Reportable Segments

9 Months Ended

Sep. 30, 2012

Reportable Segments

Note 14 – Reportable Segments

Operating segments are defined as components of an entity for which separate financial information is available that is evaluated regularly by the chief operating decision maker. The chief operating decision maker evaluates and assesses performance on a monthly basis. Segment operating performance is measured on Net Operating Income (“NOI”). NOI is defined as total operations revenues less total operations expenses. Segments are assessed before interest income, depreciation and amortization of in-place leases.

The Company has two reportable segments which are: (i) Property Operations and (ii) Home Sales and Rentals Operations segments. 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.

All revenues are from external customers and there is no customer who contributed 10% or more of the Company’s total revenues during the nine months ended September 30, 2012 and 2011.

Note 14 – Reportable Segments (continued)

The following tables summarize the Company’s segment financial information for the three months ended September 30, 2012 and 2011 (amounts in thousands):

Three Months EndedSeptember 30, 2012

	Property Operations			Home Sales and Rentals Operations			Consolidated
Operations revenues	$	170,776		$	5,833		$	176,609
Operations expenses	(83,973		)	(4,394		)	(88,367		)
Income from segment operations	86,803			1,439			88,242
Interest income	750			1,704			2,454
Depreciation on real estate and rental homes	(24,703		)	(1,591		)	(26,294		)
Amortization of in-place leases	(7,396		)	(152		)	(7,548		)
Income from operations	$	55,454		$	1,400		56,854
Reconciliation to Consolidated net income
Other revenues							2,765
General and administrative							(6,535		)
Interest and related amortization							(31,640		)
Rent control initiatives and other							(221		)
Equity in income of unconsolidated joint ventures							269
Consolidated net income							$	21,492
Total assets	$	3,260,654		$	236,471		$	3,497,125

Three Months EndedSeptember 30, 2011

	Property Operations			Home Sales and  Rentals Operations			Consolidated
Operations revenues	$	153,234		$	4,088		$	157,322
Operations expenses	(77,758		)	(3,325		)	(81,083		)
Income from segment operations	75,476			763			76,239
Interest income	919			1,269			2,188
Depreciation on real estate and rental homes	(21,675		)	(1,250		)	(22,925		)
Amortization of in-place leases	(10,759		)	—			(10,759		)
Income from operations	$	43,961		$	782		44,743
Reconciliation to Consolidated net income
Other revenues							4,534
General and administrative							(6,412		)
Acquisition Costs							(15,216		)
Interest and related amortization							(26,084		)
Rent control initiatives and other							(467		)
Equity in income of unconsolidated joint ventures							257
Consolidated net income							$	1,355
Total assets	$	3,091,731		$	201,074		$	3,292,805

Note 14 – Reportable Segments (continued)

The following tables summarize the Company’s segment financial information for the nine months ended September 30, 2012 and 2011 (amounts in thousands):

Nine Months EndedSeptember 30, 2012

	Property Operations			Home Sales and Rentals Operations			Consolidated
Operations revenues	$	507,739		$	16,915		$	524,654
Operations expenses	(243,773		)	(13,094		)	(256,867		)
Income from segment operations	263,966			3,821			267,787
Interest income	2,387			4,866			7,253
Depreciation on real estate and rental homes	(74,101		)	(4,519		)	(78,620		)
Amortization of in-place leases	(43,220		)	(1,094		)	(44,314		)
Income from operations	$	149,032		$	3,074		152,106
Reconciliation to Consolidated net income
Other revenues							6,039
General and administrative							(19,724		)
Interest and related amortization							(93,434		)
Rent control initiatives and other							(1,067		)
Equity in income of unconsolidated joint ventures							1,524
Consolidated net income							$	45,444
Total assets	$	3,260,654		$	236,471		$	3,497,125
Capital improvements	$	21,459		$	31,705		$	53,164

Nine Months EndedSeptember 30, 2011

	Property Operations			Home Sales and  Rentals Operations			Consolidated
Operations revenues	$	406,105		$	10,151		$	416,256
Operations expenses	(205,590		)	(8,343		)	(213,933		)
Income from segment operations	200,515			1,808			202,323
Interest income	2,500			1,673			4,173
Depreciation on real estate and rental homes	(56,158		)	(3,076		)	(59,234		)
Amortization of in-place leases	(10,759		)	—			(10,759		)
Income from operations	$	136,098		$	405		136,503
Reconciliation to Consolidated net income
Other revenues							6,448
General and administrative							(18,070		)
Acquisition Costs							(17,333		)
Interest and related amortization							(68,931		)
Rent control initiatives and other							(1,558		)
Equity in income of unconsolidated joint ventures							1,582
Consolidated net income							$	38,641
Total assets	$	3,091,731		$	201,074		$	3,292,805
Capital improvements	$	16,728		$	24,668		$	41,396

Note 14 – Reportable Segments (continued)

The following table summarizes the Company’s financial information for the Property Operations segment for the three and nine months ended September 30, 2012 and 2011 (amounts in thousands):

	Three Months Ended						Nine Months Ended
	September 30, 2012			September 30, 2011			September 30, 2012			September 30, 2011
Revenues:
Community base rental income	$	103,668		$	87,149		$	309,819		$	219,740
Resort base rental income	36,516			36,139			104,503			101,858
Right-to-use annual payments	12,115			12,444			36,087			37,019
Right-to-use contracts current period, gross	4,494			4,386			9,680			13,096
Right-to-use contracts current period, deferred	(2,788		)	(2,858		)	(4,680		)	(8,768		)
Utility income and other	16,036			14,498			50,021			40,044
Ancillary services revenues, net	735			1,476			2,309			3,116
Total property operations revenues	170,776			153,234			507,739			406,105
Expenses:
Property operating and maintenance	60,378			56,451			173,147			148,417
Real estate taxes	11,826			10,304			36,300			26,522
Sales and marketing, gross	3,573			2,950			7,849			8,289
Sales and marketing deferred commissions, net	(1,277		)	(1,148		)	(2,174		)	(3,495		)
Property management	9,473			9,201			28,651			25,857
Total property operations expenses	83,973			77,758			243,773			205,590
Income from property operations segment	$	86,803		$	75,476		$	263,966		$	200,515

The following table summarizes the Company’s financial information for the Home Sales and Rentals Operations segment for the three and nine months ended September 30, 2012 and 2011 (amounts in thousands):

	Three Months Ended				Nine Months Ended
	September 30, 2012		September 30, 2011		September 30, 2012		September 30, 2011
Revenues:
Gross revenue from home sales	$	1,861	$	1,636	$	5,881	$	4,281
Brokered resale revenues, net	261		141		922		608
Rental home income (a)	3,711		2,311		10,112		5,262
Total revenues	5,833		4,088		16,915		10,151
Expenses:
Cost of home sales	2,051		1,552		6,869		4,020
Home selling expenses	334		356		1,070		1,239
Rental home operating and maintenance	2,009		1,417		5,155		3,084
Total expenses	4,394		3,325		13,094		8,343
Income from home sales and rentals operations segment	$	1,439	$	763	$	3,821	$	1,808

______________________

(a) Does not include approximately $9.3 million and $6.2 million for the three months ended September 30, 2012 and 2011, respectively, and approximately $26.1 million and $16.0 million for the nine months ended September 30, 2012 and 2011, respectively, of site rental income included in Community base rental income.