10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

_________________________________________________________ 

FORM 10-Q

_________________________________________________________ 

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2019

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from             to            

Commission file number: 1-11718

_________________________________________________________ 

EQUITY LIFESTYLE PROPERTIES, INC.

(Exact Name of Registrant as Specified in Its Charter)

_________________________________________________________ 

Maryland			36-3857664
(State or other jurisdiction of incorporation)			(IRS Employer Identification Number)
Two North Riverside Plaza, Suite 800	Chicago,	Illinois	60606
(Address of Principal Executive Offices)			(Zip Code)

(312) 279-1400

Registrant's telephone number, including area code

Securities registered pursuant to Section 12(b) of the Act:
Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, $0.01 Par Value	ELS	New York Stock Exchange

_________________________________________________________ 

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  ☒    No  ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).    Yes  ☒    No  ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and "emerging growth company" in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer	☒	Accelerated filer	☐
Non-accelerated filer	☐	Smaller reporting company	☐
		Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes   ☐    No  ☒

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date: 91,033,894 shares of Common Stock as of July 24, 2019.

Equity LifeStyle Properties, Inc.

Table of Contents

		Page
Part I - Financial Information
Item 1.	Financial Statements (unaudited)
	Index To Financial Statements
	Consolidated Balance Sheets as of June 30, 2019 and December 31, 2018	3
	Consolidated Statements of Income and Comprehensive Income for the quarters and six months ended June 30, 2019 and 2018	4
	Consolidated Statements of Changes in Equity for the quarters and six months ended June 30, 2019 and 2018	5
	Consolidated Statements of Cash Flows for the six months ended June 30, 2019 and 2018	7
	Notes to Consolidated Financial Statements	9
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	19
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	34
Item 4.	Controls and Procedures	34
Part II - Other Information
Item 1.	Legal Proceedings	35
Item 1A.	Risk Factors	35
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	35
Item 3.	Defaults Upon Senior Securities	35
Item 4.	Mine Safety Disclosures	35
Item 5.	Other Information	35
Item 6.	Exhibits	36

2

Part I – Financial Information

Item 1. Financial Statements

Equity LifeStyle Properties, Inc.

Consolidated Balance Sheets

(amounts in thousands, except share and per share data)

	As of			As of
	June 30, 2019			December 31, 2018
	(unaudited)
Assets
Investment in real estate:
Land	$	1,418,353		$	1,408,832
Land improvements	3,236,899			3,143,745
Buildings and other depreciable property	781,671			720,900
	5,436,923			5,273,477
Accumulated depreciation	(1,704,091		)	(1,631,888		)
Net investment in real estate	3,732,832			3,641,589
Cash and restricted cash	90,457			68,974
Notes receivable, net	36,010			35,041
Investment in unconsolidated joint ventures	55,195			57,755
Deferred commission expense	40,710			40,308
Other assets, net	59,274			46,227
Assets held for sale, net	—			35,914
Total Assets	$	4,014,478		$	3,925,808
Liabilities and Equity
Liabilities:
Mortgage notes payable, net	$	2,075,689		$	2,149,726
Term loan, net	198,787			198,626
Accounts payable and other liabilities	127,051			102,854
Deferred revenue – upfront payments from right-to-use contracts (membership upgrade sales)	121,047			116,363
Deferred revenue – right-to-use annual payments (membership subscriptions)	13,022			10,055
Accrued interest payable	8,187			8,759
Rents and other customer payments received in advance and security deposits	104,249			81,114
Distributions payable	58,972			52,617
Liabilities related to assets held for sale	—			12,350
Total Liabilities	2,707,004			2,732,464
Equity:
Stockholders' Equity:
Preferred stock, $0.01 par value, 10,000,000 shares authorized as of June 30, 2019 and December 31, 2018; none issued and outstanding.	—			—
Common stock, $0.01 par value, 400,000,000 and 200,000,000 shares authorized as of June 30, 2019 and December 31, 2018, respectively; 91,032,007 and 89,921,018 shares issued and outstanding as of June 30, 2019 and December 31, 2018, respectively.	906			896
Paid-in capital	1,397,613			1,329,391
Distributions in excess of accumulated earnings	(162,204		)	(211,034		)
Accumulated other comprehensive income (loss)	(242		)	2,299
Total Stockholders’ Equity	1,236,073			1,121,552
Non-controlling interests – Common OP Units	71,401			71,792
Total Equity	1,307,474			1,193,344
Total Liabilities and Equity	$	4,014,478		$	3,925,808

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 June 30,						Six Months Ended June 30,
	2019			2018			2019			2018
Revenues:
Rental income	$	212,007		$	199,155		$	435,573		$	406,148
Right-to-use annual payments (membership subscriptions)	12,586			11,891			24,902			23,410
Right-to-use contracts current period, gross (membership upgrade sales)	5,041			3,944			8,879			7,106
Right-to-use contract upfront payments, deferred, net	(2,912		)	(2,021		)	(4,683		)	(3,306		)
Other income	10,265			12,536			20,635			25,572
Gross revenues from home sales	7,825			9,105			14,300			17,414
Brokered resale and ancillary services revenues, net	872			617			2,431			2,018
Interest income	1,803			1,862			3,554			3,812
Income from other investments, net	879			3,413			1,865			4,353
Total revenues	248,366			240,502			507,456			486,527
Expenses:
Property operating and maintenance	84,868			81,720			162,816			158,052
Real estate taxes	15,107			13,440			30,430			27,575
Sales and marketing, gross	4,214			3,305			7,623			6,117
Right-to-use contract commissions, deferred, net	(389		)	(262		)	(580		)	(286		)
Property management	14,385			13,472			28,070			27,153
Depreciation and amortization	37,776			34,345			75,753			66,719
Cost of home sales	8,164			9,632			14,796			18,206
Home selling expenses	1,102			973			2,185			2,048
General and administrative	9,225			9,669			19,134			17,707
Other expenses	540			367			967			710
Early debt retirement	1,491			—			1,491			—
Interest and related amortization	26,024			26,285			52,417			51,988
Total expenses	202,507			192,946			395,102			375,989
Gain on sale of real estate, net	—			—			52,507			—
Income before equity in income of unconsolidated joint ventures	45,859			47,556			164,861			110,538
Equity in income of unconsolidated joint ventures	3,226			1,613			4,759			2,808
Consolidated net income	49,085			49,169			169,620			113,346
Income allocated to non-controlling interests – Common OP Units	(2,676		)	(3,024		)	(9,902		)	(6,979		)
Redeemable perpetual preferred stock dividends	(8		)	(8		)	(8		)	(8		)
Net income available for Common Stockholders	$	46,401		$	46,137		$	159,710		$	106,359
Consolidated net income	$	49,085		$	49,169		$	169,620		$	113,346
Other comprehensive income (loss):
Adjustment for fair market value of swap	(1,610		)	764			(2,541		)	2,637
Consolidated comprehensive income	47,475			49,933			167,079			115,983
Comprehensive income allocated to non-controlling interests – Common OP Units	(2,589		)	(3,071		)	(9,759		)	(7,141		)
Redeemable perpetual preferred stock dividends	(8		)	(8		)	(8		)	(8		)
Comprehensive income attributable to Common Stockholders	$	44,878		$	46,854		$	157,312		$	108,834
Earnings per Common Share – Basic	$	0.51		$	0.52		$	1.78		$	1.20
Earnings per Common Share – Fully Diluted	$	0.51		$	0.52		$	1.77		$	1.20
Weighted average Common Shares outstanding – basic	90,156			88,549			89,969			88,537
Weighted average Common Shares outstanding – fully diluted	95,930			94,623			95,773			94,600

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, 2018	$	896	$	1,329,391		$	—		$	(211,034	)	$	2,299		$	71,792		$	1,193,344
Exchange of Common OP Units for common stock	—		66			—			—			—			(66		)	—
Issuance of common stock through exercise of options	—		53			—			—			—			—			53
Issuance of common stock through employee stock purchase plan	—		652			—			—			—			—			652
Compensation expenses related to restricted stock and stock options	—		2,420			—			—			—			—			2,420
Repurchase of common stock or Common OP Units	—		(53		)	—			—			—			—			(53		)
Adjustment for Common OP Unitholders in the Operating Partnership	—		(56		)	—			—			—			56			—
Adjustment for fair market value of swap	—		—			—			—			(931		)	—			(931		)
Consolidated net income	—		—			—			113,309			—			7,226			120,535
Distributions	—		—			—			(55,123		)	—			(3,516		)	(58,639		)
Other	—		(63		)	—			—			—			—			(63		)
Balance as of March 31, 2019	896		1,332,410			$	—		(152,848		)	1,368			75,492			1,257,318
Exchange of Common OP Units for Common Stock	5		6,430			—			—			—			(6,435		)	—
Issuance of Common Stock through employee stock purchase plan	—		587			—			—			—			—			587
Issuance of Common Stock	5		59,314			—			—			—			—			59,319
Compensation expenses related to restricted stock and stock options	—		2,625			—			—			—			—			2,625
Adjustment for Common OP Unitholders in the Operating Partnership	—		(2,883		)	—			—			—			2,883			—
Adjustment for fair market value of swap	—		—			—			—			(1,610		)	—			(1,610		)
Consolidated net income	—		—			8			46,401			—			2,676			49,085
Distributions	—		—			(8		)	(55,757		)	—			(3,215		)	(58,980		)
Other	—		(870		)	—			—			—			—			(870		)
Balance as of June 30, 2019	$	906	$	1,397,613		$	—		$	(162,204	)	$	(242	)	$	71,401		$	1,307,474

The accompanying notes are an integral part of the consolidated financial statements.

5

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, 2017	$	883	$	1,242,109		$	—		$	(211,980	)	$	942	$	68,088		$	1,100,042
Cumulative effect of change in accounting principle (ASC 606, Revenue Recognition)	—		—			—			(15,186		)	—		—			(15,186		)
Balance as of January 1, 2018	883		1,242,109			—			(227,166		)	942		68,088			1,084,856
Exchange of Common OP Units for common stock	—		80			—			—			—		(80		)	—
Issuance of common stock through employee stock purchase plan	—		503			—			—			—		—			503
Compensation expenses related to restricted stock and stock options	—		1,800			—			—			—		—			1,800
Adjustment for Common OP Unitholders in the Operating Partnership	—		782			—			—			—		(782		)	—
Adjustment for fair market value of swap	—		—			—			—			1,873		—			1,873
Consolidated net income	—		—			—			60,222			—		3,955			64,177
Distributions	—		—			—			(48,805		)	—		(3,205		)	(52,010		)
Other	—		(60		)	—			—			—		—			(60		)
Balance as of March 31, 2018	883		1,245,214			—			(215,749		)	2,815		67,976			1,101,139
Exchange of Common OP Units for Common Stock	1		81			—			—			—		(82		)	—
Issuance of Common Stock through employee stock purchase plan	—		343			—			—			—		—			343
Compensation expenses related to restricted stock and stock options	—		2,741			—			—			—		—			2,741
Adjustment for Common OP Unitholders in the Operating Partnership	—		(57		)	—			—			—		57			—
Adjustment for fair market value of swap	—		—			—			—			764		—			764
Consolidated net income	—		—			8			46,137			—		3,024			49,169
Distributions	—		—			(8		)	(48,841		)	—		(3,201		)	(52,050		)
Other	—		(275		)	—			—			—		—			(275		)
Balance as of June 30, 2018	$	884	$	1,248,047		$	—		$	(218,453	)	$	3,579	$	67,774		$	1,101,831

The accompanying notes are an integral part of the consolidated financial statements.

6

Equity LifeStyle Properties, Inc.

Consolidated Statements of Cash Flows

(amounts in thousands)

(unaudited)

	Six Months Ended June 30,
	2019			2018
Cash Flows From Operating Activities:
Consolidated net income	$	169,620		$	113,346
Adjustments to reconcile consolidated net income to net cash provided by operating activities:
Gain on sale of real estate, net	(52,507		)	—
Early debt retirement	1,491			—
Depreciation and amortization	76,648			67,431
Amortization of loan costs	1,768			1,772
Debt premium amortization	(232		)	(711		)
Equity in income of unconsolidated joint ventures	(4,759		)	(2,808		)
Distributions of income from unconsolidated joint ventures	2,008			1,732
Proceeds from insurance claims, net	4,422			1,809
Compensation expense related to restricted stock and stock options	5,045			4,541
Revenue recognized from right-to-use contract upfront payments (membership upgrade sales)	(4,195		)	(3,800		)
Commission expense recognized related to right-to-use contracts	1,867			1,810
Long-term incentive plan compensation	(3,608		)	461
Changes in assets and liabilities:
Notes receivable, net	(1,079		)	642
Deferred commission expense	(2,269		)	(2,010		)
Other assets, net	(8,275		)	10,895
Accounts payable and other liabilities	25,962			9,274
Deferred revenue – upfront payments from right-to-use contracts (membership upgrade sales)	8,879			7,106
Deferred revenue – right-to-use annual payments (membership subscriptions)	2,967			2,874
Rents and other customer payments received in advance and security deposits	20,932			15,601
Net cash provided by operating activities	244,685			229,965
Cash Flows From Investing Activities:
Real estate acquisitions, net	(38,463		)	(53,289		)
Proceeds from disposition of properties, net	77,746			—
Investment in unconsolidated joint ventures	—			(3,791		)
Distributions of capital from unconsolidated joint ventures	5,169			110
Proceeds from insurance claims	1,111			2,335
Repayments of notes receivable	—			13,823
Capital improvements	(121,444		)	(81,377		)
Net cash used in investing activities	(75,881		)	(122,189		)

The accompanying notes are an integral part of the consolidated financial statements.

7

Equity LifeStyle Properties, Inc.

Consolidated Statements of Cash Flows (continued)

(amounts in thousands)

(unaudited)

	Six Months Ended June 30,
	2019			2018
Cash Flows From Financing Activities:
Proceeds from stock options and employee stock purchase plan	1,237			846
Gross proceeds from the issuance of common stock	59,319			—
Distributions:
Common Stockholders	(104,579		)	(92,008		)
Common OP Unitholders	(6,676		)	(6,049		)
Preferred Stockholders	(8		)	(8		)
Principal payments and mortgage debt repayment	(93,982		)	(23,964		)
New mortgage notes payable financing proceeds	—			64,014
Line of Credit payoff	—			(97,000		)
Line of Credit proceeds	—			67,000
Debt issuance and defeasance costs	(1,700		)	(1,688		)
Other	(932		)	(335		)
Net cash used in financing activities	(147,321		)	(89,192		)
Net increase in cash and restricted cash	21,483			18,584
Cash and restricted cash, beginning of period	68,974			35,631
Cash and restricted cash, end of period	$	90,457		$	54,215

	Six Months Ended June 30,
	2019			2018
Supplemental Information:
Cash paid for interest	$	51,744		$	52,658
Net investment in real estate – reclassification of rental homes	$	12,451		$	15,396
Other assets, net – reclassification of rental homes	$	(12,451	)	$	(15,396	)
Real estate acquisitions:
Investment in real estate	$	(58,871	)	$	(71,756	)
Other assets, net	(412		)	(9		)
Debt assumed	19,212			9,200
Debt financed	—			8,786
Other liabilities	1,608			490
Real estate acquisitions, net	$	(38,463	)	$	(53,289	)
Real estate dispositions:
Investment in real estate	$	35,572		$	—
Notes receivable, net	295			—
Other assets, net	97			—
Mortgage notes payable, net	(11,175		)	—
Other liabilities	450			—
Gain on sale of real estate, net	52,507			—
Real estate dispositions, net	$	77,746		$	—

The accompanying notes are an integral part of the consolidated financial statements.

8

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,” "the Company," and “our.” We are a fully integrated owner and operator of lifestyle-oriented properties ("Properties") consisting primarily of manufactured home ("MH") and recreational vehicle ("RV") communities. We provide our customers the opportunity to place factory-built homes, cottages, cabins or RVs on our Properties either on a long-term or short-term basis. Our customers may lease individual developed areas ("Sites") or enter right-to-use contracts, which provide them access to specific Properties for limited stays.

Our Properties are owned primarily by the Operating Partnership and managed internally by wholly-owned 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 94.5% interest as of June 30, 2019. 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 or for variable interest entities in which ELS is not considered the primary beneficiary, 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 the 2018 Form 10-K.

Intercompany balances and transactions have been eliminated. All adjustments to the 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 interim consolidated financial statements to conform with current year presentation.

Note 2 – Summary of Significant Accounting Policies

(a)    Recently Adopted Accounting Pronouncements

In February 2016, the FASB issued ("ASU 2016-02") Leases. This new guidance, including the related subsequently issued ASUs, provides the principles for the recognition, measurement, presentation and disclosure of leases, including the requirement that lessees recognize right-of-use ("ROU") assets and lease liabilities for leases on the Consolidated Balance Sheets.

We adopted the new lease standard effective January 1, 2019 and have elected to use January 1, 2019 as our date of initial application. Results for reporting periods beginning January 1, 2019 are presented under the new lease standard. We made an accounting policy election to not recognize ROU assets and lease liabilities for leases with a term of 12 months or less. We elected the package of practical expedients permitted under the transition guidance within the new standard and were not required to reassess the following upon adoption: (i) whether an expired or existing contract met the definition of a lease, (ii) the lease classification at January 1, 2019 for existing leases and (iii) whether leasing costs previously capitalized as initial direct costs would continue to be amortized. Upon adoption, we did not have an adjustment to the opening balance of retained earnings due to the election of these practical expedients.

As a lessor, we adopted the practical expedient that allowed us not to separate expenses reimbursed by our customers (“utility recoveries”) from the associated rental revenue if certain criteria were met. We assessed these criteria and concluded the timing and pattern of transfer for rental revenue and the associated utility recoveries are the same and as our leases qualify as operating leases, we accounted for and presented rental revenue and utility recoveries as a single component under Rental income in our Consolidated Statements of Income and Comprehensive Income for 2019 and 2018. In addition, the new standard requires our expected credit loss related to the collectability of lease receivables to be reflected as an adjustment to the line item Rental income prospectively starting from January 1, 2019. For 2018, the credit loss related to the collectability of lease receivables was recognized

9

Equity LifeStyle Properties, Inc.

Notes to Consolidated Financial Statements

Note 2 – Summary of Significant Accounting Policies (continued)

in the line item Property operating and maintenance and was not significant. The guidance regarding capitalization of leasing costs did not have any effect on our consolidated financial statements.

On January 1, 2019, we recognized ROU assets of $17.5 million and lease liabilities of $18.7 million on the Consolidated Balance Sheets, principally for our ground and office space leases, in which we are the lessee.

For more disclosure on the adoption of the new lease accounting standard, see Note 3. Leases.

(b)    New Accounting Pronouncements

In August 2018, the FASB issued ("ASU 2018-15") Customer's Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract. ASU 2018-15 provides clarity on the accounting for implementation costs of a cloud computing arrangement that is a service contract. The project stage (that is, preliminary project stage, application development stage, or post implementation stage) and the nature of the implementation costs determine which costs to capitalize as an asset related to the service contract and which ones to expense. This update also requires the capitalized implementation costs to be expensed over the term of the arrangement and to be presented in the same line item in the consolidated financial statements as the fees associated with the service of the arrangement. ASU 2018-15 is effective in fiscal years beginning after December 15, 2019, including interim periods within those years. Early adoption is permitted. This guidance can be applied either retrospectively or prospectively to all implementation costs incurred after the date of adoption. We are currently in the process of evaluating the potential impact, if any, that the adoption of this standard may have on the consolidated financial statements and related disclosures.

In June 2016, the FASB issued (“ASU 2016-13”) Financial Instruments - Credit Losses: Measurement of Credit Losses on Financial Instruments (Topic 326). ASU 2016-13 requires entities to measure all expected credit losses for financial assets held at the reporting date based on historical experience, current conditions, and reasonable and supportable forecasts. Entities will now use forward-looking information to better form their credit loss estimates. ASU 2016-13 also requires enhanced disclosures to help financial statement users better understand significant estimates and judgments used in estimating credit losses, as well as the credit quality and underwriting standards of an entity’s portfolio. ASU 2016-13 is effective for annual reporting periods beginning after December 15, 2019. Early adoption is permitted. We are currently in the process of evaluating the potential impact, if any, that adoption of this standard may have on the consolidated financial statements and related disclosures.

(c)    Revenue Recognition

We account for certain revenue streams in accordance with Accounting Standard Codification (ASC) 606, Revenue from Contracts with Customers. Right-to-use contracts (also referred to as membership subscriptions), provide our customers access to specific Properties for limited stays at a specified group of Properties. Payments are deferred and recognized on a straight-line basis over the one-year period in which access to Sites at certain Properties are provided. Right-to-use upgrade contracts grant certain additional access rights to the customer and require non-refundable upfront payments. The non-refundable upfront payments are recognized on a straight-line basis over 20 years.

Income 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.

(d)    Restricted Cash

As of June 30, 2019 and December 31, 2018, restricted cash consists of $27.5 million and $24.1 million, respectively, primarily related to cash reserved for customer deposits and amounts escrowed for insurance and real estate taxes.

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Equity LifeStyle Properties, Inc.

Notes to Consolidated Financial Statements

Note 3 – Leases

Lessor

Rental income derived from customers renting our Sites is accounted for in accordance with ASC 842, Leases, and is recognized over the term of the respective operating lease or the length of a customer's stay. Our MH community Sites and annual RV community Sites are leased on an annual basis. Seasonal Sites are leased to customers generally for one to six months. Transient Sites are leased to customers on a short-term basis. In addition, customers may lease homes that are located in our Properties.

The leases entered into between the customer and us for the 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 conditions. 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 June 30, 2019
2019	$	60,067
2020	120,012
2021	65,321
2022	34,906
2023	19,714
Thereafter	84,254
Total	$	384,274

Lessee

We lease land under non-cancelable operating leases at 13 Properties expiring at various dates through 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 2026. For the quarters ended June 30, 2019 and 2018, total operating lease payments were $2.3 million and $2.1 million, respectively. For the six months ended June 30, 2019 and 2018, total operating lease payments were $4.6 million and $4.1 million, respectively.

The following table summarizes our future minimum rental payments, excluding variable costs, which are discounted by our incremental borrowing rate to calculate the lease liabilities for our operating leases:

(amounts in thousands)	As of June 30, 2019			As of December 31, 2018
2019	$	2,770		$	4,921
2020	4,801			4,801
2021	4,179			4,179
2022	2,103			2,103
2023	953			953
Thereafter	5,054			5,054
Total undiscounted rental payments	19,860			22,011
Less imputed interest	(2,895		)	(3,289		)
Total lease liabilities	$	16,965		$	18,722

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 $15.7 million and $17.0 million, respectively, as of June 30, 2019. The weighted average remaining lease term for our operating leases was 7 years and the weighted average incremental borrowing rate was 4.4% at June 30, 2019.

