What changed in this filing

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Item 2. Management’s Discussion and Analysis

2025-04-30 compared with 2024-10-30 · 91 added, 246 removed, 329 unchanged (51% 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 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.

As of March 31, 2025, we owned or had an ownership interest in a portfolio of 455 Properties located throughout the United States and Canada containing 173,340 individual developed areas (“Sites”).

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

Total Sites as of September 30, 2024

Total Sites as of March 31, 2025

MH Sites 73,200

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Results Overview

(amounts in thousands) Quarters Ended September 30,

2024 2023 $ Change % Change (1)

Net Income per fully diluted Common Share $ 0.44 $ 0.41 $ 0.03 7.5 %

FFO per fully diluted Common Share and OP Unit $ 0.72 $ 0.68 $ 0.04 5.3 %

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

Nine Months Ended September 30,

(amounts in thousands) Quarters Ended March 31,

2025 2024 $ Change % Change (1)

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Calculations prepared using actual results without rounding.

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.

Core property operating revenues increased 2.9% and Core income from property operations, excluding property management increased 3.8% for the quarter ended March 31, 2025, compared to the quarter ended March 31, 2024.

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 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.

Our Core Portfolio average occupancy includes both homeowners and renters in our MH communities and was 94.4% for the quarter ended March 31, 2025 and 94.9% for each of the quarters ended December 31, 2024 and March 31, 2024.

For the quarter ended March 31, 2025, our Core Portfolio occupancy decreased by 171 sites, primarily due to resident homes damaged by storms in late 2024 in approximately six Florida communities.

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 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:

As of March 31, 2025, we had 1,918 occupied rental homes in our Core MH communities.

RV and marina base rental income in our Core Portfolio increased 0.2% for the quarter ended March 31, 2025, compared to the same period in 2024, driven primarily by an increase in Annual RV rental income.

Core RV and marina base rental income from annuals represents 65.7% of total Core RV and marina base rental income and increased 4.1% for the quarter ended March 31, 2025, compared to the quarter ended March 31, 2024, due to a 6.4% increase in rate, offset by a decline of 2.3% in occupancy.

Core seasonal and transient RV and marina base rental income decreased 5.3% and 9.1%, respectively, for the quarter ended March 31, 2025, compared to the quarter ended March 31, 2024 due to returning competitor supply following a period of weather-related disruption in addition to a return to normalized demand.

We closed 117 new home sales during the quarter ended March 31, 2025, compared to 191 new home sales during the quarter ended March 31, 2024, a decrease of 38.7%.

The decrease in new home sales during the quarter ended March 31, 2025 was driven by the Florida and Arizona markets, primarily due to the stabilization of occupancy at certain properties which resulted in fewer homes being available for sale this quarter as compared to the quarter ended March 31, 2024, disruption due to Hurricanes Milton and Helene and a decrease in home sales in Arizona as compared to the first quarter of 2024.

Our gross investment in real estate increased $44.9 million to $7,960.5 million as of March 31, 2025 from $7,915.7 million as of December 31, 2024, primarily due to capital improvements during the quarter ended March 31, 2025.

The following chart lists the Properties acquired from January 1, 2024 through March 31, 2025 and Sites added through expansion opportunities at our existing Properties:

Location Type of Property Transaction Date Sites

Total Sites as of January 1, 2024 (1)

Acquisition Properties:

Red Oak Shores Campground

Ocean View, New Jersey RV March 28, 2023 223

Expansion Site Development:

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Sites added (reconfigured) in 2025 139

Total Sites as of September 30, 2024 (1)

Total Sites as of March 31, 2025 (1)

______________________

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Non-GAAP Financial Measures

Management’s discussion and analysis of financial condition and results of operations include certain Non-GAAP financial measures that in management’s view of the business are meaningful as they allow investors the ability to understand key operating details of our business both with and without regard to certain accounting conventions or items that may not always be indicative of recurring annual cash flows of the portfolio.

Management’s discussion and analysis of financial condition and results of operations include certain Non-GAAP financial measures that in management’s view of the business are meaningful as they allow investors the ability to understand key operating details of our business that may not always be indicative of recurring annual cash flow of the portfolio.

