ELS Reports Fourth Quarter Results

Equity LifeStyle Properties, Inc. (NYSE: ELS) (referred to herein as “we,” “us,” and “our”) today announced results for the quarter and year ended December 31, 2023. All per share results are reported on a fully diluted basis unless otherwise noted.

 

 

 

 

 

($ in millions, except per share data)

 

 

 

 

 

FINANCIAL RESULTS

Q4 2023

 

Q4 2022

 

$ Change

Total Revenues

$

360.6

 

$

340.6

 

$

20.0

 

Net Income available for Common Stockholders

$

91.9

 

$

73.0

 

$

18.9

 

Net Income per Common Share

$

0.49

 

$

0.39

 

$

0.10

 

 

 

 

 

 

 

 

 

 

 

 

 

NON-GAAP FINANCIAL MEASURES

Q4 2023

 

Q4 2022

 

$ Change

Funds from Operations (“FFO”) per Common Share and OP Unit

$

0.76

 

$

0.63

 

$

0.13

 

Normalized Funds from Operations (“Normalized FFO”) per Common Share and OP Unit

$

0.71

 

$

0.64

 

$

0.07

 

Property operating revenues

$

327.7

 

$

303.0

 

$

24.7

 

Income from property operations, excluding property management

$

191.9

 

$

177.6

 

$

14.3

 

 

 

 

 

 

 

 

 

 

 

 

 

Core Portfolio Performance

Q4 2023

 

Q4 2022

 

% Change

Core property operating revenues

$

318.8

 

$

299.0

 

 

6.6

%

Core Income from property operations, excluding property management

$

186.7

 

$

177.5

 

 

5.2

%

2024 Dividends

Our Board of Directors has approved setting the annual dividend rate for 2024 at $1.91 per share of Common Stock, an increase of 6.7%, or $0.12, over the current $1.79 per share of Common Stock for 2023. Our Board of Directors, in its sole discretion, will determine the amount of each quarterly dividend in advance of payment.

About Equity LifeStyle Properties

We are a self-administered, self-managed real estate investment trust (“REIT”) with headquarters in Chicago. As of January 29, 2024, we own or have an interest in 451 properties in 35 states and British Columbia consisting of 172,465 sites.

For additional information, please contact our Investor Relations Department at [phone] or at [e-mail].

Conference Call

A live audio webcast of our conference call discussing these results will take place tomorrow, Tuesday, January 30, 2024, at 10:00 a.m. Central Time. Please visit the Investor Relations section at www.equitylifestyleproperties.com for the link. A replay of the webcast will be available for two weeks at this site.

Forward-Looking Statements

In addition to historical information, 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 acquisitions. Forward-looking statements, including our guidance concerning Net Income, FFO and Normalized FFO per share data, by their nature, involve estimates, projections, goals, forecasts and assumptions and are subject to risks and uncertainties that could cause actual results or outcomes to differ materially from those expressed in a forward-looking statement due to a number of factors, which 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 and marina sites; (iii) scheduled or implemented rate increases on community, resort and marina sites; (iv) scheduled or implemented rate increases in annual payments under membership subscriptions; (v) occupancy changes; (vi) our ability to attract and retain membership customers; (vii) change in customer demand regarding travel and outdoor vacation destinations; (viii) our ability to manage expenses in an inflationary environment; (ix) our ability to integrate and operate recent acquisitions in accordance with our estimates; (x) our ability to execute expansion/development opportunities in the face of supply chain delays/shortages; (xi) completion of pending transactions in their entirety and on assumed schedule; (xii) our ability to attract and retain property employees, particularly seasonal employees; (xiii) ongoing legal matters and related fees; (xiv) costs to restore property operations and potential revenue losses following storms or other unplanned events; and (xv) the potential impact of, and our ability to remediate material weaknesses in our internal control over financial reporting. For further information on these and other factors that could impact us and the statements contained herein, refer to our filings with the Securities and Exchange Commission, including the “Risk Factors” and “Forward-Looking Statements” sections in our most recent Annual Report on Form 10-K or Form 10-K/A and any subsequent Quarterly Reports on Form 10-Q or Form 10-Q/A. 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.

Supplemental Financial Information

Operations and Financial Update

• Net income per Common Share was $1.69, for the year ended December 31, 2023, 10.5% higher than the year ended December 31, 2022.
• FFO per Common Share was $2.77 for the year ended December 31, 2023, 7.1% higher than the year ended December 31, 2022.
• Normalized FFO per Common Share was $2.75 for the year ended December 31, 2023, 4.7% higher than the year ended December 31, 2022.
• Acquired one RV community for a purchase price of $9.5 million during the year ended December 31, 2023.
• Added 994 expansion sites during the year ended December 31, 2023.
• New home sales of 905 for the year ended December 31, 2023.
• During the year ended December 31, 2023, we closed on four secured financing transactions totaling $463.8 million. The loans have a weighted average fixed interest rate of 5.05% per annum and a weighted average maturity of approximately eight years.

Core Portfolio

• Core portfolio generated growth of 5.0% in income from property operations, excluding property management, for the year ended December 31, 2023, compared to the year ended December 31, 2022.
• Core MH base rental income increased by 6.8% during the year ended December 31, 2023, compared to the year ended December 31, 2022. During the year ended December 31, 2023, we filled 109 expansion sites in our Core MH portfolio.
• Manufactured homeowners within our Core portfolio increased by 554 to 66,623 as of December 31, 2023, compared to 66,069 as of December 31, 2022.
• Core RV and marina base rental income for the year ended December 31, 2023 increased by 3.5%, compared to the year ended December 31, 2022.
• Core RV Annual and marina base rental income for the year ended December 31, 2023 increased by $19.2 million, or 8.1%, compared to the year ended December 31, 2022 and includes 7.6% growth from rate.
• Core property operating expenses for the quarter and year ended December 31, 2023 increased by $10.4 million, or 8.7%, and $36.6 million, or 7.0%, respectively, compared to the same periods in 2022. The increase for the quarter ended December 31, 2023 includes an increase in real estate taxes of $3.9 million, or 22.7%, primarily in our Florida portfolio. Core real estate taxes for the year ended December 31, 2023 increased $6.3 million, or 9.1%, compared to the year ended December 31, 2022.

