UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

_________________________________________________________

FORM 10-Q

_________________________________________________________



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

For the quarterly period ended June 30, ~~2018~~2019



o☐	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~~other jurisdiction of ~~Incorporation or Organization)~~ incorporation)	~~(I.R.S. Employer~~ ~~Identification No.)~~
		(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)~~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. Yesx☒ No o☐

Indicate by check mark whether the registrant has submitted electronically ~~and posted on its corporate Web site, if any,~~ every Interactive Data File required to be submitted ~~and posted~~ 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 ~~and post~~ such files). Yesx☒ No o☐

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	x☒	Accelerated filer	o☐
Non-accelerated filer	o ~~(Do not check if a smaller reporting company)~~ ☐	Smaller reporting company	o☐
		Emerging growth company	o☐

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 o☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o ☐ No x☒

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date:

~~89,098,574~~ 91,033,894 shares of Common Stock as of July ~~20, 2018.~~24, 2019.

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 June 30, ~~2018~~2019 and December 31, ~~2017~~2018	3
	Consolidated Statements of Income and Comprehensive Income for the quarters and six months ended June 30, ~~2018~~2019 and ~~2017~~2018	4
	Consolidated ~~Statement~~Statements of Changes in Equity for the quarters and six months ended June 30, 2019 and 2018	65
	Consolidated Statements of Cash Flows for the six months ended June 30, ~~2018~~2019 and ~~2017~~2018	7
	Notes to Consolidated Financial Statements	9
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	2219
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	3734
Item 4.	Controls and Procedures	3734
Part II - Other Information
Item 1.	Legal Proceedings	3835
Item 1A.	Risk Factors	3835
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	3835
Item 3.	Defaults Upon Senior Securities	3835
Item 4.	Mine Safety Disclosures	3835
Item 5.	Other Information	3835
Item 6.	Exhibits	3936

Part I – Financial Information

Item 1. Financial Statements

Equity LifeStyle Properties, Inc.

Consolidated Balance Sheets

(amounts in thousands, except share and per share data)


	As of			As of			As of			As of
	June 30, 2018			December 31, 2017			June 30, 2019			December 31, 2018
	(unaudited)						(unaudited)
Assets
Investment in real estate:
Land	$	1,284,851		$	1,221,375		$	1,418,353		$	1,408,832
Land improvements	3,072,474			3,045,221			3,236,899			3,143,745
Buildings and other depreciable property	692,495			649,217			781,671			720,900
	5,049,820			4,915,813			5,436,923			5,273,477
Accumulated depreciation	(1,580,013		)	(1,516,694		)	(1,704,091		)	(1,631,888		)
Net investment in real estate	3,469,807			3,399,119			3,732,832			3,641,589
Cash and restricted cash	46,025			31,085			90,457			68,974
Notes receivable, net	34,672			49,477			36,010			35,041
Investment in unconsolidated joint ventures	57,699			53,080			55,195			57,755
Deferred commission expense	39,843			31,443			40,710			40,308
Escrow deposits, goodwill, and other assets, net	52,143			45,828
Other assets, net							59,274			46,227
Assets held for sale, net							—			35,914
Total Assets	$	3,700,189		$	3,610,032		$	4,014,478		$	3,925,808

Liabilities and Equity
Liabilities:
Mortgage notes payable, net	$	2,028,535		$	1,971,715		$	2,075,689		$	2,149,726
Term loan	198,464			198,302
Unsecured line of credit	—			30,000
Accrued expenses and accounts payable	90,929			80,744
Deferred revenue – upfront payments from right-to-use contracts	112,288			85,596
Deferred revenue – right-to-use annual payments	12,806			9,932
Term loan, net							198,787			198,626
Accounts payable and other liabilities							127,051			102,854
Deferred revenue – upfront payments from right-to-use contracts (membership upgrade sales)							121,047			116,363
Deferred revenue – right-to-use annual payments (membership subscriptions)							13,022			10,055
Accrued interest payable	8,425			8,387			8,187			8,759
Rents and other customer payments received in advance and security deposits	94,868			79,267			104,249			81,114
Distributions payable	52,043			46,047			58,972			52,617
Liabilities related to assets held for sale							—			12,350
Total Liabilities	2,598,358			2,509,990			2,707,004			2,732,464
Equity:
Stockholders’ Equity:
Preferred stock, $0.01 par value, 10,000,000 shares authorized as of December 31, 2017 and June 30, 2018; none issued and outstanding.	—			—
Common stock, $0.01 par value, 200,000,000 shares authorized as of June 30, 2018 and December 31, 2017; 88,802,758 and 88,585,160 shares issued and outstanding as of June 30, 2018 and December 31, 2017, respectively	884			883
Stockholders' Equity:
Preferred stock, $0.01 par value, 10,000,000 shares authorized as of June 30, 2019 and December 31, 2018; none issued and outstanding.							—			—
Common stock, $0.01 par value, 400,000,000 and 200,000,000 shares authorized as of June 30, 2019 and December 31, 2018, respectively; 91,032,007 and 89,921,018 shares issued and outstanding as of June 30, 2019 and December 31, 2018, respectively.							906			896
Paid-in capital	1,248,047			1,242,109			1,397,613			1,329,391
Distributions in excess of accumulated earnings	(218,453		)	(211,980		)	(162,204		)	(211,034		)
Accumulated other comprehensive income	3,579			942
Accumulated other comprehensive income (loss)							(242		)	2,299
Total Stockholders’ Equity	1,034,057			1,031,954			1,236,073			1,121,552
Non-controlling interests – Common OP Units	67,774			68,088			71,401			71,792
Total Equity	1,101,831			1,100,042			1,307,474			1,193,344
Total Liabilities and Equity	$	3,700,189		$	3,610,032		$	4,014,478		$	3,925,808

The accompanying notes are an integral part of ~~these Consolidated Financial Statements.~~the consolidated financial statements.

Equity LifeStyle Properties, Inc.

Consolidated Statements of Income and Comprehensive Income

(amounts in thousands, except per share data)

(unaudited)


	Quarters Ended June 30,						Six Months Ended June 30,						Quarters Ended June 30,						Six Months Ended June 30,
	2018			2017			2018			2017			2019			2018			2019			2018
Revenues:
Community base rental income	$	128,579		$	121,964		$	255,318		$	242,656
Rental home income	3,561			3,632			7,076			7,237
Resort base rental income	55,231			50,055			119,485			111,123
Right-to-use annual payments	11,891			11,350			23,410			22,602
Right-to-use contracts current period, gross	3,944			3,798			7,106			7,004
Rental income													$	212,007		$	199,155		$	435,573		$	406,148
Right-to-use annual payments (membership subscriptions)													12,586			11,891			24,902			23,410
Right-to-use contracts current period, gross (membership upgrade sales)													5,041			3,944			8,879			7,106
Right-to-use contract upfront payments, deferred, net	(2,021		)	(1,321		)	(3,306		)	(2,096		)	(2,912		)	(2,021		)	(4,683		)	(3,306		)
Utility and other income	24,320			20,650			49,841			42,776
Other income													10,265			12,536			20,635			25,572
Gross revenues from home sales	9,105			7,833			17,414			14,860			7,825			9,105			14,300			17,414
Brokered resale revenues and ancillary services revenues, net	617			444			2,018			2,105
Brokered resale and ancillary services revenues, net													872			617			2,431			2,018
Interest income	1,862			1,798			3,812			3,568			1,803			1,862			3,554			3,812
Income from other investments, net	3,413			1,109			4,353			1,866			879			3,413			1,865			4,353
Total revenues	240,502			221,312			486,527			453,701			248,366			240,502			507,456			486,527
Expenses:
Property operating and maintenance	80,091			72,901			154,999			140,955			84,868			81,720			162,816			158,052
Rental home operating and maintenance	1,629			1,657			3,053			3,208
Real estate taxes	13,440			13,943			27,575			27,980			15,107			13,440			30,430			27,575
Sales and marketing, gross	3,305			2,894			6,117			5,584			4,214			3,305			7,623			6,117
Right-to-use contract commissions, deferred, net	(262		)	(112		)	(286		)	(196		)	(389		)	(262		)	(580		)	(286		)
Property management	13,472			13,023			27,153			25,583			14,385			13,472			28,070			27,153
Depreciation on real estate assets and rental homes	32,452			30,247			63,774			60,357
Amortization of in-place leases	1,893			958			2,945			1,990
Depreciation and amortization													37,776			34,345			75,753			66,719
Cost of home sales	9,632			7,895			18,206			15,014			8,164			9,632			14,796			18,206
Home selling expenses	973			929			2,048			1,854			1,102			973			2,185			2,048
General and administrative	9,669			8,461			17,707			15,834			9,225			9,669			19,134			17,707
Other expenses	367			271			710			490			540			367			967			710
Early debt retirement													1,491			—			1,491			—
Interest and related amortization	26,285			24,822			51,988			49,701			26,024			26,285			52,417			51,988
Total expenses	192,946			177,889			375,989			348,354			202,507			192,946			395,102			375,989
Gain on sale of real estate, net													—			—			52,507			—
Income before equity in income of unconsolidated joint ventures	47,556			43,423			110,538			105,347			45,859			47,556			164,861			110,538
Equity in income of unconsolidated joint ventures	1,613			1,040			2,808			2,190			3,226			1,613			4,759			2,808
Consolidated net income	49,169			44,463			113,346			107,537			49,085			49,169			169,620			113,346

Income allocated to non-controlling interests – Common OP Units	(3,024		)	(2,649		)	(6,979		)	(6,539		)	(2,676		)	(3,024		)	(9,902		)	(6,979		)
Redeemable perpetual preferred stock dividends	(8		)	(2,316		)	(8		)	(4,613		)	(8		)	(8		)	(8		)	(8		)
Net income available for Common Stockholders	$	46,137		$	39,498		$	106,359		$	96,385		$	46,401		$	46,137		$	159,710		$	106,359

Consolidated net income	$	49,169		$	44,463		$	113,346		$	107,537		$	49,085		$	49,169		$	169,620		$	113,346
Other comprehensive income:
Other comprehensive income (loss):
Adjustment for fair market value of swap	764			30			2,637			257			(1,610		)	764			(2,541		)	2,637
Consolidated comprehensive income	49,933			44,493			115,983			107,794			47,475			49,933			167,079			115,983
Comprehensive income allocated to non-controlling interests – Common OP Units	(3,071		)	(2,651		)	(7,141		)	(6,555		)	(2,589		)	(3,071		)	(9,759		)	(7,141		)
Redeemable perpetual preferred stock dividends	(8		)	(2,316		)	(8		)	(4,613		)	(8		)	(8		)	(8		)	(8		)
Comprehensive income attributable to Common Stockholders	$	46,854		$	39,526		$	108,834		$	96,626		$	44,878		$	46,854		$	157,312		$	108,834

Earnings per Common Share – Basic													$	0.51		$	0.52		$	1.78		$	1.20

Earnings per Common Share – Fully Diluted													$	0.51		$	0.52		$	1.77		$	1.20

Weighted average Common Shares outstanding – basic													90,156			88,549			89,969			88,537
Weighted average Common Shares outstanding – fully diluted													95,930			94,623			95,773			94,600

The accompanying notes are an integral part of ~~these Consolidated Financial Statements.~~the consolidated financial statements.

Equity LifeStyle Properties, Inc.

Consolidated Statements ~~of Income and Comprehensive Income (Continued)~~

~~(amounts in thousands, except per share data)~~

~~(unaudited)~~

Quarters Ended June 30, Six Months Ended June 30,
2018 2017 2018 2017
Earnings per Common Share – Basic:
Net income available for Common Stockholders $ 0.52
$ 0.46
$ 1.20
$ 1.12
Earnings per Common Share – Fully Diluted:
Net income available for Common Stockholders $ 0.52
$ 0.45
$ 1.20
$ 1.11

Distributions declared per Common Share outstanding $ 0.550
$ 0.488
$ 1.100
$ 0.975
Weighted average Common Shares outstanding – basic 88,549
86,763
88,537
86,408
Weighted average Common Shares outstanding – fully diluted 94,623
93,063
94,600
93,041

~~The accompanying notes are an integral part of these Consolidated Financial Statements.~~

~~Equity LifeStyle Properties, Inc.~~

~~Consolidated Statement~~ of Changes in Equity

(amounts in thousands)

(unaudited)


	Common Stock		Paid-in Capital			Redeemable Perpetual Preferred Stock			Distributions in Excess of Accumulated Earnings			Accumulated Other Comprehensive Loss/(Income)		Non- controlling interests – Common OP Units			Total Equity			Common Stock		Paid-in Capital			Redeemable Perpetual Preferred Stock			Distributions in Excess of Accumulated Earnings			Accumulated Other Comprehensive Income (Loss)			Non- controlling Interests – Common OP Units			Total Equity
Balance, December 31, 2017	$	883	$	1,242,109		$	—		$	(211,980	)	$	942	$	68,088		$	1,100,042
Cumulative effect of change in accounting principle (as described in Note 2)	—		—			—			(15,186		)	—		—			(15,186		)
Balance, January 1, 2018	$	883	$	1,242,109		$	—		$	(227,166	)	$	942	$	68,088		$	1,084,856
Balance as of December 31, 2018																				$	896	$	1,329,391		$	—		$	(211,034	)	$	2,299		$	71,792		$	1,193,344
Exchange of Common OP Units for common stock																				—		66			—			—			—			(66		)	—
Issuance of common stock through exercise of options																				—		53			—			—			—			—			53
Issuance of common stock through employee stock purchase plan																				—		652			—			—			—			—			652
Compensation expenses related to restricted stock and stock options																				—		2,420			—			—			—			—			2,420
Repurchase of common stock or Common OP Units																				—		(53		)	—			—			—			—			(53		)
Adjustment for Common OP Unitholders in the Operating Partnership																				—		(56		)	—			—			—			56			—
Adjustment for fair market value of swap																				—		—			—			—			(931		)	—			(931		)
Consolidated net income																				—		—			—			113,309			—			7,226			120,535
Distributions																				—		—			—			(55,123		)	—			(3,516		)	(58,639		)
Other																				—		(63		)	—			—			—			—			(63		)
Balance as of March 31, 2019																				896		1,332,410			$	—		(152,848		)	1,368			75,492			1,257,318
Exchange of Common OP Units for Common Stock	1		161			—			—			—		(162		)	—			5		6,430			—			—			—			(6,435		)	—
Issuance of Common Stock through employee stock purchase plan	—		846			—			—			—		—			846			—		587			—			—			—			—			587
Issuance of Common Stock																				5		59,314			—			—			—			—			59,319
Compensation expenses related to restricted stock and stock options	—		4,541			—			—			—		—			4,541			—		2,625			—			—			—			—			2,625
Adjustment for Common OP Unitholders in the Operating Partnership	—		725			—			—			—		(725		)	—			—		(2,883		)	—			—			—			2,883			—
Adjustment for fair market value of swap	—		—			—			—			2,637		—			2,637			—		—			—			—			(1,610		)	—			(1,610		)
Consolidated net income	—		—			8			106,359			—		6,979			113,346			—		—			8			46,401			—			2,676			49,085
Distributions	—		—			(8		)	(97,646		)	—		(6,406		)	(104,060		)	—		—			(8		)	(55,757		)	—			(3,215		)	(58,980		)
Other	—		(335		)	—			—			—		—			(335		)	—		(870		)	—			—			—			—			(870		)
Balance, June 30, 2018	$	884	$	1,248,047		$	—		$	(218,453	)	$	3,579	$	67,774		$	1,101,831
Balance as of June 30, 2019																				$	906	$	1,397,613		$	—		$	(162,204	)	$	(242	)	$	71,401		$	1,307,474

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

Equity LifeStyle Properties, Inc.

Consolidated ~~Financial Statements.~~Statements of Changes in Equity

(amounts in thousands)

(unaudited)



	Common Stock		Paid-in Capital			Redeemable Perpetual Preferred Stock			Distributions in Excess of Accumulated Earnings			Accumulated Other Comprehensive Income (Loss)		Non- controlling interests – Common OP Units			Total Equity
Balance as of December 31, 2017	$	883	$	1,242,109		$	—		$	(211,980	)	$	942	$	68,088		$	1,100,042
Cumulative effect of change in accounting principle (ASC 606, Revenue Recognition)	—		—			—			(15,186		)	—		—			(15,186		)
Balance as of January 1, 2018	883		1,242,109			—			(227,166		)	942		68,088			1,084,856
Exchange of Common OP Units for common stock	—		80			—			—			—		(80		)	—
Issuance of common stock through employee stock purchase plan	—		503			—			—			—		—			503
Compensation expenses related to restricted stock and stock options	—		1,800			—			—			—		—			1,800
Adjustment for Common OP Unitholders in the Operating Partnership	—		782			—			—			—		(782		)	—
Adjustment for fair market value of swap	—		—			—			—			1,873		—			1,873
Consolidated net income	—		—			—			60,222			—		3,955			64,177
Distributions	—		—			—			(48,805		)	—		(3,205		)	(52,010		)
Other	—		(60		)	—			—			—		—			(60		)
Balance as of March 31, 2018	883		1,245,214			—			(215,749		)	2,815		67,976			1,101,139
Exchange of Common OP Units for Common Stock	1		81			—			—			—		(82		)	—
Issuance of Common Stock through employee stock purchase plan	—		343			—			—			—		—			343
Compensation expenses related to restricted stock and stock options	—		2,741			—			—			—		—			2,741
Adjustment for Common OP Unitholders in the Operating Partnership	—		(57		)	—			—			—		57			—
Adjustment for fair market value of swap	—		—			—			—			764		—			764
Consolidated net income	—		—			8			46,137			—		3,024			49,169
Distributions	—		—			(8		)	(48,841		)	—		(3,201		)	(52,050		)
Other	—		(275		)	—			—			—		—			(275		)
Balance as of June 30, 2018	$	884	$	1,248,047		$	—		$	(218,453	)	$	3,579	$	67,774		$	1,101,831

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

Equity LifeStyle Properties, Inc.

