ELS Reports Third Quarter Results

  ELS Reports Third Quarter Results

               Strong Core Performance; Presents 2014 Guidance

Business Wire

CHICAGO -- October 21, 2013

Equity LifeStyle Properties, Inc. (NYSE: ELS) (referred to herein as “we,”
“us,” and “our”) today announced results for the quarter and nine months ended
September30, 2013. All per share results are reported on a fully diluted
basis unless otherwise noted.

Financial Results for the Quarter Ended September30, 2013

Normalized Funds from Operations (“Normalized FFO”) increased $6.8 million, or
$0.07 per common share, to $59.4 million, or $0.65 per common share, compared
to $52.6 million, or $0.58 per common share, for the same period in 2012.
Funds from Operations (“FFO”) decreased $32.8 million, or $0.36 per common
share, to $20.4 million, or $0.22 per common share, compared to $53.2 million,
or $0.58 per common share, for the same period in 2012. Net income available
for common stockholders increased $13.9 million, or $0.17 per common share, to
$29.9 million, or $0.36 per common share, compared to $16.0 million, or $0.19
per common share, for the same period in 2012. Net income available for
stockholders was impacted by the $40.6 million gain on sale of the Michigan
properties, offset by the early debt retirement expenses of $36.5 million.

Portfolio Performance

For the quarter ended September30, 2013, property operating revenues,
excluding deferrals, increased $8.5 million to $178.9 million compared to
$170.4 million for the same period in 2012. For the nine months ended
September30, 2013, property operating revenues, excluding deferrals,
increased $21.9 million to $524.3 million compared to $502.4 million for the
same period in 2012. For the quarter ended September30, 2013, income from
property operations, excluding deferrals, increased $4.6 million to $99.8
million compared to $95.2 million for the same period in 2012. For the nine
months ended September30, 2013, income from property operations, excluding
deferrals, increased $11.4 million to $298.4 million compared to $287.0
million for the same period in 2012.

For the quarter ended September30, 2013, Core property operating revenues
increased approximately 3.5 percent and income from Core property operations
increased approximately 3.3 percent compared to the same period in 2012. For
the nine months ended September30, 2013, Core property operating revenues
increased approximately 3.1 percent and income from Core property operations
increased approximately 2.9 percent compared to the same period in 2012.

Balance Sheet

We closed on $237.1 million of financing proceeds during the quarter as part
of our $430 million long-term refinancing plan. These loans have a weighted
average maturity of 20 years and bear a weighted average interest rate of 4.28
percent per annum. In connection with the refinancing, we defeased 27
mortgages during the quarter totaling $295.3 million with a weighted average
interest rate of 5.66 percent per annum which were set to mature in 2014 and
2015. In addition, we paid off $60.7 million in mortgages with a weighted
average interest rate of 6.02 percent per annum which were set to mature in
2013. We paid a $36.5 million premium for the early retirement of the
mortgages.

Interest coverage, was approximately 3.2 times in the quarter. Our cash
balance as of September30, 2013 was approximately $51.5 million. Expanded
disclosure on our balance sheet and debt statistics are included in the tables
below.

As of October 21, 2013, we own or have an interest in 376 quality properties
in 32 states and British Columbia consisting of 138,869 sites. We are a
self-administered, self-managed real estate investment trust (“REIT”) with
headquarters in Chicago.

A live webcast of our conference call discussing these results will be
available via our website in the Investor Information section at
www.equitylifestyle.com at 10:00 a.m. Central Time on October 22, 2013.

This press release 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 recent acquisitions. These forward-looking statements are
subject to numerous assumptions, risks and uncertainties, including, but not
limited to:

  *our ability to control costs, real estate market conditions, the actual
    rate of decline in 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 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 assumptions and guidance concerning 2013 estimated net income, FFO and
    Normalized FFO;
  *our ability to manage counterparty risk;
  *in the age-qualified properties, home sales results could be impacted by
    the ability of potential homebuyers 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;
  *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 dilutive effects of issuing additional securities;
  *the effect of accounting for the entry of contracts with customers
    representing a right-to-use the Properties under the Codification Topic
    “Revenue Recognition;” 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.

Tables follow:

                                                          
                                                            
                                                            
Third Quarter 2013 - Selected Financial Data

(In millions, except per share data, unaudited)
                                                            
                                                            Quarter Ended
                                                            September 30, 2013
Income from property operations - 2013 Core ^(1)            $      98.4
Income from property operations - Acquisitions ^(2)         1.4
Income from discontinued operations                         1.0
Property management and general and administrative          (16.1          )
(excluding transaction costs)
Other income and expenses                                   6.3
Financing costs and other                                   (31.6          )
Normalized FFO ^ (3)                                        59.4
Change in fair value of contingent consideration asset      (1.0           )
^(4)
Transaction costs                                           (1.5           )
Early debt retirement                                       (36.5          )
FFO ^(3) (5)                                                $      20.4    
                                                            
Normalized FFO per share - fully diluted                    $      0.65
FFO per share - fully diluted                               $      0.22
                                                            
                                                            
Normalized FFO ^(3)                                         $      59.4
Non-revenue producing improvements to real estate           (5.7           )
Funds available for distribution (FAD) ^(3)                 $      53.7    
                                                            
FAD per share - fully diluted                               $      0.59
                                                            
Weighted average shares outstanding - fully diluted         91.3
                                                                           

1.  See page 8 for details of the 2013 Core Income from Property Operations.
2.   See page 9 for details of the Income from Property Operations for the
     properties acquired during 2012 and 2013 (the “Acquisitions”).
     See page 6 for a reconciliation of Net income available for Common Shares
3.   to FFO, Normalized FFO and FAD. See definitions of FFO, Normalized FFO
     and FAD on page 23.
     Represents the change in fair value of the net asset described in the
     following sentences. We own both a fee interest and a ground leasehold
     interest in a 2,200 site property. The ground lease provides a purchase
     option to the lessee and a put option to the lessor. Either option may be
     exercised upon the death of the fee holder. We are the beneficiary of an
     escrow funded by the seller consisting of approximately 167,400 shares of
4.   our common stock as of September 30, 2013. The escrow was established to
     protect us from future scheduled ground lease payment increases as well
     as scheduled increases in the option purchase price over time. The
     current fair value estimate of the escrow is approximately $4.5 million.
     We revalue the asset based on the market value of our common stock as of
     each reporting date and recognize in earnings any increase or decrease in
     fair value of the escrow.
     Third quarter 2013 FFO adjusted to include a deduction for depreciation
5.   expense on rental homes would have been $18.7 million, or $0.21 per fully
     diluted share.
     