2024 Guidance Update (1)(2)

($ in millions, except per share data)							2024
							First Quarter		Full Year
Net Income per Common Share							$0.49 to $0.55		$1.75 to $1.85
FFO per Common Share and OP Unit							$0.75 to $0.81		$2.83 to $2.93
Normalized FFO per Common Share and OP Unit							$0.75 to $0.81		$2.83 to $2.93
	2023 Actual						2024 Growth Rates
Core Portfolio:	First Quarter			Full Year			First Quarter		Full Year
MH base rental income	$	164.4		$	668.5		6.1% to 6.7%		5.5% to 6.5%
RV and marina base rental income (3)	$	109.3		$	413.5		5.3% to 5.9%		4.9% to 5.9%
Property operating revenues	$	326.4		$	1,297.7		5.6% to 6.2%		4.8% to 5.8%
Property operating expenses	$	134.0		$	562.3		4.1% to 4.7%		4.5% to 5.5%
Income from property operations, excluding property management	$	192.4		$	735.4		6.7% to 7.3%		5.1% to 6.1%
Non-Core Portfolio:							2024 Full Year
Income from property operations, excluding property management							$14.0 to $18.0
Other Guidance Assumptions:							2024 Full Year
Property management and general administrative							$113.0 to $119.0
Debt assumptions:
Weighted average debt outstanding							$3,500 to $3,700
Interest and related amortization							$141.0 to $147.0

______________________

1. First quarter and full year 2024 guidance represent management’s estimate of a range of possible outcomes. The midpoint of the ranges reflect management’s estimate of the most likely outcome. Actual results could vary materially from management’s estimates presented above if any of our assumptions, including occupancy and rate changes, our ability to manage expenses in an inflationary environment, our ability to integrate and operate recent acquisitions and costs to restore property operations and potential revenue losses following storms or other unplanned events, are incorrect. See Forward-Looking Statements in this press release for additional factors impacting our 2024 guidance assumptions. See Non-GAAP Financial Measures Definitions and Reconciliations at the end of the supplemental financial information for definitions of FFO and Normalized FFO and a reconciliation of Net income per Common Share - Fully Diluted to FFO per Common Share and OP Unit - Fully Diluted and Normalized FFO per Common Share and OP Unit - Fully Diluted.
2. Guidance assumptions do not include future capital events (financing transactions, acquisitions or dispositions).
3. Core RV and marina annual revenue represents approximately 63.1% and 69.0% of first quarter 2024 and full year 2024 RV and marina base rental income, respectively. Core RV and marina annual revenue first quarter 2024 growth rate range is 7.5% to 8.1% and the full year 2024 growth rate range is 6.5% to 7.5%.

Financial Highlights

(In millions, except Common Shares and OP Units outstanding and per share data, unaudited)

	As of and for the Quarters Ended
	Dec 31, 2023			Sep 30, 2023			Jun 30, 2023			Mar 31, 2023			Dec 31, 2022
Operating Information
Total revenues.	$	360.6		$	388.8		$	370.0		$	370.0		$	340.6
Consolidated net income	$	96.4		$	80.7		$	66.0		$	86.5		$	76.7
Net income available for Common Stockholders	$	91.9		$	77.0		$	62.9		$	82.4		$	73.0
Adjusted EBITDAre (1)	$	171.1		$	167.0		$	157.7		$	173.0		$	156.2
FFO available for Common Stock and OP Unit holders (1)(2)	$	148.5		$	133.8		$	118.6		$	140.3		$	123.6
Normalized FFO available for Common Stock and OP Unit holders (1)(2)	$	138.2		$	133.9		$	124.9		$	140.5		$	125.1
Funds Available for Distribution ("FAD") for Common Stock and OP Unit holders (1)(2)	$	109.2		$	107.8		$	98.3		$	122.4		$	103.8
Common Shares and OP Units Outstanding (In thousands) and Per Share Data
Common Shares and OP Units, end of the period		195,531			195,525			195,514			195,446			195,386
Weighted average Common Shares and OP Units outstanding - Fully Diluted		195,475			195,440			195,430			195,369			195,281
Net income per Common Share - Fully Diluted (3)	$	0.49		$	0.41		$	0.34		$	0.44		$	0.39
FFO per Common Share and OP Unit - Fully Diluted	$	0.76		$	0.68		$	0.61		$	0.72		$	0.63
Normalized FFO per Common Share and OP Unit - Fully Diluted	$	0.71		$	0.68		$	0.64		$	0.72		$	0.64
Dividends per Common Share	$	0.4475		$	0.4475		$	0.4475		$	0.4475		$	0.4100
Balance Sheet
Total assets	$	5,614		$	5,626		$	5,586		$	5,519		$	5,493
Total liabilities	$	4,115		$	4,129		$	4,083		$	4,006		$	3,975
Market Capitalization
Total debt (4)	$	3,548		$	3,533		$	3,479		$	3,414		$	3,416
Total market capitalization (5)	$	17,341		$	15,990		$	16,557		$	16,534		$	16,038
Ratios
Total debt / total market capitalization		20.5	%		22.1	%		21.0	%		20.6	%		21.3	%
Total debt / Adjusted EBITDAre (6)		5.3			5.4			5.4			5.4			5.4
Interest coverage (7)		5.2			5.3			5.4			5.5			5.6
Fixed charges(8)		5.1			5.1			5.2			5.4			5.6

