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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_________________________________________________________
FORM 10-Q
_________________________________________________________

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

For the quarterly period ended March 31, 2022

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

For the transition period from to
Commission file number: 1-11718
_________________________________________________________
EQUITY LIFESTYLE PROPERTIES, INC.
(Exact Name of Registrant as Specified in Its Charter)
_________________________________________________________

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

(312) 279-1400
Registrant's telephone number, including area code

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

_________________________________________________________
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act. (Check one):

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

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒
Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date: 186,011,525 shares of Common Stock as of April 21, 2022.

Equity LifeStyle Properties, Inc.
Table of Contents

|  | Page
Part I - Financial Information
Item 1. | Financial Statements (unaudited) |
| Index To Financial Statements |
| Consolidated Balance Sheets as of March 31, 2022 and December 31, 2021 | 3
| Consolidated Statements of Income and Comprehensive Income for the quarters ended March 31, 2022 and 2021 | 4
| Consolidated Statements of Changes in Equity for the quarters ended Ma rch 31, 2022 and 2021 | 5
| Consolidated Statements of Cash Flows for the quarters ended March 31, 2022 and 2021 | 6
| Notes to Consolidated Financial Statements | 8
Item 2. | Management’s Discussion and Analysis of Financial Condition and Results of Operations | 17
Item 3. | Quantitative and Qualitative Disclosures About Market Risk | 31
Item 4. | Controls and Procedures | 31
Part II - Other Information
Item 1. | Legal Proceedings | 32
Item 1A. | Risk Factors | 32
Item 2. | Unregistered Sales of Equity Securities and Use of Proceeds | 32
Item 3. | Defaults Upon Senior Securities | 32
Item 4. | Mine Safety Disclosures | 32
Item 5. | Other Information | 32
Item 6. | Exhibits | 32

2

Part I – Financial Information
Item 1. Financial Statements
Equity LifeStyle Properties, Inc.
Consolidated Balance Sheets
(amounts in thousands, except share and per share data)

| March 31, 2022 |  | December 31, 2021
| (unaudited) |  |
Assets |  |  |
Investment in real estate: |  |  |
Land | $ | 2,025,609 |  |  | $ | 2,019,787 |
Land improvements | 3,962,367 |  |  | 3,912,062 |
Buildings and other depreciable property | 1,083,942 |  |  | 1,057,215 |
| 7,071,918 |  |  | 6,989,064 |
Accumulated depreciation | (2,150,238) |  |  | (2,103,774) |
Net investment in real estate | 4,921,680 |  |  | 4,885,290 |
Cash and restricted cash | 38,120 |  |  | 123,398 |
Notes receivable, net | 40,542 |  |  | 39,955 |
Investment in unconsolidated joint ventures | 79,688 |  |  | 70,312 |
Deferred commission expense | 47,859 |  |  | 47,349 |
Other assets, net | 136,916 |  |  | 141,567 |
Total Assets | $ | 5,264,805 |  |  | $ | 5,307,871 |
Liabilities and Equity |  |  |
Liabilities: |  |  |
Mortgage notes payable, net | $ | 2,598,830 |  |  | $ | 2,627,783 |
Term loan, net | 496,148 |  |  | 297,436 |
Unsecured line of credit | 69,000 |  |  | 349,000 |
Accounts payable and other liabilities | 166,435 |  |  | 172,285 |
Deferred membership revenue | 182,181 |  |  | 176,439 |
Accrued interest payable | 9,175 |  |  | 9,293 |
Rents and other customer payments received in advance and security deposits | 132,412 |  |  | 118,696 |
Distributions payable | 80,287 |  |  | 70,768 |
Total Liabilities | 3,734,468 |  |  | 3,821,700 |
Equity: |  |  |
Stockholders' Equity: |  |  |
Preferred stock, $0.01 par value, 10,000,000 shares authorized as of March 31, 2022 and December 31, 2021; none issued and outstanding. | — |  |  | — |
Common stock, $0.01 par value, 600,000,000 shares authorized as of March 31, 2022 and December 31, 2021; 186,006,354 and 185,640,379 shares issued and outstanding as of March 31, 2022, and December 31, 2021, respectively. | 1,916 |  |  | 1,913 |
Paid-in capital | 1,619,164 |  |  | 1,593,362 |
Distributions in excess of accumulated earnings | (177,158) |  |  | (183,689) |
Accumulated other comprehensive income | 13,448 |  |  | 3,524 |
Total Stockholders’ Equity | 1,457,370 |  |  | 1,415,110 |
Non-controlling interests – Common OP Units | 72,967 |  |  | 71,061 |
Total Equity | 1,530,337 |  |  | 1,486,171 |
Total Liabilities and Equity | $ | 5,264,805 |  |  | $ | 5,307,871 |

The accompanying notes are an integral part of the consolidated financial statements.
3

Equity LifeStyle Properties, Inc.
Consolidated Statements of Income and Comprehensive Income
(amounts in thousands, except per share data)
(unaudited)

| Quarters Ended March 31, |  |
| 2022 |  | 2021 |  |  |  |
Revenues: |  |  |  |  |  |  |
Rental income | $ | 285,065 |  |  | $ | 249,022 |  |  |  |  |
Annual membership subscriptions | 15,157 |  |  | 13,654 |  |  |  |  |
Membership upgrade sales current period, gross | 7,151 |  |  | 10,014 |  |  |  |  |
Membership upgrade sales upfront payments, deferred, net | (4,084) |  |  | (7,427) |  |  |  |  |
Other income | 13,542 |  |  | 10,521 |  |  |  |  |
Gross revenues from home sales, brokered resales and ancillary services | 39,695 |  |  | 25,160 |  |  |  |  |
Interest income | 1,759 |  |  | 1,767 |  |  |  |  |
Income from other investments, net | 1,904 |  |  | 936 |  |  |  |  |
Total revenues | 360,189 |  |  | 303,647 |  |  |  |  |
Expenses: |  |  |  |  |  |  |
Property operating and maintenance | 103,992 |  |  | 88,873 |  |  |  |  |
Real estate taxes | 19,457 |  |  | 17,850 |  |  |  |  |
Sales and marketing, gross | 4,914 |  |  | 6,176 |  |  |  |  |
Membership sales commissions, deferred, net | (583) |  |  | (1,499) |  |  |  |  |
Property management | 17,871 |  |  | 15,380 |  |  |  |  |
Depreciation and amortization | 49,394 |  |  | 45,398 |  |  |  |  |
Cost of home sales, brokered resales and ancillary services | 30,684 |  |  | 18,836 |  |  |  |  |
Home selling expenses and ancillary operating expenses | 6,481 |  |  | 4,941 |  |  |  |  |
General and administrative | 12,297 |  |  | 10,512 |  |  |  |  |
Other expenses | 823 |  |  | 698 |  |  |  |  |
Early debt retirement | 516 |  |  | 2,029 |  |  |  |  |
Interest and related amortization | 27,464 |  |  | 26,275 |  |  |  |  |
Total expenses | 273,310 |  |  | 235,469 |  |  |  |  |
Loss on sale of real estate, net | — |  |  | (59) |  |  |  |  |
Income before equity in income of unconsolidated joint ventures | 86,879 |  |  | 68,119 |  |  |  |  |
Equity in income of unconsolidated joint ventures | 171 |  |  | 868 |  |  |  |  |
Consolidated net income | 87,050 |  |  | 68,987 |  |  |  |  |
Income allocated to non-controlling interests – Common OP Units | (4,144) |  |  | (3,747) |  |  |  |  |
Net income available for Common Stockholders | $ | 82,906 |  |  | $ | 65,240 |  |  |  |  |
Consolidated net income | $ | 87,050 |  |  | $ | 68,987 |  |  |  |  |
Other comprehensive income (loss): |  |  |  |  |  |  |
Adjustment for fair market value of swap | 9,924 |  |  | 129 |  |  |  |  |
Consolidated comprehensive income | 96,974 |  |  | 69,116 |  |  |  |  |
Comprehensive income allocated to non-controlling interests – Common OP Units | (4,616) |  |  | (3,754) |  |  |  |  |
Comprehensive income attributable to Common Stockholders | $ | 92,358 |  |  | $ | 65,362 |  |  |  |  |
Earnings per Common Share – Basic | $ | 0.45 |  |  | $ | 0.36 |  |  |  |  |
Earnings per Common Share – Fully Diluted | $ | 0.45 |  |  | $ | 0.36 |  |  |  |  |
Weighted average Common Shares outstanding – Basic | 185,690 |  |  | 181,945 |  |  |  |  |
Weighted average Common Shares outstanding – Fully Diluted | 195,246 |  |  | 192,685 |  |  |  |  |

The accompanying notes are an integral part of the consolidated financial statements.
4

Equity LifeStyle Properties, Inc.
Consolidated Statements of Changes in Equity
(amounts in thousands)
(unaudited)

| Common Stock |  | Paid-in Capital |  |  |  | Distributions in Excess of Accumulated Earnings |  | Accumulated Other Comprehensive Income (Loss) |  | Non-controlling Interests – Common OP Units |  | Total Equity
Balance as of December 31, 2021 | $ | 1,913 |  |  | $ | 1,593,362 |  |  |  |  | $ | (183,689) |  |  | $ | 3,524 |  |  | $ | 71,061 |  |  | $ | 1,486,171 |
Exchange of Common OP Units for Common Stock | — |  |  | 67 |  |  |  |  | — |  |  | — |  |  | (67) |  |  | — |
Issuance of Common Stock through employee stock purchase plan | — |  |  | 513 |  |  |  |  | — |  |  | — |  |  | — |  |  | 513 |
Issuance of Common Stock | 3 |  |  | 28,367 |  |  |  |  | — |  |  | — |  |  | — |  |  | 28,370 |
Compensation expenses related to restricted stock and stock options | — |  |  | 2,590 |  |  |  |  | — |  |  | — |  |  | — |  |  | 2,590 |
Repurchase of Common Stock or Common OP Units | — |  |  | (3,449) |  |  |  |  | — |  |  | — |  |  | — |  |  | (3,449) |
Adjustment for Common OP Unitholders in the Operating Partnership | — |  |  | (1,641) |  |  |  |  | — |  |  | — |  |  | 1,641 |  |  | — |
Adjustment for fair market value of swap | — |  |  | — |  |  |  |  | — |  |  | 9,924 |  |  | — |  |  | 9,924 |
Consolidated net income | — |  |  | — |  |  |  |  | 82,906 |  |  | — |  |  | 4,144 |  |  | 87,050 |
Distributions | — |  |  | — |  |  |  |  | (76,375) |  |  | — |  |  | (3,812) |  |  | (80,187) |
Other | — |  |  | (645) |  |  |  |  | — |  |  | — |  |  | — |  |  | (645) |
Balance as of March 31, 2022 | $ | 1,916 |  |  | $ | 1,619,164 |  |  |  |  | $ | (177,158) |  |  | $ | 13,448 |  |  | $ | 72,967 |  |  | $ | 1,530,337 |

| Common Stock |  | Paid-in Capital |  |  |  | Distributions in Excess of Accumulated Earnings |  | Accumulated Other Comprehensive Income (Loss) |  | Non-controlling interests – Common OP Units |  | Total Equity
Balance as of December 31, 2020 | $ | 1,813 |  |  | $ | 1,411,397 |  |  |  |  | $ | (179,523) |  |  | $ | — |  |  | $ | 71,068 |  |  | $ | 1,304,755 |
Exchange of Common OP Units for Common Stock | — |  |  | 58 |  |  |  |  | — |  |  | — |  |  | (58) |  |  | — |
Issuance of Common Stock through employee stock purchase plan | — |  |  | 732 |  |  |  |  | — |  |  | — |  |  | — |  |  | 732 |
Compensation expenses related to restricted stock and stock options | — |  |  | 2,556 |  |  |  |  | — |  |  | — |  |  | — |  |  | 2,556 |
Repurchase of Common Stock or Common OP Units | — |  |  | (2,814) |  |  |  |  | — |  |  | — |  |  | — |  |  | (2,814) |
Adjustment for fair market value of swap | — |  |  | — |  |  |  |  | — |  |  | 129 |  |  | — |  |  | 129 |
Consolidated net income | — |  |  | — |  |  |  |  | 65,240 |  |  | — |  |  | 3,747 |  |  | 68,987 |
Distributions | — |  |  | — |  |  |  |  | (66,087) |  |  | — |  |  | (3,796) |  |  | (69,883) |
Other | — |  |  | (116) |  |  |  |  | — |  |  | — |  |  | — |  |  | (116) |
Balance as of March 31, 2021 | $ | 1,813 |  |  | $ | 1,411,813 |  |  |  |  | $ | (180,370) |  |  | $ | 129 |  |  | $ | 70,961 |  |  | $ | 1,304,346 |

The accompanying notes are an integral part of the consolidated financial statements.
5

