Continued Strong Performance; Guidance Increase

Equity LifeStyle Properties, Inc. (NYSE:ELS) (referred to herein as "we," "us," and "our") today announced results for the quarter and six months ended June 30, 2023. All per share results are reported on a fully diluted basis unless otherwise noted.

($ in millions, except per share data)
FINANCIAL RESULTS	Q2 2023		Q2 2022		$ Change
Total Revenues	$	370.0	$	365.3	$	4.7
Net Income available for Common Stockholders	$	62.9	$	61.5	$	1.4
Net Income per Common Share - Fully Diluted	$	0.34	$	0.33	$	0.01

NON-GAAP FINANCIAL MEASURES	Q2 2023		Q2 2022		$ Change
Funds from Operations ("FFO") per Common Share and OP Unit - Fully Diluted	$	0.63	$	0.62	$	0.01
Normalized Funds from Operations ("Normalized FFO") per Common Share and OP Unit - Fully Diluted	$	0.66	$	0.64	$	0.02
Property operating revenues, excluding deferrals	$	333.3	$	315.8	$	17.5
Income from property operations, excluding deferrals and property management	$	184.5	$	174.8	$	9.7

Core Portfolio Performance	Q2 2023		Q2 2022		% Change
Core property operating revenues, excluding deferrals	$	320.6	$	305.3		5.0	%
Core income from property operations, excluding deferrals and property management	$	175.6	$	169.9		3.5	%

Operations Update

Normalized FFO for the quarter ended June 30, 2023 was $0.66 per share, representing a 3.4% increase compared to the same period in 2022, outperforming the midpoint of our guidance expectation by $3.2 million.

Core MH base rental income for the quarter ended June 30, 2023 increased 6.7% compared to the same period in 2022, which reflects 7.0% growth from rate increases. We sold 226 new homes during the quarter ended June 30, 2023, with an average sales price of $102,000.

RV and Marina

Core RV and marina base rental income for the quarter ended June 30, 2023 increased 2.3% compared to the same period in 2022. Core RV and marina annual base rental income for the quarter ended June 30, 2023 increased 7.8% compared to the same period in 2022, which reflects 7.3% growth from rate increases and 0.5% from occupancy gains. Demand from customers to visit our RV and Thousand Trails properties remains strong as total site utilization throughout the portfolio is in line compared to the quarter ended June 30, 2022 and increased 8% compared to the quarter ended June 30, 2019. Core RV and marina transient base rental income for the quarter ended June 30, 2023 decreased 13.9% compared to the same period in 2022. We continue to see demand for annual sites and have increased our Core RV and marina annual site count by approximately 240 since December 31, 2022, which has reduced the number of transient sites available for use. We experienced significant weather events during the quarter ended June 30, 2023 in California, the Pacific Northwest and along the East coast that impacted our results. During the quarter ended June 30, 2023, we made a change to our Core portfolio. Refer to page 19 for properties designated as Non-Core.

Property Operating Expenses

Core property operating expenses for the quarter ended June 30, 2023 increased 7.0% compared to the same period in 2022. Property operating and maintenance expenses for the quarter ended June 30, 2023 were favorable to our guidance expectations and the variance, primarily related to utility and payroll expenses, demonstrated a strong correlation to RV locations with lower than expected Transient rent in the same period. See page 8 for details of the Core property operating expenses.

Guidance ⁽¹⁾⁽²⁾

($ in millions, except per share data)					2023
					Third Quarter	Full Year
Net Income per Common Share - Fully Diluted					$0.38 to $0.44	$1.59 to $1.69
FFO per Common Share and OP Unit - Fully Diluted					$0.68 to $0.74	$2.76 to $2.86
Normalized FFO per Common Share and OP Unit - Fully Diluted					$0.68 to $0.74	$2.80 to $2.90

	2022 Actual				2023 Growth Rates
Core Portfolio:	Third Quarter		Full Year		Third Quarter	Full Year
MH base rental income	$	157.0	$	626.0	6.5% to 7.1%	6.3% to 7.3%
RV and marina base rental income ⁽³⁾	$	104.3	$	392.3	2.7% to 3.3%	4.1% to 5.1%
Property operating revenues	$	320.7	$	1,238.1	4.9% to 5.5%	5.5% to 6.5%
Property operating expenses	$	142.3	$	524.1	4.7% to 5.3%	6.3% to 7.3%
Income from property operations, excluding deferrals and property management	$	178.4	$	714.0	5.2% to 5.8%	4.9% to 5.9%

Non-Core Portfolio:					2023 Full Year
Income from property operations, excluding deferrals and property management					$22.8 to $26.8

Other Guidance Assumptions:					2023 Full Year
Property management and general administrative ⁽⁴⁾					$120.6 to $126.6
Debt Assumptions: ⁽⁵⁾
Weighted average debt outstanding					$3,375 to $3,575
Interest and related amortization					$129.0 to $135.0

