Business Wire | Jul 20, 2020 04:16PM EDT

ELS Reports Second Quarter Results

Jul. 20, 2020

CHICAGO--(BUSINESS WIRE)--Jul. 20, 2020--Equity LifeStyle Properties, Inc. (NYSE: ELS) (referred to herein as "we," "us," and "our") today announced results for the quarter and six months ended June 30, 2020.

All Common Stock and OP Units as well as per share results reflect the two for one stock split that was completed on October 15, 2019. Additionally, all per share results are reported on a fully diluted basis unless otherwise noted.

Financial Results for the Quarter and Six Months Ended June 30, 2020

For the quarter ended June 30, 2020, total revenues increased $5.7 million, or 2.3 percent, to $254.1 million compared to $248.4 million for the same period in 2019. For the quarter ended June 30, 2020, net income available for Common Stockholders decreased $0.2 million, or $0.01 per Common Share, to $46.2 million, or $0.25 per Common Share, compared to $46.4 million, or $0.26 per Common Share, for the same period in 2019.

For the six months ended June 30, 2020, total revenues increased $27.1 million, or 5.3 percent, to $534.6 million compared to $507.5 million for the same period in 2019. For the six months ended June 30, 2020, net income available for Common Stockholders decreased $46.6 million, or $0.27 per Common Share, to $113.1 million, or $0.62 per Common Share, compared to $159.7 million, or $0.89 per Common Share, for the same period in 2019. The financial results for 2019 included a gain of $52.5 million on the sale of five all-age MH communities.

Non-GAAP Financial Measures and Portfolio Performance

For the quarter ended June 30, 2020, Funds from Operations ("FFO") available for Common Stock and OP Unit holders decreased $0.3 million to $89.5 million, or $0.47 per Common Share, compared to $89.8 million, or $0.47 per Common Share, for the same period in 2019. For the six months ended June 30, 2020, FFO available for Common Stock and OP Unit holders increased $4.0 million, or $0.02 per Common Share, to $201.8 million, or $1.05 per Common Share, compared to $197.8 million, or $1.03 per Common Share, for the same period in 2019.

For the quarter ended June 30, 2020, Normalized Funds from Operations ("Normalized FFO") available for Common Stock and OP Unit holders decreased $1.0 million, or $0.01 per Common Share, to $90.9 million, or $0.47 per Common Share, compared to $91.9 million, or $0.48 per Common Share, for the same period in 2019. For the six months ended June 30, 2020, Normalized FFO available for Common Stock and OP Unit holders increased $4.7 million, or $0.02 per Common Share, to $204.3 million, or $1.06 per Common Share, compared to $199.6 million, or $1.04 per Common Share, for the same period in 2019.

For the quarter ended June 30, 2020, property operating revenues, excluding deferrals, increased $6.3 million to $247.0 million compared to $240.7 million for the same period in 2019. For the six months ended June 30, 2020, property operating revenues, excluding deferrals, increased $25.1 million to $516.7 million compared to $491.6 million for the same period in 2019. For the quarter ended June 30, 2020, income from property operations, excluding deferrals and property management, increased $3.7 million to $139.4 million compared to $135.7 million for the same period in 2019. For the six months ended June 30, 2020, income from property operations, excluding deferrals and property management, increased $14.2 million to $303.3 million compared to $289.1 million for the same period in 2019.

For the quarter ended June 30, 2020, Core property operating revenues, excluding deferrals, increased approximately 0.6 percent and Core income from property operations, excluding deferrals and property management, increased approximately 1.0 percent compared to the same period in 2019. For the six months ended June 30, 2020, Core property operating revenues, excluding deferrals, increased approximately 3.1 percent and Core income from property operations, excluding deferrals and property management, increased approximately 3.2 percent compared to the same period in 2019.

Business Update - COVID-19

Page 1 of this Earnings Release and Supplemental Financial Information provides a business update regarding the COVID-19 pandemic.

About Equity LifeStyle Properties

We are a self-administered, self-managed real estate investment trust ("REIT") with headquarters in Chicago. As of July 20, 2020, we own or have an interest in 413 quality properties in 33 states and British Columbia consisting of 156,713 sites.

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

Conference Call

A live webcast of our conference call discussing these results will take place tomorrow, Tuesday, July 21, 2020, at 10:00 a.m. Central Time. Please visit the Investor Relations section at www.equitylifestyleproperties.com for the link. A replay of the webcast will be available for two weeks at this site.

Forward-Looking Statements

In addition to historical information, this press release includes certain "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. When used, words such as "anticipate," "expect," "believe," "project," "intend," "may be" and "will be" and similar words or phrases, or the negative thereof, unless the context requires otherwise, are intended to identify forward-looking statements and may include without limitation, information regarding our expectations, goals or intentions regarding the future, and the expected effect of our acquisitions. 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; * in the age-qualified properties, home sales results could be impacted by the ability of potential home buyers to sell their existing residences as well as by financial, credit and capital markets volatility; * results from home sales and occupancy will continue to be impacted by local economic conditions, lack of affordable manufactured home financing and competition from alternative housing options including site-built single-family housing; * impact of government intervention to stabilize site-built single-family housing and not manufactured housing; * effective integration of recent acquisitions and our estimates regarding the future performance of recent acquisitions; * the completion of future transactions in their entirety, if any, and timing and effective integration with respect thereto; * unanticipated costs or unforeseen liabilities associated with recent acquisitions; * ability to obtain financing or refinance existing debt on favorable terms or at all; * the effect of interest rates; * the effect from any breach of our, or any of our vendors', data management systems; * the dilutive effects of issuing additional securities; * the outcome of pending or future lawsuits or actions brought against us, including those disclosed in our filings with the Securities and Exchange Commission; and * other risks indicated from time to time in our filings with the Securities and Exchange Commission.