Equity LifeStyle Properties, Inc.
Consolidated Statements of Cash Flows
(amounts in thousands)
(unaudited)

| Quarters Ended March 31,
| 2022 |  | 2021
Cash Flows From Operating Activities: |  |  |
Consolidated net income | $ | 87,050 |  |  | $ | 68,987 |
Adjustments to reconcile consolidated net income to net cash provided by operating activities: |  |  |
Loss on sale of real estate, net | — |  |  | 59 |
Early debt retirement | 516 |  |  | 2,029 |
Depreciation and amortization | 50,237 |  |  | 46,119 |
Amortization of loan costs | 1,213 |  |  | 1,111 |
Debt premium amortization | (60) |  |  | (83) |
Equity in income of unconsolidated joint ventures | (171) |  |  | (868) |
Proceeds from insurance claims, net | 59 |  |  | 2,343 |
Compensation expense related to incentive plans | (1,529) |  |  | 2,939 |
Revenue recognized from membership upgrade sales upfront payments | (3,067) |  |  | (2,587) |
Commission expense recognized related to membership sales | 1,040 |  |  | 955 |
Changes in assets and liabilities: |  |  |
Notes receivable, net | 189 |  |  | (1,366) |
Deferred commission expense | (1,550) |  |  | (2,363) |
Other assets, net | 23,168 |  |  | 17,884 |
Accounts payable and other liabilities | (1,923) |  |  | 11,781 |
Deferred membership revenue | 8,494 |  |  | 12,687 |
Rents and other customer payments received in advance and security deposits | 13,665 |  |  | 13,704 |
Net cash provided by operating activities | 177,331 |  |  | 173,331 |
Cash Flows From Investing Activities: |  |  |
Real estate acquisitions, net | (15,402) |  |  | (295,599) |
Proceeds from disposition of properties, net | — |  |  | (7) |
Investment in unconsolidated joint ventures | (7,912) |  |  | — |
Distributions of capital from unconsolidated joint ventures | 374 |  |  | 731 |
Proceeds from insurance claims | 1,405 |  |  | — |
Capital improvements | (83,647) |  |  | (56,778) |
Net cash used in investing activities | (105,182) |  |  | (351,653) |

The accompanying notes are an integral part of the consolidated financial statements.
6

Equity LifeStyle Properties, Inc.
Consolidated Statements of Cash Flows (continued)
(amounts in thousands)
(unaudited)

| Quarters Ended March 31,
| 2022 |  | 2021
Cash Flows From Financing Activities: |  |  |
Proceeds from stock options and employee stock purchase plan | 513 |  |  | 732 |
Gross proceeds from the issuance of common stock | 28,370 |  |  | — |
Distributions: |  |  |
Common Stockholders | (67,295) |  |  | (62,414) |
Common OP Unitholders | (3,373) |  |  | (3,589) |
Share based award tax withholding payments | (3,449) |  |  | (2,814) |
Principal payments and mortgage debt repayment | (29,592) |  |  | (80,351) |
Mortgage notes payable financing proceeds | — |  |  | 270,000 |
Term loan proceeds | 200,000 |  |  | 300,000 |
Line of Credit repayment | (319,000) |  |  | (283,000) |
Line of Credit proceeds | 39,000 |  |  | 111,000 |
Debt issuance and defeasance costs | (1,957) |  |  | (3,658) |
Other | (644) |  |  | (116) |
Net cash (used in) provided by financing activities | (157,427) |  |  | 245,790 |
Net (decrease) increase in cash and restricted cash | (85,278) |  |  | 67,468 |
Cash and restricted cash, beginning of year | 123,398 |  |  | 24,060 |
Cash and restricted cash, end of period | $ | 38,120 |  |  | $ | 91,528 |

| Quarters Ended March 31,
| 2022 |  | 2021
Supplemental Information: |  |  |
Cash paid for interest | $ | 26,839 |  |  | $ | 24,864 |
Net investment in real estate – reclassification of rental homes | $ | 21,311 |  |  | $ | 12,751 |
Other assets, net – reclassification of rental homes | $ | (21,311) |  |  | $ | (12,751) |
Real estate acquisitions: |  |  |
Investment in real estate | $ | (15,075) |  |  | $ | (303,292) |
Notes receivable, net | (772) |  |  | — |
Other assets, net | — |  |  | (2,781) |
Deferred revenue - sale of right-to-use contracts | 315 |  |  | — |
Accrued expenses and accounts payable | — |  |  | 1,251 |
Other liabilities | 79 |  |  | — |
Rents and other customer payments received in advance and security deposits | 51 |  |  | 9,223 |
Real estate acquisitions, net | $ | (15,402) |  |  | $ | (295,599) |
Real estate dispositions: |  |  |
Investment in real estate | $ | — |  |  | $ | 52 |
Loss on sale of real estate, net | — |  |  | (59) |
Real estate dispositions, net | $ | — |  |  | $ | (7) |

The accompanying notes are an integral part of the consolidated financial statements.
7

Equity LifeStyle Properties, Inc.
Notes to Consolidated Financial Statements
Note 1 – Organization and Basis of Presentation
Equity LifeStyle Properties, Inc. (“ELS”), a Maryland corporation, together with MHC Operating Limited Partnership (the “Operating Partnership”) and its other consolidated subsidiaries (the “Subsidiaries”), are referred to herein as “we,” “us,” and “our”. We are a fully integrated owner of lifestyle-oriented properties (“Properties”) consisting of property operations and home sales and rental operations primarily within manufactured home (“MH”) and recreational vehicle (“RV”) communities and marinas. We have a unique business model where we own the land which we lease to customers who own manufactured homes and cottages, RVs and/or boats either on a long-term or short-term basis. Our customers may lease individual developed areas (“Sites”) or enter into right-to-use contracts, also known as membership subscriptions, which provide them access to specific Properties for limited stays.
Our Properties are owned primarily by the Operating Partnership and managed internally by affiliates of the Operating Partnership. ELS is the sole general partner of the Operating Partnership, has exclusive responsibility and discretion in management and control of the Operating Partnership and held a 95.2% interest as of March 31, 2022. As the general partner with control, ELS is the primary beneficiary of, and therefore consolidates, the Operating Partnership.
Equity method of accounting is applied to entities in which ELS does not have a controlling interest or for variable interest entities in which ELS is not considered the primary beneficiary, but with respect to which it can exercise significant influence over operations and major decisions. Our exposure to losses associated with unconsolidated joint ventures is primarily limited to the carrying value of these investments. Accordingly, distributions from a joint venture in excess of our carrying value are recognized in earnings.
The accompanying unaudited interim consolidated financial statements have been prepared pursuant to Securities and Exchange Commission (“SEC”) rules and regulations for Quarterly Reports on Form 10-Q. Accordingly, they do not include all of the information and note disclosures required by U.S. Generally Accepted Accounting Principles (“GAAP”) for complete financial statements and should be read in conjunction with the consolidated financial statements and notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2021.
Intercompany balances and transactions have been eliminated. All adjustments to the unaudited interim consolidated financial statements are of a normal, recurring nature and, in the opinion of management, are necessary for a fair presentation of results for these interim periods. Revenues and expenses are subject to seasonal fluctuations and accordingly, quarterly interim results may not be indicative of full year results. Certain prior period amounts have been reclassified on our unaudited interim consolidated financial statements to conform with current year presentation.
Note 2 – Summary of Significant Accounting Policies
(a) Revenue Recognition
Our revenue streams are predominantly derived from customers renting our Sites or entering into membership subscriptions. Leases with customers renting our Sites are accounted for as operating leases. The rental income associated with these leases is accounted for in accordance with the Accounting Standards Codification (“ASC”) 842, Leases, and is recognized over the term of the respective lease or the length of a customer’s stay. MH Sites are generally leased on an annual basis to residents who own or lease factory-built homes, including manufactured homes. RV and marina Sites are leased to those who generally have an RV, factory-built cottage, boat or other unit placed on the site, including those customers renting marina dry storage slips. Annual Sites are leased on an annual basis, including those Northern Properties that are open for the summer season. Seasonal Sites are leased to customers generally for one to six months. Transient Sites are leased to customers on a short-term basis. We do not separate expenses reimbursed by our customers (“utility recoveries”) from the associated rental income as we meet the practical expedient criteria to combine the lease and non-lease components. We assessed the criteria and concluded that the timing and pattern of transfer for rental income and the associated utility recoveries are the same and, as our leases qualify as operating leases, we account for and present rental income and utility recoveries as a single component under Rental income in our Consolidated Statements of Income and Comprehensive Income. In addition, customers may lease homes that are located in our communities. These leases are accounted for as operating leases. Rental income derived from customers leasing homes is also accounted for in accordance with ASC 842, Leases and is recognized over the term of the respective lease. The allowance for credit losses related to the collectability of lease receivables is presented as a reduction to Rental income. Lease receivables are presented within Other assets, net on the Consolidated Balance Sheets and are net of an allowance for credit losses. The estimate for credit losses is a result of our ongoing assessments and evaluations of collectability, including historical loss experience, current market conditions and future expectations in forecasting credit losses.
8

Equity LifeStyle Properties, Inc.
Notes to Consolidated Financial Statements
Note 2 – Summary of Significant Accounting Policies (continued)
Annual membership subscriptions and membership upgrade sales are accounted for in accordance with ASC 606, Revenue from Contracts with Customers. Membership subscriptions provide our customers access to specific Properties for limited stays at a specified group of Properties. Payments are deferred and recognized on a straight-line basis over the one-year period during which access to Sites at certain Properties is provided. Membership subscription receivables are presented within Other assets, net on the Consolidated Balance Sheets and are net of an allowance for credit losses. Membership upgrades grant certain additional access rights to the customer and require non-refundable upfront payments. The non-refundable upfront payments are recognized on a straight-line basis over 20 years. Financed upgrade sales (also known as contract receivables) are presented within Notes receivable, net on the Consolidated Balance Sheets and are net of an allowance for credit losses.
Income from home sales is recognized when the earnings process is complete. The earnings process is complete when the home has been delivered, the purchaser has accepted the home and title has transferred. We have a limited program under which we purchase loans made by an unaffiliated lender to homebuyers at our Properties. Financed home sales (also known as chattel loans) are presented within Notes receivable, net on the Consolidated Balance Sheets and are net of an allowance for credit losses.
(b) Restricted Cash
As of March 31, 2022 and December 31, 2021, restricted cash consists of $29.3 million for each period, primarily related to cash reserved for customer deposits and escrows for insurance and real estate taxes.
Note 3 – Leases
Lessor
The leases entered into between the customer and us for rental of a Site are renewable upon the consent of both parties or, in some instances, as provided by statute. Long-term leases that are non-cancelable by the tenants are in effect at certain Properties. Rental rate increases at these Properties are primarily a function of increases in the Consumer Price Index, taking into consideration certain conditions. Additionally, periodic market rate adjustments are made as deemed appropriate. In addition, certain state statutes allow entry into long-term agreements that effectively modify lease terms related to rent amounts and increases over the term of the agreements. The following table presents future minimum rents expected to be received under long-term non-cancelable tenant leases, as well as those leases that are subject to long-term agreements governing rent payments and increases:

(amounts in thousands) |  | As of March 31, 2022
2022 |  | $ | 119,123 |
2023 |  | 161,093 |
2024 |  | 98,692 |
2025 |  | 40,813 |
2026 |  | 21,539 |
Thereafter |  | 66,894 |
Total |  | $ | 508,154 |

Lessee
We lease land under non-cancelable operating leases at 14 Properties expiring at various dates between 2022 and 2054. The majority of the leases have terms requiring fixed payments plus additional rents based on a percentage of gross revenues at those Properties. We also have other operating leases, primarily office space, expiring at various dates through 2032. For the quarters ended March 31, 2022 and 2021, total operating lease payments were $2.6 million and $2.5 million, respectively.
9

Equity LifeStyle Properties, Inc.
Notes to Consolidated Financial Statements
Note 3 – Leases (continued)
The following table summarizes our minimum future rental payments, excluding variable costs, which are discounted by our incremental borrowing rate to calculate the lease liability for our operating leases as of March 31, 2022:

|  | As of March 31, 2022 |  |
(amounts in thousands) |  | Ground Leases |  | Office and Other Leases |  | Total |  |  |  |  |  |
2022 |  | $ | 1,603 |  |  | $ | 2,972 |  |  | $ | 4,575 |  |  |  |  |  |  |
2023 |  | 626 |  |  | 3,523 |  |  | 4,149 |  |  |  |  |  |  |
2024 |  | 632 |  |  | 3,097 |  |  | 3,729 |  |  |  |  |  |  |
2025 |  | 637 |  |  | 2,763 |  |  | 3,400 |  |  |  |  |  |  |
2026 |  | 615 |  |  | 2,543 |  |  | 3,158 |  |  |  |  |  |  |
Thereafter |  | 4,325 |  |  | 13,140 |  |  | 17,465 |  |  |  |  |  |  |
Total undiscounted rental payments |  | 8,438 |  |  | 28,038 |  |  | 36,476 |  |  |  |  |  |  |
Less imputed interest |  | (2,281) |  |  | (4,506) |  |  | (6,787) |  |  |  |  |  |  |
Total lease liabilities |  | $ | 6,157 |  |  | $ | 23,532 |  |  | $ | 29,689 |  |  |  |  |  |  |