(1)		Third quarter and full year 2023 guidance ranges represent a range of possible outcomes and the midpoint reflects management's estimate of the most likely outcome. Actual growth rates and per share amounts could vary materially from growth rates and per share amounts 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, is incorrect. See Forward-Looking Statements in this release for additional factors impacting our 2023 guidance assumptions. See Non-GAAP Financial Measures Definitions and Reconciliations at the end of the supplemental financial information.
(2)		Guidance assumptions do not include future capital events (financing transactions, acquisitions or dispositions) subsequent to those discussed in this press release or the use of free cash flow.
(3)		Core RV and marina annual revenue represents approximately 65.8% and 67.9% of third quarter 2023 and full year 2023 RV and marina base rental income, respectively. Core RV and marina annual revenue third quarter 2023 growth rate range is 8.2% to 8.8% and the full year 2023 growth rate range is 7.8% to 8.8%.
(4)		Includes accelerated vesting of stock-based compensation expense of $6.3 million recognized during the quarter ended June 30, 2023 as a result of the passing of a member of our Board of Directors.
(5)		Includes financing transactions discussed in this press release.

Balance Sheet Activity

In June 2023, we closed on a secured refinancing transaction generating gross proceeds of $89 million (the "June 2023 financing"). The loan represents an incremental borrowing from an existing secured facility, has a fixed interest rate of 5.04% per annum and matures in 10 years.

We also locked rate on a $375 million secured financing at a weighted average interest rate of 5.05% secured by a pool of MH and RV assets. The secured financing has a weighted average term to maturity of 7.5 years. We expect to close in the third quarter of 2023.

In July 2023 we repaid all debt scheduled to mature in 2023 and 2024 with proceeds from the June 2023 financing and our unsecured line of credit. Upon consummation of the $375 million secured financing, which is subject to customary closing conditions, the proceeds will be used to pay off the remaining balance on our unsecured line of credit.

About Equity LifeStyle Properties

We are a self-administered, self-managed real estate investment trust ("REIT") with headquarters in Chicago. As of July 17, 2023, we own or have an interest in 450 properties in 35 states and British Columbia consisting of 171,706 sites.

For additional information, please contact our Investor Relations Department at (800) 247-5279 or at investor_relations@equitylifestyle.com.

Conference Call

A live audio webcast of our conference call discussing these results will take place tomorrow, Tuesday, July 18, 2023, 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; and (xiv) costs to restore property operations and potential revenue losses following storms or other unplanned events. 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 and any subsequent Quarterly Reports on Form 10-Q. 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

Financial Highlights

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

	As of and for the Quarters Ended
	Jun 30, 2023			Mar 31, 2023			Dec 31, 2022			Sep 30, 2022			Jun 30, 2022
Operating Information
Total revenues	$	370.0		$	370.0		$	340.6		$	381.0		$	365.3
Consolidated net income	$	66.0		$	86.5		$	76.7		$	70.5		$	64.6
Net income available for Common Stockholders	$	62.9		$	82.4		$	73.0		$	67.2		$	61.5
Adjusted EBITDAre ⁽¹⁾	$	162.5		$	176.7		$	159.2		$	166.4		$	153.3
FFO available for Common Stock and OP Unit holders ⁽¹⁾⁽²⁾	$	123.4		$	144.1		$	126.6		$	134.4		$	121.6
Normalized FFO available for Common Stock and OP Unit holders ⁽¹⁾⁽²⁾	$	129.7		$	144.3		$	128.1		$	136.8		$	125.3
Funds Available for Distribution ("FAD") for Common Stock and OP Unit holders ⁽¹⁾⁽²⁾	$	103.1		$	126.2		$	106.9		$	115.4		$	103.6

*Common Shares and OP Units Outstanding (In thousands)* and Per Share Data**
Common Shares and OP Units, end of the period		195,514			195,446			195,386			195,380			195,373
Weighted average Common Shares and OP Units outstanding - Fully Diluted		195,430			195,369			195,281			195,269			195,227
Net income per Common Share - Fully Diluted⁽³⁾	$	0.34		$	0.44		$	0.39		$	0.36		$	0.33
FFO per Common Share and OP Unit - Fully Diluted	$	0.63		$	0.74		$	0.65		$	0.69		$	0.62
Normalized FFO per Common Share and OP Unit - Fully Diluted	$	0.66		$	0.74		$	0.66		$	0.70		$	0.64
Dividends per Common Share	$	0.4475		$	0.4475		$	0.4100		$	0.4100		$	0.4100

Balance Sheet
Total assets	$	5,586		$	5,519		$	5,493		$	5,405		$	5,400
Total liabilities	$	4,083		$	4,006		$	3,975		$	3,886		$	3,878

Market Capitalization
Total debt ⁽⁴⁾	$	3,479		$	3,414		$	3,416		$	3,329		$	3,298
Total market capitalization⁽⁵⁾	$	16,557		$	16,534		$	16,038		$	15,607		$	17,066