Consolidated Statements of Cash Flows

(amounts in thousands)

(unaudited)

Six Months Ended June 30,
2018 2017
Cash Flows From Operating Activities:
Consolidated net income $ 113,346
$ 107,537
Adjustments to reconcile Consolidated net income to Net cash provided by operating activities:
Depreciation 64,486
60,960
Amortization of in-place leases 2,945
1,990
Amortization of loan costs 1,772
1,788
Debt premium amortization (711 ) (1,166 )
Equity in income of unconsolidated joint ventures (2,808 ) (2,190 )
Distributions of income from unconsolidated joint ventures 1,732
1,270
Proceeds from insurance claims, net 1,809
4,482
Compensation expenses related to restricted stock and stock options

4,541
4,257
Revenue recognized from right-to-use contract upfront payments (3,800 ) (4,908 )
Commission expense recognized related to right-to-use contracts 1,810
2,202
Long-term incentive plan compensation 461
674
Recovery for uncollectible rents receivable 134
214
Changes in assets and liabilities:
Notes receivable activity, net 347
(282 )
Deferred commission expense (2,010 ) (2,280 )
Escrow deposits, goodwill and other assets 11,111
10,992
Accrued expenses and accounts payable 5,280
6,066
Deferred revenue – upfront payments from right-to-use contracts 7,106
7,004
Deferred revenue – right-to-use annual payments 2,874
2,742
Rents received in advance and security deposits 15,601
11,630
Net cash provided by operating activities 226,026
212,982
Cash Flows From Investing Activities:
Real estate acquisitions, net (53,289 ) (2,053 )
Investment in unconsolidated joint ventures (3,791 ) (2,267 )
Distributions of capital from unconsolidated joint ventures 110
530
Proceeds from insurance claims 2,335
590
Repayments of notes receivable 19,037
5,054
Issuance of notes receivable (4,919 ) (18,696 )
Capital improvements (81,377 ) (53,464 )
Net cash used in investing activities (121,894 ) (70,306 )
Cash Flows From Financing Activities:
Proceeds from stock options and employee stock purchase plan 846
764
Distributions:
Common Stockholders (92,008 ) (78,699 )
Common OP Unitholders (6,049 ) (5,942 )
Perpetual Preferred Stockholders (8 ) (4,613 )
Principal payments and mortgage debt payoff (23,964 ) (42,637 )
New mortgage notes payable financing proceeds 64,014
—
Line of Credit payoff (97,000 ) —
Line of Credit proceeds 67,000
—
Debt issuance and defeasance costs (1,688 ) —
Other (335 ) (149 )
Net cash used in financing activities (89,192 ) (131,276 )
Net increase in Cash and restricted cash 14,940
11,400
Cash and restricted cash, beginning of period 31,085
56,340
Cash and restricted cash, end of period $ 46,025
$ 67,740



	Six Months Ended June 30,
	2019			2018
Cash Flows From Operating Activities:
Consolidated net income	$	169,620		$	113,346
Adjustments to reconcile consolidated net income to net cash provided by operating activities:
Gain on sale of real estate, net	(52,507		)	—
Early debt retirement	1,491			—
Depreciation and amortization	76,648			67,431
Amortization of loan costs	1,768			1,772
Debt premium amortization	(232		)	(711		)
Equity in income of unconsolidated joint ventures	(4,759		)	(2,808		)
Distributions of income from unconsolidated joint ventures	2,008			1,732
Proceeds from insurance claims, net	4,422			1,809
Compensation expense related to restricted stock and stock options	5,045			4,541
Revenue recognized from right-to-use contract upfront payments (membership upgrade sales)	(4,195		)	(3,800		)
Commission expense recognized related to right-to-use contracts	1,867			1,810
Long-term incentive plan compensation	(3,608		)	461
Changes in assets and liabilities:
Notes receivable, net	(1,079		)	642
Deferred commission expense	(2,269		)	(2,010		)
Other assets, net	(8,275		)	10,895
Accounts payable and other liabilities	25,962			9,274
Deferred revenue – upfront payments from right-to-use contracts (membership upgrade sales)	8,879			7,106
Deferred revenue – right-to-use annual payments (membership subscriptions)	2,967			2,874
Rents and other customer payments received in advance and security deposits	20,932			15,601
Net cash provided by operating activities	244,685			229,965
Cash Flows From Investing Activities:
Real estate acquisitions, net	(38,463		)	(53,289		)
Proceeds from disposition of properties, net	77,746			—
Investment in unconsolidated joint ventures	—			(3,791		)
Distributions of capital from unconsolidated joint ventures	5,169			110
Proceeds from insurance claims	1,111			2,335
Repayments of notes receivable	—			13,823
Capital improvements	(121,444		)	(81,377		)
Net cash used in investing activities	(75,881		)	(122,189		)

The accompanying notes are an integral part of ~~these Consolidated Financial Statements.~~the consolidated financial statements.

Equity LifeStyle Properties, Inc.

Consolidated Statements of Cash Flows (continued)

(amounts in thousands)

(unaudited)

Six Months Ended June 30,
2018 2017
Supplemental Information:
Cash paid during the period for interest $ 52,658
$ 51,135
Building and other depreciable property – reclassification of rental homes 19,390
15,322
Escrow deposits and other assets – reclassification of rental homes (19,390 ) (15,322 )

Real estate acquisitions:
Investment in real estate, fair value $ (71,756 ) $ (7,985 )
Escrow deposits and other assets (9 ) —
Debt assumed 9,200
5,900
Debt financed 8,786
—
Accrued expenses and accounts payable 490
32
Real estate acquisitions, net $ (53,289 ) $ (2,053 )



	Six Months Ended June 30,
	2019			2018
Cash Flows From Financing Activities:
Proceeds from stock options and employee stock purchase plan	1,237			846
Gross proceeds from the issuance of common stock	59,319			—
Distributions:
Common Stockholders	(104,579		)	(92,008		)
Common OP Unitholders	(6,676		)	(6,049		)
Preferred Stockholders	(8		)	(8		)
Principal payments and mortgage debt repayment	(93,982		)	(23,964		)
New mortgage notes payable financing proceeds	—			64,014
Line of Credit payoff	—			(97,000		)
Line of Credit proceeds	—			67,000
Debt issuance and defeasance costs	(1,700		)	(1,688		)
Other	(932		)	(335		)
Net cash used in financing activities	(147,321		)	(89,192		)
Net increase in cash and restricted cash	21,483			18,584
Cash and restricted cash, beginning of period	68,974			35,631
Cash and restricted cash, end of period	$	90,457		$	54,215



	Six Months Ended June 30,
	2019			2018
Supplemental Information:
Cash paid for interest	$	51,744		$	52,658
Net investment in real estate – reclassification of rental homes	$	12,451		$	15,396
Other assets, net – reclassification of rental homes	$	(12,451	)	$	(15,396	)

Real estate acquisitions:
Investment in real estate	$	(58,871	)	$	(71,756	)
Other assets, net	(412		)	(9		)
Debt assumed	19,212			9,200
Debt financed	—			8,786
Other liabilities	1,608			490
Real estate acquisitions, net	$	(38,463	)	$	(53,289	)

Real estate dispositions:
Investment in real estate	$	35,572		$	—
Notes receivable, net	295			—
Other assets, net	97			—
Mortgage notes payable, net	(11,175		)	—
Other liabilities	450			—
Gain on sale of real estate, net	52,507			—
Real estate dispositions, net	$	77,746		$	—

The accompanying notes are an integral part of ~~these Consolidated Financial Statements.~~the consolidated financial statements.

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 ~~(“Subsidiaries”~~(the “Subsidiaries”), are referred to herein as “we,” “us,” "the Company," and “our.” We are a fully integrated owner and operator of lifestyle-oriented properties ("Properties") consisting primarily of manufactured home ("MH") ~~communities~~ and recreational vehicle ("RV") ~~resorts and campgrounds.~~communities. We provide our customers the opportunity to place ~~factory built~~factory-built homes, cottages, cabins or RVs on our ~~properties~~Properties either on a long-term or short-term basis. Our customers may lease individual developed areas ("Sites") or enter right-to-use contracts, which provide them access to specific Properties for limited stays.

~~Capitalized terms used~~Our Properties are owned primarily by the Operating Partnership and managed internally by wholly-owned 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 94.5% interest as of June 30, 2019. 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 ~~not defined herein~~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 ~~as defined~~recognized in ~~our Annual Report on Form 10-K for the year ended December 31, 2017 (“2017 Form 10-K”). These~~earnings.

The accompanying unaudited interim ~~Consolidated Financial Statements~~consolidated financial statements have been prepared pursuant to Securities and Exchange Commission (“SEC”) rules and ~~regulations.~~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 the ~~2017~~2018 Form 10-K.

~~The following notes~~Intercompany balances and transactions have been eliminated. All adjustments to the ~~unaudited~~ interim ~~Consolidated Financial Statements highlight significant changes to the notes included in the 2017 Form 10-K~~consolidated financial statements are of a normal, recurring nature and, ~~present interim disclosures as required by the SEC. The accompanying Consolidated Financial Statements reflect,~~ in the opinion of management, ~~all adjustments and estimates~~are necessary for a fair presentation of ~~the~~results for these interim ~~financial statements, which are of a normal, recurring nature.~~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 interim consolidated financial statements to conform with current year presentation.

Note 2 – Summary of Significant Accounting Policies


~~(a)~~	~~Consolidation~~

(a) Recently Adopted Accounting Pronouncements

In February 2016, the FASB issued ("ASU 2016-02") Leases. This new guidance, including the related subsequently issued ASUs, provides the principles for the recognition, measurement, presentation and disclosure of leases, including the requirement that lessees recognize right-of-use ("ROU") assets and lease liabilities for leases on the Consolidated Balance Sheets.

We ~~consolidate~~adopted the new lease standard effective January 1, 2019 and have elected to use January 1, 2019 as our ~~majority-owned Subsidiaries in which we have~~date of initial application. Results for reporting periods beginning January 1, 2019 are presented under the ~~ability~~new lease standard. We made an accounting policy election to ~~control~~not recognize ROU assets and lease liabilities for leases with a term of 12 months or less. We elected the ~~operations~~package of practical expedients permitted under the transition guidance within the new standard and ~~all variable interest entities ("VIEs") with respect~~were not required to ~~which we are~~reassess the ~~primary beneficiary. We have determined the Operating Partnership, which is our sole significant asset, meets~~following upon adoption: (i) whether an expired or existing contract met the definition of a ~~VIE. Therefore,~~lease, (ii) the lease classification at January 1, 2019 for existing leases and (iii) whether leasing costs previously capitalized as initial direct costs would continue to be amortized. Upon adoption, we consolidate the Operating Partnership. We also consolidate entities in which we have a direct or indirect controlling or voting interest. All significant intercompany balances and transactions have been eliminated in consolidation.

~~We apply the equity method of accounting to entities in which we do~~did not have a direct or indirect controlling interest or for variable interest entities where we are not considered the primary beneficiary, but can exercise influence over the entity with respect to its operations and major decisions. We apply the cost method of accounting when our investment is (i) minimal (typically less than 5.0%) and (ii) passive. Our exposure to losses associated with unconsolidated joint ventures is primarily limitedan adjustment to the ~~carrying value~~opening balance of retained earnings due to the election of these ~~investments. Accordingly, distributions from a joint venture in excess of our carrying value are recognized in earnings.~~


~~(b)~~	~~Identified Intangibles and Goodwill~~

As of both June 30, 2018 and December 31, 2017, the gross carrying amount of identified intangible assets and goodwill, a component of Escrow deposits, goodwill and other assets, net on our consolidated balance sheets, was approximately $12.1 million. As of both June 30, 2018 and December 31, 2017, this amount was comprised of approximately $4.3 million of identified intangible assets and approximately $7.8 million of goodwill. Accumulated amortization of identified intangible assets was approximately $3.0 million and $2.9 million as of June 30, 2018 and December 31, 2017, respectively.practical expedients.

As a lessor, we adopted the practical expedient that allowed us not to separate expenses reimbursed by our customers (“utility recoveries”) from the associated rental revenue if certain criteria were met. We assessed these criteria and concluded the timing and pattern of ~~June 30,~~transfer for rental revenue and the associated utility recoveries are the same and as our leases qualify as operating leases, we accounted for and presented rental revenue and utility recoveries as a single component under Rental income in our Consolidated Statements of Income and Comprehensive Income for 2019 and 2018. In addition, the new standard requires our expected credit loss related to the collectability of lease receivables to be reflected as an adjustment to the line item Rental income prospectively starting from January 1, 2019. For 2018, ~~and December 31, 2017,~~ the ~~gross carrying amount~~credit loss related to the collectability of ~~in-place~~ lease ~~intangible assets, a component of Buildings and other depreciable property on our consolidated balance sheets,~~receivables was approximately $84.4 million and $76.7 million, respectively. Accumulated amortization of in-place lease intangible assets was approximately $77.6 million and $76.5 million as of June 30, 2018 and December 31, 2017, respectively.recognized


~~(c)~~	~~Restricted Cash~~

As of both June 30, 2018 and December 31, 2017, Cash and restricted cash included approximately $5.3 million of restricted cash for the payment of capital improvements, insurance or real estate taxes pursuant to certain loan agreements.

Equity LifeStyle Properties, Inc.

Notes to Consolidated Financial Statements

Note 2 -– Summary of Significant Accounting Policies (continued)


~~(d)~~	~~Fair Value of Financial Instruments~~

~~Our financial instruments include notes receivable, accounts receivable, accounts payable, other accrued expenses, interest rate swaps~~in the line item Property operating and ~~mortgage notes payable. We disclose the estimated fair value~~maintenance and was not significant. The guidance regarding capitalization of ~~our financial instruments according to a fair value hierarchy (Level 1, 2 and 3).~~

~~Our mortgage notes payable and term loan, excluding deferred financing~~leasing costs of approximately $24.1 million and $23.7 million as of June 30, 2018 and December 31, 2017, respectively, had an aggregate carrying value of approximately $2,251.1 million and $2,193.7 million as of June 30, 2018 and December 31, 2017, respectively, and a fair value of approximately $2,230.7 million and $2,184.0 million as of June 30, 2018 and December 31, 2017, respectively. The fair value was measured using quoted prices and observable inputs from similar liabilities (Level 2). At June 30, 2018 and December 31, 2017, our cash flow hedge of interest rate risk included in Escrow deposits, goodwill and other assets, net was measured using quoted prices and observable inputs from similar assets and liabilities (Level 2). We consider our own credit risk as well as the credit risk of our counterparties when evaluating the fair value of our derivative. The fair values of our notes receivable approximate their carrying or contract values. We also utilize Level 2 and Level 3 inputs as part of our determination of the purchase price allocation for our acquisitions.


~~(e)~~	~~Revenue Recognition~~

~~Our revenue streams are predominantly derived from customers renting our Sites and are accounted for in accordance with ("ASC 840"),~~ ~~Leases~~, which include the following classifications on our Consolidated Statements of Income and Comprehensive Income: Community base rental income; Rental home income; Resort base rental income; and Utility and other income. Customers lease the Site in which their home is located, and either own or lease their home. Lease revenues for Sites and homes are accounted for as operating leases and recognized over the term of the respective lease or the length of a customer’s stay. A typical lease for the rental of a Site between us and the owner or renter of a home is month-to-month or for a one-year term, renewable upon the consent of both parties, or in some instances, as provided by statute.

~~All other classifications on our Consolidated Statements of Income and Comprehensive Income are accounted for under other applicable accounting standards.~~

We enter into right-to-use contracts that give the customer the right to a set schedule of usage at a specified group of Properties. Payments are deferred and recognized ratably over the one year period in which access to Sites at certain Properties are provided. Right-to-use upgrade contracts grant certain additional access rights to the customer and require upfront non-refundable payments. The right-to-use upfront non-refundable payments are recognized on a straight-line basis over 20 years. On January 1, 2018, we adopted (“ASU 2014-09”), ~~Revenue from Contracts with Customers.~~ ~~See~~ ~~Recently Adopted Accounting Pronouncements~~ ~~within Note 2 for further discussion.~~

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.


~~(f)~~	~~Recently Adopted Accounting Pronouncements~~

~~On January 1, 2018, the Company adopted on a prospective basis ("ASU 2017-01")~~ ~~Business Combinations~~: ~~Clarifying the Definition of a Business (Topic 805)~~. This guidance clarifies the definition of a business and provides a screen to determine when an integrated set of assets and activities is not considered a business and, thus, is accounted for as an asset acquisition rather than a business combination. The screen requires that when substantially all of the fair value of the gross assets acquired (or disposed of) is concentrated in a single identifiable asset or a group of similar identifiable assets, the set is not considered a business. Under this new guidance, transaction costs associated with asset acquisitions are capitalized, while transaction costs associated with business combinations are expensed as incurred. All of the acquisitions completed subsequent to January 1, 2018 met the screen and, therefore, were accounted for as asset acquisitions and, as such, the related transaction costs of $1.3 million were capitalized for the six months ended June 30, 2018.

~~On January 1, 2018, the Company adopted (“ASU 2016-18”)~~ ~~Statement of Cash Flows: Restricted Cash (Topic 230)~~. ASU 2016-18 requires companies to include restricted cash with cash and cash equivalents when reconciling the beginning-of-period and end-of-period total amounts shown on the statement of cash flows. The adoption of this guidance did not have any effect on ~~the Company's Consolidated Financial Statements.~~

~~Equity LifeStyle Properties, Inc.~~

~~Notes to Consolidated Financial Statements~~

~~Note 2 - Summary of Significant Accounting Policies (continued)~~

~~On January 1, 2018, the Company adopted (“ASU 2016-15”)~~ ~~Statement of Cash Flows: Classification of Certain Cash Receipts and Cash Payments (Topic 230)~~ ~~on a retrospective basis. ASU 2016-15 adds or clarifies guidance on the classification of certain cash receipts and payments in the statement of cash flows. The adoption of ASU 2016-15 impacted~~ our classification of proceeds from the settlement of insurance claims and distributions received from equity method investments. The retrospective adoption of this guidance resulted in the reclassification of $0.6 million of insurance proceeds from Operating Activities to Investing Activities and $0.5 million of distributions from equity method investments from Operating Activities to Investing Activities in our Statement of Cash Flows for the six months ended June 30, 2017.consolidated financial statements.