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Equity LifeStyle Properties, Inc.

Notes to Consolidated Financial Statements

Note 4 – Earnings Per Common Share

The following table sets forth the computation of basic and diluted earnings per common share for the quarters and six months ended June 30, 2019 and 2018:

	Quarters Ended June 30,				Six Months Ended June 30,
(amounts in thousands, except per share data)	2019		2018		2019		2018
Numerator:
Net income available for Common Stockholders – Basic	$	46,401	$	46,137	$	159,710	$	106,359
Amounts allocated to dilutive securities	2,676		3,024		9,902		6,979
Net income available for Common Stockholders – Fully Diluted	$	49,077	$	49,161	$	169,612	$	113,338
Denominator:
Weighted average Common Shares outstanding – Basic	90,156		88,549		89,969		88,537
Effect of dilutive securities:
Exchange of Common OP Units for Common Shares	5,643		5,826		5,691		5,827
Restricted stock and stock options	131		248		113		236
Weighted average Common Shares outstanding – Fully Diluted	95,930		94,623		95,773		94,600
Earnings per Common Share – Basic	$	0.51	$	0.52	$	1.78	$	1.20
Earnings per Common Share – Fully Diluted	$	0.51	$	0.52	$	1.77	$	1.20

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 limited partners of the Operating Partnership (the "Common OP Unit holders") since January 1, 2018.

Distribution Amount Per Share	For the Quarter Ended	Stockholder Record Date	Payment Date
$0.5500	March 31, 2018	March 30, 2018	April 13, 2018
$0.5500	June 30, 2018	June 29, 2018	July 13, 2018
$0.5500	September 30, 2018	September 28, 2018	October 12, 2018
$0.5500	December 31, 2018	December 28, 2018	January 11, 2019
$0.6125	March 31, 2019	March 29, 2019	April 12, 2019
$0.6125	June 30, 2019	June 28, 2019	July 12, 2019

Increase in Authorized Shares

On April 30, 2019, our stockholders approved an amendment to our charter to increase the number of shares of our common stock that we are authorized to issue from 200,000,000 to 400,000,000 shares.

Equity Offering Program

On October 26, 2018, we entered into our current 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 $200.0 million. As of June 30, 2019, we have $140.7 million of common stock available for issuance.

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Equity LifeStyle Properties, Inc.

Notes to Consolidated Financial Statements

Note 5 – Common Stock and Other Equity Related Transactions (continued)

The following table presents the shares that were issued under the current ATM equity offering program during the six months ended June 30, 2019. There was no activity under the ATM equity offering program during the six months ended June 30, 2018.

	Six Months Ended June 30,
(amounts in thousands, except stock data)	2019
Shares of Common Stock sold	505,236
Weighted average price	$	117.41
Total gross proceeds	$	59,319
Commissions paid to sales agents	$	771

Exchanges

Subject to certain limitations, Common 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. During the six months ended June 30, 2019, 495,325 OP Units were exchanged for an equal number of shares of Common Stock. During the six months ended June 30, 2018, 13,838 OP Units were exchanged for an equal number of shares of Common Stock.

Note 6 – Investment in Real Estate

Acquisitions

On May 29, 2019, we completed the acquisition of White Oak Shores Camping and RV Resort, a 455-site RV community located in Stella, North Carolina, for a purchase price of $20.5 million. The acquisition was funded with available cash.

On April 10, 2019, we completed the acquisition of Round Top RV Campground, a 391-site RV community located in Gettysburg, Pennsylvania, for a purchase price of $12.4 million. This acquisition was funded with available cash and a loan assumption of approximately $7.8 million, excluding mortgage premium of $0.2 million.

On March 25, 2019, we completed the acquisitions of Drummer Boy Camping Resort, a 465-site RV community located in Gettysburg, Pennsylvania, and Lake of the Woods Campground, a 303-site RV community located in Wautoma, Wisconsin, for a total purchase price of $25.4 million. These acquisitions were funded with available cash and a loan assumption of approximately $10.8 million, excluding mortgage premium of $0.4 million.

Dispositions

On January 23, 2019, we closed on the sale of five all-age MH communities located in Indiana and Michigan, collectively containing 1,463 sites, for $89.7 million. The assets and liabilities associated with the transaction were classifieds as held for sale on the Consolidated Balance Sheets as of December 31, 2018. We recognized a gain on sale of these Properties of $52.5 million during the first quarter of 2019.

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Equity LifeStyle Properties, Inc.

Notes to Consolidated Financial Statements

Note 7 – Investment in Unconsolidated Joint Ventures

The following table summarizes our investment in unconsolidated joint ventures (investment amounts in thousands with the number of Properties shown parenthetically as of June 30, 2019 and December 31, 2018, respectively):

						Investment as of				Income/(Loss) for Six Months Ended
Investment	Location	Number of Sites (a)	Economic Interest (b)			June 30, 2019		December 31, 2018		June 30, 2019		June 30, 2018
Meadows	Various (2,2)	1,077	50	%		$	346	$	346	$	800	$	819
Lakeshore	Florida (3,3)	720	(c)			2,154		2,263		122		123
Voyager	Arizona (1,1)	1,801	50	%	(d)	414		3,135		2,925		883
Loggerhead	Florida	2,343	49	%		35,789		35,789		642		689
ECHO JV	Various	—	50	%		16,492		16,222		270		294
		5,941				$	55,195	$	57,755	$	4,759	$	2,808

_____________________

(a) Loggerhead sites represent marina slip count.

(b) The percentages shown approximate our economic interest as of June 30, 2019. Our legal ownership interest may differ.

(c) Includes two joint ventures in which we own a 65% interest and Crosswinds joint venture in which we own a 49% interest.

(d) Voyager joint venture primarily consists of a 50% interest in Voyager RV Resort and a 33% interest in the utility plant servicing the Property.

We received approximately $7.2 million and $1.8 million in distributions from our unconsolidated joint ventures for the six months ended June 30, 2019 and 2018, respectively. Approximately $2.7 million of the distributions made to us exceeded our basis in unconsolidated joint ventures for the six months ended June 30, 2019 and, as such, were recorded as income from unconsolidated joint ventures. None of the distributions made to us exceeded our basis in joint ventures for the six months ended June 30, 2018.

Note 8 – Borrowing Arrangements

Mortgage Notes Payable

2019 Activity

During the three months ended March 31, 2019, we defeased mortgage debt of $11.2 million in conjunction with the disposition of the five MH Properties as disclosed in Note 6. Investment in Real Estate. These loans had a weighted average interest rate of 5.0% per annum.

During the three months ended June 30, 2019, we prepaid four loans secured by four properties (three MH and one RV), which were scheduled to mature in 2020. The loans had an outstanding principal balance of $66.8 million and a weighted average interest rate of 6.9% per annum. As part of the transaction, we incurred $1.4 million of prepayment penalties. We used the proceeds from the ATM and our available cash to fund the loan payments.

In connection with the acquisitions that closed during the six months ended June 30, 2019, we assumed mortgage debt of $18.6 million, excluding mortgage note premium of $0.6 million. These loans carry a weighted average interest rate of 5.4% per annum and mature between 2022 and 2024.

2018 Activity

During the three months ended March 31, 2018, we closed on one loan, secured by two RV communities, for gross proceeds of approximately $64.0 million. The loan carries an interest rate of 4.8% per annum and matures in 2038.

In connection with the Serendipity acquisition that closed during the three months ended March 31, 2018, we assumed a loan of approximately $9.2 million and obtained additional financing of $8.8 million for total mortgage debt, secured by the MH community, of $18.0 million with an interest rate of 4.8% that matures in 2039.

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Equity LifeStyle Properties, Inc.

Notes to Consolidated Financial Statements

Note 8 – Borrowing Arrangements (continued)

Our mortgage notes payable is classified as Level 2 in the fair value hierarchy. The following table presents the fair value of our mortgage notes payable:

	As of June 30, 2019				As of December 31, 2018
(amounts in thousands)	Fair Value		Carrying Value		Fair Value		Carrying Value
Mortgage notes payable, excluding deferred financing costs	$	2,203,298	$	2,099,714	$	2,164,563	$	2,174,715

The weighted average interest rate on our outstanding mortgage indebtedness, including the impact of premium/discount amortization and loan cost amortization on mortgage indebtedness, as of June 30, 2019, was approximately 4.5% per annum. The debt bears interest at stated rates ranging from 3.5% to 8.9% per annum and matures on various dates ranging from 2020 to 2041. The debt encumbered a total of 116 and 118 of our Properties as of June 30, 2019 and December 31, 2018, respectively, and the carrying value of such Properties was approximately $2,475.4 million and $2,489.8 million, as of June 30, 2019 and December 31, 2018, respectively.

Unsecured Line of Credit

During the six months ended June 30, 2019, we did not borrow or pay off amounts on our unsecured Line of Credit ("LOC"). During the six months ended June 30, 2018, we paid off our unsecured line of credit balance, including approximately $30.0 million outstanding as of December 31, 2017. As of June 30, 2019, the full capacity on our LOC remained available.

As of June 30, 2019, we were in compliance in all material respects with the covenants in all our borrowing arrangements.

Note 9 – Derivative Instruments and Hedging Activities

Cash Flow Hedges of Interest Rate Risk

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 connection with our $200.0 million senior unsecured term loan (the “Term Loan”), which has an interest rate of LIBOR plus 1.20% to 1.90% per annum, we entered into a three-year LIBOR Swap Agreement (the "Swap") allowing us to trade the variable interest rate on the Term Loan for a fixed interest rate. The Swap has a notional amount of $200.0 million of outstanding principal with an underlying LIBOR of 1.85% per annum and matures on November 1, 2020. Based on the leverage as of June 30, 2019, our spread over LIBOR was 1.20% resulting in an estimated all-in interest rate of 3.05% per annum.

Our derivative financial instrument is classified as Level 2 in the fair value hierarchy. The following table presents the fair value of our derivative financial instrument:

		As of June 30,		As of December 31,
(amounts in thousands)	Balance Sheet Location	2019		2018
Interest Rate Swap	Other assets, net	$	—	$	2,299
Interest Rate Swap	Accounts payable and other liabilities	$	242	$	—

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 six months ended June 30,					Location of (gain)/ loss reclassified from accumulated OCI into income	Amount of (gain)/loss reclassified from accumulated OCI into income for the six months ended June 30,
(amounts in thousands)	2019		2018			(amounts in thousands)	2019			2018
Interest Rate Swap	$	1,901	$	(2,544	)	Interest Expense	$	(640	)	$	93

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Notes to Consolidated Financial Statements

Note 9 – Derivative Instruments and Hedging Activities (continued)

During the next twelve months through June 30, 2020, we estimate no material changes to interest expense. This estimate may be subject to change as the underlying LIBOR changes. We determined that no adjustment was necessary for non-performance risk on our derivative obligation. As of June 30, 2019, we did not post any collateral related to this agreement.

Note 10 – Equity Incentive Awards

Our 2014 Equity Incentive Plan (the “2014 Plan”) was adopted by our Board of Directors on March 11, 2014 and approved by our stockholders on May 13, 2014. During the quarter ended March 31, 2019, 61,200 shares of restricted stock were awarded to certain members of our management team. Of these shares, 50% are time-based awards, vesting in equal installments over a three-year period on January 31, 2020, January 29, 2021, and January 31, 2022, respectively, and have a grant date fair value of $3.2 million. The remaining 50% are performance-based awards, and are valued using the closing price at the grant date when all the key terms and conditions are known to all parties. The 10,201 shares of restricted stock awarded in 2019 subject to 2019 performance goals have a grant date fair value of $1.1 million. Additionally, 11,711 shares of restricted stock awarded in 2018 subject to 2019 performance goals have a grant date fair value of $1.3 million.

During the quarter ended June 30, 2019, we awarded to certain members of our Board of Directors, 35,431 shares of restricted stock at a fair value of approximately $4.1 million. These shares are time-based awards subject to various vesting dates between October 30, 2019 and April 30, 2022.

Compensation expense related to restricted stock and stock options, reported in General and administrative on the Consolidated Statements of Income and Comprehensive Income, for the quarters ended June 30, 2019 and 2018, was $2.6 million and $2.7 million, respectively, and for the six months ended June 30, 2019 and 2018, was approximately $5.0 million and $4.5 million, 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, and 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.

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Equity LifeStyle Properties, Inc.

Notes to Consolidated Financial Statements

Note 12 – Reportable Segments

We have identified 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. 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 was no customer who contributed 10% or more of our total revenues during the quarters and six months ended June 30, 2019 or 2018.

The following tables summarize our segment financial information for the quarters and six months ended June 30, 2019 and 2018:

Quarter Ended June 30, 2019

(amounts in thousands)	Property Operations			Home Sales and Rentals Operations			Consolidated
Operations revenues	$	233,848		$	11,836		$	245,684
Operations expenses	(116,893		)	(10,558		)	(127,451		)
Income from segment operations	116,955			1,278			118,233
Interest income	950			846			1,796
Depreciation and amortization	(35,197		)	(2,579		)	(37,776		)
Income (loss) from operations	$	82,708		$	(455	)	$	82,253
Reconciliation to consolidated net income:
Corporate interest income							$	7
Income from other investments, net							879
General and administrative							(9,225		)
Other expenses							(540		)
Interest and related amortization							(26,024		)
Equity in income of unconsolidated joint ventures							3,226
Early debt retirement							(1,491		)
Consolidated net income							$	49,085
Total assets	$	3,766,573		$	247,905		$	4,014,478
Capital improvements	$	28,501		$	40,502		$	69,003

Quarter Ended June 30, 2018

(amounts in thousands)	Property Operations			Home Sales and Rentals Operations			Consolidated
Operations revenues	$	222,167		$	13,060		$	235,227
Operations expenses	(110,046		)	(12,234		)	(122,280		)
Income from segment operations	112,121			826			112,947
Interest income	823			1,033			1,856
Depreciation and amortization	(31,954		)	(2,391		)	(34,345		)
Income (loss) from operations	$	80,990		$	(532	)	$	80,458
Reconciliation to consolidated net income:
Corporate interest income							$	6
Income from other investments, net							3,413
General and administrative							(9,669		)
Other expenses							(367		)
Interest and related amortization							(26,285		)
Equity in income of unconsolidated joint ventures							1,613
Consolidated net income							$	49,169
Total assets	$	3,477,455		$	222,734		$	3,700,189
Capital improvements	$	26,602		$	23,459		$	50,061

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Notes to Consolidated Financial Statements

Note 12 – Reportable Segments (continued)

Six Months Ended June 30, 2019

(amounts in thousands)	Property Operations			Home Sales and Rentals Operations			Consolidated
Operations revenues	$	479,864		$	22,173		$	502,037
Operations expenses	(225,863		)	(19,477		)	(245,340		)
Income from segment operations	254,001			2,696			256,697
Interest income	1,844			1,696			3,540
Depreciation and amortization	(70,740		)	(5,013		)	(75,753		)
Gain on sale of real estate, net	52,507			—			52,507
Income (loss) from operations	$	237,612		$	(621	)	$	236,991
Reconciliation to consolidated net income:
Corporate interest income							$	14
Income from other investments, net							1,865
General and administrative							(19,134		)
Other expenses							(967		)
Interest and related amortization							(52,417		)
Equity in income of unconsolidated joint ventures							4,759
Early debt retirement							(1,491		)
Consolidated net income							$	169,620
Total assets	$	3,766,573		$	247,905		$	4,014,478
Capital improvements	$	52,906		$	68,538		$	121,444

Six Months Ended June 30, 2018

(amounts in thousands)	Property Operations			Home Sales and Rentals Operations			Consolidated
Operations revenues	$	453,183		$	25,179		$	478,362
Operations expenses	(215,558		)	(23,307		)	(238,865		)
Income from segment operations	237,625			1,872			239,497
Interest income	1,631			1,940			3,571
Depreciation and amortization	(56,029		)	(10,690		)	(66,719		)
Income (loss) from operations	$	183,227		$	(6,878	)	$	176,349
Reconciliation to consolidated net income:
Corporate interest income							$	241
Income from other investments, net							4,353
General and administrative							(17,707		)
Other expenses							(710		)
Interest and related amortization							(51,988		)
Equity in income of unconsolidated joint venture							2,808
Consolidated net income							$	113,346
Total assets	$	3,477,455		$	222,734		$	3,700,189
Capital Improvements	$	47,870		$	33,507		$	81,377

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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 and six months ended June 30, 2019 and 2018:    

	Quarters Ended June 30,						Six Months Ended June 30,
(amounts in thousands)	2019			2018			2019			2018
Revenues:
Rental income	$	208,375		$	195,594		$	428,357		$	399,072
Right-to-use annual payments (membership subscriptions)	12,586			11,891			24,902			23,410
Right-to-use contracts current period, gross (membership upgrade sales)	5,041			3,944			8,879			7,106
Right-to-use contract upfront payments, deferred, net	(2,912		)	(2,021		)	(4,683		)	(3,306		)
Other income	10,265			12,536			20,635			25,572
Ancillary services revenues, net	493			223			1,774			1,329
Total property operations revenues	233,848			222,167			479,864			453,183
Expenses:
Property operating and maintenance	83,576			80,091			160,320			154,999
Real estate taxes	15,107			13,440			30,430			27,575
Sales and marketing, gross	4,214			3,305			7,623			6,117
Right-to-use contract commissions, deferred, net	(389		)	(262		)	(580		)	(286		)
Property management	14,385			13,472			28,070			27,153
Total property operations expenses	116,893			110,046			225,863			215,558
Income from property operations segment	$	116,955		$	112,121		$	254,001		$	237,625

The following table summarizes our financial information for the Home Sales and Rentals Operations segment for the quarters and six months ended June 30, 2019 and 2018:

	Quarters Ended June 30,				Six Months Ended June 30,
(amounts in thousands)	2019		2018		2019		2018
Revenues:
Rental income (a)	$	3,632	$	3,561	$	7,216	$	7,076
Gross revenue from home sales	7,825		9,105		14,300		17,414
Brokered resale revenues, net	379		369		657		651
Ancillary services revenues, net	—		25		—		38
Total revenues	11,836		13,060		22,173		25,179
Expenses:
Property operating and maintenance	1,292		1,629		2,496		3,053
Cost of home sales	8,164		9,632		14,796		18,206
Home selling expenses	1,102		973		2,185		2,048
Total expenses	10,558		12,234		19,477		23,307
Income from home sales and rentals operations segment	$	1,278	$	826	$	2,696	$	1,872

______________________

(a) Segment information includes income related to rental homes. Income related to Site rent on rental homes is included within property operations.

Item 2.    Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following discussion and analysis should be read in conjunction with the consolidated financial statements and related notes included in this Quarterly Report on Form 10-Q and in our Annual Report on Form 10-K for the year ended December 31, 2018 ("2018 Form 10-K"), as well as information in the "Management's Discussion and Analysis of Financial Condition and Results of Operations" in our 2018 Form 10-K.

Overview and Outlook

We are a self-administered and self-managed real estate investment trust (“REIT”) with headquarters in Chicago, Illinois. We are a fully integrated owner and operator of lifestyle-oriented properties (“Properties”) consisting primarily of manufactured home ("MH") and recreational vehicle ("RV") communities. As of June 30, 2019, we owned or had an ownership interest in a portfolio of 413 Properties located throughout the United States and Canada containing 155,973 Sites. These Properties are located

19

Management's Discussion and Analysis (continued)

in 33 states and British Columbia, with more than 90 Properties with lake, river or ocean frontage and more than 120 Properties within 10 miles of the coastal United States.

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 value for both customers and stockholders. We seek growth in earnings, funds from operations ("FFO") and cash flows by enhancing the profitability and operation of our Properties and investments. We seek to accomplish this by attracting and retaining high quality customers, who take pride in our Properties and in their homes, and efficiently managing our Properties by increasing occupancy, maintaining competitive market rents and controlling expenses.

We believe that demand from baby boomers for manufactured housing and RV communities will continue to outpace supply for several years. We believe these individuals, seeking an active lifestyle, will continue to drive the market for second-home sales as vacation properties, investment opportunities, or retirement retreats. The entitlement process to develop new MH and RV communities is extremely restrictive. As a result, there have been few new communities developed in our target geographic markets. We believe it is likely that over the next decade, we will continue to see high levels of second-home sales and that manufactured homes and cottages in our Properties will continue to provide a viable second-home alternative to site-built homes.

We also believe that our Properties and our business model provide an opportunity for increased cash flows and appreciation in value. These may be achieved through increasing occupancy and maintaining market rents, as well as expense controls, expansion of existing Properties and opportunistic acquisitions. We actively seek to acquire and are currently engaged in various stages of negotiations relating to the possible acquisition of additional properties, which may include contracts outstanding to acquire such properties that are subject to the satisfactory completion of our due diligence review.

We generate the majority of our revenues from customers renting our individual developed areas ("Sites"), or entering into right-to-use contracts (also referred to as membership subscriptions), which provide our customers access to specific Properties for limited stays. Our MH community Sites and annual RV community Sites are leased on an annual basis. Seasonal Sites are leased to customers generally for one to six months. Transient Sites are leased to customers on a short-term basis. The revenue from seasonal and transient Sites is generally higher during the first and third quarters. We consider the transient revenue stream to be our most volatile as it is subject to weather conditions and other factors affecting the marginal RV customer's vacation and travel preferences. We also have interests in joint venture Properties for which revenue is classified as Equity in income from unconsolidated joint ventures on the Consolidated Statements of Income and Comprehensive Income.

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

	Total Sites as of June 30, 2019
MH Community Sites	72,000
RV Community Sites:
Annual	30,400
Seasonal	11,300
Transient	12,100
Thousand Trails portfolio (1)	24,300
Joint Ventures (2)	5,900
	156,000

_________________________ 

⁽¹⁾  Primarily utilized to service the approximately 115,400 membership customers who have entered into right-to-use contracts (membership subscriptions). Includes approximately 5,800 Sites rented on an annual basis.

⁽²⁾  Includes approximately 2,700 annual Sites, 400 seasonal Sites, and 500 transient Sites and approximately 2,300 marina slips.

In our Home Sales and Rental Operations business, our revenue streams include home sales, home rentals, brokerage services and ancillary activities. We generate revenue through home sales and rental operations by selling or leasing factory-built homes that are located in Properties owned and managed by us. We continue to focus on our rental operations, as we believe renting our vacant homes represents an attractive source of occupancy and an opportunity to convert the renter to a homebuyer in the future. We also sell and rent homes through our joint venture, ECHO Financing, LLC (the "ECHO JV"). We offer home sale brokerage services to residents of our Properties who move from a Property but do not relocate their home. In addition, we operate ancillary activities at certain Properties, such as golf courses, pro shops, stores and restaurants.