______________________

1. See Non-GAAP Financial Measures Definitions and Reconciliations at the end of the supplemental financial information for definitions of Adjusted EBITDAre, FFO, Normalized FFO and FAD and a reconciliation of Consolidated net income to Adjusted EBITDAre.
2. See page 7 for a reconciliation of Net income available for Common Stockholders to Non-GAAP financial measures FFO available for Common Stock and OP Unit holders, Normalized FFO available for Common Stock and OP Unit holders and FAD for Common Stock and OP Unit holders.
3. Net income per Common Share - Fully Diluted is calculated before Income allocated to non-controlling interest - Common OP Units.
4. Excludes deferred financing costs of approximately $29.5 million as of December 31, 2023.
5. See page 15 for the calculation of market capitalization as of December 31, 2023.
6. Calculated using trailing twelve months Adjusted EBITDAre.
7. Calculated by dividing trailing twelve months Adjusted EBITDAre by the interest expense incurred during the same period.
8. See Non-GAAP Financial Measures Definitions and Reconciliations at the end of the supplemental financial information for a definition of fixed charges. This ratio is calculated by dividing trailing twelve months Adjusted EBITDAre by the sum of fixed charges and preferred stock dividends, if any, during the same period.

Consolidated Balance Sheets

(In thousands, except share and per share data)

	December 31, 2023				December 31, 2022
	(unaudited)
Assets
Investment in real estate:
Land	$	2,088,657			$	2,084,532
Land improvements		4,380,649				4,115,439
Buildings and other depreciable property		1,236,985				1,169,590
		7,706,291				7,369,561
Accumulated depreciation		(2,448,876	)			(2,258,540	)
Net investment in real estate		5,257,415				5,111,021
Cash and restricted cash		29,937				22,347
Notes receivable, net		49,937				45,356
Investment in unconsolidated joint ventures		85,304				81,404
Deferred commission expense		53,641				50,441
Other assets, net		137,499				181,950
Total Assets	$	5,613,733			$	5,492,519
Liabilities and Equity
Liabilities:
Mortgage notes payable, net	$	2,989,959			$	2,693,167
Term loan, net		497,648				496,817
Unsecured line of credit		31,000				198,000
Accounts payable and other liabilities		151,567				175,148
Deferred membership revenue		218,337				197,743
Accrued interest payable		12,657				11,739
Rents and other customer payments received in advance and security deposits		126,451				122,318
Distributions payable		87,493				80,102
Total Liabilities		4,115,112				3,975,034
Equity:
Preferred stock, $0.01 par value, 10,000,000 shares authorized as of December 31, 2023 and December 31, 2022; none issued and outstanding						—
Common stock, $0.01 par value, 600,000,000 shares authorized as of December 31, 2023 and December 31, 2022; 186,426,281 and 186,120,298 shares issued and outstanding as of December 31, 2023 and December 31, 2022, respectively		1,917				1,916
Paid-in capital		1,644,319				1,628,618
Distributions in excess of accumulated earnings		(223,576	)			(204,248	)
Accumulated other comprehensive income		6,061				19,119
Total Stockholders’ Equity		1,428,721				1,445,405
Non-controlling interests – Common OP Units		69,900				72,080
Total Equity		1,498,621				1,517,485
Total Liabilities and Equity	$	5,613,733			$	5,492,519

Consolidated Statements of Income

(In thousands, unaudited)

	Quarters Ended December 31,								Years Ended December 31,
		2023				2022				2023				2022
Revenues:
Rental income	$	290,519			$	269,190			$	1,178,959			$	1,118,601
Annual membership subscriptions		16,547				16,212				65,379				63,215
Membership upgrade sales (1)		3,856				3,415				14,719				12,958
Other income		16,124				12,828				67,407				56,144
Gross revenues from home sales, brokered resales and ancillary services		29,378				35,242				145,219				180,179
Interest income		2,414				2,084				9,037				7,430
Income from other investments, net		1,806				1,633				8,703				8,553
Total revenues		360,644				340,604				1,489,423				1,447,080
Expenses:
Property operating and maintenance		108,369				101,677				469,912				443,157
Real estate taxes		21,828				17,772				77,993				74,145
Membership sales and marketing (2)		4,919				4,597				20,974				20,317
Property management		17,460				18,110				76,170				74,083
Depreciation and amortization		50,804				49,625				203,738				202,362
Cost of home sales, brokered resales and ancillary services		21,788				27,118				107,668				139,012
Home selling expenses and ancillary operating expenses		6,195				6,175				27,453				27,321
General and administrative (3)		9,117				10,022				47,280				44,857
Casualty-related charges/(recoveries), net (4)		—				—				—				—
Other expenses		1,581				1,769				5,768				8,646
Early debt retirement		—				—				68				1,156
Interest and related amortization		33,198				31,286				132,342				116,562
Total expenses		275,259				268,151				1,169,366				1,151,618
Income before income taxes and other items		85,385				72,453				320,057				295,462
Gain/(Loss) on sale of real estate and impairment, net		—				3,747				(3,581	)			—
Income tax benefit (5)		10,488				—				10,488				—
Equity in income of unconsolidated joint ventures		555				474				2,713				3,363
Consolidated net income		96,428				76,674				329,677				298,825
Income allocated to non-controlling interests – Common OP Units		(4,489	)			(3,635	)			(15,470	)			(14,198	)
Redeemable perpetual preferred stock dividends		(8	)			(8	)			(16	)			(16	)
Net income available for Common Stockholders	$	91,931			$	73,031			$	314,191			$	284,611

_____________________

1. Membership upgrade sales revenue is net of deferrals of $3.8 million and $3.5 million for the quarters ended December 31, 2023 and December 31, 2022, respectively, and $21.0 million and $21.7 million for the years ended December 31, 2023 and December 31, 2022, respectively. See page 14 for details of membership sales activity.
2. Membership sales and marketing expense is net of sales commission deferrals of $0.5 million for each of the quarters ended December 31, 2023 and December 31, 2022, and $3.2 million for each of the years ended December 31, 2023 and December 31, 2022. See page 14 for details of membership sales activity.
3. Includes accelerated vesting of stock-based compensation expense of $6.3 million recognized during the year ended December 31, 2023 as a result of the passing of a member of our Board of Directors.
4. Casualty-related charges/(recoveries), net for the quarter ended December 31, 2023 includes debris removal and cleanup costs related to Hurricane Ian of $1.3 million and insurance recovery revenue of $1.3 million. Casualty-related charges/(recoveries), net for the year ended December 31, 2023 includes debris removal and cleanup costs related to Hurricane Ian of $13.4 million and insurance recovery revenue of $13.4 million.
5. The Income tax benefit is attributable to the release of the valuation allowance of U.S. federal and state deferred tax assets related to our taxable REIT subsidiaries. We regularly assess the need for a valuation allowance against our deferred tax assets and concluded it was more likely than not we would realize the benefit of the deferred tax assets.

