Financial Statements

Note 3 – Leases (continued)

into consideration certain other factors.

Additionally, periodic market rate adjustments are made as deemed appropriate.

2 unchanged sentences

(amounts in thousands)

As of September 30, 2023

As of March 31, 2024

2024 $ 79,784

1 unchanged sentence

Total $ 310,193

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.

We lease land under non-cancelable operating leases at 10 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 2033.

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.

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, 2023:

As of September 30, 2023

For the quarters ended March 31, 2024 and 2023, total operating lease payments were $ 1.6 million and $ 1.5 million, respectively.

As of March 31, 2024

(amounts in thousands)

9 unchanged sentences

Total lease liabilities $ 5,354 $ 22,657 $ 28,011

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.

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 $ 25.8 million and $ 28.0 million, respectively, as of March 31, 2024.

The weighted average remaining lease term for our operating leases was eight years and the weighted average incremental borrowing rate was 4.0 % as of March 31, 2024.

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 $ 23.6 million and $ 25.7 million, respectively, as of December 31, 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 December 31, 2022.

The weighted average remaining lease term for our operating leases was eight years and the weighted average incremental borrowing rate was 3.9 % as of December 31, 2023.

Equity LifeStyle Properties, Inc.

1 unchanged sentence

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 nine months ended September 30, 2023 and 2022:

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 (“Common Share”) for the quarters ended March 31, 2024 and 2023:

Quarters Ended March 31,

(amounts in thousands, except per share data) 2024 2023

19 unchanged sentences

$ 0.4775 March 31, 2024 March 28, 2024 April 12, 2024

$ 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 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

On March 28, 2023, we completed the acquisition of Red Oak Shores Campground, a 223 -site RV community located in Ocean View, New Jersey for a purchase price of $ 9.5 million.

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 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.

There were no OP units exchanged for Common Stock during the quarter ended March 31, 2024 and 25,496 OP Units exchanged for an equal number of shares of Common Stock during the quarter ended March 31, 2023.

Equity Offering Program

On February 28, 2024, we entered into a new at-the-market (“ATM”) equity offering program, 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.

As of March 31, 2024, the full capacity of our ATM equity offering program remained available for issuance.

Equity LifeStyle Properties, Inc.

Notes to Consolidated Financial Statements

Note 7 – Investments in Unconsolidated Joint Ventures

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

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

Note 6 – Investment in Unconsolidated Joint Ventures

The following table summarizes our investments in unconsolidated joint ventures (investment and income/(loss) amounts in thousands):

Investment as of Income/(Loss) for the Quarters Ended

Investment Location (a)

Number of Sites Economic

March 31, 2024 December 31, 2023 March 31, 2024 March 31, 2023

Meadows Various (2,2) 1,077 50 % $ 611 $ 534 $ 676 $ 374

Lakeshore Florida (3,3) 721 (b) 3,048 2,625 487 480

Voyager Arizona (1,1) — — % (c)

Lakeshore Florida (3,3) 721 (c) 3,395 3,387 182 172

Voyager Arizona (1,1) — — % (d)

ECHO JV Various — 50 % 2,786 2,773 13 ( 190 )

RVC Various 1,283 80 % (d)

RVC Various 1,283 80 % (e)

62,401 62,441 ( 414 ) ( 353 )

3 unchanged sentences

_____________________

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

(a) The number of Properties are shown parenthetically for the quarters ended March 31, 2024 and 2023, respectively.

(b) The percentages shown approximate our economic interest as of March 31, 2024.

Our legal ownership interest may differ.

(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.

(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 $ 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.

(c) 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.

(d) In March 2023, we sold our 33 % interest in the utility plant servicing Voyager RV Resort.

(e) 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 $ 1.8 million and $ 1.2 million in distributions from our unconsolidated joint ventures for the quarters ended March 31, 2024 and 2023, respectively.

Approximately $ 0.6 million and $ 0.3 million of the distributions made to us exceeded our basis in our unconsolidated joint ventures for the quarters ended March 31, 2024 and 2023, respectively, and as such, were recorded as income from unconsolidated joint ventures.

Note 7 – Borrowing Arrangements

2 unchanged sentences

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

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

As of March 31, 2024 As of December 31, 2023

(amounts in thousands)

1 unchanged sentence

Mortgage notes payable, excluding deferred financing costs $ 2,412,142 $ 3,001,219 $ 2,425,384 $ 3,017,149

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, 2023, was approximately 3.7 % per annum.

The weighted average interest rate on our outstanding mortgage indebtedness, including the impact of loan cost amortization on mortgage indebtedness, as of March 31, 2024, was approximately 3.9 % 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 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 .

The debt encumbered a total of 120 of our Properties as of both March 31, 2024 and December 31, 2023, and the gross carrying value of such Properties was approximately $ 3,208.4 million and $ 3,194.1 million, as of March 31, 2024 and December 31, 2023, respectively.