     
     

Consolidated Income Statement
                                                  
(In thousands, unaudited)
                                                     
                          Quarters Ended             Nine Months Ended
                          September 30,              September 30,
                          2013         2012         2013         2012
Revenues:
Community base rental     $ 103,157     $ 98,752     $ 305,401     $ 295,185
income
Rental home income        3,584         3,055        10,576        8,422
Resort base rental        39,932        36,516       113,868       104,503
income
Right-to-use annual       12,323        12,115       35,889        36,087
payments
Right-to-use contracts    3,707         4,494        9,899         9,680
current period, gross
Right-to-use contracts,
deferred, net of prior    (1,856    )   (2,788   )   (4,446    )   (4,680    )
period amortization
Utility and other         16,224        15,499       48,694        48,559
income
Gross revenues from       5,415         1,660        12,328        5,585
home sales
Brokered resale revenue
and ancillary services    1,395         990          4,122         3,211
revenues, net
Interest income           2,200         2,120        6,173         6,132
Income from other         1,885        2,651       5,989        5,708     
investments, net ^(1)
Total revenues            187,966       175,064      548,493       518,392
                                                                   
Expenses:
Property operating and    61,782        58,586       175,183       168,444
maintenance
Rental home operating     1,950         1,713        5,307         4,407
and maintenance
Real estate taxes         11,584        11,362       35,873        34,729
Sales and marketing,      3,842         3,573        9,536         7,848
gross
Sales and marketing,
deferred commissions,     (706      )   (1,277   )   (1,824    )   (2,174    )
net
Property management       10,077        9,358        30,380        28,305
Depreciation on real
estate assets and         26,460        25,579       81,793        76,525
rental homes
Amortization of           485           7,394        803           38,659
in-place leases
Cost of home sales        5,137         1,804        11,837        6,485
Home selling expenses     563           325          1,544         1,051
General and               7,606         6,402        21,261        19,317
administrative ^(2)
Early debt retirement     36,530        —            37,911        —
Rent control              521           221          2,377         1,067
initiatives and other
Interest and related      29,206       31,508      89,706       93,035    
amortization
Total expenses            195,037       156,548      501,687       477,698
(Loss) income from
continuing operations
before equity in income   (7,071    )   18,516      46,806       40,694    
of unconsolidated joint
ventures
Equity in income of
unconsolidated joint      439          269         1,624        1,524     
ventures
Consolidated (loss)
income from continuing    (6,632    )   18,785      48,430       42,218    
operations
                                                                   
Discontinued
Operations:
Net income from           982           2,707        7,215         3,226
discontinued operations
Gain on sale of           40,586       —           41,544       —         
property, net of tax
Income from               41,568       2,707       48,759       3,226     
discontinued operations
Consolidated net income   34,936        21,492       97,189        45,444
                                                                   
Income allocated to
non-controlling           (2,753    )   (1,503   )   (7,483    )   (2,891    )
interest-Common OP
Units
Series A Redeemable
Perpetual Preferred       —             (3,393   )   —             (11,462   )
Stock Dividends
Series C Redeemable
Perpetual Preferred       (2,311    )   (587     )   (6,951    )   (587      )
Stock Dividends
Net income available      $ 29,872     $ 16,009    $ 82,755     $ 30,504  
for Common Shares
                                                                             

     For the quarter and nine months ended September 30, 2013 includes a $1.0
     million reduction and a $0.1 million increase, respectively, and for the
1.  quarter and nine months ended September 30, 2012 includes a $0.5 million
     increase, resulting from the change in the fair value of a contingent
     asset. See footnote 4 on page 4 for a detailed explanation.
2.   Includes transaction costs, see Reconciliation of Net Income to FFO,
     Normalized FFO and FAD on page 6.
     
     
     

Reconciliation of Net Income to FFO, Normalized FFO and FAD
                                                  
(In thousands, except per share data (prior periods adjusted for stock split),
unaudited)
                                                     
                           Quarters Ended            Nine Months Ended
                           September 30,             September 30,
                           2013        2012         2013         2012
Net income available for   $ 29,872     $ 16,009     $ 82,755      $ 30,504
Common Shares
Income allocated to        2,753        1,503        7,483         2,891
common OP Units
Right-to-use contract
upfront payments,          1,856        2,788        4,446         4,680
deferred, net ^(1)
Right-to-use contract
commissions, deferred,     (706     )   (1,277   )   (1,824    )   (2,174    )
net ^(2)
Depreciation on real       24,807       24,166       76,946        72,465
estate assets
Depreciation on real
estate assets,             —            715          1,536         2,094
discontinued operations
Depreciation on rental     1,653        1,413        4,847         4,060
homes
Amortization of in-place   485          7,394        803           38,659
leases
Amortization of in-place
leases, discontinued       —            154          —             5,656
operations
Depreciation on
unconsolidated joint       229          290          732           873
ventures
Gain on sale of            (40,586  )   —           (41,544   )   —         
property, net of tax
FFO ^(3) (4)               $ 20,363     $ 53,155     $ 136,180     $ 159,708
Change in fair value of
contingent consideration   988          (512     )   (124      )   (512      )
asset ^(5)
Transaction costs ^(6)     1,540        —            1,740         —
Early debt retirement      36,530      —           37,911       —         
Normalized FFO ^(3)        59,421       52,643       175,707       159,196
Non-revenue producing
improvements to real       (5,726   )   (7,691   )   (16,966   )   (20,041   )
estate
FAD ^(3)                   $ 53,695    $ 44,952    $ 158,741    $ 139,155 
                                                                   
(Loss) income from
continuing operations      $ (0.10  )   $ 0.16       $ 0.46        $ 0.33
per Common Share - Basic
(Loss) income from
continuing operations      $ (0.10  )   $ 0.16       $ 0.46        $ 0.33
per Common Share - Fully
Diluted
                                                                   
Net income per Common      $ 0.36       $ 0.19       $ 1.00        $ 0.37
Share - Basic
Net income per Common      $ 0.36       $ 0.19       $ 0.99        $ 0.37
Share - Fully Diluted
                                                                   
