What changed in this filing

/stocks — the workspaceLOADING

Item 7. Management’s Discussion and Analysis

2025-02-25 compared with 2024-02-22 · 111 added, 96 removed, 415 unchanged (33% of the section changed)

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We continued our strong performance in 2024, as marked by these key operational and financial accomplishments:

• Net income per Common Share on a fully diluted basis was $1.69 for the year ended December 31, 2023, 10.5% higher than the year ended December 31, 2022.

• Net income per share of common stock (“Common Share”) on a fully diluted basis was $1.96 for the year ended December 31, 2024, 16.0% higher than the year ended December 31, 2023.

• FFO per Common Share on a fully diluted basis was $3.03 for the year ended December 31, 2024, 9.5% higher than the year ended December 31, 2023.

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• Core MH base rental income increased by 6.1% during the year ended December 31, 2024, compared to the year ended December 31, 2023.

During the year ended December 31, 2023, we filled 109 expansion sites in our Core MH portfolio.

• Manufactured homeowners within our Core portfolio increased by 379 to 67,002 as of December 31, 2024, compared to 66,623 as of December 31, 2023.

• Core RV and marina base rental income for the year ended December 31, 2024 increased by 3.0%, compared to the year ended December 31, 2023.

• Core Annual RV and marina base rental income for the year ended December 31, 2023 increased by 8.1%, compared to the year ended December 31, 2022 and includes 7.6% growth from rate increases.

• Core Annual RV and marina base rental income for the year ended December 31, 2024 increased by 6.5%, compared to the year ended December 31, 2023.

• New home sales of 756 for the year ended December 31, 2024.

• Acquired one RV community for a purchase price of $9.5 million during the year ended December 31, 2023.

• Added 736 expansion sites during the year ended December 31, 2024.

• During the year ended December 31, 2023, we closed on four secured financing transactions totaling $463.8 million.

The loans have a weighted average fixed interest rate of 5.05% per annum and a weighted average maturity of approximately eight years.

• Increased the annual dividend for 2024 to $1.91 per share of Common Stock, an increase of 6.7%, or $0.12, compared to the 2023 annual dividend of $1.79.

Over the past 10 years, we have increased our dividend by an average of 11.4% per year.

• During the year ended December 31, 2024, we closed on a modification of our $500.0 million unsecured line of credit to extend the maturity date to July 18, 2028.

All other material terms, including interest rate terms, remained the same.

Additionally, we repaid our $300.0 million senior unsecured term loan and terminated the related interest rate swaps.

• During the year ended December 31, 2024, we sold approximately 4.5 million shares of our common stock at a price of $70.00 per Common Share from our prior at-the-market (“ATM”) offering program that was entered into in February 2024.

• In November 2024, we entered into our current ATM equity offering program with an aggregate offering price of up to $700.0 million.

Overview and Outlook

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As of December 31, 2024, we owned or had an ownership interest in a portfolio of 452 Properties located throughout the United States and Canada containing 173,201 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 10 miles of the coastal United States.

These Properties are located in 35 states and British Columbia.

We invest in properties in sought-after locations near retirement and vacation destinations and urban areas across the United States with a focus on delivering an exceptional experience to our residents and guests that results in delivery of value to stockholders.

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We also actively pursue opportunities that fit our acquisition criteria and are currently engaged in various stages of negotiations relating to the possible acquisition of additional properties.

Management's Discussion and Analysis (continued)

We believe the demand from baby boomers for MH and RV communities will continue to be strong over the long term.

It is estimated that approximately 10,000 baby boomers are turning 65 daily through 2029.

It is estimated that approximately 10,000 Americans turn 65 years old every day and all baby boomers will be at least age 65 by 2030.

These individuals, seeking an active lifestyle, will continue to drive the market for second-home sales as vacation properties, investment opportunities or retirement retreats.

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We also believe the Millennial and Generation Z demographic will contribute to our future long-term customer pipeline.

Management's Discussion and Analysis (continued)

After conducting a comprehensive study of RV ownership, according to the Recreational Vehicle Industry Association (“RVIA”), data suggested that RV sales are expected to benefit from an increase in demand from those born in the United States from 1980 to 2003, or Millennials and Gen Z, over the coming years.