Right-of-use (“ROU”) assets and lease liabilities from our operating leases, included within Other assets, net and Accounts payable and other liabilities on the Consolidated Balance Sheets, were $27.8 million and $29.7 million, respectively, as of March 31, 2022. The weighted average remaining lease term for our operating leases was ten years and the weighted average incremental borrowing rate was 3.8% at March 31, 2022.
ROU assets and lease liabilities from our operating leases, included within Other assets, net and Accounts payable and other liabilities on the Consolidated Balance Sheets, were $30.3 million and $30.7 million, respectively, as of December 31, 2021. The weighted average remaining lease term for our operating leases was seven years and the weighted average incremental borrowing rate was 3.8% at December 31, 2021.
Note 4 – Earnings Per Common Share
The following table sets forth the computation of basic and diluted earnings per share of common stock for the quarters ended March 31, 2022 and 2021:

|  | Quarters Ended March 31, |  |
(amounts in thousands, except per share data) |  | 2022 |  | 2021 |  |  |  |
Numerators: |  |  |  |  |  |  |  |
Net income available for Common Stockholders – Basic |  | $ | 82,906 |  |  | $ | 65,240 |  |  |  |  |
Amounts allocated to non controlling interest (dilutive securities) |  | 4,144 |  |  | 3,747 |  |  |  |  |
Net income available for Common Stockholders – Fully Diluted |  | $ | 87,050 |  |  | $ | 68,987 |  |  |  |  |
Denominators: |  |  |  |  |  |  |  |
Weighted average Common Shares outstanding – Basic |  | 185,690 |  |  | 181,945 |  |  |  |  |
Effect of dilutive securities: |  |  |  |  |  |  |  |
Exchange of Common OP Units for Common Shares |  | 9,301 |  |  | 10,473 |  |  |  |  |
Stock options and restricted stock |  | 255 |  |  | 267 |  |  |  |  |
Weighted average Common Shares outstanding – Fully Diluted |  | 195,246 |  |  | 192,685 |  |  |  |  |
Earnings per Common Share – Basic |  | $ | 0.45 |  |  | $ | 0.36 |  |  |  |  |
Earnings per Common Share – Fully Diluted |  | $ | 0.45 |  |  | $ | 0.36 |  |  |  |  |

Note 5 – Common Stock and Other Equity Related Transactions
Common Stockholder Distribution Activity
The following quarterly distributions have been declared and paid to Common Stockholders and the Operating Partnership unit (“OP Unit”) holders since January 1, 2021.
10

Equity LifeStyle Properties, Inc.
Notes to Consolidated Financial Statements
Note 5 – Common Stock and Other Equity Related Transactions (continued)

Distribution Amount Per Share |  | For the Quarter Ended |  | Stockholder Record Date |  | Payment Date
$0.3625 |  | March 31, 2021 |  | March 26, 2021 |  | April 9, 2021
$0.3625 |  | June 30, 2021 |  | June 25, 2021 |  | July 9, 2021
$0.3625 |  | September 30, 2021 |  | September 24, 2021 |  | October 8, 2021
$0.3625 |  | December 31, 2021 |  | December 31, 2021 |  | January 14, 2022
$0.4100 |  | March 31, 2022 |  | March 25, 2022 |  | April 8, 2022

Equity Offering Program
On February 24, 2022, we entered into our current at-the-market (“ATM”) equity offering program with certain sales agents, pursuant to which we may sell, from time-to-time, shares of our common stock, par value $0.01 per share, having an aggregate offering price of up to $500.0 million. Prior to the new program, the aggregate offering price was up to $200.0 million. As of March 31, 2022, the full capacity of our current ATM equity offering program remained available for issuance.
The following table presents the shares that were issued under our prior ATM equity offering program during the quarter ended March 31, 2022. There was no ATM equity activity during the quarter ended March 31, 2021.

| Quarter Ended March 31,
(amounts in thousands, except share data) | 2022
Shares of common stock sold | 328,123 |
Weighted average price | $ | 86.46 |
Total gross proceeds | $ | 28,370 |
Commissions paid to sales agents | $ | 389 |

Exchanges
Subject to certain limitations, OP Unit holders can request an exchange of any or all of their OP Units for shares of Common Stock at any time. Upon receipt of such a request, we may, in lieu of issuing shares of Common Stock, cause the Operating Partnership to pay cash. During the quarters ended March 31, 2022 and 2021, 8,640 and 8,560 OP Units, respectively, were exchanged for an equal number of shares of Common Stock.
Note 6 – Investment in Real Estate
Acquisitions
2022
On February 18, 2022, we completed the acquisition of Blue Mesa Recreational Ranch, a 385-site membership RV community located in Gunnison, Colorado, and Pilot Knob RV Resort a 247-site RV community located in Winterhaven, California for a combined purchase price of $15.9 million. The acquisition was funded with available cash.
11

Equity LifeStyle Properties, Inc.
Notes to Consolidated Financial Statements
Note 7 – Investments in Unconsolidated Joint Ventures
The following table summarizes our investment in unconsolidated joint ventures (investment amounts in thousands with the number of Properties shown parenthetically as of March 31, 2022 and December 31, 2021, respectively):

|  |  |  |  |  |  |  | Investment as of |  | Income/(Loss) for the quarters ended
Investment |  | Location |  | Number of Sites |  | Economic Interest (a) |  | March 31, 2022 |  | December 31, 2021 |  | March 31, 2022 |  | March 31, 2021
Meadows |  | Various (2,2) |  | 1,077 |  |  | 50 | % |  | $ | 60 |  |  | $ | — |  |  | $ | 260 |  |  | $ | 550 |
Lakeshore |  | Florida (3,3) |  | 721 |  |  | (b) |  | 2,599 |  |  | 2,638 |  |  | 135 |  |  | 152 |
Voyager |  | Arizona (1,1) |  | — |  |  | 33 | % | (c) | 160 |  |  | 141 |  |  | 20 |  |  | 30 |
ECHO JV |  | Various |  | — |  |  | 50 | % |  | 18,313 |  |  | 18,136 |  |  | 177 |  |  | 136 |
RVC |  | Various |  | 1,019 |  |  | 80 | % |  | 53,085 |  |  | 49,397 |  |  | (421) |  |  | — |
Mulberry Farms |  | Various |  | — |  |  | 50 | % | (d) | 5,471 |  |  | — |  |  | — |  |  | — |
|  |  |  | 2,817 |  |  |  |  | $ | 79,688 |  |  | $ | 70,312 |  |  | $ | 171 |  |  | $ | 868 |

_____________________
(a)The percentages shown approximate our economic interest as of March 31, 2022. Our legal ownership interest may differ.
(b)Includes two joint ventures in which we own a 65% interest in each and the Crosswinds joint venture in which we own a 49% interest.
(c)Consists of a 33% interest in the utility plant servicing Voyager RV Resort. On October 14, 2021, we completed the acquisition of the remaining 50% interest in Voyager RV Resort.
(d)On January 18, 2022, we acquired a 50% equity interest in an entity developing an age-restricted community in Prescott Valley, Arizona.
We received approximately $0.4 million and $0.7 million in distributions from our unconsolidated joint ventures for the quarters ended March 31, 2022 and 2021, respectively. Approximately $0.3 million and $0.7 million of the distributions made to us exceeded our basis in our unconsolidated joint ventures for the quarters ended March 31, 2022 and 2021, respectively, and as such, were recorded as income from unconsolidated joint ventures.
Note 8 – Borrowing Arrangements
Mortgage Notes Payable
Our mortgage notes payable is classified as Level 2 in the fair value hierarchy. The following table presents the fair value of our mortgage notes payable:

|  | As of March 31, 2022 |  | As of December 31, 2021
(amounts in thousands) |  | Fair Value |  | Carrying Value |  | Fair Value |  | Carrying Value
Mortgage notes payable, excluding deferred financing costs |  | $ | 3,065,711 |  |  | $ | 2,624,409 |  |  | $ | 2,743,527 |  |  | $ | 2,654,086 |

The weighted average interest rate on our outstanding mortgage indebtedness, including the impact of premium/discount amortization and loan cost amortization on mortgage indebtedness, as of March 31, 2022, was approximately 3.8% per annum. The debt bears interest at stated rates ranging from 2.4% to 8.9% per annum and matures on various dates ranging from 2022 to 2041. The debt encumbered a total of 114 and 117 of our Properties as of March 31, 2022 and December 31, 2021, respectively, and the gross carrying value of such Properties was approximately $2,811.0 million and $2,817.5 million, as of March 31, 2022 and December 31, 2021, respectively.
During the quarter ended March 31, 2022, we repaid $14.2 million of principal on two mortgage loans that were due to mature in 2022, incurring $0.5 million of prepayment penalties. These mortgage loans had a weighted average interest rate of 5.25% per annum and were secured by three RV communities.
In April 2022, we closed on a secured refinancing transaction generating gross proceeds of $200.0 million. The loan is secured by one MH community, has a fixed interest rate of 3.36% per annum and has a maturity date of May 1, 2034. See Note 13. Subsequent Events for further details.
12

Equity LifeStyle Properties, Inc.
Notes to Consolidated Financial Statements
Note 8 – Borrowing Arrangements (continued)
Unsecured Debt
During the quarter ended March 31, 2022 we entered into a $200.0 million senior unsecured term loan agreement. The maturity date is January 21, 2027, with an interest rate of Secured Overnight Financing Rate (“SOFR”) plus approximately 1.30% to 1.80%, depending on leverage levels.
The Line of Credit (“LOC”) had a balance of $69.0 million and $349.0 million outstanding as of March 31, 2022 and December 31, 2021, respectively. As of March 31, 2022, our LOC had a remaining borrowing capacity of $431.0 million. In conjunction with the closing of the secured refinancing transaction, we repaid the remaining balance on the LOC. As of April 26, 2022, there is no outstanding balance on the LOC.
As of March 31, 2022, we were in compliance in all material respects with the covenants in all our borrowing arrangements.
Note 9 – Derivative Instruments and Hedging
Cash Flow Hedges of Interest Rate Risk
We record all derivatives at fair value. Our objective in utilizing interest rate derivatives is to add stability to our interest expense and to manage our exposure to interest rate movements. We do not enter into derivatives for speculative purposes.
We have a three-year LIBOR Swap Agreement (the “Swap”) allowing us to trade the variable interest rate associated with our variable rate debt for a fixed interest rate. The Swap has a notional amount of $300.0 million of outstanding principal with a fixed interest rate of 0.39% per annum and matures on March 25, 2024. Based on the leverage as of March 31, 2022, our spread over LIBOR was 1.40% resulting in an estimated all-in interest rate of 1.79% per annum.
Our derivative financial instrument was classified as Level 2 in the fair value hierarchy. The following table presents the fair value of our derivative financial instrument:

|  |  |  | As of March 31, |  | As of December 31,
(amounts in thousands) |  | Balance Sheet Location |  | 2022 |  | 2021
Interest Rate Swap |  | Other assets, net |  | $ | 13,448 |  |  | $ | 3,524 |

The following table presents the effect of our derivative financial instrument on the Consolidated Statements of Income and Comprehensive Income:

Derivatives in Cash Flow Hedging Relationship |  | Amount of (gain)/loss recognized in OCI on derivative for the quarters ended March 31, |  | Location of (gain)/ loss reclassified from accumulated OCI into income |  | Amount of (gain)/loss reclassified from accumulated OCI into income for the quarters ended March 31,
(amounts in thousands) |  | 2022 |  | 2021 |  | (amounts in thousands) |  | 2022 |  | 2021
Interest Rate Swap |  | $ | (9,661) |  |  | $ | (112) |  |  | Interest Expense |  | $ | 263 |  |  | $ | 17 |

During the next twelve months, we estimate that $4.2 million will be reclassified as a decrease to interest expense. This estimate may be subject to change as the underlying LIBOR changes. We determined that no adjustment was necessary for non-performance risk on our derivative obligation. As of March 31, 2022, we had not posted any collateral related to the Swap.
13