These Non-GAAP financial measures as determined and presented by us may not be comparable to similarly titled measures reported by other companies, and include income from property operations and Core Portfolio, FFO and Normalized FFO.

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We use income from property operations, income from property operations, excluding property management, and Core Portfolio income from property operations, excluding property management, as alternative measures to evaluate the operating results of our Properties.

Income from property operations represents rental income, membership subscriptions and upgrade sales, utility and other income less property and rental home operating and maintenance expenses, real estate taxes, membership sales and marketing expenses and property management expenses.

Income from property operations represents rental income, membership subscriptions and upgrade revenue, utility and other income less property and rental home operating and maintenance expenses, real estate taxes, membership sales and marketing expenses and property management expenses.

Income from property operations, excluding property management, represents income from property operations excluding property management expenses.

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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 nine months ended September 30, 2024 and 2023:

Quarters Ended September 30, Nine Months Ended September 30,

The following table reconciles net income available for Common Stockholders to income from property operations for the quarters ended March 31, 2025 and 2024:

Quarters Ended March 31,

(amounts in thousands)

2024 2023 2024 2023

Computation of Income from Property Operations:

Net income available for Common Stockholders $ 109,192 $ 109,905

Redeemable perpetual preferred stock dividends — — 8 8

Income allocated to non-controlling interests – Common OP Units 5,201 5,366

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Equity in income of unconsolidated joint ventures (4,901) (283)

Income tax benefit

(Gain)/Loss on sale of real estate and impairment, net 1,798 949 1,798 3,581

Gross revenues from home sales, brokered resales and ancillary services (20,923) (30,053)

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Casualty-related charges/(recoveries), net (2)

591 — (20,422) —

Other expenses (1)

Early debt retirement 30 68 30 68

Interest and related amortization 31,136 33,543

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_____________________

(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)

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 nine months ended September 30, 2024 and 2023:

Quarters Ended September 30, Nine Months Ended September 30,

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

(2) Casualty-related charges/(recoveries), net for the quarter ended March 31, 2025 includes debris removal and cleanup costs related to Hurricane Milton of $0.5 million, Hurricane Helene of $0.2 million and Hurricane Ian of $0.1 million and insurance recovery revenue for Hurricane Milton and Hurricane Ian of $0.5 million and $0.1 million.

Quarters Ended March 31,

(amounts in thousands)

2024 2023 2024 2023

Computation of FFO and Normalized FFO:

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Depreciation on unconsolidated joint ventures 1,331 1,051

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

(Gain)/Loss on sale of real estate and impairment, net 1,798 949 1,798 3,581

FFO available for Common Stock and OP Unit holders 166,666 167,430

Deferred income tax benefit — (239)

Early debt retirement 30 68 30 68

Transaction/pursuit costs and other — 383

Insurance proceeds due to catastrophic weather event (1)

(451) — (21,464) —

Accelerated vesting of stock-based compensation (3)

Normalized FFO available for Common Stock and OP Unit holders $ 166,666 $ 152,731

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_____________________

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

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

(3) Represents 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.

Management's Discussion and Analysis (continued)

Results of Operations

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.

This section discusses the comparison of our results of operations for the quarters ended March 31, 2025 and March 31, 2024 and our operating activities, investing activities and financing activities for the quarters ended March 31, 2025 and March 31, 2024.

Our Core Portfolio consists of our Properties owned and operated during all of 2024 and 2025.

Our Non-Core Portfolio includes all Properties that were not owned and operated during all of 2024 and 2025, 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 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

For the comparison of our results of operations for the quarters ended March 31, 2024 and March 31, 2023 and discussion of our operating activities, investing activities and financing activities for the quarters ended March 31, 2024 and March 31, 2023, refer to Part I.

Management’s Discussion and Analysis of Financial Condition and Results of Operations of the Quarterly Report on Form 10-Q for the fiscal quarter ended March 31, 2024, filed with the SEC on May 1, 2024.