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Joint Ventures (2)

Total 173,200

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(2) Includes approximately 2,000 annual Sites and 1,800 transient Sites.

(3) Total does not foot due to rounding.

Membership Sites are primarily utilized to service approximately 113,600 annual subscription members, including 21,500 free trial members added through our RV dealer program.

The remaining 97,400 have purchased a Thousand Trails Camping (“TTC”) membership, which is an annual subscription providing the member access to our Properties in one to five geographic regions of the United States.

The majority of the remaining 92,100 have purchased a Thousand Trails Camping (“TTC”) membership, which is an annual subscription providing the member access to our Properties in one to five geographic regions of the United States.

In 2024, a TTC membership for a single geographic region required an annual payment of $725.

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(2) the ability to make earlier advance reservations;

(3) discounts on rental accommodations and (4) access to additional properties, including non-membership recreational vehicle ("RV") properties.

Each membership upgrade requires a non-refundable upfront payment, for which we offer financing options to eligible customers.

As a customer acquisition tool, we have relationships with a network of RV dealers to provide each new RV owner with a free one-year trial subscription to a TTC membership.

(3) discounts on rental

Management's Discussion and Analysis (continued)

accommodations and (4) access to additional properties, including non-membership recreational vehicle ("RV") properties.

Certain membership upgrades require a non-refundable upfront payment, for which we offer financing options to eligible customers.

As a customer acquisition tool, we have relationships with a network of RV dealers to provide each new RV owner with a free one-year trial subscription to a TTC membership.

In our Home Sales and Rentals Operations business, our revenue streams include home sales, home rentals and brokerage services and ancillary activities.

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We have a limited program under which we purchase loans made by an unaffiliated lender to homebuyers at our Properties.

Under the existing administration, the Federal Housing Finance Agency (the “FHFA”), overseer of Fannie Mae, Freddie Mac (the “GSEs”) and the Federal Home Loan Banks, has focused on equitable access to affordable and sustainable housing.

In 2017, the FHFA published the Underserved Markets Plans for 2018-2020 (the “GSE Plans”) under the Duty-To-Serve (“DTS”) provisions mandated by the Federal Housing Enterprises Financial Safety and Soundness Act of 1992, as amended by the Housing and Economic Recovery Act of 2008.

The GSEs subsequently added a 2021 Plan as a one-year extension and have since published their current 2022-2024 Plans.

The FHFA mandate requires the GSE Plans to address leadership in developing loan products and flexible underwriting guidelines in underserved markets to facilitate a secondary market for mortgages on manufactured homes titled as real property or personal property, blanket loans for certain categories of manufactured housing communities, preserving the affordability of housing for renters and homebuyers, and housing in rural markets.

While the FHFA and the current GSE 2022-24 DTS Plans may have a positive impact on the ability of our customers to obtain chattel financing, the actual impact on us, as well as the industry, cannot be determined at this time.

The Federal Housing Finance Agency (the “FHFA”), overseer of Fannie Mae, Freddie Mac (the “GSEs”) and the Federal Home Loan Banks, focuses on equitable access to affordable and sustainable housing.

Since 2017, the FHFA has developed programs for the GSEs that address leadership in developing loan products and flexible underwriting guidelines in underserved markets to facilitate a secondary market for mortgages on manufactured homes titled as real property or personal property, blanket loans for certain categories of manufactured housing communities, preserving the affordability of housing for renters and homebuyers, and housing in rural markets.

While the FHFA and the current programs may have a positive impact on our customers, the impact on us as well as the industry cannot be determined at this time.

In addition to net income computed in accordance with U.S.

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Results Overview

For the year ended December 31, 2023, net income available for Common Stockholders increased $29.6 million, or $0.16 per fully diluted Common Share, to $314.2 million, or $1.69 per fully diluted Common Share, compared to $284.6 million, or $1.53 per fully diluted Common Share, for the same period in 2022.

