EQUITY LIFESTYLE PROPERTIES INC 10-Q

Item 1. Financial Statements Equity LifeStyle Properties, Inc. Consolidated Balance Sheets (amounts in thousands, except share and per share data) March 31, 2025 December 31, 2024 (unaudited) Assets Investment in real estate: Land $ 2,088,682 $ 2,088,682 Land improvements 4,630,575 4,582,815 Buildings and other depreciable property 1,241,287 1,244,193 7,960,544 7,915,690 Accumulated depreciation ( 2,688,159 ) ( 2,639,538 ) Net investment in real estate 5,272,385 5,276,152 Cash and restricted cash 47,476 24,576 Notes receivable, net 47,730 50,726 Investment in unconsolidated joint ventures 89,553 83,772 Deferred commission expense 57,144 56,516 Other assets, net 128,076 153,910 Total Assets $ 5,642,364 $ 5,645,652 Liabilities and Equity Liabilities: Mortgage notes payable, net $ 2,912,325 $ 2,928,292 Term loans, net 199,423 199,344 Unsecured line of credit 63,000 77,000 Accounts payable and other liabilities 161,751 159,225 Deferred membership revenue 230,455 229,301 Accrued interest payable 10,489 10,679 Rents and other customer payments received in advance and security deposits 128,673 122,448 Distributions payable 102,983 95,577 Total Liabilities 3,809,099 3,821,866 Equity: Stockholders' Equity: Preferred stock, $ 0.01 par value, 10,000,000 shares authorized as of March 31, 2025 and December 31, 2024; none issued and outstanding. — — Common stock, $ 0.01 par value, 600,000,000 shares authorized as of March 31, 2025 and December 31, 2024; 191,144,217 and 191,056,527 shares issued and outstanding as of March 31, 2025 and December 31, 2024, respectively. 1,962 1,962 Paid-in capital 1,951,391 1,951,430 Distributions in excess of accumulated earnings ( 204,226 ) ( 214,979 ) Accumulated other comprehensive income 674 2,303 Total Stockholders’ Equity 1,749,801 1,740,716 Non-controlling interests – Common OP Units 83,464 83,070 Total Equity 1,833,265 1,823,786 Total Liabilities and Equity $ 5,642,364 $ 5,645,652 The accompanying notes are an integral part of the consolidated financial statements. 3 Equity LifeStyle Properties, Inc. Consolidated Statements of Income and Comprehensive Income (amounts in thousands, except per share data) (unaudited) Quarters Ended March 31, 2025 2024 Revenues: Rental income $ 327,206 $ 316,599 Annual membership subscriptions 16,342 16,215 Membership upgrade revenue 3,052 3,947 Other income 15,555 15,548 Gross revenues from home sales, brokered resales and ancillary services 20,923 30,053 Interest income 2,238 2,168 Income from other investments, net 2,018 2,038 Total revenues 387,334 386,568 Expenses: Property operating and maintenance 118,566 114,783 Real estate taxes 21,643 20,787 Membership sales and marketing 3,931 5,297 Property management 20,430 19,710 Depreciation and amortization 50,942 51,108 Cost of home sales, brokered resales and ancillary services 13,692 21,967 Home selling expenses and ancillary operating expenses 6,168 6,147 General and administrative 9,239 11,989 Casualty-related charges/(recoveries), net 217 ( 14,843 ) Other expenses 1,878 1,092 Interest and related amortization 31,136 33,543 Total expenses 277,842 271,580 Income before other items 109,492 114,988 Equity in income of unconsolidated joint ventures 4,901 283 Consolidated net income 114,393 115,271 Income allocated to non-controlling interests – Common OP Units ( 5,201 ) ( 5,366 ) Net income available for Common Stockholders $ 109,192 $ 109,905 Consolidated net income $ 114,393 $ 115,271 Other comprehensive income (loss): Adjustment for fair market value of swaps ( 1,629 ) ( 781 ) Consolidated comprehensive income 112,764 114,490 Comprehensive income allocated to non-controlling interests – Common OP Units ( 5,127 ) ( 5,329 ) Comprehensive income attributable to Common Stockholders $ 107,637 $ 109,161 Earnings per Common Share – Basic $ 0.57 $ 0.59 Earnings per Common Share – Fully Diluted $ 0.57 $ 0.59 Weighted average Common Shares outstanding – Basic 190,925 186,287 Weighted average Common Shares outstanding – Fully Diluted 200,074 195,545 The accompanying notes are an integral part of the consolidated financial statements. 4 Equity LifeStyle Properties, Inc. Consolidated Statements of Changes in Equity (amounts in thousands) (unaudited) Common Stock Paid-in Capital Redeemable Perpetual Preferred Stock Distributions in Excess of Accumulated Earnings Accumulated Other Comprehensive Income (Loss) Non-controlling Interests – Common OP Units Total Equity Balance as of December 31, 2024 $ 1,962 $ 1,951,430 $ — $ ( 214,979 ) $ 2,303 $ 83,070 $ 1,823,786 Issuance of Common Stock through employee stock purchase plan — 391 — — — — 391 Compensation expenses related to restricted stock and stock options — 1,771 — — — — 1,771 Repurchase of Common Stock or Common OP Units — ( 2,258 ) — — — — ( 2,258 ) Adjustment for Common OP Unitholders in the Operating Partnership — 118 — — — ( 118 ) — Adjustment for fair market value of swap — — — — ( 1,629 ) — ( 1,629 ) Consolidated net income — — — 109,192 — 5,201 114,393 Distributions — — — ( 98,439 ) — ( 4,689 ) ( 103,128 ) Other — ( 61 ) — — — — ( 61 ) Balance as of March 31, 2025 $ 1,962 $ 1,951,391 $ — $ ( 204,226 ) $ 674 $ 83,464 $ 1,833,265 Common Stock Paid-in Capital Redeemable Perpetual Preferred Stock Distributions in Excess of Accumulated Earnings Accumulated Other Comprehensive Income (Loss) Non-controlling interests – Common OP Units Total Equity Balance as of December 31, 2023 $ 1,917 $ 1,644,319 $ — $ ( 223,576 ) $ 6,061 $ 69,900 $ 1,498,621 Issuance of Common Stock through employee stock purchase plan — 382 — — — — 382 Compensation expenses related to restricted stock and stock options — 1,716 — — — — 1,716 Repurchase of Common Stock or Common OP Units — ( 1,908 ) — — — — ( 1,908 ) Adjustment for Common OP Unitholders in the Operating Partnership — 58 — — — ( 58 ) — Adjustment for fair market value of swap — — — — ( 781 ) — ( 781 ) Consolidated net income — — — 109,905 — 5,366 115,271 Distributions — — — ( 89,050 ) — ( 4,348 ) ( 93,398 ) Other — ( 157 ) — — — — ( 157 ) Balance as of March 31, 2024 $ 1,917 $ 1,644,410 $ — $ ( 202,721 ) $ 5,280 $ 70,860 $ 1,519,746 The accompanying notes are an integral part of the consolidated financial statements. 5 Equity LifeStyle Properties, Inc. Consolidated Statements of Cash Flows (amounts in thousands) (unaudited) Quarters Ended March 31, 2025 2024 Cash Flows From Operating Activities: Consolidated net income $ 114,393 $ 115,271 Adjustments to reconcile consolidated net income to net cash provided by operating activities: Depreciation and amortization 52,176 52,427 Amortization of loan costs 1,239 1,286 Equity in income of unconsolidated joint ventures ( 4,901 ) ( 283 ) Distributions of income from unconsolidated joint ventures 74 224 Proceeds from insurance claims, net 145 ( 12,349 ) Compensation expense related to incentive plans 2,334 2,497 Revenue recognized from membership upgrade sales upfront payments ( 3,220 ) ( 3,947 ) Commission expense related to memberships 971 1,108 Changes in assets and liabilities: Manufactured homes, net ( 3,074 ) 2,333 Notes receivable, net 2,996 539 Deferred commission expense ( 1,599 ) ( 1,491 ) Other assets, net 19,632 11,157 Accounts payable and other liabilities 1,627 15,801 Deferred membership revenue 4,372 9,080 Rents and other customer payments received in advance and security deposits 6,225 5,095 Net cash provided by operating activities 193,390 198,748 Cash Flows From Investing Activities: Investment in unconsolidated joint ventures ( 8,690 ) ( 1,330 ) Distributions of capital from unconsolidated joint ventures 7,404 1,586 Proceeds from insurance claims, net 4,167 3,158 Capital improvements ( 45,202 ) ( 54,706 ) Net cash used in investing activities ( 42,321 ) ( 51,292 ) The accompanying notes are an integral part of the consolidated financial statements. 6 Equity LifeStyle Properties, Inc. Consolidated Statements of Cash Flows (continued) (amounts in thousands) (unaudited) Quarters Ended March 31, 2025 2024 Cash Flows From Financing Activities: Proceeds from stock options and employee stock purchase plan 391 382 Distributions: Common Stockholders ( 91,229 ) ( 83,426 ) Common OP Unitholders ( 4,347 ) ( 4,074 ) Share based award tax withholding payments ( 2,258 ) ( 1,908 ) Principal payments and mortgage debt repayment ( 16,665 ) ( 15,929 ) Line of credit repayment ( 199,500 ) ( 158,000 ) Line of credit proceeds 185,500 133,000 Other ( 61 ) ( 157 ) Net cash used in financing activities ( 128,169 ) ( 130,112 ) Net increase in cash and restricted cash 22,900 17,344 Cash and restricted cash, beginning of period 24,576 29,937 Cash and restricted cash, end of period $ 47,476 $ 47,281 Quarters Ended March 31, 2025 2024 Supplemental Information: Cash paid for interest, net $ 31,661 $ 33,630 Cash paid for the purchase of manufactured homes $ 11,273 $ 12,927 The accompanying notes are an integral part of the consolidated financial statements. 7 Equity LifeStyle Properties, Inc. Notes to Consolidated Financial Statements Note 1 – Organization and Basis of Presentation Equity LifeStyle Properties, Inc. (“ELS”), a Maryland corporation, together with MHC Operating Limited Partnership (the “Operating Partnership”) and its other consolidated subsidiaries (the “Subsidiaries”), are referred to herein as “we,” “us,” and “our”. 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. We provide our customers the opportunity to place manufactured homes and cottages, RVs and/or boats on our Properties either on a long-term or short-term basis. Our customers may lease individual developed areas (“Sites”) or enter into right-to-use contracts, also known as membership subscriptions, which provide them access to specific Properties for limited stays. Our Properties are owned primarily by the Operating Partnership and managed internally by affiliates of the Operating Partnership. ELS is the sole general partner of the Operating Partnership, has exclusive responsibility and discretion in management and control of the Operating Partnership and held a 95.5 % interest as of March 31, 2025. As the general partner with control, ELS is the primary beneficiary of, and therefore consolidates, the Operating Partnership. Equity method of accounting is applied to entities in which ELS does not have a controlling interest but with respect to which it can exercise significant influence over operations and major decisions. Our exposure to losses associated with unconsolidated joint ventures is primarily limited to the carrying value of these investments. Accordingly, distributions from a joint venture in excess of our carrying value are recognized in earnings. The accompanying unaudited interim consolidated financial