In the manufactured housing industry, options for home financing, also known as chattel financing, are limited. Chattel financing options available today include community owner-funded programs or third party lender programs that provide subsidized financing to customers and often require the community owner to guarantee customer defaults. Third party lender programs have

20

Management's Discussion and Analysis (continued)

stringent underwriting criteria, sizable down payment requirements, short loan amortization and high interest rates. We have a limited program under which we purchase loans made by an unaffiliated lender to purchasers of homes at our Properties.

In addition to net income computed in accordance with GAAP, we assess and measure our overall financial and operating performance using certain Non-GAAP supplemental measures, which include: (i) FFO, (ii) Normalized funds from operations ("Normalized FFO"), (iii) Income from property operations, (iv) Income from property operations, excluding deferrals and property management, (v) Core Portfolio income from property operations, excluding deferrals and property management (operating results for Properties owned and operated in both periods under comparison), and (vi) Income from rental operations, net of depreciation. We use these measures internally to evaluate the operating performance of our portfolio and provide a basis for comparison with other real estate companies. Definitions and reconciliations of these measures to the most comparable GAAP measures are included below in this discussion.

Results Overview

For the quarter ended June 30, 2019, Net income available for Common Stockholders increased $0.3 million to $46.4 million, or $0.51 per fully diluted Common Share, compared to $46.1 million, or $0.52 per fully diluted Common Share, for the same period in 2018. For the six months ended June 30, 2019, Net income available for Common Stockholders increased $53.3 million, or $0.57 per fully diluted Common Share, to $159.7 million, or $1.77 per fully diluted Common Share, compared to $106.4 million, or $1.20 per fully diluted Common Share, for the same period in 2018.

For the quarter ended June 30, 2019, FFO available for Common Stock and OP Unit holders increased $4.2 million, or $0.04 per fully diluted Common Share, to $89.8 million, or $0.94 per fully diluted Common Share, compared to $85.6 million, or $0.90 per fully diluted Common Share, for the same period in 2018. For the six months ended June 30, 2019, FFO available for Common Stock and OP Unit holders increased $14.0 million, or $0.13 per fully diluted Common Share, to $197.8 million or $2.07 per fully diluted Common Share, compared to $183.8 million or $1.94 per fully diluted Common Share, for the same period in 2018.

For the quarter ended June 30, 2019, Normalized FFO available for Common Stock and OP Unit holders increased $8.1 million, or $0.07 per fully diluted Common Share, to $91.9 million, or $0.96 per fully diluted Common Share, compared to $83.8 million, or $0.89 per fully diluted Common Share, for the same period in 2018. For the six months ended June 30, 2019, Normalized FFO available for Common Stock and OP Unit holders increased $17.9 million or $0.16 per fully diluted Common Share, to $199.6 million, or $2.08 per fully diluted Common Share, compared to $181.7 million or $1.92 per fully diluted Common Share, for the same period in 2018.

For the quarter ended June 30, 2019, our Core Portfolio property operating revenues, excluding deferrals, increased 4.9% and property operating expenses, excluding deferrals and property management, increased 4.5%, from the same period in 2018, resulting in an increase in income from property operations, excluding deferrals and property management, of 5.2% compared to the same period in 2018. For the six months ended June 30, 2019, our Core Portfolio property operating revenues, excluding deferrals, increased 4.4% and property operating expenses, excluding deferrals and property management, increased 3.5% from the same period in 2018, resulting in an increase in income from property operations, excluding deferrals and property management, of 5.1% compared to the same period in 2018.

We focus on the quality of occupancy growth by increasing the number of manufactured homeowners in our Core Portfolio over the long term. There may be fluctuations in the sources of occupancy gains depending on local market conditions, availability of vacant sites and success with converting renters to home owners. Our Core Portfolio average occupancy includes both homeowners and renters in our MH communities and was 95.4% for the quarter ended June 30, 2019, compared to 95.3% for the quarter ended March 31, 2019 and 94.9% for the quarter ended June 30, 2018. As of June 30, 2019, our Core Portfolio occupancy increased 126 Sites with an increase in homeowner occupancy of 79 Sites compared to occupancy as of March 31, 2019. By comparison, our Core Portfolio occupancy increased 61 Sites with an increase in homeowner occupancy of 145 Sites from the same period in 2018. Additionally, for both the quarter and six months ended June 30, 2019, we have experienced rental rate increases, contributing to a 4.5% growth in community base rent compared to the same period in 2018.

We continue to grow RV rental income in our Core Portfolio as a result of our ability to increase rates and occupancy. RV rental income in our Core Portfolio for the quarter ended June 30, 2019 was 4.1% higher than the same period in 2018. Annual and seasonal rental income for the quarter ended June 30, 2019 increased 6.0% and 4.0%, respectively. Transient rental income declined 1.1% for the quarter ended June 30, 2019 compared to the same period in 2018. RV rental income in our Core Portfolio for the six months ended June 30, 2019 was 4.2% higher than the same period in 2018. Annual and seasonal rental income for the six months ended June 30, 2019 increased 6.1% and 3.1%, respectively. Transient rental income declined 0.8% for the six months ended June 30, 2019 compared to the same period in 2018. The decrease in transient rental income for both the quarter and six months ended June 30, 2019 was mainly due to weather related events at a limited number of Properties.

21

Management's Discussion and Analysis (continued)

We experienced growth in our membership base within our Thousand Trails portfolio during the quarter ended June 30, 2019. We sold approximately 6,600 Thousand Trails camping passes in the quarter and 10,200 for the six months ended June 30, 2019, an increase of 13.2% and 14.2% over the quarter and six months ended June 30, 2018, respectively. In addition, we sold 749 membership upgrades during the quarter ended June 30, 2019, 19.8% more than the same period in 2018. Our customers are increasingly choosing self-service options to complete their transactions with us. During the quarter ended June 30, 2019, our total Core RV rental income through digital channels increased 21.0% and our sales of online camping passes increased 27.6% compared to the same period in 2018.

Demand for our homes and communities remains strong as evidenced by factors including our high occupancy levels. We closed 117 new home sales during the quarter ended June 30, 2019 compared to 146 during the quarter ended June 30, 2018 and 208 new home sales during the six months ended June 30, 2019 compared to 276 during the six months ended in June 30, 2018. The decrease in new home sales from the same period in the prior year was mainly due to certain areas of our portfolio reaching historically high occupancy levels. We continue to believe renting our vacant homes represents an attractive source of occupancy and an opportunity to convert the renter to a homebuyer in the future.

As of June 30, 2019, we had 4,013 occupied rental homes in our Core MH communities, including 298 homes rented through our ECHO JV. Our Core Portfolio income from rental operations, net of depreciation, was $7.6 million for the quarter ended June 30, 2019 and $7.3 million for the quarter ended June 30, 2018. Approximately $7.8 million of rental operations revenue related to Site rental was included within community base rental income in our Core Portfolio for both the quarters ended June 30, 2019 and 2018. Our Core Portfolio income from rental operations, net of depreciation, was $15.2 million for the six months ended June 30, 2019 and $14.7 million for the six months ended June 30, 2018. Approximately $15.5 million and $15.6 million of rental operations revenue related to Site rental was included in community base rental income in our Core Portfolio for the six months ended June 30, 2019 and 2018, respectively.

Our gross investment in real estate increased approximately $163.4 million to $5,436.9 million as of June 30, 2019 from $5,273.5 million as of December 31, 2018, primarily due to new acquisitions and capital expenditures.

The following chart lists the Properties acquired or sold from January 1, 2018 through June 30, 2019 and Sites added through expansion opportunities at our existing Properties.

Property	Location	Type of Property	Transaction Date	Sites
Total Sites as of January 1, 2018				151,323
Acquisitions:
Kingswood	Riverview, Florida	MH	March 8, 2018	229
Serendipity	Clearwater, Florida	MH	March 15, 2018	425
Holiday Travel Park	Holiday, Florida	RV	April 20, 2018	613
Everglades Lakes	Fort Lauderdale, Florida	MH	July 20, 2018	612
Sunseekers RV Resort	North Fort Myers, Florida	RV	September 21, 2018	241
Timber Creek RV Resort	Westerly, Rhode Island	RV	November 20, 2018	364
Palm Lake	Riviera Beach, Florida	MH	December 13, 2018	915
King Nummy Trail Campground	Cape May Court House, New Jersey	RV	December 20, 2018	313
Drummer Boy Camping Resort	Gettysburg, Pennsylvania	RV	March 25, 2019	465
Lake of the Woods Campground	Wautoma, Wisconsin	RV	March 25, 2019	303
Round Top RV Campground	Gettysburg, Pennsylvania	RV	April 10, 2019	391
White Oak Shores Camping and RV Resort	Stella, North Carolina	RV	May 29, 2019	455
Expansion Site Development:
Sites added in 2018				419
Sites added in 2019				373
Site Reconfigured, net				(5)
Dispositions:
Hoosier Estates	Lebanon, Indiana	MH	January 23, 2019	(288)
Lake in the Hills	Auburn Hills, Michigan	MH	January 23, 2019	(238)
North Glen Village	Westfield, Indiana	MH	January 23, 2019	(282)
Oak Tree Village	Portage, Indiana	MH	January 23, 2019	(361)
Swan Creek	Ypsilanti, Michigan	MH	January 23, 2019	(294)
Total Sites as of June 30, 2019				155,973

22

Management's Discussion and Analysis (continued)

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 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, Normalized FFO and Income from rental operations, net of depreciation.

We believe investors should review Income from property operations and Core Portfolio, FFO, Normalized FFO and Income from rental operations, net of depreciation, along with GAAP net income and cash flow from operating activities, investing activities and financing activities, when evaluating an equity REIT's operating performance. A discussion of Income from property operations and Core Portfolio, FFO, Normalized FFO and Income from rental operations, net of depreciation, and a reconciliation to net income, are included below.

Income from Property Operations and Core Portfolio

We use Income from property operations and Income from property operations, excluding deferrals and property management, and Core Portfolio income from property operations, excluding deferrals and property management, as alternative measures to evaluate the operating results of our MH and RV communities. Income from property operations represents rental income, utility and other income and right-to-use income less property and rental home operating and maintenance expenses, real estate taxes, sales and marketing expenses and property management expenses. Income from property operations, excluding deferrals and property management, represents income from property operations excluding property management expenses and the impact of the GAAP deferral of right-to-use contract upfront payments and related commissions, net. For comparative purposes, we present bad debt expense within Property operating, maintenance and real estate taxes in the current and prior periods.

Our Core Portfolio consists of our Properties owned and operated since January 1, 2018. Core Portfolio income from property operations, excluding deferrals and property management, is useful to investors for annual comparison as it removes the fluctuations associated with acquisitions, dispositions and significant transactions or unique situations. Our Non-Core Portfolio includes all Properties that were not owned and operated during all of 2018 and 2019, including Fiesta Key and Sunshine Key RV communities.

Funds from Operations ("FFO") and Normalized Funds from Operations ("Normalized FFO")

We define FFO as net income, computed in accordance with GAAP, excluding gains or losses from sales of properties, depreciation and amortization related to real estate, impairment charges, and adjustments to reflect our share of FFO of unconsolidated joint ventures. Adjustments for unconsolidated joint ventures are calculated to reflect FFO on the same basis. We compute FFO in accordance with our interpretation of standards established by the National Association of Real Estate Investment Trusts (“NAREIT”), which may not be comparable to FFO reported by other REITs that do not define the term in accordance with the current NAREIT definition or that interpret the current NAREIT definition differently than we do. We receive upfront non-refundable payments from the entry of right-to-use contracts. In accordance with GAAP, the upfront non-refundable payments and related commissions are deferred and amortized over the estimated customer life. Although the NAREIT definition of FFO does not address the treatment of non-refundable right-to-use payments, we believe that it is appropriate to adjust for the impact of the deferral activity in our calculation of FFO.

We define Normalized FFO as FFO excluding the following non-operating income and expense items: a) gains and losses from early debt extinguishment, including prepayment penalties and defeasance costs, and b) other miscellaneous non-comparable items. Normalized FFO presented herein is not necessarily comparable to Normalized FFO presented by other real estate companies due to the fact that not all real estate companies use the same methodology for computing this amount.

We believe that FFO and Normalized FFO are helpful to investors as supplemental measures of the performance of an equity REIT. We believe that by excluding the effect of gains or losses from sales of properties, depreciation and amortization related to real estate and impairment charges, which are based on historical costs and may be of limited relevance in evaluating current performance, FFO can facilitate comparisons of operating performance between periods and among other equity REITs. We further believe that Normalized FFO provides useful information to investors, analysts and our management because it allows them to compare our operating performance to the operating performance of other real estate companies and between periods on a consistent basis without having to account for differences not related to our operations. For example, we believe that excluding the early extinguishment of debt, including prepayment penalties and defeasance costs from Normalized FFO allows investors, analysts and our management to assess the sustainability of operating performance in future periods because these costs do not affect the future operations of the properties. In some cases, we provide information about identified non-cash components of FFO and Normalized FFO because it allows investors, analysts and our management to assess the impact of those items.

23

Management's Discussion and Analysis (continued)

Income from Rental Operations, Net of Depreciation    

We use Income from rental operations, net of depreciation as an alternative measure to evaluate the operating results of our home rental program. Income from rental operations, net of depreciation, represents income from rental operations less depreciation expense on rental homes. We believe this measure is meaningful for investors as it provides a more complete picture of the home rental program operating results including the impact of depreciation which affects our home rental program investment decisions.

Our definitions and calculations of these Non-GAAP financial and operating measures and other terms may differ from the definitions and methodologies used by other REITs and, accordingly, may not be comparable. These Non-GAAP financial and operating measures do not represent cash generated from operating activities in accordance with GAAP, nor do they represent cash available to pay distributions and should not be considered as an alternative to net income, determined in accordance with GAAP, as an indication of our financial performance, or to cash flow from operating activities, determined in accordance with GAAP, as a measure of our liquidity, nor is it indicative of funds available to fund our cash needs, including our ability to make cash distributions.

The following table reconciles Net income available for Common Stockholders to income from property operations:

	Quarters Ended June 30,						Six Months Ended June 30,
(amounts in thousands)	2019			2018			2019			2018
Computation of Income from Property Operations:
Net income available for Common Stockholders	$	46,401		$	46,137		$	159,710		$	106,359
Redeemable preferred stock dividends	8			8			8			8
Income allocated to non-controlling interests – Common OP Units	2,676			3,024			9,902			6,979
Equity in income of unconsolidated joint ventures	(3,226		)	(1,613		)	(4,759		)	(2,808		)
Income before equity in income of unconsolidated joint ventures	45,859			47,556			164,861			110,538
Gain on sale of real estate, net	—			—			(52,507		)	—
Total other expenses, net	72,374			65,391			144,343			128,959
Loss/(Income) from home sales operations and other	569			883			250			822
Income from property operations	$	118,802		$	113,830		$	256,947		$	240,319

The following table presents a calculation of FFO and Normalized FFO available for Common Stock and OP Unit holders:

	Quarters Ended June 30,						Six Months Ended June 30,
(amounts in thousands)	2019			2018			2019			2018
Computation of FFO and Normalized FFO:
Net income available for Common Stockholders	$	46,401		$	46,137		$	159,710		$	106,359
Income allocated to non-controlling interests – Common OP Units	2,676			3,024			9,902			6,979
Right-to-use contract upfront payments, deferred, net	2,912			2,021			4,683			3,306
Right-to-use contract commissions, deferred, net	(389		)	(262		)	(580		)	(286		)
Depreciation and amortization	37,776			34,345			75,753			66,719
Depreciation on unconsolidated joint ventures	441			367			873			739
Gain on sale of real estate, net	—			—			(52,507		)	—
FFO available for Common Stock and OP Unit holders	89,817			85,632			197,834			183,816
Early debt retirement (1)	2,085			—			2,085			—
Insurance proceeds due to catastrophic weather event (2)	—			(1,806		)	(349		)	(2,092		)
Normalized FFO available for Common Stock and OP Unit holders	$	91,902		$	83,826		$	199,570		$	181,724
Weighted average Common Shares outstanding – Fully Diluted	95,930			94,623			95,773			94,600

______________________

⁽¹⁾ Includes our portion of early debt retirement costs incurred by unconsolidated joint ventures.

⁽²⁾ Represents insurance recovery revenue from reimbursement for capital expenditures related to Hurricane Irma.

24

Management's Discussion and Analysis (continued)

Results of Operations

Comparison of the Quarter Ended June 30, 2019 to the Quarter Ended June 30, 2018

Income from Property Operations

The following table summarizes certain financial and statistical data for the Core Portfolio and the total portfolio for the quarters ended June 30, 2019 and 2018. Core Portfolio growth percentages exclude the impact of GAAP deferrals of upfront payments from right-to-use contracts and related commissions.

	Core Portfolio									Total Portfolio
	Quarters Ended June 30,									Quarters Ended June 30,
(amounts in thousands)	2019		2018		Variance			% Change		2019		2018		Variance			% Change
Community base rental income	$	132,406	$	125,879	$	6,527		5.2	%	$	136,213	$	128,579	$	7,634		5.9	%
Rental home income	3,631		3,274		357			10.9	%	3,632		3,561		71			2.0	%
Resort base rental income	56,181		53,952		2,229			4.1	%	60,997		55,231		5,766			10.4	%
Right-to-use annual payments (membership subscriptions)	12,579		11,891		688			5.8	%	12,586		11,891		695			5.8	%
Right-to-use contracts current period, gross (membership upgrade sales)	5,041		3,944		1,097			27.8	%	5,041		3,944		1,097			27.8	%
Utility and other income	21,817		21,909		(92		)	(0.4	)%	22,250		24,320		(2,070		)	(8.5	)%
Property operating revenues, excluding deferrals	231,655		220,849		10,806			4.9	%	240,719		227,526		13,193			5.8	%
Property operating and maintenance	80,277		78,105		2,172			2.8	%	84,396		80,091		4,305			5.4	%
Real estate taxes	14,357		12,920		1,437			11.1	%	15,107		13,440		1,667			12.4	%
Rental home operating and maintenance	1,282		1,515		(233		)	(15.4	)%	1,292		1,629		(337		)	(20.7	)%
Sales and marketing, gross	4,214		3,305		909			27.5	%	4,214		3,305		909			27.5	%
Property operating expenses, excluding deferrals and property management	100,130		95,845		4,285			4.5	%	105,009		98,465		6,544			6.6	%
Income from property operations, excluding deferrals and property management	131,525		125,004		6,521			5.2	%	135,710		129,061		6,649			5.2	%
Property management	14,383		13,472		911			6.8	%	14,385		13,472		913			6.8	%
Income from property operations, excluding deferrals	117,142		111,532		5,610			5.0	%	121,325		115,589		5,736			5.0	%
Right-to-use contracts, deferred and sales and marketing, deferred, net	2,523		1,759		764			43.4	%	2,523		1,759		764			43.4	%
Income from property operations (1)	$	114,619	$	109,773	$	4,846		4.4	%	$	118,802	$	113,830	$	4,972		4.4	%

__________________________

⁽¹⁾     Non-GAAP measure. See the Results Overview section of the Management's Discussion and Analysis for Non-GAAP Financial Measure Definitions and reconciliations of these Non-GAAP measures to Net Income available to Common Shareholders.

Total portfolio income from property operations for 2019 increased $5.0 million, or 4.4%, from 2018, comprised of an increase of $4.8 million, or 4.4%, from our Core Portfolio and an increase of $0.2 million from our Non-Core Portfolio. The increase in income from property operations from our Core Portfolio was primarily due to higher community base rental income and resort base rental income, partially offset by higher property operating expenses. The increase in income from property operations from our Non-Core Portfolio was partially offset by a decrease in income due to the sale of five all-age MH communities located in Indiana and Michigan during the first quarter of 2019.

Property Operating Revenues

Community base rental income in our Core Portfolio for 2019 increased $6.5 million, or 5.2%, from 2018, which reflects 4.5% growth from rate increases and 0.7% growth from occupancy gains. The average monthly base rental income per Site in our Core Portfolio increased to approximately $665 in 2019 from approximately $636 in the same period in 2018. The average occupancy for our Core Portfolio increased to 95.4% in 2019 from 94.9% in the same period in 2018.

25

Management's Discussion and Analysis (continued)

Resort base rental income in our Core Portfolio for 2019 increased $2.2 million, or 4.1%, from 2018, primarily driven by higher rental rates. The decrease in transient rental income from 2018 was mainly due to weather related events at a limited number of Properties, which was offset by an increase in number of membership subscriptions sold in 2019.

Resort base rental income is comprised of the following:

	Core Portfolio									Total Portfolio
	Quarters Ended June 30,									Quarters Ended June 30,
(amounts in thousands)	2019		2018		Variance			% Change		2019		2018		Variance		% Change
Annual	$	38,257	$	36,077	$	2,180		6.0	%	$	40,790	$	36,595	$	4,195	11.5	%
Seasonal	5,135		4,939		196			4.0	%	5,713		5,206		507		9.7	%
Transient	12,789		12,936		(147		)	(1.1	)%	14,494		13,430		1,064		7.9	%
Resort base rental income	$	56,181	$	53,952	$	2,229		4.1	%	$	60,997	$	55,231	$	5,766	10.4	%

Property Operating Expenses

Property operating expenses, excluding deferrals and property management, in our Core Portfolio for 2019 increased $4.3 million, or 4.5%, from 2018, mainly due to an increase in property operating and maintenance expenses of $2.2 million and an increase in property taxes of $1.4 million. The increase in property operating and maintenance expenses was primarily driven by an increase of $1.0 million in property payroll due to wage increases and an increase of $0.9 million in insurance expense. The increase in property taxes was primarily a result of a resolution of appeals in certain states in 2018.

Home Sales and Rental Operations

Home Sales and Other

The following table summarizes certain financial and statistical data for Home Sales and Other.

	Quarters Ended June 30,
(amounts in thousands, except home sales volumes)	2019			2018			Variance			% Change
Gross revenues from new home sales (1)	$	6,064		$	6,859		$	(795	)	(11.6	)%
Cost of new home sales (1)	(5,984		)	(6,800		)	816			12.0	%
Gross profit from new home sales	80			59			21			35.6	%
Gross revenues from used home sales	1,761			2,246			(485		)	(21.6	)%
Cost of used home sales	(2,180		)	(2,832		)	652			23.0	%
Loss from used home sales	(419		)	(586		)	167			28.5	%
Brokered resale and ancillary services revenues, net	872			617			255			41.3	%
Home selling expenses	(1,102		)	(973		)	(129		)	(13.3	)%
Income (loss) from home sales and other	$	(569	)	$	(883	)	$	314		35.6	%
Home sales volumes
Total new home sales (2)	117			146			(29		)	(19.9	)%
New Home Sales Volume - ECHO JV	18			25			(7		)	(28.0	)%
Used home sales	210			297			(87		)	(29.3	)%
Brokered home resales	237			253			(16		)	(6.3	)%

_________________________

⁽¹⁾ New home sales gross revenues and costs of new home sales do not include the revenues and costs associated with our ECHO JV.