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 line of credit (“LOC”) and a $ 300.0 million senior unsecured term loan (the “$ 300 million Term Loan”).

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

The LOC bears interest at a rate of SOFR plus 0.10 % plus 1.25 % to 1.65 % and requires an annual facility fee of 0.20 % to 0.35 % and matures on April 18, 2025.

The $ 300 million Term Loan has an interest rate of SOFR plus 0.10 % plus 1.40 % to 1.95 % per annum.

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

Equity LifeStyle Properties, Inc.

1 unchanged sentence

Note 7 – 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 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.

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

The $ 300 million Term Loan has an interest rate of SOFR plus 1.40 % to 1.95 % per annum.

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 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 “ 200.0 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.

The maturity date is January 21, 2027, with an interest rate of SOFR plus 0.10 % plus 1.20 % to 1.70 %, depending on leverage levels.

The LOC had a balance of $ 6.0 million and $ 31.0 million outstanding as of March 31, 2024 and December 31, 2023, respectively.

As of March 31, 2024, our LOC had a remaining borrowing capacity of $ 493.9 million.

As of March 31, 2024, we were in compliance in all material respects with the covenants in all our borrowing arrangements.

Note 8 – Derivative Instruments and Hedging

6 unchanged sentences

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

The 2021 Swap had a fixed interest rate of 0.41 % per annum.

The 2021 Swap matured on March 25, 2024.

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 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 September 30, As of December 31,

Based on the leverage as of March 31, 2024, our spread over SOFR was 1.20 % resulting in an estimated all-in interest rate of 4.88 % per annum.

In April 2024, we entered into new swap agreements.

Subsequent Events for additional information.

Our derivative financial instruments are classified as Level 2 in the fair value hierarchy.

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

As of March 31, As of December 31,

(amounts in thousands) Balance Sheet Location 2024 2023

Interest Rate Swaps Other assets, net $ 5,280 $ 6,061

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:

The following table presents the effect of our derivative financial instrument 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 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) 2024 2023 (amounts in thousands) 2024 2023

3 unchanged sentences

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

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

As of March 31, 2024, we had not posted any collateral related to the 2023 Swap.

Equity LifeStyle Properties, Inc.

Notes to Consolidated Financial Statements

Note 9 - Deferred Revenue from Membership Upgrade Sales and Deferred Commission Expense

1 unchanged sentence

(amounts in thousands)

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

Quarter Ended March 31, 2024 Quarter Ended March 31, 2023

Deferred revenue - upfront payments from membership upgrade sales, beginning $ 206,625 $ 185,660

Membership upgrade sales, gross 28,041 27,771

Membership upgrade sales 7,543 7,975

Revenue recognized from membership upgrade sales upfront payments ( 3,947 ) ( 3,505 )

9 unchanged sentences

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

Equity LifeStyle Properties, Inc.

Notes to Consolidated Financial Statements

Note 10 – Equity Incentive Awards

1 unchanged sentence

During the quarter ended March 31, 2024, 90,378 shares of restricted stock were awarded to certain members of our management team.

Of these shares, 50 % are time-based awards, vesting in equal installments over a three-year period on January 30, 2024, February 4, 2025 and February 3, 2026, respectively, and have a grant date fair value of $ 3.0 million.

The remaining 50 % are performance-based awards vesting in equal installments on January 30, 2024, February 4, 2025 and February 3, 2026, respectively, upon meeting performance conditions as established by the Compensation Committee in the year of the vesting period.

Of these shares, 50 % are time-based awards, vesting in equal installments over a three-year period on February 4, 2025, February 3, 2026 and February 7, 2027, respectively, and have a grant date fair value of $ 3.0 million.

The remaining 50 % are performance-based awards vesting in equal installments on February 4, 2025, February 3, 2026 and February 7, 2027, respectively, upon meeting performance conditions as established by the Compensation Committee in the year of the vesting period.

They are valued using the closing price at the grant date when all the key terms and conditions are known to all parties.

The 15,062 shares of restricted stock subject to 2024 performance goals have a grant date fair value of $ 1.0 million.

During the quarter ended June 30, 2023, we awarded to certain members of our Board of Directors 60,391 shares of restricted stock at a fair value of approximately $ 4.1 million and options to purchase 8,450 shares of common stock with an exercise price of $ 68.01 .

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 $ 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.

Stock-based compensation expense, reported in General and administrative expense on the Consolidated Statements of Income and Comprehensive Income, was $ 1.7 million and $ 2.5 million for the quarters ended March 31, 2024 and 2023, respectively.

Note 11 – 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.

Beginning on August 31, 2023 through October 12, 2023, certain private party plaintiffs filed several putative class actions in the U.S.