On January 1, ~~2018,~~2019, we ~~adopted ASU 2014-09, which is a comprehensive new revenue recognition model that requires revenue to be~~ recognized ~~in a manner to depict the transfer~~ROU assets of goods or services to a customer at an amount that reflects the consideration expected to be received in exchange for those goods or services. We applied the modified retrospective method to our right-to-use upgrade contracts$17.5 million and ~~related commissions that were not fully amortized as~~lease liabilities of January 1, 2018. Results for reporting periods beginning after January 1, 2018 are presented under ASU 2014-09, while prior period amounts are not adjusted and continue to be reported under the previous accounting standards. As a result of the cumulative impact of adopting this guidance, we recorded a net reduction to retained earnings of approximately $15.2$18.7 million ~~as of January 1, 2018 in Distributions in excess of accumulated earnings in~~on the Consolidated ~~Statement of Changes~~Balance Sheets, principally for our ground and office space leases, in ~~Equity. There have not been significant changes to our business processes, systems, or internal controls as a result of implementing~~which we are the standard. In addition to the information included within Note 2 regarding the impact of ASU 2014-09, also see Note 10, Reportable Segments, for further disaggregation of our various revenue streams by major source.lessee.

~~The cumulative effect adjustments resulting from~~For more disclosure on the adoption of ~~ASU 2014-09 as of January 1, 2018 were as follows:~~the new lease accounting standard, see Note 3. Leases.

(b) New Accounting Pronouncements

(amounts in thousands) Balance at December 31, 2017 Adjustment due to ASU 2014-09 Adoption Balance at January 1, 2018
Assets
Deferred commission expense $ 31,443
$ 8,200
$ 39,643
Liabilities
Deferred revenue-upfront payment from right-to-use contracts $ 85,596
$ 23,386
$ 108,982
Equity
Distribution in excess of accumulated earnings $ (211,980 ) $ (15,186 ) $ (227,166 )

~~The impact of ASU 2014-09 on the Company’s Consolidated Statements of Income and Comprehensive Income for the quarter ended June 30, 2018 was as follows:~~

(amounts in thousands, except per share data) As Reported Balances Without Adoption of ASU 2014-09 (a) Effect of Change Higher/(Lower)
Revenues
Right-to-use contract upfront payments, deferred, net $ (2,021 ) $ (1,286 ) $ 735
Total revenues $ 240,502
$ 241,237
$ (735 )

Expenses

Right-to-use contract commissions, deferred, net $ (262 ) $ (43 ) $ 219
Total expenses $ 192,946
$ 193,165
$ (219 )

Consolidated net income $ 49,169
$ 49,685
$ (516 )
Net income available for Common Stockholders $ 46,137
$ 46,629
$ (492 )
Earnings per Common Share - Basic $ 0.52
$ 0.53
$ (0.01 )
Earnings per Common Share - Fully Diluted $ 0.52
$ 0.53
$ (0.01 )

~~_____________________~~

~~(a) Represents the amounts that would have been reported under GAAP that existed prior to the January 1, 2018 adoption of ASU 2014-09.~~

~~Equity LifeStyle Properties, Inc.~~

~~Notes to Consolidated Financial Statements~~

~~Note 2 - Summary of Significant Accounting Policies (continued)~~

~~The impact of ASU 2014-09 on the Company’s Consolidated Statements of Income and Comprehensive Income for the six months ended June 30, 2018 was as follows:~~

(amounts in thousands, except per share data) As Reported Balances Without Adoption of ASU 2014-09 (a) Effect of Change Higher/(Lower)
Revenues
Right-to-use contract upfront payments, deferred, net $ (3,306 ) $ (1,837 ) $ 1,469
Total revenues $ 486,527
$ 487,996
$ (1,469 )

Expenses

Right-to-use contract commissions, deferred, net $ (286 ) $ 164
$ 450
Total expenses $ 375,989
$ 376,439
$ (450 )

Consolidated net income $ 113,346
$ 114,365
$ (1,019 )
Net income available for Common Stockholders $ 106,359
$ 107,323
$ (964 )
Earnings per Common Share - Basic $ 1.20
$ 1.21
$ (0.01 )
Earnings per Common Share - Fully Diluted $ 1.20
$ 1.21
$ (0.01 )

~~_____________________~~

~~(a) Represents the amounts that would have been reported under GAAP that existed prior to the January 1, 2018 adoption of ASU 2014-09.~~


~~(g)~~	~~New Accounting Pronouncements~~

In August ~~2017,~~2018, the FASB issued ("ASU ~~2017-12"~~2018-15")~~Derivatives and Hedging~~: ~~Targeted Improvements to~~ Customer's Accounting for ~~Hedging Activities (Topic 815)~~Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract. ASU ~~2017-12~~2018-15 provides ~~guidance about income statement classification~~clarity on the accounting for implementation costs of a cloud computing arrangement that is a service contract. The project stage (that is, preliminary project stage, application development stage, or post implementation stage) and ~~eliminates~~ the ~~requirement~~nature of the implementation costs determine which costs to ~~separately measure~~capitalize as an asset related to the service contract and ~~report hedge ineffectiveness. The entire change in fair value for qualifying hedge instruments including ineffectiveness will~~which ones to expense. This update also requires the capitalized implementation costs to be ~~recorded in Other comprehensive income ("OCI")~~expensed over the term of the arrangement and ~~amounts deferred in OCI will~~to be ~~reclassified to earnings~~presented in the same ~~income statement~~ line item in ~~which~~ the ~~earnings effect~~consolidated financial statements as the fees associated with the service of the hedged item is reported. The new guidance also amends the presentation and disclosure requirements. The intention is to align hedge accounting with companies' risk management strategies more closely, thereby simplifying the application of hedge accounting and increasing transparency as to the scope and results of hedging programs.arrangement. ASU ~~2017-12~~2018-15 is effective in fiscal years beginning after December 15, ~~2018,~~2019, including interim periods within those years. Early adoption is permitted. This guidance can be applied either retrospectively or prospectively to all implementation costs incurred after the date of adoption. We are currently in the process of evaluating the potential impact, if any, that the adoption of this standard may have on ~~our Consolidated Financial Statements~~the consolidated financial statements and related disclosures.

In June 2016, the FASB issued (“ASU 2016-13”) Financial Instruments - Credit Losses: Measurement of Credit Losses on Financial Instruments (Topic 326). ASU 2016-13 requires entities to measure all expected credit losses for financial assets held at the reporting date based on historical experience, current conditions, and reasonable and supportable forecasts. Entities will now use forward-looking information to better form their credit loss estimates. ASU 2016-13 also requires enhanced disclosures to help financial statement users better understand significant estimates and judgments used in estimating credit losses, as well as the credit quality and underwriting standards of an entity’s portfolio. ASU 2016-13 ~~will be~~is effective for annual reporting periods beginning after December 15, 2019. Early adoption is permitted. We are currently in the process of evaluating the potential impact, if any, that adoption of this standard may have on ~~our Consolidated Financial Statements~~the consolidated financial statements and related disclosures.

~~In February 2016,~~(c) Revenue Recognition

We account for certain revenue streams in accordance with Accounting Standard Codification (ASC) 606, Revenue from Contracts with Customers. Right-to-use contracts (also referred to as 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 ~~FASB issued ("ASU 2016-02")~~ ~~Leases. ASU 2016-02 amends the existing accounting standards for lease accounting, including requiring lessees~~one-year period in which access to recognize most leases on their balance sheets and making targeted changes to lessor accounting. ASU 2016-02 requires a modified retrospective transition approach for all leases existing at, or entered into after, the date of initial application, with an option to use certain transition relief. ASU 2016-02 will continue to classify leases as either finance or operating, with classification affecting the pattern of expense recognition in the statement of income. ASU 2016-02 will be effective for annual reporting periods beginning after December 15, 2018. As the lessor, we generate rental income and other income when customers rent the Sites at ~~our Properties. We~~certain Properties are provided. Right-to-use upgrade contracts grant certain additional access rights to the ~~lessee in other arrangements,~~customer and require non-refundable upfront payments. The non-refundable upfront payments are recognized on a straight-line basis over 20 years.

(d) Restricted Cash

As of June 30, 2019 and December 31, 2018, restricted cash consists of $27.5 million and $24.1 million, respectively, primarily related to cash reserved for ~~office space, ground leases~~customer deposits and ~~certain equipment. We are currently in the process of evaluating the potential impact, as both a lessor~~amounts escrowed for insurance and ~~a lessee, this standard may have on our Consolidated Financial Statements and related disclosures.~~ real estate taxes.

Equity LifeStyle Properties, Inc.

Notes to Consolidated Financial Statements

Note 3 – Leases

Lessor

Rental income derived from customers renting our Sites is accounted for in accordance with ASC 842, Leases, and is recognized over the term of the respective operating lease or the length of a customer's stay. Our MH community Sites and annual RV community Sites are leased on an annual basis. Seasonal Sites are leased to customers generally for one to six months. Transient Sites are leased to customers on a short-term basis. In addition, customers may lease homes that are located in our Properties.

The leases entered into between the customer and us for the 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 June 30, 2019
2019	$	60,067
2020	120,012
2021	65,321
2022	34,906
2023	19,714
Thereafter	84,254
Total	$	384,274

Lessee

We lease land under non-cancelable operating leases at 13 Properties expiring at various dates through 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 2026. For the quarters ended June 30, 2019 and 2018, total operating lease payments were $2.3 million and $2.1 million, respectively. For the six months ended June 30, 2019 and 2018, total operating lease payments were $4.6 million and $4.1 million, respectively.

The following table summarizes our future minimum rental payments, excluding variable costs, which are discounted by our incremental borrowing rate to calculate the lease liabilities for our operating leases:



(amounts in thousands)	As of June 30, 2019			As of December 31, 2018
2019	$	2,770		$	4,921
2020	4,801			4,801
2021	4,179			4,179
2022	2,103			2,103
2023	953			953
Thereafter	5,054			5,054
Total undiscounted rental payments	19,860			22,011
Less imputed interest	(2,895		)	(3,289		)
Total lease liabilities	$	16,965		$	18,722

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 $15.7 million and $17.0 million, respectively, as of June 30, 2019. The weighted average remaining lease term for our operating leases was 7 years and the weighted average incremental borrowing rate was 4.4% at June 30, 2019.

Equity LifeStyle Properties, Inc.

Notes to Consolidated Financial Statements

Note 34 – Earnings Per Common Share

The following table sets forth the computation of basic and diluted earnings per common share for the quarters and six months ended June 30, ~~2018~~2019 and ~~2017:~~2018:



	Quarters Ended June 30,				Six Months Ended June 30,
(amounts in thousands, except per share data)	2019		2018		2019		2018
Numerator:
Net income available for Common Stockholders – Basic	$	46,401	$	46,137	$	159,710	$	106,359
Amounts allocated to dilutive securities	2,676		3,024		9,902		6,979
Net income available for Common Stockholders – Fully Diluted	$	49,077	$	49,161	$	169,612	$	113,338
Denominator:
Weighted average Common Shares outstanding – Basic	90,156		88,549		89,969		88,537
Effect of dilutive securities:
Exchange of Common OP Units for Common Shares	5,643		5,826		5,691		5,827
Restricted stock and stock options	131		248		113		236
Weighted average Common Shares outstanding – Fully Diluted	95,930		94,623		95,773		94,600

Earnings per Common Share – Basic	$	0.51	$	0.52	$	1.78	$	1.20

Earnings per Common Share – Fully Diluted	$	0.51	$	0.52	$	1.77	$	1.20

Quarters Ended Six Months Ended
June 30, June 30,
(amounts in thousands, except per share data) 2018 2017 2018 2017
Numerator:
Net Income Available for Common Stockholders:
Net income available for Common Stockholders – basic $ 46,137
$ 39,498
$ 106,359
$ 96,385
Amounts allocated to dilutive securities 3,024
2,649
6,979
6,539
Net income available for Common Stockholders – fully diluted $ 49,161
$ 42,147
$ 113,338
$ 102,924
Denominator:
Weighted average Common Shares outstanding – basic 88,549
86,763
88,537
86,408
Effect of dilutive securities:
Exchange of Common OP Units for Common Shares 5,826
5,886
5,827
6,235
Stock options and restricted shares 248
414
236
398
Weighted average Common Shares outstanding – fully diluted 94,623
93,063
94,600
93,041

Earnings per Common Share – Basic:
Net income available for Common Stockholders $ 0.52
$ 0.46
$ 1.20
$ 1.12

Earnings per Common Share – Fully Diluted:
Net income available for Common Stockholders $ 0.52
$ 0.45
$ 1.20
$ 1.11

~~Equity LifeStyle Properties, Inc.~~

~~Notes to Consolidated Financial Statements~~

Note 45 – Common Stock and Other Equity Related Transactions

Common Stockholder Distribution Activity

The following quarterly distributions have been declared and paid to ~~common stockholders~~Common Stockholders and ~~non-controlling common operating partnership unit ("~~the limited partners of the Operating Partnership (the "Common OP ~~Unit"~~Unit holders") ~~holders for the six months ended June 30,~~since January 1, 2018.



Distribution Amount Per Share	For the Quarter Ended	Stockholder Record Date	Payment Date
$0.5500	March 31, 2018	March 30, 2018	April 13, 2018
$0.5500	June 30, 2018	June 29, 2018	July 13, 2018
$0.5500	September 30, 2018	September 28, 2018	October 12, 2018
$0.5500	December 31, 2018	December 28, 2018	January 11, 2019
$0.6125	March 31, 2019	March 29, 2019	April 12, 2019
$0.6125	June 30, 2019	June 28, 2019	July 12, 2019

Increase in Authorized Shares

On April 30, 2019, our stockholders approved an amendment to our charter to increase the number of shares of our common stock that we are authorized to issue from 200,000,000 to 400,000,000 shares.

Equity Offering Program

On October 26, 2018, 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 $200.0 million. As of June 30, ~~2018, approximately $150.0~~2019, we have $140.7 million of common stock available for issuance.

Equity LifeStyle Properties, Inc.

Notes to Consolidated Financial Statements

Note 5 – Common Stock ~~remained available for issuance~~and Other Equity Related Transactions (continued)

The following table presents the shares that were issued under the ~~at-the-market (“ATM”)~~current ATM equity offering ~~program.~~program during the six months ended June 30, 2019. There was no activity under the ATM equity offering program during the six months ended June 30, 2018.



	Six Months Ended June 30,
(amounts in thousands, except stock data)	2019
Shares of Common Stock sold	505,236
Weighted average price	$	117.41
Total gross proceeds	$	59,319
Commissions paid to sales agents	$	771

Exchanges

Subject to certain limitations, ~~holders of~~Common OP ~~Units~~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 six months ended June 30, 2019, 495,325 OP Units were exchanged for an equal number of shares of Common Stock. During the six months ended June 30, 2018, 13,838 OP Units were exchanged for an equal number of shares of Common Stock.

Note 56 – Investment in Real Estate

Acquisitions

On ~~April 20, 2018,~~May 29, 2019, we completed the acquisition of ~~Holiday Travel Park, a 613-site~~White Oak Shores Camping and RV Resort, a 455-site RV community located in ~~Holiday, Florida. The~~Stella, North Carolina, for a purchase price of $20.5 million. The acquisition was ~~$22.5 million, including $0.3 million~~funded with available cash.

On April 10, 2019, we completed the acquisition of ~~transaction costs, and~~Round Top RV Campground, a 391-site RV community located in Gettysburg, Pennsylvania, for a purchase price of $12.4 million. This acquisition was funded with available cash and ~~proceeds from our line~~a loan assumption of ~~credit.~~approximately $7.8 million, excluding mortgage premium of $0.2 million.

On March ~~15, 2018,~~25, 2019, we completed the ~~acquisition~~acquisitions of ~~Serendipity,~~Drummer Boy Camping Resort, a ~~425-site manufactured home~~465-site RV community located in ~~Clearwater, Florida. The~~Gettysburg, Pennsylvania, and Lake of the Woods Campground, a 303-site RV community located in Wautoma, Wisconsin, for a total purchase price ~~was $30.7 million, including $0.6 million~~ of ~~transaction costs, and was~~$25.4 million. These acquisitions were funded with available cash and a loan assumption of ~~$9.2~~approximately $10.8 million, ~~and new loan proceeds~~excluding mortgage premium of ~~$8.8~~$0.4 million.

Dispositions

On ~~March 8, 2018,~~January 23, 2019, we ~~completed~~closed on the ~~acquisition~~sale of ~~Kingswood, a 229-site manufactured home community~~five all-age MH communities located in ~~Riverview, Florida.~~Indiana and Michigan, collectively containing 1,463 sites, for $89.7 million. The ~~purchase price was $17.5~~assets and liabilities associated with the transaction were classifieds as held for sale on the Consolidated Balance Sheets as of December 31, 2018. We recognized a gain on sale of these Properties of $52.5 million ~~including $0.4 million~~during the first quarter of ~~transaction costs, and was funded with available cash.~~2019.

Equity LifeStyle Properties, Inc.