⁽²⁾ Total new home sales volume includes home sales from our ECHO JV.

Loss from home sales and other was $0.6 million for 2019 compared to $0.9 million for 2018. The decrease in loss from home sales and other was due to a decrease in loss from used home sales and an increase in ancillary services revenues, net.

26

Management's Discussion and Analysis (continued)

Rental Operations

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

	Quarters Ended June 30,
(amounts in thousands, except rental unit volumes)	2019			2018			Variance			% Change
Manufactured homes:
Rental operations revenue (1)	$	11,422		$	11,064		$	358		3.2	%
Rental home operating and maintenance	(1,282		)	(1,515		)	233			15.4	%
Income from rental operations	10,140			9,549			591			6.2	%
Depreciation on rental homes (2)	(2,544		)	(2,251		)	(293		)	(13.0	)%
Income from rental operations, net of depreciation	$	7,596		$	7,298		$	298		4.1	%
Gross investment in new manufactured home rental units (3)	$	191,975		$	135,886		$	56,089		41.3	%
Gross investment in used manufactured home rental units	$	25,103		$	34,476		$	(9,373	)	(27.2	)%
Net investment in new manufactured home rental units	$	159,950		$	110,298		$	49,652		45.0	%
Net investment in used manufactured home rental units	$	11,563		$	24,538		$	(12,975	)	(52.9	)%
Number of occupied rentals – new, end of period (4)	3,006			2,547			459			18.0	%
Number of occupied rentals – used, end of period	1,007			1,467			(460		)	(31.4	)%

______________________

⁽¹⁾  Rental operations revenue consists of Site rental income and home rental income in our Core Portfolio. Approximately $7.8 million of Site rental income for both the quarters ended June 30, 2019 and 2018 is included in community 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⁾  Included in Depreciation and amortization in the Consolidated Statements of Income and Comprehensive Income.

⁽³⁾  Includes both occupied and unoccupied rental homes in our Core Portfolio. New home cost basis does not include the costs associated with our ECHO JV. Our investment in the ECHO JV was $16.5 million and $15.9 million as of June 30, 2019 and 2018, respectively.

⁽⁴⁾  Occupied rentals as of the end of the period in our Core Portfolio and includes 298 and 264 homes rented through our ECHO JV during the quarters ended June 30, 2019 and 2018, respectively.

The increase in income from rental operations, net of depreciation, in our Core Portfolio was primarily due to an increase in the number of new occupied rental units at a higher rental rate, partially offset by a decrease in the number of used occupied rental units.

Other Income and Expenses

The following table summarizes other income and expenses, net.

	Quarters Ended June 30,
(amounts in thousands, expenses shown as negative)	2019			2018			Variance			% Change
Depreciation and amortization	$	(37,776	)	$	(34,345	)	$	(3,431	)	(10.0	)%
Interest income	1,803			1,862			(59		)	(3.2	)%
Income from other investments, net	879			3,413			(2,534		)	(74.2	)%
General and administrative	(9,225		)	(9,669		)	444			4.6	%
Other expenses	(540		)	(367		)	(173		)	(47.1	)%
Early debt retirement	(1,491		)	—			(1,491		)	—	%
Interest and related amortization	(26,024		)	(26,285		)	261			1.0	%
Total other income and (expenses), net	$	(72,374	)	$	(65,391	)	$	(6,983	)	(10.7	)%

Total other income and (expenses), net increased $7.0 million during 2019 compared to 2018, primarily due to an increase in depreciation and amortization and a decrease in income from other investments, net. The decrease in income from other investments, net was mainly due to $1.8 million of insurance recovery revenue from reimbursement for capital expenditures related to Hurricane Irma in 2018. Additionally, we incurred $1.5 million of early debt retirement costs in 2019.

27

Management's Discussion and Analysis (continued)

Comparison of the Six Months Ended June 30, 2019 to the Six Months Ended June 30, 2018

Income from Property Operations

The following table summarizes certain financial and statistical data for the Core Portfolio and the total portfolio for the six months ended June 30, 2019 and 2018. Core Portfolio growth percentages exclude the impact of GAAP deferrals of upfront payments from right-to-use contracts and related commissions.

	Core Portfolio									Total Portfolio
	Six Months Ended June 30,									Six Months Ended June 30,
(amounts in thousands)	2019		2018		Variance			% Change		2019		2018		Variance			% Change
Community base rental income	$	263,444	$	250,669	$	12,775		5.1	%	$	271,495	$	255,318	$	16,177		6.3	%
Rental home income	7,121		6,506		615			9.5	%	7,216		7,076		140			2.0	%
Resort base rental income	122,115		117,235		4,880			4.2	%	133,165		119,485		13,680			11.4	%
Right-to-use annual payments (membership subscriptions)	24,889		23,409		1,480			6.3	%	24,902		23,410		1,492			6.4	%
Right-to-use contracts current period, gross (membership upgrade sales)	8,879		7,108		1,771			24.9	%	8,879		7,106		1,773			25.0	%
Utility and other income	44,434		45,970		(1,536		)	(3.3	)%	46,001		49,841		(3,840		)	(7.7	)%
Property operating revenues, excluding deferrals	470,882		450,897		19,985			4.4	%	491,658		462,236		29,422			6.4	%
Property operating and maintenance	154,575		151,241		3,334			2.2	%	161,989		154,999		6,990			4.5	%
Real estate taxes	28,931		26,743		2,188			8.2	%	30,430		27,575		2,855			10.4	%
Rental home operating and maintenance	2,464		2,873		(409		)	(14.2	)%	2,496		3,053		(557		)	(18.2	)%
Sales and marketing, gross	7,627		6,118		1,509			24.7	%	7,623		6,117		1,506			24.6	%
Property operating expenses, excluding deferrals and property management	193,597		186,975		6,622			3.5	%	202,538		191,744		10,794			5.6	%
Income from property operations, excluding deferrals and property management	277,285		263,922		13,363			5.1	%	289,120		270,492		18,628			6.9	%
Property management	28,067		27,151		916			3.4	%	28,070		27,153		917			3.4	%
Income from property operations, excluding deferrals	249,218		236,771		12,447			5.3	%	261,050		243,339		17,711			7.3	%
Right-to-use contracts, deferred and sales and marketing, deferred, net	4,103		3,020		1,083			35.9	%	4,103		3,020		1,083			35.9	%
Income from property operations (1)	$	245,115	$	233,751	$	11,364		4.9	%	$	256,947	$	240,319	$	16,628		6.9	%

__________________________

⁽¹⁾     Non-GAAP measure. See the Results Overview section of the Management's Discussion and Analysis for Non-GAAP Financial Measure Definitions and reconciliations of these Non-GAAP measures to Net Income available to Common Shareholders.

Total Portfolio income from property operations for 2019 increased $16.6 million, or 6.9%, from 2018, primarily as a result of an increase of $11.4 million, or 4.9%, from our Core Portfolio and an increase of $5.2 million, from our Non-Core Portfolio. The increase in income from property operations from our Core Portfolio was primarily due to an increase in community base rental income and resort base rental income, partially offset by an increase in property operating expenses. The increase in income from property operations from our Non-Core Portfolio was partially offset by a decrease in income due to the sale of five all-age MH communities located in Indiana and Michigan during the first quarter of 2019.

Property Operating Revenues

Community base rental income in our Core Portfolio for 2019 increased $12.8 million, or 5.1%, from 2018, which reflects 4.5% growth from rate increases and 0.6% growth from occupancy gains. The average monthly base rental income per Site increased to approximately $662 in 2019 from approximately $633 in 2018. The average occupancy for the Core Portfolio increased to 95.3% in 2019 from 94.9% in the same period in 2018.

28

Management's Discussion and Analysis (continued)

Resort base rental income in our Core Portfolio for 2019 increased $4.9 million, or 4.2%, from 2018, primarily driven by higher rental rates. The decrease in transient rental income from 2018 was mainly due to weather related events at a limited number of Properties, which was offset by an increase in number of membership subscriptions sold in 2019.

Resort base rental income is comprised of the following:

	Core Portfolio									Total Portfolio
	Six Months Ended June 30,									Six Months Ended June 30,
(amounts in thousands)	2019		2018		Variance			% Change		2019		2018		Variance		% Change
Annual	$	75,606	$	71,274	$	4,332		6.1	%	$	79,874	$	71,751	$	8,123	11.3	%
Seasonal	24,319		23,597		722			3.1	%	26,798		24,229		2,569		10.6	%
Transient	22,190		22,364		(174		)	(0.8	)%	26,493		23,505		2,988		12.7	%
Resort base rental income	$	122,115	$	117,235	$	4,880		4.2	%	$	133,165	$	119,485	$	13,680	11.4	%

Property Operating Expenses

Property operating expenses, excluding deferrals and property management, in our Core Portfolio for 2019 increased $6.6 million, or 3.5%, from 2018, mainly due to an increase in property operating and maintenance expenses of $3.3 million and an increase in property taxes of $2.2 million. The increase in property operating and maintenance expenses was primarily driven by an increase in property payroll as a result of salary increases and higher electric and trash expenses in California and the South. The increase in property taxes was primarily a result of a resolution of appeals in certain states in 2018.

Home Sales and Rental Operations

Home Sales and Other

The following table summarizes certain financial and statistical data for Home Sales and Other.

	Six Months Ended June 30,
(amounts in thousands, except home sales volumes)	2019			2018			Variance			% Change
Gross revenues from new home sales (1)	$	10,628		$	13,595		$	(2,967	)	(21.8	)%
Cost of new home sales (1)	(10,378		)	(13,310		)	2,932			22.0	%
Gross profit from new home sales	250			285			(35		)	(12.3	)%
Gross revenues from used home sales	3,672			3,819			(147		)	(3.8	)%
Cost of used home sales	(4,418		)	(4,896		)	478			9.8	%
Loss from used home sales	(746		)	(1,077		)	331			30.7	%
Brokered resale and ancillary services revenues, net	2,431			2,018			413			20.5	%
Home selling expenses	(2,185		)	(2,048		)	(137		)	(6.7	)%
Income (loss) from home sales and other	$	(250	)	$	(822	)	$	572		69.6	%
Home sales volumes
Total new home sales (2)	208			276			(68		)	(24.6	)%
New Home Sales Volume - ECHO JV	31			43			(12		)	(27.9	)%
Used home sales	429			538			(109		)	(20.3	)%
Brokered home resales	405			446			(41		)	(9.2	)%

_________________________

⁽¹⁾ New home sales gross revenues and costs of new home sales do not include the revenues and costs associated with our ECHO JV.

⁽²⁾ Total new home sales volume includes home sales from our ECHO JV.

Loss from home sales and other was $0.3 million for 2019 compared to $0.8 million for 2018. The decrease in loss from home sales and other was primarily due to a decrease in the loss from used home sales and an increase in ancillary services revenues, net.

29

Management's Discussion and Analysis (continued)

Rental Operations

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

	Six Months Ended June 30,
(amounts in thousands, except rental unit volumes)	2019			2018			Variance			% Change
Manufactured homes:
Rental operations revenue (1)	$	22,633		$	22,152		$	481		2.2	%
Rental home operating and maintenance	(2,464		)	(2,873		)	409			14.2	%
Income from rental operations	20,169			19,279			890			4.6	%
Depreciation on rental homes (2)	(4,957		)	(4,605		)	(352		)	(7.6	)%
Income from rental operations, net of depreciation	$	15,212		$	14,674		$	538		3.7	%
Gross investment in new manufactured home rental units (3)	$	191,975		$	135,886		$	56,089		41.3	%
Gross investment in used manufactured home rental units	$	25,103		$	34,476		$	(9,373	)	(27.2	)%
Net investment in new manufactured home rental units	$	159,950		$	110,298		$	49,652		45.0	%
Net investment in used manufactured home rental units	$	11,563		$	24,538		$	(12,975	)	(52.9	)%
Number of occupied rentals – new, end of period (4)	3,006			2,547			459			18.0	%
Number of occupied rentals – used, end of period	1,007			1,467			(460		)	(31.4	)%

______________________

⁽¹⁾  Rental operations revenue consists of Site rental income and home rental income in our Core Portfolio. Approximately $15.5 million and $15.6 million of Site rental income for the six months ended June 30, 2019 and 2018, respectively, are included in community 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⁾  Included in Depreciation and amortization in the Consolidated Statements of Income and Comprehensive Income.

⁽³⁾  Includes both occupied and unoccupied rental homes in our Core Portfolio. New home cost basis does not include the costs associated with our ECHO JV. Our investment in the ECHO JV was $16.5 million and $15.9 million as of June 30, 2019 and 2018, respectively.

⁽⁴⁾  Occupied rentals as of the end of the period in our Core Portfolio and includes 298 and 264 homes rented through our ECHO JV during the six months ended June 30, 2019 and 2018, respectively.

The increase in income from rental operations, net of depreciation, was primarily due to an increase in the number of new occupied rental units at a higher rental rate, partially offset by a decrease in the number of used occupied rental units.

Other Income and Expenses

The following table summarizes other income and expenses, net.

	Six Months Ended June 30,
(amounts in thousands, expenses shown as negative)	2019			2018			Variance			% Change
Depreciation and amortization	$	(75,753	)	$	(66,719	)	$	(9,034	)	(13.5	)%
Interest income	3,554			3,812			(258		)	(6.8	)%
Income from other investments, net	1,865			4,353			(2,488		)	(57.2	)%
General and administrative	(19,134		)	(17,707		)	(1,427		)	(8.1	)%
Other expenses	(967		)	(710		)	(257		)	(36.2	)%
Early debt retirement	(1,491		)	—			(1,491		)	—	%
Interest and related amortization	(52,417		)	(51,988		)	(429		)	(0.8	)%
Total other income and (expenses), net	$	(144,343	)	$	(128,959	)	$	(15,384	)	(11.9	)%

Total other income and (expenses), net increased $15.4 million for 2019, compared to 2018. The increase was primarily due to an increase in depreciation and amortization and a decrease in income from other investments, net. The decrease in income from other investments, net was mainly due to $2.1 million of insurance recovery revenue from reimbursement for capital expenditures related to Hurricane Irma in 2018. Additionally, we incurred $1.5 million of early debt retirement costs in 2019.

Gain on Sale of Real Estate, Net

On January 23, 2019, we closed on the sale of five all-age MH communities located in Indiana and Michigan, collectively containing 1,463 sites, for $89.7 million. We recognized a gain on sale of these Properties of $52.5 million during the first quarter of 2019.

30

Management's Discussion and Analysis (continued)

Liquidity and Capital Resources

Liquidity

Our primary demands for liquidity include payment of operating expenses, dividend distributions, debt service, including principal and interest, capital improvements on Properties, home purchases and property acquisitions. 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 ("LOC") and proceeds from issuance of equity and debt securities.

Our at-the-market (“ATM”) equity offering program allows us to sell, from time-to-time, shares of our common stock, par value $0.01 per share, having an aggregate offering price of up to $200.0 million. As of June 30, 2019, we have $140.7 million of common stock available for issuance.

On April 30, 2019, our stockholders approved an amendment to our charter to increase the number of shares of our common stock that we are authorized to issue from 200,000,000 to 400,000,000 shares. As of June 30, 2019, we have available liquidity in the form of approximately 309.0 million shares of authorized and unissued common stock and 10.0 million shares of authorized and unissued preferred stock registered for sale under the Securities Act of 1933, as amended.

One of our stated objectives is to maintain financial flexibility. Achieving this objective allows us to take advantage of strategic opportunities that may arise. We believe effective management of our balance sheet, including maintaining various access points to raise capital, managing future debt maturities and borrowing at competitive rates, enables us to meet this objective. Our financing objectives continue to focus on accessing long-term low-cost secured debt.

We also utilize interest rate swaps to add stability to our interest expense and to manage our exposure to interest rate movements. Interest rate swaps designated as cash flow hedges involve the receipt of variable amounts from a counterparty in exchange for making fixed-rate payments over the life of the agreements without exchange of the underlying notional amount. The changes in the fair value of the designated derivative are recorded in Accumulated other comprehensive income (loss) on the Consolidated Balance Sheets and subsequently reclassified into earnings on the Consolidated Statements of Income and Comprehensive Income in the period that the hedged forecasted transaction affects earnings. For additional information regarding our interest rate swap, see Item 1. Financial Statements—Note 9. Derivative Instruments and Hedging Activities.

We expect to meet our short-term liquidity requirements, including principal payments, capital improvements and dividend distributions for the next twelve months, mainly through available cash as well as net cash provided by operating activities. Our LOC has a borrowing capacity of $400.0 million with the option to increase the borrowing capacity by $200.0 million, subject to certain conditions. The LOC bears interest at a rate of LIBOR plus 1.10% to 1.55%, requires an annual facility fee of 0.15% to 0.35% and matures on October 27, 2021.

As part of our Unsecured Credit Facility, our LOC arrangement will mature prior to the expected discontinuation of LIBOR subsequent to 2021 and our $200.0 million term loan is scheduled to mature in April 2023. We continue to monitor the development and adoption of an alternative index to LIBOR to manage the transition and as it pertains to new arrangements to be entered in the future. Given over 90% of our current debt is secured and not subject to LIBOR, we do not believe the discontinuation of LIBOR will have a significant impact on our consolidated financial statements.

We expect to meet certain long-term liquidity requirements, including scheduled debt maturities, property acquisitions and capital improvements by use of our long-term collateralized and uncollateralized borrowings including the existing LOC and the issuance of debt securities or additional equity securities. We have no debt maturing in 2019 and approximately $48.9 million of scheduled debt matures in 2020 (excluding scheduled principal payments on debt maturing in 2020 and beyond).

For information regarding our debt activities and related borrowing arrangements, see Item 1. Financial Statements—Note 8. Borrowing Arrangements.

The table below summarizes our cash flow activity:

	Six Months Ended June 30,
(amounts in thousands)	2019			2018
Net cash provided by operating activities	$	244,685		$	229,965
Net cash used in investing activities	(75,881		)	(122,189		)
Net cash used in financing activities	(147,321		)	(89,192		)
Net increase in cash and restricted cash	$	21,483		$	18,584

31

Management's Discussion and Analysis (continued)

Operating Activities

Net cash provided by operating activities increased $14.7 million to $244.7 million for the six months ended June 30, 2019, from $230.0 million for the six months ended June 30, 2018. The increase in net cash provided by operating activities was primarily due to higher income from property operations of $16.6 million and an increase in rents and other customer payments received in advance and security deposits of approximately $5.3 million, partially offset by long term incentive compensation of approximately $4.2 million paid during the first quarter of 2019 and a net decrease in other assets and accounts payable and other liabilities of approximately of $2.5 million.

Investing Activities

Net cash used in investing activities was $75.9 million for the six months ended June 30, 2019 compared to $122.2 million for the six months ended June 30, 2018. The decrease in net cash used in investing activities was primarily due to proceeds received of $77.7 million as a result of the sale of five MH properties during the first quarter of 2019 and distributions of capital from unconsolidated joint ventures of $5.2 million. This was partially offset by an increase of $40.1 million in capital improvements.

Capital Improvements

The table below summarizes capital improvement activities:

	Six Months Ended June 30,
(amounts in thousands)	2019		2018
Recurring capital expenditures (1)	$	22,913	$	21,175
Property upgrades and development(2)	28,915		25,580
New home investments (3)(4)	67,086		31,701
Used home investments (4)	1,452		1,807
Total property	120,366		80,263
Corporate	1,078		1,114
Total capital improvements	$	121,444	$	81,377

______________________

⁽¹⁾  Recurring capital expenditures are primarily comprised of common area improvements, furniture and mechanical improvements.

⁽²⁾  Includes $2.5 million and $9.5 million of restoration and improvement capital expenditures related to Hurricane Irma for the six months ended June 30, 2019 and 2018, respectively.

⁽³⁾  Excludes new home investment associated with our ECHO JV.

⁽⁴⁾  Net proceeds from new and used home sale activities are reflected within Operating Activities.

Financing Activities

Net cash used in financing activities increased $58.1 million to $147.3 million for the six months ended June 30, 2019 from $89.2 million for the six months ended June 30, 2018. The increase in cash used in financing activities was primarily due to an increase in debt repayments and distributions paid of $70.0 million and $13.2 million, respectively, during the six months ended June 30, 2019 as compared to the same period in the prior year. Proceeds of $59.3 million received from the sale of our common stock under our ATM equity offering program for the six months ended June 30, 2019 was offset by debt proceeds received during the six months ended June 30, 2018. These increases in cash used in financing activities during the six months ended June 30, 2019 were partially offset by a $30.0 million net payment related to the LOC during the six months ended June 30, 2018.

Contractual Obligations

Significant ongoing contractual obligations consist primarily of long-term borrowings, interest expense, operating leases, LOC maintenance fees and ground leases. For a summary and complete presentation and description of our ongoing commitments and contractual obligations, see the Contractual Obligations section of the "Management's Discussion and Analysis of Financial Condition and Results of Operations" in our 2018 Form 10-K.

Off-Balance Sheet Arrangements

As of June 30, 2019, we have no off-balance sheet arrangements.

Critical Accounting Policies and Estimates

Refer to the "Management’s Discussion and Analysis of Financial Condition and Results of Operations" in our 2018 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 six months ended June 30, 2019.

32

Management's Discussion and Analysis (continued)

Forward-Looking Statements

This Quarterly Report on Form 10-Q for the quarter ended June 30, 2019 includes certain “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. When used, words such as “anticipate,” “expect,” “believe,” “project,” “intend,” “may be” and “will be” and similar words or phrases, or the negative thereof, unless the context requires otherwise, are intended to identify forward-looking statements and may include without limitation, information regarding our expectations, goals or intentions regarding the future, and the expected effect of our acquisitions. These forward-looking statements are subject to numerous assumptions, risks and uncertainties, including, but not limited to:

• our ability to control costs and real estate market conditions, our ability to retain customers, the actual use of Sites by customers and our success in acquiring new customers at our Properties (including those that we may acquire);

• our ability to maintain historical or increase future rental rates and occupancy with respect to properties currently owned or that we may acquire;

• our ability to retain and attract customers renewing, upgrading and entering right-to-use contracts;

• our assumptions about rental and home sales markets;

• our ability to manage counterparty risk;

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

• in the age-qualified Properties, home sales results could be impacted by the ability of potential home buyers to sell their existing residences as well as by financial, credit and capital markets volatility;

• results from home sales and occupancy will continue to be impacted by local economic conditions, lack of affordable manufactured home financing and competition from alternative housing options including site-built single-family housing;

• impact of government intervention to stabilize site-built single-family housing and not manufactured housing;

• effective integration of recent acquisitions and our estimates regarding the future performance of recent acquisitions;

• the completion of future transactions in their entirety, if any, and timing and effective integration with respect thereto;

• unanticipated costs or unforeseen liabilities associated with recent acquisitions;

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

• the effect of interest rates;

• the effect from any breach of our, or any of our vendor's, data management systems;

• the dilutive effects of issuing additional securities;

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

• other risks indicated from time to time in our filings with the Securities and Exchange Commission.