Non-GAAP Financial Measures

This document contains certain Non-GAAP measures used by management that we believe are helpful to understand our business. We believe investors should review these Non-GAAP measures along with GAAP net income and cash flows from operating activities, investing activities and financing activities, when evaluating an equity REIT’s operating performance. 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 flows from operating activities, determined in accordance with GAAP, as a measure of our liquidity, nor are they indicative of funds available to fund our cash needs, including our ability to make cash distributions. For definitions and reconciliations of Non-GAAP measures to our financial statements as prepared under GAAP, refer to both Reconciliation of Net Income to Non-GAAP Financial Measures on page 7 and Non-GAAP Financial Measures Definitions and Reconciliations on pages 17-20.

Selected Non-GAAP Financial Measures

(In millions, except per share data, unaudited)

	Quarter Ended
	December 31, 2023
Income from property operations, excluding property management - 2023 Core (1)	$	186.7
Income from property operations, excluding property management - Non-Core (1)		5.2
Property management and general and administrative		(26.6	)
Other income and expenses (excluding deferred income tax benefit and transaction/pursuit costs)		6.1
Interest and related amortization		(33.2	)
Normalized FFO available for Common Stock and OP Unit holders (2)	$	138.2
Deferred income tax benefit (3)		10.5
Transaction/pursuit costs (4)		(0.2	)
FFO available for Common Stock and OP Unit holders (2)	$	148.5
FFO per Common Share and OP Unit	$	0.76
Normalized FFO per Common Share and OP Unit	$	0.71
Normalized FFO available for Common Stock and OP Unit holders (2)	$	138.2
Non-revenue producing improvements to real estate		(29.0	)
FAD for Common Stock and OP Unit holders (2)	$	109.2
Weighted average Common Shares and OP Units - Fully Diluted		195.5

______________________

1. See pages 8-9 for details of the Core Income from Property Operations, excluding property management. See page 10 for details of the Non-Core Income from Property Operations, excluding property management.
2. See page 6 for a reconciliation of Net income available for Common Stockholders to FFO available for Common Stock and OP Unit holders, Normalized FFO available for Common Stock and OP Unit holders and FAD for Common Stock and OP Unit holders.
3. Represents the release of the valuation allowance of U.S. federal and state deferred tax assets related to our taxable REIT subsidiaries.
4. Represents transaction/pursuit costs related to unconsummated acquisitions included in Other expenses in the Consolidated Statements of Income on page 3.

Reconciliation of Net Income to Non-GAAP Financial Measures

(In thousands, except per share data, unaudited)

	Quarters Ended December 31,								Years Ended December 31,
		2023				2022				2023				2022
Net income available for Common Stockholders	$	91,931			$	73,031			$	314,191			$	284,611
Income allocated to non-controlling interests – Common OP Units		4,489				3,635				15,470				14,198
Depreciation and amortization		50,804				49,625				203,738				202,362
Depreciation on unconsolidated joint ventures		1,242				1,075				4,599				3,886
Gain on unconsolidated joint ventures		—				—				(416	)			—
(Gain)/Loss on sale of real estate and impairment, net		—				(3,747	)			3,581				—
FFO available for Common Stock and OP Unit holders		148,466				123,619				541,163				505,057
Deferred income tax benefit (1)		(10,488	)			—				(10,488	)			—
Accelerated vesting of stock-based compensation expense (2)		—				—				6,320				—
Early debt retirement		—				—				68				1,156
Transaction/pursuit costs (3)		251				423				368				3,807
Lease termination expenses(4)		—				1,046				90				3,119
Normalized FFO available for Common Stock and OP Unit holders		138,229				125,088				537,521				513,139
Non-revenue producing improvements to real estate		(28,974	)			(21,246	)			(99,726	)			(80,527	)
FAD for Common Stock and OP Unit holders	$	109,255			$	103,842			$	437,795			$	432,612
Net income per Common Share - Basic	$	0.49			$	0.39			$	1.69			$	1.53
Net income per Common Share - Fully Diluted (5)	$	0.49			$	0.39			$	1.69			$	1.53
FFO per Common Share and OP Unit - Basic	$	0.76			$	0.63			$	2.77			$	2.59
FFO per Common Share and OP Unit - Fully Diluted	$	0.76			$	0.63			$	2.77			$	2.59
Normalized FFO per Common Share and OP Unit - Basic	$	0.71			$	0.64			$	2.75			$	2.63
Normalized FFO per Common Share and OP Unit - Fully Diluted	$	0.71			$	0.64			$	2.75			$	2.63
Weighted average Common Shares outstanding - Basic		186,217				185,848				186,061				185,780
Weighted average Common Shares and OP Units outstanding - Basic		195,348				195,117				195,278				195,069
Weighted average Common Shares and OP Units outstanding - Fully Diluted		195,475				195,281				195,429				195,255

____________________

1. Represents the release of the valuation allowance of U.S. federal and state deferred tax assets related to our taxable REIT subsidiaries.
2. Represents accelerated vesting of stock-based compensation expense of $6.3 million recognized during the year ended December 31, 2023 as a result of the passing of a member of our Board of Directors.
3. Represents transaction/pursuit costs related to unconsummated acquisitions included in Other expenses in the Consolidated Statements of Income on page 3.
4. Represents non-operating expenses associated with the Westwinds ground leases that terminated on August 31, 2022.
5. Net income per Common Share - Fully Diluted is calculated before Income allocated to non-controlling interest - Common OP Units.

