What changed in this filing

/stocks — the workspaceLOADING

Item 2. Management’s Discussion and Analysis

2024-10-30 compared with 2024-07-30 · 112 added, 93 removed, 463 unchanged (31% of the section changed)

5 unchanged sentences

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 and marinas.

As of June 30, 2024, we owned or had an ownership interest in a portfolio of 452 Properties located throughout the United States and Canada containing 172,866 individual developed areas (“Sites”).

As of September 30, 2024, we owned or had an ownership interest in a portfolio of 452 Properties located throughout the United States and Canada containing 172,870 individual developed areas (“Sites”).

These Properties are located in 35 states and British Columbia, with more than 110 Properties with lake, river or ocean frontage and more than 120 Properties within ten miles of the coastal United States.

24 unchanged sentences

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

Total Sites as of June 30, 2024

Total Sites as of September 30, 2024

MH Sites 73,000

25 unchanged sentences

Results Overview

(amounts in thousands) Quarters Ended June 30,

(amounts in thousands) Quarters Ended September 30,

2024 2023 $ Change % Change (1)

2 unchanged sentences

Normalized FFO per fully diluted Common Share and OP Unit $ 0.72 $ 0.68 $ 0.04 4.9 %

Six Months Ended June 30,

Nine Months Ended September 30,

2024 2023 $ Change % Change (1)

4 unchanged sentences

Calculations prepared using actual results without rounding.

Core property operating revenues increased 4.6% and Core income from property operations, excluding property management increased 5.5% for the quarter ended June 30, 2024, compared to the same period in 2023.

For the six months ended June 30, 2024, Core property operating revenues increased 5.2% and Core income from property operations, excluding property management increased 6.4% compared to the same period in 2023.

Core property operating revenues increased 4.4% and Core income from property operations, excluding property management increased 5.8% for the quarter ended September 30, 2024, compared to the same period in 2023.

For the nine months ended September 30, 2024, Core property operating revenues increased 4.9% and Core income from property operations, excluding property management increased 6.2% compared to the same period in 2023.

Management's Discussion and Analysis (continued)

We continue to focus on the quality of occupancy growth by increasing the number of manufactured homeowners in our Core Portfolio.

Our Core Portfolio average occupancy includes both homeowners and renters in our MH communities and was 94.9% for each of the quarters ended June 30, 2024 and December 31, 2023 and 94.8% for the quarter ended June 30, 2023.

For the quarter ended June 30, 2024, our Core Portfolio occupancy increased by 29 sites, which included an increase in homeowner occupancy of 171 sites and a decrease in rental occupancy of 142 compared to March 31, 2024.

Our Core Portfolio average occupancy includes both homeowners and renters in our MH communities and was 95.0% for the quarter ended September 30, 2024 and 94.9% for each of the quarters ended December 31, 2023 and September 30, 2023.

For the quarter ended September 30, 2024, our Core Portfolio occupancy increased by 107 sites, which included an increase in homeowner occupancy of 111 sites and a decrease in rental occupancy of 4 compared to June 30, 2024.

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

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

As of June 30, 2024, we had 2,016 occupied rental homes in our Core MH communities.

RV and marina base rental income in our Core Portfolio increased 2.0% for the quarter ended June 30, 2024, compared to the same period in 2023, driven primarily by an increase in Annual RV rental income.

Core RV and marina base rental income from annuals represents 73.9% of total Core RV and marina base rental income and increased 6.6% for the quarter ended June 30, 2024, compared to the same period in 2023 due to an 8.3% increase in rate, offset by a 1.7% decrease in occupancy.

Core seasonal and transient RV and marina base rental income decreased 16.7% and 5.6%, respectively, for the quarter ended June 30, 2024, compared to the same period in 2023 due to non-returning Hurricane Ian workers at our Florida properties, decreased reservation extensions at our Sun Belt locations due to a mild winter and returning competitor supply, partially offset by California properties recovering from weather disruption events in the second quarter of 2023.

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

We closed 255 new home sales during the quarter ended June 30, 2024, compared to 226 new home sales during the quarter ended June 30, 2023, an increase of 12.8%.

The new home sales during the quarter ended June 30, 2024 were primarily in the Florida market.

Our gross investment in real estate increased $98.8 million to $7,805.1 million as of June 30, 2024 from $7,706.3 million as of December 31, 2023, primarily due to capital improvements during the six months ended June 30, 2024.

The following chart lists the Properties acquired from January 1, 2023 through June 30, 2024 and Sites added through expansion opportunities at our existing Properties:

As of September 30, 2024, we had 2,012 occupied rental homes in our Core MH communities.