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.

For further information on these and other factors that could impact us and the statements contained herein, refer to our filings with the Securities and Exchange Commission, including the "Risk Factors" section in our most recent Annual Report on Form 10-K and subsequent quarterly reports on Form 10-Q.

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

Supplemental Financial Information

COVID-19 Update

Operating Business Update

Below is an update on our operations pertaining to the COVID-19 pandemic:

* All properties are open subject to state and local guidelines. Some of the amenities at certain properties remain closed at this time due to state and local guidelines. All RV properties are currently open to transient customers, although during the second quarter several properties were limited by local orders to restrict transient reservations.

* Rent assistance and relief: During the second quarter we approved approximately 540 resident applications for deferral of rent due to COVID related financial hardship. The total amount deferred was approximately $0.5 million. Based on declining monthly deferral applications, we discontinued offering deferrals in July. In early July, we provided approximately $0.9 million of payment credits to annual residents at 15 Northern RV properties that experienced significantly delayed openings. Most of these properties were not open prior to the Memorial Day holiday weekend. We have continued to waive late payment fees for July.

* As of July 17, 2020 the total collection rate from our MH, RV Annuals, and Thousand Trails customers for the quarter ended June 30, 2020 was 99%, consistent with our collection rate for the quarter ended June 30, 2019. Collections for July 2020 as of the 17th of the month were consistent with the month-to-date collections for each month in the quarter ended June 30, 2020.

Investor Information

Equity Research Coverage^ (1)

Bank of America Securities BMO Capital Markets Citi Research

Jeffrey Spector/ Joshua John Kim Michael Bilerman/ NickDennerlein Joseph



Evercore ISI Green Street Robert W. Baird & Company Advisors

Steve Sakwa/ Samir Khanal John Pawlowski RJ Milligan



Wells Fargo Securities

Todd Stender



______________________

* Any opinions, estimates or forecasts regarding our performance made by these analysts or agencies do not represent our opinions, forecasts or predictions. We do not by reference to these firms imply our endorsement of or concurrence with such information, conclusions or recommendations.

Financial Highlights

(In millions, except Common Stock and OP Units outstanding and per share data(adjusted for stock split), unaudited)

As of and for the Three Months Ended

Jun 30, Mar 31, Dec 31, Sept 30, Jun 30, 2020 2020 2019 2019 2019

Operating Information

Total revenues $ 254.1 $ 280.5 $ 258.6 $ 271.2 $ 248.4

Net income $ 48.9 $ 70.7 $ 58.1 $ 68.2 $ 49.1

Net incomeavailable for $ 46.2 $ 66.9 $ 55.0 $ 64.5 $ 46.4 Common Stockholders

Adjusted EBITDAre ^ $ 116.2 $ 138.2 $ 124.5 $ 127.0 $ 117.7 (1)

FFO available forCommon Stock and OP $ 89.5 $ 112.3 $ 99.5 $ 108.6 $ 89.8 Unit holders ^(1)(2)

Normalized FFOavailable forCommon Stock and OP $ 90.9 $ 113.3 $ 99.5 $ 102.7 $ 91.9 Unit holders ^(1)(2)

Funds Available forDistribution("FAD") for Common $ 75.6 $ 101.8 $ 84.6 $ 88.4 $ 79.1 Stock and OP Unitholders ^(1)(2)



Common Stock and OPUnits Outstanding (In thousands) andPer Share Data

Common Stock and OPUnits, end of the 192,636 192,627 192,581 192,574 192,562 period

Weighted averageCommon Stock and OP 192,542 192,564 192,458 192,400 191,860 Units outstanding -Fully Diluted

Net income perCommon Share - $ 0.25 $ 0.37 $ 0.30 $ 0.35 $ 0.26 Fully Diluted^ (3)

FFO per CommonShare and OP Unit - $ 0.47 $ 0.58 $ 0.52 $ 0.56 $ 0.47 Fully Diluted

Normalized FFO perCommon Share and OP $ 0.47 $ 0.59 $ 0.52 $ 0.53 $ 0.48 Unit - FullyDiluted

Dividends per $ 0.3425 $ 0.3425 $ 0.3063 $ 0.3063 $ 0.3063 Common Share



Balance Sheet

Total assets $ 4,268 $ 4,212 $ 4,151 $ 4,137 $ 4,014

Total liabilities $ 2,961 $ 2,892 $ 2,829 $ 2,818 $ 2,707



Market Capitalization

Total debt ^(4) $ 2,522 $ 2,486 $ 2,432 $ 2,406 $ 2,300

Total market $ 14,558 $ 13,558 $ 15,988 $ 15,270 $ 13,983 capitalization^ (5)



Ratios

Total debt / totalmarket 17.3 % 18.3 % 15.2 % 15.8 % 16.4 %capitalization

Total debt /Adjusted EBITDAre ^ 5.0 4.9 4.8 4.9 4.7 (6)

Interest coverage ^ 4.9 4.9 4.9 4.8 4.7 (7)