FFO per Common Share -     $ 0.22       $ 0.59       $ 1.50        $ 1.77
Basic
FFO per Common Share -     $ 0.22       $ 0.58       $ 1.49        $ 1.76
Fully Diluted
                                                                   
Normalized FFO per         $ 0.66       $ 0.58       $ 1.94        $ 1.77
Common Share - Basic
Normalized FFO per
Common Share - Fully       $ 0.65       $ 0.58       $ 1.93        $ 1.75
Diluted
                                                                   
FAD per Common Share -     $ 0.59       $ 0.50       $ 1.75        $ 1.54
Basic
FAD per Common Share -     $ 0.59       $ 0.49       $ 1.74        $ 1.53
Fully Diluted
                                                                   
Average Common Shares -    83,021       82,380       83,023        82,274
Basic
Average Common Shares      90,625       90,265       90,529        90,193
and OP Units - Basic
Average Common Shares
and OP Units - Fully       91,259       90,894       91,149        90,836
Diluted
                                                                             

     We are required by GAAP to defer, over the estimated customer life,
     recognition of non-refundable upfront payments from the entry of
     right-to-use contracts and upgrade sales. The customer life is currently
1.  estimated to range from one to 31 years and is based upon our experience
     operating the membership platform since 2008 as well as historical
     attrition rates provided to us by the prior operator. The amount shown
     represents the deferral of a substantial portion of current period
     upgrade sales, offset by amortization of prior period sales.
     We are required by GAAP to defer recognition of commissions paid related
     to the entry of right-to-use contracts. The deferred commissions will be
     amortized using the same method as used for the related non-refundable
2.   upfront payments from the entry of right-to-use contracts and upgrade
     sales. The amount shown represents the deferral of a substantial portion
     of current period commissions on those contracts, offset by the
     amortization of prior period commissions.
3.   See definitions of FFO, Normalized FFO and FAD on page 23.
     FFO adjusted to include a deduction for depreciation expense on rental
     homes for the quarters ended September 30, 2013 and 2012 would have been
     $18.7 million, or $0.21 per fully diluted share, and $51.7 million, or
4.   $0.57 per fully diluted share, respectively, and for the nine months
     ended September 30, 2013 and 2012, would have been $131.3 million, or
     $1.44 per fully diluted share, and $155.7 million, or $1.71 per fully
     diluted share, respectively.
5.   See footnote 4 on page 4 for a detailed explanation.
6.   Included in the line item general and administrative on the Consolidated
     Income Statement on page 5.
     
     
     

Consolidated Income from Property Operations (1)
                                                      
(In millions, except home site and occupancy figures, unaudited)
                                                         
                                  Quarters Ended         Nine Months Ended
                                  September 30,          September 30,
                                  2013       2012       2013       2012
Community base rental income      $ 103.2     $ 98.8     $ 305.4     $ 295.2
^(2)
Rental home income                3.6         3.1        10.6        8.4
Resort base rental income ^(3)    39.9        36.5       113.9       104.5
Right-to-use annual payments      12.3        12.1       35.9        36.1
Right-to-use contracts current    3.7         4.5        9.9         9.7
period, gross
Utility and other income          16.2       15.4      48.6       48.5    
Property operating revenues       178.9       170.4      524.3       502.4
                                                                     
Property operating,
maintenance, and real estate      73.3        69.9       211.1       203.2
taxes
Rental home operating and         2.0         1.7        5.3         4.4
maintenance
Sales and marketing, gross        3.8        3.6       9.5        7.8     
Property operating expenses       79.1       75.2      225.9      215.4   
Income from property operations   $ 99.8     $ 95.2    $ 298.4    $ 287.0 
                                                                     
Manufactured home site figures
and occupancy averages:
Total sites                       69,585      68,774     69,047      68,761
Occupied sites                    63,782      62,619     63,225      62,554
Occupancy %                       91.7    %   91.1   %   91.6    %   91.0    %
Monthly base rent per site        $ 539       $ 526      $ 537       $ 524
                                                                     
Core total sites                  68,652      68,646     68,651      68,633
Core occupied sites               63,019      62,617     62,971      62,549
Core occupancy %                  91.8    %   91.2   %   91.7    %   91.1    %
Core monthly base rent per site   $ 539       $ 526      $ 537       $ 524
                                                                     
Resort base rental income:
Annual                            $ 23.9      $ 22.0     $ 70.3      $ 64.8
Seasonal                          3.1         2.7        18.0        17.0
Transient                         12.9       11.8      25.6       22.7    
Total resort base rental income   $ 39.9     $ 36.5    $ 113.9    $ 104.5 
                                                                             

     See page 5 for a complete Income Statement. The line items that we
     include in property operating revenues and property operating expenses
1.  are also individually included in our Consolidated Income Statement.
     Income from property operations excludes property management expenses and
     the GAAP deferral of right-to-use contract upfront payments and related
     commissions, net.
2.   See the manufactured home site figures and occupancy averages below
     within this table.
3.   See resort base rental income detail included below within this table.
     
     
     

2013 Core Income from Property Operations (1)
                                                                    
(In millions, except home site and occupancy figures, unaudited)
                                                                         
               Quarters Ended                    Nine Months Ended
               September 30,          %          September 30,           %
               2013       2012       Change    2013       2012       Change
                                      ^(2)                               ^ (2)
Community
base rental    $ 101.9     $ 98.8     3.2   %    $ 304.1     $ 295.2     3.0  %
income ^(3)
Rental home    3.6         3.1        16.9  %    10.6        8.4         25.4 %
income
Resort base
rental         38.8        36.5       6.3   %    109.4       104.5       4.7  %
income ^(4)
Right-to-use
annual         12.3        12.1       1.7   %    35.9        36.1        (0.6 )%
payments
Right-to-use
contracts
current        3.7         4.5        (17.5 )%   9.9         9.7         2.3  %
period,
gross
Utility and
other income   16.1       15.4      3.9   %    48.2       48.5       (0.6 )%
^(5)
Property
operating      176.4       170.4      3.5   %    518.1       502.4       3.1  %
revenues
                                                                         