RV and marina base rental income in our Core Portfolio increased 1.3% for the quarter ended September 30, 2024, compared to the same period in 2023, driven primarily by an increase in Annual RV rental income.

Core RV and marina base rental income from annuals represents 68.0% of total Core RV and marina base rental income and increased 6.2% for the quarter ended September 30, 2024, compared to the same period in 2023 due to an 8.3% increase in rate, offset by a 2.1% decrease in occupancy.

Core seasonal and transient RV and marina base rental income decreased 13.3% and 6.1%, respectively, for the quarter ended September 30, 2024, compared to the same period in 2023 due to loss of occupancy from Hurricane Ian workers at our Florida properties and returning competitor supply, weather disruptions in the Northeast and normalized demand following the COVID pandemic.

We closed 174 new home sales during the quarter ended September 30, 2024, compared to 285 new home sales during the quarter ended September 30, 2023, a decrease of 38.9%.

The decrease in new home sales during the quarter ended September 30, 2024 was primarily driven by the Florida and Arizona markets, where we had fewer sales locations than the same period in 2023.

Our gross investment in real estate increased $149.6 million to $7,855.9 million as of September 30, 2024 from $7,706.3 million as of December 31, 2023, primarily due to capital improvements during the nine months ended September 30, 2024.

The following chart lists the Properties acquired from January 1, 2023 through September 30, 2024 and Sites added through expansion opportunities at our existing Properties:

Location Type of Property Transaction Date Sites

6 unchanged sentences

Sites added (reconfigured) in 2024 405

Total Sites as of June 30, 2024 (1)

Total Sites as of September 30, 2024 (1)

______________________

33 unchanged sentences

Management's Discussion and Analysis (continued)

The following table reconciles net income available for Common Stockholders to income from property operations for the quarters and six months ended June 30, 2024 and 2023:

Quarters Ended June 30, Six Months Ended June 30,

The following table reconciles net income available for Common Stockholders to income from property operations for the quarters and nine months ended September 30, 2024 and 2023:

Quarters Ended September 30, Nine Months Ended September 30,

(amounts in thousands)

19 unchanged sentences

Other expenses 1,402 1,338 4,120 4,187

Early debt retirement 30 68 30 68

Interest and related amortization 36,497 33,434 106,077 99,144

3 unchanged sentences

_____________________

(1) Represents insurance recovery revenue for reimbursement of capital expenditures related to Hurricane Ian.

The following table presents a calculation of FFO available for Common Stock and OP Unitholders and Normalized FFO available for Common Stock and OP Unitholders for the quarters and six months ended June 30, 2024 and 2023:

Quarters Ended June 30, Six Months Ended June 30,

(1) Casualty-related charges/(recoveries), net for the quarter ended September 30, 2024 includes debris removal and cleanup costs related to Hurricane Ian of $1.3 million and Hurricane Helene of $1.0 million and insurance recovery revenue for Hurricane Ian of $1.7 million including $0.5 million for reimbursement of capital expenditures related to Hurricane Ian.

Casualty-related charges/(recoveries), net for the nine months ended September 30, 2024 includes debris removal and cleanup costs related to Hurricane Ian of $2.5 million and Hurricane Helene of $1.0 million and insurance recovery revenue for Hurricane Ian of $24.0 million including $21.5 million for reimbursement of capital expenditures related to Hurricane Ian.

Management's Discussion and Analysis (continued)

Quarters Ended September 30, Nine Months Ended September 30,

(amounts in thousands)

9 unchanged sentences

Deferred income tax benefit — — (239) —

Early debt retirement 30 68 30 68

Transaction/pursuit costs and other (1)

2 unchanged sentences

Accelerated vesting of stock-based compensation (3)

— 6,320 — 6,320

Normalized FFO available for Common Stock and OP Unit holders $ 140,483 $ 133,867 $ 421,707 $ 399,292

6 unchanged sentences

Results of Operations

This section discusses the comparison of our results of operations for the quarters and six months ended June 30, 2024 and June 30, 2023 and our operating activities, investing activities and financing activities for the six months ended June 30, 2024 and June 30, 2023.

This section discusses the comparison of our results of operations for the quarters and nine months ended September 30, 2024 and September 30, 2023 and our operating activities, investing activities and financing activities for the nine months ended September 30, 2024 and September 30, 2023.

Our Core Portfolio consists of our Properties owned and operated during all of 2023 and 2024.

Our Non-Core Portfolio includes all Properties that were not owned and operated during all of 2023 and 2024, including six properties in Florida impacted by Hurricane Ian and two properties in California that were impacted by storm and flooding events.