Equity LifeStyle Properties, Inc.
Notes to Consolidated Financial Statements
Note 10 – Equity Incentive Awards
Our 2014 Equity Incentive Plan (the “2014 Plan”) was adopted by the Board of Directors on March 11, 2014 and approved by our stockholders on May 13, 2014.
During the quarter ended March 31, 2022, 79,078 shares of restricted stock were awarded to certain members of our management team. Of these shares, 50% are time-based awards, vesting in equal installments over a three-year period on January 27, 2023, January 26, 2024 and January 31, 2025, respectively, and have a grant date fair value of $3.0 million. The remaining 50% are performance-based awards vesting in equal installments on January 27, 2023, January 26, 2024 and January 31, 2025, respectively, upon meeting performance conditions as established by the Compensation Committee in the year of the vesting period. They are valued using the closing price at the grant date when all the key terms and conditions are known to all parties. The 13,178 shares of restricted stock subject to 2022 performance goals have a grant date fair value of $1.0 million.
Stock based compensation expense, reported in General and administrative expense on the Consolidated Statements of Income and Comprehensive Income, was $2.6 million for each of the quarters ended March 31, 2022 and 2021.
Note 11 – Commitments and Contingencies
We are involved in various legal and regulatory proceedings (“Proceedings”) arising in the ordinary course of business. The Proceedings include, but are not limited to, legal claims made by employees, vendors and customers, and notices, consent decrees, information requests, additional permit requirements and other similar enforcement actions by governmental agencies relating to our utility infrastructure, including water and wastewater treatment plants and other waste treatment facilities and electrical systems. Additionally, in the ordinary course of business, our operations are subject to audit by various taxing authorities. Management believes these Proceedings taken together do not represent a material liability. In addition, to the extent any such Proceedings or audits relate to newly acquired Properties, we consider any potential indemnification obligations of sellers in our favor.
The Operating Partnership operates and manages Westwinds, a 720 site mobilehome community, and Nicholson Plaza, an adjacent shopping center, both located in San Jose, California pursuant to ground leases that expire on August 31, 2022 and do not contain extension options. The master lessor of these ground leases, The Nicholson Family Partnership (the “Nicholsons”), has expressed a desire to redevelop Westwinds, and in a written communication, they claimed that we were obligated to deliver the property free and clear of any and all subtenancies upon the expiration of the ground leases on August 31, 2022. In connection with any redevelopment, the City of San Jose’s conversion ordinance requires, among other things, that the landowner provide relocation, rental and purchase assistance to the impacted residents.
We believe the Nicholsons’ demand is unlawful, and on December 30, 2019, the Operating Partnership, together with certain interested parties, filed a complaint in California Superior Court for Santa Clara County, seeking declaratory relief pursuant to which it requested that the Court determine, among other things, that the Operating Partnership has no obligation to deliver the property free and clear of the mobilehome residents upon the expiration of the ground leases. The Operating Partnership and the interested parties filed an amended complaint on January 29, 2020. The Nicholsons filed a demand for arbitration on January 28, 2020, which they subsequently amended, pursuant to which they request (i) a declaration that the Operating Partnership, as the “owner and manager” of Westwinds, is “required by the Ground Leases, and State and local law to deliver the Property free of any encumbrances or third-party claims at the expiration of the lease terms,” (ii) that the Operating Partnership anticipatorily breached the ground leases by publicly repudiating any such obligation and (iii) that the Operating Partnership is required to indemnify the Nicholsons with respect to the claims brought by the interested parties in the Superior Court proceeding.
On February 3, 2020, the Nicholsons filed a motion in California Superior Court to compel arbitration and to stay the Superior Court litigation, which motion was heard on June 25, 2020. On July 29, 2020, the Superior Court issued a final order denying the Nicholsons' motion to compel arbitration. The Nicholsons filed a notice of appeal on August 7, 2020. On February 4, 2022, the California Court of Appeal affirmed the Superior Court’s order denying the Nicholsons' motion to compel arbitration. On February 22, 2022, the Nicholsons filed a petition for rehearing, which the Court of Appeal denied on March 2, 2022. On March 16, 2022, the Nicholsons filed a petition for review with the California Supreme Court.
The arbitration is stayed pursuant to an agreement between MHC and the Nicholsons. We intend to continue to vigorously defend our interests in this matter. As of March 31, 2022, we have not made an accrual, as we are unable to predict the outcome of this matter or reasonably estimate any possible loss.
14

Equity LifeStyle Properties, Inc.
Notes to Consolidated Financial Statements
Note 12 – Reportable Segments
We have identified two reportable segments: (i) Property Operations and (ii) Home Sales and Rentals Operations. The Property Operations segment owns and operates land lease Properties and the Home Sales and Rentals Operations segment purchases, sells and leases homes at the Properties. The distribution of the Properties throughout the United States reflects our belief that geographic diversification helps insulate the portfolio from regional economic influences.
All revenues were from external customers and there is no customer who contributed 10% or more of our total revenues during the quarters ended March 31, 2022 or 2021.
The following tables summarize our segment financial information for the quarters ended March 31, 2022 and 2021:
Quarter Ended March 31, 2022

(amounts in thousands) | Property Operations |  | Home Sales and Rentals Operations |  | Consolidated
Operations revenues | $ | 325,426 |  |  | $ | 31,100 |  |  | $ | 356,526 |
Operations expenses | (154,988) |  |  | (27,828) |  |  | (182,816) |
Income from segment operations | 170,438 |  |  | 3,272 |  |  | 173,710 |
Interest income | 1,377 |  |  | 380 |  |  | 1,757 |
Depreciation and amortization | (46,877) |  |  | (2,517) |  |  | (49,394) |
Income (loss) from operations | $ | 124,938 |  |  | $ | 1,135 |  |  | $ | 126,073 |
Reconciliation to consolidated net income: |  |  |  |  |
Corporate interest income |  |  |  |  | 2 |
Income from other investments, net |  |  |  |  | 1,904 |
General and administrative |  |  |  |  | (12,297) |
Other expenses |  |  |  |  | (823) |
Interest and related amortization |  |  |  |  | (27,464) |
Equity in income of unconsolidated joint ventures |  |  |  |  | 171 |
Early debt retirement |  |  |  |  | (516) |
Consolidated net income |  |  |  |  | $ | 87,050 |
Total assets | $ | 5,012,335 |  |  | $ | 252,470 |  |  | $ | 5,264,805 |
Capital improvements | $ | 54,990 |  |  | $ | 28,657 |  |  | $ | 83,647 |

Quarter Ended March 31, 2021

(amounts in thousands) | Property Operations |  | Home Sales and Rentals Operations |  | Consolidated
Operations revenues | $ | 280,998 |  |  | $ | 19,946 |  |  | $ | 300,944 |
Operations expenses | (132,980) |  |  | (17,577) |  |  | (150,557) |
Income from segment operations | 148,018 |  |  | 2,369 |  |  | 150,387 |
Interest income | 1,148 |  |  | 615 |  |  | 1,763 |
Depreciation and amortization | (42,778) |  |  | (2,620) |  |  | (45,398) |
Gain on sale of real estate, net | (59) |  |  | — |  |  | (59) |
Income (loss) from operations | $ | 106,329 |  |  | $ | 364 |  |  | $ | 106,693 |
Reconciliation to consolidated net income: |  |  |  |  |
Corporate interest income |  |  |  |  | 4 |
Income from other investments, net |  |  |  |  | 936 |
General and administrative |  |  |  |  | (10,512) |
Other expenses |  |  |  |  | (698) |
Interest and related amortization |  |  |  |  | (26,275) |
Equity in income of unconsolidated joint ventures |  |  |  |  | 868 |
Early debt retirement |  |  |  |  | (2,029) |
Consolidated net income |  |  |  |  | $ | 68,987 |
Total assets | $ | 4,524,713 |  |  | $ | 261,002 |  |  | $ | 4,785,715 |
Capital improvements | $ | 36,468 |  |  | $ | 20,310 |  |  | $ | 56,778 |

15

Equity LifeStyle Properties, Inc.
Notes to Consolidated Financial Statements
Note 12 – Reportable Segments (continued)
The following table summarizes our financial information for the Property Operations segment for the quarters ended March 31, 2022 and 2021:

| Quarters Ended March 31, |  |
(amounts in thousands) | 2022 |  | 2021 |  |  |  |
Revenues: |  |  |  |  |  |  |
Rental income | $ | 281,104 |  |  | $ | 244,729 |  |  |  |  |
Annual membership subscriptions | 15,157 |  |  | 13,654 |  |  |  |  |
Membership upgrade sales current period, gross | 7,151 |  |  | 10,014 |  |  |  |  |
Membership upgrade sales upfront payments, deferred, net | (4,084) |  |  | (7,427) |  |  |  |  |
Other income | 13,542 |  |  | 10,521 |  |  |  |  |
Gross revenues from ancillary services | 12,556 |  |  | 9,507 |  |  |  |  |
Total property operations revenues | 325,426 |  |  | 280,998 |  |  |  |  |
Expenses: |  |  |  |  |  |  |
Property operating and maintenance | 102,590 |  |  | 87,630 |  |  |  |  |
Real estate taxes | 19,457 |  |  | 17,850 |  |  |  |  |
Sales and marketing, gross | 4,914 |  |  | 6,176 |  |  |  |  |
Membership sales commissions, deferred, net | (583) |  |  | (1,499) |  |  |  |  |
Cost of ancillary services | 5,721 |  |  | 3,808 |  |  |  |  |
Ancillary operating expenses | 5,018 |  |  | 3,635 |  |  |  |  |
Property management | 17,871 |  |  | 15,380 |  |  |  |  |
Total property operations expenses | 154,988 |  |  | 132,980 |  |  |  |  |
Income from property operations segment | $ | 170,438 |  |  | $ | 148,018 |  |  |  |  |

The following table summarizes our financial information for the Home Sales and Rentals Operations segment for the quarters ended March 31, 2022 and 2021:

| Quarters Ended March 31, |  |
(amounts in thousands) | 2022 |  | 2021 |  |  |  |
Revenues: |  |  |  |  |  |  |
Rental income (a) | $ | 3,961 |  |  | $ | 4,293 |  |  |  |  |
Gross revenue from home sales and brokered resales | 27,139 |  |  | 15,653 |  |  |  |  |
Total revenues | 31,100 |  |  | 19,946 |  |  |  |  |
Expenses: |  |  |  |  |  |  |
Rental home operating and maintenance | 1,402 |  |  | 1,243 |  |  |  |  |
Cost of home sales and brokered resales | 24,963 |  |  | 15,028 |  |  |  |  |
Home selling expenses | 1,463 |  |  | 1,306 |  |  |  |  |
Total expenses | 27,828 |  |  | 17,577 |  |  |  |  |
Income from home sales and rentals operations segment | $ | 3,272 |  |  | $ | 2,369 |  |  |  |  |

______________________
(a)Rental income within Home Sales and Rentals Operations does not include base rent related to the rental home Sites. Base rent is included within property operations.
Note 13 – Subsequent Events
On April 18, 2022, we closed on a secured refinancing transaction generating gross proceeds of $200.0 million. The loan is secured by one MH community, has a fixed interest rate of 3.36% per annum and has a maturity date of May 1, 2034. The net proceeds from the transaction were used to repay all debt scheduled to mature in 2022 and to repay amounts outstanding on the LOC.
16

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
The following discussion and analysis should be read in conjunction with the consolidated financial statements and accompanying notes thereto included in this Quarterly Report on Form 10-Q and in our Annual Report on Form 10-K for the year ended December 31, 2021 (“2021 Form 10-K”), as well as information in Part II. Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations in our 2021 Form 10-K.
Overview and Outlook
We are a self-administered and self-managed real estate investment trust (“REIT”) with headquarters in Chicago, Illinois. We are a fully integrated owner of lifestyle-oriented properties (“Properties”) consisting of property operations and home sales and rental operations primarily within manufactured home (“MH”) and recreational vehicle (“RV”) communities and marinas. As of March 31, 2022, we owned or had an ownership interest in a portfolio of 446 Properties located throughout the United States and Canada containing 169,984 individual developed areas (“Sites”). These Properties are located in 35 states and British Columbia, with more than 110 Properties with lake, river or ocean frontage and more than 120 Properties within 10 miles of the coastal United States.
We invest in properties in sought-after locations near retirement and vacation destinations and urban areas across the United States with a focus on delivering an exceptional experience to our residents and guests that results in delivery of value to stockholders. Our business model is intended to provide an opportunity for increased cash flows and appreciation in value. We seek growth in earnings, Funds from Operations (“FFO”), Normalized Funds from Operations (“Normalized FFO”) and cash flows by enhancing the profitability and operation of our Properties and investments. We accomplish this by attracting and retaining high quality customers to our Properties, who take pride in our Properties and in their homes, and efficiently managing our Properties by increasing occupancy, maintaining competitive market rents and controlling expenses. We also actively pursue opportunities that fit our acquisition criteria and are currently engaged in various stages of negotiations relating to the possible acquisition of additional properties.
We believe the demand from baby boomers for MH and RV communities will continue to be strong over the long term. It is estimated that approximately 10,000 baby boomers are turning 65 daily through 2030. In addition, the population age 55 and older is expected to grow 17% within the next 15 years. These individuals, seeking an active lifestyle, will continue to drive the market for second-home sales as vacation properties, investment opportunities or retirement retreats. We expect it is likely that over the next decade, we will continue to see high levels of second-home sales and that manufactured homes and cottages in our Properties will continue to provide a viable second-home alternative to site-built homes. We also believe the Millennial and Generation Z demographic will contribute to our future long-term customer pipeline. After conducting a comprehensive study of RV ownership, according to the Recreational Vehicle Industry Association (“RVIA”), data suggested that RV sales are expected to benefit from an increase in demand from those born in the United States from 1980 to 2003, or Millennials and Generation Z, over the coming years. We believe the demand from baby boomers and these younger generations will continue to outpace supply for MH and RV communities. The entitlement process to develop new MH and RV communities is extremely restrictive. As a result, there have been limited new communities developed in our target geographic markets.
We generate the majority of our revenues from customers renting our Sites or entering into right-to-use contracts, also known as membership subscriptions, which provide them access to specific Properties for limited stays. 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. The revenue from seasonal and transient Sites is generally higher during the first and third quarters. We consider the transient revenue stream to be our most volatile as it is subject to weather conditions and other factors affecting the marginal RV customer’s vacation and travel preferences. We also generate revenue from customers renting our marina dry storage. Additionally, we have interests in joint venture Properties for which revenue is classified as Equity in income from unconsolidated joint ventures on the Consolidated Statements of Income and Comprehensive Income.
17