Ratios
Total debt / total market capitalization		21.0	%		20.6	%		21.3	%		21.3	%		19.3	%
Total debt / Adjusted EBITDAre ⁽⁶⁾		5.2			5.2			5.3			5.2			5.3
Interest coverage ⁽⁷⁾		5.4			5.5			5.6			5.7			5.7
Fixed charges⁽⁸⁾		5.2			5.4			5.6			5.6			5.6
_____________________________
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. See page 6 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. Net income per Common Share - Fully Diluted is calculated before Income allocated to non-controlling interest - Common OP Units. Excludes deferred financing costs of approximately $28.0 million as of June 30, 2023. See page 14 for the calculation of market capitalization as of June 30, 2023. Calculated using trailing twelve months Adjusted EBITDAre. Calculated by dividing trailing twelve months Adjusted EBITDAre by the interest expense incurred during the same period. 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)
	June 30, 2023			December 31, 2022
	*(unaudited)*
Assets
Investment in real estate:
Land	$	2,088,511		$	2,084,532
Land improvements		4,237,327			4,115,439
Buildings and other depreciable property		1,223,492			1,169,590
		7,549,330			7,369,561
Accumulated depreciation		(2,355,031	)		(2,258,540	)
Net investment in real estate		5,194,299			5,111,021
Cash and restricted cash		28,107			22,347
Notes receivable, net		47,375			45,356
Investment in unconsolidated joint ventures		82,423			81,404
Deferred commission expense		51,978			50,441
Other assets, net		181,805			181,950
Total Assets	$	5,585,987		$	5,492,519

Liabilities and Equity
Liabilities:
Mortgage notes payable, net	$	2,748,807		$	2,693,167
Term loan, net		497,195			496,817
Unsecured line of credit		205,000			198,000
Accounts payable and other liabilities		172,851			175,148
Deferred membership revenue		210,242			197,743
Accrued interest payable		12,305			11,739
Rents and other customer payments received in advance and security deposits		148,989			122,318
Distributions payable		87,486			80,102
Total Liabilities		4,082,875			3,975,034
Equity:
Preferred stock, $0.01 par value, 10,000,000 shares authorized as of June 30, 2023 and December 31, 2022; none issued and outstanding.		—			—
Common stock, $0.01 par value, 600,000,000 shares authorized as of June 30, 2023 and December 31, 2022; 186,273,876 and 186,120,298 shares issued and outstanding as of June 30, 2023 and December 31, 2022, respectively.		1,916			1,916
Paid-in capital		1,638,354			1,628,618
Distributions in excess of accumulated earnings		(225,640	)		(204,248	)
Accumulated other comprehensive income		17,327			19,119
Total Stockholders' Equity		1,431,957			1,445,405
Non-controlling interests – Common OP Units		71,155			72,080
Total Equity		1,503,112			1,517,485
Total Liabilities and Equity	$	5,585,987		$	5,492,519

Consolidated Statements of Income

(In thousands, unaudited)
	Quarters Ended June 30,						Six Months Ended June 30,
	2023			2022			2023			2022
Revenues:
Rental income	$	288,655		$	275,330		$	585,106		$	560,395
Annual membership subscriptions		16,189			15,592			32,159			30,749
Membership upgrade sales ⁽¹⁾		3,614			3,168			7,119			6,235
Other income		17,911			14,195			35,625			27,736
Gross revenues from home sales, brokered resales and ancillary services		38,913			52,681			71,046			92,390
Interest income		2,259			1,722			4,347			3,481
Income from other investments, net		2,473			2,617			4,564			4,521
Total revenues		370,014			365,305			739,966			725,507

Expenses:
Property operating and maintenance		122,214			114,307			234,697			218,299
Real estate taxes		18,832			19,182			37,148			38,639
Membership sales and marketing ⁽²⁾		5,521			5,452			10,359			9,783
Property management		19,359			19,099			38,823			36,970
Depreciation and amortization		51,464			50,796			101,966			100,190
Cost of home sales, brokered resales and ancillary services		29,268			40,971			52,409			71,670
Home selling expenses and ancillary operating expenses		7,170			7,584			14,094			14,066
General and administrative ⁽³⁾⁽⁴⁾		16,607			11,679			28,268			23,750
Casualty-related charges/(recoveries), net ⁽⁵⁾		—			—			—			—
Other expenses ⁽⁴⁾		1,381			4,205			2,849			5,251
Early debt retirement		—			640			—			1,156
Interest and related amortization		33,122			28,053			65,710			55,517
Total expenses		304,938			301,968			586,323			575,291
Loss on sale of real estate and impairment, net		—			—			(2,632	)		—
Income before equity in income of unconsolidated joint ventures		65,076			63,337			151,011			150,216
Equity in income of unconsolidated joint ventures		973			1,253			1,497			1,424
Consolidated net income		66,049			64,590			152,508			151,640