statements have been prepared pursuant to Securities and Exchange Commission (“SEC”) rules and regulations for Quarterly Reports on Form 10-Q. Accordingly, they do not include all of the information and note disclosures required by U.S. Generally Accepted Accounting Principles (“GAAP”) for complete financial statements and should be read in conjunction with the consolidated financial statements and notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2024. Intercompany balances and transactions have been eliminated. All adjustments to the unaudited interim consolidated financial statements are of a normal, recurring nature and, in the opinion of management, are necessary for a fair presentation of results for these interim periods. Revenues and expenses are subject to seasonal fluctuations and accordingly, quarterly interim results may not be indicative of full year results. Certain prior period amounts have been reclassified on our unaudited interim consolidated financial statements to conform with current year presentation. Note 2 – Summary of Significant Accounting Policies (a) Revenue Recognition Our revenue streams are predominantly derived from customers renting our Sites or entering into membership subscriptions. Leases with customers renting our Sites are accounted for as operating leases. The rental income associated with these leases is accounted for in accordance with the Accounting Standards Codification (“ASC”) 842, Leases, and is recognized over the term of the respective lease or the length of a customer’s stay. MH Sites are generally leased on an annual basis to residents who own or lease factory-built homes, including manufactured homes. RV and marina Sites are leased to those who generally have an RV, factory-built cottage, boat or other unit placed on the site, including those customers renting marina dry storage slips. Annual Sites are leased on an annual basis, including those Northern Properties that are open for the summer season. Seasonal Sites are leased to customers generally for one to six months . Transient Sites are leased to customers on a short-term basis. We do not separate expenses reimbursed by our customers (“utility recoveries”) from the associated rental income as we meet the practical expedient criteria of ASC 842, Leases to combine the lease and non-lease components. We assessed the criteria and concluded that the timing and pattern of transfer for rental income and the associated utility recoveries are the same and, as our leases qualify as operating leases, we account for and present rental income and utility recoveries as a single component under Rental income in our Consolidated Statements of Income and Comprehensive Income. In addition, customers may lease homes that are located in our communities. These leases are accounted for as operating leases. Rental income derived from customers leasing homes is also accounted for in accordance with ASC 842, Leases and is recognized over the term of the respective lease. The allowance for credit losses related to the collectability of lease receivables is presented as a reduction to Rental income. Lease receivables are presented within Other assets, net on the Consolidated Balance Sheets and are net of an allowance for credit losses. The estimate for credit losses is a result of our ongoing assessments and evaluations of collectability, including historical loss experience, current market conditions and future expectations in forecasting credit losses. 8 Equity LifeStyle Properties, Inc. Notes to Consolidated Financial Statements Note 2 – Summary of Significant Accounting Policies (continued) Annual membership subscriptions and membership upgrades are accounted for in accordance with ASC 606 , Revenue from Contracts with Customers. Membership subscriptions provide our customers access to specific Properties for limited stays at a specified group of Properties. Upgraded memberships provide enhanced benefits for members in good standing, including longer stays, the ability to make earlier reservations, potential discounts on rental units, and potential access to additional properties. Beginning in the first quarter of 2025, membership upgrade product offerings include two -to four-year term subscription products, that require a non-refundable upfront deposit. Prior to the introduction of subscription-based upgrade products, membership upgrades required non-refundable upfront payments, and members in good standing are entitled to enhanced benefits for as long as they choose to remain in the program. Membership subscriptions, including subscription-based membership upgrades, are presented within Annual membership subscriptions on the Consolidated Statements of Income and Comprehensive Income. Payments for membership subscriptions are deferred and recognized on a straight-line basis over the period during which access to Sites at certain Properties is provided. Membership subscription receivables are presented within Other assets, net on the Consolidated Balance Sheets and are net of an allowance for credit losses. Non-refundable upfront payments are recognized on a straight-line basis over 24 years and are presented within Membership upgrade revenue on the Consolidated Statements of Income and Comprehensive Income. Financed upgrade sales (also known as contract receivables) are presented within