Management's Discussion and Analysis (continued)
The following table shows the breakdown of our Sites by type (amounts are approximate):

|  | Total Sites as of March 31, 2022
MH Sites |  | 73,400 |
RV Sites: |  |
Annual |  | 34,000 |
Seasonal |  | 12,700 |
Transient |  | 14,700 |
Marina Slips |  | 6,900 |
Membership (1) |  | 25,500 |
Joint Ventures (2) |  | 2,800 |
Total |  | 170,000 |

_________________________
(1)Primarily utilized to service the approximately 128,100 members. Includes approximately 6,200 Sites rented on an annual basis.
(2)Includes approximately 1,800 annual Sites and 1,000 transient Sites.
In our Home Sales and Rentals Operations business, our revenue streams include home sales, home rentals and brokerage services and ancillary activities. We generate revenue through home sales and rental operations by selling or leasing manufactured homes and cottages that are located in Properties owned and managed by us. We believe renting our vacant homes represents an attractive source of occupancy and an opportunity to convert the renter to a homebuyer in the future. We also sell and rent homes through our joint venture, ECHO Financing, LLC (the “ECHO JV”). Additionally, home sale brokerage services are offered to our residents who may choose to sell their homes rather than relocate them when moving from a Property. At certain Properties, we operate ancillary facilities, such as golf courses, pro shops, stores and restaurants.
In the manufactured housing industry, options for home financing, also known as chattel financing, are limited. Chattel financing options available today include community owner-funded programs or third-party lender programs that provide subsidized financing to customers and often require the community owner to guarantee customer defaults. Third-party lender programs have stringent underwriting criteria, sizable down payment requirements, short term loan amortization and high interest rates. We have a limited program under which we purchase loans made by an unaffiliated lender to homebuyers at our Properties.
In addition to net income computed in accordance with U.S. Generally Accepted Accounting Principles (“GAAP”), we assess and measure our overall financial and operating performance using certain Non-GAAP supplemental measures, which include: (i) FFO, (ii) Normalized FFO, (iii) Income from property operations, (iv) Income from property operations, excluding deferrals and property management, (v) Core Portfolio income from property operations, excluding deferrals and property management (operating results for Properties owned and operated in both periods under comparison), and (vi) Income from rental operations, net of depreciation. We use these measures internally to evaluate the operating performance of our portfolio and provide a basis for comparison with other real estate companies. Definitions and reconciliations of these measures to the most comparable GAAP measures are included below in this discussion.
COVID-19 Pandemic Update
Since the COVID-19 pandemic began, we have taken actions to prioritize the safety and security of our employees, residents and customers, while maintaining our high-quality standards in service to our residents and customers. We have implemented and may continue to implement Centers for Disease Control and Prevention (“CDC”) and local public health department guidelines and protocols for social distancing and enhanced community and office cleaning procedures. Our Properties continue to be open subject to seasons of operations and state and local guidelines. Our property offices are open to residents and customers and we are complying with CDC recommended protocols.
We attribute the solid performance of our business to the fundamentals of our business model. The property locations and the lifestyle we offer have broad appeal to customers interested in enjoying an outdoor experience. We believe this is particularly relevant in a COVID-19 impacted environment. We intend to continue to monitor the evolving situation and we may take further actions that alter our business operations as may be required and that are in the best interests of our employees, residents, customers and shareholders. The extent of the impact that COVID-19 will have on our business going forward, including our financial condition, results of operations and cash flows, is dependent on multiple factors, many of which are unknown.
18

Management's Discussion and Analysis (continued)
Results Overview
For the quarter ended March 31, 2022, net income available for Common Stockholders increased $17.7 million, or $0.09 per fully diluted Common Share, to $82.9 million, or $0.45 per fully diluted Common Share, compared to $65.2 million, or $0.36 per fully diluted Common Share, for the same period in 2021.
For the quarter ended March 31, 2022, FFO available for Common Stock and Operating Partnership unit (“OP Unit”) holders increased $20.3 million, or $0.09 per fully diluted Common Share, to $140.9 million, or $0.72 per fully diluted Common Share, compared to $120.6 million, or $0.63 per fully diluted Common Share, for the same period in 2021.
For the quarter ended March 31, 2022, Normalized FFO available for Common Stock and OP Unit holders increased $18.8 million, or $0.08 per fully diluted Common Share, to $141.4 million, or $0.72 per fully diluted Common Share, compared to $122.6 million, or $0.64 per fully diluted Common Share, for the same period in 2021.
For the quarter ended March 31, 2022, our Core Portfolio property operating revenues, excluding deferrals, increased 9.5% and property operating expenses, excluding deferrals and property management, increased 10.3%, from the same period in 2021, resulting in an increase in income from property operations, excluding deferrals and property management, of 9.0%, compared to the same period in 2021.
We continue to focus on the quality of occupancy growth by increasing the number of manufactured homeowners in our Core Portfolio. Our Core Portfolio average occupancy includes both homeowners and renters in our MH communities and was 95.1% for each of the quarters ended March 31, 2022 and December 31, 2021. Our Core Portfolio average occupancy was 95.2% for the quarter ended March 31, 2021. The decrease in average occupancy from the prior year was due to expansion sites completed and added to our Core Portfolio during the quarter but not yet occupied as of March 31, 2022. For the quarter ended March 31, 2022, our Core Portfolio occupancy increased by 38 sites with an increase in homeowner occupancy of 191 sites, compared to occupancy as of December 31, 2021. By comparison, for the quarter ended March 31, 2021, our Core Portfolio occupancy increased 92 sites with an increase in homeowner occupancy of 109 sites. While we continue to focus on increasing the number of manufactured homeowners in our Core Portfolio, we also believe renting our vacant homes represents an attractive source of occupancy and an opportunity to potentially convert the renter to a new homebuyer in the future. We continue to expect there to be fluctuations in the sources of occupancy gains depending on local market conditions, availability of vacant sites and success with converting renters to homeowners. As of March 31, 2022, we had 3,310 occupied rental homes in our Core MH communities, including 210 homes rented through our ECHO JV.
RV and marina rental income in our Core Portfolio for the quarter ended March 31, 2022 was 21.4% higher than the same period in 2021 driven by the rebound of seasonal demand in the South and West as we welcomed back our Canadian guests and our domestic customers were able to travel without restrictions. Annual, seasonal and transient rental income for the quarter ended March 31, 2022 increased 8.6%, 64.8% and 21.2%, respectively.
Annual membership subscription revenue in our Core Portfolio increased $1.5 million, or 11%, from 2021, reflecting a 5.3% increase in the number of Thousand Trails Camping members and a rate increase of 5.7%. The increase in annual membership subscription revenue compared to 2021 was offset by a Membership upgrade sales current period, gross decrease of $2.9 million, or 28.9%, from 2021, as a result of the decrease in the number of upgrades sold primarily due to the introduction of the Adventure product during the first quarter of 2021.
Demand for our homes and communities remains strong as evidenced by factors including our high occupancy levels. We closed 261 new home sales during the quarter ended March 31, 2022, compared to 192 new home sales during the quarter ended March 31, 2021, an increase of 35.9%. The increase in new home sales was primarily due to favorable housing trends in the broader real estate market.
Our gross investment in real estate increased $82.8 million to $7,071.9 million as of March 31, 2022 from $6,989.1 million as of December 31, 2021, primarily due to acquisitions and capital improvements during the quarter ended March 31, 2022.
19

Management's Discussion and Analysis (continued)
The following chart lists the Properties acquired or sold from January 1, 2021 through March 31, 2022 and Sites added through expansion opportunities at our existing Properties:

|  | Location |  | Type of Property |  | Transaction Date |  | Sites
Total Sites as of January 1, 2021 (1) |  |  |  |  |  |  |  | 160,500
Acquisition Properties: |  |  |  |  |  |  |  |
Okeechobee KOA Resort |  | Okeechobee, Florida |  | RV |  | January 21, 2021 |  | 740
Cortez Village Marina |  | Cortez, Florida |  | Marina |  | February 5, 2021 |  | 353
Fish Tale Marina |  | Fort Myers Beach, Florida |  | Marina |  | February 5, 2021 |  | 296
Hi-Lift Marina |  | Adventure, Florida |  | Marina |  | February 5, 2021 |  | 211
Hidden Harbour Marina |  | Pompano Beach, Florida |  | Marina |  | February 5, 2021 |  | 357
Inlet Harbor Marina |  | Ponce Inlet, Florida |  | Marina |  | February 5, 2021 |  | 295
Palm Harbour Marina |  | Cape Haze, Florida |  | Marina |  | February 5, 2021 |  | 260
Riverwatch Marina |  | Stuart, Florida |  | Marina |  | February 5, 2021 |  | 306
Boathouse Marina |  | Beaufort, North Carolina |  | Marina |  | February 5, 2021 |  | 547
Dale Hollow State Park Marina |  | Burkesville, Kentucky |  | Marina |  | February 5, 2021 |  | 198
Bay Point Marina |  | Marblehead, Ohio |  | Marina |  | February 5, 2021 |  | 841
Rivers Edge Marina |  | North Charleston, South Carolina |  | Marina |  | February 5, 2021 |  | 503
Pine Haven |  | Cape May, New Jersey |  | RV |  | June 3, 2021 |  | 629
Myrtle Beach Property (2) |  | Myrtle Beach, South Carolina |  | RV |  | August 26, 2021 |  | 813
Voyager RV Resort (3) |  | Tucson, Arizona |  | RV |  | October 14, 2021 |  | —
RVC Portfolio |  | Multiple |  | JV |  | November 1, 2021 |  | 988
Hope Valley |  | Turner, Oregon |  | RV |  | November 18, 2021 |  | 164
Lake Conroe |  | Montgomery, Texas |  | RV |  | December 15, 2021 |  | 261
Blue Mesa Recreational Ranch |  | Gunnison, Colorado |  | Membership |  | February 18, 2022 |  | 385
Pilot Knob RV Resort |  | Winterhaven, California |  | RV |  | February 18, 2022 |  | 247
Expansion Site Development: |  |  |  |  |  |  |  |
Sites added (reconfigured) in 2021 |  |  |  |  |  |  |  | 1,037
Sites added (reconfigured) in 2022 |  |  |  |  |  |  |  | 56
Total Sites as of March 31, 2022 (1) |  |  |  |  |  |  |  | 170,000

______________________
(1) Sites are approximate. Total does not foot due to rounding.
(2) RV community operated by a tenant pursuant to an existing ground lease.
(3) On October 14, 2021, we completed the acquisition of the remaining interest in the Voyager RV Resort joint venture. The Voyager RV Resort joint venture sites are included in the Total Sites as of January 1, 2021.
Non-GAAP Financial Measures
Management’s discussion and analysis of financial condition and results of operations include certain Non-GAAP financial measures that in management’s view of the business are meaningful as they allow investors the ability to understand key operating details of our business both with and without regard to certain accounting conventions or items that may not always be indicative of recurring annual cash flows of the portfolio. These Non-GAAP financial measures as determined and presented by us may not be comparable to similarly titled measures reported by other companies, and include income from property operations and Core Portfolio, FFO, Normalized FFO and income from rental operations, net of depreciation.
We believe investors should review Income from property operations and Core Portfolio, FFO, Normalized FFO and Income from rental operations, net of depreciation, along with GAAP net income and cash flow from operating activities, investing activities and financing activities, when evaluating an equity REIT’s operating performance. A discussion of Income from property operations and Core Portfolio, FFO, Normalized FFO and Income from rental operations, net of depreciation, and a reconciliation to net income, are included below.
Income from Property Operations and Core Portfolio
We use income from property operations, income from property operations, excluding deferrals and property management, and Core Portfolio income from property operations, excluding deferrals and property management, as alternative measures to evaluate the operating results of our Properties. Income from property operations represents 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 and property management expenses. Income from property operations,
20