Income allocated to non-controlling interests – Common OP Units		(3,121	)		(3,073	)		(7,209	)		(7,217	)
Redeemable perpetual preferred stock dividends		(8	)		(8	)		(8	)		(8	)
Net income available for Common Stockholders	$	62,920		$	61,509		$	145,291		$	144,415
________________________________
Membership upgrade sales revenue is net of deferrals of $5.7 million and $6.4 million for the quarters ended June 30, 2023 and June 30, 2022, respectively, and $10.1 million and $10.5 million for the six months ended June 30, 2023 and June 30, 2022, respectively. Membership sales and marketing expense is net of sales commission deferrals of $0.9 million and $1.0 million for the quarters ended June 30, 2023 and June 30, 2022, respectively, and $1.6 million and $1.5 million for the six months ended June 30, 2023 and June 30, 2022, respectively. Includes accelerated vesting of stock-based compensation expense of $6.3 million recognized during the quarter and six months ended June 30, 2023 as a result of the passing of a member of our Board of Directors. Prior period amounts have been reclassified to conform to the current period presentation. Casualty-related charges/(recoveries), net for the quarter ended June 30, 2023 includes debris removal and cleanup costs related to Hurricane Ian of $1.8 million and insurance recovery revenue of $1.8 million. Casualty-related charges/(recoveries), net for the six months ended June 30, 2023 includes debris removal and cleanup costs related to Hurricane Ian of $10.3 million and insurance recovery revenue of $10.3 million.

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 6 and Non-GAAP Financial Measures Definitions and Reconciliations on pages 16-19.

Selected Non-GAAP Financial Measures

(In millions, except per share data, unaudited)
	Quarter Ended
	June 30, 2023
Income from property operations, excluding deferrals and property management - 2023 Core ⁽¹⁾	$	175.6
Income from property operations, excluding deferrals and property management - Non-Core ⁽¹⁾		9.0
Property management and general and administrative		(36.0	)
Other income and expenses		14.2
Interest and related amortization		(33.1	)
Normalized FFO available for Common Stock and OP Unit holders ⁽²⁾	$	129.7
Accelerated vesting of stock-based compensation expense⁽³⁾		(6.3	)
FFO available for Common Stock and OP Unit holders⁽²⁾	$	123.4

FFO per Common Share and OP Unit - Fully Diluted	$	0.63
Normalized FFO per Common Share and OP Unit - Fully Diluted	$	0.66

Normalized FFO available for Common Stock and OP Unit holders ⁽²⁾	$	129.7
Non-revenue producing improvements to real estate		(26.6	)
FAD for Common Stock and OP Unit holders ⁽²⁾	$	103.1

Weighted average Common Shares and OP Units - Fully Diluted		195.4
______________________________________
See pages 8-9 for details of the Core Income from Property Operations, excluding deferrals and property management. See page 10 for details of the Non-Core Income from Property Operations, excluding deferrals and property management. 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. Represents accelerated vesting of stock-based compensation expense of $6.3 million recognized during the quarter ended June 30, 2023 as a result of the passing of a member of our Board of Directors.

Reconciliation of Net Income to Non-GAAP Financial Measures

(In thousands, except per share data, unaudited)
	Quarters Ended June 30,						Six Months Ended June 30,
	2023			2022			2023			2022
Net income available for Common Stockholders	$	62,920		$	61,509		$	145,291		$	144,415
Income allocated to non-controlling interests – Common OP Units		3,121			3,073			7,209			7,217
Membership upgrade sales upfront payments, deferred, net⁽¹⁾		5,664			6,367			10,134			10,451
Membership sales commissions, deferred, net⁽¹⁾		(871	)		(957	)		(1,550	)		(1,540	)
Depreciation and amortization		51,464			50,796			101,966			100,190
Depreciation on unconsolidated joint ventures		1,081			835			2,216			1,776
Gain on unconsolidated joint ventures		—			—			(416	)		—
Loss on sale of real estate and impairment, net		—			—			2,632			—
FFO available for Common Stock and OP Unit holders		123,379			121,623			267,482			262,509
Accelerated vesting of stock-based compensation expense ⁽²⁾		6,320			—			6,320			—
Early debt retirement		—			640			—			1,156
Transaction/pursuit costs		—			3,082			117			3,082
Lease termination expenses		—			—			90			—
Normalized FFO available for Common Stock and OP Unit holders		129,699			125,345			274,009			266,747
Non-revenue producing improvements to real estate		(26,573	)		(21,738	)		(44,685	)		(38,106	)
FAD for Common Stock and OP Unit holders	$	103,126		$	103,607		$	229,324		$	228,641

Net income per Common Share - Basic	$	0.34		$	0.33		$	0.78		$	0.78
Net income per Common Share - Fully Diluted ⁽³⁾	$	0.34		$	0.33		$	0.78		$	0.78

FFO per Common Share and OP Unit - Basic	$	0.63		$	0.62		$	1.37		$	1.35
FFO per Common Share and OP Unit - Fully Diluted	$	0.63		$	0.62		$	1.37		$	1.34