Notes receivable, net on the Consolidated Balance Sheets and are net of an allowance for credit losses. Revenue from home sales is recognized when the earnings process is complete. The earnings process is complete when the home has been delivered, the purchaser has accepted the home and title has transferred. We have a limited program under which we purchase loans made by an unaffiliated lender to homebuyers at our Properties. Financed home sales (also known as chattel loans) are presented within Notes receivable, net on the Consolidated Balance Sheets and are net of an allowance for credit losses. (b) Restricted Cash As of March 31, 2025 and December 31, 2024, restricted cash consisted of $ 21.3 million and $ 19.0 million, respectively, primarily related to cash reserved for customer deposits and escrows for insurance and real estate taxes. (c) Fair Value of Financial Instruments We disclose the estimated fair value of our financial instruments according to a fair value hierarchy. The valuation hierarchy is based on the transparency of the lowest level of input that is significant to the valuation of an asset or a liability as of the measurement date. The three levels are defined as follows: Level 1 - Inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets. Level 2 - Inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets and inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument. Level 3 - Inputs to the valuation methodology are unobservable and significant to the fair value measurement. The carrying values of cash and restricted cash, accounts receivable and accounts payable approximate their fair market values due to the short-term nature of these instruments. The carrying value of the notes receivable approximates the fair market value as the interest rates are generally comparable to current market rates. Concentrations of credit risk with respect to notes receivable are limited due to the size of the receivable and geographic diversity of the underlying Properties. The fair market value of mortgage notes payable, the term loan and interest rate derivatives are measured with Level 2 inputs using quoted prices and observable inputs from similar liabilities as disclosed in Note 7. Borrowing Arrangements and Note 8. Derivative Instruments and Hedging Activities. We also utilize Level 2 and Level 3 inputs as part of our determination of the purchase price allocation for our acquisitions. 9 Equity LifeStyle Properties, Inc. Notes to Consolidated Financial Statements Note 2 – Summary of Significant Accounting Policies (continued) (d) Insurance Recoveries We carry comprehensive insurance coverage for losses resulting from property damage and environmental liability and business interruption claims on all of our properties. We record the estimated amount of expected insurance proceeds for property damage, clean-up costs and other losses incurred as an asset (typically a receivable from our insurance carriers) and income up to the amount of the losses incurred when receipt of insurance proceeds is deemed probable. Any amount of insurance recovery in excess of the losses incurred and any amount of insurance recovery related to business interruption are considered a gain contingency and will be recognized in the period in which the insurance proceeds are received. During the quarters ended March 31, 2025 and March 31, 2024, we recognized approximately $ 0.8 million and $ 0.5 million, respectively, of expense related to debris removal and cleanup related to Hurricane Ian, Hurricane Milton and Hurricane Helene, with $ 0.6 million and $ 0.5 million of offsetting insurance recovery revenue accruals which offset the expenses incurred during the same periods. During the quarter ended March 31, 2024, we also recorded $ 14.8 million of insurance recovery revenue in excess of expenses and business interruption proceeds related to Hurricane Ian. The debris and cleanup costs and offsetting recovery accrual and reimbursement of capital expenditures are reflected in Casualty-related charges/(recoveries), net on the Consolidated Statements of Income and Comprehensive Income. During the quarters ended March 31, 2025 and March 31, 2024, we recognized business interruption recovery revenue of approximately $ 1.8 million and $ 1.9 million, respectively, related to Hurricane Ian. (e) New Accounting Pronouncements In November 2024, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update 2024-03, Disaggregation of Income Statement Expenses (“ASU 2024-03”). ASU 2024-03 requires additional disaggregated disclosure of the nature of expenses included in the income statement into certain required expense categories. This update is effective for annual periods beginning after December 15, 2026, with early adoption being permitted. We are currently evaluating the impact of ASU 2024-03 on our consolidated financial statements. Note 3 – Leases Lessor The leases entered into between a customer and us for rental of a Site are renewable upon the consent of both parties or, in some instances, as provided by statute. Long-term leases that are non-cancelable by the tenants are in effect at certain Properties. Rental rate increases at these Properties are primarily a function of increases in the Consumer Price Index, taking into consideration certain other factors. Additionally, periodic market rate