For the year ended December 31, 2023, FFO available for Common Stock and OP Unit holders increased $36.1 million, or $0.18 per fully diluted Common Share, to $541.2 million, or $2.77 per fully diluted Common Share, compared to $505.1 million, or $2.59 per fully diluted Common Share, for the same period in 2022.

For the year ended December 31, 2023, Normalized FFO available for Common Stock and OP Unit holders increased $24.4 million, or $0.12 per fully diluted Common Share, to $537.5 million, or $2.75 per fully diluted Common Share, compared to $513.1 million, or $2.63 per fully diluted Common Share, for the same period in 2022.

(amounts in thousands) Years Ended December 31,

2024 2023 $ Change % Change (1)

Net Income per fully diluted Common Share $ 1.96 $ 1.69 $ 0.27 16.0 %

FFO per fully diluted Common Share and OP Unit $ 3.03 $ 2.77 $ 0.26 9.5 %

Normalized FFO per fully diluted Common Share and OP Unit $ 2.91 $ 2.75 $ 0.16 5.9 %

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(1) Calculations prepared using actual results without rounding.

Our Core Portfolio could change from time-to-time depending on acquisitions, dispositions and significant transactions or unique situations.

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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 year ended December 31, 2023, property operating revenues in our Core Portfolio, increased 5.8% and property operating expenses in our Core Portfolio, excluding property management, increased 7.0%, from the year ended December 31, 2022, resulting in an increase in income from property operations, excluding property management, of 5.0%.

For the year ended December 31, 2024, property operating revenues in our Core Portfolio, increased 4.8% and property operating expenses in our Core Portfolio, excluding property management, increased 2.6%, from the year ended December 31, 2023, resulting in increased income from property operations, excluding property management, of 6.5%.

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

We continue to expect there to be fluctuations in the sources of occupancy gains

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

Management's Discussion and Analysis (continued)

depending on local market conditions, availability of vacant sites and success with converting renters to homeowners.

Our Core Portfolio average occupancy, including both homeowners and renters, in our MH communities was 94.9% and 95.1% for the years ended December 31, 2023 and December 31, 2022, respectively.

Portfolio was comprised of approximately 92% homeowners and 3% renters, and our average aggregate occupancy in our MH communities was approximately 95% for both the years ended December 31, 2024 and December 31, 2023.

For the year ended December 31, 2024, our Core Portfolio occupancy increased by 38 sites with an increase in homeowner occupancy of 379 sites and a decrease in rental occupancy of 341.

In addition to maintaining occupancy, we have experienced rental rate increases during the year ended December 31, 2024, which contributed to a growth of 6.1% in Core MH base rental income compared to the same period in 2023.

RV and marina base rental income in our Core Portfolio for the year ended December 31, 2023, was 3.5% higher than the same period in 2022 and was driven by an increase in annual and seasonal revenues.

Core RV and marina base rental income from annuals represents more than 68.6% of total Core RV and marina base rental income and increased 8.1% for the year ended December 31, 2023 compared to the same period in 2022.

Core seasonal RV and marina base rental income increased 2.6% for the year ended December 31, 2023 compared to the same period in 2022.

RV and marina base rental income in our Core Portfolio for the year ended December 31, 2024, was 3.0% higher than the same period in 2023 and was driven by an increase in annual revenues.

Core RV and marina base rental income from annuals represents 70.3% of total Core RV and marina base rental income and increased 6.5% for the year ended December 31, 2024 compared to the same period in 2023.

Core seasonal RV and marina base rental income decreased 4.7% for the year ended December 31, 2024 compared to the same period in 2023.

Core transient RV and marina base rental income decreased 4.3% for the year ended December 31, 2024 compared to the same period in 2023.

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

We continue to experience a stable membership base within our Thousand Trails portfolio.

For the year ended December 31, 2024, annual membership subscriptions revenue increased 0.8% over the same period in 2023.

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RV Dealer TTC Activations 23,552 25,232 28,178 26,600 23,542

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

We closed 905 new home sales during the year ended December 31, 2023 compared to 1,176 new home sales during the year ended December 31, 2022.