Normalized FFO per Common Share and OP Unit - Basic	$	0.66		$	0.64		$	1.40		$	1.37
Normalized FFO per Common Share and OP Unit - Fully Diluted	$	0.66		$	0.64		$	1.40		$	1.37

Weighted average Common Shares outstanding - Basic		186,023			185,767			185,962			185,729
Weighted average Common Shares and OP Units outstanding - Basic		195,263			195,064			195,213			195,028
Weighted average Common Shares and OP Units outstanding - Fully Diluted		195,430			195,227			195,388			195,253
____________________________
See page 13 for details of Membership upgrade sales and related commissions. Represents accelerated vesting of stock-based compensation expense of $6.3 million recognized during the quarter and six months ended June 30, 2023 as a result of the passing of a member of our Board of Directors. 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 June 30,						Six Months Ended June 30,
	2023			2022			2023			2022
MH base rental income ⁽²⁾	$	166.4		$	158.7		$	331.0		$	316.0
Rental home income ⁽²⁾		3.7			3.8			7.6			7.8
RV and marina base rental income ⁽²⁾		101.9			98.3			213.5			207.1
Annual membership subscriptions		16.2			15.6			32.1			30.7
Membership upgrade sales current period, gross ⁽³⁾		9.3			9.5			17.2			16.7
Utility and other income ⁽²⁾⁽⁴⁾		35.8			29.9			71.2			59.9
Property operating revenues		333.3			315.8			672.6			638.2

Property operating, maintenance and real estate taxes ⁽²⁾		142.4			134.6			274.3			259.6
Membership sales and marketing, gross ⁽³⁾		6.4			6.4			11.9			11.3
Property operating expenses		148.8			141.0			286.2			270.9
Income from property operations, excluding deferrals and property management ⁽¹⁾	$	184.5		$	174.8		$	386.4		$	367.3



Manufactured home site figures and occupancy averages:
Total sites		72,729			73,442			72,723			73,505
Occupied sites		68,792			69,693			68,820			69,723
Occupancy %		94.6	%		94.9	%		94.6	%		94.9	%
Monthly base rent per site	$	806		$	759		$	802		$	756

RV and marina base rental income:
Annual	$	72.7		$	66.6		$	142.1		$	131.0
Seasonal		9.5			9.5			37.4			36.1
Transient		19.7			22.2			34.0			40.0
Total RV and marina base rental income	$	101.9		$	98.3		$	213.5		$	207.1
___________________________
Excludes property management and the GAAP deferral of membership upgrade sales upfront payments and membership sales commissions, net. 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 3. Bad debt expense is presented in Property operating, maintenance and real estate taxes in this table. See page 13 for details of Membership upgrade sales and related commissions. Includes approximately $4.0 million and $8.0 million of business interruption income from Hurricane Ian during the quarter ended June 30, 2023 and six months ended June 30, 2023, respectively.

Core Income from Property Operations ⁽¹⁾

(In millions, except home site and occupancy figures, unaudited)
	Quarters Ended June 30,						Six Months Ended June 30,
	2023		2022		*Change ⁽²⁾*		2023		2022		*Change ⁽²⁾*
MH base rental income	$	166.3	$	155.8	6.7	%	$	330.7	$	310.2	6.6	%
Rental home income		3.7		3.8	(2.9	)%		7.5		7.8	(2.6	)%
RV and marina base rental income		96.5		94.2	2.3	%		204.8		196.8	4.1	%
Annual membership subscriptions		15.9		15.2	4.7	%		31.5		30.1	4.8	%
Membership upgrade sales current period, gross		9.0		9.3	(2.8	)%		16.9		16.2	4.2	%
Utility and other income		29.2		27.0	8.6	%		58.7		53.9	9.0	%
Property operating revenues		320.6		305.3	5.0	%		650.1		615.0	5.7	%

Utility expense		36.3		34.2	6.2	%		74.5		68.4	8.9	%
Payroll		30.7		29.7	3.3	%		58.5		55.1	6.2	%
Repair & maintenance		26.2		24.0	8.9	%		47.9		43.1	11.0	%
Insurance and other⁽³⁾		27.3		23.6	15.5	%		50.0		46.5	7.4	%
Real estate taxes		18.2		17.5	4.2	%		35.9		35.4	1.2	%
Membership sales and marketing, gross		6.3		6.3	(0.9	)%		11.8		11.2	5.3	%
Property operating expenses		145.0		135.3	7.0	%		278.6		259.7	7.2	%
Income from property operations, excluding deferrals and property management ⁽¹⁾	$	175.6	$	169.9	*3.5*	%	$	371.5	$	355.2	*4.6*	%