Property
operating,
maintenance,   72.3        69.9       3.4   %    207.8       203.1       2.3  %
and real
estate taxes
Rental home
operating      1.9         1.7        13.7  %    5.3         4.4         20.1 %
and
maintenance
Sales and
marketing,     3.8        3.6       7.5   %    9.5        7.8        21.5 %
gross
Property
operating      78.0       75.2      3.8   %    222.6      215.3      3.4  %
expenses
Income from
property       $ 98.4     $ 95.2    3.3   %    $ 295.5    $ 287.1    2.9  %
operations
Occupied       63,100      62,745
sites ^(6)
                                                                         
Core manufactured home site figures and
occupancy averages:
Total sites    68,652      68,646                68,651      68,633
Occupied       63,019      62,617                62,971      62,549
sites
Occupancy %    91.8    %   91.2   %              91.7    %   91.1    %
Monthly base
rent per       $ 539       $ 526                 $ 537       $ 524
site
                                                                         
Resort base
rental
income:
Annual         $ 22.7      $ 22.0     3.9   %    $ 67.3      $ 64.7      3.9  %
Seasonal       3.2         2.7        16.3  %    17.4        17.0        2.7  %
Transient      12.9       11.8      8.6   %    24.7       22.8       8.4  %
Total resort
base rental    $ 38.8     $ 36.5    6.3   %    $ 109.4    $ 104.5    4.7  %
income
                                                                              

     2013 Core properties include properties we expect to own and operate
1.  during all of 2012 and 2013. Income from property operations excludes
     property management expenses and the GAAP deferral of right-to-use
     contract upfront payments and related commissions, net.
2.   Calculations prepared using actual results without rounding.
3.   See the Core manufactured home site figures and occupancy averages
     included below within this table.
4.   See resort base rental income detail included below within this table.
     During the nine months ended September 30, 2012, we recognized
5.   approximately $2.1 million of cable service prepayments due to the
     bankruptcy of a third-party cable service provider at certain properties.
6.   Occupied sites as of the end of the period shown. Occupied sites have
     increased by 224 from 62,876 at December 31, 2012.
     
     
     

Acquisitions - Income from Property Operations (1)
                                                        
(In millions, unaudited)
                                                           
                                           Quarter Ended   Nine Months Ended
                                           September 30,   September 30,
                                           2013            2013
Community base rental income               $   1.3         $       1.3
Resort base rental income                  1.1             4.5
Utility income and other property income   0.1            0.4
Property operating revenues                2.5             6.2
                                                           
Property operating expenses                1.1            3.2
Income from property operations            $   1.4        $       3.0
                                                                   

     Represents actual performance of two properties we acquired during 2012
1.  and four properties we acquired during 2013. Excludes property management
     expenses.
     
     
     

Income from Rental Home Operations
                                                        
(In millions, except occupied rentals, unaudited)
                                                           
                                      Quarters Ended       Nine Months Ended
                                      September 30,        September 30,
                                      2013      2012      2013      2012
Manufactured homes:
New home                              $ 5.6      $ 4.7     $ 16.6     $ 13.1
Used home                             8.5       8.3      27.7       23.1   
Rental operations revenues ^(1)       14.1       13.0      44.3       36.2
Rental operations expense             (2.0   )   (1.7  )   (5.3   )   (4.4   )
Income from rental operations,        12.1       11.3      39.0       31.8
before depreciation
Depreciation on rental homes          (1.7   )   (1.4  )   (4.8   )   (4.1   )
Income from rental operations,        $ 10.4    $ 9.9    $ 34.2     $ 27.7 
after depreciation
                                                                      
Occupied rentals: ^ (2)
New                                   2,032      1,668
Used                                  3,380      3,119
                                                                      
                                                                      
                                                                      

                          As of
                           September 30, 2013        September 30, 2012
Cost basis in rental       Gross      Net of         Gross      Net of
homes: ^(3)                            Depreciation               Depreciation
New                        $ 112.6     $  100.4       $ 100.6     $    91.9
Used                       64.1       56.1          55.3       50.2
Total rental homes         $ 176.7    $  156.5      $ 155.9    $    142.1
                                                                       

     For the quarters ended September 30, 2013 and 2012, approximately $10.5
     million and $9.9 million, respectively, are included in the Community
     base rental income line in the Consolidated Income from Property
     Operations table on page 7. For the nine months ended September 30, 2013
1.  and 2012, approximately $33.7 million and $27.8 million, respectively,
     are included in the Community base rental income line in the Consolidated
     Income from Property Operations table on page 7. The remainder of the
     rental operations revenue is included in the Rental home income line in
     the Consolidated Income from Property Operations table on page 7.
2.   Occupied rentals as of the end of the period shown.
3.   Includes both occupied and unoccupied rental homes.
     
     

Total Sites and Home Sales
                                                                   
(In thousands, except sites and home sale volumes, unaudited)
                                                                       
Summary of Total Sites as of September 30, 2013
                                               Sites
Community sites                                 69,900
Resort sites:
Annuals                                         23,200
Seasonal                                        9,000
Transient                                       9,600
Membership ^ (1)                                24,100
Joint Ventures ^(2)                             3,100   
Total                                           138,900 
                                                                       
Home Sales - Select Data
                                     Quarters Ended         Nine Months Ended
                                     September 30,          September 30,
                                     2013       2012        2013       2012
New Home Sales Volume ^ (3)          36         3           69         20
New Home Sales Gross Revenues        $ 1,530    $ 141       $ 3,269    $ 1,038
                                                                       
Used Home Sales Volume               402        338         1,141      981
Used Home Sales Gross Revenues       $ 3,885    $ 1,519     $ 9,059    $ 4,547
                                                                       
Brokered Home Resales Volume         176        191         623        709
Brokered Home Resale Revenues, net   $ 225      $ 258       $ 840      $ 917
                                                                         

1.  Sites primarily utilized by approximately 98,700 members. Includes
     approximately 4,800 sites rented on an annual basis.
     Joint venture income is included in the Equity in income from
2.   unconsolidated joint ventures line in the Consolidated Income Statement
     on page 5.
     Includes 12 related party home sales and one third-party dealer sale for
     the quarter ended September 30, 2013 and 14 related party home sales and
3.   one third-party dealer sale for the nine months ended September 30, 2013.
     Includes one third party home sale for the quarter ended September 30,
     2012.
     