Our strategy of converting existing residents to home buyers continues to be successful with approximately 25% of our home sales during the year ended December 31, 2023 coming from individuals who already reside in our communities as an existing renter or homeowner.

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

Additionally, we closed 756 new home sales during the year ended December 31, 2024 compared to 905 new home sales during the year ended December 31, 2023.

Our strategy of converting existing residents to home buyers continues to be successful, with approximately 25% of our home sales during the year ended December 31, 2023 coming from individuals who already reside in our communities as an existing renters or homeowners.

Our gross investment in real estate increased $209.4 million to $7,915.7 million as of December 31, 2024, from $7,706.3 million as of December 31, 2023, primarily due to capital improvements during the year ended December 31, 2024.

Management's Discussion and Analysis (continued)

Property Acquisitions/Dispositions and Joint Ventures

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Acquisition Properties:

Blue Mesa Recreational Ranch Gunnison, Colorado Membership February 18, 2022 385

Pilot Knob RV Resort Winterhaven, California RV February 18, 2022 247

Holiday Trav-L-Park Resort Emerald Isle, North Carolina RV June 15, 2022 299

Oceanside RV Resort Oceanside, California RV June 16, 2022 139

Hiawasee KOA JV Hiawassee, Georgia Unconsolidated JV November 10, 2022 283

Whippoorwill Campground Marmora, New Jersey RV December 20, 2022 288

Red Oak Shores Campground Ocean View, New Jersey RV March 28, 2023 223

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Sites added (reconfigured) in 2024 736

Ground Lease Termination:

Westwinds San Jose, California MH August 31, 2022 (723)

Total Sites as of December 31, 2024 (1)

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(1) Includes the marina slips.

(1) Sites are approximate

The following table identifies our largest markets by number of Sites and provides information regarding our Properties (excluding fourteen Properties owned through our Joint Ventures).

Management's Discussion and Analysis (continued)

The following table identifies our largest markets by number of Sites and provides information regarding our Properties (excluding sixteen Properties owned through our Joint Ventures).

Major Market Total Sites Number of

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We believe we have met the requirements and have qualified for taxation as a REIT and we plan to continue to meet these requirements.

The requirements for qualification as a REIT are highly technical and complex, as they pertain to the ownership of our outstanding stock, the nature of our assets, the sources of our income and the amount of our

Management's Discussion and Analysis (continued)

distributions to our stockholders.

Examples include that at least 95% of our gross income must come from sources that are itemized in the REIT tax laws and at least 90% of our REIT taxable income, computed without regard to our deduction for dividends paid and our net capital gain, must be distributed to stockholders annually.

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We believe exclusion of property management expenses is helpful to investors and analysts as a measure of the operating results of our properties, excluding items that are not directly related to the operation of the properties.

For comparative purposes, we present bad debt expense within Property operating and maintenance in the current and prior periods.

Management's Discussion and Analysis (continued)

comparative purposes, we present bad debt expense within Insurance and other in the current and prior periods.

We believe that this Non-GAAP financial measure is helpful to investors and analysts as a measure of the operating results of our properties.

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While FFO is a relevant and widely used measure of operating performance for equity REITs, it does not represent cash flow from operations or net income as defined by GAAP, and it should not be considered as an alternative to these indicators in evaluating liquidity or operating performance.

We define Normalized FFO as FFO excluding non-operating income and expense items, such as gains and losses from early debt extinguishment, including prepayment penalties, defeasance costs, transaction/pursuit costs, and other miscellaneous non-comparable items.

Management's Discussion and Analysis (continued)

We believe that FFO and Normalized FFO are helpful to investors as supplemental measures of the performance of an equity REIT.