These forward-looking statements are based on management's present expectations and beliefs about future events. As with any projection or forecast, these statements are inherently susceptible to uncertainty and changes in circumstances. We are under no obligation to, and expressly disclaim any obligation to, update or alter our forward-looking statements whether as a result of such changes, new information, subsequent events or otherwise.

33

Item 3. Quantitative and Qualitative Disclosures About Market Risk

We disclosed a quantitative and qualitative analysis regarding market risk in Part II, Item 7A. Quantitative and Qualitative Disclosures About Market Risk in our 2018 Form 10-K. There have been no material changes in the assumptions used or results obtained regarding market risk since December 31, 2018.

Item 4. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

Our management, with the participation of our Chief Executive Officer (principal executive officer) and Chief Financial Officer (principal financial officer), has evaluated the effectiveness of our disclosure controls and procedures as of June 30, 2019. Based on that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were effective to give reasonable assurances to the timely collection, evaluation and disclosure of information relating to us that would potentially be subject to disclosure under the Securities and Exchange Act of 1934, as amended (the “Exchange Act”), and the rules and regulations promulgated thereunder as of June 30, 2019. Any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives. 

Changes in Internal Control Over Financial Reporting

During the quarter ended June 30, 2019, there were no changes in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

34

Part II – Other Information

Item 1. Legal Proceedings

See Item 1. Financial Statements—Note 11. Commitments and Contingencies accompanying the Consolidated Financial Statements in this Quarterly Report on Form 10-Q.

Item 1A. Risk Factors

There have been no material changes to the risk factors discussed in “Item 1A. Risk Factors” in our 2018 Form 10-K.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

None.

Item 3. Defaults Upon Senior Securities

None.

Item 4. Mine Safety Disclosures

None.

Item 5. Other Information

None.

35

Item 6. Exhibits

3.1	Articles of Amendment of Equity LifeStyle Properties, Inc. effective May 2, 2019 (Included as an exhibit to our Report on Form 8-K dated May 2, 2019 and incorporated herein by reference).
31.1	Certification of Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2	Certification of Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1	Certification of Chief Financial Officer Pursuant to 18 U.S.C. Section 1350.
32.2	Certification of Chief Executive Officer Pursuant to 18 U.S.C. Section 1350.
101.INS	XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.
101.SCH	Inline XBRL Taxonomy Extension Schema Document
101.CAL	Inline XBRL Taxonomy Extension Calculation Linkbase Document
101.LAB	Inline XBRL Taxonomy Extension Label Linkbase Document
101.PRE	Inline XBRL Taxonomy Extension Presentation Linkbase Document
101.DEF	Inline XBRL Taxonomy Extension Definition Linkbase Document

36

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this Report to be signed on its behalf by the undersigned thereunto duly authorized.

	EQUITY LIFESTYLE PROPERTIES, INC.
Date: July 30, 2019	By:	/s/ Marguerite Nader
		Marguerite Nader
		President and Chief Executive Officer
		(Principal Executive Officer)
Date: July 30, 2019	By:	/s/ Paul Seavey
		Paul Seavey
		Executive Vice President, Chief Financial Officer and Treasurer
		(Principal Financial Officer)
Date: July 30, 2019	By:	/s/ Valerie Henry
		Valerie Henry
		Vice President, Chief Accounting Officer
		(Principal Accounting Officer)

37

EX-3.1

EX-31.1

CERTIFICATION OF CHIEF FINANCIAL OFFICER PURSUANT TO SECTION 302 OF

THE SARBANES-OXLEY ACT OF 2002

I, Paul Seavey, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Equity LifeStyle Properties, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: July 30, 2019	By:	/s/ Paul Seavey
		Paul Seavey
		Executive Vice President, Chief Financial Officer and Treasurer

EX-31.2

CERTIFICATION OF CHIEF EXECUTIVE OFFICER PURSUANT TO SECTION 302 OF

THE SARBANES-OXLEY ACT OF 2002

I, Marguerite Nader, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Equity LifeStyle Properties, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: July 30, 2019	By:	/s/ Marguerite Nader
		Marguerite Nader
		President and Chief Executive Officer

EX-32.1

CERTIFICATION OF CHIEF FINANCIAL OFFICER

PURSUANT TO 18 U.S.C. SECTION 1350

In connection with the accompanying Quarterly Report on Form 10-Q of Equity LifeStyle Properties, Inc. for the three months ended June 30, 2019 (the “Form 10-Q”), I, Paul Seavey, Executive Vice President, Chief Financial Officer and Treasurer of Equity LifeStyle Properties, Inc., hereby certify pursuant to 18 U.S.C. Section 1350, as adopted by Section 906 of the Sarbanes-Oxley Act of 2002, that to the best of my knowledge:

1. the Form 10-Q fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2. the information contained in the Form 10-Q fairly presents, in all material respects, the financial condition and results of operations of Equity LifeStyle Properties, Inc.

Date: July 30, 2019	By:	/s/ Paul Seavey
		Paul Seavey
		Executive Vice President, Chief Financial Officer and Treasurer

A signed original of this written statement required by Section 906 has been provided to

Equity LifeStyle Properties, Inc. and will be retained by Equity LifeStyle Properties, Inc. and furnished to

the Securities and Exchange Commission or its staff upon request.

EX-32.2

CERTIFICATION OF CHIEF EXECUTIVE OFFICER

PURSUANT TO 18 U.S.C. SECTION 1350

In connection with the accompanying Quarterly Report on Form 10-Q of Equity LifeStyle Properties, Inc. for the three months ended June 30, 2019 (the “Form 10-Q”), I, Marguerite Nader, President and Chief Executive Officer of Equity LifeStyle Properties, Inc., hereby certify pursuant to 18 U.S.C. Section 1350, as adopted by Section 906 of the Sarbanes-Oxley Act of 2002, that to the best of my knowledge:

1. the Form 10-Q fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2. the information contained in the Form 10-Q fairly presents, in all material respects, the financial condition and results of operations of Equity LifeStyle Properties, Inc.

Date: July 30, 2019	By:	/s/ Marguerite Nader
		Marguerite Nader
		President and Chief Executive Officer

A signed original of this written statement required by Section 906 has been provided to

Equity LifeStyle Properties, Inc. and will be retained by Equity LifeStyle Properties, Inc. and furnished to

the Securities and Exchange Commission or its staff upon request.

XML

Cover - shares	6 Months Ended
	Jun. 30, 2019	Jul. 24, 2019
Cover page.
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Jun. 30, 2019
Document Transition Report	false
Commission File Number	1-11718
Entity Registrant Name	EQUITY LIFESTYLE PROPERTIES INC
Entity Incorporation, State or Country Code	MD
Entity Tax Identification Number	36-3857664
Entity Address, Street Name	Two North Riverside Plaza, Suite 800
Entity Address, City	Chicago,
Entity Address, State	IL
Entity Address, Postal Zip Code	60606
City Area Code	312
Local Phone Number	279-1400
Title of each class	Common Stock, $0.01 Par Value
Trading Symbol(s)	ELS
Name of each exchange on which registered	NYSE
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Large Accelerated Filer
Entity Small Business	false
Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		91,033,894
Document Fiscal Year Focus	2019
Document Fiscal Period Focus	Q2
Entity Central Index Key	0000895417
Amendment Flag	false
Current Fiscal Year End Date	--12-31

XML

Consolidated Balance Sheets - USD ($) $ in Thousands	Jun. 30, 2019	Dec. 31, 2018
Investment in real estate:
Land	$ 1,418,353	$ 1,408,832
Land improvements	3,236,899	3,143,745
Buildings and other depreciable property	781,671	720,900
Investment in real estate	5,436,923	5,273,477
Accumulated depreciation	(1,704,091)	(1,631,888)
Net investment in real estate	3,732,832	3,641,589
Cash and restricted cash	90,457	68,974
Notes receivable, net	36,010	35,041
Investment in unconsolidated joint ventures	55,195	57,755
Deferred commission expense	40,710	40,308
Other assets, net	59,274	46,227
Assets held for sale, net	0	35,914
Total Assets	4,014,478	3,925,808
Liabilities:
Mortgage notes payable, net	2,075,689	2,149,726
Term loan, net	198,787	198,626
Accounts payable and other liabilities	127,051	102,854
Accrued interest payable	8,187	8,759
Rents and other customer payments received in advance and security deposits	104,249	81,114
Distributions payable	58,972	52,617
Liabilities related to assets held for sale	0	12,350
Total Liabilities	2,707,004	2,732,464
Stockholders' Equity:
Preferred stock, $0.01 par value, 10,000,000 shares authorized as of June 30, 2019 and December 31, 2018; none issued and outstanding.	0	0
Common stock, $0.01 par value, 400,000,000 and 200,000,000 shares authorized as of June 30, 2019 and December 31, 2018, respectively; 91,032,007 and 89,921,018 shares issued and outstanding as of June 30, 2019 and December 31, 2018, respectively.	906	896
Paid-in capital	1,397,613	1,329,391
Distributions in excess of accumulated earnings	(162,204)	(211,034)
Accumulated other comprehensive income (loss)	(242)	2,299
Total Stockholders’ Equity	1,236,073	1,121,552
Non-controlling interests – Common OP Units	71,401	71,792
Total Equity	1,307,474	1,193,344
Total Liabilities and Equity	4,014,478	3,925,808
Deferred revenue – upfront payments from right-to-use contracts (membership upgrade sales)
Liabilities:
Deferred revenue	121,047	116,363
Deferred revenue – right-to-use annual payments (membership subscriptions)
Liabilities:
Deferred revenue	$ 13,022	$ 10,055

XML

Consolidated Balance Sheets (Parenthetical) - $ / shares	Jun. 30, 2019	Dec. 31, 2018
Statement of Financial Position [Abstract]
Preferred stock, par value (usd per share)	$ 0.01	$ 0.01
Preferred stock, shares authorized (shares)	10,000,000	10,000,000
Preferred stock, shares issued (shares)	0	0
Preferred stock, shares outstanding (shares)	0	0
Common stock, par value (usd per share)	$ 0.01	$ 0.01
Common stock, shares authorized (shares)	400,000,000	200,000,000
Common stock, shares issued (shares)	91,032,007	89,921,018
Common stock, shares outstanding (shares)	91,032,007	89,921,018

XML

Consolidated Statements of Income and Comprehensive Income - USD ($) shares in Thousands, $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2019	Jun. 30, 2018
Revenues:
Rental income	$ 212,007	$ 199,155	$ 435,573	$ 406,148
Other income	10,265	12,536	20,635	25,572
Interest income	1,803	1,862	3,554	3,812
Income from other investments, net	879	3,413	1,865	4,353
Total revenues	248,366	240,502	507,456	486,527
Expenses:
Property operating and maintenance	84,868	81,720	162,816	158,052
Real estate taxes	15,107	13,440	30,430	27,575
Sales and marketing, gross	4,214	3,305	7,623	6,117
Right-to-use contract commissions, deferred, net	(389)	(262)	(580)	(286)
Depreciation and amortization	37,776	34,345	75,753	66,719
Home selling expenses	1,102	973	2,185	2,048
General and administrative	9,225	9,669	19,134	17,707
Other expenses	540	367	967	710
Early debt retirement	1,491	0	1,491	0
Interest and related amortization	26,024	26,285	52,417	51,988
Total expenses	202,507	192,946	395,102	375,989
Gain on sale of real estate, net	0	0	52,507	0
Income before equity in income of unconsolidated joint ventures	45,859	47,556	164,861	110,538
Equity in income of unconsolidated joint ventures	3,226	1,613	4,759	2,808
Consolidated net income	49,085	49,169	169,620	113,346
Income allocated to non-controlling interests – Common OP Units	(2,676)	(3,024)	(9,902)	(6,979)
Net income available for Common Stockholders	46,401	46,137	159,710	106,359
Other comprehensive income (loss):
Adjustment for fair market value of swap	(1,610)	764	(2,541)	2,637
Consolidated comprehensive income	47,475	49,933	167,079	115,983
Comprehensive income allocated to non-controlling interests – Common OP Units	(2,589)	(3,071)	(9,759)	(7,141)
Comprehensive income attributable to Common Stockholders	$ 44,878	$ 46,854	$ 157,312	$ 108,834
Earnings per Common Share – Basic (usd per share)	$ 0.51	$ 0.52	$ 1.78	$ 1.20
Earnings per Common Share – Fully Diluted (usd per share)	$ 0.51	$ 0.52	$ 1.77	$ 1.20
Weighted average Common Shares outstanding – basic (shares)	90,156	88,549	89,969	88,537
Weighted Average Number of Shares Outstanding, Diluted (shares)	95,930	94,623	95,773	94,600
Right-to-use annual payments (membership subscriptions)
Revenues:
Contract revenue	$ 12,586	$ 11,891	$ 24,902	$ 23,410
Right-to-use contracts current period, gross (membership upgrade sales)
Revenues:
Contract revenue	5,041	3,944	8,879	7,106
Right-to-use contract upfront payments, deferred, net
Revenues:
Contract revenue	(2,912)	(2,021)	(4,683)	(3,306)
Gross revenues from home sales
Revenues:
Contract revenue	7,825	9,105	14,300	17,414
Expenses:
Cost of services	8,164	9,632	14,796	18,206
Brokered resale and ancillary services revenues, net
Revenues:
Contract revenue	872	617	2,431	2,018
Property management
Expenses:
Cost of services	14,385	13,472	28,070	27,153
Redeemable Perpetual Preferred Stock
Expenses:
Redeemable perpetual preferred stock dividends	$ (8)	$ (8)	$ (8)	$ (8)

XML

Consolidated Statements of Changes In Equity - USD ($) $ in Thousands	Total	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
Balance at Dec. 31, 2017	$ 1,100,042	$ 883	$ 1,242,109		$ (211,980)	$ 942	$ 68,088
Increase (Decrease) in Stockholders' Equity
Exchange of Common OP Units for common stock			80				(80)
Issuance of common stock through employee stock purchase plan	503		503
Compensation expenses related to restricted stock and stock options	1,800		1,800
Adjustment for Common OP Unitholders in the Operating Partnership			782				(782)
Adjustment for fair market value of swap	1,873					1,873
Consolidated net income	64,177				60,222		3,955
Distributions	(52,010)				(48,805)		(3,205)
Other	(60)		(60)
Balance at Mar. 31, 2018	1,101,139	883	1,245,214		(215,749)	2,815	67,976
Balance at Dec. 31, 2017	1,100,042	883	1,242,109		(211,980)	942	68,088
Increase (Decrease) in Stockholders' Equity
Adjustment for fair market value of swap	2,637
Balance at Jun. 30, 2018	1,101,831	884	1,248,047	$ 0	(218,453)	3,579	67,774
Balance at Mar. 31, 2018	1,101,139	883	1,245,214		(215,749)	2,815	67,976
Increase (Decrease) in Stockholders' Equity
Exchange of Common OP Units for common stock		1	81				(82)
Issuance of common stock through employee stock purchase plan	343		343
Compensation expenses related to restricted stock and stock options	2,741		2,741
Adjustment for Common OP Unitholders in the Operating Partnership			(57)				57
Adjustment for fair market value of swap	764					764
Consolidated net income	49,169			8	46,137		3,024
Distributions	(52,050)			(8)	(48,841)		(3,201)
Other	(275)		(275)
Balance at Jun. 30, 2018	1,101,831	884	1,248,047	0	(218,453)	3,579	67,774
Balance at Dec. 31, 2018	1,193,344	896	1,329,391	0	(211,034)	2,299	71,792
Increase (Decrease) in Stockholders' Equity
Exchange of Common OP Units for common stock			66				(66)
Issuance of common stock through exercise of options	53		53
Issuance of common stock through employee stock purchase plan	652		652
Compensation expenses related to restricted stock and stock options	2,420		2,420
Repurchase of common stock or Common OP Units	(53)		(53)
Adjustment for Common OP Unitholders in the Operating Partnership			(56)				56
Adjustment for fair market value of swap	(931)					(931)
Consolidated net income	120,535				113,309		7,226
Distributions	(58,639)				(55,123)		(3,516)
Other	(63)		(63)
Balance at Mar. 31, 2019	1,257,318	896	1,332,410	0	(152,848)	1,368	75,492
Balance at Dec. 31, 2018	1,193,344	896	1,329,391	0	(211,034)	2,299	71,792
Increase (Decrease) in Stockholders' Equity
Adjustment for fair market value of swap	(2,541)
Balance at Jun. 30, 2019	1,307,474	906	1,397,613	0	(162,204)	(242)	71,401
Balance at Mar. 31, 2019	1,257,318	896	1,332,410	0	(152,848)	1,368	75,492
Increase (Decrease) in Stockholders' Equity
Exchange of Common OP Units for common stock		5	6,430				(6,435)
Issuance of common stock through employee stock purchase plan	587		587
Issuance of Common Stock	59,319	5	59,314
Compensation expenses related to restricted stock and stock options	2,625		2,625
Adjustment for Common OP Unitholders in the Operating Partnership			(2,883)				2,883
Adjustment for fair market value of swap	(1,610)					(1,610)	0
Consolidated net income	49,085			8	46,401		2,676
Distributions	(58,980)			(8)	(55,757)		(3,215)
Other	(870)		(870)
Balance at Jun. 30, 2019	$ 1,307,474	$ 906	$ 1,397,613	$ 0	$ (162,204)	$ (242)	$ 71,401

XML

Consolidated Statements of Cash Flows - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018
Cash Flows From Operating Activities:
Consolidated net income	$ 169,620	$ 113,346
Adjustments to reconcile consolidated net income to net cash provided by operating activities:
Gain on sale of real estate, net	(52,507)	0
Early debt retirement	1,491	0
Depreciation and amortization	76,648	67,431
Amortization of loan costs	1,768	1,772
Debt premium amortization	(232)	(711)
Equity in income of unconsolidated joint ventures	(4,759)	(2,808)
Distributions of income from unconsolidated joint ventures	2,008	1,732
Proceeds from insurance claims, net	4,422	1,809
Compensation expense related to restricted stock and stock options	5,045	4,541
Revenue recognized from right-to-use contract upfront payments (membership upgrade sales)	(4,195)	(3,800)
Commission expense recognized related to right-to-use contracts	1,867	1,810
Long-term incentive plan compensation	(3,608)	461
Changes in assets and liabilities:
Notes receivable, net	(1,079)	642
Deferred commission expense	(2,269)	(2,010)
Other assets, net	(8,275)	10,895
Accounts payable and other liabilities	25,962	9,274
Rents and other customer payments received in advance and security deposits	20,932	15,601
Net cash provided by operating activities	244,685	229,965
Cash Flows From Investing Activities:
Real estate acquisitions, net	(38,463)	(53,289)
Proceeds from disposition of properties, net	77,746	0
Investment in unconsolidated joint ventures	0	(3,791)
Distributions of capital from unconsolidated joint ventures	5,169	110
Proceeds from insurance claims	1,111	2,335
Repayments of notes receivable	0	13,823
Capital improvements	(121,444)	(81,377)
Net cash used in investing activities	(75,881)	(122,189)
Cash Flows From Financing Activities:
Proceeds from stock options and employee stock purchase plan	1,237	846
Gross proceeds from the issuance of common stock	59,319	0
Distributions:
Common Stockholders	(104,579)	(92,008)
Common OP Unitholders	(6,676)	(6,049)
Preferred Stockholders	(8)	(8)
Principal payments and mortgage debt repayment	(93,982)	(23,964)
New mortgage notes payable financing proceeds	0	64,014
Line of Credit payoff	0	(97,000)
Line of Credit proceeds	0	67,000
Debt issuance and defeasance costs	(1,700)	(1,688)
Other	(932)	(335)
Net cash used in financing activities	(147,321)	(89,192)
Net increase in cash and restricted cash	21,483	18,584
Cash and restricted cash, beginning of period	68,974	35,631
Cash and restricted cash, end of period	90,457	54,215
Supplemental Information:
Cash paid for interest	51,744	52,658
Net investment in real estate – reclassification of rental homes	12,451	15,396
Other assets, net – reclassification of rental homes	(12,451)	(15,396)
Real estate acquisitions:
Investment in real estate	(58,871)	(71,756)
Other assets, net	(412)	(9)
Debt assumed	19,212	9,200
Debt financed	0	8,786
Other liabilities	1,608	490
Real estate acquisitions, net	(38,463)	(53,289)
Real estate dispositions:
Investment in real estate	35,572	0
Notes receivable, net	295	0
Other assets, net	97	0
Mortgage notes payable, net	(11,175)	0
Other liabilities	450	0
Gain on sale of real estate, net	52,507	0
Proceeds from disposition of properties, net	77,746	0
Deferred revenue – upfront payments from right-to-use contracts (membership upgrade sales)
Changes in assets and liabilities:
Deferred revenue	8,879	7,106
Deferred revenue – right-to-use annual payments (membership subscriptions)
Changes in assets and liabilities:
Deferred revenue	$ 2,967	$ 2,874

XML

Organization and Basis of Presentation

6 Months Ended

Jun. 30, 2019

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Organization and Basis of Presentation

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,” "the Company," and “our.” We are a fully integrated owner and operator of lifestyle-oriented properties ("Properties") consisting primarily of manufactured home ("MH") and recreational vehicle ("RV") communities. We provide our customers the opportunity to place factory-built homes, cottages, cabins or RVs on our Properties either on a long-term or short-term basis. Our customers may lease individual developed areas ("Sites") or enter right-to-use contracts, which provide them access to specific Properties for limited stays.

Our Properties are owned primarily by the Operating Partnership and managed internally by wholly-owned 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 94.5% interest as of June 30, 2019. 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 or for variable interest entities in which ELS is not considered the primary beneficiary, 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 the 2018 Form 10-K.

Intercompany balances and transactions have been eliminated. All adjustments to the 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 interim consolidated financial statements to conform with current year presentation.