Comparison of the Quarter Ended March 31, 2025 to the Quarter Ended March 31, 2024

Income from Property Operations

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Core Portfolio Total Portfolio

Quarters Ended September 30, Quarters Ended September 30,

Quarters Ended March 31, Quarters Ended March 31,

(amounts in thousands) 2025 2024 Variance %

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Annual membership subscriptions 16,204 16,215 (11) (0.1) % 16,342 16,215 127 0.8 %

Membership upgrade sales (2)

Membership upgrade revenue (2)(3)

2,985 3,947 (962) (24.4) % 3,052 3,947 (895) (22.7) %

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Property operating revenues 355,590 345,680 9,910 2.9 % 363,705 353,728 9,977 2.8 %

Property operating and maintenance (1)(3)

Utilities expense 39,461 38,695 766 2.0 % 40,269 39,202 1,067 2.7 %

Payroll 27,483 27,736 (253) (0.9) % 28,271 28,268 3 — %

Repairs & maintenance 22,264 20,859 1,405 6.7 % 22,889 21,362 1,527 7.1 %

Insurance and other (1)(4)

26,253 25,020 1,233 4.9 % 27,539 25,992 1,547 6.0 %

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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 $5.9 million and $7.0 million for the quarters ended September 30, 2024 and September 30, 2023, respectively.

(2) Beginning in the first quarter of 2025, membership upgrade product offerings include two- to four-year term subscription products.

Prices for two-year products range between $4,000 to $8,000 and between approximately $7,000 to $14,000 for the four-year product, which results in approximately $2,500-$3,000 of earned revenue on an annual basis.

(3) Membership upgrade revenue is net of deferrals of $0.9 million and $3.6 million for the quarters ended March 31, 2025 and March 31, 2024, respectively.

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

(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) Membership sales and marketing expense is net of sales commission deferrals of $0.3 million and $0.4 million for the quarters ended March 31, 2025 and March 31, 2024, respectively.

(6) 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 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.

Total portfolio income from property operations for the quarter ended March 31, 2025, increased $5.9 million, or 3.1%, from the quarter ended March 31, 2024, driven by an increase of $7.1 million, or 3.8%, from our Core Portfolio, offset by a decrease of $1.2 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 along with an increase

Management's Discussion and Analysis (continued)

in Utility and other income, partially offset by a decrease in Membership upgrade revenue driven by a cessation of upfront membership upgrade product offerings, during the first quarter of 2025.

The increase in Property operating revenues was partially offset by an increase in property operating expenses, primarily an increase in Repairs and maintenance and Insurance and other, partially offset by a decrease in Membership sales and marketing expenses.

Property Operating Revenues

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.

MH base rental income in our Core Portfolio for the quarter ended March 31, 2025 increased $9.6 million, or 5.5%, from the quarter ended March 31, 2024, which reflects 5.7% growth from rate increases offset by a decrease of 0.2% in occupancy.

The average monthly base rental income per Site in our Core Portfolio increased to approximately $895 for the quarter ended March 31, 2025 from approximately $847 for the quarter ended March 31, 2024.

The average occupancy for our Core Portfolio was 94.4% and 94.9% for the quarters ended March 31, 2025 and March 31, 2024, respectively.

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

Core Portfolio Total Portfolio

Quarters Ended September 30, Quarters Ended September 30,

Quarters Ended March 31, Quarters Ended March 31,

(amounts in thousands) 2025 2024 Variance %

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RV and marina base rental income $ 116,111 $ 115,895 $ 216 0.2 % $ 121,565 $ 120,167 $ 1,398 1.2 %

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.

RV and marina base rental income in our Core Portfolio for the quarter ended March 31, 2025 increased $0.2 million, or 0.2%, from the quarter ended March 31, 2024, driven by an increase in Annual RV and marina base rental income.

The increase in Annual RV and marina base rental income of 4.1% was partially offset by decreases in Seasonal and Transient RV and marina base rental income of 5.3% and 9.1%, respectively, for the quarter ended March 31, 2025, compared to the quarter ended March 31, 2024, due to returning competitor supply following a period of weather-related disruption in addition to a return to normalized demand.

Utility and other income in our Core Portfolio for the quarter ended March 31, 2025 increased $1.2 million, or 3.9%, from the quarter ended March 31, 2024.