Notes to Consolidated Financial Statements

Note 67 – Investment in Unconsolidated Joint Ventures

The following table summarizes our ~~Investment~~investment in unconsolidated joint ventures (investment amounts in thousands with the number of Properties shown parenthetically as of June 30, ~~2018~~2019 and December 31, ~~2017)~~2018, respectively):


						Investment as of				Joint Venture Income/(Loss) for the Six Months Ended									Investment as of				Income/(Loss) for Six Months Ended
Investment	Location	Number of Sites ^(a)	Economic Interest ^(b)			June 30, 2018		December 31, 2017		June 30, 2018		June 30, 2017		Location	Number of Sites ^(a)	Economic Interest ^(b)			June 30, 2019		December 31, 2018		June 30, 2019		June 30, 2018
Meadows	Various (2,2)	1,077	50	%		$	526	$	307	$	819	$	1,130	Various (2,2)	1,077	50	%		$	346	$	346	$	800	$	819
Lakeshore	Florida (3,3)	720	(c)			2,435		2,530		123		147		Florida (3,3)	720	(c)			2,154		2,263		122		123
Voyager	Arizona (1,1)	1,801	50	%	^(d)	3,614		3,205		883		800		Arizona (1,1)	1,801	50	%	^(d)	414		3,135		2,925		883
Loggerhead	Florida	2,343	49	%		35,205		31,414		689		—		Florida	2,343	49	%		35,789		35,789		642		689
ECHO JV	Various	—	50	%		15,919		15,624		294		113		Various	—	50	%		16,492		16,222		270		294
		5,941				$	57,699	$	53,080	$	2,808	$	2,190		5,941				$	55,195	$	57,755	$	4,759	$	2,808

_____________________


(a)	Loggerhead sites represent marina slip count.


(b)	The percentages shown approximate our economic interest as of June 30, ~~2018.~~2019. Our legal ownership interest may differ.


(c)	Includes two joint ventures in which we own a 65% interest and Crosswinds joint venture in which we own a 49% interest.


(d)	Voyager joint venture primarily consists of a 50% interest in Voyager RV Resort and a 33% interest in the utility plant servicing the Property.

On March 29, 2018, the Crosswinds joint venture repaid a short-term loan to us in the amount of $13.8 million. We provided the loan to Crosswinds in conjunction with the formation of the joint venture in June 2017.

We received approximately $7.2 million and $1.8 million in distributions from ~~these~~our unconsolidated joint ventures for ~~both~~ the six months ended June 30, 2019 and 2018, respectively. Approximately $2.7 million of the distributions made to us exceeded our basis in unconsolidated joint ventures for the six months ended June 30, 2019 and, ~~2017. Approximately $0.3 million~~as such, were recorded as income from unconsolidated joint ventures. None of the distributions made to us exceeded our basis in joint ventures for the six months ended June 30, ~~2017, and as such were recorded as income from unconsolidated joint ventures. None of the distributions made to us exceed our basis in joint ventures for the six months ended June 30,~~ 2018.

Note 78 – Borrowing Arrangements

Mortgage Notes Payable

2019 Activity

During the three months ended March 31, 2019, we defeased mortgage debt of $11.2 million in conjunction with the disposition of the five MH Properties as disclosed in Note 6. Investment in Real Estate. These loans had a weighted average interest rate of 5.0% per annum.

During the three months ended June 30, 2019, we prepaid four loans secured by four properties (three MH and one RV), which were scheduled to mature in 2020. The loans had an outstanding principal balance of $66.8 million and a weighted average interest rate of 6.9% per annum. As part of the transaction, we incurred $1.4 million of prepayment penalties. We used the proceeds from the ATM and our available cash to fund the loan payments.

In connection with the acquisitions that closed during the six months ended June 30, 2019, we assumed mortgage debt of $18.6 million, excluding mortgage note premium of $0.6 million. These loans carry a weighted average interest rate of 5.4% per annum and mature between 2022 and 2024.

2018 Activity

During the three months ended March 31, 2018, we closed on one loan, secured by two RV ~~resorts,~~communities, for gross proceeds of approximately $64.0 million. The loan carries an interest rate of ~~4.83%~~4.8% per annum and matures in 2038.

In connection with the Serendipity acquisition that closed during the ~~first quarter of~~three months ended March 31, 2018, we assumed a loan of approximately $9.2 million and obtained additional financing of $8.8 million for a total mortgage debt, secured by the ~~manufactured home~~MH community, of $18.0 million with an interest rate of ~~4.75%~~4.8% that matures in 2039.

Equity LifeStyle Properties, Inc.

Notes to Consolidated Financial Statements

Note 8 – Borrowing Arrangements (continued)

Our mortgage notes payable is classified as Level 2 in the fair value hierarchy. The following table presents the fair value of ~~June 30, 2018 and December 31, 2017, we had outstanding~~our mortgage ~~indebtedness of approximately $2,028.5 million and $1,971.7 million, respectively, net of deferred financing costs.~~notes payable:



	As of June 30, 2019				As of December 31, 2018
(amounts in thousands)	Fair Value		Carrying Value		Fair Value		Carrying Value
Mortgage notes payable, excluding deferred financing costs	$	2,203,298	$	2,099,714	$	2,164,563	$	2,174,715

The weighted average interest rate on our outstanding mortgage indebtedness, including the impact of premium/discount amortization and loan cost amortization on mortgage indebtedness, ~~for the six months ended~~as of June 30, ~~2018~~2019, was approximately ~~4.7%~~4.5% per annum. The debt bears interest at stated rates ranging from ~~3.1%~~3.5% to 8.9% per annum and matures on various dates ranging from ~~2018~~2020 to 2041. The debt encumbered a total of ~~124~~116 and ~~120~~118 of our Properties as of June 30, ~~2018~~2019 and December 31, ~~2017,~~2018, respectively, and the carrying value of such Properties was approximately ~~$2,499.0~~$2,475.4 million and ~~$2,323.1~~$2,489.8 million, as of June 30, ~~2018~~2019 and December 31, ~~2017,~~2018, respectively.

Unsecured Line of Credit

During the six months ended June 30, 2019, we did not borrow or pay off amounts on our unsecured Line of Credit ("LOC"). During the six months ended June 30, 2018, we paid off our unsecured line of credit balance, including approximately $30.0 million outstanding as of December 31, 2017. As of June 30, 2019, the full capacity on our LOC remained available.

As of June 30, ~~2018,~~2019, we ~~are~~were in compliance in all material respects with the covenants in all our borrowing arrangements.

Note 9 – Derivative Instruments and Hedging Activities

Cash Flow Hedges of Interest Rate Risk

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. In connection with our $200.0 million senior unsecured term loan (the “Term Loan”), which has an interest rate of LIBOR plus 1.20% to 1.90% per annum, we entered into a three-year LIBOR Swap Agreement (the "Swap") allowing us to trade the variable interest rate on the Term Loan for a fixed interest rate. The Swap has a notional amount of $200.0 million of outstanding principal with an underlying LIBOR of 1.85% per annum and matures on November 1, 2020. Based on the leverage as of June 30, 2019, our spread over LIBOR was 1.20% resulting in an estimated all-in interest rate of 3.05% per annum.

Our derivative financial instrument is classified as Level 2 in the fair value hierarchy. The following table presents the fair value of our derivative financial instrument:



		As of June 30,		As of December 31,
(amounts in thousands)	Balance Sheet Location	2019		2018
Interest Rate Swap	Other assets, net	$	—	$	2,299
Interest Rate Swap	Accounts payable and other liabilities	$	242	$	—

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 six months ended June 30,					Location of (gain)/ loss reclassified from accumulated OCI into income	Amount of (gain)/loss reclassified from accumulated OCI into income for the six months ended June 30,
(amounts in thousands)	2019		2018			(amounts in thousands)	2019			2018
Interest Rate Swap	$	1,901	$	(2,544	)	Interest Expense	$	(640	)	$	93

Equity LifeStyle Properties, Inc.

Notes to Consolidated Financial Statements

Note 9 – Derivative Instruments and Hedging Activities (continued)

During the next twelve months through June 30, 2020, we estimate no material changes 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 June 30, 2019, we did not post any collateral related to this agreement.

Note 810 – Equity Incentive Awards

Our 2014 Equity Incentive Plan (the “2014 Plan”) was adopted by our Board of Directors on March 11, 2014 and approved by our stockholders on May 13, 2014. During the quarter ended March 31, 2019, 61,200 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 31, 2020, January 29, 2021, and January 31, 2022, respectively, and have a grant date fair value of $3.2 million. The remaining 50% are performance-based awards, and are valued using the closing price at the grant date when all the key terms and conditions are known to all parties. The 10,201 shares of restricted stock awarded in 2019 subject to 2019 performance goals have a grant date fair value of $1.1 million. Additionally, 11,711 shares of restricted stock awarded in 2018 subject to 2019 performance goals have a grant date fair value of $1.3 million.

During the quarter ended June 30, 2019, we awarded to certain members of our Board of Directors, 35,431 shares of restricted stock at a fair value of approximately $4.1 million. These shares are time-based awards subject to various vesting dates between October 30, 2019 and April 30, 2022.

Compensation expense related to restricted stock and stock options, reported in General and administrative on the Consolidated Statements of Income and Comprehensive Income, for the quarters ended June 30, 2019 and 2018, ~~and 2017~~ was ~~approximately~~$2.6 million and $2.7 million, ~~and $2.5 million~~respectively, and for the six months ended June 30, ~~2018~~2019 and ~~2017~~2018, was approximately ~~$4.5~~$5.0 million and ~~$4.3~~$4.5 million, respectively.

Our 2014 Equity Incentive Plan (the “2014 Plan”) was adopted by our Board of Directors on March 11, 2014 and approved by our stockholders on May 13, 2014. Grants under the 2014 Plan are approved by the Compensation Committee, which determines the individuals eligible to receive awards, the types of awards, and the terms, conditions and restrictions applicable to any award, except grants to directors which are approved by the Board of Directors. The Compensation Committee determines the vesting schedule, if any, of each restricted stock grant or stock option grant and the term of each stock option, which term shall not exceed ten years from the date of grant. Shares that do not vest are forfeited. Dividends paid on restricted stock are not returnable, even if the underlying stock does not entirely vest. A maximum of 3,750,000 shares of Common Stock were originally available for grant under the 2014 Plan. As of June 30, 2018, 2,934,810 shares remained available for grant.

On May 1, 2018, we awarded to certain members of our Board of Directors, 51,388 shares of Restricted Stock at a fair market value of approximately $4.6 million and Options to purchase 6,270 shares of common stock with an exercise price of $89.65 per share. The shares of common stock covered by these awards are subject to multiple tranches that vest between November 1, 2018 and May 1, 2021.

On February 1, 2018, we awarded 70,250 shares of restricted stock (the “2018 Awards”) at a fair market value of approximately $5.9 million to certain members of our senior management for their service in 2018. These restricted stock grants vest over a three-year vesting period, with one-third vesting on December 28, 2018 and the remaining two-thirds vesting on each of December 28, 2019 and December 28, 2020, respectively (the “Extended Vesting Portion”). One-half of the Extended Vesting Portion of the 2018 Awards provide solely for time-based vesting and will vest in equal installments on December 28, 2019 and December 28, 2020. The remaining one-half of the Extended Vesting Portion of the 2018 Awards provide for performance-based vesting and will vest, subject to the satisfaction of the performance conditions to be established by the Compensation Committee in the year of the vesting period, in equal installments on December 28, 2019 and December 28, 2020.

Additionally, on February 1, 2018, we awarded a one-time transition award of time-based restricted stock (the "Transition Awards") as a transition from our prior practice of granting annual restricted stock awards which vest in full on December 31 of the relevant grant year. On February 1, 2018, we awarded Transition Awards for 70,250 shares of common stock at a fair market value of approximately $5.9 million to certain members of our senior management. These Transition Awards are intended to mitigate the impact of a reduction in the realized pay for certain members of our senior management in 2018 and 2019 resulting from the three-year vesting period for the 2018 Awards. Two-thirds of each Transition Award will vest on December 28, 2018, and the remaining one-third will vest on December 28, 2019. The Transition Awards are not subject to performance goals. The Compensation Committee does not intend to replicate these Transition Awards in future years.

The fair market value of our restricted stock grants was determined by using the closing share price of our common stock on the date the shares were issued. Time-based restricted stock awards are recorded as stock-based compensation expense and paid in capital over the vesting period. Stock-based compensation for restricted stock awards with performance conditions will be recognized using the closing price of our common stock at the grant date when the key terms and conditions are known to all parties.

Note 911 – Commitments and Contingencies

~~Civil Investigation by Certain California District Attorneys~~

In November 2014, we received a civil investigative subpoena from the office of the District Attorney for Monterey County, California ("MCDA"), seeking information relating to, among other items, statewide compliance with asbestos and hazardous waste regulations dating back to 2005 primarily in connection with demolition and renovation projects performed by third-party contractors at our California Properties. We ~~responded by providing the information required by the subpoena.~~

On October 20, 2015, we attended a meeting with representatives of the MCDA and certain other District Attorneys' offices at which the MCDA reviewed the preliminary results of their investigation including, among other things, (i) alleged violations of asbestos and related regulations associated with approximately 200 historical demolition and renovation projects in California; (ii) potential exposure to civil penalties and unpaid fees; and (iii) next steps with respect to a negotiated resolution of the alleged

~~Equity LifeStyle Properties, Inc.~~

~~Notes to Consolidated Financial Statements~~

~~Note 9 – Commitments and Contingencies (continued)~~

violations. No legal proceedings have been instituted to date and we are involved in settlement discussions with the District Attorneys' offices. We continue to assess the allegations and the underlying facts, and at this time we are unable to predict the outcome of the investigation or reasonably estimate any possible loss.

~~Other~~

~~In addition to legal matters discussed above, we~~ are involved in various ~~other~~ legal and regulatory proceedings ("~~Other~~ Proceedings") arising in the ordinary course of business. ~~Other~~The Proceedings include, but are not limited to, legal claims made by employees, vendors and customers, and notices, consent decrees, information requests, and 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 ~~Other~~ 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.

Equity LifeStyle Properties, Inc.

Notes to Consolidated Financial Statements

Note 1012 – Reportable Segments

We have identified two reportable segments which are: (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 ~~are~~were from external customers and there iswas no customer who contributed 10% or more of our total revenues during the quarters and six months ended June 30, ~~2018~~2019 or ~~2017.~~2018.

The following tables summarize our segment financial information for the quarters and six months ended June 30, ~~2018~~2019 and ~~2017~~:2018:

Quarter Ended June 30, 2019



(amounts in thousands)	Property Operations			Home Sales and Rentals Operations			Consolidated
Operations revenues	$	233,848		$	11,836		$	245,684
Operations expenses	(116,893		)	(10,558		)	(127,451		)
Income from segment operations	116,955			1,278			118,233
Interest income	950			846			1,796
Depreciation and amortization	(35,197		)	(2,579		)	(37,776		)
Income (loss) from operations	$	82,708		$	(455	)	$	82,253
Reconciliation to consolidated net income:
Corporate interest income							$	7
Income from other investments, net							879
General and administrative							(9,225		)
Other expenses							(540		)
Interest and related amortization							(26,024		)
Equity in income of unconsolidated joint ventures							3,226
Early debt retirement							(1,491		)
Consolidated net income							$	49,085

Total assets	$	3,766,573		$	247,905		$	4,014,478
Capital improvements	$	28,501		$	40,502		$	69,003

Quarter EndedJune 30, 2018



(amounts in thousands)	Property Operations			Home Sales and Rentals Operations			Consolidated
Operations revenues	$	222,167		$	13,060		$	235,227
Operations expenses	(110,046		)	(12,234		)	(122,280		)
Income from segment operations	112,121			826			112,947
Interest income	823			1,033			1,856
Depreciation and amortization	(31,954		)	(2,391		)	(34,345		)
Income (loss) from operations	$	80,990		$	(532	)	$	80,458
Reconciliation to consolidated net income:
Corporate interest income							$	6
Income from other investments, net							3,413
General and administrative							(9,669		)
Other expenses							(367		)
Interest and related amortization							(26,285		)
Equity in income of unconsolidated joint ventures							1,613
Consolidated net income							$	49,169

Total assets	$	3,477,455		$	222,734		$	3,700,189
Capital improvements	$	26,602		$	23,459		$	50,061

(amounts in thousands)
Property
Operations

Home Sales
and Rentals
Operations
Consolidated
Operations revenues $ 222,167
$ 13,060
$ 235,227
Operations expenses (110,046 ) (12,234 ) (122,280 )
Income from segment operations 112,121
826
112,947
Interest income 823
1,033
1,856
Depreciation on real estate assets and rental homes (30,061 ) (2,391 ) (32,452 )
Amortization of in-place leases (1,893 ) —
(1,893 )
Income (loss) from operations $ 80,990
$ (532 ) $ 80,458
Reconciliation to consolidated net income:
Corporate interest income 6
Income from other investments, net 3,413
General and administrative (9,669 )
Other expenses (367 )
Interest and related amortization (26,285 )
Equity in income of unconsolidated joint ventures 1,613
Consolidated net income $ 49,169

Total assets $ 3,477,455
$ 222,734
$ 3,700,189
Capital improvements $ 26,602
$ 23,459
$ 50,061

Equity LifeStyle Properties, Inc.

