Reportable Segments

12 Months Ended

Dec. 31, 2012

Reportable Segments

—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) the 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 three years ended December 31, 2012, 2011, and 2010.

The following tables summarize the Company’s segment financial information (amounts in thousands):

Year Ended December 31, 2012

	Property Operations			Home Sales and Rentals Operations			Consolidated
Operations revenues	$	669,270		$	23,805		$	693,075
Operations expenses	(320,726		)	(18,245		)	(338,971		)
Income from segment operations	348,544			5,560			354,104
Interest income	3,075			6,488			9,563
Depreciation on real estate and rental homes	(98,713		)	(6,204		)	(104,917		)
Amortization of in-place leases	(44,010		)	(1,112		)	(45,122		)
Income from operations	$	208,896		$	4,732		213,628
Reconciliation to Consolidated net income
Other revenues							7,239
General and administrative							(26,744		)
Acquisition costs							(180		)
Interest and related amortization							(124,524		)
Rent control initiatives and other							(1,456		)
Equity in income of unconsolidated joint ventures							1,899
Gain on sale of property, net of tax							4,596
Consolidated net income							$	74,458
Total assets	$	3,078,304		$	319,922		$	3,398,226
Capital improvements	$	30,863		$	44,397		$	75,260

Note 20—Reportable Segments (continued)

Year Ended December 31, 2011

	Property Operations			Home Sales and  Rentals Operations			Consolidated
Operations revenues	$	560,883		$	14,864		$	575,747
Operations expenses	(279,748		)	(12,122		)	(291,870		)
Income from segment operations	281,135			2,742			283,877
Interest income	3,377			3,340			6,717
Depreciation on real estate and rental homes	(79,923		)	(4,334		)	(84,257		)
Amortization of in-place leases	(27,707		)	(772		)	(28,479		)
Income from operations	$	176,882		$	976		177,858
Reconciliation to Consolidated net income
Other revenues							6,735
General and administrative							(23,833		)
Acquisition costs							(18,493		)
Interest and related amortization							(99,668		)
Rent control initiatives and other							(2,043		)
Equity in income of unconsolidated joint ventures							1,948
Consolidated net income							$	42,504
Total assets	$	3,274,200		$	221,901		$	3,496,101
Capital improvements	$	26,224		$	35,808		$	62,032

Year Ended December 31, 2010

	Property Operations			Home Sales and  Rentals Operations			Consolidated
Operations revenues	$	495,150		$	11,990		$	507,140
Operations expenses	(257,616		)	(10,585		)	(268,201		)
Income from segment operations	237,534			1,405			238,939
Interest income	3,263			782			4,045
Depreciation on real estate and rental homes	(68,067		)	(2,885		)	(70,952		)
Income from operations	$	172,730		$	(698	)	172,032
Reconciliation to Consolidated net income
Other revenues							6,114
General and administrative							(22,559		)
Goodwill impairment							(3,635		)
Interest and related amortization							(91,151		)
Rent control initiatives and other							(2,200		)
Equity in income of unconsolidated joint ventures							2,027
Loss from sale of property							(231		)
Consolidated net income							$	60,397
Total assets	$	1,914,578		$	133,817		$	2,048,395
Capital improvements	$	28,852		$	19,777		$	48,629

Note 20—Reportable Segments (continued)

The following table summarizes the Company’s financial information for the Property Operations segment for the years ended December 31, 2012, 2011, and 2010 (amounts in thousands):

	December 31, 2012			December 31, 2011			December 31, 2010
Revenues:
Community base rental income	$	414,170		$	318,851		$	259,351
Resort base rental income	134,327			130,489			129,481
Right-to-use annual payments	47,662			49,122			49,831
Right-to-use contracts current period, gross	13,433			17,856			19,496
Right-to-use contracts current period, deferred	(6,694		)	(11,936		)	(14,856		)
Utility income and other	64,432			53,843			48,357
Ancillary services revenues, net	1,940			2,658			3,490
Total property operations revenues	669,270			560,883			495,150
Expenses:
Property operating and maintenance	226,952			200,623			185,786
Real estate taxes	47,623			37,619			32,110
Sales and marketing, gross	10,846			11,219			12,606
Sales and marketing deferred commissions, net	(3,155		)	(4,789		)	(5,525		)
Property management	38,460			35,076			32,639
Total property operations expenses	320,726			279,748			257,616
Income from property operations segment	$	348,544		$	281,135		$	237,534

The following table summarizes the Company’s financial information for the Home Sales and Rentals Operations segment for the years ended December 31, 2012, 2011, and 2010 (amounts in thousands):

	December 31, 2012		December 31, 2011		December 31, 2010
Revenues:
Gross revenue from home sales	$	8,566	$	6,088	$	6,120
Brokered resale revenues, net	1,174		806		918
Rental home income (a)	14,065		7,970		4,952
Total revenues	23,805		14,864		11,990
Expenses:
Cost of home sales	9,475		5,683		5,396
Home selling expenses	1,411		1,589		2,078
Rental home operating and maintenance	7,359		4,850		3,111
Total expenses	18,245		12,122		10,585
Income from home sales and rentals operations segment	$	5,560	$	2,742	$	1,405

(a) Does not include approximately $36.2 million, $23.9 million, and $15.3 million of site rental income included in Community base rental income for the years ended December 31, 2012, 2011, and 2010, respectively.