Fixed charges^(8) 4.9 4.9 4.8 4.7 4.6

______________________

* See Non-GAAP Financial Measures Definitions and Other Terms at the end of the supplemental financial information for definitions of Adjusted EBITDAre, FFO, Normalized FFO and FAD and a reconciliation of Consolidated net income to Adjusted EBITDAre. * See page 8 for a reconciliation of Net income available for Common Stockholders to Non-GAAP financial measures FFO available for Common Stock and OP Unit holders, Normalized FFO available for Common Stock and OP Unit holders and FAD for Common Stock and OP Unit holders. * Net income per Common Share - Fully Diluted is calculated before Income allocated to non-controlling interest - Common OP Units. * Excludes deferred financing costs of approximately $25.3 million as of June 30, 2020. * See page 15 for the calculation of market capitalization as of June 30, 2020. * Calculated using trailing twelve months Adjusted EBITDAre. * Calculated by dividing trailing twelve months Adjusted EBITDAre by the interest expense incurred during the same period. * See Non-GAAP Financial Measures Definitions and Other Terms at the end of the supplemental financial information for a definition of fixed charges. This ratio is calculated by dividing trailing twelve months Adjusted EBITDAre by the sum of fixed charges and preferred stock dividends, if any, during the same period.

Consolidated Balance Sheets

(In thousands, except share and per share data)

June 30, 2020 December 31, 2019

(unaudited)

Assets

Investment in real estate:

Land $ 1,528,929 $ 1,525,407

Land improvements 3,396,132 3,336,070

Buildings and other depreciable property 903,249 881,572

5,828,310 5,743,049

Accumulated depreciation (1,849,799) (1,776,224)

Net investment in real estate 3,978,511 3,966,825

Cash and restricted cash 119,993 28,860

Notes receivable, net 35,304 37,558

Investment in unconsolidated joint ventures 19,864 20,074

Deferred commission expense 41,622 41,149

Other assets, net 72,880 56,809

Total Assets $ 4,268,174 $ 4,151,275



Liabilities and Equity

Liabilities:

Mortgage notes payable, net $ 2,247,790 $ 2,049,509

Term loan, net 199,111 198,949

Unsecured line of credit 50,000 160,000

Accounts payable and other liabilities 142,269 124,665

Deferred revenue - upfront payments from 132,023 126,814 membership upgrade sales

Deferred revenue - annual membership 12,655 10,599 subscriptions

Accrued interest payable 8,485 8,639

Rents and other customer payments received in 102,480 91,234 advance and security deposits

Distributions payable 65,978 58,978

Total Liabilities 2,960,791 2,829,387

Equity:

Preferred stock, $0.01 par value, 10,000,000shares authorized as of June 30, 2020 and - - December 31, 2019; none issued and outstanding.

Common stock, $0.01 par value, 600,000,000 and400,000,000 shares authorized as of June 30,2020 and December 31, 2019, respectively; 1,812 1,812 182,153,754 and 182,089,595 shares issued andoutstanding as of June 30, 2020 and December 31,2019, respectively.

Paid-in capital 1,405,764 1,402,696

Distributions in excess of accumulated earnings (169,903) (154,318)

Accumulated other comprehensive income (loss) (1,161) (380)

Total Stockholders' Equity 1,236,512 1,249,810

Non-controlling interests - Common OP Units 70,871 72,078

Total Equity 1,307,383 1,321,888

Total Liabilities and Equity $ 4,268,174 $ 4,151,275

Consolidated Income Statements

(In thousands, unaudited)

Quarters Ended June 30, Six Months Ended June 30,

2020 2019 2020 2019

Revenues:

Rental income $ 217,963 $ 212,007 $ 457,309 $ 435,573

Annual membership 12,961 12,586 26,034 24,902 subscriptions

Membership upgrade sales 5,048 5,041 9,891 8,879 current period, gross

Membership upgrade salesupfront payments, (2,666) (2,912) (5,208) (4,683) deferred, net

Other income 9,680 10,265 20,739 20,635

Gross revenues from home 8,866 7,825 20,175 14,300 sales

Brokered resale andancillary services (575) 872 363 2,431 revenues, net

Interest income 1,791 1,803 3,598 3,554

Income from other 1,022 879 1,665 1,865 investments, net

Total revenues 254,090 248,366 534,566 507,456



Expenses:

Property operating and 85,265 84,868 168,899 162,816 maintenance

Real estate taxes 16,668 15,107 33,509 30,430

Sales and marketing, 4,276 4,214 8,254 7,623 gross

Membership salescommissions, deferred, (481) (389) (697) (580) net

Property management 14,813 14,385 29,817 28,070

Depreciation and 38,332 37,776 77,356 75,753 amortization

Cost of home sales 8,850 8,164 20,761 14,796

Home selling expenses 1,081 1,102 2,294 2,185

General and 10,609 9,225 21,464 19,134 administrative

Other expenses 639 540 1,227 967

Early debt retirement - 1,491 1,054 1,491

Interest and related 26,249 26,024 52,322 52,417 amortization

Total expenses 206,301 202,507 416,260 395,102

Gain on sale of real - - - 52,507 estate, net

Income before equity inincome of unconsolidated 47,789 45,859 118,306 164,861 joint ventures

Equity in income ofunconsolidated joint 1,064 3,226 1,271 4,759 ventures

Consolidated net income 48,853 49,085 119,577 169,620



Income allocated tonon-controlling (2,658) (2,676) (6,507) (9,902) interests - Common OPUnits