The increase was primarily due to a $0.9 million and $0.6 million increase in utility income and pass-through income, respectively, partially offset by a $0.3 million decrease in other property income.

The utility recovery rate (utility income divided by utility expenses) for 2025 and 2024 was approximately 48% and 47%, respectively.

Property Operating Expenses

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.

Property operating expenses, excluding property management, in our Core Portfolio for the quarter ended March 31, 2025 increased $2.1 million, or 1.5%, from the quarter ended March 31, 2024, driven by increases in Repair and maintenance expenses of $1.4 million, Insurance and other of $1.2 million and Utilities expense of $0.8 million, partially offset by a decrease in Membership sales and marketing of $1.4 million.

The increase in Repair and maintenance expenses is primarily due to higher contract repairs, lawn and common area maintenance and pool expenses.

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

The increase in Utilities expense is due to an increase in water, electric and trash expenses.

The decrease in Membership sales and marketing expense was driven by a decrease in allowances for credit losses related to financed membership products that are no longer being offered, beginning in the first quarter of 2025.

Management's Discussion and Analysis (continued)

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

Quarters Ended September 30,

Quarters Ended March 31,

(amounts in thousands, except home sales volumes) 2025 2024 Variance %

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Brokered home resales 98 109 (11) (10.1) %

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.

Gross revenues from new home sales decreased $8.3 million and Cost of new home sales decreased $6.8 million during the quarter ended March 31, 2025, compared to the quarter ended March 31, 2024, driven by the Florida and Arizona markets primarily due to the stabilization of occupancy at certain properties which resulted in fewer homes being available for sale this quarter as compared to March 31, 2024, disruption due to Hurricanes Milton and Helene and a decrease in home sales in Arizona as compared to the first quarter of 2024.

Rental Operations

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

Quarters Ended September 30,

Quarters Ended March 31,

(amounts in thousands, except rental unit volumes)

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

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.

Approximately $5.0 million and $5.6 million for the quarters ended March 31, 2025 and March 31, 2024, 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 $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.

Rental operations revenues were $0.7 million, or 7.3%, lower during the quarter ended March 31, 2025, compared to the quarter ended March 31, 2024, primarily due to a decrease in the number of occupied rentals.

Management's Discussion and Analysis (continued)

Miscellaneous Other Income and Expenses

Other Income and Expenses

The following table summarizes other income and expenses, net:

Quarters Ended September 30,

Quarters Ended March 31,

(amounts in thousands, expenses shown as negative)

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Other expenses (1)

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 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 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 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 nine months ended September 30, 2024 and 2023:

Core Portfolio Total Portfolio

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

(amounts in thousands) 2024 2023 Variance %

Change 2024 2023 Variance %

MH base rental income (1)

(1,878) (1,092) (786) (72.0) %

Rental home income (1)

10,262 11,097 (835) (7.5) % 10,299 11,130 (831) (7.5) %

RV and marina base rental income (1)

327,109 317,444 9,665 3.0 % 336,887 326,280 10,607 3.3 %

Annual membership subscriptions 49,162 48,644 518 1.1 % 49,298 48,832 466 1.0 %

Membership upgrade sales (2)

12,160 10,824 1,336 12.3 % 12,170 10,863 1,307 12.0 %

Utility and other income (1)

96,873 90,483 6,390 7.1 % 106,390 107,029 (639) (0.6) %

Property operating revenues 1,025,155 976,935 48,220 4.9 % 1,045,146 1,003,040 42,106 4.2 %

Property operating and maintenance (1)(3)

361,081 354,461 6,620 1.9 % 369,201 361,282 7,919 2.2 %

Real estate taxes 60,520 54,955 5,565 10.1 % 61,617 56,165 5,452 9.7 %

Rental home operating and maintenance 4,313 3,879 434 11.2 % 4,335 3,883 452 11.6 %

Membership sales and marketing (4)

17,836 16,030 1,806 11.3 % 17,871 16,055 1,816 11.3 %

Property operating expenses, excluding property management 443,750 429,325 14,425 3.4 % 453,024 437,385 15,639 3.6 %

Income from property operations, excluding property management (5)

581,405 547,610 33,795 6.2 % 592,122 565,655 26,467 4.7 %

Property management 59,311 58,711 600 1.0 % 59,311 58,710 601 1.0 %

Income from property operations (5)

$ 522,094 $ 488,899 $ 33,195 6.8 % $ 532,811 $ 506,945 $ 25,866 5.1 %

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(1) Rental income consists of the following total portfolio income items:

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.