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Summary of Significant Accounting Policies

6 Months Ended

Jun. 30, 2019

Accounting Policies [Abstract]

Summary of Significant Accounting Policies

Summary of Significant Accounting Policies

(a)    Recently Adopted Accounting Pronouncements

In February 2016, the FASB issued ("ASU 2016-02") Leases. This new guidance, including the related subsequently issued ASUs, provides the principles for the recognition, measurement, presentation and disclosure of leases, including the requirement that lessees recognize right-of-use ("ROU") assets and lease liabilities for leases on the Consolidated Balance Sheets.

We adopted the new lease standard effective January 1, 2019 and have elected to use January 1, 2019 as our date of initial application. Results for reporting periods beginning January 1, 2019 are presented under the new lease standard. We made an accounting policy election to not recognize ROU assets and lease liabilities for leases with a term of 12 months or less. We elected the package of practical expedients permitted under the transition guidance within the new standard and were not required to reassess the following upon adoption: (i) whether an expired or existing contract met the definition of a lease, (ii) the lease classification at January 1, 2019 for existing leases and (iii) whether leasing costs previously capitalized as initial direct costs would continue to be amortized. Upon adoption, we did not have an adjustment to the opening balance of retained earnings due to the election of these practical expedients.

As a lessor, we adopted the practical expedient that allowed us not to separate expenses reimbursed by our customers (“utility recoveries”) from the associated rental revenue if certain criteria were met. We assessed these criteria and concluded the timing and pattern of transfer for rental revenue and the associated utility recoveries are the same and as our leases qualify as operating leases, we accounted for and presented rental revenue and utility recoveries as a single component under Rental income in our Consolidated Statements of Income and Comprehensive Income for 2019 and 2018. In addition, the new standard requires our expected credit loss related to the collectability of lease receivables to be reflected as an adjustment to the line item Rental income prospectively starting from January 1, 2019. For 2018, the credit loss related to the collectability of lease receivables was recognized

in the line item Property operating and maintenance and was not significant. The guidance regarding capitalization of leasing costs did not have any effect on our consolidated financial statements.

On January 1, 2019, we recognized ROU assets of $17.5 million and lease liabilities of $18.7 million on the Consolidated Balance Sheets, principally for our ground and office space leases, in which we are the lessee.

For more disclosure on the adoption of the new lease accounting standard, see Note 3. Leases.

(b)    New Accounting Pronouncements

In August 2018, the FASB issued ("ASU 2018-15") Customer's Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract. ASU 2018-15 provides clarity on the accounting for implementation costs of a cloud computing arrangement that is a service contract. The project stage (that is, preliminary project stage, application development stage, or post implementation stage) and the nature of the implementation costs determine which costs to capitalize as an asset related to the service contract and which ones to expense. This update also requires the capitalized implementation costs to be expensed over the term of the arrangement and to be presented in the same line item in the consolidated financial statements as the fees associated with the service of the arrangement. ASU 2018-15 is effective in fiscal years beginning after December 15, 2019, including interim periods within those years. Early adoption is permitted. This guidance can be applied either retrospectively or prospectively to all implementation costs incurred after the date of adoption. We are currently in the process of evaluating the potential impact, if any, that the adoption of this standard may have on the consolidated financial statements and related disclosures.

In June 2016, the FASB issued (“ASU 2016-13”) Financial Instruments - Credit Losses: Measurement of Credit Losses on Financial Instruments (Topic 326). ASU 2016-13 requires entities to measure all expected credit losses for financial assets held at the reporting date based on historical experience, current conditions, and reasonable and supportable forecasts. Entities will now use forward-looking information to better form their credit loss estimates. ASU 2016-13 also requires enhanced disclosures to help financial statement users better understand significant estimates and judgments used in estimating credit losses, as well as the credit quality and underwriting standards of an entity’s portfolio. ASU 2016-13 is effective for annual reporting periods beginning after December 15, 2019. Early adoption is permitted. We are currently in the process of evaluating the potential impact, if any, that adoption of this standard may have on the consolidated financial statements and related disclosures.

(c)    Revenue Recognition

We account for certain revenue streams in accordance with Accounting Standard Codification (ASC) 606, Revenue from Contracts with Customers. Right-to-use contracts (also referred to as membership subscriptions), provide our customers access to specific Properties for limited stays at a specified group of Properties. Payments are deferred and recognized on a straight-line basis over the one-year period in which access to Sites at certain Properties are provided. Right-to-use upgrade contracts grant certain additional access rights to the customer and require non-refundable upfront payments. The non-refundable upfront payments are recognized on a straight-line basis over 20 years.

Income 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.

(d)    Restricted Cash

As of June 30, 2019 and December 31, 2018, restricted cash consists of $27.5 million and $24.1 million, respectively, primarily related to cash reserved for customer deposits and amounts escrowed for insurance and real estate taxes.

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Leases

6 Months Ended

Jun. 30, 2019

Leases [Abstract]

Leases

Leases

Lessor

Rental income derived from customers renting our Sites is accounted for in accordance with ASC 842, Leases, and is recognized over the term of the respective operating lease or the length of a customer's stay. Our MH community Sites and annual RV community Sites are leased on an annual basis. Seasonal Sites are leased to customers generally for one to six months. Transient Sites are leased to customers on a short-term basis. In addition, customers may lease homes that are located in our Properties.

The leases entered into between the customer and us for the 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 conditions. 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 June 30, 2019
2019	$	60,067
2020	120,012
2021	65,321
2022	34,906
2023	19,714
Thereafter	84,254
Total	$	384,274

Lessee

We lease land under non-cancelable operating leases at 13 Properties expiring at various dates through 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 2026. For the quarters ended June 30, 2019 and 2018, total operating lease payments were $2.3 million and $2.1 million, respectively. For the six months ended June 30, 2019 and 2018, total operating lease payments were $4.6 million and $4.1 million, respectively.

The following table summarizes our future minimum rental payments, excluding variable costs, which are discounted by our incremental borrowing rate to calculate the lease liabilities for our operating leases:

(amounts in thousands)	As of June 30, 2019			As of December 31, 2018
2019	$	2,770		$	4,921
2020	4,801			4,801
2021	4,179			4,179
2022	2,103			2,103
2023	953			953
Thereafter	5,054			5,054
Total undiscounted rental payments	19,860			22,011
Less imputed interest	(2,895		)	(3,289		)
Total lease liabilities	$	16,965		$	18,722

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 $15.7 million and $17.0 million, respectively, as of June 30, 2019. The weighted average remaining lease term for our operating leases was 7 years and the weighted average incremental borrowing rate was 4.4% at June 30, 2019.

Leases

Leases

Lessor

Rental income derived from customers renting our Sites is accounted for in accordance with ASC 842, Leases, and is recognized over the term of the respective operating lease or the length of a customer's stay. Our MH community Sites and annual RV community Sites are leased on an annual basis. Seasonal Sites are leased to customers generally for one to six months. Transient Sites are leased to customers on a short-term basis. In addition, customers may lease homes that are located in our Properties.

The leases entered into between the customer and us for the 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 conditions. 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 June 30, 2019
2019	$	60,067
2020	120,012
2021	65,321
2022	34,906
2023	19,714
Thereafter	84,254
Total	$	384,274

Lessee

We lease land under non-cancelable operating leases at 13 Properties expiring at various dates through 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 2026. For the quarters ended June 30, 2019 and 2018, total operating lease payments were $2.3 million and $2.1 million, respectively. For the six months ended June 30, 2019 and 2018, total operating lease payments were $4.6 million and $4.1 million, respectively.

The following table summarizes our future minimum rental payments, excluding variable costs, which are discounted by our incremental borrowing rate to calculate the lease liabilities for our operating leases:

(amounts in thousands)	As of June 30, 2019			As of December 31, 2018
2019	$	2,770		$	4,921
2020	4,801			4,801
2021	4,179			4,179
2022	2,103			2,103
2023	953			953
Thereafter	5,054			5,054
Total undiscounted rental payments	19,860			22,011
Less imputed interest	(2,895		)	(3,289		)
Total lease liabilities	$	16,965		$	18,722

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 $15.7 million and $17.0 million, respectively, as of June 30, 2019. The weighted average remaining lease term for our operating leases was 7 years and the weighted average incremental borrowing rate was 4.4% at June 30, 2019.

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Earnings Per Common Share

6 Months Ended

Jun. 30, 2019

Earnings Per Share [Abstract]

Earnings Per Common Share

Earnings Per Common Share

The following table sets forth the computation of basic and diluted earnings per common share for the quarters and six months ended June 30, 2019 and 2018:

	Quarters Ended June 30,				Six Months Ended June 30,
(amounts in thousands, except per share data)	2019		2018		2019		2018
Numerator:
Net income available for Common Stockholders – Basic	$	46,401	$	46,137	$	159,710	$	106,359
Amounts allocated to dilutive securities	2,676		3,024		9,902		6,979
Net income available for Common Stockholders – Fully Diluted	$	49,077	$	49,161	$	169,612	$	113,338
Denominator:
Weighted average Common Shares outstanding – Basic	90,156		88,549		89,969		88,537
Effect of dilutive securities:
Exchange of Common OP Units for Common Shares	5,643		5,826		5,691		5,827
Restricted stock and stock options	131		248		113		236
Weighted average Common Shares outstanding – Fully Diluted	95,930		94,623		95,773		94,600
Earnings per Common Share – Basic	$	0.51	$	0.52	$	1.78	$	1.20
Earnings per Common Share – Fully Diluted	$	0.51	$	0.52	$	1.77	$	1.20

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Common Stock and Other Equity Related Transactions

6 Months Ended

Jun. 30, 2019

Equity [Abstract]

Common Stock and Other Equity Related Transactions

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 limited partners of the Operating Partnership (the "Common OP Unit holders") since January 1, 2018.

Distribution Amount Per Share	For the Quarter Ended	Stockholder Record Date	Payment Date
$0.5500	March 31, 2018	March 30, 2018	April 13, 2018
$0.5500	June 30, 2018	June 29, 2018	July 13, 2018
$0.5500	September 30, 2018	September 28, 2018	October 12, 2018
$0.5500	December 31, 2018	December 28, 2018	January 11, 2019
$0.6125	March 31, 2019	March 29, 2019	April 12, 2019
$0.6125	June 30, 2019	June 28, 2019	July 12, 2019

Increase in Authorized Shares

On April 30, 2019, our stockholders approved an amendment to our charter to increase the number of shares of our common stock that we are authorized to issue from 200,000,000 to 400,000,000 shares.

Equity Offering Program

On October 26, 2018, we entered into our current 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 $200.0 million. As of June 30, 2019, we have $140.7 million of common stock available for issuance.

The following table presents the shares that were issued under the current ATM equity offering program during the six months ended June 30, 2019. There was no activity under the ATM equity offering program during the six months ended June 30, 2018.

	Six Months Ended June 30,
(amounts in thousands, except stock data)	2019
Shares of Common Stock sold	505,236
Weighted average price	$	117.41
Total gross proceeds	$	59,319
Commissions paid to sales agents	$	771

Exchanges

Subject to certain limitations, Common 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. During the six months ended June 30, 2019, 495,325 OP Units were exchanged for an equal number of shares of Common Stock. During the six months ended June 30, 2018, 13,838 OP Units were exchanged for an equal number of shares of Common Stock.

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Investment in Real Estate

6 Months Ended

Jun. 30, 2019

Business Combinations [Abstract]

Investment in Real Estate

Investment in Real Estate

Acquisitions

On May 29, 2019, we completed the acquisition of White Oak Shores Camping and RV Resort, a 455-site RV community located in Stella, North Carolina, for a purchase price of $20.5 million. The acquisition was funded with available cash.

On April 10, 2019, we completed the acquisition of Round Top RV Campground, a 391-site RV community located in Gettysburg, Pennsylvania, for a purchase price of $12.4 million. This acquisition was funded with available cash and a loan assumption of approximately $7.8 million, excluding mortgage premium of $0.2 million.

On March 25, 2019, we completed the acquisitions of Drummer Boy Camping Resort, a 465-site RV community located in Gettysburg, Pennsylvania, and Lake of the Woods Campground, a 303-site RV community located in Wautoma, Wisconsin, for a total purchase price of $25.4 million. These acquisitions were funded with available cash and a loan assumption of approximately $10.8 million, excluding mortgage premium of $0.4 million.

Dispositions

On January 23, 2019, we closed on the sale of five all-age MH communities located in Indiana and Michigan, collectively containing 1,463 sites, for $89.7 million. The assets and liabilities associated with the transaction were classifieds as held for sale on the Consolidated Balance Sheets as of December 31, 2018. We recognized a gain on sale of these Properties of $52.5 million during the first quarter of 2019.

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Investment in Unconsolidated Joint Ventures

6 Months Ended

Jun. 30, 2019

Equity Method Investments and Joint Ventures [Abstract]

Investment in Unconsolidated Joint Ventures

Investment in Unconsolidated Joint Ventures

The following table summarizes our investment in unconsolidated joint ventures (investment amounts in thousands with the number of Properties shown parenthetically as of June 30, 2019 and December 31, 2018, respectively):

						Investment as of				Income/(Loss) for Six Months Ended
Investment	Location	Number of Sites (a)	Economic Interest (b)			June 30, 2019		December 31, 2018		June 30, 2019		June 30, 2018
Meadows	Various (2,2)	1,077	50	%		$	346	$	346	$	800	$	819
Lakeshore	Florida (3,3)	720	(c)			2,154		2,263		122		123
Voyager	Arizona (1,1)	1,801	50	%	(d)	414		3,135		2,925		883
Loggerhead	Florida	2,343	49	%		35,789		35,789		642		689
ECHO JV	Various	—	50	%		16,492		16,222		270		294
		5,941				$	55,195	$	57,755	$	4,759	$	2,808

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(a) Loggerhead sites represent marina slip count.

(b) The percentages shown approximate our economic interest as of June 30, 2019. Our legal ownership interest may differ.

(c) Includes two joint ventures in which we own a 65% interest and Crosswinds joint venture in which we own a 49% interest.

(d) Voyager joint venture primarily consists of a 50% interest in Voyager RV Resort and a 33% interest in the utility plant servicing the Property.

We received approximately $7.2 million and $1.8 million in distributions from our unconsolidated joint ventures for the six months ended June 30, 2019 and 2018, respectively. Approximately $2.7 million of the distributions made to us exceeded our basis in unconsolidated joint ventures for the six months ended June 30, 2019 and, as such, were recorded as income from unconsolidated joint ventures. None of the distributions made to us exceeded our basis in joint ventures for the six months ended June 30, 2018.

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Borrowing Arrangements

6 Months Ended

Jun. 30, 2019

Debt Disclosure [Abstract]

Borrowing Arrangements

Borrowing Arrangements

Mortgage Notes Payable

2019 Activity

During the three months ended March 31, 2019, we defeased mortgage debt of $11.2 million in conjunction with the disposition of the five MH Properties as disclosed in Note 6. Investment in Real Estate. These loans had a weighted average interest rate of 5.0% per annum.

During the three months ended June 30, 2019, we prepaid four loans secured by four properties (three MH and one RV), which were scheduled to mature in 2020. The loans had an outstanding principal balance of $66.8 million and a weighted average interest rate of 6.9% per annum. As part of the transaction, we incurred $1.4 million of prepayment penalties. We used the proceeds from the ATM and our available cash to fund the loan payments.

In connection with the acquisitions that closed during the six months ended June 30, 2019, we assumed mortgage debt of $18.6 million, excluding mortgage note premium of $0.6 million. These loans carry a weighted average interest rate of 5.4% per annum and mature between 2022 and 2024.

2018 Activity

During the three months ended March 31, 2018, we closed on one loan, secured by two RV communities, for gross proceeds of approximately $64.0 million. The loan carries an interest rate of 4.8% per annum and matures in 2038.

In connection with the Serendipity acquisition that closed during the three months ended March 31, 2018, we assumed a loan of approximately $9.2 million and obtained additional financing of $8.8 million for total mortgage debt, secured by the MH community, of $18.0 million with an interest rate of 4.8% that matures in 2039.

Our mortgage notes payable is classified as Level 2 in the fair value hierarchy. The following table presents the fair value of our mortgage notes payable:

	As of June 30, 2019				As of December 31, 2018
(amounts in thousands)	Fair Value		Carrying Value		Fair Value		Carrying Value
Mortgage notes payable, excluding deferred financing costs	$	2,203,298	$	2,099,714	$	2,164,563	$	2,174,715

The weighted average interest rate on our outstanding mortgage indebtedness, including the impact of premium/discount amortization and loan cost amortization on mortgage indebtedness, as of June 30, 2019, was approximately 4.5% per annum. The debt bears interest at stated rates ranging from 3.5% to 8.9% per annum and matures on various dates ranging from 2020 to 2041. The debt encumbered a total of 116 and 118 of our Properties as of June 30, 2019 and December 31, 2018, respectively, and the carrying value of such Properties was approximately $2,475.4 million and $2,489.8 million, as of June 30, 2019 and December 31, 2018, respectively.

Unsecured Line of Credit

During the six months ended June 30, 2019, we did not borrow or pay off amounts on our unsecured Line of Credit ("LOC"). During the six months ended June 30, 2018, we paid off our unsecured line of credit balance, including approximately $30.0 million outstanding as of December 31, 2017. As of June 30, 2019, the full capacity on our LOC remained available.

As of June 30, 2019, we were in compliance in all material respects with the covenants in all our borrowing arrangements.

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Derivative Instruments and Hedging Activities

6 Months Ended

Jun. 30, 2019

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Derivative Instruments and Hedging Activities

Derivative Instruments and Hedging Activities

Cash Flow Hedges of Interest Rate Risk

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 connection with our $200.0 million senior unsecured term loan (the “Term Loan”), which has an interest rate of LIBOR plus 1.20% to 1.90% per annum, we entered into a three-year LIBOR Swap Agreement (the "Swap") allowing us to trade the variable interest rate on the Term Loan for a fixed interest rate. The Swap has a notional amount of $200.0 million of outstanding principal with an underlying LIBOR of 1.85% per annum and matures on November 1, 2020. Based on the leverage as of June 30, 2019, our spread over LIBOR was 1.20% resulting in an estimated all-in interest rate of 3.05% per annum.

Our derivative financial instrument is classified as Level 2 in the fair value hierarchy. The following table presents the fair value of our derivative financial instrument:

		As of June 30,		As of December 31,
(amounts in thousands)	Balance Sheet Location	2019		2018
Interest Rate Swap	Other assets, net	$	—	$	2,299
Interest Rate Swap	Accounts payable and other liabilities	$	242	$	—

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 six months ended June 30,					Location of (gain)/ loss reclassified from accumulated OCI into income	Amount of (gain)/loss reclassified from accumulated OCI into income for the six months ended June 30,
(amounts in thousands)	2019		2018			(amounts in thousands)	2019			2018
Interest Rate Swap	$	1,901	$	(2,544	)	Interest Expense	$	(640	)	$	93

During the next twelve months through June 30, 2020, we estimate no material changes to interest expense. This estimate may be subject to change as the underlying LIBOR changes. We determined that no adjustment was necessary for non-performance risk on our derivative obligation. As of June 30, 2019, we did not post any collateral related to this agreement.

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Equity Incentive Awards

6 Months Ended

Jun. 30, 2019

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Equity Incentive Awards

Equity Incentive Awards

Our 2014 Equity Incentive Plan (the “2014 Plan”) was adopted by our Board of Directors on March 11, 2014 and approved by our stockholders on May 13, 2014. During the quarter ended March 31, 2019, 61,200 shares of restricted stock were awarded to certain members of our management team. Of these shares, 50% are time-based awards, vesting in equal installments over a three-year period on January 31, 2020, January 29, 2021, and January 31, 2022, respectively, and have a grant date fair value of $3.2 million. The remaining 50% are performance-based awards, and are valued using the closing price at the grant date when all the key terms and conditions are known to all parties. The 10,201 shares of restricted stock awarded in 2019 subject to 2019 performance goals have a grant date fair value of $1.1 million. Additionally, 11,711 shares of restricted stock awarded in 2018 subject to 2019 performance goals have a grant date fair value of $1.3 million.

During the quarter ended June 30, 2019, we awarded to certain members of our Board of Directors, 35,431 shares of restricted stock at a fair value of approximately $4.1 million. These shares are time-based awards subject to various vesting dates between October 30, 2019 and April 30, 2022.

Compensation expense related to restricted stock and stock options, reported in General and administrative on the Consolidated Statements of Income and Comprehensive Income, for the quarters ended June 30, 2019 and 2018, was $2.6 million and $2.7 million, respectively, and for the six months ended June 30, 2019 and 2018, was approximately $5.0 million and $4.5 million, respectively.

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Commitments and Contingencies	6 Months Ended
	Jun. 30, 2019
Commitments and Contingencies Disclosure [Abstract]
Commitments and Contingencies	Commitments and ContingenciesWe 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, and 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.

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Reportable Segments

6 Months Ended

Jun. 30, 2019

Segment Reporting [Abstract]

Reportable Segments

Reportable Segments

We have identified 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. 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 was no customer who contributed 10% or more of our total revenues during the quarters and six months ended June 30, 2019 or 2018.