Occupied sites ⁽⁴⁾		68,778		68,992
__________________________________
Excludes property management and the GAAP deferral of membership upgrades sales upfront payments and membership sales commissions, net. Calculations prepared using actual results without rounding. Includes bad debt expense for the periods presented. 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 June 30,								Six Months Ended June 30,
	2023			2022			*Change ⁽¹⁾*		2023			2022			*Change ⁽¹⁾*
Core manufactured home site figures and occupancy averages:
Total sites		72,468			72,458					72,462			72,521
Occupied sites		68,734			68,915					68,762			68,948
Occupancy %		94.8	%		95.1	%				94.9	%		95.1	%
Monthly base rent per site	$	806		$	753				$	801		$	750





Core RV and marina base rental income:
Annual⁽²⁾	$	69.1		$	64.0		7.8	%	$	136.1		$	125.8		8.1	%
Seasonal		9.1			9.0		1.6	%		36.5			33.3		9.2	%
Transient		18.3			21.3		(13.9	)%		32.3			37.6		(14.2	)%
Total Seasonal and Transient	$	27.4		$	30.3		(9.3	)%	$	68.8		$	70.9		(3.2	)%
Total RV and marina base rental income	$	96.5		$	94.3		2.3	%	$	204.9		$	196.7		4.1	%





Core utility information:
Income	$	16.4		$	15.0		9.6	%	$	34.0		$	30.6		11.1	%
Expense		36.3			34.1		6.2	%		74.6			68.4		9.1	%
Expense, net	$	19.9		$	19.1		4.2	%	$	40.6		$	37.8		7.4	%

Utility recovery rate ⁽³⁾		45.2	%		44.0	%				45.6	%		44.7	%
___________________________
Calculations prepared using actual results without rounding. Core Annual marina base rental income represents approximately 99% of the total Core marina base rental income for all periods presented. Calculated by dividing the utility income by utility expense.

Non-Core Income from Property Operations ⁽¹⁾

(In millions, unaudited)
	Quarter Ended		Six Months Ended
	June 30, 2023		June 30, 2023
MH base rental income	$	0.2	$	0.3
RV and marina base rental income		5.4		8.7
Annual membership subscriptions		0.3		0.7
Utility and other income		6.6		12.5
Membership upgrade sales current period, gross		0.3		0.3
Property operating revenues		12.8		22.5

Property operating expenses⁽²⁾		3.8		7.6
Income from property operations, excluding deferrals and property management ⁽¹⁾	$	9.0	$	14.9

________________________________
Excludes property management and the GAAP deferral of membership upgrade sales upfront payments and membership sales commissions, net. 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 June 30,				Six Months Ended June 30,
	2023		2022		2023		2022
Total new home sales volume ⁽¹⁾		226		365		402		626
New home sales gross revenues ⁽¹⁾	$	23,038	$	33,848	$	41,352	$	59,378

Total used home sales volume		66		97		168		169
Used home sales gross revenues	$	1,034	$	1,367	$	2,209	$	2,364

Brokered home resales volume		201		263		335		451
Brokered home resales gross revenues	$	876	$	1,049	$	1,551	$	1,660

Rental Homes - Select Data	Quarters Ended June 30,				Six Months Ended June 30,
	2023		2022		2023		2022

Rental operations revenues ⁽²⁾	$	9,827	$	10,868	$	20,085	$	22,216
Rental home operations expense⁽³⁾		1,158		1,220		2,117		2,611
Depreciation on rental homes ⁽⁴⁾		2,802		2,500		5,549		5,017

Occupied rentals:⁽⁵⁾
New		2,236		2,742
Used		292		375
Total occupied rental sites		2,528		3,117

	As of June 30, 2023				As of June 30, 2022
Cost basis in rental homes: ⁽⁶⁾	Gross		Net of Depreciation		Gross		Net of Depreciation
New	$	257,978	$	215,087	$	221,251	$	191,048
Used		13,491		7,806		14,571		7,673
Total rental homes	$	271,469	$	222,893	$	235,822	$	198,721
_________________________
For 2022, total new home sales volume includes 29 home sales from our ECHO Financing LLC ("ECHO joint venture"). New home sales gross revenues does not include the revenues associated with the ECHO joint venture. For the quarters ended June 30, 2023 and 2022, approximately $6.1 million and $7.1 million, respectively, of the rental operations revenue is included in the MH base rental income in the Core Income from Property Operations on pages 8-9. The remainder of the rental operations revenue for the quarters ended June 30, 2023 and 2022 is included in Rental home income in the Core Income from Property Operations on pages 8-9. Rental home operations expense is included in Property operating, maintenance and real estate taxes in the Consolidated Income from Property Operations on page 7. Rental home operations expense is included in Insurance and other in the Core Income from Property Operations on pages 8-9. Depreciation on rental homes in our Core portfolio is presented in Depreciation and amortization in the Consolidated Statements of Income on page 3. Occupied rentals as of the end of the period in our Core portfolio. Included in occupied rentals as of June 30, 2022 were 185 homes rented through our ECHO joint venture. On December 22, 2022, we completed the purchase of all homes held by the ECHO joint venture. Includes both occupied and unoccupied rental homes in our Core portfolio. New home cost basis does not include the costs associated with our ECHO joint venture for 2022.