Consolidated Income from Property Operations (1)

(In millions, except home site and occupancy figures, unaudited)

	Quarters Ended December 31,								Years Ended December 31,
		2023				2022				2023				2022
MH base rental income (2)	$	170.2			$	158.9			$	669.1			$	634.0
Rental home income (2)		3.5				3.7				14.6				15.2
RV and marina base rental income (2)		99.4				92.6				425.7				409.6
Annual membership subscriptions		16.5				16.2				65.4				63.2
Membership upgrade sales (3)		3.9				3.4				14.7				13.0
Utility and other income (2)(4)		34.2				28.2				141.2				120.7
Property operating revenues		327.7				303.0				1,330.7				1,255.7
Property operating, maintenance and real estate taxes (2)		130.8				120.8				552.1				522.1
Membership sales and marketing (3)		5.0				4.6				21.0				20.3
Property operating expenses		135.8				125.4				573.1				542.4
Income from property operations, excluding property management (1)	$	191.9			$	177.6			$	757.6			$	713.3
Manufactured home site figures and occupancy averages:
Total sites		72,825				72,715				72,752				73,204
Occupied sites		68,879				68,968				68,834				69,449
Occupancy %		94.6	%			94.8	%			94.6	%			94.9	%
Monthly base rent per site	$	824			$	768			$	810			$	761
RV and marina base rental income:
Annual	$	75.4			$	67.1			$	291.5			$	266.1
Seasonal		12.6				13.3				58.6				58.9
Transient		11.4				12.2				75.6				84.6
Total RV and marina base rental income	$	99.4			$	92.6			$	425.7			$	409.6

______________________

1. Excludes property management expenses.
2. MH base rental income, Rental home income, RV and marina base rental income and Utility income, net of bad debt expense, are presented in Rental income in the Consolidated Statements of Income on page 4. Bad debt expense is presented in Property operating, maintenance and real estate taxes in this table.
3. See page 14 for details of membership sales activity.
4. Includes approximately $0.9 million and $10.6 million of business interruption income from Hurricane Ian during the quarter and year ended December 31, 2023, respectively.

Core Income from Property Operations (1)

(In millions, except occupancy figures, unaudited)

	Quarters Ended December 31,									Years Ended December 31,
		2023			2022		Change (2)				2023			2022		Change (2)
MH base rental income	$	170.1		$	158.8		7.1	%		$	668.5		$	626.0		6.8	%
Rental home income		3.5			3.7		(6.1	)%			14.6			15.2		(4.1	)%
RV and marina base rental income		94.7			91.2		3.8	%			406.0			392.3		3.5	%
Annual membership subscriptions		16.3			15.8		2.9	%			64.0			61.7		3.7	%
Membership upgrade sales		3.8			3.4		13.4	%			13.9			11.6		20.4	%
Utility and other income		30.4			26.1		16.7	%			120.5			109.5		10.0	%
Property operating revenues		318.8			299.0		6.6	%			1,287.5			1,216.3		5.8	%
Utility expense		36.1			34.1		6.1	%			152.1			142.4		6.8	%
Payroll		27.0			26.8		0.9	%			116.8			113.7		2.7	%
Repair & maintenance		18.8			17.2		9.2	%			91.6			83.5		9.7	%
Insurance and other (3)		23.9			21.5		11.3	%			100.6			92.2		9.1	%
Real estate taxes		21.3			17.4		22.7	%			75.7			69.4		9.1	%
Membership sales and marketing		4.9			4.6		7.0	%			20.7			19.7		5.5	%
Property operating expenses		132.0			121.6		8.7	%			557.5			520.9		7.0	%
Income from property operations, excluding property management (1)	$	186.7		$	177.5		5.2	%		$	730.0		$	695.3		5.0	%
Occupied sites (4)		68,885			68,880

_____________________

1. Excludes property management expenses.
2. Calculations prepared using actual results without rounding.
3. Includes bad debt expense for the periods presented.
4. Occupied sites are presented as of the end of the period.

Core Income from Property Operations (continued)

(In millions, except home site and occupancy figures, unaudited)

	Quarters Ended December 31,											Years Ended December 31,
		2023				2022			Change (1)				2023				2022			Change (1)
Core manufactured home site figures and occupancy averages:
Total sites		72,512				72,454							72,478				72,461
Occupied sites		68,820				68,913							68,776				68,913
Occupancy %		94.9	%			95.1	%						94.9	%			95.1	%
Monthly base rent per site	$	824			$	768						$	810			$	757
Core RV and marina base rental income:
Annual (2)	$	71.9			$	66.4			8.3	%		$	278.3			$	257.4			8.1	%
Seasonal		12.1				12.9			(6.8	)%			56.6				55.1			2.6	%
Transient		10.8				11.9			(9.4	)%			71.1				79.9			(11.0	)%
Total Seasonal and Transient	$	22.9			$	24.8			(8.1	)%		$	127.7			$	135.0			(5.4	)%
Total RV and marina base rental income	$	94.8			$	91.2			3.8	%		$	406.0			$	392.4			3.5	%
Core utility information:
Income	$	16.4			$	15.3			7.1	%		$	68.3			$	62.5			9.3	%
Expense		36.1				34.1			6.1	%			152.1				142.4			6.8	%
Expense, net	$	19.7			$	18.8			4.8	%		$	83.8			$	79.9			4.9	%
Utility recovery rate (3)		45.4	%			44.9	%						44.9	%			43.9	%

_____________________

1. Calculations prepared using actual results without rounding.
2. Core Annual marina base rental income represents approximately 99% of the total Core marina base rental income for all periods presented.
3. Calculated by dividing the utility income by utility expense.