adjustments are made as deemed appropriate. In addition, certain state statutes allow entry into long-term agreements that effectively modify lease terms related to rent amounts and increases over the term of the agreements. The following table presents future minimum rents expected to be received under long-term non-cancelable tenant leases, as well as those leases that are subject to long-term agreements governing rent payments and increases: (amounts in thousands) As of March 31, 2025 2025 $ 63,456 2026 82,297 2027 52,490 2028 27,851 2029 23,121 Thereafter 45,658 Total $ 294,873 Lessee We lease land under non-cancelable operating leases at 10 Properties expiring on various dates between 2028 and 2054. The majority of the leases have terms requiring fixed payments plus additional rents based on a percentage of gross revenues at those Properties. We also have other operating leases, primarily office space, expiring at various dates through 2033. For the quarters ended March 31, 2025 and 2024, total operating lease payments were $ 1.7 million and $ 1.6 million, respectively. 10 Equity LifeStyle Properties, Inc. Notes to Consolidated Financial Statements Note 3 – Leases (continued) The following table summarizes our minimum future rental payments, excluding variable costs, which are discounted by our incremental borrowing rate to calculate the lease liability for our operating leases as of March 31, 2025: As of March 31, 2025 (amounts in thousands) Ground Leases Office and Other Leases Total 2025 $ 680 $ 4,180 $ 4,860 2026 684 3,957 4,641 2027 689 3,408 4,097 2028 685 3,029 3,714 2029 627 3,060 3,687 Thereafter 3,212 7,853 11,065 Total undiscounted rental payments 6,577 25,487 32,064 Less imputed interest ( 1,677 ) ( 3,968 ) ( 5,645 ) Total lease liabilities $ 4,900 $ 21,519 $ 26,419 Right-of-use (“ROU”) assets and lease liabilities from our operating leases, included within Other assets, net and Accounts payable and other liabilities on the Consolidated Balance Sheets, were $ 22.9 million and $ 26.4 million, respectively, as of March 31, 2025. The weighted average remaining lease term for our operating leases was eight years and the weighted average incremental borrowing rate was 4.1 % as of March 31, 2025. ROU assets and lease liabilities from our operating leases, included within Other assets, net and Accounts payable and other liabilities on the Consolidated Balance Sheets, were $ 23.9 million and $ 27.1 million, respectively, as of December 31, 2024. The weighted average remaining lease term for our operating leases was eight years and the weighted average incremental borrowing rate was 4.1 % as of December 31, 2024. Note 4 – Earnings Per Common Share The following table sets forth the computation of basic and diluted earnings per share of common stock (“Common Share”) for the quarters ended March 31, 2025 and 2024: Quarters Ended March 31, (amounts in thousands, except per share data) 2025 2024 Numerators: Net income available for Common Stockholders – Basic $ 109,192 $ 109,905 Amounts allocated to non controlling interest (dilutive securities) 5,201 5,366 Net income available for Common Stockholders – Fully Diluted $ 114,393 $ 115,271 Denominators: Weighted average Common Shares outstanding – Basic 190,925 186,287 Effect of dilutive securities: Exchange of Common OP Units for Common Shares 9,104 9,105 Stock options and restricted stock 45 153 Weighted average Common Shares outstanding and OP Units – Fully Diluted 200,074 195,545 Earnings per Common Share – Basic $ 0.57 $ 0.59 Earnings per Common Share – Fully Diluted $ 0.57 $ 0.59 11 Equity LifeStyle Properties, Inc. Notes to Consolidated Financial Statements Note 5 – Common Stock and Other Equity Related Transactions Common Stockholder Distribution Activity The following quarterly distributions have been declared and paid to Common Stockholders and the Operating Partnership unit (“OP Unit”) holders since January 1, 2024: Distribution Amount Per Share For the Quarter Ended Stockholder Record Date Payment Date $ 0.4775 March 31, 2024 March 28, 2024 April 12, 2024 $ 0.4775 June 30, 2024 June 28, 2024 July 12, 2024 $ 0.4775 September 30, 2024 September 27, 2024 October 11, 2024 $ 0.4775 December 31, 2024 December 27, 2024 January 10, 2025 $ 0.5150 March 31, 2025 March 28, 2025 April 11, 2025 Exchanges Subject to certain limitations, OP Unit holders can request an exchange of any or all of their OP Units for shares of Common Stock at any time. Upon receipt of such a request, we may, in lieu of issuing shares of Common Stock, cause the Operating Partnership to pay cash. There were no OP units exchanged for Common Stock during the quarters ended March 31, 2025 and 2024. Equity Offering Program On November 1, 2024, we entered into a new 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. As of March 31, 2025, the full capacity of our ATM equity offering program remained available for issuance. Note 6 – Investment in Unconsolidated Joint Ventures The following table summarizes our investments in unconsolidated joint ventures (investment and income/(loss) amounts in thousands): Investment as of Income/(Loss) for the Quarters Ended Investment Location Number of Sites Economic Interest (a) March 31, 2025 December 31, 2024 March 31, 2025 March 31, 2024 RVC Various 1,489 80 % (b) 59,921 61,505 ( 1,645 ) ( 414 ) Other (c) Various 2,417 