For the comparison of our results of operations for the quarters and six months ended June 30, 2023 and June 30, 2022 and discussion of our operating activities, investing activities and financing activities for the six months ended June 30, 2023 and June 30, 2022, refer to Part I.

Management’s Discussion and Analysis of Financial Condition and Results of Operations of the Quarterly Report on Form 10-Q/A for the fiscal quarter ended June 30, 2023, filed with the SEC on January 23, 2024.

Comparison of the Quarter Ended June 30, 2024 to the Quarter Ended June 30, 2023

For the comparison of our results of operations for the quarters and nine months ended September 30, 2023 and September 30, 2022 and discussion of our operating activities, investing activities and financing activities for the nine months ended September 30, 2023 and September 30, 2022, refer to Part I.

Management’s Discussion and Analysis of Financial Condition and Results of Operations of the Quarterly Report on Form 10-Q/A for the fiscal quarter ended September 30, 2023, filed with the SEC on January 23, 2024.

Comparison of the Quarter Ended September 30, 2024 to the Quarter Ended September 30, 2023

Income from Property Operations

1 unchanged sentence

Core Portfolio Total Portfolio

Quarters Ended June 30, Quarters Ended June 30,

Quarters Ended September 30, Quarters Ended September 30,

(amounts in thousands) 2024 2023 Variance %

28 unchanged sentences

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

(2) Membership upgrade sales revenue is net of deferrals of $4.7 million and $5.7 million for the quarters ended June 30, 2024 and June 30, 2023, respectively.

(2) Membership upgrade sales revenue is net of deferrals of $5.9 million and $7.0 million for the quarters ended September 30, 2024 and September 30, 2023, respectively.

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

(4) Membership sales and marketing expense is net of sales commission deferrals of $0.9 million for both the quarters ended June 30, 2024 and June 30, 2023.

(4) Membership sales and marketing expense is net of sales commission deferrals of $1.2 million for both the quarters ended September 30, 2024 and September 30, 2023.

(5) See Part I.

Management's Discussion and Analysis—Non-GAAP Financial Measures for definitions and reconciliations of these Non-GAAP measures to Net Income available for Common Shareholders.

Total portfolio income from property operations for the quarter ended June 30, 2024, increased $5.2 million, or 3.2%, from the quarter ended June 30, 2023, driven by an increase of $9.4 million, or 6.2%, from our Core Portfolio, offset by a decrease of $4.2 million from our Non-Core Portfolio.

Total portfolio income from property operations for the quarter ended September 30, 2024, increased $7.5 million, or 4.5%, from the quarter ended September 30, 2023, driven by an increase of $10.3 million, or 6.3%, from our Core Portfolio, offset by a decrease of $2.8 million from our Non-Core Portfolio.

The increase in income from property operations from our Core Portfolio was primarily due to higher property operating revenues, primarily in MH base rental income, RV and marina base rental income and utility and other income, partially offset by an increase in property operating and maintenance expenses and real estate taxes.

1 unchanged sentence

Property Operating Revenues

MH base rental income in our Core Portfolio for the quarter ended June 30, 2024 increased $10.3 million, or 6.2%, from the quarter ended June 30, 2023, which reflects 6.0% growth from rate increases and 0.2% from occupancy gains.

The average monthly base rental income per Site in our Core Portfolio increased to approximately $854 for the quarter ended June 30, 2024 from approximately $806 for the quarter ended June 30, 2023.

The average occupancy for our Core Portfolio was 94.9% and 94.8% for the quarters ended June 30, 2024 and June 30, 2023, respectively.

MH base rental income in our Core Portfolio for the quarter ended September 30, 2024 increased $10.3 million, or 6.2%, from the same period in 2023, which reflects 5.8% growth from rate increases and 0.4% from occupancy gains.

The average monthly base rental income per Site in our Core Portfolio increased to approximately $861 for the quarter ended September 30, 2024 from approximately $813 for the quarter ended September 30, 2023.

The average occupancy for our Core Portfolio was 95.0% and 94.9% for the quarters ended September 30, 2024 and September 30, 2023, respectively.

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

Core Portfolio Total Portfolio

Quarters Ended June 30, Quarters Ended June 30,

Quarters Ended September 30, Quarters Ended September 30,

(amounts in thousands) 2024 2023 Variance %

4 unchanged sentences

RV and marina base rental income $ 110,919 $ 109,473 $ 1,446 1.3 % $ 113,357 $ 112,819 $ 538 0.5 %

RV and marina base rental income in our Core Portfolio for the quarter ended June 30, 2024 increased $1.9 million, or 2.0%, from the quarter ended June 30, 2023, driven primarily by an increase in Annual RV and marina base rental income.