     
     

                 2013 Guidance - Selected Financial Data ^(1)

Our guidance acknowledges the existence of volatile economic conditions, which
may impact our current guidance assumptions. Factors impacting 2013 guidance
include, but are not limited to the following: (i) the mix of site usage
within the portfolio; (ii) yield management on our short-term resort sites;
(iii) scheduled or implemented rate increases on community and resort sites;
(iv) scheduled or implemented rate increases in annual payments under
right-to-use contracts; (v) occupancy changes; (vi) our ability to retain and
attract customers renewing or entering right-to-use contracts; (vii)
performance of the chattel loans purchased by us in connection with a prior
acquisition; (viii) our ability to integrate and operate recent acquisitions
in accordance with our estimates; (ix) completion of pending transactions in
their entirety and on assumed schedule and (x) ongoing legal matters and
related fees.

(In millions, except per share data unaudited)
                                                             
                                                             Year Ended
                                                             December 31, 2013
Income from property operations - 2013 Core ^(2)             $     391.5
Income from property operations - Acquisitions ^(3)          4.9
Income from discontinued operations                          8.8
Property management and general and administrative           (66.3         )
Other income and expenses ^(4)                               18.2
Financing costs and other                                    (128.0        )
Normalized FFO ^(5)                                          229.1
Change in fair value of contingent consideration asset ^(6)  0.1
Transaction costs                                            (1.7          )
Early debt retirement                                        (37.9         )
FFO ^(5)                                                     189.6
Depreciation on real estate and other                        (104.6        )
Depreciation on rental homes                                 (6.5          )
Depreciation on discontinued operations                      (1.5          )
Deferral of right-to-use contract sales revenue and          (3.7          )
commission, net
Income allocated to OP units                                 (9.7          )
Gain on sale of property                                     41.5          
Net income available to common shares                        $     105.1   
                                                             
Normalized FFO per share - fully diluted                     $2.48-$2.54
FFO per share - fully diluted                                $2.05-$2.11
Net income per common share - fully diluted ^(7)             $1.23-$1.29
                                                             
Weighted average shares outstanding - fully diluted          91.2

     Each line item represents the mid-point of a range of possible outcomes
     and reflects management’s estimate of the most likely outcome. Actual
1.  Normalized FFO, Normalized FFO per share, FFO, FFO per share, Net Income
     and Net Income per share could vary materially from amounts presented
     above if any of our assumptions is incorrect.
     See page 14 for 2013 Core Guidance Assumptions. Amount represents 2012
2.   income from property operations from the 2013 Core Properties of $381.0
     million multiplied by an estimated growth rate of 2.8%.
3.   See page 15 for the 2013 Assumptions regarding the Acquisition
     Properties.
4.   See page 18 for 2011 Acquired Chattel Loan Assumptions.
5.   See page 23 for definitions of Normalized FFO and FFO.
6.   See footnote 4 on page 4 for a detailed explanation.
7.   Net income per fully diluted common share is calculated before Income
     allocated to OP Units.
     
     
     

         Fourth Quarter 2013 Guidance - Selected Financial Data ^(1)

Our guidance acknowledges the existence of volatile economic conditions, which
may impact our current guidance assumptions. Factors impacting 2013 guidance
include, but are not limited to the following: (i) the mix of site usage
within the portfolio; (ii) yield management on our short-term resort sites;
(iii) scheduled or implemented rate increases on community and resort sites;
(iv) scheduled or implemented rate increases in annual payments under
right-to-use contracts; (v) occupancy changes; (vi) our ability to retain and
attract customers renewing or entering right-to-use contracts; (vii)
performance of the chattel loans purchased by us in connection with a prior
acquisition; (viii) our ability to integrate and operate recent acquisitions
in accordance with our estimates; (ix) completion of pending transactions in
their entirety and on assumed schedule and (x) ongoing legal matters and
related fees.

(In millions, except per share data unaudited)
                                                           
                                                             Quarter Ended
                                                             December 31, 2013
Income from property operations - 2013 Core ^ (2)            $     96.0
Income from property operations - Acquisitions ^(3)          1.9
Property management and general and administrative           (16.4         )
Other income and expenses ^(4)                               3.2
Financing costs and other                                    (31.2         )
Normalized FFO and FFO ^(5)                                  53.5
Depreciation on real estate and other                        (26.1         )
Depreciation on rental homes                                 (1.7          )
Deferral of right-to-use contract sales revenue and          (1.1          )
commission, net
Income allocated to OP units                                 (2.1          )
Net income available to common shares                        $     22.5    
                                                             
Normalized FFO per share - fully diluted                     $0.56-$0.62
FFO per share - fully diluted                                $0.56-$0.62
Net income per common share - fully diluted ^(6)             $0.24-$0.30
                                                             
Weighted average shares outstanding - fully diluted          91.3
                                                                           

     Each line item represents the mid-point of a range of possible outcomes
     and reflects management’s best estimate of the most likely outcome.
1.  Actual Normalized FFO, Normalized FFO per share, FFO, FFO per share, Net
     Income and Net Income per share could vary materially from amounts
     presented above if any of our assumptions is incorrect.
     See page 14 for Core Guidance Assumptions. Amount represents Core Income
2.   from property operations from the 2013 Core Properties of $93.9 million
     multiplied by an estimated growth rate of 2.3%.
3.   See page 15 for the 2013 Assumptions regarding the Acquisition
     Properties.
4.   See page 18 for 2011 Acquired Chattel Loan Assumptions.
5.   See page 23 for definitions of Normalized FFO and FFO.
6.   Net income per fully diluted common share is calculated before Income
     allocated to OP Units.
     