District Court for the Northern District of Illinois, Eastern Division, against Datacomp Appraisal Systems, Inc.

Equity LifeStyle Properties, Inc.

Notes to Consolidated Financial Statements

Note 11 - Commitments and Contingencies (continued)

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.

On December 15, 2023, the plaintiffs filed an amended consolidated complaint captioned , In re Manufactured Home Lot Rents Antitrust Litigation, No.

1:23-cv-6715 .

Plaintiffs seek both injunctive relief and monetary damages, including attorneys’ fees.

The defendants filed a motion to dismiss on January 29, 2024.

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.

As of March 31, 2024, we have not made an accrual, as we are unable to predict the outcome of this matter or reasonably estimate any possible loss.

Note 12 - 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 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

Operations Home Sales

Operations Consolidated

Operations revenues $ 351,243 $ 32,961 $ 384,204

Operations expenses ( 183,579 ) ( 28,502 ) ( 212,081 )

Income from segment operations 167,664 4,459 172,123

Interest income 1,637 631 2,268

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

Reconciliation to consolidated net income:

Corporate interest income 8

Income from other investments, net 2,333

General and administrative ( 9,895 )

Other expenses ( 1,338 )

Interest and related amortization ( 33,434 )

Equity in income of unconsolidated joint ventures 661

Early debt retirement ( 68 )

Consolidated net income $ 80,741

Total assets $ 5,351,993 $ 274,298 $ 5,626,291

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

Quarter Ended September 30, 2022

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, 2024 or 2023.

The following tables summarize our segment financial information for the quarters ended March 31, 2024 and 2023:

Quarter Ended March 31, 2024

(amounts in thousands) Property

6 unchanged sentences

Depreciation and amortization ( 48,540 ) ( 2,568 ) ( 51,108 )

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

Income from operations $ 143,477 $ 1,215 $ 144,692

3 unchanged sentences

General and administrative ( 11,989 )

Casualty-related charges/(recoveries), net 14,843

Other expenses ( 1,331 )

Interest and related amortization ( 33,543 )

Income tax benefit 239

Equity in income of unconsolidated joint ventures 283

2 unchanged sentences

Capital improvements $ 51,408 $ 3,298 $ 54,706

______________________

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

Equity LifeStyle Properties, Inc.

1 unchanged sentence

Note 12 – Reportable Segments (continued)

Nine Months Ended September 30, 2023

(amounts in thousands) Property

Operations Home Sales

Operations Consolidated

Operations revenues $ 1,029,609 $ 85,650 $ 1,115,259

Operations expenses ( 526,052 ) ( 73,559 ) ( 599,611 )

Income from segment operations 503,557 12,091 515,648

Interest income 4,819 1,782 6,601

Depreciation and amortization ( 144,659 ) ( 8,275 ) ( 152,934 )

Loss on sale of real estate and impairment, net ( 3,581 ) — ( 3,581 )

Income from operations $ 360,136 $ 5,598 $ 365,734

Reconciliation to consolidated net income:

Corporate interest income 22

Income from other investments, net 6,897

General and administrative ( 38,163 )

Other expenses ( 4,187 )

Interest and related amortization ( 99,144 )

Equity in income of unconsolidated joint ventures 2,158

Early debt retirement ( 68 )

Consolidated net income $ 233,249

Total assets $ 5,351,993 $ 274,298 $ 5,626,291

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

Nine Months Ended September 30, 2022

Quarter Ended March 31, 2023

(amounts in thousands) Property

15 unchanged sentences

Equity in income of unconsolidated joint ventures 524

Early debt retirement ( 1,156 )

Consolidated net income $ 86,459

1 unchanged sentence

Capital improvements $ 51,412 $ 9,562 $ 60,974

________________

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

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,

The following table summarizes our financial information for the Property Operations segment for the quarters ended March 31, 2024 and 2023:

Quarters Ended March 31,

(amounts in thousands) 2024 2023

13 unchanged sentences

Income from property operations segment $ 190,331 $ 176,714

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,

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 ended March 31, 2024 and 2023:

Quarters Ended March 31,

(amounts in thousands) 2024 2023

11 unchanged sentences

Base rent is included within property operations .

Note 13 – Subsequent Events

On April 1, 2024, we entered into three Swap Agreements (“2024 Swaps”) with an aggregate notional value of $ 300.0 million allowing us to trade the variable interest rate associated with our $ 300.0 million Term Loan (see Note 7.

Borrowing Arrangements ) for a fixed interest rate.

The 2024 Swaps have a weighted average fixed interest rate of 4.65 % per annum and mature on April 17, 2026.

Based on the leverage as of March 31, 2024, our spread over SOFR was 1.40 %, resulting in an estimated weighted average all-in fixed interest rate of 6.05 % per annum.

Equity LifeStyle Properties, Inc.

1 unchanged sentence

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