Notes to Consolidated Financial Statements

Note 1012 – Reportable Segments (continued)

~~Quarter EndedJune 30, 2017~~

(amounts in thousands)
Property
Operations

Home Sales
and Rentals
Operations
Consolidated
Operations revenues $ 206,594
$ 11,811
$ 218,405
Operations expenses (102,649 ) (10,481 ) (113,130 )
Income from segment operations 103,945
1,330
105,275
Interest income 754
1,041
1,795
Depreciation on real estate assets and rental homes (27,609 ) (2,638 ) (30,247 )
Amortization of in-place leases (958 ) —
(958 )
Income (loss) from operations $ 76,132
$ (267 ) $ 75,865
Reconciliation to Consolidated net income:
Corporate interest income 3
Income from other investments, net 1,109
General and administrative (8,461 )
Other expenses (271 )
Interest and related amortization (24,822 )
Equity in income of unconsolidated joint ventures 1,040
Consolidated net income $ 44,463

Total assets $ 3,267,947
$ 217,411
$ 3,485,358
Capital improvements $ 18,534
$ 10,576
$ 29,110

Six Months Ended June 30, 2019



(amounts in thousands)	Property Operations			Home Sales and Rentals Operations			Consolidated
Operations revenues	$	479,864		$	22,173		$	502,037
Operations expenses	(225,863		)	(19,477		)	(245,340		)
Income from segment operations	254,001			2,696			256,697
Interest income	1,844			1,696			3,540
Depreciation and amortization	(70,740		)	(5,013		)	(75,753		)
Gain on sale of real estate, net	52,507			—			52,507
Income (loss) from operations	$	237,612		$	(621	)	$	236,991
Reconciliation to consolidated net income:
Corporate interest income							$	14
Income from other investments, net							1,865
General and administrative							(19,134		)
Other expenses							(967		)
Interest and related amortization							(52,417		)
Equity in income of unconsolidated joint ventures							4,759
Early debt retirement							(1,491		)
Consolidated net income							$	169,620

Total assets	$	3,766,573		$	247,905		$	4,014,478
Capital improvements	$	52,906		$	68,538		$	121,444

Six Months Ended June 30, 2018

(amounts in thousands)
Property
Operations

Home Sales
and Rentals
Operations
Consolidated
Operations revenues $ 453,183
$ 25,179
$ 478,362
Operations expenses (215,558 ) (23,307 ) (238,865 )
Income from segment operations 237,625
1,872
239,497
Interest income 1,631
1,940
3,571
Depreciation on real estate assets and rental homes (53,084 ) (10,690 ) (63,774 )
Amortization of in-place leases (2,945 ) —
(2,945 )
Income (loss) from operations $ 183,227
$ (6,878 ) $ 176,349
Reconciliation to consolidated net income:
Corporate interest income 241
Income from other investments, net 4,353
General and administrative (17,707 )
Other expenses (710 )
Interest and related amortization (51,988 )
Equity in income of unconsolidated joint ventures 2,808
Consolidated net income $ 113,346

Total assets $ 3,477,455
$ 222,734
$ 3,700,189
Capital improvements $ 47,870
$ 33,507
$ 81,377



(amounts in thousands)	Property Operations			Home Sales and Rentals Operations			Consolidated
Operations revenues	$	453,183		$	25,179		$	478,362
Operations expenses	(215,558		)	(23,307		)	(238,865		)
Income from segment operations	237,625			1,872			239,497
Interest income	1,631			1,940			3,571
Depreciation and amortization	(56,029		)	(10,690		)	(66,719		)
Income (loss) from operations	$	183,227		$	(6,878	)	$	176,349
Reconciliation to consolidated net income:
Corporate interest income							$	241
Income from other investments, net							4,353
General and administrative							(17,707		)
Other expenses							(710		)
Interest and related amortization							(51,988		)
Equity in income of unconsolidated joint venture							2,808
Consolidated net income							$	113,346

Total assets	$	3,477,455		$	222,734		$	3,700,189
Capital Improvements	$	47,870		$	33,507		$	81,377

Equity LifeStyle Properties, Inc.

Notes to Consolidated Financial Statements

Note 1012 – Reportable Segments (continued)

~~Six Months EndedJune 30, 2017~~

(amounts in thousands)
Property
Operations

Home Sales
and Rentals
Operations
Consolidated
Operations revenues $ 425,582
$ 22,685
$ 448,267
Operations expenses (199,906 ) (20,076 ) (219,982 )
Income from segment operations 225,676
2,609
228,285
Interest income 1,484
2,079
3,563
Depreciation on real estate assets and rental homes (55,062 ) (5,295 ) (60,357 )
Amortization of in-place leases (1,990 ) —
(1,990 )
Income (loss) from operations $ 170,108
$ (607 ) $ 169,501
Reconciliation to Consolidated net income:
Corporate interest income 5
Income from other investments, net 1,866
General and administrative (15,834 )
Other expenses (490 )
Interest and related amortization (49,701 )
Equity in income of unconsolidated joint ventures 2,190
Consolidated net income $ 107,537

Total assets $ 3,267,947
$ 217,411
$ 3,485,358
Capital improvements $ 31,731
$ 21,733
$ 53,464

The following table summarizes our financial information for the Property Operations segment for the quarters and six months ended June 30, ~~2018~~2019 and ~~2017~~: 2018:


	Quarters Ended						Six Months Ended						Quarters Ended June 30,						Six Months Ended June 30,
(amounts in thousands)	June 30, 2018			June 30, 2017			June 30, 2018			June 30, 2017			2019			2018			2019			2018
Revenues:
Community base rental income	$	128,579		$	121,964		$	255,318		$	242,656
Resort base rental income	55,231			50,055			119,485			111,123
Right-to-use annual payments	11,891			11,350			23,410			22,602
Right-to-use contracts current period, gross	3,944			3,798			7,106			7,004
Rental income													$	208,375		$	195,594		$	428,357		$	399,072
Right-to-use annual payments (membership subscriptions)													12,586			11,891			24,902			23,410
Right-to-use contracts current period, gross (membership upgrade sales)													5,041			3,944			8,879			7,106
Right-to-use contract upfront payments, deferred, net	(2,021		)	(1,321		)	(3,306		)	(2,096		)	(2,912		)	(2,021		)	(4,683		)	(3,306		)
Utility and other income	24,320			20,650			49,841			42,776
Other income													10,265			12,536			20,635			25,572
Ancillary services revenues, net	223			98			1,329			1,517			493			223			1,774			1,329
Total property operations revenues	222,167			206,594			453,183			425,582			233,848			222,167			479,864			453,183
Expenses:
Property operating and maintenance	80,091			72,901			154,999			140,955			83,576			80,091			160,320			154,999
Real estate taxes	13,440			13,943			27,575			27,980			15,107			13,440			30,430			27,575
Sales and marketing, gross	3,305			2,894			6,117			5,584			4,214			3,305			7,623			6,117
Right-to-use contract commissions, deferred, net	(262		)	(112		)	(286		)	(196		)	(389		)	(262		)	(580		)	(286		)
Property management	13,472			13,023			27,153			25,583			14,385			13,472			28,070			27,153
Total property operations expenses	110,046			102,649			215,558			199,906			116,893			110,046			225,863			215,558
Income from property operations segment	$	112,121		$	103,945		$	237,625		$	225,676		$	116,955		$	112,121		$	254,001		$	237,625

~~Equity LifeStyle Properties, Inc.~~

~~Notes to Consolidated Financial Statements~~

~~Note 10 – Reportable Segments (continued)~~

The following table summarizes our financial information for the Home Sales and Rentals Operations segment for the quarters and six months ended June 30, ~~2018~~2019 and ~~2017:~~2018:


	Quarters Ended				Six Months Ended				Quarters Ended June 30,				Six Months Ended June 30,
(amounts in thousands)	June 30, 2018		June 30, 2017		June 30, 2018		June 30, 2017		2019		2018		2019		2018
Revenues:
Rental income ^(a)									$	3,632	$	3,561	$	7,216	$	7,076
Gross revenue from home sales	$	9,105	$	7,833	$	17,414	$	14,860	7,825		9,105		14,300		17,414
Brokered resale revenues, net	369		346		651		588		379		369		657		651
Rental home income ^(a)	3,561		3,632		7,076		7,237
Ancillary services revenues, net	25		—		38		—		—		25		—		38
Total revenues	13,060		11,811		25,179		22,685		11,836		13,060		22,173		25,179
Expenses:
Property operating and maintenance									1,292		1,629		2,496		3,053
Cost of home sales	9,632		7,895		18,206		15,014		8,164		9,632		14,796		18,206
Home selling expenses	973		929		2,048		1,854		1,102		973		2,185		2,048
Rental home operating and maintenance	1,629		1,657		3,053		3,208
Total expenses	12,234		10,481		23,307		20,076		10,558		12,234		19,477		23,307
Income from home sales and rentals operations segment	$	826	$	1,330	$	1,872	$	2,609	$	1,278	$	826	$	2,696	$	1,872

______________________


(a)	Segment information ~~does not include~~includes income related to rental homes. Income related to Site rent on rental ~~income~~homes is included ~~in Community base rental income.~~within property operations.

~~Note 11 - Subsequent Events~~

On July 20, 2018, we completed the acquisition of Everglades Lakes, a 612-site MH community in Fort Lauderdale, Florida. The purchase price was $72.0 million and was funded with net proceeds from sales of common stock under our ATM equity offering program and proceeds from our line of credit.

During July 2018, we sold 252,864 shares of common stock as part of our ATM equity offering program at a weighted average price per share of $91.85, resulting in net cash proceeds of approximately $22.9 million. As of July 26, 2018, $126.8 million of common stock remains available for issuance under the ATM equity offering program.

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~~consolidated financial statements and related ~~Notes~~notes included ~~elsewhere~~ in this Quarterly Report on Form 10-Q and in our Annual Report on Form 10-K for the year ended December 31, ~~2017, and with~~2018 ("2018 Form 10-K"), as well as information in the ~~information under the heading~~ "Management's Discussion and Analysis of Financial Condition and Results of Operations" in our ~~Annual Report on~~2018 Form ~~10-K for the year ended December 31, 2017.~~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 and operator of lifestyle-oriented properties (“Properties”) consisting primarily of manufactured home ("MH") ~~communities~~ and recreational vehicle ("RV") ~~resorts and campgrounds.~~communities. As of June 30, ~~2018,~~2019, we owned or had an ownership interest in a portfolio of ~~409~~413 Properties located throughout the United States and Canada containing ~~152,937~~155,973 Sites. These ~~properties~~Properties are located

Management's Discussion and Analysis (continued)

in 3233 states and British Columbia, with more than 90 Properties with lake, river or ocean frontage and more than ~~100~~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 ~~increasing operating cash flows.~~delivering value for both customers and stockholders. We seek growth in earnings, funds from operations ("FFO") and cash flows by enhancing the profitability and operation of our Properties and investments. We seek to accomplish this by attracting ~~high- quality customers to our Properties~~ and retaining ~~these~~high quality customers, who take pride in ~~the Property~~our Properties and in their homes, and efficiently managing our Properties ~~to increase operating margins~~ by increasing occupancy, maintaining competitive market rents and controlling expenses.

We believe that demand from baby boomers for manufactured housing and RV ~~resorts~~communities will continue to outpace supply for several years. We believe these individuals, seeking an active lifestyle, will continue to drive the market for ~~second home~~second-home sales as vacation properties, investment opportunities, or retirement retreats. The entitlement process to develop new MH and RV communities is extremely restrictive. As a result, there have been few new communities developed in our target geographic markets. We believe it is likely that over the next decade, we will continue to see high levels of ~~second home~~second-home sales and that ~~resort~~manufactured homes and cottages in our Properties will continue to provide a viable second-home alternative to site-built homes.

We also believe that our Properties and our business model provide an opportunity for increased cash flows and appreciation in value. These may be achieved through ~~increases in rental~~increasing occupancy and ~~occupancy rates,~~maintaining market rents, as well as expense controls, expansion of existing Properties and opportunistic acquisitions. We actively seek to acquire and are currently engaged in various stages of negotiations relating to the possible acquisition of additional properties, which may include contracts outstanding to acquire such properties that are subject to the satisfactory completion of our due diligence review.

We generate the majority of our revenues from customers renting our ~~Sites,~~individual developed areas ("Sites"), or entering into right-to-use contracts (also referred to as membership ~~products)~~subscriptions), which provide our customers access to specific Properties for limited stays. Our MH community Sites and annual RV ~~resort~~community Sites are leased on an annual basis. Seasonal Sites are leased to customers generally for one to six months. Transient 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 have interests in joint venture Properties for which revenue is classified as Equity in income from unconsolidated joint ventures inon the Consolidated Statements of Income and Comprehensive Income.

The following table shows the breakdown of our Sites by type ~~is as follows~~ (amounts are approximate):



		Total Sites as of June 30, ~~2018~~2019
MH Community Sites	~~71,800~~	72,000
~~Resort~~RV Community Sites:
Annual	~~28,400~~	30,400
Seasonal	~~11,200~~	11,300
Transient	~~11,400~~	12,100
~~Right-to-use~~Thousand Trails portfolio ⁽¹⁾	~~24,200~~	24,300
Joint Ventures ⁽²⁾		5,900
	~~152,900~~	156,000

_________________________


⁽¹⁾	Primarily utilized to service the approximately ~~110,400~~115,400 membership customers who have entered into ~~a Thousand Trails Camping Pass.~~right-to-use contracts (membership subscriptions). Includes approximately 5,800 Sites rented on an annual basis.


⁽²⁾	~~Joint ventures have~~Includes approximately 2,700 annual Sites, 400 seasonal Sites, and 500 transient Sites and ~~includes~~ approximately 2,300 marina slips.

~~Management's Discussion (continued)~~

In our Home Sales and Rental Operations business, our revenue streams include home sales, home rentals, brokerage services and ancillary activities. We generate revenue through home sales and rental operations by selling or leasing ~~Site Set~~factory-built homes that are located in Properties owned and managed by us. We continue to focus on our rental operations, as we believe renting our vacant ~~new~~ homes represents an attractive source of occupancy and ~~the~~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"). We ~~provide~~offer home sale brokerage services to residents of our Properties who move from a Property but do not relocate their home. In addition, we operate ancillary activities at certain Properties, 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~~third party lender programs that provide subsidized financing to customers and often require the community owner to guarantee customer defaults. ~~Third-party~~Third party lender programs have

Management's Discussion and Analysis (continued)

stringent underwriting criteria, sizable down payment requirements, short loan amortization and high interest rates. We have a limited program under which we purchase loans made by an unaffiliated lender to purchasers of homes at our Properties.

In addition to ~~Net~~net income computed in accordance with GAAP, we assess and measure our overall financial and operating performance using certain Non-GAAP supplemental measures, which include: (i) FFO, (ii) Normalized funds from operations ("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~~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.

Results Overview

For the quarter ended June 30, 2019, Net income available for Common Stockholders increased ~~$6.6~~$0.3 million to $46.4 million, or ~~$0.07~~$0.51 per fully diluted Common Share, compared to $46.1 million, or $0.52 per fully diluted Common Share, for the ~~quarter~~same period in 2018. For the six months ended June 30, ~~2018, compared to $39.5 million, or $0.45 per Common Share for the quarter ended June 30, 2017.~~2019, Net income available for Common Stockholders increased ~~$10.0~~$53.3 million, or ~~$0.09~~$0.57 per fully diluted Common Share, to $159.7 million, or $1.77 per fully diluted Common Share, compared to $106.4 million, or $1.20 per fully diluted Common Share, for the ~~six months ended June 30, 2018, compared to $96.4 million, or $1.11 per Common Share for the six months ended June 30, 2017.~~same period in 2018.

For the quarter ended June 30, ~~2018,~~2019, FFO available for Common Stock and OP Unit holders increased ~~$10.7~~$4.2 million, or ~~$0.09~~$0.04 per fully diluted Common Share, to $89.8 million, or $0.94 per fully diluted Common Share, compared to $85.6 million, or $0.90 per ~~Common Share, compared to $74.9 million, or $0.81 per~~fully diluted Common Share, for the same period in ~~2017.~~2018. For the six months ended June 30, ~~2018,~~2019, FFO available for Common Stock and OP Unit holders increased ~~$15.8~~$14.0 million, or $0.13 per fully diluted Common Share, to $197.8 million or $2.07 per fully diluted Common Share, compared to $183.8 million or $1.94 per ~~Common Share, compared to $168.0 million, or $1.81 per~~fully diluted Common Share, for the same period in ~~2017.~~2018.

For the quarter ended June 30, ~~2018,~~2019, Normalized FFO available for Common Stock and OP Unit holders increased ~~$8.7~~$8.1 million, or ~~$0.08~~$0.07 per fully diluted Common Share, to $91.9 million, or $0.96 per fully diluted Common Share, compared to $83.8 million, or $0.89 per ~~Common Share, compared to $75.1 million, or $0.81 per~~fully diluted Common Share, for the same period in ~~2017.~~2018. For the six months ended June 30, ~~2018,~~2019, Normalized FFO available for Common Stock and OP Unit holders increased ~~$13.4~~$17.9 million or ~~$0.11~~$0.16 per fully diluted Common Share, to $199.6 million, or $2.08 per fully diluted Common Share, compared to $181.7 million or $1.92 per ~~Common Share, compared to $168.3 million, or $1.81 per~~fully diluted Common Share, for the same period in ~~2017.~~2018.

For the quarter ended June 30, ~~2018,~~2019, our Core Portfolio property operating revenues, ~~in our Core Portfolio,~~ excluding deferrals, ~~were up $11.6 million, or 5.6%~~increased 4.9% and property operating expenses, ~~in our Core Portfolio,~~ excluding deferrals and property management, ~~were up $5.4 million, or 6.0%~~increased 4.5%, from the ~~quarter ended June 30, 2017,~~same period in 2018, resulting in an increase in ~~our Income~~income from property operations, excluding deferrals and property management, of ~~$6.2 million, or~~ 5.2%~~, from~~ compared to the ~~quarter ended June 30, 2017.~~same period in 2018. For the six months ended June 30, ~~2018,~~2019, our Core Portfolio property operating revenues, ~~in our Core Portfolio,~~ excluding deferrals, ~~were up $23.9 million, or 5.6%~~increased 4.4% and property operating expenses, ~~in our Core Portfolio,~~ excluding deferrals and property management, ~~were up $11.9 million or 6.8% for~~increased 3.5% from the ~~six months ended June 30,~~same period in 2018, resulting in an increase in ~~our Income~~income from property operations, excluding deferrals and property management, of ~~$12.0 million or 4.8% from~~5.1% compared to the ~~six months ended June 30, 2017.~~same period in 2018.

We ~~continue to~~ focus on the quality of occupancy growth by increasing the number of manufactured homeowners in our Core ~~Portfolio.~~Portfolio over the long term. There may be fluctuations in the sources of occupancy gains depending on local market conditions, availability of vacant sites and success with converting renters to home owners. Our Core Portfolio average occupancy ~~consists of occupied home Sites~~includes both homeowners and renters in our MH communities ~~(both homeowners and renters)~~ and was ~~94.7%~~95.4% for the quarter ended June 30, ~~2018,~~2019, compared to ~~94.6%~~95.3% for the quarter ended March 31, ~~2018~~2019 and ~~94.2%~~94.9% for the quarter ended June 30, ~~2017. During the quarter ended~~2018. As of June 30, ~~2018, we increased occupancy of manufactured homes within~~2019, our Core Portfolio ~~by 63~~occupancy increased 126 Sites with an increase in homeowner occupancy of ~~150~~79 Sites compared to occupancy as of March 31, ~~2018.~~2019. By comparison, ~~as of June 30, 2017,~~ our Core Portfolio occupancy increased ~~114~~61 Sites with an increase in homeowner occupancy of ~~204 Sites.~~

~~Management's Discussion (continued)~~

145 Sites from the same period in 2018. Additionally, for both the quarter and six months ended June 30, 2019, we have experienced rental rate increases, contributing to a 4.5% growth in community base rent compared to the same period in 2018.