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The following table reconciles net income available for Common Stockholders to income from property operations for the years ended December 31, 2024, 2023 and 2022:

Management's Discussion and Analysis (continued)

Total Portfolio

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Other expenses 5,533 5,768 8,646

Other items (6,800) — —

Early debt retirement 5,833 68 1,156

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Income from property operations $ 721,541 $ 681,415 $ 639,216

Management's Discussion and Analysis (continued)

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 years ended December 31, 2024, 2023 and 2022:

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Depreciation on unconsolidated joint ventures 4,826 4,599 3,886

Gain on unconsolidated joint ventures (416) — —

Loss on sale of real estate and impairment, net 3,581 — 59

(Gain)/Loss on unconsolidated joint ventures — (416) —

(Gain)/Loss on sale of real estate and impairment, net 2,466 3,581 —

FFO available for Common Stock and OP Unit holders 595,973 541,163 505,057

Deferred tax benefit (1)

Deferred income tax benefit (1)

(354) (10,488) —

Accelerated vesting of stock-based compensation expense (2)

Early debt retirement 5,833 68 1,156

Transaction/pursuit costs (3)

Transaction/pursuit costs and other (3)

383 458 3,807

Insurance proceeds due to catastrophic weather events, net (22,101) — —

Other items (4)

Lease termination expenses (5)

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(3) Represents transaction/pursuit costs related to unconsummated acquisitions included in Other expenses in the Consolidated Statements of Income.

(4) Represents an increase in Other income of $6.8 million related to aged prepaid balances that were determined to no longer be liabilities.

Financial Statements and Supplementary Data—Note 2.

Summary of Significant Accounting Policies

(5) Represents non-operating expenses associated with the Westwinds ground leases that terminated on August 31, 2022 and is included in General and Administrative expenses in the Consolidated Statement of Income.

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For the comparison of our results of operations for the years ended December 31, 2023 and December 31, 2022 and discussion of our operating activities, investing activities and financing activities for these years, refer to Part II, Item 7.

Management’s Discussion and Analysis of Financial Condition and Results of Operations of the Annual Report on Form 10-K/A for the fiscal year ended December 31, 2022, filed with the SEC on January 22, 2024.

Management’s Discussion and Analysis of Financial Condition and Results of Operations of the Annual Report on Form 10-K for the fiscal year ended December 31, 2023, filed with the SEC on February 22, 2024.

Income from Property Operations

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Utility and other income 129,889 121,193 8,696 7.2 % 144,801 141,178 3,623 2.6 %

120,486 109,534 10,952 10.0 % 141,178 120,750 20,428 16.9 %

Property operating revenues 1,360,672 1,297,748 62,924 4.8 % 1,389,413 1,330,693 58,720 4.4 %

Property operating and maintenance (1)(3)

Utilities expense 156,734 152,841 3,893 2.5 % 159,058 155,160 3,898 2.5 %

Payroll 117,465 118,150 (685) (0.6) % 120,204 120,310 (106) (0.1) %

Repairs & maintenance 91,739 92,405 (666) (0.7) % 93,997 94,424 (427) (0.5) %

Insurance and other (1)(3)

103,150 96,096 7,054 7.3 % 106,801 98,847 7,954 8.0 %

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

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

(2) Membership upgrade sales revenue is net of deferrals of $15.1 million and $21.0 million for the years ended December 31, 2024 and 2023, respectively.

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

(4) Membership sales and marketing expense is net of sales commission deferrals of $3.2 million for the years ended December 31, 2023 and 2022.

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

Total portfolio income from property operations for 2023 increased $42.2 million, or 6.6%, from 2022, driven by an increase of $32.4 million, or 5.2%, from our Core Portfolio and an increase of $9.8 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 and RV and marina base rental income, partially offset by an increase in property operating expenses, excluding property management.

The increase in income from property operations from our Non-Core Portfolio was attributed to income from properties acquired in the fourth quarter of 2022 and during the year ended December 31, 2023.

(4) Membership sales and marketing expense is net of sales commission deferrals of $2.6 million and $3.2 million for the years ended December 31, 2024 and 2023, respectively.

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

Total portfolio income from property operations for 2024 increased $40.1 million, or 5.9%, from 2023, driven by an increase of $46.2 million, or 7.0%, from our Core Portfolio, partially offset by a decrease of $6.1 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 and RV and marina base rental income, as well as utility and other income, partially offset by an increase in property operating expenses, excluding property management.

The decrease in income from property operations from our Non-Core Portfolio was primarily attributed to higher business interruption insurance proceeds received in 2023 related to Hurricane Ian and lower property operating income in 2024.