The increase in Annual RV and marina base rental income was partially offset by decreases in Seasonal and Transient RV and marina base rental income of 16.7% and 5.6%, respectively, for the quarter ended June 30, 2024, compared to the same period in 2023.

Utility and other income in our Core Portfolio for the quarter ended June 30, 2024 increased $2.0 million, or 6.6%, from the quarter ended June 30, 2023.

RV and marina base rental income in our Core Portfolio for the quarter ended September 30, 2024 increased $1.4 million, or 1.3%, from the same period in 2023, driven primarily by an increase in Annual RV and marina base rental income.

The increase in Annual RV and marina base rental income of 6.2% was partially offset by decreases in Seasonal and Transient RV and marina base rental income of 13.3% and 6.1%, respectively, for the quarter ended September 30, 2024, compared to the same period in 2023.

Utility and other income in our Core Portfolio for the quarter ended September 30, 2024 increased $2.8 million, or 8.8%, from the same period in 2023.

The increase was primarily due to a $2.0 million and $0.8 million increase in utility income and pass-through income, respectively.

1 unchanged sentence

Property Operating Expenses

Property operating expenses, excluding property management, in our Core Portfolio for the quarter ended June 30, 2024 increased $5.0 million, or 3.4%, from the quarter ended June 30, 2023, driven by increases in property operating and maintenance expenses of $2.7 million and real estate taxes of $1.2 million.

Core property operating and maintenance expenses were higher in 2024 primarily due to an increase in utility expense of $1.5 million.

Real estate taxes were higher in 2024, primarily in the South and North regions, driven by tax increases that were effective in 2023.

Property operating expenses, excluding property management, in our Core Portfolio for the quarter ended September 30, 2024 increased $4.2 million, or 2.8%, from the same period in 2023, driven by increases in property operating and maintenance expenses of $2.0 million and real estate taxes of $1.8 million.

Core property operating and maintenance expenses were higher in 2024, primarily due to an increase in insurance of $1.3 million and utility expense of $0.7 million.

The increase in insurance of $1.3 million is due to higher insurance premiums following our property and casualty insurance renewal in the second quarter of 2024.

Real estate taxes were higher in 2024, primarily in the Florida portfolio, driven by higher real estate tax assessments in 2023.

Management's Discussion and Analysis (continued)

1 unchanged sentence

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

Quarters Ended June 30,

Quarters Ended September 30,

(amounts in thousands, except home sales volumes) 2024 2023 Variance %

10 unchanged sentences

Brokered home resales 135 160 (25) (15.6) %

Gross revenues from new home sales decreased $0.3 million and Cost of new home sales decreased $1.2 million during the quarter ended June 30, 2024, compared to the quarter ended June 30, 2023, primarily due to lower average selling prices and lower average cost of home sales, respectively.

Gross revenues from new home sales decreased $12.2 million and Cost of new home sales decreased $10.4 million during the quarter ended September 30, 2024, compared to the quarter ended September 30, 2023, primarily due to lower sales volume and lower average cost of home sales.

Rental Operations

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

Quarters Ended June 30,

Quarters Ended September 30,

(amounts in thousands, except rental unit volumes)

13 unchanged sentences

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

Approximately $5.2 million and $6.1 million for the quarters ended June 30, 2024 and June 30, 2023, respectively, of Site rental income is included in MH base rental income in the Core Portfolio Income from Property Operations table.

Approximately $5.1 million and $5.9 million for the quarters ended September 30, 2024 and September 30, 2023, respectively, of Site rental income is included in MH base rental income in the Core Portfolio Income from Property Operations table.

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

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

Rental operations revenues were $1.2 million, or 12.5%, lower during the quarter ended June 30, 2024, compared to the quarter ended June 30, 2023, primarily due to a decrease in the number of occupied rentals.

Rental operations revenues were $0.9 million, or 9.5%, lower during the quarter ended September 30, 2024, compared to the quarter ended September 30, 2023, primarily due to a decrease in the number of occupied rentals.

Management's Discussion and Analysis (continued)

1 unchanged sentence

The following table summarizes other income and expenses, net:

Quarters Ended June 30,

Quarters Ended September 30,

(amounts in thousands, expenses shown as negative)

5 unchanged sentences

Other expenses (1,402) (1,338) (64) (4.8) %

Early debt retirement (30) (68) 38 55.9 %

Interest and related amortization (36,497) (33,434) (3,063) (9.2) %

Total other income and expenses, net $ (93,515) $ (91,094) $ (2,421) (2.7) %

Total other income and expenses, net decreased $5.1 million for the quarter ended June 30, 2024, compared to the quarter ended June 30, 2023, primarily due to lower general and administrative expenses as a result of an accelerated stock-based compensation expense in 2023, partially offset by higher interest and related amortization.