We ~~have experienced growth in revenues~~continue to grow RV rental income in our Core RV Portfolio as a result of our ability to increase ~~rental~~ rates and occupancy. RV ~~revenues~~rental income in our Core Portfolio for the quarter ended June 30, ~~2018 were 7.7%~~2019 was 4.1% higher than the ~~quarter ended June 30, 2017.~~same period in 2018. Annual and seasonal ~~and transient revenues~~rental income for the quarter ended June 30, ~~2018~~2019 increased ~~7.0%~~6.0% and 4.0%, ~~11.8% and 8.3%, respectively, from~~respectively. Transient rental income declined 1.1% for the quarter ended June 30, ~~2017.~~2019 compared to the same period in 2018. RV ~~revenues~~rental income in our Core Portfolio for the six months ended June 30, ~~2018 were 7.6%~~2019 was 4.2% higher than the ~~six months ended June 30, 2017.~~same period in 2018. Annual and seasonal ~~and transient revenues~~rental income for the six months ended June 30, ~~2018~~2019 increased ~~6.9%~~6.1% and 3.1%, ~~9.6% and 7.7%, respectively, from~~respectively. Transient rental income declined 0.8% for the six months ended June 30, ~~2017.~~

~~We continue~~2019 compared to ~~build on our successful multi-channel marketing campaigns, incorporating social media~~the same period in 2018. The decrease in transient rental income for both the quarter and ~~advanced marketing analytics. During the quarter~~six months ended June 30, ~~2018,~~2019 was mainly due to weather related events at a limited number of Properties.

Management's Discussion and Analysis (continued)

We experienced growth in our ~~RV revenue through digital channels increased 15% and~~membership base within our sales of online camping passes increased 42% compared to the quarter ended June 30, 2017. Our summer marketing campaigns are aimed at strengthening the commitment with our customer. We have increased the awareness of our product offerings and year over year we have seen an increase in social media fans of 20%.

~~We see high demand for our homes and communities. We closed 146 new home sales in the quarter ended June 30, 2018 compared to 120~~Thousand Trails portfolio during the quarter ended June 30, ~~2017~~2019. We sold approximately 6,600 Thousand Trails camping passes in the quarter and ~~276 new home sales in~~10,200 for the six months ended June 30, ~~2018 compared to 240 during the six months ended June 30, 2017. The new home sales during~~2019, an increase of 13.2% and 14.2% over the quarter and six months ended June 30, 2018, ~~were primarily~~respectively. In addition, we sold 749 membership upgrades during the quarter ended June 30, 2019, 19.8% more than the same period in 2018. Our customers are increasingly choosing self-service options to complete their transactions with us. During the quarter ended June 30, 2019, our ~~Arizona, Florida, Colorado~~total Core RV rental income through digital channels increased 21.0% and ~~California communities.~~our sales of online camping passes increased 27.6% compared to the same period in 2018.

Demand for our homes and communities remains strong as evidenced by factors including our high occupancy levels. We closed 117 new home sales during the quarter ended June 30, 2019 compared to 146 during the quarter ended June 30, 2018 and 208 new home sales during the six months ended June 30, 2019 compared to 276 during the six months ended in June 30, 2018. The decrease in new home sales from the same period in the prior year was mainly due to certain areas of our portfolio reaching historically high occupancy levels. We continue to believe renting our vacant homes represents an attractive source of occupancy and an opportunity to convert the renter to a homebuyer in the future.

As of June 30, ~~2018,~~2019, we had ~~4,282~~4,013 occupied rental homes in our Core MH communities, including ~~264~~298 homes rented through our ECHO ~~joint venture. Home~~JV. Our Core Portfolio income from rental ~~program net operating income was approximately $7.8 million,~~operations, net of ~~rental asset~~ depreciation, ~~expense of approximately $2.4~~was $7.6 million for the quarter ended June 30, ~~2018,~~2019 and ~~approximately $8.2 million, net of rental asset depreciation expense of approximately $2.6~~$7.3 million for the quarter ended June 30, ~~2017.~~2018. Approximately ~~$8.2~~$7.8 million ~~and $8.8 million~~ of ~~home~~ rental operations revenue related to Site rental was included ~~in Community~~within community base rental income in our Core Portfolio for both the quarters ended June 30, ~~2018~~2019 and ~~2017, respectively. For the six months ended June 30, 2018 and 2017, home~~2018. Our Core Portfolio income from rental ~~program net operating income was approximately $15.6 million and $16.4 million, respectively,~~operations, net of ~~rental asset~~ depreciation, ~~expense of approximately $4.9~~was $15.2 million for the six months ended June 30, ~~2018~~2019 and ~~$5.3~~$14.7 million for the six months ended June 30, ~~2017.~~2018. Approximately ~~$16.5~~$15.5 million and ~~$17.6~~$15.6 million of ~~home~~ rental operations revenue related to Site rental was included in ~~Community~~community base rental income in our Core Portfolio for the six months ended June 30, ~~2018~~2019 and ~~six months ended June 30, 2017,~~2018, respectively.

Our gross investment in real estate increased approximately ~~$134.0~~$163.4 million to ~~$5,049.8~~$5,436.9 million as of June 30, ~~2018~~2019 from ~~$4,915.8~~$5,273.5 million as of December 31, ~~2017,~~2018, primarily due to ~~the~~new acquisitions ~~of Kingswood, Serendipity~~ and ~~Holiday Travel Park, as well as~~ capital ~~expenditures during the six months ended June 30, 2018.~~expenditures.

The following chart lists ~~both~~ the Properties acquired or ~~invested in~~sold from January 1, ~~2017~~2018 through June 30, ~~2018, which represents Non-Core Properties;~~2019 and Sites added through expansion opportunities at our existing Properties.



Property	Location	Type of Property	Transaction Date	Sites^(a)

Total Sites as of January 1, ~~2017~~2018				~~146,610~~	151,323
Acquisitions:
~~Paradise Park - Largo~~	~~Largo, Florida~~	MH	~~May 10, 2017~~	~~108~~
~~Bethpage Camp Resort~~	~~Urbanna, Virginia~~	RV	~~November 15, 2017~~	~~1,034~~
~~Grey's Point Camp~~	~~Topping, Virginia~~	RV	~~November 15, 2017~~	~~728~~
Kingswood	Riverview, Florida	MH	March 8, 2018	229
Serendipity	Clearwater, Florida	MH	March 15, 2018	425
Holiday Travel Park	Holiday, Florida	RV	April 20, 2018	613
~~Joint Venture:~~Everglades Lakes
~~Crosswinds~~	~~St. Petersburg,~~Fort Lauderdale, Florida	MH	~~June 15, 2017~~July 20, 2018	~~376~~	612
~~Loggerhead~~Sunseekers RV Resort	~~Multiple,~~North Fort Myers, Florida	~~Marina~~RV	~~August 8, 2017~~	~~2,343~~
~~Expansion Site Development and other:~~
~~Net Sites added (reconfigured) in 2017~~				~~124~~
~~Net Sites added (reconfigured) in~~September 21, 2018	241
Timber Creek RV Resort	Westerly, Rhode Island	RV	~~347~~
~~Total Sites as of June 30,~~November 20, 2018	364
Palm Lake	Riviera Beach, Florida	MH	~~152,937~~December 13, 2018	915
King Nummy Trail Campground	Cape May Court House, New Jersey	RV	December 20, 2018	313
Drummer Boy Camping Resort	Gettysburg, Pennsylvania	RV	March 25, 2019	465
Lake of the Woods Campground	Wautoma, Wisconsin	RV	March 25, 2019	303
Round Top RV Campground	Gettysburg, Pennsylvania	RV	April 10, 2019	391
White Oak Shores Camping and RV Resort	Stella, North Carolina	RV	May 29, 2019	455

Expansion Site Development:
~~(a)~~Sites added in 2018	~~Loggerhead sites represent marina slip count.~~				419
Sites added in 2019					373

Site Reconfigured, net					(5)

Dispositions:
Hoosier Estates		Lebanon, Indiana	MH	January 23, 2019	(288)
Lake in the Hills		Auburn Hills, Michigan	MH	January 23, 2019	(238)
North Glen Village		Westfield, Indiana	MH	January 23, 2019	(282)
Oak Tree Village		Portage, Indiana	MH	January 23, 2019	(361)
Swan Creek		Ypsilanti, Michigan	MH	January 23, 2019	(294)
Total Sites as of June 30, 2019					155,973

Management's Discussion and Analysis (continued)

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 ~~the investor~~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

~~Management's Discussion (continued)~~

of recurring annual cash flow 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~~property operations and Core Portfolio, FFO, Normalized FFO and Income from ~~Rental Operation,~~rental operations, net of depreciation.

We believe investors should review Income from ~~Property Operations~~property operations and Core Portfolio, FFO, Normalized FFO and Income from ~~Rental Operations,~~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 and 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 ~~manufactured home~~MH and RV communities. Income from property operations represents rental income, utility and other income and right-to-use income less property and rental home operating and maintenance expenses, real estate ~~tax,~~taxes, sales and marketing expenses and property management expenses. Income from property operations, excluding deferrals and property management, represents income from property operations excluding property management expenses and the impact of the GAAP deferral of right-to-use contract upfront payments and related commissions, net. For comparative purposes, 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 since ~~December 31, 2016.~~January 1, 2018. 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 ~~(or Acquisitions)~~ includes all Properties that were not owned and operated during all of ~~2017~~2018 and ~~2018. This includes, but is not limited to, three properties acquired during 2018, three properties acquired during 2017 and~~2019, including Fiesta Key and Sunshine Key RV ~~Resorts.~~communities.

Funds from Operations ("FFO") and Normalized Funds from Operations ("Normalized FFO")

We define FFO as net income, computed in accordance with GAAP, excluding gains ~~and actual~~ or ~~estimated~~ losses from sales of properties, ~~plus real estate related~~ depreciation and amortization ~~impairments, if any,~~related to real estate, impairment charges, and ~~after~~ adjustments ~~for~~to reflect our share of FFO of unconsolidated ~~partnerships and~~ joint ventures. Adjustments for unconsolidated ~~partnerships and~~ 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 upfront non-refundable payments from the entry of right-to-use contracts. In accordance with GAAP, the upfront non-refundable payments and related commissions are deferred and amortized over the estimated customer life. Although the NAREIT definition of FFO does not address the treatment of non-refundable right-to-use 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 the following non-operating income and expense items: a) gains and losses from early debt extinguishment, including prepayment penalties and defeasance ~~costs;~~costs, and b) ~~acquisition and other transaction costs related to business combinations; and c)~~ 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 ~~depreciation, amortization, impairments, if any, and actual or estimated~~ gains or losses from sales of properties, depreciation and amortization related to real estate ~~all of~~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 operations. For example, we believe that excluding the early extinguishment of debt, ~~property acquisition~~including prepayment penalties and ~~other transaction~~defeasance costs ~~related to business combinations~~ from Normalized FFO allows investors, analysts and our management to assess the sustainability of operating performance in future periods because these costs do not affect the future operations of the properties. In some cases, we provide information about identified non-cash components of FFO and Normalized FFO because it allows investors, analysts and our management to assess the impact of those items.

Management's Discussion and Analysis (continued)

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

~~Management's Discussion (continued)~~

expense on rental homes. We believe this measure is meaningful for investors as it provides a more 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 flow from operating activities, determined in accordance with GAAP, as a measure of our liquidity, nor is it indicative of funds available to fund our cash needs, including our ability to make cash distributions.

The following table reconciles Net income available for Common Stockholders to ~~Income~~income from property ~~operations for the quarters and six months ended June 30, 2018 and June 30, 2017~~ ~~(amounts in thousands)~~:operations:


	Quarters ended June 30,						Six Months Ended June 30,						Quarters Ended June 30,						Six Months Ended June 30,
	2018			2017			2018			2017
(amounts in thousands)													2019			2018			2019			2018
Computation of Income from Property Operations:
Net income available for Common Stockholders	$	46,137		$	39,498		$	106,359		$	96,385		$	46,401		$	46,137		$	159,710		$	106,359
Redeemable perpetual preferred stock dividends	8			2,316			8			4,613
Income allocated to non-controlling interests - Common OP Units	3,024			2,649			6,979			6,539
Redeemable preferred stock dividends													8			8			8			8
Income allocated to non-controlling interests – Common OP Units													2,676			3,024			9,902			6,979
Equity in income of unconsolidated joint ventures	(1,613		)	(1,040		)	(2,808		)	(2,190		)	(3,226		)	(1,613		)	(4,759		)	(2,808		)
Income before equity in income of unconsolidated joint ventures	47,556			43,423			110,538			105,347			45,859			47,556			164,861			110,538
Gain on sale of real estate, net													—			—			(52,507		)	—
Total other expenses, net	65,391			61,852			128,959			122,938			72,374			65,391			144,343			128,959
Income from home sales operations and other	883			547			822			(97		)
Loss/(Income) from home sales operations and other													569			883			250			822
Income from property operations	$	113,830		$	105,822		$	240,319		$	228,188		$	118,802		$	113,830		$	256,947		$	240,319

~~Management's Discussion (continued)~~

The following table presents a calculation of FFO ~~available for Common Stock and OP Unit holders~~ and Normalized FFO available for Common Stock and OP Unit ~~holders for the quarters and six months ended June 30, 2018 and June 30, 2017~~ ~~(amounts in thousands)~~:holders:


	Quarters ended June 30,						Six Months Ended June 30,						Quarters Ended June 30,						Six Months Ended June 30,
	2018			2017			2018			2017
(amounts in thousands)													2019			2018			2019			2018
Computation of FFO and Normalized FFO:
Net income available for Common Stockholders	$	46,137		$	39,498		$	106,359		$	96,385		$	46,401		$	46,137		$	159,710		$	106,359
Income allocated to non-controlling interests - Common OP units	3,024			2,649			6,979			6,539
Income allocated to non-controlling interests – Common OP Units													2,676			3,024			9,902			6,979
Right-to-use contract upfront payments, deferred, net ⁽¹⁾	2,021			1,321			3,306			2,096			2,912			2,021			4,683			3,306
Right-to-use contract commissions, deferred, net	(262		)	(112		)	(286		)	(196		)	(389		)	(262		)	(580		)	(286		)
Depreciation on real estate assets	30,062			27,608			58,883			55,061
Depreciation on rental homes	2,390			2,639			4,891			5,296
Amortization of in-place leases	1,893			958			2,945			1,990
Depreciation and amortization													37,776			34,345			75,753			66,719
Depreciation on unconsolidated joint ventures	367			364			739			811			441			367			873			739
Gain on sale of real estate, net													—			—			(52,507		)	—
FFO available for Common Stock and OP Unit holders	85,632			74,925			183,816			167,982			89,817			85,632			197,834			183,816
Transaction costs ⁽²⁾	—			220			—			324
Insurance proceeds due to catastrophic weather event ⁽³⁾	(1,806		)	—			(2,092		)	—
Early debt retirement ⁽¹⁾													2,085			—			2,085			—
Insurance proceeds due to catastrophic weather event ⁽²⁾													—			(1,806		)	(349		)	(2,092		)
Normalized FFO available for Common Stock and OP Unit holders	$	83,826		$	75,145		$	181,724		$	168,306		$	91,902		$	83,826		$	199,570		$	181,724
Weighted average Common Shares outstanding – fully diluted	94,623			93,063			94,600			93,041
Weighted average Common Shares outstanding – Fully Diluted													95,930			94,623			95,773			94,600

______________________

⁽¹⁾~~The Company adopted ASU 2014-09,~~ ~~Revenue from Contracts with Customers,~~ ~~and all related amendments, effective January 1, 2018. Upon adoption, right-to-use upfront nonrefundable payments will be recognized on a straight-line basis over 20 years to reflect~~ Includes our ~~current estimated customer life for the majority~~portion of our upgrade contracts. Results for reporting periods beginning after January 1, 2018 are presented under ASU 2014-09, while prior period amounts are not adjusted and continue to be reported under the previous accounting standards.early debt retirement costs incurred by unconsolidated joint ventures.

⁽²⁾~~The Company adopted ASU 2017-01,~~ ~~Business Combinations~~, effective January 1, 2018. Upon adoption, transaction costs related to asset acquisitions are capitalized. All acquisitions completed subsequent to January 1, 2018 were determined by the Company to be asset acquisitions and, as such, the related transaction costs were capitalized. Transaction costs related to 2017 acquisitions, occurring prior to the adoption of this guidance, are included in General and administrative on the Consolidated Income Statement.

⁽³⁾Represents insurance recovery revenue from reimbursement for capital expenditures related to Hurricane Irma.

Management's Discussion and Analysis (continued)

Results of Operations

Comparison of the Quarter Ended June 30, ~~2018~~2019 to the Quarter Ended June 30, ~~2017~~2018

Income from Property Operations

The following table summarizes certain financial and statistical data for the Core Portfolio and the total portfolio for the quarters endedJune 30, ~~2018~~2019 and ~~2017(amounts in thousands). The Core Portfolio in this discussion includes all Properties acquired on or before December 31, 2016 and which we have owned and operated continuously since January 1, 2017.~~2018. Core Portfolio growth percentages exclude the impact of GAAP deferrals of upfront payments from right-to-use contracts and related commissions.