49 % to 65 % 29,632 22,267 6,546 697 3,906 $ 89,553 $ 83,772 $ 4,901 $ 283 _____________________ (a) The percentages shown approximate our economic interest as of March 31, 2025. Our legal ownership interest may differ. We do not exercise control over these entities. (b) Includes three joint ventures which include eight operating RV communities and one RV property under development. (c) Includes various other joint ventures. We received approximately $ 7.5 million and $ 1.8 million in distributions from our unconsolidated joint ventures for the quarters ended March 31, 2025 and 2024, respectively. Approximately $ 6.8 million and $ 0.6 million of the distributions made to us exceeded our basis in our unconsolidated joint ventures for the quarters ended March 31, 2025 and 2024, respectively, and as such, were recorded as income from unconsolidated joint ventures. 12 Equity LifeStyle Properties, Inc. Notes to Consolidated Financial Statements Note 7 – Borrowing Arrangements Mortgage Notes Payable Our mortgage notes payable are classified as Level 2 in the fair value hierarchy. The following table presents the fair value of our mortgage notes payable: As of March 31, 2025 As of December 31, 2024 (amounts in thousands) Fair Value Carrying Value Fair Value Carrying Value Mortgage notes payable, excluding deferred financing costs $ 2,459,573 $ 2,936,023 $ 2,329,253 $ 2,952,689 The weighted average interest rate on our outstanding mortgage indebtedness, including the impact of loan cost amortization on mortgage indebtedness, as of March 31, 2025, was approximately 4.0 % per annum. The debt bears interest at stated rates ranging from 2.4 % to 5.1 % per annum and matures on various dates ranging from 2025 to 2041. The debt encumbered a total of 120 of our Properties as of both March 31, 2025 and December 31, 2024, and the gross carrying value of such Properties was approximately $ 3,283.1 million and $ 3,268.5 million, as of March 31, 2025 and December 31, 2024, respectively. Unsecured Debt We previously entered into a Third Amended and Restated Credit Agreement (“Credit Agreement”), pursuant to which we have access to a $ 500.0 million unsecured line of credit (“LOC”) and had access to a $ 300.0 million senior unsecured term loan (the “$ 300 million Term Loan”). We have the option to increase the borrowing capacity of the LOC by $ 200.0 million, subject to certain conditions. On March 1, 2023, we amended the Credit Agreement to transition the LIBOR rate borrowings to Secured Overnight Financing Rate (“SOFR”) borrowings. The LOC bears interest at a rate of the SOFR plus 0.10 % plus 1.25 % to 1.65 % and requires an annual facility fee of 0.20 % to 0.35 %. For both the LOC and the $ 300 million Term Loan, the spread over SOFR is variable based on leverage throughout the respective loan terms. On July 18, 2024, we entered into a Second Amendment to the Third Amended and Restated Credit Agreement (the “Second Amendment”). Pursuant to the Second Amendment, the LOC maturity date was extended to July 18, 2028, and this term can be extended for two additional six-month terms, subject to certain conditions. All other material terms, including interest rate terms, remain the same. On October 3, 2024, we repaid the $ 300 million Term Loan. We previously entered into a $ 200.0 million senior unsecured term loan agreement (the “$ 200.0 million Term Loan”). The maturity date is January 21, 2027, with an interest rate of SOFR plus 0.10 % plus 1.20 % to 1.70 %, depending on leverage levels. The LOC had a balance of $ 63.0 million and $ 77.0 million outstanding as of March 31, 2025 and December 31, 2024, respectively. As of March 31, 2025, our LOC had a remaining borrowing capacity of $ 436.9 million. As of March 31, 2025, we were in compliance in all material respects with the covenants in all our borrowing arrangements. Note 8 – Derivative Instruments and Hedging Cash Flow Hedges of Interest Rate Risk We record all derivatives at fair value. Our objective in utilizing interest rate derivatives is to add stability to our interest expense and to manage our exposure to interest rate movements. We do not enter into derivatives for speculative purposes. In March 2021, we entered into a Swap Agreement (the “2021 Swap”), with a notional amount of $ 300.0 million allowing us to trade the variable interest rate associated with our $ 300.0 million Term Loan for a fixed interest rate. In March 2023, we amended the 2021 Swap agreement to reflect the change in the $ 300.0 million Term Loan interest rate benchmark from LIBOR to SOFR (see Note 7. Borrowing Arrangements ). The 2021 Swap had a fixed interest rate of 0.41 % per annum. The 2021 Swap matured on March 25, 2024. In April 2023, we entered into a Swap Agreement (the “2023 Swap”) with a notional amount of $ 200.0 million allowing us to trade the variable interest rate associated with our $ 200.0 million Term Loan for a fixed interest rate. The 2023 Swap has a 13 Equity LifeStyle Properties, Inc. Notes to Consolidated Financial Statements Note 8 – Derivative Instruments and Hedging (continued) fixed interest rate of 3.68 % per annum and matures on January 21, 2027. Based on the leverage as of March 31, 2025, our spread over SOFR was 1.20 % resulting in an estimated all-in interest rate of 4.88 % per annum. Our derivative financial instruments are classified