Total Sites

(Unaudited)
Summary of Total Sites as of June 30, 2023
	Sites ⁽¹⁾
MH sites	72,700
RV sites:
Annual	35,300
Seasonal	12,500
Transient	14,900
Marina slips	6,900
Membership⁽²⁾	25,800
Joint Ventures ⁽³⁾	3,600
Total	171,700
____________________________
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. Sites primarily utilized by approximately 126,900 members. Includes approximately 6,200 sites rented on an annual basis. Joint ventures have approximately 2,000 annual sites and 1,600 transient.

Memberships - Select Data

(Unaudited)
	Years Ended December 31,
	2019		2020		2021		2022		Six Months Ended June 30, 2023
Member Count ⁽¹⁾		115,680		116,169		125,149		128,439		126,945
Thousand Trails Camping Pass (TTC) Origination		41,484		44,129		50,523		51,415		24,576
TTC Sales		19,267		20,587		23,923		23,237		11,294
RV Dealer TTC Activations		22,217		23,542		26,600		28,178		13,282
Number of annuals ⁽²⁾		5,938		5,986		6,320		6,390		6,175
Number of upgrade sales ⁽³⁾		2,919		3,373		4,863		4,068		1,877

*(In thousands, unaudited)*
Annual membership subscriptions	$	51,015	$	53,085	$	58,251	$	63,215	$	32,159
RV base rental income from annuals	$	19,634	$	20,761	$	23,127	$	25,945	$	13,578
RV base rental income from seasonals/transients	$	20,181	$	18,126	$	25,562	$	24,316	$	8,507
Membership upgrade sales current period, gross	$	19,111	$	21,739	$	36,270	$	34,661	$	17,253
Utility and other income	$	2,422	$	2,426	$	2,735	$	2,626	$	1,129

Membership Upgrade Sales Activity	Quarters Ended June 30,						Six Months Ended June 30,
		2023			2022			2023			2022
Membership upgrade sales current period, gross	$	9,278		$	9,535		$	17,253		$	16,686
Membership upgrade sales upfront payments, deferred, net		(5,664	)		(6,367	)		(10,134	)		(10,451	)
Membership upgrade sales	$	3,614		$	3,168		$	7,119		$	6,235

Membership sales and marketing, gross	$	(6,392	)	$	(6,409	)	$	(11,909	)	$	(11,323	)
Membership sales commissions, deferred, net		871			957			1,550			1,540
Membership sales and marketing	$	(5,521	)	$	(5,452	)	$	(10,359	)	$	(9,783	)
________________________________
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. Members who rent a specific site for an entire year in connection with their membership subscriptions. 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 June 30, 2023

	Total Common Shares/Units		% of Total Common Shares/Units		Total		% of Total		% of Total Market Capitalization

Secured Debt					$	2,774	79.7	%
Unsecured Debt						705	20.3	%
Total Debt ⁽¹⁾					$	3,479	100.0	%	21.0	%

Common Shares		186,273,876	95.3	%
OP Units		9,240,069	4.7	%
Total Common Shares and OP Units		195,513,945	100.0	%
Common Stock price at June 30, 2023	$	66.89
Fair Value of Common Shares and OP Units					$	13,078	100.0	%
Total Equity					$	13,078	100.0	%	79.0	%

Total Market Capitalization					$	16,557			100.0	%
________________________
1. Excludes deferred financing costs of approximately $28.0 million.

Debt Maturity Schedule

Debt Maturity Schedule as of June 30, 2023
(In thousands, unaudited)

Year	Outstanding Debt			Weighted Average Interest Rate		% of Total Debt		Weighted Average Years to Maturity

Secured Debt
2023	$	90,597		4.88	%	2.60	%	0.02
2024		9,887		5.49	%	0.28	%	0.95
2025		91,841		3.45	%	2.64	%	1.79
2026		—		—	%	—	%	—
2027		—		—	%	—	%	—
2028		204,491		4.19	%	5.88	%	5.22
2029		38,905		4.10	%	1.12	%	6.01
2030		275,385		2.69	%	7.92	%	6.77
2031		255,210		2.46	%	7.34	%	7.91
2032		202,000		2.47	%	5.81	%	9.22
Thereafter		1,605,601		3.99	%	46.15	%	13.93
Total	$	2,773,917		3.64	%	79.74	%	10.7

Unsecured Term Loans
2023	$	—		—	%	—	%	—
2024		—		—	%	—	%	—
2025		—		—	%	—	%	—
2026		300,000		1.81	%	8.62	%	2.84
2027		200,000		4.88	%	5.75	%	3.61
Thereafter		—		—	%	—	%	—
Total	$	500,000		3.04	%	14.37	%	3.2

Total Secured and Unsecured	$	3,273,917		3.55	%	94.11	%	9.5

Line of Credit Borrowing ⁽¹⁾		205,000		6.29	%	5.89	%	—

Note Premiums and Unamortized loan costs		(27,915	)

Total Debt, Net	$	3,451,002		3.92% ⁽²⁾		100	%

______________________
Our floating interest rate exposure is limited to line of credit borrowing. Reflects effective interest rate for the quarter ended June 30, 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

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 receive non-refundable upfront payments from membership upgrade contracts. In accordance with GAAP, the non-refundable upfront payments and related commissions are deferred and amortized over the estimated membership upgrade contract term. Although the NAREIT definition of FFO does not address the treatment of non-refundable upfront payments, we believe that it is appropriate to adjust for the impact of the deferral activity in our calculation of FFO.