     
     

2013 Core (1)
Guidance Assumptions - Income from Property Operations
                                                                
(In millions, unaudited)

                                                                     Fourth
                           Year Ended     2013       Quarter Ended   Quarter
                                                                     2013
                           December 31,   Growth     December 31,    Growth
                           2012           Factors   2012            Factors
                                          ^(2)                       ^(2)
Community base rental      $   394.6      3.0   %    $   99.4        2.9   %
income
Rental home income         11.7           23.2  %    3.2             17.7  %
Resort base rental         134.3          4.7   %    29.8            4.5   %
income ^ (3)
Right-to-use annual        47.7           —     %    11.6            1.8   %
payments
Right-to-use contracts     13.4           —     %    3.8             (5.9  )%
current period, gross
Utility and other income   62.4          0.3   %    13.9           3.5   %
Property operating         664.1          3.2   %    161.7           3.3   %
revenues
                                                                     
Property operating,
maintenance, and real      (265.9     )   2.9   %    (62.8      )    4.5   %
estate taxes
Rental home operating      (6.4       )   15.7  %    (2.0       )    5.5   %
and maintenance
Sales and marketing,       (10.8      )   17.7  %    (3.0       )    7.8   %
gross
Property operating         (283.1     )   3.7   %    (67.8      )    4.7   %
expenses
Income from property       $   381.0     2.8   %    $   93.9       2.3   %
operations
                                                                     
Resort base rental
income:
Annual                     $   87.2       3.9   %    $   22.4        4.0   %
Seasonal                   21.1           3.3   %    4.1             5.9   %
Transient                  26.0          8.2   %    3.3            6.6   %
Total resort base rental   $   134.3     4.7   %    $   29.8       4.5   %
income
                                                                           

     2013 Core properties include properties we expect to own and operate
1.  during all of 2012 and 2013. Excludes property management expenses and
     the GAAP deferral of right to use contract upfront payments and related
     commissions, net.
     Management’s estimate of the growth of property operations in the 2013
     Core Properties compared to actual 2012 performance. Represents our
2.   estimate of the mid-point of a range of possible outcomes. Calculations
     prepared using actual results without rounding. Actual growth could vary
     materially from amounts presented above if any of our assumptions is
     incorrect.
3.   See Resort base rental income detail included below within this table.
     
     
     

2013 Assumptions Regarding Acquisition Properties (1)
                                                     
(In millions, unaudited)
                                                        
                               Year Ended               Quarter Ended
                               December 31, 2013 ^(2)   December 31, 2013 ^(2)
Community base rental income   $       3.2              $       2.0
Resort base rental income      6.0                      1.6
Utility income and other       0.8                     0.2              
property income
Property operating revenues    10.0                     3.8
                                                        
Property operating,
maintenance, and real estate   (5.1             )       (1.9             )
taxes
Property operating expenses    (5.1             )       (1.9             )
Income from property           $       4.9             $       1.9      
operations
                                                                         

1.  The acquisition properties includes two properties we acquired in 2012
     and four properties acquired during 2013.
     Each line item represents our estimate of the mid-point of a possible
     range of outcomes and reflects management’s best estimate of the most
2.   likely outcome for the Acquisition Properties. Actual income from
     property operations for the Acquisition Properties could vary materially
     from amounts presented above if any of our assumptions is incorrect.
     
     
     

                 2014 Guidance - Selected Financial Data ^(1)

Our guidance acknowledges the existence of volatile economic conditions, which
may impact our current guidance assumptions. Factors impacting 2014 guidance
include, but are not limited to the following: (i) the mix of site usage
within the portfolio; (ii) yield management on our short-term resort sites;
(iii) scheduled or implemented rate increases on community and resort sites;
(iv) scheduled or implemented rate increases in annual payments under
right-to-use contracts; (v) occupancy changes; (vi) our ability to retain and
attract customers renewing or entering right-to-use contracts; (vii)
performance of the chattel loans we purchased in connection with a prior
acquisition; (viii) our ability to integrate and operate recent acquisitions
in accordance with our estimates; (ix) completion of pending transactions in
their entirety and on assumed schedule; and (x) ongoing legal matters and
related fees.

(In millions, except per share data unaudited)
                                                           
                                                             Year Ended
                                                             December 31, 2014
Income from property operations - 2014 Core ^(2)             $     408.0
Income from property operations - Acquisitions               7.0
Property management and general and administrative           (68.2         )
Other income and expenses                                    17.4
Financing costs and other                                    (121.1        )
Normalized FFO and FFO ^(3)                                  243.1
Depreciation on real estate and other                        (103.6        )
Depreciation on rental homes                                 (6.6          )
Deferral of right-to-use contract sales revenue and          (4.8          )
commission, net
Income allocated to OP units                                 (10.8         )
Net income available to common shares                        $     117.3   
                                                             
Normalized FFO per share - fully diluted                     $2.61-$2.71
FFO per share - fully diluted                                $2.61-$2.71
Net income per common share - fully diluted ^(4)             $1.35-$1.45
                                                             
Weighted average shares outstanding - fully diluted          91.5
                                                                           

     Each line item represents the mid-point of a range of possible outcomes
     and reflects management’s estimate of the most likely outcome. Actual
1.  Normalized FFO, Normalized FFO per share, FFO, FFO per share, Net Income
     and Net Income per share could vary materially from amounts presented
     above if any of our assumptions is incorrect.
     See page 17 for 2014 Core Guidance Assumptions. Amount represents 2013
2.   income from property operations from the 2014 Core Properties of $393.9
     million multiplied by an estimated growth rate of 3.6%.
3.   See page 23 for definitions of Normalized FFO and FFO.
4.   Net income per fully diluted common share is calculated before Income
     allocated to OP Units.
     
     
     

2014 Core (1)
Guidance Assumptions - Income from Property Operations
                                                               
(In millions, unaudited)
                                                                  
                                                 Estimated 2013   2014 Growth
                                                                  Factors ^(2)
Community base rental income                     $   406.4        2.2     %
Rental home income                               14.4             9.7     %
Resort base rental income                        146.3            3.8     %
Right-to-use annual payments                     47.7             (5.5    )%
Right-to-use contracts current period, gross     13.4             0.1     %
Utility and other income                         63.1            5.7     %
Property operating revenues                      691.3            2.4     %
                                                                  
Property operating, maintenance, and real        $   (277.2  )    1.7     %
estate taxes
Rental home operating and maintenance            (7.4        )    0.9     %
Sales and marketing, gross                       (12.8       )    (17.2   )%
Property operating expenses                      (297.4      )    0.9     %
Income from property operations                  $   393.9       3.6     %
                                                                  
Resort base rental income:
Annual                                           $   94.7         4.0     %
Seasonal                                         22.5             3.2     %
Transient                                        29.1            3.8     %
Total resort base rental income                  $   146.3       3.8     %
                                                                          

     2014 Core properties include properties we expect to own and operate
1.  during all of 2013 and 2014. Excludes property management expenses and
     the GAAP deferral of right to use contract upfront payments and related
     commissions, net.
     Management’s estimate of the growth of property operations in the 2014
     Core Properties compared to actual 2013 performance. Represents our
2.   estimate of the mid-point of a range of possible outcomes. Calculations
     prepared using actual results without rounding. Actual growth could vary
     materially from amounts presented above if any of our assumptions is
     incorrect.
     