Redeemable perpetualpreferred stock (8) (8) (8) (8) dividends

Net income available for $ 46,187 $ 46,401 $ 113,062 $ 159,710 Common Stockholders

Non-GAAP Financial Measures

This document contains certain non-GAAP measures used by management that we believe are helpful in understanding our business. We believe investors should review these non-GAAP measures along with GAAP net income and cash flows from operating activities, investing activities and financing activities, when evaluating an equity REIT's operating performance. Our definitions and calculations of these non-GAAP financial and operating measures and other terms may differ from the definitions and methodologies used by other REITs and, accordingly, may not be comparable. These non-GAAP financial and operating measures do not represent cash generated from operating activities in accordance with GAAP, nor do they represent cash available to pay distributions and should not be considered as an alternative to net income, determined in accordance with GAAP, as an indication of our financial performance, or to cash flows from operating activities, determined in accordance with GAAP, as a measure of our liquidity, nor is it indicative of funds available to fund our cash needs, including our ability to make cash distributions. For definitions and reconciliations of non-GAAP measures to our financial statements as prepared under GAAP, refer to both Reconciliation of Net Income to Non-GAAP Financial Measures on page 8 and Non-GAAP Financial Measures Definitions and Reconciliations on pages 17 - 19.

Selected Non-GAAP Financial Measures

(In millions, except per share data, unaudited)

Quarter Ended

June 30, 2020

Income from property operations, excluding deferrals and property $ 136.4 management - 2020 Core ^(1)

Income from property operations, excluding deferrals and property 3.0 management - Non-Core ^(1)

Property management and general and administrative (25.4)

Other income and expenses 1.7

Interest and related amortization (26.2)

FFO available for Common Stock and OP Unit holders ^(2) 89.5

COVID-19 expenses ^(3) 1.4

Normalized FFO available for Common Stock and OP Unit holders^ (2) $ 90.9



FFO per Common Share and OP Unit - Fully Diluted $0.47

Normalized FFO per Common Share and OP Unit - Fully Diluted $0.47





Normalized FFO available for Common Stock and OP Unit holders ^(2) $ 90.9

Non-revenue producing improvements to real estate (15.3)

FAD for Common Stock and OP Unit holders ^(2) $ 75.6



Weighted average Common Stock and OP Units - Fully Diluted 192.5

______________________

* See page 10 for details of the Core Income from Property Operations, excluding deferrals and property management. See page 11 for details of the Non-Core Income from Property Operations, excluding deferrals and property management. * See page 8 for a reconciliation of Net income available for Common Stockholders to FFO available for Common Stock and OP Unit holders, Normalized FFO available for Common Stock and OP Unit holders and FAD for Common Stock and OP Unit holders. * Includes expenses incurred related to the development and implementation of Center for Disease Control ("CDC") and public health guidelines for social distancing and enhanced cleaning, property employee appreciation bonuses and emergency time-off pay. These COVID-19 expenses are considered incremental to our normal operations and are nonrecurring. As such, they have been excluded from the calculation of Normalized FFO. Of the total expenses, $1.0 million was included in Core income from property operations and $0.4 million was included in other income and expenses.

Reconciliation of Net Income to Non-GAAP Financial Measures

(In thousands, except per share data (adjusted for stock split), unaudited)

Quarters Ended June 30, Six Months Ended June 30,

2020 2019 2020 2019

Net income available for $ 46,187 $ 46,401 $ 113,062 $ 159,710 Common Stockholders

Income allocated tonon-controlling interests 2,658 2,676 6,507 9,902 - Common OP Units

Membership upgrade salesupfront payments, 2,666 2,912 5,208 4,683 deferred, net

Membership salescommissions, deferred, (481) (389) (697) (580) net

Depreciation and 38,332 37,776 77,356 75,753 amortization

Depreciation onunconsolidated joint 184 441 361 873 ventures

Gain on sale of real - - - (52,507) estate, net

FFO available for Common 89,546 89,817 201,797 197,834 Stock and OP Unit holders

Early debt retirement - 2,085 1,054 2,085

Insurance proceeds due tocatastrophic weather - - - (349) event ^(1)

COVID-19 expenses ^(2) 1,407 - 1,446 -

Normalized FFO availablefor Common Stock and OP 90,953 91,902 204,297 199,570 Unit holders

Non-revenue producingimprovements to real (15,330) (12,849) (26,796) (22,913) estate

FAD for Common Stock and $ 75,623 $ 79,053 $ 177,501 $ 176,657 OP Unit holders



Net income available per $ 0.25 $ 0.26 $ 0.62 $ 0.89 Common Share - Basic

Net income available perCommon Share - Fully $ 0.25 $ 0.26 $ 0.62 $ 0.89 Diluted ^(3)



FFO per Common Share and $ 0.47 $ 0.47 $ 1.05 $ 1.03 OP Unit - Basic

FFO per Common Share and $ 0.47 $ 0.47 $ 1.05 $ 1.03 OP Unit - Fully Diluted



Normalized FFO per Common $ 0.47 $ 0.48 $ 1.06 $ 1.04 Share and OP Unit - Basic

Normalized FFO per CommonShare and OP Unit - Fully $ 0.47 $ 0.48 $ 1.06 $ 1.04 Diluted



Average Common Stock - 181,833 180,312 181,781 179,938 Basic

Average Common Stock and 192,315 191,598 192,267 191,320 OP Units - Basic

Average Common Stock and 192,542 191,860 192,538 191,546 OP Units - Fully Diluted

______________________

* Represents insurance recovery revenue from reimbursement for capital expenditures related to Hurricane Irma. * Includes expenses incurred related to the development and implementation of CDC and public health guidelines for social distancing and enhanced cleaning, property employee appreciation bonuses and emergency time-off pay. These COVID-19 expenses are considered incremental to our normal operations and are nonrecurring. As such, they have been excluded from the calculation of Normalized FFO. * Net income per fully diluted Common Share is calculated before Income allocated to non-controlling interest - Common OP Units.

