Reportable Segments

6 Months Ended

Jun. 30, 2013

Reportable Segments

Note 13 – 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 operating revenues less total operating expenses. Segments are assessed before interest income, depreciation and amortization of in-place leases.

We have two reportable segments which are: (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.

All revenues are from external customers and there is no customer who contributed 10% or more of our total revenues during the quarters or six months endedJune 30, 2013 or 2012.

The following tables summarize our segment financial information for the quarters endedJune 30, 2013 and 2012 (amounts in thousands):

Quarter Ended June 30, 2013

	Property Operations			Home Sales and Rentals Operations			Consolidated
Operations revenues	$	164,940		$	8,113		$	173,053
Operations expenses	(83,081		)	(5,860		)	(88,941		)
Income from segment operations	81,859			2,253			84,112
Interest income	932			1,025			1,957
Depreciation on real estate and rental homes	(27,599		)	(1,714		)	(29,313		)
Amortization of in-place leases	(159		)	—			(159		)
Income from operations	$	55,033		$	1,564		56,597
Reconciliation to Consolidated net income
Other revenues							1,743
General and administrative							(6,946		)
Interest and related amortization							(30,377		)
Early debt retirement							(1,381		)
Rent control initiatives and other							(1,624		)
Equity in income of unconsolidated joint ventures							609
Discontinued operations							3,165
Consolidated net income							$	21,786
Assets held for use	$	3,104,484		$	296,596		$	3,401,080
Assets held for disposition							$	120,049
Total assets							$	3,521,129

Note 13 – Reportable Segments (continued)

Quarter Ended June 30, 2012

	Property Operations			Home Sales and  Rentals Operations			Consolidated
Operations revenues	$	159,870		$	5,038		$	164,908
Operations expenses	(79,681		)	(4,194		)	(83,875		)
Income from segment operations	80,189			844			81,033
Interest income	782			1,015			1,797
Depreciation on real estate and rental homes	(24,149		)	(1,374		)	(25,523		)
Amortization of in-place leases	(15,346		)	(304		)	(15,650		)
Income from operations	$	41,476		$	181		41,657
Reconciliation to Consolidated net income
Other revenues							1,678
General and administrative							(6,810		)
Interest and related amortization							(30,705		)
Rent control initiatives and other							(367		)
Equity in income of unconsolidated joint ventures							492
Discontinued operations							353
Consolidated net income							$	6,298
Assets held for use	$	3,175,796		$	204,602		$	3,380,398
Assets held for disposition							$	118,252
Total assets							$	3,498,650

The following tables summarize our segment financial information for the six months endedJune 30, 2013 and 2012 (amounts in thousands):

Six Months EndedJune 30, 2013

	Property Operations			Home Sales and Rentals Operations			Consolidated
Operations revenues	$	337,930		$	14,520		$	352,450
Operations expenses	(162,570		)	(11,038		)	(173,608		)
Income from segment operations	175,360			3,482			178,842
Interest income	1,733			2,002			3,735
Depreciation on real estate and rental homes	(51,975		)	(3,358		)	(55,333		)
Amortization of in-place leases	(318		)	—			(318		)
Income from operations	$	124,800		$	2,126		126,926
Reconciliation to Consolidated net income
Other revenues							4,343
General and administrative							(13,655		)
Interest and related amortization							(60,500		)
Early debt retirement							(1,381		)
Rent control initiatives and other							(1,856		)
Equity in income of unconsolidated joint ventures							1,185
Discontinued operations							6,233
Gain on sale of property, net of tax							958
Consolidated net income							$	62,253
Assets held for use	$	3,104,484		$	296,596		$	3,401,080
Assets held for disposition							$	120,049
Total assets							$	3,521,129
Capital improvements	$	13,571		$	22,279		$	35,850

Note 13 – Reportable Segments (continued)

Six Months EndedJune 30, 2012

	Property Operations			Home Sales and  Rentals Operations			Consolidated
Operations revenues	$	326,306		$	9,951		$	336,257
Operations expenses	(155,542		)	(8,103		)	(163,645		)
Income from segment operations	170,764			1,848			172,612
Interest income	1,636			2,156			3,792
Depreciation on real estate and rental homes	(48,257		)	(2,690		)	(50,947		)
Amortization of in-place leases	(30,657		)	(608		)	(31,265		)
Income from operations	$	93,486		$	706		94,192
Reconciliation to Consolidated net income
Other revenues							3,275
General and administrative							(12,909		)
Interest and related amortization							(61,528		)
Rent control initiatives and other							(846		)
Equity in income of unconsolidated joint ventures							1,255
Discontinued operations							513
Consolidated net income							$	23,952
Assets held for use	$	3,175,796		$	204,602		$	3,380,398
Assets held for disposition							$	118,252
Total assets							$	3,498,650
Capital improvements	$	13,349		$	17,211		$	30,560

The following table summarizes our financial information for the Property Operations segment, specific to continuing operations, for the quarters and six months endedJune 30, 2013 and 2012 (amounts in thousands):        

	Quarters Ended						Six Months Ended
	June 30, 2013			June 30, 2012			June 30, 2013			June 30, 2012
Revenues:
Community base rental income	$	101,468		$	98,336		$	202,244		$	196,433
Resort base rental income	33,197			30,408			73,936			67,987
Right-to-use annual payments	12,043			12,221			23,566			23,972
Right-to-use contracts current period, gross	3,361			2,942			6,192			5,186
Right-to-use contracts current period, deferred	(1,550		)	(1,285		)	(2,590		)	(1,891		)
Utility income and other	15,787			17,097			32,470			33,053
Ancillary services revenues, net	634			151			2,112			1,566
Total property operations revenues	164,940			159,870			337,930			326,306
Expenses:
Property operating and maintenance	58,345			56,882			113,401			109,850
Real estate taxes	11,888			11,510			24,290			23,367
Sales and marketing, gross	3,333			2,632			5,694			4,275
Sales and marketing deferred commissions, net	(655		)	(655		)	(1,118		)	(897		)
Property management	10,170			9,312			20,303			18,947
Total property operations expenses	83,081			79,681			162,570			155,542
Income from property operations segment	$	81,859		$	80,189		$	175,360		$	170,764

Note 13 – Reportable Segments (continued)

The following table summarizes our financial information for the Home Sales and Rentals Operations segment, specific to continuing operations, for the quarters and six months endedJune 30, 2013 and 2012 (amounts in thousands):

	Quarters Ended				Six Months Ended
	June 30, 2013		June 30, 2012		June 30, 2013		June 30, 2012
Revenues:
Gross revenue from home sales	$	4,217	$	1,921	$	6,913	$	3,925
Brokered resale revenues, net	298		331		615		659
Rental home income (a)	3,598		2,786		6,992		5,367
Total revenues	8,113		5,038		14,520		9,951
Expenses:
Cost of home sales	3,919		2,514		6,700		4,681
Home selling expenses	454		399		981		728
Rental home operating and maintenance	1,487		1,281		3,357		2,694
Total expenses	5,860		4,194		11,038		8,103
Income from home sales and rentals operations segment	$	2,253	$	844	$	3,482	$	1,848

______________________

(a) Does not include approximately $9.8 million and $7.9 million for the quarters endedJune 30, 2013 and 2012, respectively, and approximately $19.2 million and $15.3 million for the six months endedJune 30, 2013 and 2012, respectively, of site rental income included in Community base rental income.