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 and 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 DEFERRALS AND PROPERTY MANAGEMENT. We define Income from property operations, excluding deferrals and 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, sales and marketing expenses, excluding property management expenses and the impact of GAAP deferrals of membership upgrade sales upfront payments and membership sales commissions, net. 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 June 30,						Six Months Ended June 30,
(amounts in thousands)	2023			2022			2023			2022
Net income available for Common Stockholders	$	62,920		$	61,509		$	145,291		$	144,415
Redeemable perpetual preferred stock dividends		8			8			8			8
Income allocated to non-controlling interests – Common OP Units		3,121			3,073			7,209			7,217
Equity in income of unconsolidated joint ventures		(973	)		(1,253	)		(1,497	)		(1,424	)
Income before equity in income of unconsolidated joint ventures		65,076			63,337			151,011			150,216
Loss on sale of real estate and impairment, net		—			—			2,632			—
Membership upgrade sales upfront payments, deferred, net		5,664			6,367			10,134			10,451
Gross revenues from home sales, brokered resales and ancillary services		(38,913	)		(52,681	)		(71,046	)		(92,390	)
Interest income		(2,259	)		(1,722	)		(4,347	)		(3,481	)
Income from other investments, net		(2,473	)		(2,617	)		(4,564	)		(4,521	)
Membership sales commissions, deferred, net		(871	)		(957	)		(1,550	)		(1,540	)
Property management		19,359			19,099			38,823			36,970
Depreciation and amortization		51,464			50,796			101,966			100,190
Cost of home sales, brokered resales and ancillary services		29,268			40,971			52,409			71,670
Home selling expenses and ancillary operating expenses		7,170			7,584			14,094			14,066
General and administrative ⁽¹⁾⁽²⁾		16,607			11,679			28,268			23,750
Casualty-related charges/(recoveries), net ⁽³⁾		—			—			—			—
Other expenses ⁽¹⁾		1,381			4,205			2,849			5,251
Early debt retirement		—			640			—			1,156
Interest and related amortization		33,122			28,053			65,710			55,517
Income from property operations, excluding deferrals and property management		184,595			174,754			386,389			367,305
Membership upgrade sales upfront payments, and membership sales commissions, deferred, net		(4,793	)		(5,410	)		(8,584	)		(8,911	)
Property management		(19,359	)		(19,099	)		(38,823	)		(36,970	)
Income from property operations	$	160,443		$	150,245		$	338,982		$	321,424

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 receive non-refundable upfront payments from membership upgrade contracts. In accordance with GAAP, the non-refundable upfront payments and related commissions are deferred and amortized over the estimated customer life. Although the NAREIT definition of EBITDAre does not address the treatment of non-refundable upfront payments, we believe that it is appropriate to adjust for the impact of the deferral activity in our calculation of EBITDAre.

_____________________

Prior period amounts have been reclassified to conform to the current period presentation.
Represents accelerated vesting of stock-based compensation expense of $6.3 million recognized during the quarter and six months ended June 30, 2023 as a result of the passing of a member of our Board of Directors.
Casualty-related charges/(recoveries), net for the quarter ended June 30, 2023 includes debris removal and cleanup costs related to Hurricane Ian of $1.8 million and insurance recovery revenue of $1.8 million. Casualty-related charges/(recoveries), net for the six months ended June 30, 2023 includes debris removal and cleanup costs related to Hurricane Ian of $10.3 million and insurance recovery revenue of $10.3 million.

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 June 30,						Six Months Ended June 30,
(amounts in thousands)	2023			2022			2023			2022
Consolidated net income	$	66,049		$	64,590		$	152,508		$	151,640
Interest income		(2,259	)		(1,722	)		(4,347	)		(3,481	)
Membership upgrade sales upfront payments, deferred, net ⁽¹⁾		5,664			6,367			10,134			10,451
Membership sales commissions, deferred, net ⁽¹⁾		(871	)		(957	)		(1,550	)		(1,540	)
Real estate depreciation and amortization		51,464			50,796			101,966			100,190
Other depreciation and amortization		1,339			1,119			2,690			1,946
Interest and related amortization		33,122			28,053			65,710			55,517
Loss on sale of real estate and impairment, net		—			—			2,632			—
Adjustments to our share of EBITDAre of unconsolidated joint ventures		1,684

ELS Reports Second Quarter Results