Management's Discussion and Analysis (continued)

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The average monthly base rental income per Site in our Core portfolio increased to approximately $858 in 2024 from approximately $810 in 2023.

The average occupancy in our Core Portfolio was 94.9% in 2023 and 95.1% in 2022.

The average occupancy in our Core Portfolio was approximately 94.9% in both 2024 and 2023.

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

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RV and marina base rental income $ 425,760 $ 413,459 $ 12,301 3.0 % $ 438,448 $ 425,664 $ 12,784 3.0 %

Core Annual RV and marina base rental income increased during the year ended December 31, 2023, from the year ended December 31, 2022, across all regions and was due to growth from rate increases of 7.6% and 0.5% from occupancy gains.

The increase in Core Seasonal RV and marina base rental income was driven by increases in the South and West regions.

The decrease in Core Transient RV and marina base rental income was mainly a result of unfavorable weather patterns.

Core Annual RV and marina base rental income increased during the year ended December 31, 2024, from the year ended December 31, 2023, primarily in the South and West regions, and was due to growth from rate increases of 8.2% and a decline of 1.7% in occupancy.

The decrease in Core Seasonal RV and marina base rental income was due to reduced demand from individuals seeking to work remotely and non-returning Hurricane Ian workers at our Florida properties.

The decrease in Core Transient RV and marina base rental income was primarily due to returning competitor supply, weather disruptions and normalized demand following the COVID pandemic.

Utility and other income in our Core Portfolio for 2024 increased $8.7 million, or 7.2%, from 2023.

The increase was primarily due to higher utility income of $5.8 million and an increase in other property income of $5.2 million.

Utility income increased across all utility types.

The increase was primarily due to higher utility income of $5.1 million, pass-through income of $2.8 million and insurance proceeds of $1.2 million, partially offset by a decrease in other property income of $0.4 million.

Utility income increased mainly due to higher trash and sewer income in all regions.

The increase in pass-through income was due to increases in real estate tax pass-throughs to customers in Florida.

The increase in insurance proceeds was primarily due to California flood insurance proceeds received in 2024.

Property Operating Expenses

Property operating expenses, excluding property management, in our Core Portfolio for 2023 increased $36.6 million, or 7.0%, from 2022, primarily due to increases in property operating and maintenance expenses of $29.2 million and real estate taxes of $6.3 million.

Property operating and maintenance expenses were higher in 2023, primarily due to increases in utility expenses of $9.6 million, insurance of $8.5 million, repair and maintenance expenses of $8.1 million and property payroll expenses of $3.1 million.

Property operating expenses, excluding property management, in our Core Portfolio for 2024 increased $14.8 million, or 2.6%, from 2023, primarily due to increases in insurance of $4.7 million, utility expenses of $3.9 million, real estate taxes of $3.9 million and bad debt expense of $1.2 million.

Management's Discussion and Analysis (continued)

Home Sales and Other

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Gross revenue from new home sales decreased $22.1 million and Cost of new home sales decreased $20.7 million during the year ended December 31, 2024, compared to the year ended December 31, 2023, primarily due to a decrease in the number of new homes sold.

Management's Discussion and Analysis (continued)

Rental Operations

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Interest and related amortization (137,710) (132,342) (5,368) (4.1) %

Other items 6,800 — 6,800 100.0 %

Total other income and expenses, net $ (367,126) $ (371,456) $ 4,330 1.2 %

Total other income and expenses, net increased $13.9 million in 2023 compared to 2022, primarily due to higher interest and related amortization expenses, general and administrative, depreciation and amortization.

The increase in interest and related amortization is due to higher debt levels in 2023 compared to 2022.

The increase in general and administrative expenses was primarily due to higher payroll and related benefits.

The increase in depreciation and amortization was due to depreciation on Non-Core properties acquired throughout 2022 and 2023.

Casualty related charges/(recoveries), net

During the year ended December 31, 2023 and December 31, 2022, we recognized expenses of approximately $13.4 million and $40.6 million related to debris removal and cleanup costs related to Hurricane Ian and an offsetting insurance recovery revenue accrual of $13.4 million and $40.6 million, respectively, 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 year ended December 31, 2023 and December 31, 2022, we received insurance proceeds of approximately $68.3 million and zero, respectively, of which $10.6 million and zero was identified as business interruption recovery revenue, respectively.