Total other income and expenses, net increased $2.4 million for the quarter ended September 30, 2024, compared to the quarter ended September 30, 2023, primarily due to higher interest and related amortization as a result of an increase in interest rates, partially offset by lower general and administrative expenses.

Casualty-related charges/(recoveries), net

During the quarters ended June 30, 2024 and June 30, 2023, we recognized expenses of approximately $0.7 million and $1.8 million, respectively, related to debris removal and cleanup costs related to Hurricane Ian and we recognized an offsetting insurance recovery revenue accrual of $0.7 million and $1.8 million, respectively, related to the expected insurance recovery.

During the quarters ended June 30, 2024 and June 30, 2023, we also recognized insurance recovery revenue in excess of expenses and business interruption proceeds of approximately $6.2 million and zero, respectively, within Casualty-related charges/(recoveries), net.

During the quarters ended September 30, 2024 and September 30, 2023, we recognized expenses of approximately $2.3 million and $1.8 million, respectively, related to debris removal and cleanup costs related to Hurricane Ian and Hurricane Helene.

We recognized an offsetting insurance recovery revenue accrual for Hurricane Ian of $1.3 million and $1.8 million during the quarters ended September 30, 2024 and September 30, 2023, respectively, related to the expected insurance recovery.

During the quarters ended September 30, 2024 and September 30, 2023, we also recognized insurance recovery revenue in excess of expenses and business interruption proceeds for Hurricane Ian of approximately $0.5 million and zero, respectively, within Casualty-related charges/(recoveries), net.

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.

Loss on sale of real estate and impairment, net

Loss on sale of real estate and impairment, net was $0.8 million higher during the quarter ended September 30, 2024, compared to the quarter ended September 30, 2023, primarily due to a write down of certain assets of $1.8 million as a result of Hurricane Helene, compared to $0.9 million related to storm events in 2023.

Equity in income of unconsolidated joint ventures

Equity in income of unconsolidated joint ventures was $5.2 million higher during the quarter ended September 30, 2024, compared to the quarter ended September 30, 2023, primarily due to a distribution from an unconsolidated joint venture that refinanced a secured loan and distributed proceeds, of which $5.1 million exceeded our basis in the joint venture.

Management's Discussion and Analysis (continued)

Comparison of the Six Months Ended June 30, 2024 to the Six Months Ended June 30, 2023

Comparison of the Nine Months Ended September 30, 2024 to the Nine Months Ended September 30, 2023

Income from Property Operations

The following table summarizes certain financial and statistical data for the Core Portfolio and the total portfolio for the six months ended June 30, 2024 and 2023:

The following table summarizes certain financial and statistical data for the Core Portfolio and the total portfolio for the nine months ended September 30, 2024 and 2023:

Core Portfolio Total Portfolio

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

Nine Months Ended September 30, Nine Months Ended September 30,

(amounts in thousands) 2024 2023 Variance %

28 unchanged sentences

(2) Membership upgrade sales revenue is net of deferrals of $8.3 million and $10.1 million for the six months ended June 30, 2024 and June 30, 2023, respectively.

(2) Membership upgrade sales revenue is net of deferrals of $14.2 million and $17.2 million for the nine months ended September 30, 2024 and September 30, 2023, respectively.

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

(4) Membership sales and marketing expense is net of sales commission deferrals of $1.3 million and $1.6 million the six months ended June 30, 2024 and June 30, 2023, respectively.

(4) Membership sales and marketing expense is net of sales commission deferrals of $2.4 million and $2.7 million the nine months ended September 30, 2024 and September 30, 2023, respectively.

(5) See Part I.

Management's Discussion and Analysis—Non-GAAP Financial Measures for definitions and reconciliation of these Non-GAAP measures to Net Income available for Common Shareholders.

Total Portfolio income from property operations for the six months ended June 30, 2024 increased $18.4 million, or 5.4%, from the same period in 2023, driven by an increase of $22.9 million, or 7.0%, from our Core Portfolio, offset by a decrease of $4.5 million from our Non-Core Portfolio.

Total Portfolio income from property operations for the nine months ended September 30, 2024 increased $25.9 million, or 5.1%, from the same period in 2023, driven by an increase of $33.2 million, or 6.8%, from our Core Portfolio, offset by a decrease of $7.3 million from our Non-Core Portfolio.