	Core Portfolio									Total Portfolio									Core Portfolio									Total Portfolio
	2018		2017		Variance			% Change		2018		2017		Variance			% Change		Quarters Ended June 30,									Quarters Ended June 30,
(amounts in thousands)																			2019		2018		Variance			% Change		2019		2018		Variance			% Change
Community base rental income	$	127,409	$	121,848	$	5,561		4.6	%	$	128,579	$	121,964	$	6,615		5.4	%	$	132,406	$	125,879	$	6,527		5.2	%	$	136,213	$	128,579	$	7,634		5.9	%
Rental home income	3,561		3,632		(71		)	(2.0	)%	3,561		3,632		(71		)	(2.0	)%	3,631		3,274		357			10.9	%	3,632		3,561		71			2.0	%
Resort base rental income	51,881		48,161		3,720			7.7	%	55,231		50,055		5,176			10.3	%	56,181		53,952		2,229			4.1	%	60,997		55,231		5,766			10.4	%
Right-to-use annual payments	11,891		11,350		541			4.8	%	11,891		11,350		541			4.8	%
Right-to-use contracts current period, gross	3,944		3,798		146			3.8	%	3,944		3,798		146			3.8	%
Right-to-use annual payments (membership subscriptions)																			12,579		11,891		688			5.8	%	12,586		11,891		695			5.8	%
Right-to-use contracts current period, gross (membership upgrade sales)																			5,041		3,944		1,097			27.8	%	5,041		3,944		1,097			27.8	%
Utility and other income	22,248		20,507		1,741			8.5	%	24,320		20,650		3,670			17.8	%	21,817		21,909		(92		)	(0.4	)%	22,250		24,320		(2,070		)	(8.5	)%
Property operating revenues, excluding deferrals	220,934		209,296		11,638			5.6	%	227,526		211,449		16,077			7.6	%	231,655		220,849		10,806			4.9	%	240,719		227,526		13,193			5.8	%

Property operating and maintenance	77,483		71,652		5,831			8.1	%	80,091		72,901		7,190			9.9	%	80,277		78,105		2,172			2.8	%	84,396		80,091		4,305			5.4	%
Real estate taxes																			14,357		12,920		1,437			11.1	%	15,107		13,440		1,667			12.4	%
Rental home operating and maintenance	1,629		1,657		(28		)	(1.7	)%	1,629		1,657		(28		)	(1.7	)%	1,282		1,515		(233		)	(15.4	)%	1,292		1,629		(337		)	(20.7	)%
Real estate taxes	13,073		13,861		(788		)	(5.7	)%	13,440		13,943		(503		)	(3.6	)%
Sales and marketing, gross	3,305		2,894		411			14.2	%	3,305		2,894		411			14.2	%	4,214		3,305		909			27.5	%	4,214		3,305		909			27.5	%
Property operating expenses, excluding deferrals and Property management	95,490		90,064		5,426			6.0	%	98,465		91,395		7,070			7.7	%
Income from property operations, excluding deferrals and Property management ⁽¹⁾	125,444		119,232		6,212			5.2	%	129,061		120,054		9,007			7.5	%
Property operating expenses, excluding deferrals and property management																			100,130		95,845		4,285			4.5	%	105,009		98,465		6,544			6.6	%
Income from property operations, excluding deferrals and property management																			131,525		125,004		6,521			5.2	%	135,710		129,061		6,649			5.2	%
Property management	13,472		13,023		449			3.4	%	13,472		13,023		449			3.4	%	14,383		13,472		911			6.8	%	14,385		13,472		913			6.8	%
Income from property operations, excluding deferrals⁽¹⁾	111,972		106,209		5,763			5.4	%	115,589		107,031		8,558			8.0	%
Income from property operations, excluding deferrals																			117,142		111,532		5,610			5.0	%	121,325		115,589		5,736			5.0	%
Right-to-use contracts, deferred and sales and marketing, deferred, net	1,759		1,209		550			45.5	%	1,759		1,209		550			45.5	%	2,523		1,759		764			43.4	%	2,523		1,759		764			43.4	%
Income from property operations ⁽¹⁾	$	110,213	$	105,000	$	5,213		5.0	%	$	113,830	$	105,822	$	8,008		7.6	%	$	114,619	$	109,773	$	4,846		4.4	%	$	118,802	$	113,830	$	4,972		4.4	%

__________________________

⁽¹⁾ Non-GAAP ~~measure, see~~measure. See the Results Overview section of the ~~Management~~Management's Discussion and Analysis for Non-GAAP Financial Measure Definitions and reconciliations of these Non-GAAP measures to Net Income available to Common Shareholders.

Total Portfolio income from property operations, which includes Core and Non-Core portfolios, for the quarter ended June 30, 2018 increased $8.0 million, or 7.6%, from the quarter ended June 30, 2017, driven by an increase of $5.2 million, or 5.0%, in our Core Portfolio income from property operations. Non-Core Portfolioportfolio income from property operations for ~~the quarter ended June 30,~~2019 increased $5.0 million, or 4.4%, from 2018, ~~was $3.6~~comprised of an increase of $4.8 million, ~~which increased $2.8~~or 4.4%, from our Core Portfolio and an increase of $0.2 million from our Non-Core Portfolio. The increase in income from property operations from our Core Portfolio was primarily due to higher community base rental income and resort base rental income, partially offset by higher property operating expenses. The increase in income from property operations from our Non-Core Portfolio was partially offset by a decrease in income due to the sale of five all-age MH communities located in Indiana and Michigan during the first quarter ~~ended June 30, 2017, and includes $1.5 million~~ of ~~insurance proceeds which we have identified as business interruption recovery at our RV properties in the Florida Keys.~~2019.

Property Operating Revenues

Community base rental income in our Core Portfolio for ~~the quarter ended June 30, 2018~~2019 increased ~~$5.6~~$6.5 million, or ~~4.6%~~5.2%, from ~~the quarter ended June 30, 2017,~~2018, which reflects ~~4.0%~~4.5% growth from rate increases and ~~approximately 0.6%~~0.7% growth from occupancy gains. The average monthly base rental income per Site in our Core Portfolio increased to approximately ~~$633 for the quarter ended June 30, 2018~~$665 in 2019 from approximately ~~$608 for~~$636 in the ~~quarter ended June 30, 2017.~~same period in 2018. The average occupancy for ~~the~~our Core Portfolio increased to ~~94.7% for~~95.4% in 2019 from 94.9% in the ~~quarter ended June 30, 2018 from 94.2% for the quarter ended June 30, 2017.~~same period in 2018.

Management's Discussion and Analysis (continued)

Resort base rental income in our Core Portfolio for ~~the quarter ended June 30, 2018~~2019 increased ~~$3.7~~$2.2 million, or ~~7.7%~~4.1%, from ~~the quarter ended June 30, 2017~~2018, primarily driven by ~~increases~~higher rental rates. The decrease in ~~annual, seasonal and~~ transient ~~revenues. Annual revenues increased~~rental income from 2018 was mainly due to ~~increased rates and occupancy gains across the portfolio. Seasonal revenues increased due to~~weather related events at a limited number of Properties, which was offset by an increase in ~~rate and an increase~~

~~Management's Discussion (continued)~~

~~in the~~ number of ~~night stays. Transient revenues increased primarily due to an increase~~membership subscriptions sold in ~~rent, particularly at our properties in Texas, New York and California.~~2019.

Resort base rental income is comprised of the ~~following~~ ~~(amounts in thousands)~~:following:

Core Portfolio Total Portfolio
2018 2017 Variance
%
Change
2018 2017 Variance
%
Change
Annual $ 34,793
$ 32,523
$ 2,270
7.0 % $ 36,595
$ 32,869
$ 3,726
11.3 %
Seasonal 4,938
4,416
522
11.8 % 5,206
4,902
304
6.2 %
Transient 12,150
11,222
928
8.3 % 13,430
12,284
1,146
9.3 %
Resort base rental income $ 51,881
$ 48,161
$ 3,720
7.7 % $ 55,231
$ 50,055
$ 5,176
10.3 %

Utility and other income in our Core Portfolio increased by $1.7 million primarily driven by an increase in utility income due to usage and rate increases and insurance recovery revenue related to a flood event in California, which were partially offset by utility expenses and repairs and maintenance costs related to debris removal and cleanup following a flood event in California (see Property Operating Expenses below).



	Core Portfolio									Total Portfolio
	Quarters Ended June 30,									Quarters Ended June 30,
(amounts in thousands)	2019		2018		Variance			% Change		2019		2018		Variance		% Change
Annual	$	38,257	$	36,077	$	2,180		6.0	%	$	40,790	$	36,595	$	4,195	11.5	%
Seasonal	5,135		4,939		196			4.0	%	5,713		5,206		507		9.7	%
Transient	12,789		12,936		(147		)	(1.1	)%	14,494		13,430		1,064		7.9	%
Resort base rental income	$	56,181	$	53,952	$	2,229		4.1	%	$	60,997	$	55,231	$	5,766	10.4	%

Property Operating Expenses

Property operating expenses, excluding deferrals and property management, in our Core Portfolio for ~~the quarter ended June 30, 2018~~2019 increased ~~$5.4~~$4.3 million, or ~~6.0%~~4.5%, from ~~the quarter ended June 30, 2017, primarily driven by~~2018, mainly due to an increase in property operating and maintenance expenses of ~~$5.8~~$2.2 million and an increase in property taxes of $1.4 million. The increase in property operating and maintenance expenses was primarily driven by an increase of $1.0 million in property payroll due to ~~an increase in repairs and maintenance expenses, including costs related to debris removal and clean up following a flood event in California,~~wage increases and an increase of $0.9 million in ~~property payroll, primarily as a result of 2018 salary increases.~~insurance expense. The increase in property ~~operating and maintenance expenses~~taxes was ~~also due to an increase~~primarily a result of a resolution of appeals in ~~utility expense, primarily due to increases~~certain states in ~~gas usage in the West and South and an increase in administrative expenses primarily due to legal costs.~~2018.

Home Sales and Rental Operations

Home Sales and Other

The following table summarizes certain financial and statistical data for Home Sales ~~for the~~ ~~quarters ended~~ ~~June 30, 2018~~ and ~~2017~~ ~~(amounts in thousands, except home sales volumes)~~.Other.


	2018			2017			Variance			% Change		Quarters Ended June 30,
(amounts in thousands, except home sales volumes)												2019			2018			Variance			% Change
Gross revenues from new home sales ⁽¹⁾	$	6,859		$	4,548		$	2,311		50.8	%	$	6,064		$	6,859		$	(795	)	(11.6	)%
Cost of new home sales ⁽¹⁾	(6,800		)	(4,419		)	(2,381		)	(53.9	)%	(5,984		)	(6,800		)	816			12.0	%
Gross profit from new home sales	59			129			(70		)	(54.3	)%	80			59			21			35.6	%

Gross revenues from used home sales	2,246			3,285			(1,039		)	(31.6	)%	1,761			2,246			(485		)	(21.6	)%
Cost of used home sales	(2,832		)	(3,476		)	644			18.5	%	(2,180		)	(2,832		)	652			23.0	%
Loss from used home sales	(586		)	(191		)	(395		)	(206.8	)%	(419		)	(586		)	167			28.5	%

Brokered resale revenues and ancillary services revenues, net	617			444			173			39.0	%
Brokered resale and ancillary services revenues, net												872			617			255			41.3	%
Home selling expenses	(973		)	(929		)	(44		)	(4.7	)%	(1,102		)	(973		)	(129		)	(13.3	)%
Loss from home sales and other	$	(883	)	$	(547	)	$	(336	)	(61.4	)%
Income (loss) from home sales and other												$	(569	)	$	(883	)	$	314		35.6	%

Home sales volumes
Total new home sales ⁽²⁾	146			120			26			21.7	%	117			146			(29		)	(19.9	)%
New Home Sales Volume - ECHO JV	25			41			(16		)	(39.0	)%	18			25			(7		)	(28.0	)%
Used home sales	297			338			(41		)	(12.1	)%	210			297			(87		)	(29.3	)%
Brokered home resales	253			252			1			0.4	%	237			253			(16		)	(6.3	)%

_________________________

⁽¹⁾ New home sales gross revenues and costs of new home sales ~~does~~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.

Loss from home sales and other was $0.6 million for 2019 compared to $0.9 million for ~~the quarter ended June 30, 2018 compared with $0.5 million for the quarter ended June 30, 2017.~~2018. The ~~increase~~decrease in ~~Loss~~loss from home sales and other was ~~primarily~~ due to ~~an increase of $0.4 million~~a decrease in ~~the~~ loss from used home ~~sales.~~sales and an increase in ancillary services revenues, net.

Management's Discussion and Analysis (continued)

Rental Operations

The following table summarizes certain financial and statistical data for ~~manufact~~u~~red home~~MH Rental ~~Operations for the~~ ~~quarters ended~~ ~~June 30, 2018 and 2017~~ ~~(amounts in thousands, except rental unit volumes)~~.Operations.


	2018			2017			Variance			% Change		Quarters Ended June 30,
(amounts in thousands, except rental unit volumes)												2019			2018			Variance			% Change
Manufactured homes:
New Home	$	7,388		$	6,985		$	403		5.8	%
Used Home	4,384			5,483			(1,099		)	(20.0	)%
Rental operations revenue ⁽¹⁾	11,772			12,468			(696		)	(5.6	)%	$	11,422		$	11,064		$	358		3.2	%
Rental home operating and maintenance	(1,629		)	(1,657		)	28			1.7	%	(1,282		)	(1,515		)	233			15.4	%
Income from rental operations	10,143			10,811			(668		)	(6.2	)%	10,140			9,549			591			6.2	%
Depreciation on rental homes ⁽²⁾	(2,390		)	(2,639		)	249			9.4	%	(2,544		)	(2,251		)	(293		)	(13.0	)%
Income from rental operations, net of depreciation	$	7,753		$	8,172		$	(419	)	(5.1	)%	$	7,596		$	7,298		$	298		4.1	%

Gross investment in new manufactured home rental units ⁽³⁾	$	138,934		$	129,868		$	9,066		7.0	%	$	191,975		$	135,886		$	56,089		41.3	%
Gross investment in used manufactured home rental units	$	39,189		$	48,182		$	(8,993	)	(18.7	)%	$	25,103		$	34,476		$	(9,373	)	(27.2	)%

Net investment in new manufactured home rental units	$	110,739		$	104,710		$	6,029		5.8	%	$	159,950		$	110,298		$	49,652		45.0	%
Net investment in used manufactured home rental units	$	19,962		$	28,182		$	(8,220	)	(29.2	)%	$	11,563		$	24,538		$	(12,975	)	(52.9	)%

Number of occupied rentals – new, end of period ⁽⁴⁾	2,614			2,517			97			3.9	%	3,006			2,547			459			18.0	%
Number of occupied rentals – used, end of period	1,668			2,157			(489		)	(22.7	)%	1,007			1,467			(460		)	(31.4	)%

______________________

⁽¹⁾

Rental operations revenue consists of Site rental income and home rental ~~income.~~income in our Core Portfolio. Approximately ~~$8.2~~$7.8 million ~~and $8.8 million~~of Site rental income for both the quarters ended June 30, 2019 and 2018 ~~and 2017, respectively, of Site rental income are~~is included in ~~Community~~community base rental income inwithin the Core Portfolio Income from Property Operations table. The remainder of home rental income is included in ~~Rental~~rental home income inwithin the Core Portfolio Income from Property Operations table.


⁽²⁾	Included in Depreciation ~~on real estate~~ and ~~rental homes~~amortization in the Consolidated Statements of Income and Comprehensive Income.


⁽³⁾	Includes both occupied and unoccupied rental homes in our Core Portfolio. New home cost basis does not include the costs associated with our ECHO JV. Our investment in the ECHO JV was ~~$15.9~~$16.5 million and ~~$15.4~~$15.9 million as of June 30, ~~2018~~2019 and ~~2017,~~2018, respectively.


⁽⁴⁾	Occupied rentals as of the end of the period in our Core Portfolio and includes ~~264~~298 and ~~257~~264 homes rented through our ECHO JV during the quarters ended June 30, ~~2018~~2019 and ~~2017,~~2018, respectively.

The ~~decrease~~increase in income from rental operations, net of depreciation, in our Core Portfolio was primarily due to an increase in the number of new occupied rental units at a higher rental rate, partially offset by a decrease in the number of used occupied rental units. ~~This was partially offset by an increase in the number of new occupied rentals at a higher rental rate.~~

Other Income and Expenses

The following table summarizes other income and expenses, ~~net for the~~ ~~quarters endedJune 30, 2018~~ ~~and~~ ~~2017(amounts in thousands, expenses shown as negative)~~.net.


	2018			2017			Variance			% Change		Quarters Ended June 30,
Depreciation on real estate and rental homes	$	(32,452	)	$	(30,247	)	$	(2,205	)	(7.3	)%
Amortization of in-place leases	(1,893		)	(958		)	(935		)	(97.6	)%
(amounts in thousands, expenses shown as negative)												2019			2018			Variance			% Change
Depreciation and amortization												$	(37,776	)	$	(34,345	)	$	(3,431	)	(10.0	)%
Interest income	1,862			1,798			64			3.6	%	1,803			1,862			(59		)	(3.2	)%
Income from other investments, net	3,413			1,109			2,304			207.8	%	879			3,413			(2,534		)	(74.2	)%
General and administrative	(9,669		)	(8,241		)	(1,428		)	(17.3	)%	(9,225		)	(9,669		)	444			4.6	%
Transaction costs	—			(220		)	220			100.0	%
Other expenses	(367		)	(271		)	(96		)	(35.4	)%	(540		)	(367		)	(173		)	(47.1	)%
Early debt retirement												(1,491		)	—			(1,491		)	—	%
Interest and related amortization	(26,285		)	(24,822		)	(1,463		)	(5.9	)%	(26,024		)	(26,285		)	261			1.0	%
Total other income and expenses, net	$	(65,391	)	$	(61,852	)	$	(3,539	)	(5.7	)%
Total other income and (expenses), net												$	(72,374	)	$	(65,391	)	$	(6,983	)	(10.7	)%

~~Other expenses,~~Total other income and (expenses), net increased ~~$3.5~~$7.0 million ~~for the quarter ended June 30, 2018,~~during 2019 compared to ~~the quarter ended June 30, 2017. The increase from the quarter ended June 30, 2017 was~~2018, primarily due to ~~increases~~an increase in depreciation ~~on real estate~~ and ~~rental homes, interest and related~~ amortization and ~~general and administrative costs. These increases were partially offset by~~a decrease in income from other investments, net. The decrease in income from other investments, net was mainly due to $1.8 million of insurancerecovery revenue from reimbursement for capital expenditures related to Hurricane Irma ~~during the quarter ended June 30,~~in 2018. Additionally, we incurred $1.5 million of early debt retirement costs in 2019.