     
     

                    2011 Acquired Chattel Loan Assumptions

The following chattel loan assumptions exclude the 11 Michigan properties sold
in 2013. For the year ending December31, 2013, other income and expenses
guidance includes estimated interest income of approximately $3.5 million from
notes receivable acquired from the seller and secured by manufactured homes in
connection with the acquisition of properties in 2011. As of September30,
2013, our carrying value of the notes receivable was approximately $14.7
million. Our initial carrying value was based on a third party valuation
utilizing 2011 market transactions and is adjusted based on actual performance
in the loan pool. Factors used in determining the initial carrying value
included delinquency status, market interest rates and recovery assumptions.
The following tables provide a summary of the notes receivable and certain
assumptions about future performance on the remaining notes receivable
portfolio, including interest income guidance for 2013. An increase in the
estimate of expected cash flows would generally result in additional interest
income to be recognized over the remaining life of the underlying pool of
loans. A decrease in the estimate of expected cash flows could result in an
impairment loss to the carrying value of the loans. There can be no assurance
that the notes receivable will perform in accordance with these assumptions.

(In millions, unaudited)
                                                              
                                                                 2013
Contractual cash flows to maturity                               $   93.9
beginning January 1,
Expected cash flows to maturity beginning                        38.3
January 1,
Expected interest income to maturity                             12.7
beginning January 1,
                                                                 
                                            Actual through       2013 Guidance
                                            September 30, 2013   Assumptions
Default rate                                14            %      17         %
Recoveries as percentage of defaults        25            %      24         %
Yield                                       18            %      27         %
                                                                 
Average carrying amount of loans            $     16.1           $   15.6
Contractual principal pay downs             1.6                  2.2
Contractual interest income                 2.7                  3.6
Expected cash flows applied to principal    2.4                  2.9
Expected cash flows applied to interest     2.7                  3.5
income
                                                                            
                                                                            
                                                                            

Right-To-Use Memberships - Select Data
                     
(In thousands, except member count, number of Zone Park Passes, number of
annuals and number of upgrades, unaudited)
                       
                       Year Ended December 31,
                       2010       2011       2012       2013 ^(1)  2014
                                                                       ^(1)
Member Count ^(2)      102,726     99,567      96,687      97,000      96,000
Right-to-use annual    $ 49,831    $ 49,122    $ 47,662    $ 47,700    $ 45,000
payments ^(3)
Number of Zone Park    4,487       7,404       10,198      16,000      18,000
Passes (ZPPs) ^(4)
Number of annuals      3,062       3,555       4,280       4,800       4,900
^(5)
Resort base rental     $ 6,712     $ 8,069     $ 9,585     $ 11,200    $ 12,300
income from annuals
Number of upgrades     3,659       3,930       3,069       3,100       3,150
^(6)
Upgrade contract       $ 17,430    $ 17,663    $ 13,431    $ 13,400    $ 13,400
initiations ^(7)
Resort base rental
income from            $ 10,967    $ 10,852    $ 11,042    $ 12,300    $ 12,900
seasonals/transients
Utility and other      $ 2,059     $ 2,444     $ 2,407     $ 2,200     $ 2,300
income
                                                                         

     Guidance estimate. Each line item represents our estimate of the
1.  mid-point of a possible range of outcomes and reflects management’s best
     estimate of the most likely outcome. Actual figures could vary materially
     from amounts presented above if any of our assumptions is incorrect.
     Members have entered into right-to-use contracts with us that entitle
2.   them to use certain properties on a continuous basis for up to 21 days.
     For the year ended December 31, 2012 and years ending December 31, 2013
     and 2014, includes 1,300, 6,600 and 8,500 RV dealer ZPPs.
     The year ended December 31, 2012 and the year ending December 31, 2013,
     includes $0.1 million and $2.1 million, respectively, of revenue
     recognized related to our right-to-use annual memberships activated
3.   through our dealer program. No cash is received from the members during
     the first year of membership for memberships activated through the dealer
     program. Revenue earned is offset by non-cash membership sales and
     marketing expenses related to advertising provided by RV dealers.
4.   ZPPs allow access to up to five zones of the United States.
5.   Members who rent a specific site for an entire year in connection with
     their right to use contract.
     Existing customers that have upgraded agreements are eligible for longer
6.   stays, can make earlier reservations, may receive discounts on rental
     units, and may have access to additional Properties. Upgrades require a
     non-refundable upfront payment.
     Revenues associated with contract upgrades, included in the line item
7.   Right-to-use contracts current period, gross, on our Consolidated Income
     Statement on page 5.
     
     
     

Balance Sheet
                                                              
(In thousands, except share (prior period adjusted for stock split) and per
share data)
                                                                 