as Level 2 in the fair value hierarchy. The following table presents the fair value of our derivative financial instruments: As of March 31, As of December 31, (amounts in thousands) Balance Sheet Location 2025 2024 Interest Rate Swaps Other assets, net $ 673 $ 2,303 The following table presents the effect of our derivative financial instrument on the Consolidated Statements of Income and Comprehensive Income: Derivatives in Cash Flow Hedging Relationship Amount of (gain)/loss recognized in OCI on derivative for the quarters ended March 31, Location of (gain)/ loss reclassified from Accumulated OCI into income Amount of (gain)/loss reclassified from Accumulated OCI into income for the quarters ended March 31, (amounts in thousands) 2025 2024 (amounts in thousands) 2025 2024 Interest Rate Swaps $ 909 $ ( 4,057 ) Interest Expense $ ( 721 ) $ ( 4,838 ) During the next twelve months, we estimate that $ 0.6 million will be reclassified from Accumulated other comprehensive income (loss) as a decrease to interest expense related to the 2023 Swap. This estimate may be subject to change as the underlying SOFR changes. As of March 31, 2025, we had not posted any collateral related to the 2023 Swap. Note 9 - Deferred Revenue from Membership Upgrades and Deferred Commission Expense The components of the change in deferred revenue from membership upgrades and deferred commission expense were as follows: (amounts in thousands) Quarter Ended March 31, 2025 Quarter Ended March 31, 2024 Deferred revenue, beginning $ 218,164 $ 206,625 Deferred membership upgrade revenue 2,886 7,543 Revenue recognized from membership upgrades ( 3,220 ) ( 3,947 ) Net increase (decrease) in deferred revenue ( 334 ) 3,596 Deferred revenue, ending (a) $ 217,830 $ 210,221 Deferred commission expense, beginning $ 53,516 $ 53,641 Deferred commission expense 1,599 1,491 Commission expense recognized ( 971 ) ( 1,108 ) Net increase in deferred commission expense 628 383 Deferred commission expense, ending $ 54,144 $ 54,024 _____________________ (a) Included in Deferred membership revenue on the Consolidated Balance Sheets. Note 10 – Equity Incentive Awards Our 2024 Equity Incentive Plan (the “2024 Plan”) was adopted by the Board of Directors on February 6, 2024 and approved by our stockholders on April 30, 2024. During the quarter ended March 31, 2025, 99,765 shares of restricted stock were awarded to certain members of our management team pursuant to the authority set forth in the 2024 Plan. Of these shares, 50 % are time-based awards, with 47,503 shares vesting in equal installments over a three-year period on February 3, 2026, February 2, 2027 and February 1, 2028, respectively, and with 2,378 shares vesting two-thirds on February 3, 2026 and one-third on February 2, 2027. These time-based awards have a grant date fair value of $ 3.2 million. The remaining 50 % are performance-based awards with 47,506 shares vesting in equal installments on February 3, 2026, February 2, 2027 and February 1, 2028, respectively, and 2,378 shares vesting two thirds on February 3, 2026 and one-third on February 2, 2027, upon meeting performance conditions as established 14 Equity LifeStyle Properties, Inc. Notes to Consolidated Financial Statements Note 10 – Equity Incentive Awards (continued) by the Compensation Committee in the year of the vesting period. The performance-based awards are valued using the closing price at the grant date when all the key terms and conditions are known to all parties. The 17,418 shares of restricted stock subject to 2025 performance goals have a grant date fair value of $ 1.1 million. Stock-based compensation expense, reported in General and administrative expense on the Consolidated Statements of Income and Comprehensive Income, was $ 1.8 million and $ 1.7 million for the quarters ended March 31, 2025 and 2024, respectively. Note 11 – Commitments and Contingencies We are involved in various legal and regulatory proceedings (“Proceedings”) arising in the ordinary course of business. The Proceedings include, but are not limited to, legal claims made by employees, vendors and customers, and notices, consent decrees, information requests, additional permit requirements and other similar enforcement actions by governmental agencies relating to our utility infrastructure, including water and wastewater treatment plants and other waste treatment facilities and electrical systems. Additionally, in the ordinary course of business, our operations are subject to audit by various taxing authorities. Management believes these Proceedings taken together do not represent a material liability. In addition, to the extent any such Proceedings or audits relate to newly acquired Properties, we consider any potential indemnification obligations of sellers in our favor. Beginning on August 31, 2023 through December 4, 2023, certain private party plaintiffs filed several putative class actions in the U.S. District Court for the Northern District of Illinois, Eastern Division, against Datacomp Appraisal Systems, Inc. (“Datacomp”) and several owner/operators of manufactured housing communities, including ELS (the “Datacomp Litigation”), alleging that the community owner/operators used JLT Market Reports produced by Datacomp to conspire to raise manufactured home lot rents in violation of Section 1 of the Sherman Act. ELS purchased