Management's Discussion and Analysis (continued)
excluding deferrals and property management, represents income from property operations excluding property management expenses and the impact of the GAAP deferrals of membership upgrade sales upfront payments and membership sales commissions, net. We present bad debt expense within Property operating, maintenance and real estate taxes in the current and prior periods.
Our Core Portfolio consists of our Properties owned and operated during all of 2021 and 2022. Core Portfolio income from property operations, excluding deferrals and property management, is useful to investors for annual comparison as it removes the fluctuations associated with acquisitions, dispositions and significant transactions or unique situations. Our Non-Core Portfolio includes all Properties that were not owned and operated during all of 2021 and 2022. This includes, but is not limited to, six RV communities and eleven marinas acquired during 2021, one membership RV community and one RV community acquired during 2022 and our Westwinds MH community and Nicholson Plaza.
Funds from Operations (“FFO”) and Normalized Funds from Operations (“Normalized FFO”)
We define FFO as net income, computed in accordance with GAAP, excluding gains or losses from sales of properties, depreciation and amortization related to real estate, impairment charges and adjustments to reflect our share of FFO of unconsolidated joint ventures. Adjustments for unconsolidated joint ventures are calculated to reflect FFO on the same basis. We compute FFO in accordance with our interpretation of standards established by the National Association of Real Estate Investment Trusts (“NAREIT”), which may not be comparable to FFO reported by other REITs that do not define the term in accordance with the current NAREIT definition or that interpret the current NAREIT definition differently than we do. We receive 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 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, 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.
We believe that FFO and Normalized FFO are helpful to investors as supplemental measures of the performance of an equity REIT. We believe that by excluding the effect of gains or losses from sales of properties, depreciation and amortization related to real estate and impairment charges, which are based on historical costs and which may be of limited relevance in evaluating current performance, FFO can facilitate comparisons of operating performance between periods and among other equity REITs. We further believe that Normalized FFO provides useful information to investors, analysts and our management because it allows them to compare our operating performance to the operating performance of other real estate companies and between periods on a consistent basis without having to account for differences not related to our 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 Rental Operations, Net of Depreciation
We use income from rental operations, net of depreciation as an alternative measure to evaluate the operating results of our home rental program. Income from rental operations, net of depreciation represents income from rental operations less depreciation expense on rental homes. We believe this measure is meaningful for investors as it provides a complete picture of the home rental program operating results including the impact of depreciation which affects our home rental program investment decisions.
Our definitions and calculations of these Non-GAAP financial and operating measures and other terms may differ from the definitions and methodologies used by other REITs and, accordingly, may not be comparable. These Non-GAAP financial and operating measures do not represent cash generated from operating activities in accordance with GAAP, nor do they represent cash available to pay distributions and should not be considered as an alternative to net income, determined in accordance with GAAP, as an indication of our financial performance, or to cash flows from operating activities, determined in accordance with GAAP, as a measure of our liquidity, nor is it indicative of funds available to fund our cash needs, including our ability to make cash distributions.
21

Management's Discussion and Analysis (continued)
The following table reconciles net income available for Common Stockholders to income from property operations for the quarters ended March 31, 2022 and 2021:

|  | Quarters Ended March 31, |  |
(amounts in thousands) |  | 2022 |  | 2021 |  |  |  |
Computation of Income from Property Operations: |  |  |  |  |  |  |  |
Net income available for Common Stockholders |  | $ | 82,906 |  |  | $ | 65,240 |  |  |  |  |
Income allocated to non-controlling interests – Common OP Units |  | 4,144 |  |  | 3,747 |  |  |  |  |
Equity in income of unconsolidated joint ventures |  | (171) |  |  | (868) |  |  |  |  |
Income before equity in income of unconsolidated joint ventures |  | 86,879 |  |  | 68,119 |  |  |  |  |
Loss on sale of real estate, net |  | — |  |  | 59 |  |  |  |  |
Total other expenses, net |  | 86,831 |  |  | 82,209 |  |  |  |  |
Gain from home sales operations and other |  | (2,530) |  |  | (1,383) |  |  |  |  |
Income from property operations |  | $ | 171,180 |  |  | $ | 149,004 |  |  |  |  |

The following table presents a calculation of FFO available for Common Stock and OP Unitholders and Normalized FFO available for Common Stock and OP Unitholders for the quarters ended March 31, 2022 and 2021:

|  | Quarters Ended March 31, |  |
(amounts in thousands) |  | 2022 |  | 2021 |  |  |  |
Computation of FFO and Normalized FFO: |  |  |  |  |  |  |  |
Net income available for Common Stockholders |  | $ | 82,906 |  |  | $ | 65,240 |  |  |  |  |
Income allocated to non-controlling interests – Common OP Units |  | 4,144 |  |  | 3,747 |  |  |  |  |
Membership upgrade sales upfront payments, deferred, net |  | 4,084 |  |  | 7,427 |  |  |  |  |
Membership sales commissions, deferred, net |  | (583) |  |  | (1,499) |  |  |  |  |
Depreciation and amortization |  | 49,394 |  |  | 45,398 |  |  |  |  |
Depreciation on unconsolidated joint ventures |  | 941 |  |  | 183 |  |  |  |  |
Loss on sale of real estate, net |  | — |  |  | 59 |  |  |  |  |
FFO available for Common Stock and OP Unit holders |  | 140,886 |  |  | 120,555 |  |  |  |  |
Early debt retirement |  | 516 |  |  | 2,029 |  |  |  |  |
Normalized FFO available for Common Stock and OP Unit holders |  | $ | 141,402 |  |  | $ | 122,584 |  |  |  |  |
Weighted average Common Shares outstanding – Fully Diluted |  | 195,246 |  |  | 192,685 |  |  |  |  |

22

Management's Discussion and Analysis (continued)
Results of Operations
This section discusses the comparison of our results of operations for the quarters ended March 31, 2022 and March 31, 2021 and our operating activities, investing activities and financing activities for the quarters ended March 31, 2022 and March 31, 2021. For the comparison of our results of operations for the quarters ended March 31, 2021 and March 31, 2020 and discussion of our operating activities, investing activities and financing activities for the quarters ended March 31, 2021 and March 31, 2020, refer to Part I, Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations of the Quarterly Report on Form 10-Q for the fiscal quarter ended March 31, 2021, filed with the SEC on April 27, 2021.
Comparison of the quarter ended March 31, 2022 to the quarter ended March 31, 2021
Income from Property Operations
The following table summarizes certain financial and statistical data for our Core Portfolio and total portfolio for the quarters ended March 31, 2022 and March 31, 2021:

| Core Portfolio |  | Total Portfolio
| Quarters Ended March 31, |  | Quarters Ended March 31,
(amounts in thousands) | 2022 |  | 2021 |  | Variance |  | % Change |  | 2022 |  | 2021 |  | Variance |  | % Change
MH base rental income (1) | $ | 154,436 |  |  | $ | 146,206 |  |  | $ | 8,230 |  |  | 5.6 | % |  | $ | 157,336 |  |  | $ | 148,974 |  |  | $ | 8,362 |  |  | 5.6 | %
Rental home income (1) | 3,954 |  |  | 4,288 |  |  | (334) |  |  | (7.8) | % |  | 3,961 |  |  | 4,293 |  |  | (332) |  |  | (7.7) | %
RV and marina base rental income (1) | 96,402 |  |  | 79,405 |  |  | 16,997 |  |  | 21.4 | % |  | 108,764 |  |  | 83,588 |  |  | 25,176 |  |  | 30.1 | %
Annual membership subscriptions | 15,103 |  |  | 13,651 |  |  | 1,452 |  |  | 10.6 | % |  | 15,157 |  |  | 13,654 |  |  | 1,503 |  |  | 11.0 | %
Membership upgrades sales current period, gross | 7,115 |  |  | 10,014 |  |  | (2,899) |  |  | (28.9) | % |  | 7,151 |  |  | 10,014 |  |  | (2,863) |  |  | (28.6) | %
Utility and other income (1) | 26,315 |  |  | 23,458 |  |  | 2,857 |  |  | 12.2 | % |  | 30,044 |  |  | 24,718 |  |  | 5,326 |  |  | 21.5 | %
Property operating revenues, excluding deferrals | 303,325 |  |  | 277,022 |  |  | 26,303 |  |  | 9.5 | % |  | 322,413 |  |  | 285,241 |  |  | 37,172 |  |  | 13.0 | %
Property operating and maintenance (1)(2) | 97,736 |  |  | 86,298 |  |  | 11,438 |  |  | 13.3 | % |  | 104,088 |  |  | 89,660 |  |  | 14,428 |  |  | 16.1 | %
Real estate taxes | 17,214 |  |  | 16,233 |  |  | 981 |  |  | 6.0 | % |  | 19,457 |  |  | 17,850 |  |  | 1,607 |  |  | 9.0 | %
Rental home operating and maintenance | 1,388 |  |  | 1,225 |  |  | 163 |  |  | 13.3 | % |  | 1,402 |  |  | 1,243 |  |  | 159 |  |  | 12.8 | %
Sales and marketing, gross | 4,899 |  |  | 6,175 |  |  | (1,276) |  |  | (20.7) | % |  | 4,914 |  |  | 6,176 |  |  | (1,262) |  |  | (20.4) | %
Property operating expenses, excluding deferrals and property management | 121,237 |  |  | 109,931 |  |  | 11,306 |  |  | 10.3 | % |  | 129,861 |  |  | 114,929 |  |  | 14,932 |  |  | 13.0 | %
Income from property operations, excluding deferrals and property management (3) | 182,088 |  |  | 167,091 |  |  | 14,997 |  |  | 9.0 | % |  | 192,552 |  |  | 170,312 |  |  | 22,240 |  |  | 13.1 | %
Property management | 17,871 |  |  | 15,380 |  |  | 2,491 |  |  | 16.2 | % |  | 17,871 |  |  | 15,380 |  |  | 2,491 |  |  | 16.2 | %
Income from property operations, excluding deferrals (3) | 164,217 |  |  | 151,711 |  |  | 12,506 |  |  | 8.2 | % |  | 174,681 |  |  | 154,932 |  |  | 19,749 |  |  | 12.7 | %
Membership upgrade sales upfront payments and membership sales commission, deferred, net | 3,501 |  |  | 5,928 |  |  | (2,427) |  |  | (40.9) | % |  | 3,501 |  |  | 5,928 |  |  | (2,427) |  |  | (40.9) | %
Income from property operations (3) | $ | 160,716 |  |  | $ | 145,783 |  |  | $ | 14,933 |  |  | 10.2 | % |  | $ | 171,180 |  |  | $ | 149,004 |  |  | $ | 22,176 |  |  | 14.9 | %

_____________________
(1)Rental income consists of the following total portfolio income items in this table: 1) MH base rental income, 2) Rental home income, 3) RV and marina base rental income and 4) Utility income, which is calculated by subtracting Other income on the Consolidated Statements of Income and Comprehensive Income from Utility and other income in this table. The difference between the sum of the total portfolio income items and Rental income on the Consolidated Statements of Income and Comprehensive Income is bad debt expense, which is presented in Property operating and maintenance expense in this table.
(2)Includes bad debt expense for all periods presented.
(3)See Non-GAAP Financial Measures section of the Management Discussion and Analysis for definitions and reconciliations of these Non-GAAP measures to Net Income available for Common Shareholders.
Total portfolio income from property operations for the quarter ended March 31, 2022, increased $22.2 million, or 14.9%, from the quarter ended March 31, 2021, driven by an increase of $14.9 million, or 10.2%, from our Core Portfolio and an increase of $7.3 million from our Non-Core Portfolio. The increase in income from property operations from our Core Portfolio was primarily due to higher property operating revenues, excluding deferrals, primarily in RV and marina base rental income and MH base rental income, partially offset by an increase in property operating expenses, excluding deferrals and property management. The increase in income from property operations from our Non-Core Portfolio was primarily attributed to income from properties acquired in 2021 and the first quarter of 2022.
23

Management's Discussion and Analysis (continued)
Property Operating Revenues
MH base rental income in our Core Portfolio for the quarter ended March 31, 2022 increased $8.2 million, or 5.6%, from the quarter ended March 31, 2021, which reflects 5.1% growth from rate increases and 0.5% growth from occupancy gains. The average monthly base rental income per Site in our Core Portfolio increased to approximately $747 for the quarter ended March 31, 2022 from approximately $711 for the quarter ended March 31, 2021. The average occupancy for our Core Portfolio was 95.1% and 95.2% for the quarters ended March 31, 2022 and March 31, 2021, respectively. The average occupancy rate decreased slightly due to the addition of expansion sites.
RV and marina base rental income is comprised of the following:

|  | Core Portfolio |  | Total Portfolio
|  | Quarters Ended March 31, |  | Quarters Ended March 31,
(amounts in thousands) |  | 2022 |  | 2021 |  | Variance |  | % Change |  | 2022 |  | 2021 |  | Variance |  | % Change
Annual |  | $ | 55,408 |  |  | $ | 51,022 |  |  | $ | 4,386 |  |  | 8.6 | % |  | $ | 64,333 |  |  | $ | 54,519 |  |  | $ | 9,814 |  |  | 18.0 | %
Seasonal |  | 24,928 |  |  | 15,125 |  |  | 9,803 |  |  | 64.8 | % |  | 26,625 |  |  | 15,362 |  |  | 11,263 |  |  | 73.3 | %
Transient |  | 16,066 |  |  | 13,258 |  |  | 2,808 |  |  | 21.2 | % |  | 17,806 |  |  | 13,707 |  |  | 4,099 |  |  | 29.9 | %
RV and marina base rental income |  | $ | 96,402 |  |  | $ | 79,405 |  |  | $ | 16,997 |  |  | 21.4 | % |  | $ | 108,764 |  |  | $ | 83,588 |  |  | $ | 25,176 |  |  | 30.1 | %