(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 $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 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 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)

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

Core Portfolio Total Portfolio

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

(amounts in thousands)

2024 2023 Variance %

Change 2024 2023 Variance %

Annual $ 222,782 $ 208,377 $ 14,405 6.9 % $ 229,596 $ 216,163 $ 13,433 6.2 %

Seasonal 43,159 45,132 (1,973) (4.4) % 44,857 45,908 (1,051) (2.3) %

Transient 61,168 63,935 (2,767) (4.3) % 62,434 64,209 (1,775) (2.8) %

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 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 $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.

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

Property Operating Expenses

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:

Nine Months Ended September 30,

(amounts in thousands, except home sales volumes)

2024 2023 Variance %

Gross revenues from new home sales $ 55,906 $ 69,036 $ (13,130) (19.0) %

Cost of new home sales 48,703 61,542 (12,839) (20.9) %

Gross revenues from used home sales 2,961 3,229 (268) (8.3) %

Cost of used home sales 2,329 2,987 (658) (22.0) %

Gross revenue from brokered resales and ancillary services 39,590 43,576 (3,986) (9.1) %

Cost of brokered resales and ancillary services 20,636 21,351 (715) (3.3) %

Home selling and ancillary operating expenses 20,955 21,258 (303) (1.4) %

Home sales volumes

New home sales 620 687 (67) (9.8) %

Used home sales 173 252 (79) (31.3) %

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

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)

Rental Operations

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

Nine Months Ended September 30,

(amounts in thousands, except rental unit volumes)

2024 2023 Variance %

Rental operations revenue (1)

$ 26,170 $ 29,491 $ (3,321) (11.3) %

Rental home operating and maintenance expenses 4,313 3,879 434 11.2 %

Depreciation on rental homes (2)

7,450 8,275 (825) (10.0) %

Gross investment in new manufactured home rental units $ 220,134 $ 249,568 $ (29,434) (11.8) %

Gross investment in used manufactured home rental units $ 11,197 $ 12,606 $ (1,409) (11.2) %

Net investment in new manufactured home rental units $ 180,787 $ 218,955 $ (38,168) (17.4) %

Net investment in used manufactured home rental units $ 6,972 $ 8,906 $ (1,934) (21.7) %

Number of occupied rentals – new, end of period 1,795 2,086 (291) (14.0) %

Number of occupied rentals – used, end of period 217 259 (42) (16.2) %

______________________

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

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 $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:

Nine Months Ended September 30,

(amounts in thousands, expenses shown as negative)

2024 2023 Variance %

Depreciation and amortization $ (153,386) $ (152,934) $ (452) (0.3) %

Interest income 7,018 6,623 395 6.0 %

Income from other investments, net 6,860 6,897 (37) (0.5) %

General and administrative (30,248) (38,163) 7,915 20.7 %

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

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

Interest and related amortization (31,136) (33,543) 2,407 7.2 %

Total other income and expenses, net $ (88,939) $ (93,526) $ 4,587 4.9 %

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.

_____________________

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

Total other income and expenses, net decreased $4.6 million for the quarter ended March 31, 2025, compared to the quarter ended March 31, 2024, primarily due to lower General and administrative expenses and Interest and related amortization as a result of debt repayment.

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.

During the quarters ended March 31, 2025 and March 31, 2024, we recognized expenses of approximately $0.8 million and $0.5 million, respectively, related to debris removal and cleanup costs related to Hurricane Ian, Hurricane Helene, and Hurricane Milton.

We recognized an offsetting insurance recovery revenue accrual of approximately $0.6 million and $0.5 million during the quarters ended March 31, 2025 and March 31, 2024, respectively, for Hurricane Milton and Hurricane Ian.