Property Operating Revenues

MH base rental income in our Core Portfolio for the six months ended June 30, 2024 increased $20.8 million, or 6.3%, from the same period in 2023, which reflects 6.1% growth from rate increases and 0.2% from occupancy gains.

The average monthly base rental income per Site increased to approximately $850 for the six months ended June 30, 2024 from approximately $801 for the six months ended June 30, 2023.

The average occupancy for the Core Portfolio was 94.9% for both the six months ended June 30, 2024 and June 30, 2023.

MH base rental income in our Core Portfolio for the nine months ended September 30, 2024 increased $31.1 million, or 6.2%, from the same period in 2023, which reflects 6.0% growth from rate increases and 0.2% from occupancy gains.

The average monthly base rental income per Site increased to approximately $854 for the nine months ended September 30, 2024 from approximately $805 for the nine months ended September 30, 2023.

The average occupancy for the Core Portfolio was 94.9% for both the nine months ended September 30, 2024 and September 30, 2023.

Management's Discussion and Analysis (continued)

1 unchanged sentence

Core Portfolio Total Portfolio

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

Nine Months Ended September 30, Nine Months Ended September 30,

(amounts in thousands)

5 unchanged sentences

RV and marina base rental income $ 327,109 $ 317,444 $ 9,665 3.0 % $ 336,887 $ 326,280 $ 10,607 3.3 %

RV and marina base rental income in our Core Portfolio for the six months ended June 30, 2024 increased $8.2 million, or 4.0%, from the same period in 2023 primarily due to an increase in Annual RV and marina base rental income, partially offset by a decrease in Seasonal and Transient RV base rental income.

RV and marina base rental income in our Core Portfolio for the nine months ended September 30, 2024 increased $9.7 million, or 3.0%, from the same period in 2023 primarily due to an increase in Annual RV and marina base rental income, partially offset by a decrease in Seasonal and Transient RV base rental income.

The increase in Annual RV and marina base rental income was $14.4 million, or 6.9%.

The decrease in Seasonal RV and marina base rental income was $2.0 million, or 4.4%.

The decrease in Transient RV and marina base rental income was $0.9 million.

Utility and other income in our Core Portfolio for the six months ended June 30, 2024 increased $3.6 million, or 6.1%, from the same period in 2023.

The increase was primarily due to an increase in utility income, pass-through income and other property income.

The decrease in Transient RV and marina base rental income was $2.8 million, or 4.3%.

Utility and other income in our Core Portfolio for the nine months ended September 30, 2024 increased $6.4 million, or 7.1%, from the same period in 2023.

The increase was primarily due to an increase in utility income and pass-through income.

The utility recovery rate (utility income divided by utility expenses) for 2024 and 2023 was approximately 47% and 45%, respectively.

1 unchanged sentence

Property Operating Expenses

Property operating expenses, excluding property management, in our Core Portfolio for the six months ended June 30, 2024 increased $10.3 million, or 3.7%, from the same period in 2023, driven by increases in property operating and maintenance expenses of $4.6 million and real estate taxes of $3.8 million.

Core property operating and maintenance expenses were higher during the six months ended June 30, 2024, compared to the same period in 2023 primarily due to increases in insurance of $2.5 million and higher utility expenses.

The increase in Core real estate taxes was driven by higher real estate assessments in our Florida portfolio in 2023.

Home Sales and Rental Operations

Property operating expenses, excluding property management, in our Core Portfolio for the nine months ended September 30, 2024 increased $14.4 million, or 3.4%, from the same period in 2023, driven by increases in property operating and maintenance expenses of $6.6 million and real estate taxes of $5.6 million.

Core property operating and maintenance expenses were higher during the nine months ended September 30, 2024, compared to the same period in 2023, primarily due to increases in insurance of $3.8 million and higher utility expenses of $2.5 million.

The increase in insurance was due to higher insurance premiums following our property and casualty insurance renewal in the second quarter of 2024.

The real estate taxes were driven by higher real estate assessments in our Florida portfolio in 2023.

Home Sales and Other

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

Six Months Ended June 30,

Nine Months Ended September 30,

(amounts in thousands, except home sales volumes)

11 unchanged sentences

Brokered home resales 396 495 (99) (20.0) %

Gross revenues from new home sales decreased $0.9 million and Cost of new home sales decreased $2.4 million during the six months ended June 30, 2024, compared to the six months ended June 30, 2023, primarily due to lower average selling prices and lower average cost of home sales.

Gross revenues from new home sales decreased $13.1 million and Cost of new home sales decreased $12.8 million during the nine months ended September 30, 2024, compared to the nine months ended September 30, 2023, primarily due to lower sales volume and lower average cost of home sales.