RV and marina base rental income in our Core Portfolio for the quarter ended March 31, 2022 increased $17.0 million, or 21.4%, from the quarter ended March 31, 2021, driven by an increase in Seasonal and Annual RV and marina base rental income. The increase in Seasonal RV and marina base rental income of 64.8% was driven by increases in all regions, due to the rebound of seasonal demand in the South and West as we welcomed back our Canadian guests and our domestic customers were able to travel without restrictions. The increase in Annual RV and marina base rental income was 8.6%, with 5.5% growth from rate increases and 3.1% from occupancy gains.
Annual membership subscription revenue in our Core Portfolio for the quarter ended March 31, 2022 increased $1.5 million, or 11%, from the quarter ended March 31, 2021, reflecting a 5.3% increase in the number of Thousand Trails Camping members. The increase in annual membership subscription revenue compared to 2021 was offset by a Membership upgrade sales current period, gross decrease of $2.9 million, or 28.9%, from 2021, as a result of the decrease in the number of upgrades sold primarily due to the introduction of the Adventure product during the first quarter of 2021.
Utility and other income in our Core Portfolio for the quarter ended March 31, 2022 increased $2.9 million, or 12.2%, from the quarter ended March 31, 2021. The increase was due to higher utility income of $2.0 million, pass-through income of $0.5 million, and other property income of $0.4 million. The increase in utility income was primarily due to an increase in electric income across the West, South, and Northeast. The utility recovery rate (utility income divided by utility expenses) for both the quarters ended March 31, 2022 and 2021 was approximately 46%.
Property Operating Expenses
Property operating expenses, excluding deferrals and property management, in our Core Portfolio for the quarter ended March 31, 2022 increased $11.3 million, or 10.3%, from the quarter ended March 31, 2021, driven by increases in property operating and maintenance expenses of $11.4 million and real estate taxes of $1.0 million, partially offset by a decrease in gross sales and marketing expenses of $1.3 million. Core property operating and maintenance expenses were higher in 2022 primarily due to increases in utility expenses of $4.6 million, repair and maintenance of $2.9 million, property payroll of $1.7 million and administrative expenses of $1.6 million.
24

Management's Discussion and Analysis (continued)
Home Sales and Rental Operations
Home Sales and Other
The following table summarizes certain financial and statistical data for our Home Sales and Other Operations:

|  | Quarters Ended March 31,
(amounts in thousands, except home sales volumes) |  | 2022 |  | 2021 |  | Variance |  | % Change
Gross revenues from new home sales (1) |  | $ | 25,530 |  |  | $ | 14,338 |  |  | $ | 11,192 |  |  | 78.1 | %
Cost of new home sales (1) |  | 23,326 |  |  | 13,715 |  |  | 9,611 |  |  | 70.1 | %
Gross profit from new home sales |  | 2,204 |  |  | 623 |  |  | 1,581 |  |  | 253.8 | %
Gross revenues from used home sales |  | 998 |  |  | 882 |  |  | 116 |  |  | 13.2 | %
Cost of used home sales |  | 1,410 |  |  | 1,153 |  |  | 257 |  |  | 22.3 | %
Loss from used home sales |  | (412) |  |  | (271) |  |  | (141) |  |  | (52.0) | %
Gross revenue from brokered resales and ancillary services |  | 13,167 |  |  | 9,940 |  |  | 3,227 |  |  | 32.5 | %
Cost of brokered resales and ancillary services |  | 5,948 |  |  | 3,968 |  |  | 1,980 |  |  | 49.9 | %
Gross profit from brokered resales and ancillary services |  | 7,219 |  |  | 5,972 |  |  | 1,247 |  |  | 20.9 | %
Home selling and ancillary operating expenses |  | 6,481 |  |  | 4,941 |  |  | 1,540 |  |  | 31.2 | %
Income from home sales and other |  | $ | 2,530 |  |  | $ | 1,383 |  |  | $ | 1,147 |  |  | 82.9 | %
Home sales volumes |  |  |  |  |  |  |  |
Total new home sales (2) |  | 261 |  |  | 192 |  |  | 69 |  |  | 35.9 | %
New Home Sales Volume - ECHO JV |  | 22 |  |  | 8 |  |  | 14 |  |  | 175.0 | %
Used home sales |  | 72 |  |  | 102 |  |  | (30) |  |  | (29.4) | %
Brokered home resales |  | 188 |  |  | 160 |  |  | 28 |  |  | 17.5 | %

_________________________
(1) New home sales gross revenues and costs of new home sales do not include the revenues and costs associated with our ECHO JV.
(2) Total new home sales volume includes home sales from our ECHO JV.
Income from home sales and other operations was $2.5 million for the first quarter of 2022, an increase of $1.1 million, compared to $1.4 million in the first quarter of 2021. The increase in income from home sales and other operations was primarily due to an increase in gross profit from new home sales resulting from an increase of 69 new home sales during the first quarter of 2022 compared to the first quarter of 2021, primarily driven by favorable housing trends in the broader real estate market.
25

Management's Discussion and Analysis (continued)
Rental Operations
The following table summarizes certain financial and statistical data for our MH Rental Operations:

|  | Quarters Ended March 31,
(amounts in thousands, except rental unit volumes) |  | 2022 |  | 2021 |  | Variance |  | % Change
Rental operations revenue (1) |  | $ | 11,343 |  |  | $ | 12,389 |  |  | $ | (1,046) |  |  | (8.4) | %
Rental home operating and maintenance expenses |  | 1,388 |  |  | 1,225 |  |  | 163 |  |  | 13.3 | %
Income from rental operations |  | 9,955 |  |  | 11,164 |  |  | (1,209) |  |  | (10.8) | %
Depreciation on rental homes (2) |  | 2,517 |  |  | 2,620 |  |  | (103) |  |  | (3.9) | %
Income from rental operations, net of depreciation |  | $ | 7,438 |  |  | $ | 8,544 |  |  | $ | (1,106) |  |  | (12.9) | %
Gross investment in new manufactured home rental units (3) |  | $ | 228,755 |  |  | $ | 237,635 |  |  | $ | (8,880) |  |  | (3.7) | %
Gross investment in used manufactured home rental units |  | $ | 15,009 |  |  | $ | 15,264 |  |  | $ | (255) |  |  | (1.7) | %
Net investment in new manufactured home rental units |  | $ | 185,896 |  |  | $ | 203,244 |  |  | $ | (17,348) |  |  | (8.5) | %
Net investment in used manufactured home rental units |  | $ | 7,873 |  |  | $ | 9,001 |  |  | $ | (1,128) |  |  | (12.5) | %
Number of occupied rentals – new, end of period (4) |  | 2,908 |  |  | 3,383 |  |  | (475) |  |  | (14.0) | %
Number of occupied rentals – used, end of period |  | 402 |  |  | 524 |  |  | (122) |  |  | (23.3) | %

______________________
(1)Consists of Site rental income and home rental income. Approximately $7.4 million and $8.1 million for the quarters ended March 31, 2022 and March 31, 2021, respectively, of Site rental income is included in MH base rental income in the Core Portfolio Income from Property Operations table. The remainder of home rental income is included in rental home income in our Core Portfolio Income from Property Operations table.
(2)Presented in Depreciation and amortization in the Consolidated Statements of Income and Comprehensive Income.
(3)New home cost basis does not include the costs associated with our ECHO JV. Our investment in the ECHO JV was $18.3 million and $17.5 million as of March 31, 2022 and March 31, 2021, respectively.
(4)Includes 210 and 295 homes rented through our ECHO JV as of March 31, 2022 and 2021, respectively.
Income from rental operations, net of depreciation, decreased $1.1 million during the first quarter of 2022, compared to the first quarter of 2021 primarily due to a decrease in rental operations revenues as a result of a decrease in the number of new occupied rentals.
Other Income and Expenses
The following table summarizes other income and expenses, net:

|  | Quarters Ended March 31,
(amounts in thousands, expenses shown as negative) |  | 2022 |  | 2021 |  | Variance |  | % Change
Depreciation and amortization |  | $ | (49,394) |  |  | $ | (45,398) |  |  | $ | (3,996) |  |  | (8.8) | %
Interest income |  | 1,759 |  |  | 1,767 |  |  | (8) |  |  | (0.5) | %
Income from other investments, net |  | 1,904 |  |  | 936 |  |  | 968 |  |  | 103.4 | %
General and administrative |  | (12,297) |  |  | (10,512) |  |  | (1,785) |  |  | (17.0) | %
Other expenses |  | (823) |  |  | (698) |  |  | (125) |  |  | (17.9) | %
Early debt retirement |  | (516) |  |  | (2,029) |  |  | 1,513 |  |  | 74.6 | %
Interest and related amortization |  | (27,464) |  |  | (26,275) |  |  | (1,189) |  |  | (4.5) | %
Total other income and expenses, net |  | $ | (86,831) |  |  | $ | (82,209) |  |  | $ | (4,622) |  |  | (5.6) | %

Total other income and expenses, net increased $4.6 million for the quarter ended March 31, 2022 compared to the quarter ended March 31, 2021, primarily due to higher depreciation and amortization and an increase in general and administrative costs, partially offset by a decrease in early debt retirement costs. The increase in depreciation and amortization is due to depreciation on Non-core properties acquired in 2021 and the first quarter of 2022. The decrease in early debt retirement costs was due to lower debt repayment costs for the quarter ended March 31, 2022 compared to the quarter ended March 31, 2021.
26

Management's Discussion and Analysis (continued)
Liquidity and Capital Resources
Liquidity
Our primary demands for liquidity include payment of operating expenses, dividend distributions, debt service, including principal and interest, capital improvements on Properties, home purchases and property acquisitions. We expect similar demand for liquidity will continue for the short-term and long-term. Our primary sources of cash include operating cash flows, proceeds from financings, borrowings under our unsecured Line of Credit (“LOC”) and proceeds from issuance of equity and debt securities.
One of our stated objectives is to maintain financial flexibility. Achieving this objective allows us to take advantage of strategic opportunities that may arise. When investing capital, we consider all potential uses, including returning capital to our stockholders or the conditions under which we may repurchase our stock. These conditions include, but are not limited to, market price, balance sheet flexibility, alternative opportunistic capital uses and capital requirements. We believe effective management of our balance sheet, including maintaining various access points to raise capital, managing future debt maturities and borrowing at competitive rates, enables us to meet this objective. Accessing long-term low-cost secured debt continues to be our focus.
On February 24, 2022, we entered into our current at-the-market (“ATM”) equity offering program with certain sales agents, pursuant to which we may sell, from time-to-time, shares of our common stock, par value $0.01 per share, having an aggregate offering price of up to $500.0 million. Prior to the new program, the aggregate offering price was up to $200.0 million. As of March 31, 2022, the full capacity of our current ATM equity offering program remained available for issuance.
During the quarter ended March 31, 2022, we sold 328,123 shares of our common stock under our prior ATM equity program for gross cash proceeds of approximately $28.0 million at a weighted average share price of $86.46.
As of March 31, 2022, we had available liquidity in the form of approximately 414.0 million shares of authorized and unissued common stock, par value $0.01 per share, and 10.0 million shares of authorized and unissued preferred stock registered for sale under the Securities Act of 1933, as amended.
During the quarter ended March 31, 2022, we closed on a $200.0 million senior unsecured term loan. The maturity date is January 21, 2027. The term loan bears interest at a rate of Secured Overnight Financing Rate (“SOFR”), plus approximately 1.30% to 1.80%, depending on leverage levels. See Item 1. Financial Statements—Note 8. Borrowing Arrangements for further details.
We also utilize interest rate swaps to add stability to our interest expense and to manage our exposure to interest rate movements. Interest rate swaps designated as cash flow hedges involve the receipt of variable amounts from a counterparty in exchange for making fixed-rate payments over the life of the agreements without exchange of the underlying notional amount. The changes in the fair value of the designated derivative are recorded in accumulated other comprehensive income (loss) on the Consolidated Balance Sheets and subsequently reclassified into earnings on the Consolidated Statements of Income and Comprehensive Income in the period that the hedged forecasted transaction affects earnings. For additional information regarding our interest rate swap, see Item 1. Financial Statements—Note 9. Derivative Instruments and Hedging.
We expect to meet our short-term liquidity requirements, including principal payments, capital improvements and dividend distributions for the next twelve months, generally through available cash, net cash provided by operating activities and our LOC. As of March 31, 2022, our LOC had a borrowing capacity of $431.0 million. As of March 31, 2022, the LOC bears interest at a rate of LIBOR plus 1.25% to 1.65%, carries an annual facility fee of 0.20% to 0.35% and matures on April 18, 2025.
On April 18, 2022, we closed on a secured refinancing transaction generating gross proceeds of $200.0 million. The loan is secured by one MH community, has a fixed interest rate of 3.36% per annum and has a maturity date of May 1, 2034. The net proceeds from the transaction were used to repay all debt scheduled to mature in 2022 and to repay amounts outstanding on the LOC. See Item 1. Financial Statements—Note 13. Subsequent Events for further details.
We expect to meet certain long-term liquidity requirements, such as scheduled debt maturities, property acquisitions and capital improvements, using long-term collateralized and uncollateralized borrowings including the existing LOC and the issuance of debt securities or the issuance of equity including under our ATM equity offering program.
We continue to monitor the development and adoption of an alternative index to LIBOR to manage the transition. Given the majority of our current debt is secured and not subject to LIBOR, we do not believe the discontinuation of LIBOR will have a significant impact on our consolidated financial statements.
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Management's Discussion and Analysis (continued)
The impact the COVID-19 pandemic will continue to have on our financial condition and cashflows is uncertain and is dependent upon various factors including the manner in which operations will continue at our Properties, customer payment patterns and operational decisions we have made and may make in the future in response to guidance from public authorities and/or for the health and safety of our employees, residents and guests.
The following table summarizes our cash flows activity:

| For the quarters ended March 31,
(amounts in thousands) | 2022 |  | 2021
Net cash provided by operating activities | $ | 177,331 |  |  | $ | 173,331 |
Net cash used in investing activities | (105,182) |  |  | (351,653) |
Net cash (used in) provided by financing activities | (157,427) |  |  | 245,790 |
Net (decrease) increase in cash and restricted cash | $ | (85,278) |  |  | $ | 67,468 |