The following tables summarize our segment financial information for the quarters and six months ended June 30, 2019 and 2018:

Quarter Ended June 30, 2019

(amounts in thousands)	Property Operations			Home Sales and Rentals Operations			Consolidated
Operations revenues	$	233,848		$	11,836		$	245,684
Operations expenses	(116,893		)	(10,558		)	(127,451		)
Income from segment operations	116,955			1,278			118,233
Interest income	950			846			1,796
Depreciation and amortization	(35,197		)	(2,579		)	(37,776		)
Income (loss) from operations	$	82,708		$	(455	)	$	82,253
Reconciliation to consolidated net income:
Corporate interest income							$	7
Income from other investments, net							879
General and administrative							(9,225		)
Other expenses							(540		)
Interest and related amortization							(26,024		)
Equity in income of unconsolidated joint ventures							3,226
Early debt retirement							(1,491		)
Consolidated net income							$	49,085
Total assets	$	3,766,573		$	247,905		$	4,014,478
Capital improvements	$	28,501		$	40,502		$	69,003

Quarter Ended June 30, 2018

(amounts in thousands)	Property Operations			Home Sales and Rentals Operations			Consolidated
Operations revenues	$	222,167		$	13,060		$	235,227
Operations expenses	(110,046		)	(12,234		)	(122,280		)
Income from segment operations	112,121			826			112,947
Interest income	823			1,033			1,856
Depreciation and amortization	(31,954		)	(2,391		)	(34,345		)
Income (loss) from operations	$	80,990		$	(532	)	$	80,458
Reconciliation to consolidated net income:
Corporate interest income							$	6
Income from other investments, net							3,413
General and administrative							(9,669		)
Other expenses							(367		)
Interest and related amortization							(26,285		)
Equity in income of unconsolidated joint ventures							1,613
Consolidated net income							$	49,169
Total assets	$	3,477,455		$	222,734		$	3,700,189
Capital improvements	$	26,602		$	23,459		$	50,061

Six Months Ended June 30, 2019

(amounts in thousands)	Property Operations			Home Sales and Rentals Operations			Consolidated
Operations revenues	$	479,864		$	22,173		$	502,037
Operations expenses	(225,863		)	(19,477		)	(245,340		)
Income from segment operations	254,001			2,696			256,697
Interest income	1,844			1,696			3,540
Depreciation and amortization	(70,740		)	(5,013		)	(75,753		)
Gain on sale of real estate, net	52,507			—			52,507
Income (loss) from operations	$	237,612		$	(621	)	$	236,991
Reconciliation to consolidated net income:
Corporate interest income							$	14
Income from other investments, net							1,865
General and administrative							(19,134		)
Other expenses							(967		)
Interest and related amortization							(52,417		)
Equity in income of unconsolidated joint ventures							4,759
Early debt retirement							(1,491		)
Consolidated net income							$	169,620
Total assets	$	3,766,573		$	247,905		$	4,014,478
Capital improvements	$	52,906		$	68,538		$	121,444

Six Months Ended June 30, 2018

(amounts in thousands)	Property Operations			Home Sales and Rentals Operations			Consolidated
Operations revenues	$	453,183		$	25,179		$	478,362
Operations expenses	(215,558		)	(23,307		)	(238,865		)
Income from segment operations	237,625			1,872			239,497
Interest income	1,631			1,940			3,571
Depreciation and amortization	(56,029		)	(10,690		)	(66,719		)
Income (loss) from operations	$	183,227		$	(6,878	)	$	176,349
Reconciliation to consolidated net income:
Corporate interest income							$	241
Income from other investments, net							4,353
General and administrative							(17,707		)
Other expenses							(710		)
Interest and related amortization							(51,988		)
Equity in income of unconsolidated joint venture							2,808
Consolidated net income							$	113,346
Total assets	$	3,477,455		$	222,734		$	3,700,189
Capital Improvements	$	47,870		$	33,507		$	81,377

The following table summarizes our financial information for the Property Operations segment for the quarters and six months ended June 30, 2019 and 2018:    

	Quarters Ended June 30,						Six Months Ended June 30,
(amounts in thousands)	2019			2018			2019			2018
Revenues:
Rental income	$	208,375		$	195,594		$	428,357		$	399,072
Right-to-use annual payments (membership subscriptions)	12,586			11,891			24,902			23,410
Right-to-use contracts current period, gross (membership upgrade sales)	5,041			3,944			8,879			7,106
Right-to-use contract upfront payments, deferred, net	(2,912		)	(2,021		)	(4,683		)	(3,306		)
Other income	10,265			12,536			20,635			25,572
Ancillary services revenues, net	493			223			1,774			1,329
Total property operations revenues	233,848			222,167			479,864			453,183
Expenses:
Property operating and maintenance	83,576			80,091			160,320			154,999
Real estate taxes	15,107			13,440			30,430			27,575
Sales and marketing, gross	4,214			3,305			7,623			6,117
Right-to-use contract commissions, deferred, net	(389		)	(262		)	(580		)	(286		)
Property management	14,385			13,472			28,070			27,153
Total property operations expenses	116,893			110,046			225,863			215,558
Income from property operations segment	$	116,955		$	112,121		$	254,001		$	237,625

The following table summarizes our financial information for the Home Sales and Rentals Operations segment for the quarters and six months ended June 30, 2019 and 2018:

	Quarters Ended June 30,				Six Months Ended June 30,
(amounts in thousands)	2019		2018		2019		2018
Revenues:
Rental income (a)	$	3,632	$	3,561	$	7,216	$	7,076
Gross revenue from home sales	7,825		9,105		14,300		17,414
Brokered resale revenues, net	379		369		657		651
Ancillary services revenues, net	—		25		—		38
Total revenues	11,836		13,060		22,173		25,179
Expenses:
Property operating and maintenance	1,292		1,629		2,496		3,053
Cost of home sales	8,164		9,632		14,796		18,206
Home selling expenses	1,102		973		2,185		2,048
Total expenses	10,558		12,234		19,477		23,307
Income from home sales and rentals operations segment	$	1,278	$	826	$	2,696	$	1,872

______________________

(a)

Segment information includes income related to rental homes. Income related to Site rent on rental homes is included within property operations.

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Summary of Significant Accounting Policies (Policies)

6 Months Ended

Jun. 30, 2019

Accounting Policies [Abstract]

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,” "the Company," and “our.” We are a fully integrated owner and operator of lifestyle-oriented properties ("Properties") consisting primarily of manufactured home ("MH") and recreational vehicle ("RV") communities. We provide our customers the opportunity to place factory-built homes, cottages, cabins or RVs on our Properties either on a long-term or short-term basis. Our customers may lease individual developed areas ("Sites") or enter right-to-use contracts, which provide them access to specific Properties for limited stays.

Our Properties are owned primarily by the Operating Partnership and managed internally by wholly-owned 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 94.5% interest as of June 30, 2019. 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 or for variable interest entities in which ELS is not considered the primary beneficiary, 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.

Consolidation

Equity method of accounting is applied to entities in which ELS does not have a controlling interest or for variable interest entities in which ELS is not considered the primary beneficiary, 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.

Recently Adopted Accounting Pronouncements and New Accounting Pronouncements

Recently Adopted Accounting Pronouncements

In February 2016, the FASB issued ("ASU 2016-02") Leases. This new guidance, including the related subsequently issued ASUs, provides the principles for the recognition, measurement, presentation and disclosure of leases, including the requirement that lessees recognize right-of-use ("ROU") assets and lease liabilities for leases on the Consolidated Balance Sheets.

We adopted the new lease standard effective January 1, 2019 and have elected to use January 1, 2019 as our date of initial application. Results for reporting periods beginning January 1, 2019 are presented under the new lease standard. We made an accounting policy election to not recognize ROU assets and lease liabilities for leases with a term of 12 months or less. We elected the package of practical expedients permitted under the transition guidance within the new standard and were not required to reassess the following upon adoption: (i) whether an expired or existing contract met the definition of a lease, (ii) the lease classification at January 1, 2019 for existing leases and (iii) whether leasing costs previously capitalized as initial direct costs would continue to be amortized. Upon adoption, we did not have an adjustment to the opening balance of retained earnings due to the election of these practical expedients.

As a lessor, we adopted the practical expedient that allowed us not to separate expenses reimbursed by our customers (“utility recoveries”) from the associated rental revenue if certain criteria were met. We assessed these criteria and concluded the timing and pattern of transfer for rental revenue and the associated utility recoveries are the same and as our leases qualify as operating leases, we accounted for and presented rental revenue and utility recoveries as a single component under Rental income in our Consolidated Statements of Income and Comprehensive Income for 2019 and 2018. In addition, the new standard requires our expected credit loss related to the collectability of lease receivables to be reflected as an adjustment to the line item Rental income prospectively starting from January 1, 2019. For 2018, the credit loss related to the collectability of lease receivables was recognized

in the line item Property operating and maintenance and was not significant. The guidance regarding capitalization of leasing costs did not have any effect on our consolidated financial statements.

On January 1, 2019, we recognized ROU assets of $17.5 million and lease liabilities of $18.7 million on the Consolidated Balance Sheets, principally for our ground and office space leases, in which we are the lessee.

For more disclosure on the adoption of the new lease accounting standard, see Note 3. Leases.

(b)    New Accounting Pronouncements

In August 2018, the FASB issued ("ASU 2018-15") Customer's Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract. ASU 2018-15 provides clarity on the accounting for implementation costs of a cloud computing arrangement that is a service contract. The project stage (that is, preliminary project stage, application development stage, or post implementation stage) and the nature of the implementation costs determine which costs to capitalize as an asset related to the service contract and which ones to expense. This update also requires the capitalized implementation costs to be expensed over the term of the arrangement and to be presented in the same line item in the consolidated financial statements as the fees associated with the service of the arrangement. ASU 2018-15 is effective in fiscal years beginning after December 15, 2019, including interim periods within those years. Early adoption is permitted. This guidance can be applied either retrospectively or prospectively to all implementation costs incurred after the date of adoption. We are currently in the process of evaluating the potential impact, if any, that the adoption of this standard may have on the consolidated financial statements and related disclosures.

In June 2016, the FASB issued (“ASU 2016-13”) Financial Instruments - Credit Losses: Measurement of Credit Losses on Financial Instruments (Topic 326). ASU 2016-13 requires entities to measure all expected credit losses for financial assets held at the reporting date based on historical experience, current conditions, and reasonable and supportable forecasts. Entities will now use forward-looking information to better form their credit loss estimates. ASU 2016-13 also requires enhanced disclosures to help financial statement users better understand significant estimates and judgments used in estimating credit losses, as well as the credit quality and underwriting standards of an entity’s portfolio. ASU 2016-13 is effective for annual reporting periods beginning after December 15, 2019. Early adoption is permitted. We are currently in the process of evaluating the potential impact, if any, that adoption of this standard may have on the consolidated financial statements and related disclosures.

Revenue Recognition

Revenue Recognition

We account for certain revenue streams in accordance with Accounting Standard Codification (ASC) 606, Revenue from Contracts with Customers. Right-to-use contracts (also referred to as membership subscriptions), provide our customers access to specific Properties for limited stays at a specified group of Properties. Payments are deferred and recognized on a straight-line basis over the one-year period in which access to Sites at certain Properties are provided. Right-to-use upgrade contracts grant certain additional access rights to the customer and require non-refundable upfront payments. The non-refundable upfront payments are recognized on a straight-line basis over 20 years.

Income 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.

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Leases (Tables)

6 Months Ended

Jun. 30, 2019

Leases [Abstract]

Lessor Operating Lease, Payments to be Received

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 June 30, 2019
2019	$	60,067
2020	120,012
2021	65,321
2022	34,906
2023	19,714
Thereafter	84,254
Total	$	384,274

Minimum Future Operating Lease Payments

The following table summarizes our future minimum rental payments, excluding variable costs, which are discounted by our incremental borrowing rate to calculate the lease liabilities for our operating leases:

(amounts in thousands)	As of June 30, 2019			As of December 31, 2018
2019	$	2,770		$	4,921
2020	4,801			4,801
2021	4,179			4,179
2022	2,103			2,103
2023	953			953
Thereafter	5,054			5,054
Total undiscounted rental payments	19,860			22,011
Less imputed interest	(2,895		)	(3,289		)
Total lease liabilities	$	16,965		$	18,722

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Earnings Per Common Share (Tables)

6 Months Ended

Jun. 30, 2019

Earnings Per Share [Abstract]

Schedule of computation of basic and diluted earnings per Common Share

The following table sets forth the computation of basic and diluted earnings per common share for the quarters and six months ended June 30, 2019 and 2018:

	Quarters Ended June 30,				Six Months Ended June 30,
(amounts in thousands, except per share data)	2019		2018		2019		2018
Numerator:
Net income available for Common Stockholders – Basic	$	46,401	$	46,137	$	159,710	$	106,359
Amounts allocated to dilutive securities	2,676		3,024		9,902		6,979
Net income available for Common Stockholders – Fully Diluted	$	49,077	$	49,161	$	169,612	$	113,338
Denominator:
Weighted average Common Shares outstanding – Basic	90,156		88,549		89,969		88,537
Effect of dilutive securities:
Exchange of Common OP Units for Common Shares	5,643		5,826		5,691		5,827
Restricted stock and stock options	131		248		113		236
Weighted average Common Shares outstanding – Fully Diluted	95,930		94,623		95,773		94,600
Earnings per Common Share – Basic	$	0.51	$	0.52	$	1.78	$	1.20
Earnings per Common Share – Fully Diluted	$	0.51	$	0.52	$	1.77	$	1.20

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Common Stock and Other Equity Related Transactions (Tables)

6 Months Ended

Jun. 30, 2019

Equity [Abstract]

Dividends declared

The following quarterly distributions have been declared and paid to Common Stockholders and the limited partners of the Operating Partnership (the "Common OP Unit holders") since January 1, 2018.

Distribution Amount Per Share	For the Quarter Ended	Stockholder Record Date	Payment Date
$0.5500	March 31, 2018	March 30, 2018	April 13, 2018
$0.5500	June 30, 2018	June 29, 2018	July 13, 2018
$0.5500	September 30, 2018	September 28, 2018	October 12, 2018
$0.5500	December 31, 2018	December 28, 2018	January 11, 2019
$0.6125	March 31, 2019	March 29, 2019	April 12, 2019
$0.6125	June 30, 2019	June 28, 2019	July 12, 2019

Schedule of stock by class

The following table presents the shares that were issued under the current ATM equity offering program during the six months ended June 30, 2019. There was no activity under the ATM equity offering program during the six months ended June 30, 2018.

	Six Months Ended June 30,
(amounts in thousands, except stock data)	2019
Shares of Common Stock sold	505,236
Weighted average price	$	117.41
Total gross proceeds	$	59,319
Commissions paid to sales agents	$	771

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Investment in Unconsolidated Joint Ventures (Tables)

6 Months Ended

Jun. 30, 2019

Equity Method Investments and Joint Ventures [Abstract]

Schedule of our investment in unconsolidated joint ventures

The following table summarizes our investment in unconsolidated joint ventures (investment amounts in thousands with the number of Properties shown parenthetically as of June 30, 2019 and December 31, 2018, respectively):

						Investment as of				Income/(Loss) for Six Months Ended
Investment	Location	Number of Sites (a)	Economic Interest (b)			June 30, 2019		December 31, 2018		June 30, 2019		June 30, 2018
Meadows	Various (2,2)	1,077	50	%		$	346	$	346	$	800	$	819
Lakeshore	Florida (3,3)	720	(c)			2,154		2,263		122		123
Voyager	Arizona (1,1)	1,801	50	%	(d)	414		3,135		2,925		883
Loggerhead	Florida	2,343	49	%		35,789		35,789		642		689
ECHO JV	Various	—	50	%		16,492		16,222		270		294
		5,941				$	55,195	$	57,755	$	4,759	$	2,808

_____________________

(a) Loggerhead sites represent marina slip count.

(b) The percentages shown approximate our economic interest as of June 30, 2019. Our legal ownership interest may differ.

(c) Includes two joint ventures in which we own a 65% interest and Crosswinds joint venture in which we own a 49% interest.

(d)

Voyager joint venture primarily consists of a 50% interest in Voyager RV Resort and a 33% interest in the utility plant servicing the Property.

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Borrowing Arrangements (Tables)

6 Months Ended

Jun. 30, 2019

Debt Disclosure [Abstract]

Fair Value of Mortgage Debt

Our mortgage notes payable is classified as Level 2 in the fair value hierarchy. The following table presents the fair value of our mortgage notes payable:

	As of June 30, 2019				As of December 31, 2018
(amounts in thousands)	Fair Value		Carrying Value		Fair Value		Carrying Value
Mortgage notes payable, excluding deferred financing costs	$	2,203,298	$	2,099,714	$	2,164,563	$	2,174,715

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Derivative Instruments and Hedging Activities (Tables)

6 Months Ended

Jun. 30, 2019

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Fair Value of Derivative Financial Instruments

The following table presents the fair value of our derivative financial instrument:

		As of June 30,		As of December 31,
(amounts in thousands)	Balance Sheet Location	2019		2018
Interest Rate Swap	Other assets, net	$	—	$	2,299
Interest Rate Swap	Accounts payable and other liabilities	$	242	$	—

Schedule of Derivative Instruments, Effect on Other Comprehensive Income (Loss)

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 six months ended June 30,					Location of (gain)/ loss reclassified from accumulated OCI into income	Amount of (gain)/loss reclassified from accumulated OCI into income for the six months ended June 30,
(amounts in thousands)	2019		2018			(amounts in thousands)	2019			2018
Interest Rate Swap	$	1,901	$	(2,544	)	Interest Expense	$	(640	)	$	93

Derivative Instruments, Gain (Loss)

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 six months ended June 30,					Location of (gain)/ loss reclassified from accumulated OCI into income	Amount of (gain)/loss reclassified from accumulated OCI into income for the six months ended June 30,
(amounts in thousands)	2019		2018			(amounts in thousands)	2019			2018
Interest Rate Swap	$	1,901	$	(2,544	)	Interest Expense	$	(640	)	$	93

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Reportable Segments (Tables)

6 Months Ended

Jun. 30, 2019

Segment Reporting [Abstract]

Schedule of segment financial information

The following tables summarize our segment financial information for the quarters and six months ended June 30, 2019 and 2018:

Quarter Ended June 30, 2019

(amounts in thousands)	Property Operations			Home Sales and Rentals Operations			Consolidated
Operations revenues	$	233,848		$	11,836		$	245,684
Operations expenses	(116,893		)	(10,558		)	(127,451		)
Income from segment operations	116,955			1,278			118,233
Interest income	950			846			1,796
Depreciation and amortization	(35,197		)	(2,579		)	(37,776		)
Income (loss) from operations	$	82,708		$	(455	)	$	82,253
Reconciliation to consolidated net income:
Corporate interest income							$	7
Income from other investments, net							879
General and administrative							(9,225		)
Other expenses							(540		)
Interest and related amortization							(26,024		)
Equity in income of unconsolidated joint ventures							3,226
Early debt retirement							(1,491		)
Consolidated net income							$	49,085
Total assets	$	3,766,573		$	247,905		$	4,014,478
Capital improvements	$	28,501		$	40,502		$	69,003

Quarter Ended June 30, 2018

(amounts in thousands)	Property Operations			Home Sales and Rentals Operations			Consolidated
Operations revenues	$	222,167		$	13,060		$	235,227
Operations expenses	(110,046		)	(12,234		)	(122,280		)
Income from segment operations	112,121			826			112,947
Interest income	823			1,033			1,856
Depreciation and amortization	(31,954		)	(2,391		)	(34,345		)
Income (loss) from operations	$	80,990		$	(532	)	$	80,458
Reconciliation to consolidated net income:
Corporate interest income							$	6
Income from other investments, net							3,413
General and administrative							(9,669		)
Other expenses							(367		)
Interest and related amortization							(26,285		)
Equity in income of unconsolidated joint ventures							1,613
Consolidated net income							$	49,169
Total assets	$	3,477,455		$	222,734		$	3,700,189
Capital improvements	$	26,602		$	23,459		$	50,061

Six Months Ended June 30, 2019

(amounts in thousands)	Property Operations			Home Sales and Rentals Operations			Consolidated
Operations revenues	$	479,864		$	22,173		$	502,037
Operations expenses	(225,863		)	(19,477		)	(245,340		)
Income from segment operations	254,001			2,696			256,697
Interest income	1,844			1,696			3,540
Depreciation and amortization	(70,740		)	(5,013		)	(75,753		)
Gain on sale of real estate, net	52,507			—			52,507
Income (loss) from operations	$	237,612		$	(621	)	$	236,991
Reconciliation to consolidated net income:
Corporate interest income							$	14
Income from other investments, net							1,865
General and administrative							(19,134		)
Other expenses							(967		)
Interest and related amortization							(52,417		)
Equity in income of unconsolidated joint ventures							4,759
Early debt retirement							(1,491		)
Consolidated net income							$	169,620
Total assets	$	3,766,573		$	247,905		$	4,014,478
Capital improvements	$	52,906		$	68,538		$	121,444

Six Months Ended June 30, 2018

(amounts in thousands)	Property Operations			Home Sales and Rentals Operations			Consolidated
Operations revenues	$	453,183		$	25,179		$	478,362
Operations expenses	(215,558		)	(23,307		)	(238,865		)
Income from segment operations	237,625			1,872			239,497
Interest income	1,631			1,940			3,571
Depreciation and amortization	(56,029		)	(10,690		)	(66,719		)
Income (loss) from operations	$	183,227		$	(6,878	)	$	176,349
Reconciliation to consolidated net income:
Corporate interest income							$	241
Income from other investments, net							4,353
General and administrative							(17,707		)
Other expenses							(710		)
Interest and related amortization							(51,988		)
Equity in income of unconsolidated joint venture							2,808
Consolidated net income							$	113,346
Total assets	$	3,477,455		$	222,734		$	3,700,189
Capital Improvements	$	47,870		$	33,507		$	81,377

Financial information for the property operations segment

The following table summarizes our financial information for the Property Operations segment for the quarters and six months ended June 30, 2019 and 2018:    

	Quarters Ended June 30,						Six Months Ended June 30,
(amounts in thousands)	2019			2018			2019			2018
Revenues:
Rental income	$	208,375		$	195,594		$	428,357		$	399,072
Right-to-use annual payments (membership subscriptions)	12,586			11,891			24,902			23,410
Right-to-use contracts current period, gross (membership upgrade sales)	5,041			3,944			8,879			7,106
Right-to-use contract upfront payments, deferred, net	(2,912		)	(2,021		)	(4,683		)	(3,306		)
Other income	10,265			12,536			20,635			25,572
Ancillary services revenues, net	493			223			1,774			1,329
Total property operations revenues	233,848			222,167			479,864			453,183
Expenses:
Property operating and maintenance	83,576			80,091			160,320			154,999
Real estate taxes	15,107			13,440			30,430			27,575
Sales and marketing, gross	4,214			3,305			7,623			6,117
Right-to-use contract commissions, deferred, net	(389		)	(262		)	(580		)	(286		)
Property management	14,385			13,472			28,070			27,153
Total property operations expenses	116,893			110,046			225,863			215,558
Income from property operations segment	$	116,955		$	112,121		$	254,001		$	237,625

The following table summarizes our financial information for the Home Sales and Rentals Operations segment for the quarters and six months ended June 30, 2019 and 2018:

	Quarters Ended June 30,				Six Months Ended June 30,
(amounts in thousands)	2019		2018		2019		2018
Revenues:
Rental income (a)	$	3,632	$	3,561	$	7,216	$	7,076
Gross revenue from home sales	7,825		9,105		14,300		17,414
Brokered resale revenues, net	379		369		657		651
Ancillary services revenues, net	—		25		—		38
Total revenues	11,836		13,060		22,173		25,179
Expenses:
Property operating and maintenance	1,292		1,629		2,496		3,053
Cost of home sales	8,164		9,632		14,796		18,206
Home selling expenses	1,102		973		2,185		2,048
Total expenses	10,558		12,234		19,477		23,307
Income from home sales and rentals operations segment	$	1,278	$	826	$	2,696	$	1,872

______________________

(a)

Segment information includes income related to rental homes. Income related to Site rent on rental homes is included within property operations.