Non-Core Income from Property Operations (1)

(In millions, unaudited)

	Quarter Ended			Year Ended
	December 31, 2023			December 31, 2023
MH base rental income	$	0.2		$	0.6
RV and marina base rental income		4.6			19.7
Annual membership subscriptions		0.3			1.4
Utility and other income		3.7			20.7
Membership upgrade sales		—			0.8
Property operating revenues		8.8			43.2
Property operating expenses (2)		3.6			15.6
Income from property operations, excluding property management (1)	$	5.2		$	27.6

______________________

1. Excludes property management expenses.
2. Includes bad debt expense for the periods presented.

Home Sales and Rental Home Operations

(In thousands, except home sale volumes and occupied rentals, unaudited)

Home Sales - Select Data	Quarters Ended December 31,						Years Ended December 31,
		2023			2022			2023			2022
Total new home sales volume (1)		218			219			905			1,176
New home sales gross revenues (1)	$	19,510		$	24,562		$	88,546		$	116,790
Total used home sales volume		61			87			313			337
Used home sales gross revenues	$	643		$	1,064		$	3,872		$	4,401
Brokered home resales volume		135			134			630			808
Brokered home resales gross revenues	$	592		$	604		$	2,847		$	3,195

Rental Homes - Select Data	Quarters Ended December 31,						Years Ended December 31,
		2023			2022			2023			2022
Rental operations revenues (2)	$	9,142		$	10,236		$	38,633		$	42,871
Rental home operations expense (3)		1,511			1,276			5,390			5,370
Depreciation on rental homes (4)		2,606			2,522			10,881			10,060
Occupied rentals:
New		2,016			2,481
Used		246			330
Total occupied rental sites		2,262			2,811

	As of December 31, 2023						As of December 31, 2022
Cost basis in rental homes: (5)	Gross			Net of Depreciation			Gross			Net of Depreciation
New	$	245,130		$	203,936		$	237,932		$	205,946
Used		12,245			7,372			15,127			10,837
Total rental homes	$	257,375		$	211,308		$	253,059		$	216,783

______________________

1. For the quarter and year ended December 31, 2022, total new home sales volume includes 6 and 78 home sales, respectively, from our ECHO Financing LLC ("ECHO joint venture"). New home sales gross revenues does not include the revenues associated with the ECHO joint venture. On December 22, 2022, we completed the purchase of all homes held by the ECHO joint venture.
2. For the quarters ended December 31, 2023 and 2022, approximately $5.7 million and $6.5 million, respectively, of the rental operations revenue is included in the MH base rental income in the Core Income from Property Operations on pages 9-10. The remainder of the rental operations revenue for the quarters ended December 31, 2023 and 2022 is included in Rental home income in the Core Income from Property Operations on pages 9-10.
3. Rental home operations expense is included in Property operating, maintenance and real estate taxes in the Consolidated Income from Property Operations on page 8. Rental home operations expense is included in Insurance and other in the Core Income from Property Operations on pages 9-10.
4. Depreciation on rental homes in our Core portfolio is presented in Depreciation and amortization in the Consolidated Statements of Income on page 4.
5. Includes both occupied and unoccupied rental homes in our Core portfolio.

Total Sites

(Unaudited)

Summary of Total Sites as of December 31, 2023
	Sites (1)
MH sites.	73,000
RV sites:
Annual	34,900
Seasonal	12,500
Transient	15,600
Marina slips	6,900
Membership (2)	26,000
Joint Ventures (3)	3,600
Total	172,500

______________________

1. MH sites are generally leased on an annual basis to residents who own or lease factory-built homes, including manufactured homes. Annual RV and marina sites are leased on an annual basis to customers who generally have an RV, factory-built cottage, boat or other unit placed on the site, including those Northern properties that are open for the summer season. Seasonal RV and marina sites are leased to customers generally for one to six months. Transient RV and marina sites are leased to customers on a short-term basis.
2. Sites primarily utilized by approximately 121,000 members. Includes approximately 6,200 sites rented on an annual basis.
3. Joint ventures have approximately 2,000 annual sites and 1,600 transient.

Memberships - Select Data

(Unaudited)

	Years Ended December 31,
		2019			2020			2021			2022			2023
Member Count (1)		115,680			116,169			125,149			128,439			121,002
Thousand Trails Camping Pass (TTC) Origination		41,484			44,129			50,523			51,415			45,990
TTC Sales		19,267			20,587			23,923			23,237			20,758
RV Dealer TTC Activations		22,217			23,542			26,600			28,178			25,232
Number of annuals (2)		5,938			5,986			6,320			6,390			6,154
Number of upgrade sales (3)		2,919			3,373			4,863			4,068			3,858
(In thousands, unaudited)
Annual membership subscriptions	$	51,015		$	53,085		$	58,251		$	63,215		$	65,379
RV base rental income from annuals	$	19,634		$	20,761		$	23,127		$	25,945		$	27,842
RV base rental income from seasonals/transients	$	20,181		$	18,126		$	25,562		$	24,316		$	20,996
Membership upgrade sales current period, gross	$	19,111		$	21,739		$	36,270		$	34,661		$	35,684
Utility and other income	$	2,422		$	2,426		$	2,735		$	2,626		$	2,544

(In thousands, unaudited)
Membership Sales Activity	Quarters Ended December 31,								Years Ended December 31,
		2023				2022				2023				2022
Membership upgrade sales current period, gross	$	7,643			$	6,890			$	35,684			$	34,661
Membership upgrade sales upfront payments, deferred, net		(3,787	)			(3,475	)			(20,965	)			(21,703	)
Membership upgrade sales	$	3,856			$	3,415			$	14,719			$	12,958
Membership sales and marketing, gross	$	(5,411	)		$	(5,047	)		$	(24,194	)		$	(23,513	)
Membership sales commissions, deferred, net		492				450				3,220				3,196
Membership sales and marketing	$	(4,919	)		$	(4,597	)		$	(20,974	)		$	(20,317	)

______________________

1. Members who have entered into annual subscriptions with us that entitle them to use certain properties on a continuous basis for up to 21 days.
2. Members who rent a specific site for an entire year in connection with their membership subscriptions.
3. Existing members who have upgraded memberships are eligible for enhanced benefits, including but not limited to longer stays, the ability to make earlier reservations, potential discounts on rental units, and potential access to additional properties. Upgrades require a non-refundable upfront payment.