Operating Activities
Net cash provided by operating activities increased $4.0 million to $177.3 million for the quarter ended March 31, 2022 from $173.3 million for the quarter ended March 31, 2021. The increase in net cash provided by operating activities was primarily due to higher income from property operations of $22.2 million, partially offset by long term incentive compensation of approximately $4.4 million paid during the first quarter of 2022 and a decrease in deferred membership revenue of $4.2 million.
Investing Activities
Net cash used in investing activities decreased $246.5 million to $105.2 million for the quarter ended March 31, 2022 from $351.7 million for the quarter ended March 31, 2021. The decrease was due to a decrease in spending on acquisitions of $280.2 million, partially offset by an increase in capital improvement spending of $26.9 million.
Capital Improvements
The following table summarizes capital improvements:

| For the quarters ended March 31,
(amounts in thousands) | 2022 |  | 2021
Asset preservation (1) | $ | 9,906 |  |  | $ | 7,644 |
Improvements and renovations(2) | 6,431 |  |  | 3,940 |
Property upgrades and development | 30,302 |  |  | 23,566 |
New and used home investments (3) (4) | 28,657 |  |  | 20,310 |
Total property improvements | 75,296 |  |  | 55,460 |
Corporate | 8,351 |  |  | 1,318 |
Total capital improvements | $ | 83,647 |  |  | $ | 56,778 |

______________________
(1)Includes upkeep of property infrastructure including utilities and streets and replacement of community equipment and vehicles.
(2)Includes enhancements to amenities such as buildings, common areas, swimming pools and replacement of furniture and site amenities.
(3)Excludes new home investments associated with our ECHO JV.
(4)Net proceeds from new and used home sale activities are reflected within Operating Activities.
Financing Activities
Net cash used in financing activities was $157.4 million for the quarter ended March 31, 2022. Net cash provided by financing activities was $245.8 million for the quarter ended March 31, 2021. The decrease in net cash provided by financing activities was primarily due to a decrease in net debt proceeds of approximately $425.0 million, partially offset by proceeds from the sale of common stock under our ATM program of approximately $28.0 million.
Contractual Obligations
Significant ongoing contractual obligations consist primarily of long-term borrowings, interest expense, operating leases, LOC maintenance fees and ground leases. For a summary and complete presentation and description of our ongoing commitments and contractual obligations, see Part II. Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations-Contractual Obligations in our 2021 Form 10-K.
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Management's Discussion and Analysis (continued)
Westwinds
The Operating Partnership operates and manages Westwinds, a 720 site mobilehome community, and Nicholson Plaza, an adjacent shopping center, both located in San Jose, California pursuant to ground leases that expire on August 31, 2022 and do not contain extension options. Westwinds provides affordable, rent-controlled homes to numerous residents, including families with children and residents over 65 years of age. For the year ended December 31, 2021, Westwinds and Nicholson Plaza generated approximately $6.0 million of net operating income.
The master lessor of these ground leases, The Nicholson Family Partnership (together with its predecessor in interest, the “Nicholsons”), has expressed a desire to redevelop Westwinds, and in a written communication, they claimed that we were obligated to deliver the property free and clear of any and all subtenancies upon the expiration of the ground leases on August 31, 2022. In connection with any redevelopment, the City of San Jose’s conversion ordinance requires, among other things, that the landowner provide relocation, rental and purchase assistance to the impacted residents. We believe the Nicholsons are unlawfully attempting to impose those obligations upon the Operating Partnership.
Westwinds opened in the 1970s and was developed by the original ground lessee with assistance from the Nicholsons. In 1997, the Operating Partnership acquired the leasehold interest in the ground leases. In addition to rent based on the operations of Westwinds, the Nicholsons receive a percentage of gross revenues from the sale of new or used mobile homes in Westwinds.
The Operating Partnership has entered into subtenancy agreements with the mobilehome residents of Westwinds. Because the ground leases with the Nicholsons have an expiration date of August 31, 2022, and no further right of extension, the Operating Partnership has not entered into any subtenancy agreements that extend beyond August 31, 2022. However, the mobilehome residents’ occupancy rights continue by operation of California state and San Jose municipal law beyond the expiration date of the ground leases. Notwithstanding this, the Nicholsons have made what we believe to be an unlawful demand that the Operating Partnership deliver the property free and clear of any subtenancies upon the expiration of the ground leases by August 31, 2022. We believe the Nicholsons’ demand (i) violates California state and San Jose municipal law because the Nicholsons are demanding that the Operating Partnership remove all residents without just cause and (ii) conflicts with the terms and conditions of the ground leases, which contain no express or implied requirement that the Operating Partnership deliver the property free and clear of all subtenancies at the mobile home park and require, instead, that the Operating Partnership continuously operate the mobilehome park during the lease term.
On December 30, 2019, the Operating Partnership, together with certain interested parties, filed a complaint in California Superior Court for Santa Clara County, seeking declaratory relief pursuant to which it requested that the Court determine, among other things, that the Operating Partnership has no obligation to deliver the property free and clear of the mobilehome residents upon the expiration of the ground leases. The Operating Partnership and the interested parties filed an amended complaint on January 29, 2020.
The Nicholsons filed a demand for arbitration on January 28, 2020, which they subsequently amended, pursuant to which they request (i) a declaration that the Operating Partnership, as the “owner and manager” of Westwinds, is “required by the Ground Leases, and State and local law to deliver the Property free of any encumbrances or third-party claims at the expiration of the lease terms,” (ii) that the Operating Partnership anticipatorily breached the ground leases by publicly repudiating any such obligation and (iii) that the Operating Partnership is required to indemnify the Nicholsons with respect to the claims brought by the interested parties in the Superior Court proceeding.
On February 3, 2020, the Nicholsons filed a motion in California Superior Court to compel arbitration and to stay the Superior Court litigation, which motion was heard on June 25, 2020. On July 29, 2020, the Superior Court issued a final order denying the Nicholsons' motion to compel arbitration. The Nicholsons filed a notice of appeal on August 7, 2020, which appeal was heard on February 1, 2022. On February 4, 2022, the California Court of Appeal affirmed the Superior Court’s order denying the Nicholsons' motion to compel arbitration. On February 22, 2022, the Nicholsons filed a petition for rehearing, which the Court of Appeal denied on March 2, 2022. On March 16, 2022, the Nicholsons filed a petition for review with the California Supreme Court. The arbitration is stayed pursuant to an agreement between MHC and the Nicholsons.
Following the filing of our lawsuit, the City of San Jose took steps to accelerate the passage of a general plan amendment previously under review by the City to change the designation for Westwinds from its current general plan designation of Urban Residential (which would allow for higher density redevelopment), to a newly created designation of Mobile Home Park. The Nicholsons expressed opposition to this change in designation. However, on March 10, 2020, following significant pressure from residents and advocacy groups, the City Council approved this new designation for all 58 mobilehome communities in the City of San Jose, including Westwinds. In addition to requirements imposed by California state and San Jose municipal law, the change in designation requires, among other things, a further amendment to the general plan to a different land use designation by the City Council prior to any change in use.
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Management's Discussion and Analysis (continued)
Off-Balance Sheet Arrangements
As of March 31, 2022, we have no off-balance sheet arrangements.
Critical Accounting Policies and Estimates
Refer to Part II. Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations in our 2021 Form 10-K for a discussion of our critical accounting policies. There have been no significant changes to our critical accounting policies and estimates during the quarter ended March 31, 2022.
Forward-Looking Statements
This Quarterly Report on Form 10-Q includes certain “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. When used, words such as “anticipate,” “expect,” “believe,” “project,” “intend,” “may be” and “will be” and similar words or phrases, or the negative thereof, unless the context requires otherwise, are intended to identify forward-looking statements and may include without limitation, information regarding our expectations, goals or intentions regarding the future, and the expected effect of our acquisitions. These forward-looking statements are subject to numerous assumptions, risks and uncertainties, including, but not limited to:
•our ability to control costs and real estate market conditions, our ability to retain customers, the actual use of Sites by customers and our success in acquiring new customers at our Properties (including those that we may acquire);
•our ability to maintain historical or increase future rental rates and occupancy with respect to properties currently owned or that we may acquire;
•our ability to attract and retain customers entering, renewing and upgrading membership subscriptions;
•our assumptions about rental and home sales markets;
•our ability to manage counterparty risk;
•our ability to renew our insurance policies at existing rates and on consistent terms;
•home sales results could be impacted by the ability of potential homebuyers to sell their existing residences as well as by financial, credit and capital markets volatility;
•results from home sales and occupancy will continue to be impacted by local economic conditions, including an adequate supply of homes at reasonable costs, lack of affordable manufactured home financing and competition from alternative housing options including site-built single-family housing;
•impact of government intervention to stabilize site-built single-family housing and not manufactured housing;
•effective integration of recent acquisitions and our estimates regarding the future performance of recent acquisitions;
•the completion of future transactions in their entirety, if any, and timing and effective integration with respect thereto;
•unanticipated costs or unforeseen liabilities associated with recent acquisitions;
•our ability to obtain financing or refinance existing debt on favorable terms or at all;
•the effect of inflation and interest rates;
•the effect from any breach of our, or any of our vendors’, data management systems;
•the dilutive effects of issuing additional securities;
•the outcome of pending or future lawsuits or actions brought by or against us, including those disclosed in our filings with the Securities and Exchange Commission; and
•other risks indicated from time to time in our filings with the Securities and Exchange Commission.
In addition, these forward-looking statements are subject to risks related to the COVID-19 pandemic, many of which are unknown, including the duration of the pandemic, the extent of the adverse health impact on the general population and on our residents, customers, and employees in particular, its impact on the employment rate and the economy, the extent and impact of governmental responses, and the impact of operational changes we have implemented and may implement in response to the pandemic.
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.
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Item 3.Quantitative and Qualitative Disclosures About Market Risk
We disclosed a quantitative and qualitative analysis regarding market risk in Part II, Item 7A. Quantitative and Qualitative Disclosures About Market Risk in our 2021 Form 10-K. There have been no material changes in the assumptions used or results obtained regarding market risk since December 31, 2021.
Item 4.Controls and Procedures
Evaluation of Disclosure Controls and Procedures
Our management, with the participation of our Chief Executive Officer (principal executive officer) and Chief Financial Officer (principal financial officer), has evaluated the effectiveness of our disclosure controls and procedures as of March 31, 2022. Based on that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were effective to give reasonable assurances to the timely collection, evaluation and disclosure of information relating to us that would potentially be subject to disclosure under the Securities and Exchange Act of 1934, as amended (the “Exchange Act”), and the rules and regulations promulgated thereunder as of March 31, 2022. Any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives.
Changes in Internal Control Over Financial Reporting
During the quarter ended March 31, 2022, there were no changes in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
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Part II – Other Information
Item 1.Legal Proceedings
See Part I. Item 1. Financial Statements—Note 11. Commitments and Contingencies accompanying the Consolidated Financial Statements in this Quarterly Report on Form 10-Q.
Item 1A.Risk Factors
A description of the risk factors associated with our business are discussed in Part I. Item 1A. Risk Factors in our 2021 Form 10-K.
Item 2.Unregistered Sales of Equity Securities and Use of Proceeds
None.
Item 3.Defaults Upon Senior Securities
None.
Item 4.Mine Safety Disclosures
None.
Item 5.Other Information
None.
Item 6.Exhibits

10.1 | Consulting Agreement, by and between Roger Maynard and MHC Property Management Limited Partnership, dated February 10, 2022.
14.1 | Equity LifeStyle Properties, Inc. Business Ethics and Conduct Policy, dated October 27, 2020.
31.1 | Certification of Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2 | Certification of Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1 | Certification of Chief Financial Officer Pursuant to 18 U.S.C. Section 1350.
32.2 | Certification of Chief Executive Officer Pursuant to 18 U.S.C. Section 1350.
101.INS | XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.
101.SCH | Inline XBRL Taxonomy Extension Schema Document
101.CAL | Inline XBRL Taxonomy Extension Calculation Linkbase Document
101.LAB | Inline XBRL Taxonomy Extension Label Linkbase Document
101.PRE | Inline XBRL Taxonomy Extension Presentation Linkbase Document
101.DEF | Inline XBRL Taxonomy Extension Definition Linkbase Document
104 | Cover Page Interactive Data File included as Exhibit 101 (embedded within the Inline XBRL document)

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

| EQUITY LIFESTYLE PROPERTIES, INC.
Date: April 26, 2022 | By: | /s/ Marguerite Nader
|  | Marguerite Nader
|  | President and Chief Executive Officer
|  | (Principal Executive Officer)
Date: April 26, 2022 | By: | /s/ Paul Seavey
|  | Paul Seavey
|  | Executive Vice President and Chief Financial Officer
|  | (Principal Financial Officer)
Date: April 26, 2022 | By: | /s/ Valerie Henry
|  | Valerie Henry
|  | Senior Vice President and Chief Accounting Officer
|  | (Principal Accounting Officer)

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