                                                 September 30,   December 31,
                                                 2013            2012
                                                 (unaudited)
Assets
Investment in real estate:
Land                                             $ 1,023,456     $ 984,224
Land improvements                                2,654,169       2,565,299
Buildings and other depreciable property         530,027        495,127     
                                                 4,207,652       4,044,650
Accumulated depreciation                         (1,031,152  )   (948,581    )
Net investment in real estate                    3,176,500       3,096,069
Cash                                             51,526          37,126
Notes receivable, net                            43,415          45,469
Investment in joint ventures                     9,795           8,420
Rent and other customer receivables, net         930             1,046
Deferred financing costs, net                    19,811          20,620
Retail inventory                                 3,027           1,569
Deferred commission expense                      24,666          22,841
Escrow deposits, goodwill, and other assets,     67,460          45,214
net
Assets held for disposition                      —              119,852     
Total Assets                                     $ 3,397,130    $ 3,398,226 
Liabilities and Equity
Liabilities:
Mortgage notes payable                           $ 1,994,308     $ 2,061,610
Term loan                                        200,000         200,000
Unsecured lines of credit                        —               —
Accrued payroll and other operating expenses     79,020          63,672
Deferred revenue – upfront payments from         67,425          62,979
right-to-use contracts
Deferred revenue – right-to-use annual           11,456          11,088
payments
Accrued interest payable                         9,523           10,500
Rents and other customer payments received in    53,104          54,017
advance and security deposits
Distributions payable                            22,759          —
Liabilities held for disposition                 —              10,058      
Total Liabilities                                2,437,595       2,473,924
Equity:
Stockholders’ Equity:
Preferred stock, $0.01 par value 9,945,539
shares authorized as of September 30, 2013 and   —               —
December 31, 2012; none issued and outstanding
as of September 30, 2013 and December 31, 2012
6.75% Series C Cumulative Redeemable Perpetual
Preferred Stock, $0.01 par value, 54,461
shares authorized and 54,458 issued and          136,144         136,144
outstanding as of September 30, 2013 and
December 31, 2012 at liquidation value
Common stock, $0.01 par value 100,000,000
shares authorized; 83,356,321 and 83,193,310     834             832
shares issued and outstanding as of September
30, 2013 and December 31, 2012, respectively
Paid-in capital                                  1,021,694       1,012,514
Distributions in excess of accumulated           (267,415    )   (287,652    )
earnings
Accumulated other comprehensive loss             (1,357      )   (2,590      )
Total Stockholders’ Equity                       889,900         859,248
Non-controlling interests – Common OP Units      69,635         65,054      
Total Equity                                     959,535        924,302     
Total Liabilities and Equity                     $ 3,397,130    $ 3,398,226 
                                                                             

Debt Maturity Schedule & Summary
             
Secured Debt Maturity Schedule
(In thousands, unaudited)
                 
Year             Amount
2013             $   —
2014             113,792
2015             289,707
2016             226,076
2017             90,153
2018             202,669
2019             212,345
2020             128,677
2021+            711,877
Total ^(1)       $   1,975,296
                     
                     
                     

Debt Summary as of September30, 2013
                                                                           
(In millions, except weighted average interest and average years to maturity, unaudited)

             Total                            Secured                          Unsecured
                        Weighted   Average               Weighted   Average              Weighted   Average
             Balance   Average   Years to   Balance   Average   Years to   Balance  Average   Years to
                        Interest   Maturity              Interest   Maturity             Interest   Maturity
                        ^(2)                             ^(2)                            ^(2)
Consolidated $ 2,194   5.0   %   6.7        $ 1,994   5.2   %    6.9        $200     3.1%      3.8
Debt

     Represents our mortgage notes payable excluding $19.0 million net note
     premiums and our $200 million term loan as of September 30, 2013. As of
     September 30, 2013, we had an unsecured line of credit with a borrowing
1.  capacity of $380.0 million, $0 outstanding, an interest rate of LIBOR
     plus 1.40% to 2.00% per annum and a 0.25% to 0.40% facility fee depending
     on leverage as defined in the loan agreement. The unsecured line of
     credit matures on September 15, 2016 and has a one-year extension option.
2.   Includes loan costs amortization.
     
     
     

Market Capitalization
                                                                          
(In millions, except share and OP Unit data, unaudited)
                                                                                
Capital Structure as of September 30, 2013
                Total         % of     Total        % of Total   % of
                                Total                                 Total
Secured debt                              $  1,994      90.9    %
Unsecured debt                            200         9.1     %
Total debt                                $  2,194      100.0   %     40.3  %
                                                                                
Common Shares    83,356,321     91.6  %
OP Units         7,681,075    8.4   %
Total Common
Shares and OP    91,037,396     100.0 %
Units
Common Share     $   34.17
price
Fair value of                             $  3,111      95.8    %
Common Shares
Perpetual
Preferred                                 136         4.2     %
Equity
Total Equity                              $  3,247      100.0   %     59.7  %
                                                                                
Total market                              $  5,441                    100.0 %
capitalization
                                                                                
Perpetual Preferred Equity as of September 30, 2013
                                                                      Annual Dividend
Series          Callable              Outstanding  Liquidation  Per      Value
                 Date                     Shares        Value         Share
6.75% Series C   9/7/2017                 54,458        $136          $168.75   $ 9.2
                                                                                  
                                                                                  
                                                                                  

                         Non-GAAP Financial Measures

Funds from Operations (“FFO”) is a non-GAAP financial measure. We believe FFO,
as defined by the Board of Governors of the National Association of Real
Estate Investment Trusts (“NAREIT”), is generally an appropriate measure of
performance for an equity REIT. While FFO is a relevant and widely used
measure of operating performance for equity REITs, it does not represent cash
flow from operations or net income as defined by GAAP, and it should not be
considered as an alternative to these indicators in evaluating liquidity or
operating performance.

We define FFO as net income, computed in accordance with GAAP, excluding gains
and actual or estimated losses from sales of properties, plus real estate
related depreciation and amortization, impairments, if any, and after
adjustments for unconsolidated partnerships and joint ventures. Adjustments
for unconsolidated partnerships and joint ventures are calculated to reflect
FFO on the same basis. We receive up-front 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 nonrefundable right-to-use payments, we believe
that it is appropriate to adjust for the impact of the deferral activity in
our calculation of FFO.

Normalized Funds from Operations (“Normalized FFO”) is a non-GAAP measure. We
define Normalized FFO as FFO excluding the following non-operating income and
expense items: a) the financial impact of contingent consideration; b) gains
and losses from early debt extinguishment, including prepayment penalties and
defeasance costs; c) property acquisition and other transaction costs related
to mergers and acquisitions; and d) other miscellaneous non-comparable items.

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 depreciation, amortization and actual or estimated
gains or losses from sales of real estate, all of which are based on
historical costs and which 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,
property acquisition and other transaction costs related to mergers and
acquisitions and the change in fair value of our contingent consideration
asset 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.

Funds available for distribution (“FAD”) is a non-GAAP financial measure. We
define FAD as Normalized FFO less non-revenue producing capital expenditures.

Investors should review FFO, Normalized FFO and FAD, along with GAAP net
income and cash flow from operating activities, investing activities and
financing activities, when evaluating an equity REIT’s operating performance.
We compute FFO in accordance with our interpretation of standards established
by 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. 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. FFO, Normalized FFO and
FAD 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.

Contact:

Equity LifeStyle Properties, Inc.
Paul Seavey, (312) 279-1488
 
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