Market Capitalization

(In millions, except share and OP Unit data, unaudited)

Capital Structure as of December 31, 2023
	Total Common Shares/Units			% of Total Common Shares/Units			Total			% of Total			% of Total Market Capitalization
Secured Debt							$	3,017		85.0	%
Unsecured Debt								531		15.0	%
Total Debt (1)							$	3,548		100.0	%		20.5	%
Common Shares		186,426,281		95.3	%
OP Units		9,104,654		4.7	%
Total Common Shares and OP Units		195,530,935		100.0	%
Common Stock price at December 31, 2023	$	70.54
Fair Value of Common Shares and OP Units							$	13,793		100.0	%
Total Equity							$	13,793		100.0	%		79.5	%
Total Market Capitalization							$	17,341					100.0	%

______________________

1. Excludes deferred financing costs of approximately $29.5 million.

Debt Maturity Schedule

Debt Maturity Schedule as of December 31, 2023

(In thousands, unaudited)

Year	Outstanding Debt				Weighted Average Interest Rate			% of Total Debt			Weighted Average Years to Maturity
Secured Debt
2024	$	—			—	%		—	%		—
2025		90,461			3.45	%		2.55	%		1.27
2026		—			—	%		—	%		—
2027		—			—	%		—	%		—
2028		201,823			4.19	%		5.69	%		4.70
2029		272,481			4.92	%		7.68	%		5.69
2030		275,385			2.69	%		7.76	%		6.26
2031		250,924			2.46	%		7.07	%		7.40
2032		202,000			2.47	%		5.69	%		8.71
Thereafter		1,724,075			4.07	%		48.59	%		13.12
Total	$	3,017,149			3.77	%		85.03	%		10.12
Unsecured Term Loans
2024	$	—			—	%		—	%		—
2025		—			—	%		—	%		—
2026		300,000			1.81	%		8.46	%		2.33
2027		200,000			4.88	%		5.64	%		3.10
Thereafter		—			—	%		—	%		—
Total	$	500,000			3.04	%		14.10	%		2.64
Total Secured and Unsecured	$	3,517,149			3.67	%		99.13	%		9.07
Line of Credit Borrowing (1)		31,000			6.65	%		0.87	%		—
Note Premiums and Unamortized loan costs		(29,541	)
Total Debt, Net	$	3,518,608			3.83% (2)			100	%

_____________________

1. The floating interest rate on the line of credit is daily SOFR plus 1.25% to 1.65%. During the quarter ended December 31, 2023, the effective interest rate on the line of credit borrowings was 6.65%.
2. Reflects effective interest rate for the quarter ended December 31, 2023, including interest associated with the line of credit and amortization of note premiums and deferred financing costs.

Non-GAAP Financial Measures Definitions and Reconciliations

The following Non-GAAP financial measures definitions have been revised and do not include adjustments in respect to membership upgrade sales: (i) FFO; (ii) Normalized FFO; (iii) EBITDAre; (iv) Adjusted EBITDAre; (v) Property operating revenues; (vi) Property operating expenses; and (vii) Income from property operations, excluding property management. For comparability, prior periods’ non-GAAP financial measures have also been updated.

FUNDS FROM OPERATIONS (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 believe FFO, as defined by the Board of Governors of NAREIT, is generally a 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.

NORMALIZED FUNDS FROM OPERATIONS (NORMALIZED FFO). We define Normalized FFO as FFO excluding non-operating income and expense items, such as gains and losses from early debt extinguishment, including prepayment penalties, defeasance costs, transaction/pursuit costs, and 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.

FUNDS AVAILABLE FOR DISTRIBUTION (FAD). We define FAD as Normalized FFO less non-revenue producing capital expenditures.

We believe that FFO, Normalized FFO and FAD 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 normal operations. For example, we believe that excluding the early extinguishment of debt and other miscellaneous non-comparable items from 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.

INCOME FROM PROPERTY OPERATIONS, EXCLUDING PROPERTY MANAGEMENT. We define Income from property operations, excluding property management as rental income, membership subscriptions and upgrade sales, utility and other income less property and rental home operating and maintenance expenses, real estate taxes, membership sales and marketing expenses, excluding property management expenses. Property management represents the expenses associated with indirect costs such as off-site payroll and certain administrative and professional expenses. We believe exclusion of property management expenses is helpful to investors and analysts as a measure of the operating results of our properties, excluding items that are not directly related to the operation of the properties. For comparative purposes, we present bad debt expense within Property operating, maintenance and real estate taxes in the current and prior periods. We believe that this Non-GAAP financial measure is helpful to investors and analysts as a measure of the operating results of our properties.