Management's Discussion and Analysis (continued)

1 unchanged sentence

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

Six Months Ended June 30,

Nine Months Ended September 30,

(amounts in thousands, except rental unit volumes)

13 unchanged sentences

(1) Consists of Site rental income and home rental income in our Core Portfolio.

Approximately $10.8 million and $12.5 million of Site rental income for the six months ended June 30, 2024 and 2023, respectively, are included in MH base rental income within the Core Portfolio Income from Property Operations table.

Approximately $15.9 million and $18.4 million of Site rental income for the nine months ended September 30, 2024 and 2023, respectively, are included in MH base rental income within the Core Portfolio Income from Property Operations table.

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

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

Rental operations revenues were $2.4 million or 12.1% lower during the six months ended June 30, 2024, compared to the six months ended June 30, 2023, primarily due to a decrease in the number of occupied rentals.

Rental operations revenues were $3.3 million or 11.3% lower during the nine months ended September 30, 2024, compared to the nine months ended September 30, 2023, primarily due to a decrease in the number of occupied rentals.

Miscellaneous Other Income and Expenses

The following table summarizes other income and expenses, net:

Six Months Ended June 30,

Nine Months Ended September 30,

(amounts in thousands, expenses shown as negative)

5 unchanged sentences

Other expenses (4,120) (4,187) 67 1.6 %

Early debt retirement (30) (68) 38 55.9 %

Interest and related amortization (106,077) (99,144) (6,933) (7.0) %

Total other income and expenses, net $ (279,983) $ (280,976) $ 993 0.4 %

Total other income and expenses, net decreased $3.4 million during the six months ended June 30, 2024, compared to the six months ended June 30, 2023, primarily due to lower general and administrative expense primarily as a result of accelerated vesting of stock-based compensation expense in 2023 partially offset by interest and related amortization.

Total other income and expenses, net decreased $1.0 million during the nine months ended September 30, 2024, compared to the nine months ended September 30, 2023, primarily due to lower general and administrative expense primarily as a result of accelerated vesting of stock-based compensation expense in 2023 partially offset by higher interest and related amortization as a result of higher interest rates.

Casualty-related charges/(recoveries), net

During the six months ended June 30, 2024 and June 30, 2023, we recognized expenses of approximately $1.2 million and $10.3 million, respectively, related to debris removal and cleanup costs related to Hurricane Ian and we recognized an offsetting insurance recovery revenue of $1.2 million and $10.3 million, respectively, related to the expected insurance recovery.

During the six months ended June 30, 2024 and June 30, 2023, we also recognized insurance recovery revenue in excess of expenses and business interruption proceeds of approximately $21.0 million and zero, respectively, within Casualty-related charges/(recoveries), net.

During the nine months ended September 30, 2024 and September 30, 2023, we recognized expenses of approximately $3.5 million and $12.1 million, respectively, related to debris removal and cleanup costs related to Hurricane Ian and Hurricane Helene.

We recognized an offsetting insurance recovery revenue accrual for Hurricane Ian of $2.5 million and $12.1 million, respectively, related to the expected insurance recovery.

During the nine months ended September 30, 2024 and September 30, 2023, we also recognized insurance recovery revenue in excess of expenses and business interruption proceeds for Hurricane Ian of approximately $21.5 million and zero, respectively, within Casualty-related charges/(recoveries), net.

Management's Discussion and Analysis (continued)

Loss on sale of real estate and impairment, net

Loss on sale of real estate and impairment, net was $1.8 million lower during the nine months ended September 30, 2024, compared to the nine months ended September 30, 2023, primarily due to a higher write down of $3.6 million in 2023 related to flooding events at certain properties in California and Florida compared to Hurricane Helene in 2024 of $1.8 million.

Equity in income of unconsolidated joint ventures

Equity in income of unconsolidated joint ventures was $4.6 million higher during the nine months ended September 30, 2024, compared to the nine months ended September 30, 2023, primarily due to a distribution from an unconsolidated joint venture which refinanced a secured loan and distributed proceeds of which $5.1 million exceeded our basis in the joint venture.

Management's Discussion and Analysis (continued)

Liquidity and Capital Resources

9 unchanged sentences

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 June 30, 2024, the full capacity of our ATM equity offering program remained available for issuance.

As of June 30, 2024, we had available liquidity in the form of approximately 413.5 million shares of authorized and unissued common stock, par value $0.01 per share, and 10.0 million shares of authorized and unissued preferred stock registered for sale under the Securities Act of 1933, as amended.

As of September 30, 2024, the full capacity of our ATM equity offering program remained available for issuance.

In October 2024, we sold approximately 4.5 million shares of our common stock at a price of $70.00 from our at-the-market (“ATM”) offering program.