Loss on sale of real estate and impairment, net

During the year ended December 31, 2023, we recorded a $3.6 million reduction to the carrying value of certain assets, as a result of property damage caused by weather events in 2023.

During the year ended December 31, 2022, we recorded a $5.4 million reduction to the carrying value of certain assets as a result of property damage caused by Hurricane Ian and offsetting insurance recovery revenue of $5.4 million for the expected recovery from this loss.

Management's Discussion and Analysis (continued)

Total other income and expenses, net decreased $4.3 million in 2024 compared to 2023, primarily due to lower General and administrative expenses and higher other items, partially offset by higher early debt retirement costs and interest and related amortization expenses.

The decrease in General and administrative expenses was primarily due to accelerated vesting of stock-based compensation expense in 2023.

The increase in Other items was due to aged prepaid balances that were determined to no longer be liabilities.

The increase in Early debt retirement costs is due to the payment of approximately $5.8 million in swap termination fees and the write off of unamortized loan costs in connection with repayment of our $300 million unsecured term loan in 2024.

The increase in Interest and related amortization is due to higher interest rates in 2024 compared to 2023.

Casualty related charges/(recoveries), net

During the year ended December 31, 2024, we recognized debris removal and cleanup costs related to Hurricane Milton, Hurricane Ian and Hurricane Helene of $3.6 million, $2.6 million, and $1.2 million, respectively, and insurance recovery revenue related to Hurricane Ian and Hurricane Milton of $24.9 million and $3.4 million, respectively, including $22.3 million for reimbursement of capital expenditures, which is included in Casualty related charges/recoveries, net in the Consolidated Statements of Income and Comprehensive Income.

During the year ended December 31, 2023, we recognized expenses of $13.4 million related to debris removal and cleanup costs related to Hurricane Ian and an offsetting insurance recovery revenue accrual of $13.4 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 year ended December 31, 2024 and December 31, 2023, we received insurance proceeds of approximately $32.4 million and $68.3 million, respectively, of which $7.6 million and $10.6 million was identified as business interruption recovery revenue, respectively.

Gain/(Loss) on sale of real estate and impairment, net

Gain/(Loss) on sale of real estate and impairment, net was $1.1 million lower during the year ended December 31, 2024, compared to the year ended December 31, 2023, due to a higher reduction of the carrying value of certain assets, as a result of property damage caused by weather events in 2023.

Equity in income of unconsolidated joint ventures

Equity in income of unconsolidated joint ventures was $3.5 million higher during the year ended December 31, 2024, compared to the year ended December 31, 2023, primarily due to a distribution from an unconsolidated joint venture that refinanced a secured loan and distributed proceeds, of which $5.2 million exceeded our basis in the joint venture.

Income tax benefit

During the year ended December 31, 2023, we released the full valuation allowance of $10.5 million related to our taxable REIT subsidiaries deferred tax assets.

Income tax benefit during the year ended December 31, 2024 decreased compared to year ended December 31, 2023, primarily due to the release of the full valuation allowance of $10.5 million related to our taxable REIT subsidiaries deferred tax assets in 2023.

Liquidity and Capital Resources

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Accessing long-term secured debt continues to be our focus.

Total secured debt encumbered a total of 120 and 114 of our Properties as of December 31, 2023 and December 31, 2022, respectively, and the gross carrying value of such Properties was approximately $3,194.1 million and $2,868.3 million, as of December 31, 2023 and December 31, 2022, respectively.

Total secured debt encumbered a total of 120 of our Properties as of both December 31, 2024 and December 31, 2023, and the gross carrying value of such Properties was approximately $3,268.5 million and $3,194.1 million, as of December 31, 2024 and December 31, 2023, respectively.

Management's Discussion and Analysis (continued)

On November 1, 2024, we entered into our current at-the-market (“ATM”) equity offering program with certain sales agents, pursuant to which we may sell, from time-to-time, shares of our common stock, par value $0.01 per share, having an aggregate offering price of up to $700.0 million.