Consolidated Income from Property Operations ^(1)

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

Quarters Ended June Six Months Ended June 30, 30,

2020 2019 2020 2019

MH base rental income ^(2) $ 142.6 $ 136.2 $ 284.0 $ 271.5

Rental home income 4.1 3.6 8.1 7.2

RV and marina base rental income 60.1 61.0 141.2 133.1 ^(3)

Annual membership subscriptions 13.0 12.6 26.0 24.9

Membership upgrade sales current 5.0 5.0 9.9 8.9 period, gross

Utility and other income ^(4) 22.2 22.3 47.5 46.0

Property operating revenues 247.0 240.7 516.7 491.6



Property operating, maintenance 102.1 99.5 202.5 192.4 and real estate taxes ^(5) (6)

Rental home operating and 1.3 1.3 2.6 2.5 maintenance

Sales and marketing, gross 4.2 4.2 8.3 7.6

Property operating expenses 107.6 105.0 213.4 202.5

Income from property operations,excluding deferrals and property $ 139.4 $ 135.7 $ 303.3 $ 289.1 management ^(1) (6)







Manufactured home site figures and occupancy averages:

Total sites 72,362 71,988 72,307 72,178

Occupied sites 68,613 68,316 68,554 68,453

Occupancy % 94.8 % 94.9 % 94.8 % 94.8 %

Monthly base rent per site $ 693 $ 665 $ 690 $ 661



RV and marina base rental income:

Annual $ 47.1 $ 40.8 $ 94.4 $ 79.8

Seasonal 5.2 5.7 27.8 26.8

Transient 7.8 14.5 19.0 26.5

Total RV and marina base rental $ 60.1 $ 61.0 $ 141.2 $ 133.1 income

______________________

* Excludes property management and the GAAP deferral of membership upgrade sales upfront payments and membership sales commissions, net. * See the manufactured home site figures and occupancy averages included below within this table. * See RV and marina base rental income detail included below within this table. * Includes Hurricane Irma insurance recovery revenues of $0.6 million, which we have identified as business interruption, for the six months ended June 30, 2019. * Includes bad debt expense for the periods presented. * Includes $1.0 million related to the development and implementation of CDC and public health guidelines for social distancing and enhanced cleaning, property employee appreciation bonuses and emergency time-off pay. These COVID-19 expenses are considered incremental to our normal operations and are nonrecurring. As such, they have been excluded from the calculation of Normalized FFO. Excluding the impact of these expenses, Consolidated income from property operations, excluding deferrals and property management, was $140.4 million and $304.3 million for the quarter and six months ended June 30, 2020, respectively.

Core Income from Property Operations ^(1)

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

Quarters Ended June 30, Six Months Ended June 30,

2020 2019 Change ^ 2020 2019 Change ^ (2) (2)

MH baserental income $ 142.5 $ 136.2 4.6 % $ 283.9 $ 271.1 4.8 %^(3)

Rental home 4.1 3.6 12.3 % 8.1 7.1 13.2 %income

RV baserental income 54.3 59.6 (8.8) % 130.0 131.7 (1.4) %^(4)

Annualmembership 13.0 12.6 3.0 % 26.0 24.9 4.5 %subscriptions

Membershipupgrade sales 5.0 5.0 0.1 % 9.9 8.9 11.4 %currentperiod, gross

Utility andother income 21.8 22.2 (1.9) % 46.6 45.9 1.7 %^(5)

Propertyoperating 240.7 239.2 0.6 % 504.5 489.6 3.1 %revenues



Propertyoperating,maintenance 98.8 98.7 - % 196.2 191.3 2.6 %and realestate taxes^(6) (7)

Rental homeoperating and 1.3 1.3 (3.8) % 2.6 2.5 4.4 %maintenance

Sales andmarketing, 4.2 4.2 1.5 % 8.2 7.6 8.3 %gross

Propertyoperating 104.3 104.2 0.1 % 207.0 201.4 2.8 %expenses

Income frompropertyoperations,excluding $ 136.4 $ 135.0 1.0 % $ 297.5 $ 288.2 3.2 %deferrals andpropertymanagement ^(1) (7)



Occupied 68,679 68,386 sites ^(8)



Core manufactured home site figures and occupancy averages:

Total sites 72,087 71,820 72,033 71,787

Occupied 68,599 68,276 68,543 68,224 sites

Occupancy % 95.2 % 95.1 % 95.2 % 95.0 %

Monthly base $ 693 $ 665 $ 690 $ 662 rent per site



Core RV baserental income:

Annual $ 41.9 $ 40.0 4.7 % $ 83.9 $ 79.0 6.1 %

Seasonal 5.1 5.7 (8.9) % 27.7 26.8 3.7 %

Transient 7.3 13.9 (47.7) % 18.4 25.9 (29.2) %

Total RV base $ 54.3 $ 59.6 (8.8) % $ 130.0 $ 131.7 (1.4) %rental income

______________________

* Excludes property management and the GAAP deferral of membership upgrades sales upfront payments and membership sales commissions, net. * Calculations prepared using actual results without rounding. * See Core manufactured home site figures and occupancy averages included below within this table. * See Core RV base rental income detail included below within this table. * Includes Hurricane Irma insurance recovery revenues of $0.6 million, which we have identified as business interruption, for the six months ended June 30, 2019. * Includes bad debt expense for the periods presented. * Includes $1.0 million related to expenses incurred related to the development and implementation of CDC and public health guidelines for social distancing and enhanced cleaning, property employee appreciation bonuses and emergency time-off pay. These COVID-19 expenses are considered incremental to our normal operations and are nonrecurring. As such, they have been excluded from the calculation of Normalized FFO. Excluding the impact of these expenses, Core income from property operations, excluding deferrals and property management, was $137.4 million and $298.5 million for the quarter and six months ended June 30, 2020, respectively. * Occupied sites are presented as of the end of the period. Occupied sites have increased by 103 from 68,576 at December 31, 2019.

Non-Core Income from Property Operations ^(1)

(In millions, unaudited)

Quarter Six Months Ended Ended

June 30, June 30, 2020 2020

MH base rental income $ 0.1 $ 0.1

Rental home income - -

RV and marina base rental income 5.8 11.2

Utility and other income 0.4 0.9

Property operating revenues 6.3 12.2



Property operating expenses ^(2) 3.3 6.4

Income from property operations, excluding deferrals $ 3.0 $ 5.8 and property management ^(1)





______________________

* Excludes property management and the GAAP deferral of membership upgrade sales upfront payments and membership sales commissions, net. * Includes bad debt expense for the periods presented.

Income from Rental Home Operations

(In millions, except occupied rentals, unaudited)

Quarters Ended June 30, Six Months Ended June 30,

2020 2019 2020 2019

Manufactured homes:

Rental operations revenues $ 11.9 $ 11.4 $ 23.6 $ 22.6 ^(1)

Rental operations expense 1.3 1.3 2.6 2.5

Income from rental 10.6 10.1 21.0 20.1 operations

Depreciation on rental 2.7 2.6 5.5 5.0 homes ^(2)

Income from rentaloperations, net of $ 7.9 $ 7.5 $ 15.5 $ 15.1 depreciation



Occupied rentals:^ (3)

New 3,291 3,011

Used 632 1,008

Total occupied rental 3,923 4,019 sites

As of June 30, 2020 As of June 30, 2019

Cost basis in rental Gross Net of Gross Net ofhomes: ^(4) Depreciation Depreciation

New $ 233.8 $ 196.2 $ 195.8 $ 171.9

Used 17.5 7.5 25.1 11.8

Total rental homes $ 251.3 $ 203.7 $ 220.9 $ 183.7

______________________

* For the quarters ended June 30, 2020 and 2019, approximately $7.8 million of the rental operations revenue is included in the MH base rental income in the Core Income from Property Operations for each respective period on page 10. For the six months ended June 30, 2020 and 2019, approximately $15.6 million and $15.5 million, respectively, of the rental operations revenue is included in the MH base rental income in the Core Income from Property Operations on page 10. The remainder of the rental operations revenue is included in Rental home income for the quarters and six months ended June 30, 2020 and 2019 in the Core Income from Property Operations on page 10. * Depreciation on rental homes in our Core portfolio is included in Depreciation and amortization in the Consolidated Income Statements on page 5. * Occupied rentals as of the end of the period in our Core portfolio. Included in the quarters ended June 30, 2020 and 2019 were 283 and 298 homes rented through our ECHO joint venture, respectively. As of June 30, 2020 and 2019, the rental home investment associated with our ECHO joint venture totaled approximately $11.4 million and $10.6 million, respectively. * Includes both occupied and unoccupied rental homes in our Core portfolio. New home cost basis does not include the costs associated with our ECHO joint venture. At June 30, 2020 and 2019, our investment in the ECHO joint venture was approximately $17.1 million and $16.5 million, respectively.

Total Sites and Home Sales

(In thousands, except sites and home sale volumes, unaudited)

Summary of Total Sites as of June 30, 2020

Sites ^(1)

MH sites 72,300

RV sites:

Annual 29,500

Seasonal 10,200

Transient 14,200

Marina slips 2,300

Membership^ (2) 24,600

Joint Ventures ^(3) 3,600

Total 156,700

Home Sales - Select Data

Quarters Ended June Six Months Ended June 30, 30,

2020 2019 2020 2019

Total New Home Sales Volume ^(4) 133 117 288 208

New Home Sales Volume - ECHO 11 18 23 31 joint venture

New Home Sales Gross Revenues ^ $ 7,552 $ 6,064 $ 16,934 $ 10,628 (4)



Total Used Home Sales Volume 136 210 330 429

Used Home Sales Gross Revenues $ 1,314 $ 1,761 $ 3,241 $ 3,672



Brokered Home Resales Volume 111 237 287 405

Brokered Home Resale Revenues, $ 178 $ 379 $ 439 $ 657 net

______________________

* MH sites are generally leased on an annual basis to residents who own or lease factory-built homes, including manufactured homes. Annual RV and marina sites are leased on an annual basis to customers who generally have an RV, factory-built cottage, boat or other unit placed on the site, including those Northern properties that are open for the summer season. Seasonal RV and marina sites are leased to customers generally for one to six months. Transient RV and marina sites are leased to customers on a short-term basis. * Sites primarily utilized by approximately 117,700 members. Includes approximately 5,700 sites rented on an annual basis. * Joint ventures have approximately 2,900 annual Sites, 500 seasonal Sites, and 200 transient Sites. * Total new home sales volume includes home sales from our ECHO joint venture. New home sales gross revenues does not include the revenues associated with our ECHO joint venture.