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

	Quarters Ended December 31,								Years Ended December 31,
(amounts in thousands)		2023				2022				2023				2022
Net income available for Common Stockholders	$	91,931			$	73,031			$	314,191			$	284,611
Redeemable perpetual preferred stock dividends		8				8				16				16
Income allocated to non-controlling interests – Common OP Units		4,489				3,635				15,470				14,198
Income before income taxes and other items		96,428				76,674				329,677				298,825
Equity in income of unconsolidated joint ventures		(555	)			(474	)			(2,713	)			(3,363	)
Income tax benefit		(10,488	)			—				(10,488	)			—
(Gain)/Loss on sale of real estate and impairment, net		—				(3,747	)			3,581				—
Gross revenues from home sales, brokered resales and ancillary services		(29,378	)			(35,242	)			(145,219	)			(180,179	)
Interest income		(2,414	)			(2,084	)			(9,037	)			(7,430	)
Income from other investments, net		(1,806	)			(1,633	)			(8,703	)			(8,553	)
Property management		17,460				18,110				76,170				74,083
Depreciation and amortization		50,804				49,625				203,738				202,362
Cost of home sales, brokered resales and ancillary services		21,788				27,118				107,668				139,012
Home selling expenses and ancillary operating expenses		6,195				6,175				27,453				27,321
General and administrative		9,117				10,022				47,280				44,857
Casualty-related charges/(recoveries), net		—				—				—				—
Other expenses		1,581				1,769				5,768				8,646
Early debt retirement		—				—				68				1,156
Interest and related amortization		33,198				31,286				132,342				116,562
Income from property operations, excluding property management		191,930				177,599				757,585				713,299
Property management		(17,460	)			(18,110	)			(76,170	)			(74,083	)
Income from property operations	$	174,470			$	159,489			$	681,415			$	639,216

EARNINGS BEFORE INTEREST, TAX, DEPRECIATION AND AMORTIZATION FOR REAL ESTATE (EBITDAre) AND ADJUSTED EBITDAre. We define EBITDAre as net income or loss excluding interest income and expense, income taxes, depreciation and amortization, gains or losses from sales of properties, impairments charges, and adjustments to reflect our share of EBITDAre of unconsolidated joint ventures. We compute EBITDAre in accordance with our interpretation of the standards established by NAREIT, which may not be comparable to EBITDAre 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 define Adjusted EBITDAre as EBITDAre excluding non-operating income and expense items, such as gains and losses from early debt extinguishment, including prepayment penalties and defeasance costs, transaction/pursuit costs and other miscellaneous non-comparable items.

We believe that EBITDAre and Adjusted EBITDAre may be useful to an investor in evaluating our operating performance and liquidity because the measures are widely used to measure the operating performance of an equity REIT.

The following table reconciles Consolidated net income to EBITDAre and Adjusted EBITDAre:

	Quarters Ended December 31,								Years Ended December 31,
(amounts in thousands)		2023				2022				2023				2022
Consolidated net income	$	96,428			$	76,674			$	329,677			$	298,825
Interest income		(2,414	)			(2,084	)			(9,037	)			(7,430	)
Real estate depreciation and amortization		50,804				49,625				203,738				202,362
Other depreciation and amortization		1,330				1,346				5,358				4,619
Interest and related amortization		33,198				31,286				132,342				116,562
Income tax benefit		(10,488	)			—				(10,488	)			—
(Gain)/Loss on sale of real estate and impairment, net		—				(3,747	)			3,581				—
Adjustments to our share of EBITDAre of unconsolidated joint ventures		2,014				1,637				6,799				5,893
EBITDAre		170,872				154,737				661,970				620,831
Stock-based compensation expense (1)		—				—				6,320				—
Early debt retirement		—				—				68				1,156
Transaction/pursuit costs (2)		251				423				368				3,807
Lease termination expenses (3)		—				1,046				90				3,119
Adjusted EBITDAre	$	171,123			$	156,206			$	668,816			$	628,913

CORE. The Core properties include properties we owned and operated during all of 2022 and 2023. We believe Core is a measure that is useful to investors for annual comparison as it removes the fluctuations associated with acquisitions, dispositions and significant transactions or unique situations.

NON-CORE. The Non-Core properties include properties in 2023 that were not owned and operated during all of 2022 and 2023. The 2024 guidance reflects Non-Core properties in 2024, which includes properties not owned and operated during all of 2023 and 2024.

NON-REVENUE PRODUCING IMPROVEMENTS. Represents capital expenditures that do not directly result in increased revenue or expense savings and are primarily comprised of common area improvements, furniture and mechanical improvements.

FIXED CHARGES. Fixed charges consist of interest expense, amortization of note premiums and debt issuance costs.

______________________

1. Represents accelerated vesting of stock-based compensation expense of $6.3 million recognized during the year ended December 31, 2023 as a result of the passing of a member of our Board of Directors.
2. Represents transaction/pursuit costs related to unconsummated acquisitions included in Other expenses in the Consolidated Statements of Income on page 3.

3. Represents non-operating expenses associated with the Westwinds ground leases that terminated on August 31, 2022.

FORWARD-LOOKING NON-GAAP MEASURES. The following table reconciles Net Income per Common Share - Fully Diluted guidance to FFO per Common Share and OP Unit - Fully Diluted guidance and Normalized FFO per Common Share and OP Unit - Fully diluted guidance:

(Unaudited)	First Quarter 2024		Full Year 2024
Net income per Common Share	$0.49 to $0.55		$1.75 to $1.85
Depreciation and amortization	0.27		1.08
FFO and Normalized FFO per Common Share and OP Unit	$0.75 to $0.81		$2.83 to $2.93

This press release includes certain forward-looking information, including Core and Non-Core Income from property operations, excluding property management, that is not presented in accordance with GAAP. In reliance on the exception in Item 10(e)(1)(i)(B) of Regulation S-K, we do not provide a quantitative reconciliation of such forward-looking information to the most directly comparable financial measure calculated and presented in accordance with GAAP, where we are unable to provide a meaningful or accurate calculation or estimation of reconciling items and the information is not available without unreasonable effort. This includes, for example, (i) scheduled or implemented rate increases on community, resort and marina sites; (ii) scheduled or implemented rate increases in annual payments under membership subscriptions; (iii) occupancy changes; (iv) costs to restore property operations and potential revenue losses following storms or other unplanned events and (v) other nonrecurring/unplanned income or expense items, which may not be within our control, may vary between periods and cannot be reasonably predicted. These unavailable reconciling items could significantly impact our future financial results.

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The Equity Lifestyle Properties Stock at the time of publication of the news with a raise of +0,41 % to 61,75EUR on Lang & Schwarz stock exchange (29. Januar 2024, 22:29 Uhr).