Our prior ATM equity offering program, entered into in February 2024 (the “February ATM”), had an aggregate offering price of up to $500.0 million.

During the year ended December 31, 2024, we sold approximately 4.5 million shares of our common stock under our prior ATM equity program for net proceeds of approximately $314.2 million at a share price of $70.00 per Common Share.

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

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

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As of December 31, 2024, our LOC had a remaining borrowing capacity of $423.0 million with the option to increase the borrowing capacity by $200.0 million, subject to certain conditions.

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

The LOC bears interest at a rate of Secured Overnight Financing Rate plus 0.10% plus 1.25% to 1.65%, requires an annual facility fee of 0.20% to 0.35%.

During the year ended December 31, 2024 we entered into an amendment of our credit agreement.

Pursuant to the amendment, the maturity of our date was extended to July 18, 2028 and can be extended for two additional six-month terms, subject to certain conditions.

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.

During the year ended December 31, 2024, we repaid the $300 million Term Loan in conjunction with the sale of shares under the February ATM equity offering program.

For information regarding our debt activities and related borrowing arrangements, see Item 8.

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Borrowing Arrangements.

By the end of February 2024, we anticipate entering 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.

The following table summarizes our cash flows activity:

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Net cash used in investing activities (217,838) (324,753) (402,067)

Net cash (used in) provided by financing activities (215,662) (174,798) 418,741

Net increase (decrease) in cash and restricted cash $ 7,590 $ (101,051) $ 99,338

Management's Discussion and Analysis (continued)

Net cash used in financing activities (384,244) (215,662) (174,798)

Net (decrease) increase in cash and restricted cash $ (5,361) $ 7,590 $ (101,051)

Operating Activities

Net cash provided by operating activities increased $48.7 million to $596.7 million for the year ended December 31, 2024, from $548.0 million for the year ended December 31, 2023.

The overall increase in net cash provided by operating activities was primarily due to a net increase in proceeds from insurance claims and higher income from property operations partially offset by changes in accounts payable and other liabilities.

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

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

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Net cash used in investing activities decreased $106.9 million to $217.8 million for the year ended December 31, 2024, from $324.8 million for the year ended December 31, 2023.

The decrease in net cash used in investing activities was primarily due to a decrease in acquisitions of $130.7 million, partially offset by an increase in capital improvements of $67.8 million.

The decrease in net cash used in investing activities was primarily

Management's Discussion and Analysis (continued)

due to decreases in capital improvements of $75.8 million, proceeds from insurance claims, net of $14.4 million, and distributions of capital from unconsolidated joint ventures of $9.8 million.

Capital improvements

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

(3) Includes $34.3 million of restoration and improvement capital expenditures related to Hurricane Ian for the year ended December 31, 2023.

(3) Includes $1.2 million, $3.6 million, $13.7 million of restoration and improvement capital expenditures related to Hurricane Helene, Hurricane Milton, and Hurricane Ian, respectively, for the year ended December 31, 2024.

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

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Net cash used in financing activities increased $168.6 million to $384.2 million for the year ended December 31, 2024, from $215.7 million for the year ended December 31, 2023.

The increase in net cash used in financing activities was primarily due to increased dividend distributions of $31.6 million.

Management's Discussion and Analysis (continued)

The increase in net cash used in financing activities was primarily due to an increase of net debt repayments of $450.6 million and dividend distributions of $25.2 million, partially offset by an increase in proceeds from the issuance of common stock of $317.4 million.

Contractual Obligations

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As of December 31, 2024, approximately 19.1% of our outstanding debt is fully amortizing.

Management's Discussion and Analysis (continued)

Critical Accounting Policies and Estimates

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If the sum of the estimated undiscounted cash flows is less than the carrying amount of the asset, an impairment loss is recorded for the carrying amount in excess of the estimated fair value.

Management's Discussion and Analysis (continued)

Off Balance Sheet Arrangements

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

What changed 10-K

Item 7. Management’s Discussion and Analysis