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Organization and Basis of Presentation (Details)	Jun. 30, 2019
Operating Partnership
Other Ownership Interests
Ownership interest (percent)	94.50%

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Summary of Significant Accounting Policies - Additional Information (Detail) - USD ($) $ in Thousands	Jun. 30, 2019	Jan. 01, 2019	Dec. 31, 2018
New Accounting Pronouncements or Change in Accounting Principle
Right of use asset	$ 15,700
Operating lease liability	16,965
Cash and cash equivalents, restricted cash	$ 27,500		$ 24,100
ASU 2016-02
New Accounting Pronouncements or Change in Accounting Principle
Right of use asset		$ 17,500
Operating lease liability		$ 18,700

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Leases - Additional Information (Details) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2019 USD ($) lease	Jun. 30, 2018 USD ($)	Jun. 30, 2019 USD ($) lease	Jun. 30, 2018 USD ($)
Lease Description
Number of non-cancelable operating leases, lessee (leases) | lease	13		13
Operating lease payments	$ 2,300	$ 2,100	$ 4,600	$ 4,100
Right of use asset	15,700		15,700
Operating lease liability	$ 16,965		$ 16,965
Weighted average operating lease term	7 years		7 years
Operating lease weighted average interest rate (percent)	4.40%		4.40%
Minimum
Lease Description
Lessor operating lease term	1 month		1 month
Maximum
Lease Description
Lessor operating lease term	6 months		6 months

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Leases - Operating Lease Future Proceeds (Details) $ in Thousands	Jun. 30, 2019 USD ($)
Lessor, Operating Lease, Payments, Fiscal Year Maturity
2019	$ 60,067
2020	120,012
2021	65,321
2022	34,906
2023	19,714
Thereafter	84,254
Total	$ 384,274

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Leases - Operating Lease Minimum Payments (Details) - USD ($) $ in Thousands	Jun. 30, 2019	Dec. 31, 2018
Operating Lease Liabilities, Payments Due
2019	$ 2,770
2020	4,801
2021	4,179
2022	2,103
2023	953
Thereafter	5,054
Total undiscounted rental payments	19,860
Less imputed interest	(2,895)
Total lease liabilities	$ 16,965
Operating Leases Liabilities, Before Adoption
2019		$ 4,921
2020		4,801
2021		4,179
2022		2,103
2023		953
Thereafter		5,054
Total undiscounted rental payments		22,011
Less imputed interest		(3,289)
Total lease liabilities		$ 18,722

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Earnings Per Common Share - Calculation of numerator and denominator in eps table (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2019	Jun. 30, 2018
Numerator:
Net income available for Common Stockholders	$ 46,401	$ 46,137	$ 159,710	$ 106,359
Amounts allocated to dilutive securities	2,676	3,024	9,902	6,979
Net income available for Common Stockholders – Fully Diluted	$ 49,077	$ 49,161	$ 169,612	$ 113,338
Denominator:
Weighted average Common Shares outstanding – basic (shares)	90,156	88,549	89,969	88,537
Effect of dilutive securities:
Exchange of Common OP Units for Common Shares (shares)	5,643	5,826	5,691	5,827
Restricted stock and options (shares)	131	248	113	236
Weighted average Common Shares outstanding – Fully Diluted (shares)	95,930	94,623	95,773	94,600
Earnings per Common Share – Basic (usd per share)	$ 0.51	$ 0.52	$ 1.78	$ 1.20
Earnings per Common Share – Fully Diluted (usd per share)	$ 0.51	$ 0.52	$ 1.77	$ 1.20

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Common Stock and Other Equity Related Transactions - Common Stockholders Distribution Activity (Details) - $ / shares	Jul. 12, 2019	Apr. 12, 2019	Jan. 11, 2019	Oct. 12, 2018	Jul. 13, 2018	Apr. 13, 2018
Class of Stock
Common stock, dividends paid (usd per share)		$ 0.6125	$ 0.5500	$ 0.5500	$ 0.5500	$ 0.5500
Subsequent Event
Class of Stock
Common stock, dividends paid (usd per share)	$ 0.6125

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Common Stock and Other Equity Related Transactions - Additional Information (Detail) - USD ($) $ / shares in Units, $ in Millions	6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018	Apr. 30, 2019	Mar. 31, 2019	Dec. 31, 2018	Oct. 26, 2018
Class of Stock
Common stock, shares authorized (shares)	400,000,000		400,000,000	200,000,000	200,000,000
Common stock, par value (usd per share)	$ 0.01				$ 0.01
OP units were exchanged for an equal number of shares of common stock (OP Units)	495,325	13,838
ATM
Class of Stock
Common stock, par value (usd per share)						$ 0.01
Aggregate offering price						$ 200.0
Remaining authorized shares (shares)	$ 140.7

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Common Stock and Other Equity Related Transactions - ATM Activity (Details) - USD ($) $ / shares in Units, $ in Thousands	6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018
Class of Stock
Commissions paid to sales agents	$ 932	$ 335
ATM
Class of Stock
Total gross proceeds	$ 59,319
ATM | Common Stock
Class of Stock
Shares of Common Stock sold (shares)	505,236
Weighted average price (usd per share)	$ 117.41
Commissions paid to sales agents	$ 771

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Investment in Real Estate (Details) $ in Millions					3 Months Ended
	May 29, 2019 USD ($) site	Apr. 10, 2019 USD ($) site	Mar. 25, 2019 USD ($) site	Jan. 23, 2019 USD ($) property site	Mar. 31, 2019 USD ($)
Disposed of by Sale | Manufactured Homes in Indiana and Michigan
Business Acquisition
Number of properties sold | property				5
Number of sites sold (sites) | site				1,463
Proceeds from sales of properties				$ 89.7
Gin on sales of properties					$ 52.5
White Oak Shores Camping and RV Resort
Business Acquisition
Number of acquired sites (sites) | site	455
Purchase price	$ 20.5
Round Top RV Campground
Business Acquisition
Number of acquired sites (sites) | site		391
Purchase price		$ 12.4
Liabilities incurred		7.8
Mortgage premium transferred		$ 0.2
Drummer Boy
Business Acquisition
Purchase price			$ 25.4
Liabilities incurred			10.8
Mortgage premium transferred			$ 0.4
Drummer Boy | Gettysburg, Pennsylvania and Lake of the Woods Campground
Business Acquisition
Number of acquired sites (sites) | site			465
Drummer Boy | Wautoma, Wisconsin
Business Acquisition
Number of acquired sites (sites) | site			303

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Investment in Unconsolidated Joint Ventures - Schedule of Investments (Details) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2019 USD ($)	Jun. 30, 2018 USD ($)	Jun. 30, 2019 USD ($)	Jun. 30, 2018 USD ($)	Jun. 30, 2019 joint_venture_site	Jun. 30, 2019	Jun. 30, 2019 site	Dec. 31, 2018 USD ($)
Schedule of Equity Method Investments
Number of sites					2		5,941
Economic interest (in percentage)						65.00%
Investment in unconsolidated joint ventures	$ 55,195		$ 55,195					$ 57,755
Equity in income of unconsolidated joint ventures	3,226	$ 1,613	4,759	$ 2,808
Meadows | Various
Schedule of Equity Method Investments
Number of sites | site							1,077
Economic interest (in percentage)						50.00%
Investment in unconsolidated joint ventures	346		346					346
Equity in income of unconsolidated joint ventures			800	819
Lakeshore | Florida
Schedule of Equity Method Investments
Number of sites | site							720
Investment in unconsolidated joint ventures	2,154		2,154					2,263
Equity in income of unconsolidated joint ventures			122	123
Voyager | Arizona
Schedule of Equity Method Investments
Number of sites | site							1,801
Economic interest (in percentage)						50.00%
Investment in unconsolidated joint ventures	414		414					3,135
Equity in income of unconsolidated joint ventures			2,925	883
Loggerhead | Florida
Schedule of Equity Method Investments
Number of sites | site							2,343
Economic interest (in percentage)						49.00%
Investment in unconsolidated joint ventures	35,789		35,789					35,789
Equity in income of unconsolidated joint ventures			642	689
ECHO JV | Various
Schedule of Equity Method Investments
Number of sites | site							0
Economic interest (in percentage)						50.00%
Investment in unconsolidated joint ventures	$ 16,492		16,492					$ 16,222
Equity in income of unconsolidated joint ventures			$ 270	$ 294

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Investment in Unconsolidated Joint Ventures - Additional Information (Detail)	6 Months Ended
	Jun. 30, 2019 USD ($) joint_venture_site	Jun. 30, 2018 USD ($)	Jun. 30, 2019	Jun. 30, 2019 site
Schedule of Equity Method Investments
Number of sites	2			5,941
Economic interest (in percentage)			65.00%
Income from distribution made to us	$ 7,200,000	$ 1,800,000
Distributions, including those in excess of basis	$ 2,700,000	$ 0
Crosswinds
Schedule of Equity Method Investments
Economic interest (in percentage)			49.00%
Recreational Vehicle Resort | Voyager
Schedule of Equity Method Investments
Economic interest (in percentage)			50.00%
Servicing Assets | Voyager
Schedule of Equity Method Investments
Economic interest (in percentage)			33.00%

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Borrowing Arrangements - Additional Information (Detail) $ in Millions	3 Months Ended			6 Months Ended
	Jun. 30, 2019 USD ($) Property loan property	Mar. 31, 2019 USD ($) property	Mar. 31, 2018 USD ($) loan property	Jun. 30, 2019 USD ($) Property property	Jun. 30, 2018 USD ($)	Jan. 23, 2019 property	Dec. 31, 2018 USD ($) Property
Debt Instrument
Number of pledged properties | Property	116			116			118
Pledged assets, not separately reported	$ 2,475.4			$ 2,475.4			$ 2,489.8
Repayment of line of unsecured line of credit					$ 30.0
Disposed of by Sale | Manufactured Homes in Indiana and Michigan
Debt Instrument
Number of properties sold | property						5
Mortgage
Debt Instrument
Number of loans | loan			1
Proceeds from loans		$ 64.0
Stated interest rate (percentage)			4.80%
Mortgage | Serendipity
Debt Instrument
Proceeds from loans			$ 8.8
Stated interest rate (percentage)			4.80%
Debt assumed for the purchase of property			$ 9.2
Pledged assets, not separately reported			$ 18.0
Mortgage | 2019 Asset Acquisition
Debt Instrument
Weighted average interest rate (percentage)	5.40%			5.40%
Liabilities incurred				$ 18.6
Mortgage premium transferred				$ 0.6
Mortgage | R V Resort
Debt Instrument
Number of pledged properties | property			2
Mortgage | Prepaid Loans
Debt Instrument
Weighted average interest rate (percentage)	6.90%			6.90%
Repayments of debt	$ 66.8
Number of loans repaid (loans) | loan	4
Number of pledged properties | property	4			4
Payments of prepayment penalties	$ 1.4
Mortgage | Prepaid Loans | MH Resort
Debt Instrument
Number of pledged properties | property	3			3
Mortgage | Prepaid Loans | R V Resort
Debt Instrument
Number of pledged properties | property	1			1
Mortgage | Disposed of by Sale
Debt Instrument
Defeasance of debt		$ 11.2
Weighted average interest rate (percentage)		5.00%
Mortgage | Disposed of by Sale | Manufactured Homes in Indiana and Michigan
Debt Instrument
Number of properties sold | property		5
Secured Debt
Debt Instrument
Weighted average interest rate (percentage)	4.50%			4.50%
Secured Debt | Minimum
Debt Instrument
Stated interest rate (percentage)	3.50%			3.50%
Secured Debt | Maximum
Debt Instrument
Stated interest rate (percentage)	8.90%			8.90%

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Borrowing Arrangements - Fair Value of Mortgage Debt (Details) - Level 2 - USD ($) $ in Thousands	Jun. 30, 2019	Dec. 31, 2018
Fair Value
Debt Instrument
Mortgage notes payable, excluding deferred financing costs	$ 2,203,298	$ 2,164,563
Carrying Value
Debt Instrument
Mortgage notes payable, excluding deferred financing costs	$ 2,099,714	$ 2,174,715

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Derivative Instruments and Hedging Activities - Additional Information (Details) - USD ($)	6 Months Ended	12 Months Ended
	Jun. 30, 2019	Dec. 31, 2018
Interest Rate Swap
Derivative Instruments and Hedging Activities Disclosures
Notional amount	$ 200,000,000.0
Derivative instrument, underlying rate (percentage)	1.85%
Derivative instrument, effective rate (percentage)	3.05%
LIBOR | Interest Rate Swap
Derivative Instruments and Hedging Activities Disclosures
Derivative instrument, variable rate (percentage)	1.20%
Term Loan
Derivative Instruments and Hedging Activities Disclosures
Debt instrument face amount	$ 200,000,000.0
Loans Payable
Derivative Instruments and Hedging Activities Disclosures
Derivative, contract term (years)		3 years
Loans Payable | LIBOR | Minimum
Derivative Instruments and Hedging Activities Disclosures
Debt instrument, variable rate on spread	1.20%
Loans Payable | LIBOR | Maximum
Derivative Instruments and Hedging Activities Disclosures
Debt instrument, variable rate on spread	1.90%

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Derivative Instruments and Hedging Activities - Fair Value of Derivative Financial Instrument (Details) - Designated as Hedging Instrument - Interest Rate Swap - USD ($) $ in Thousands	Jun. 30, 2019	Dec. 31, 2018
Other assets, net
Derivatives, Fair Value
Derivative asset	$ 0	$ 2,299
Accounts payable and other liabilities
Derivatives, Fair Value
Derivative liability	$ 242	$ 0

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Derivative Instruments and Hedging Activities - Effects of Derivative Instruments on Statement of Comprehensive Income and Income Statement (Details) - Interest Rate Swap - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018
Derivative Instruments and Hedging Activities Disclosures
Amount of (gain)/loss recognized in OCI on derivative	$ 1,901	$ (2,544)
Interest Expense
Derivative Instruments and Hedging Activities Disclosures
Amount of (gain)/loss reclassified from accumulated OCI into income	$ (640)	$ 93

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Equity Incentive Awards - Additional Information (Detail) - USD ($) $ in Millions	3 Months Ended			6 Months Ended		12 Months Ended
	Jun. 30, 2019	Mar. 31, 2019	Jun. 30, 2018	Jun. 30, 2019	Jun. 30, 2018	Dec. 31, 2018
General and Administrative Expense
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based compensation expense	$ 2.6		$ 2.7	$ 5.0	$ 4.5
Restricted Stock | 2014 Plan
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Shares issued (shares)	35,431	61,200				11,711
Shares categorized as vesting (percent)		50.00%
Vesting period				3 years
Fair value of shares issued	$ 4.1	$ 3.2				$ 1.3
Shares categorized as performance based (percent)		50.00%
Restricted Stock | 2014 Plan | Share-based Compensation Award, Tranche One
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting percentage				33.33%
Restricted Stock | 2014 Plan | Share-based Compensation Award, Tranche Two
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting percentage				33.33%
Restricted Stock | 2014 Plan | Share-based Compensation Award, Tranche Three
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting percentage				33.33%
Performance Shares | 2014 Plan
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Shares issued (shares)				10,201
Fair value of shares issued				$ 1.1

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Reportable Segments - Additional Information (Detail)	6 Months Ended
	Jun. 30, 2019 segment
Segment Reporting [Abstract]
Number of reportable segments	2

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Reportable Segments - Consolidated Net Income (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2019	Jun. 30, 2018	Dec. 31, 2018
Segment Reporting Information [Line Items]
Depreciation and amortization	$ (37,776)	$ (34,345)	$ (75,753)	$ (66,719)
Gain on sale of real estate, net	0	0	52,507	0
Reconciliation to Consolidated net income:
Income from other investments, net	10,265	12,536	20,635	25,572
General and administrative	(9,225)	(9,669)	(19,134)	(17,707)
Other expenses	(540)	(367)	(967)	(710)
Interest and related amortization	(26,024)	(26,285)	(52,417)	(51,988)
Equity in income of unconsolidated joint ventures	3,226	1,613	4,759	2,808
Early debt retirement	(1,491)	0	(1,491)	0
Consolidated net income	49,085	49,169	169,620	113,346
Total assets	4,014,478	3,700,189	4,014,478	3,700,189	$ 3,925,808
Capital improvements	69,003	50,061	121,444	81,377
Property Operations
Reconciliation to Consolidated net income:
Total assets	3,766,573	3,477,455	3,766,573	3,477,455
Capital improvements	28,501	26,602	52,906	47,870
Home Sales and Rentals Operations
Reconciliation to Consolidated net income:
Total assets	247,905	222,734	247,905	222,734
Capital improvements	40,502	23,459	68,538	33,507
Operating Segments
Segment Reporting Information [Line Items]
Operations revenues	245,684	235,227	502,037	478,362
Operations expenses	(127,451)	(122,280)	(245,340)	(238,865)
Income from segment operations	118,233	112,947	256,697	239,497
Interest income	1,796	1,856	3,540	3,571
Depreciation and amortization	(37,776)	(34,345)	(75,753)	(66,719)
Gain on sale of real estate, net			52,507
Income (loss) from operations	82,253	80,458	236,991	176,349
Operating Segments | Property Operations
Segment Reporting Information [Line Items]
Operations revenues	233,848	222,167	479,864	453,183
Operations expenses	(116,893)	(110,046)	(225,863)	(215,558)
Income from segment operations	116,955	112,121	254,001	237,625
Interest income	950	823	1,844	1,631
Depreciation and amortization	(35,197)	(31,954)	(70,740)	(56,029)
Gain on sale of real estate, net			52,507
Income (loss) from operations	82,708	80,990	237,612	183,227
Operating Segments | Home Sales and Rentals Operations
Segment Reporting Information [Line Items]
Operations revenues	11,836	13,060	22,173	25,179
Operations expenses	(10,558)	(12,234)	(19,477)	(23,307)
Income from segment operations	1,278	826	2,696	1,872
Interest income	846	1,033	1,696	1,940
Depreciation and amortization	(2,579)	(2,391)	(5,013)	(10,690)
Gain on sale of real estate, net			0
Income (loss) from operations	(455)	(532)	(621)	(6,878)
Segment Reconciling Items
Reconciliation to Consolidated net income:
Corporate interest income	7	6	14	241
Income from other investments, net	879	3,413	1,865	4,353
General and administrative	(9,225)	(9,669)	(19,134)	(17,707)
Other expenses	(540)	(367)	(967)	(710)
Interest and related amortization	(26,024)	(26,285)	(52,417)	(51,988)
Equity in income of unconsolidated joint ventures	3,226	$ 1,613	4,759	$ 2,808
Early debt retirement	$ (1,491)		$ (1,491)

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Reportable Segments - Income from Segment (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2019	Jun. 30, 2018
Revenues:
Rental income	$ 212,007	$ 199,155	$ 435,573	$ 406,148
Other income	10,265	12,536	20,635	25,572
Total revenues	248,366	240,502	507,456	486,527
Expenses:
Real estate taxes	15,107	13,440	30,430	27,575
Sales and marketing, gross	4,214	3,305	7,623	6,117
Right-to-use contract commissions, deferred, net	(389)	(262)	(580)	(286)
Home selling expenses	1,102	973	2,185	2,048
Total expenses	202,507	192,946	395,102	375,989
Income before equity in income of unconsolidated joint ventures	45,859	47,556	164,861	110,538
Property Operations
Revenues:
Rental income	208,375	195,594	428,357	399,072
Total revenues	233,848	222,167	479,864	453,183
Expenses:
Rental home operating and maintenance	83,576	80,091	160,320	154,999
Real estate taxes	15,107	13,440	30,430	27,575
Sales and marketing, gross	4,214	3,305	7,623	6,117
Right-to-use contract commissions, deferred, net	(389)	(262)	(580)	(286)
Total expenses	116,893	110,046	225,863	215,558
Income before equity in income of unconsolidated joint ventures	116,955	112,121	254,001	237,625
Home Sales and Rentals Operations
Revenues:
Rental home income	3,632	3,561	7,216	7,076
Total revenues	11,836	13,060	22,173	25,179
Expenses:
Rental home operating and maintenance	1,292	1,629	2,496	3,053
Home selling expenses	1,102	973	2,185	2,048
Total expenses	10,558	12,234	19,477	23,307
Income before equity in income of unconsolidated joint ventures	1,278	826	2,696	1,872
Right-to-use annual payments (membership subscriptions)
Revenues:
Contract revenue	12,586	11,891	24,902	23,410
Right-to-use annual payments (membership subscriptions) | Property Operations
Revenues:
Contract revenue	12,586	11,891	24,902	23,410
Right-to-use contracts current period, gross (membership upgrade sales)
Revenues:
Contract revenue	5,041	3,944	8,879	7,106
Right-to-use contracts current period, gross (membership upgrade sales) | Property Operations
Revenues:
Contract revenue	5,041	3,944	8,879	7,106
Right-to-use contract upfront payments, deferred, net
Revenues:
Contract revenue	(2,912)	(2,021)	(4,683)	(3,306)
Right-to-use contract upfront payments, deferred, net | Property Operations
Revenues:
Contract revenue	(2,912)	(2,021)	(4,683)	(3,306)
Gross revenues from home sales
Revenues:
Contract revenue	7,825	9,105	14,300	17,414
Expenses:
Cost of home sales	8,164	9,632	14,796	18,206
Gross revenues from home sales | Home Sales and Rentals Operations
Revenues:
Contract revenue	7,825	9,105	14,300	17,414
Expenses:
Cost of home sales	8,164	9,632	14,796	18,206
Brokered resale revenues, net | Home Sales and Rentals Operations
Revenues:
Contract revenue	379	369	657	651
Ancillary services | Property Operations
Revenues:
Contract revenue	493	223	1,774	1,329
Ancillary services | Home Sales and Rentals Operations
Revenues:
Contract revenue	0	25	0	38
Property management
Expenses:
Cost of home sales	14,385	13,472	28,070	27,153
Property management | Property Operations
Expenses:
Cost of home sales	$ 14,385	$ 13,472	$ 28,070	$ 27,153

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Label	Element	Value
AOCI Attributable to Parent [Member]
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest	us-gaap_StockholdersEquityIncludingPortionAttributableToNoncontrollingInterest	$ 942,000
Common Stock [Member]
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest	us-gaap_StockholdersEquityIncludingPortionAttributableToNoncontrollingInterest	883,000
Accumulated Distributions in Excess of Net Income [Member]
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest	us-gaap_StockholdersEquityIncludingPortionAttributableToNoncontrollingInterest	(227,166,000)
Additional Paid-in Capital [Member]
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest	us-gaap_StockholdersEquityIncludingPortionAttributableToNoncontrollingInterest	1,242,109,000
Noncontrolling Interest Of Common Units [Member]
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest	us-gaap_StockholdersEquityIncludingPortionAttributableToNoncontrollingInterest	68,088,000
Accounting Standards Update 2014-09 [Member]
Cumulative Effect of New Accounting Principle in Period of Adoption	us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption	$ (15,186,000)