Memberships - Select Data

(Unaudited)

2016 2017 2018 2019 2020 Q2 YTD ^(1)

Member Count 104,728 106,456 111,094 115,680 117,727 ^(2)

ThousandTrailsCamping Pass 29,576 31,618 37,528 41,484 19,693 (TTC)Origination

TTC Sales 12,856 14,128 17,194 19,267 9,022

RV Dealer TTC 16,720 17,490 20,334 22,217 10,671 Activations

Number of 5,756 5,843 5,888 5,938 5,744 annuals ^(3)

Number ofupgrade sales 2,477 2,514 2,500 2,919 1,563 ^(4)



(Inthousands, unaudited)

Annualmembership $ 45,036 $ 45,798 $ 47,778 $ 51,015 $ 26,034 subscriptions

RV baserental income $ 15,413 $ 16,841 $ 18,363 $ 19,634 $ 10,025 from annuals

RV baserental incomefrom $ 17,344 $ 18,231 $ 19,840 $ 20,181 $ 5,714 seasonals/transients

Membershipupgrade sales $ 12,312 $ 14,130 $ 15,191 $ 19,111 $ 9,891 currentperiod, gross

Utility and $ 2,442 $ 2,254 $ 2,410 $ 2,422 $ 944 other income



______________________

* Activity through June 30, 2020. * Members have entered into annual subscriptions with us that entitle them to use certain properties on a continuous basis for up to 21 days. * Members who rent a specific site for an entire year in connection with their membership subscriptions. * Existing members who have upgraded memberships are eligible for enhanced benefits, including but not limited to longer stays, the ability to make earlier reservations, potential discounts on rental units, and potential access to additional properties. Upgrades require a non-refundable upfront payment.

Market Capitalization

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

Capital Structure as of June 30, 2020



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



Secured Debt $ 2,272 90.1 %

Unsecured Debt 250 9.9 %

Total Debt ^ $ 2,522 100.0 % 17.3 %(1)



Common Stock 182,153,754 94.6 %

OP Units 10,481,994 5.4 %

Total CommonStock and OP 192,635,748 100.0 % Units

Common Stockprice at June $ 62.48 30, 2020

Fair Value ofCommon Stock $ 12,036 100.0 % and OP Units

Total Equity $ 12,036 100.0 % 82.7 %



Total Market $ 14,558 100.0 %Capitalization



______________________

* Excludes deferred financing costs of approximately $25.3 million.

Debt Maturity Schedule

Debt Maturity Schedule as of June 30, 2020

(In thousands, unaudited)

Weighted Weighted % of WeightedYear Secured Average Unsecured Average Total Debt Total Average Debt Interest Debt Interest Debt Interest Rate Rate Rate

2020 $ - - % $ - - % $ - - % - %

2021 167,155 5.01 % - - % 167,155 6.76 % 5.01 %

2022 143,774 4.62 % - - % 143,774 5.82 % 4.62 %

2023 101,200 5.02 % 200,000 3.05 % 301,200 12.19 % 3.71 %

2024 10,537 5.49 % - - % 10,537 0.43 % 5.49 %

2025 99,658 3.45 % - - % 99,658 4.03 % 3.45 %

2026 - - % - - % - - % - %

2027 - - % - - % - - % - %

2028 219,466 4.19 % - - % 219,466 8.88 % 4.19 %

2029 - - % - - % - - % - %

Thereafter 1,529,589 3.96 % - - % 1,529,589 61.89 % 3.96 %

Total $ 2,271,379 4.13 % $ 200,000 3.05 % $ 2,471,379 100.0 % 4.05 %



UnsecuredLine of - 50,000 50,000 Credit^(1)



Note 849 - 849 Premiums



Total Debt 2,272,228 250,000 2,522,228



DeferredFinancing (24,438) (889) (25,327) Costs



Total $ 2,247,790 $ 249,111 $ 2,496,901 4.23 % ^Debt, net (2)



AverageYears to 12.5 2.6 11.5 Maturity

______________________

* Reflects outstanding balance on our line of credit as of June 30, 2020. The Line of Credit matures in October 2021 and had an effective interest rate of 2.42% during the second quarter of 2020. * Reflects effective interest rate for the quarter ended June 30, 2020, including amortization of note premiums and deferred financing costs.

Non-GAAP Financial Measures Definitions and Reconciliations

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

We believe FFO, as defined by the Board of Governors of NAREIT, is generally a measure of performance for an equity REIT. While FFO is a relevant and widely used measure of operating performance for equity REITs, it does not represent cash flow from operations or net income as defined by GAAP, and it should not be considered as an alternative to these indicators in evaluating liquidity or operating performance.