Datacomp in connection with the MHVillage/Datacomp acquisition during the year ended December 31, 2021. On December 15, 2023, the plaintiffs filed an amended consolidated complaint captioned , In re Manufactured Home Lot Rents Antitrust Litigation, No. 1:23-cv-6715 . Plaintiffs seek both injunctive relief and monetary damages, including attorneys’ fees. The defendants filed a motion to dismiss on January 29, 2024. We believe that the Datacomp Litigation is without merit, and we intend to vigorously defend our interests in this matter. As of March 31, 2025 , we have not made an accrual, as we are unable to predict the outcome of this matter or reasonably estimate any possible loss. Note 12 - Reportable Segments We have identified two reportable segments: (i) Property Operations and (ii) Home Sales and Rentals Operations. The Property Operations segment owns and operates land lease Properties and the Home Sales and Rentals Operations segment purchases, sells and leases homes at the Properties. Each segment is primarily evaluated based on Net Operating Income (“NOI”) which is defined as total operating revenues less total operating expenses. The distribution of the Properties throughout the United States reflects our belief that geographic diversification helps insulate the portfolio from regional economic influences. All revenues were from external customers and there is no customer who contributed 10% or more of our total revenues during the quarters ended March 31, 2025 or 2024. 15 Equity LifeStyle Properties, Inc. Notes to Consolidated Financial Statements Note 12 – Reportable Segments (continued) The following tables summarize our segment financial information for the quarters ended March 31, 2025 and 2024: Quarter Ended March 31, 2025 (amounts in thousands) Property Operations Home Sales and Rentals Operations Consolidated Operations revenues $ 369,086 $ 13,992 $ 383,078 Operations expenses ( 172,731 ) ( 11,699 ) ( 184,430 ) NOI 196,355 2,293 198,648 Reconciliation to consolidated net income: Depreciation and amortization ( 50,942 ) Interest income 2,238 Income from other investments, net 2,018 General and administrative ( 9,239 ) Casualty-related charges/(recoveries), net ( 217 ) Other expenses ( 1,878 ) Interest and related amortization ( 31,136 ) Equity in income of unconsolidated joint ventures 4,901 Consolidated net income $ 114,393 Total assets $ 5,398,043 $ 244,321 $ 5,642,364 Capital improvements $ 43,531 $ 1,671 $ 45,202 Quarter Ended March 31, 2024 (amounts in thousands) Property Operations Home Sales and Rentals Operations Consolidated Operations revenues $ 359,736 $ 22,626 $ 382,362 Operations expenses ( 169,405 ) ( 19,286 ) ( 188,691 ) NOI 190,331 3,340 193,671 Reconciliation to consolidated net income: Depreciation and amortization ( 51,108 ) Interest income 2,168 Income from other investments, net 2,038 General and administrative ( 11,989 ) Casualty-related charges/(recoveries), net 14,843 Other expenses (1) ( 1,092 ) Interest and related amortization ( 33,543 ) Equity in income of unconsolidated joint ventures 283 Consolidated net income $ 115,271 Total assets $ 5,366,765 $ 263,469 $ 5,630,234 Capital improvements $ 51,408 $ 3,298 $ 54,706 _____________________ (1) Prior period amounts have been reclassified to conform to the current period presentation. 16 Equity LifeStyle Properties, Inc. Notes to Consolidated Financial Statements Note 12 – Reportable Segments (continued) The following table summarizes our financial information for the Property Operations segment for the quarters ended March 31, 2025 and 2024: Quarters Ended March 31, (amounts in thousands) 2025 2024 Revenues: Rental income $ 323,813 $ 313,083 Annual membership subscriptions 16,342 16,215 Membership upgrade revenue 3,052 3,947 Other income 15,555 15,548 Gross revenues from ancillary services 10,324 10,943 Total property operations revenues 369,086 359,736 Expenses: Utility expense 40,269 39,202 Payroll 28,271 28,268 Repairs & maintenance 22,889 21,362 Insurance and other 25,989 24,573 Real estate taxes 21,643 20,787 Membership sales and marketing 3,931 5,297 Cost of ancillary services 4,445 5,493 Ancillary operating expenses 4,864 4,713 Property management 20,430 19,710 Total property operations expenses 172,731 169,405 NOI $ 196,355 $ 190,331 The following table summarizes our financial information for the Home Sales and Rentals Operations segment for the quarters ended March 31, 2025 and 2024: Quarters Ended March 31, (amounts in thousands) 2025 2024 Revenues: Rental income (1) $ 3,393 $ 3,516 Gross revenue from home sales and brokered resales 10,599 19,110 Total revenues 13,992 22,626 Expenses: Rental home operating and maintenance 1,148 1,378 Cost of home sales and brokered resales 9,247 16,474 Home selling expenses 1,304 1,434 Total expenses 11,699 19,286 NOI $ 2,293 $ 3,340 ______________________ (1) Rental income within Home Sales and Rentals Operations does not include base rent related to the rental home Sites. Base rent is included within property operations. Note 13 – Subsequent Events In April 2025, we repaid $ 86.9 million of principal on eight mortgage loans using our line of credit. These mortgage loans had a weighted average interest rate of 3.45 % per annum and were secured by four RV communities and four MH communities. The payment represents all debt maturing in 2025. 17