During the quarter ended March 31, 2024, we also recognized excess insurance recovery revenue of approximately $14.8 million for reimbursement of capital expenditures related to Hurricane Ian.

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)

Equity in income of unconsolidated joint ventures was $4.6 million higher during the quarter ended March 31, 2025, compared to the quarter ended March 31, 2024, primarily due to a distribution from an unconsolidated joint venture that refinanced a secured loan and distributed proceeds, of which $6.2 million exceeded our basis in the joint venture.

Liquidity and Capital Resources

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We expect similar demand for liquidity will continue for the short-term and long-term.

Our primary sources of cash include operating cash flows, proceeds from financings, borrowings under our unsecured line of credit (the “LOC”) and proceeds from issuance of equity and debt securities, including issuances under our ATM equity offering program (as defined below).

One of our stated objectives is to maintain financial flexibility.

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

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 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.

On November 1, 2024, we entered into a new 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.

As of March 31, 2025, the full capacity of our ATM equity offering program remained available for issuance.

Management's Discussion and Analysis (continued)

As of March 31, 2025, we had available liquidity in the form of approximately 408.9 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 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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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 September 30, 2024, our LOC had a borrowing capacity of $467.4 million.

As of March 31, 2025, our LOC had a borrowing capacity of $436.9 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 nine months ended September 30,

For the quarters ended March 31,

(amounts in thousands) 2025 2024

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Operating Activities

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)

Net cash provided by operating activities decreased $5.4 million to $193.4 million for the quarter ended March 31, 2025 from $198.7 million for the quarter ended March 31, 2024.

The decrease in net cash provided by operating activities was primarily due to increases in cash outflows related to accounts payable and other liabilities and Manufactured homes, net, partially offset by an increase in insurance proceeds.

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

For the nine months ended September 30,

For the quarters ended March 31,

(amounts in thousands)

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Investing Activities

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.

Net cash used in investing activities decreased $9.0 million to $42.3 million for the quarter ended March 31, 2025 from $51.3 million for the quarter ended March 31, 2024.

The decrease was primarily due to a decrease in capital expenditures of $9.5 million.

Management's Discussion and Analysis (continued)

Capital Improvements

The following table summarizes capital improvements:

For the nine months ended September 30,

For the quarters ended March 31,

(amounts in thousands) 2025 2024

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Improvements and renovations (2)

22,728 29,505

Property upgrades and development (3)

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

(3) Includes $7.4 million and $5.6 million of restoration and improvement capital expenditures related to hurricane activity for the quarters ended March 31, 2025 and March 31, 2024, respectively.

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

Financing Activities

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.

Net cash used in financing activities decreased $1.9 million to $128.2 million for the quarter ended March 31, 2025 from $130.1 million for the quarter ended March 31, 2024.

The decrease was primarily due to lower net debt repayments of $10.3 million, partially offset by increases in distributions to common stock and OP unit holders of $8.1 million.

Contractual Obligations

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Off-Balance Sheet Arrangements

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

As of March 31, 2025, we have no off-balance sheet arrangements.

Critical Accounting Policies and Estimates

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Management’s Discussion and Analysis of Financial Condition and Results of Operations in our 2024 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 September 30, 2024.

Management's Discussion and Analysis (continued)

There have been no significant changes to our critical accounting policies and estimates during the quarter ended March 31, 2025.

Forward-Looking Statements

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• our ability to manage counterparty risk;

Management's Discussion and Analysis (continued)

• our ability to renew our insurance policies at existing rates and on consistent terms;

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• our ability to obtain financing or refinance existing debt on favorable terms or at all;

• the effect of inflation and interest rates;

• the effect of inflation and interest rates, including the impact of changes in tariffs, as well as costs associated with supply chain disruptions;

• the effect from any breach of our, or any of our vendors’, data management systems;

• the dilutive effects of issuing additional securities;

• the potential impact of, and our ability to remediate, material weaknesses in our internal control over financial reporting;

• the potential impact of material weaknesses, if any, in our internal control over financial reporting;

• the outcome of pending or future lawsuits or actions brought by or against us, including those disclosed in our filings with the Securities and Exchange Commission;

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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-Q

Item 2. Management’s Discussion and Analysis