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

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

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

INCOME FROM PROPERTY OPERATIONS, EXCLUDING DEFERRALS AND PROPERTY MANAGEMENT. We define Income from property operations, excluding deferrals and property management as rental income, membership subscriptions and upgrade sales, utility and other income less property and rental home operating and maintenance expenses, real estate taxes, sales and marketing expenses, excluding property management and the GAAP deferral of membership upgrade sales upfront payments and membership sales commissions, net. For comparative purposes, we present bad debt expense within Property operating, maintenance and real estate taxes in the current and prior periods. We believe that this Non-GAAP financial measure is helpful to investors and analysts as a measure of the operating results of our properties.

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

Quarters Ended June 30, Six Months Ended June 30,

(amounts in thousands) 2020 2019 2020 2019

Net income available $ 46,187 $ 46,401 $ 113,062 $ 159,710 for Common Stockholders

Redeemable perpetualpreferred stock 8 8 8 8 dividends

Income allocated tonon-controlling 2,658 2,676 6,507 9,902 interests - Common OPUnits

Equity in income ofunconsolidated joint (1,064) (3,226) (1,271) (4,759) ventures

Income before equity inincome of 47,789 45,859 118,306 164,861 unconsolidated jointventures

Gain on sale of real - - - (52,507) estate, net

Membership upgradesales upfront payments, 2,666 2,912 5,208 4,683 deferred, net

Gross revenues from (8,866) (7,825) (20,175) (14,300) home sales

Brokered resale andancillary services 575 (872) (363) (2,431) revenues, net

Interest income (1,791) (1,803) (3,598) (3,554)

Income from other (1,022) (879) (1,665) (1,865) investments, net

Membership salescommissions, deferred, (481) (389) (697) (580) net

Property management 14,813 14,385 29,817 28,070

Depreciation and 38,332 37,776 77,356 75,753 amortization

Cost of home sales 8,850 8,164 20,761 14,796

Home selling expenses 1,081 1,102 2,294 2,185

General and 10,609 9,225 21,464 19,134 administrative

Other expenses 639 540 1,227 967

Early debt retirement - 1,491 1,054 1,491

Interest and related 26,249 26,024 52,322 52,417 amortization

Income from propertyoperations, excluding 139,443 135,710 303,311 289,120 deferrals and propertymanagement

Membership upgradesales upfront payments,and membership sales (2,185) (2,523) (4,511) (4,103) commissions, deferred,net

Property management (14,813) (14,385) (29,817) (28,070)

Income from property $ 122,445 $ 118,802 $ 268,983 $ 256,947 operations

EARNINGS BEFORE INTEREST, TAX, DEPRECIATION AND AMORTIZATION FOR REAL ESTATE (EBITDAre) AND ADJUSTED EBITDAre. We define EBITDAre as net income or loss excluding interest income and expense, income taxes, depreciation and amortization, gains or losses from sales of properties, impairments charges, and adjustments to reflect our share of EBITDAre of unconsolidated joint ventures. We compute EBITDAre in accordance with our interpretation of the standards established by NAREIT, which may not be comparable to EBITDAre reported by other REITs that do not define the term in accordance with the current NAREIT definition or that interpret the current NAREIT definition differently than we do. We receive non-refundable upfront payments from membership upgrade contracts. In accordance with GAAP, the non-refundable upfront payments and related commissions are deferred and amortized over the estimated customer life. Although the NAREIT definition of EBITDAre does not address the treatment of non-refundable upfront payments, we believe that it is appropriate to adjust for the impact of the deferral activity in our calculation of EBITDAre.

We define Adjusted EBITDAre as EBITDAre excluding non-operating income and expense items, such as gains and losses from early debt extinguishment, including prepayment penalties and defeasance costs, and other miscellaneous non-comparable items.

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

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

Quarters Ended June 30, Six Months Ended June 30,

(amounts in thousands) 2020 2019 2020 2019

Consolidated net income $ 48,853 $ 49,085 $ 119,577 $ 169,620

Interest income (1,791) (1,803) (3,598) (3,554)

Membership upgradesales upfront payments, 2,666 2,912 5,208 4,683 deferred, net

Membership salescommissions, deferred, (481) (389) (697) (580) net

Real estatedepreciation and 38,332 37,776 77,356 75,753 amortization

Other depreciation and 639 449 1,227 876 amortization

Interest and related 26,249 26,024 52,322 52,417 amortization

Gain on sale of real - - - (52,507) estate, net

Adjustments to ourshare of EBITDAre of 279 1,598 542 2,599 unconsolidated jointventures

EBITDAre 114,746 115,652 251,937 249,307

Early debt retirement - 2,085 1,054 2,085

Insurance proceeds dueto catastrophic weather - - - (349) event

COVID-19 expenses 1,407 - 1,446 -

Adjusted EBITDAre $ 116,153 $ 117,737 $ 254,437 $ 251,043

CORE. The Core properties include properties we owned and operated during all of 2019 and 2020. We believe Core is a measure that is useful to investors for annual comparison as it removes the fluctuations associated with acquisitions, dispositions and significant transactions or unique situations.

NON-CORE. The Non-Core properties include properties that were not owned and operated during all of 2019 and 2020. This includes, but is not limited to, four properties and the marinas acquired and five properties sold during 2019.

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.

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

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

View source version on businesswire.com: https://www.businesswire.com/news/home/20200720005718/en/

CONTACT: Paul Seavey (800) 247-5279