Subsequent Events for additional information.

As of September 30, 2024, we had available liquidity in the form of approximately 413.5 million shares of authorized and unissued common stock, par value $0.01 per share, and 10.0 million shares of authorized and unissued preferred stock registered for sale under the Securities Act of 1933, as amended.

We anticipate entering into a new at-the-market (“ATM”) equity offering program within the near future, pursuant to which we may sell, from time-to-time, shares of our common stock, par value $0.01 per share, with an aggregate offering price capacity of at least $500.0 million.

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

5 unchanged sentences

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

As of June 30, 2024, our LOC had a borrowing capacity of $485.9 million.

As of September 30, 2024, our LOC had a borrowing capacity of $467.4 million.

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

The following table summarizes our cash flows activity:

For the six months ended June 30,

For the nine months ended September 30,

(amounts in thousands) 2024 2023

4 unchanged sentences

Operating Activities

Net cash provided by operating activities increased $75.1 million to $341.9 million for the six months ended June 30, 2024 from $266.8 million for the six months ended June 30, 2023.

The increase in net cash provided by operating activities was primarily due to net increases in manufactured homes, net, accounts payable and other liabilities and other assets, net, partially offset by a reduction in proceeds from insurance claims, net.

Net cash provided by operating activities increased $72.7 million to $491.4 million for the nine months ended September 30, 2024 from $418.7 million for the nine months ended September 30, 2023.

The increase in net cash provided by operating activities was primarily due to net increases in manufactured homes, net and accounts payable and other liabilities.

Management's Discussion and Analysis (continued)

The following table summarizes our purchase and sale activity of manufactured homes:

For the six months ended June 30,

For the nine months ended September 30,

(amounts in thousands)

3 unchanged sentences

Investing Activities

Net cash used in investing activities decreased $49.0 million to $104.6 million for the six months ended June 30, 2024 from $153.6 million for the six months ended June 30, 2024.

The decrease was due to a decrease in capital improvement spending of $31.8 million, a decrease in spending on acquisitions of $9.2 million, and an increase in Hurricane Ian proceeds in 2024 compared to same period in 2023.

Net cash used in investing activities decreased $85.6 million to $151.9 million for the nine months ended September 30, 2024 from $237.5 million for the nine months ended September 30, 2023.

The decrease was due to a decrease in capital expenditures of $55.5 million, an increase of $13.6 million in Hurricane Ian proceeds in 2024 compared to the same period in 2023 and an increase in distributions of capital from unconsolidated joint ventures of $10.4 million.

Capital Improvements

The following table summarizes capital improvements:

For the six months ended June 30,

For the nine months ended September 30,

(amounts in thousands) 2024 2023

12 unchanged sentences

(2) Includes enhancements to amenities such as buildings, common areas, swimming pools and replacement of furniture and site amenities.

(3) Includes $10.4 million of restoration and improvement capital expenditures related to Hurricane Ian for the six months ended June 30, 2024.

(3) Includes $12.3 million of restoration and improvement capital expenditures related to Hurricane Ian for the nine months ended September 30, 2024.

(4) Includes capital expenditures to improve the infrastructure required to set manufactured homes.

Financing Activities

Net cash used in financing activities increased $124.1 million to $231.6 million for the six months ended June 30, 2024 from $107.5 million for the six months ended June 30, 2023.

The increase was primarily due to a higher line of credit, net repayment of $24.0 million and a decrease in mortgage note financing proceeds of $88.8 million.

Net cash used in financing activities increased $185.2 million to $329.0 million for the nine months ended September 30, 2024 from $143.8 million for the nine months ended September 30, 2023.

The increase was primarily due to a decrease in mortgage note financing proceeds of $463.8 million and an increase in distributions to common stockholders of $18.5 million, partially offset by a lower line of credit, net repayment of $199.5 million and lower principal payments and mortgage debt repayment of $100.8 million.

Contractual Obligations

3 unchanged sentences

Off-Balance Sheet Arrangements

As of June 30, 2024, we have no off-balance sheet arrangements.

As of September 30, 2024, we have no off-balance sheet arrangements.

Critical Accounting Policies and Estimates

1 unchanged sentence

Management’s Discussion and Analysis of Financial Condition and Results of Operations in our 2023 Form 10-K for a discussion of our critical accounting policies.

There have been no significant changes to our critical accounting policies and estimates during the quarter ended June 30, 2024.

There have been no significant changes to our critical accounting policies and estimates during the quarter ended September 30, 2024.

Management's Discussion and Analysis (continued)

36 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 2. Management’s Discussion and Analysis