Management's Discussion and Analysis (continued)

Comparison of the Six Months Ended June 30, ~~2018~~2019 to the Six Months Ended June 30, ~~2017~~2018

Income from Property Operations

The following table summarizes certain financial and statistical data for the Core Portfolio and the total portfolio for the six months ended June 30, ~~2018~~2019 and ~~2017~~ ~~(amounts in thousands). The Core Portfolio in this discussion includes all Properties acquired on or before December 31, 2016 and which we have owned and operated continuously since January 1, 2017.~~2018. Core Portfolio growth percentages exclude the impact of GAAP deferrals of upfront payments from right-to-use contracts and related commissions.


	Core Portfolio										Total Portfolio									Core Portfolio									Total Portfolio
	2018			2017		Variance			% Change		2018		2017		Variance			% Change		Six Months Ended June 30,									Six Months Ended June 30,
(amounts in thousands)																				2019		2018		Variance			% Change		2019		2018		Variance			% Change
Community base rental income	$	253,732		$	242,540	$	11,192		4.6	%	$	255,318	$	242,656	$	12,662		5.2	%	$	263,444	$	250,669	$	12,775		5.1	%	$	271,495	$	255,318	$	16,177		6.3	%
Rental home income	7,076			7,237		(161		)	(2.2	)%	7,076		7,237		(161		)	(2.2	)%	7,121		6,506		615			9.5	%	7,216		7,076		140			2.0	%
Resort base rental income	113,870			105,847		8,023			7.6	%	119,485		111,123		8,362			7.5	%	122,115		117,235		4,880			4.2	%	133,165		119,485		13,680			11.4	%
Right-to-use annual payments	23,407		34,130	22,602		805			3.6	%	23,410		22,602		808			3.6	%
Right-to-use contracts current period, gross	7,106			7,004		102			1.5	%	7,106		7,004		102			1.5	%
Right-to-use annual payments (membership subscriptions)																				24,889		23,409		1,480			6.3	%	24,902		23,410		1,492			6.4	%
Right-to-use contracts current period, gross (membership upgrade sales)																				8,879		7,108		1,771			24.9	%	8,879		7,106		1,773			25.0	%
Utility and other income	46,384			42,440		3,944			9.3	%	49,841		42,776		7,065			16.5	%	44,434		45,970		(1,536		)	(3.3	)%	46,001		49,841		(3,840		)	(7.7	)%
Property operating revenues, excluding deferrals	451,575			427,670		23,905			5.6	%	462,236		433,398		28,838			6.7	%	470,882		450,897		19,985			4.4	%	491,658		462,236		29,422			6.4	%

Property operating and maintenance	150,615			138,346		12,269			8.9	%	154,999		140,955		14,044			10.0	%	154,575		151,241		3,334			2.2	%	161,989		154,999		6,990			4.5	%
Real estate taxes																				28,931		26,743		2,188			8.2	%	30,430		27,575		2,855			10.4	%
Rental home operating and maintenance	3,054			3,208		(154		)	(4.8	)%	3,053		3,208		(155		)	(4.8	)%	2,464		2,873		(409		)	(14.2	)%	2,496		3,053		(557		)	(18.2	)%
Real estate taxes	27,066			27,830		(764		)	(2.7	)%	27,575		27,980		(405		)	(1.4	)%
Sales and marketing, gross	6,117			5,584		533			9.5	%	6,117		5,584		533			9.5	%	7,627		6,118		1,509			24.7	%	7,623		6,117		1,506			24.6	%
Property operating expenses, excluding deferrals and Property management	186,852			174,968		11,884			6.8	%	191,744		177,727		14,017			7.9	%
Income from property operations, excluding deferrals and Property management ⁽¹⁾	264,723			252,702		12,021			4.8	%	270,492		255,671		14,821			5.8	%
Property operating expenses, excluding deferrals and property management																				193,597		186,975		6,622			3.5	%	202,538		191,744		10,794			5.6	%
Income from property operations, excluding deferrals and property management																				277,285		263,922		13,363			5.1	%	289,120		270,492		18,628			6.9	%
Property management	27,153			25,583		1,570			6.1	%	27,153		25,583		1,570			6.1	%	28,067		27,151		916			3.4	%	28,070		27,153		917			3.4	%
Income from property operations, excluding deferrals⁽¹⁾	237,570			227,119		10,451			4.6	%	243,339		230,088		13,251			5.8	%
Income from property operations, excluding deferrals																				249,218		236,771		12,447			5.3	%	261,050		243,339		17,711			7.3	%
Right-to-use contracts, deferred and sales and marketing, deferred, net	3,020			1,900		1,120			58.9	%	3,020		1,900		1,120			58.9	%	4,103		3,020		1,083			35.9	%	4,103		3,020		1,083			35.9	%
Income from property operations ⁽¹⁾	$	234,550		$	225,219	$	9,331		4.1	%	$	240,319	$	228,188	$	12,131		5.3	%	$	245,115	$	233,751	$	11,364		4.9	%	$	256,947	$	240,319	$	16,628		6.9	%

__________________________

Total Portfolio income from property operations ~~which includes Core and Non-Core portfolios,~~ for ~~the six months ended June 30, 2018~~2019 increased ~~$12.1~~$16.6 million, or ~~5.3%~~6.9%, from ~~the six months ended June 30, 2017, driven by~~2018, primarily as a result of an increase of ~~$9.3~~$11.4 million, or ~~4.1%~~4.9%, infrom our Core Portfolio ~~income~~and an increase of $5.2 million, from ~~property operations.~~our Non-Core ~~Portfolio~~Portfolio. The increase in income from property operations ~~increased $2.8 million~~ from our Core Portfolio was primarily due to an increase in community base rental income and resort base rental income, partially offset by an increase in property operating expenses. The increase in income from property operations from our Non-Core Portfolio was partially offset by a decrease in income due to the ~~six months ended June 30, 2017 primarily driven by $2.5 million~~sale of ~~insurance proceeds which we have identified as business interruption recovery at our RV properties~~five all-age MH communities located in Indiana and Michigan during the ~~Florida Keys.~~first quarter of 2019.

Property Operating Revenues

Community base rental income in our Core Portfolio for ~~the six months ended June 30, 2018~~2019 increased ~~$11.2~~$12.8 million, or ~~4.6%~~5.1%, from ~~the quarter ended June 30, 2017,~~2018, which reflects ~~4.0%~~4.5% growth from rate increases and ~~approximately~~ 0.6% growth from occupancy gains. The average monthly base rental income per Site increased to approximately ~~$630 for the six months ended June 30, 2018~~$662 in 2019 from approximately ~~$606 for the six months ended June 30, 2017.~~$633 in 2018. The average occupancy for the Core Portfolio increased to ~~94.6% for~~95.3% in 2019 from 94.9% in the ~~six months ended June 30, 2018 from 94.1% for the six months ended June 30, 2017.~~same period in 2018.

Management's Discussion and Analysis (continued)

Resort base rental income in our Core Portfolio for ~~the six months ended June 30, 2018~~2019 increased ~~$8.0~~$4.9 million, or ~~7.6%~~4.2%, from ~~the six months ended June 30, 2017~~2018, primarily driven by ~~increases~~higher rental rates. The decrease in ~~annual, seasonal and~~ transient ~~revenues. Annual revenues increased~~rental income from 2018 was mainly due to ~~increased rates and occupancy gains across the portfolio. Seasonal revenues increased due to~~weather related events at a limited number of Properties, which was offset by an increase in ~~rate and an increase in the~~ number of ~~night stays. All regions had an increase~~membership subscriptions sold in ~~transient revenues during the six months ended June 30, 2018 compared to the six months ended June 30, 2017.~~2019.

~~Management's Discussion (continued)~~

Resort base rental income is comprised of the ~~following~~ ~~(amounts in thousands)~~:following:

Core Portfolio Total Portfolio
2018 2017 Variance
%
Change
2018 2017 Variance
%
Change
Annual $ 68,713
$ 64,297
$ 4,416
6.9 % $ 71,751
$ 64,965
$ 6,786
10.4 %
Seasonal 23,598
21,540
2,058
9.6 % 24,229
23,401
828
3.5 %
Transient 21,559
20,010
1,549
7.7 % 23,505
22,757
748
3.3 %
Resort base rental income $ 113,870
$ 105,847
$ 8,023
7.6 % $ 119,485
$ 111,123
$ 8,362
7.5 %

Utility and other income in our Core Portfolio increased by $3.9 million primarily driven by insurance proceeds related to Hurricane Irma, which were offset by debris removal and cleanup costs (see Property Operating Expenses below). Additionally, utility income increased as a result of an increase in electric income recovery.



	Core Portfolio									Total Portfolio
	Six Months Ended June 30,									Six Months Ended June 30,
(amounts in thousands)	2019		2018		Variance			% Change		2019		2018		Variance		% Change
Annual	$	75,606	$	71,274	$	4,332		6.1	%	$	79,874	$	71,751	$	8,123	11.3	%
Seasonal	24,319		23,597		722			3.1	%	26,798		24,229		2,569		10.6	%
Transient	22,190		22,364		(174		)	(0.8	)%	26,493		23,505		2,988		12.7	%
Resort base rental income	$	122,115	$	117,235	$	4,880		4.2	%	$	133,165	$	119,485	$	13,680	11.4	%

Property Operating Expenses

Property operating expenses, excluding deferrals and property management, in our Core Portfolio for ~~the six months ended June 30, 2018~~2019 increased ~~$11.9~~$6.6 million, or ~~6.8%~~3.5%, from ~~the six months ended June 30, 2017, primarily driven by~~2018, mainly due to an increase in property operating and maintenance expenses of ~~$12.3~~$3.3 million and an increase in property taxes of $2.2 million. The increase in property operating and maintenance expenses was primarily ~~due to an increase in repairs and maintenance expenses, primarily related to cleanup costs from Hurricane Irma,~~driven by an increase in property payroll ~~primarily~~ as a result of ~~2018~~ salary increases and anhigher electric and trash expenses in California and the South. The increase in ~~utility expense,~~property taxes was primarily ~~due to increases~~a result of a resolution of appeals in ~~electric and water expenses, which was partially offset by an increase~~certain states in ~~utility income recovery.~~2018.

Home Sales and Rental Operations

Home Sales and Other

The following table summarizes certain financial and statistical data for Home Sales ~~for the six months ended June 30, 2018~~ and ~~2017~~ ~~(amounts in thousands, except home sales volumes)~~.Other.


	2018			2017			Variance			% Change		Six Months Ended June 30,
(amounts in thousands, except home sales volumes)												2019			2018			Variance			% Change
Gross revenues from new home sales ⁽¹⁾	$	13,595		$	9,491		$	4,104		43.2	%	$	10,628		$	13,595		$	(2,967	)	(21.8	)%
Cost of new home sales ⁽¹⁾	(13,310		)	(9,191		)	(4,119		)	(44.8	)%	(10,378		)	(13,310		)	2,932			22.0	%
Gross profit from new home sales	285			300			(15		)	(5.0	)%	250			285			(35		)	(12.3	)%

Gross revenues from used home sales	3,819			5,369			(1,550		)	(28.9	)%	3,672			3,819			(147		)	(3.8	)%
Cost of used home sales	(4,896		)	(5,823		)	927			15.9	%	(4,418		)	(4,896		)	478			9.8	%
Loss from used home sales	(1,077		)	(454		)	(623		)	(137.2	)%	(746		)	(1,077		)	331			30.7	%

Brokered resale revenues and ancillary services revenues, net	2,018			2,105			(87		)	(4.1	)%
Brokered resale and ancillary services revenues, net												2,431			2,018			413			20.5	%
Home selling expenses	(2,048		)	(1,854		)	(194		)	(10.5	)%	(2,185		)	(2,048		)	(137		)	(6.7	)%
Income (loss) from home sales and other	$	(822	)	$	97		$	(919	)	(947.4	)%	$	(250	)	$	(822	)	$	572		69.6	%

Home sales volumes
Total new home sales ⁽²⁾	276			240			36			15.0	%	208			276			(68		)	(24.6	)%
New Home Sales Volume - ECHO JV	43			78			(35		)	(44.9	)%	31			43			(12		)	(27.9	)%
Used home sales	538			623			(85		)	(13.6	)%	429			538			(109		)	(20.3	)%
Brokered home resales	446			420			26			6.2	%	405			446			(41		)	(9.2	)%

_________________________

⁽¹⁾ New home sales gross revenues and costs of new home sales ~~does~~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.

Loss from home sales and other was $0.3 million for 2019 compared to $0.8 million for ~~the six months ended June 30, 2018 compared with Income from homes sales and other of $0.1 million for the six months ended June 30, 2017.~~2018. The ~~Loss~~decrease in loss from home sales and other was primarily due to ~~an increase~~a decrease in the loss from used home sales and an increase in ~~home selling expenses.~~ancillary services revenues, net.

Management's Discussion and Analysis (continued)

Rental Operations

The following table summarizes certain financial and statistical data for ~~manufact~~u~~red home~~MH Rental ~~Operations for the six months ended June 30, 2018 and 2017~~ ~~(amounts in thousands, except rental unit volumes)~~.Operations.


	2018			2017			Variance			% Change		Six Months Ended June 30,
(amounts in thousands, except rental unit volumes)												2019			2018			Variance			% Change
Manufactured homes:
New Home	$	14,931		$	13,618		$	1,313		9.6	%
Used Home	8,638			11,267			(2,629		)	(23.3	)%
Rental operations revenue ⁽¹⁾	23,569			24,885			(1,316		)	(5.3	)%	$	22,633		$	22,152		$	481		2.2	%
Rental home operating and maintenance	(3,053		)	(3,208		)	155			4.8	%	(2,464		)	(2,873		)	409			14.2	%
Income from rental operations	20,516			21,677			(1,161		)	(5.4	)%	20,169			19,279			890			4.6	%
Depreciation on rental homes ⁽²⁾	(4,891		)	(5,296		)	405			7.6	%	(4,957		)	(4,605		)	(352		)	(7.6	)%
Income from rental operations, net of depreciation	$	15,625		$	16,381		$	(756	)	(4.6	)%	$	15,212		$	14,674		$	538		3.7	%

Gross investment in new manufactured home rental units ⁽³⁾	$	138,934		$	129,868		$	9,066		7.0	%	$	191,975		$	135,886		$	56,089		41.3	%
Gross investment in used manufactured home rental units	$	39,189		$	48,182		$	(8,993	)	(18.7	)%	$	25,103		$	34,476		$	(9,373	)	(27.2	)%

Net investment in new manufactured home rental units	$	110,739		$	104,710		$	6,029		5.8	%	$	159,950		$	110,298		$	49,652		45.0	%
Net investment in used manufactured home rental units	$	19,962		$	28,182		$	(8,220	)	(29.2	)%	$	11,563		$	24,538		$	(12,975	)	(52.9	)%

Number of occupied rentals – new, end of period ⁽⁴⁾	2,614			2,517			97			3.9	%	3,006			2,547			459			18.0	%
Number of occupied rentals – used, end of period	1,668			2,157			(489		)	(22.7	)%	1,007			1,467			(460		)	(31.4	)%

______________________

⁽¹⁾

Rental operations revenue consists of Site rental income and home rental ~~income.~~income in our Core Portfolio. Approximately ~~$16.5~~$15.5 million and ~~$17.6~~$15.6 million of Site rental income for the six months ended June 30, 2019 and 2018, ~~and 2017,~~ respectively, ~~of Site rental income~~ are included in ~~Community~~community base rental income inwithin the Core Portfolio Income from Property Operations table. The remainder of home rental income is included in ~~Rental~~rental home income inwithin the Core Portfolio Income from Property Operations table.


⁽²⁾	Included in Depreciation ~~on real estate~~ and ~~rental homes~~amortization in the Consolidated Statements of Income and Comprehensive Income.


⁽³⁾	Includes both occupied and unoccupied rental homes in our Core Portfolio. New home cost basis does not include the costs associated with our ECHO JV. Our investment in the ECHO JV was ~~$15.9~~$16.5 million and ~~$15.4~~$15.9 million as of June 30, ~~2018~~2019 and ~~2017,~~2018, respectively.


⁽⁴⁾	Occupied rentals as of the end of the period in our Core Portfolio and includes ~~264~~298 and ~~257~~264 homes rented through our ECHO JV during the six months ended June 30, ~~2018~~2019 and ~~2017,~~2018, respectively.

The ~~decrease~~increase in income from rental operations, net of depreciation, was primarily due to an increase in the number of new occupied rental units at a higher rental rate, partially offset by a decrease in the number of used occupied rental units. ~~This was partially offset by an increase in the number of new occupied rentals at a higher rental rate.~~

Other Income and Expenses

The following table summarizes other income and expenses, ~~net for the six months ended June 30, 2018 and 2017~~ ~~(amounts in thousands, expenses shown as negative)~~.net.


	2018			2017			Variance			% Change		Six Months Ended June 30,
Depreciation on real estate and rental homes	$	(63,774	)	$	(60,357	)	$	(3,417	)	(5.7	)%
Amortization of in-place leases	(2,945		)	(1,990		)	(955		)	(48.0	)%
(amounts in thousands, expenses shown as negative)												2019			2018			Variance			% Change
Depreciation and amortization												$	(75,753	)	$	(66,719	)	$	(9,034	)	(13.5	)%
Interest income	3,812			3,568			244			6.8	%	3,554			3,812			(258		)	(6.8	)%
Income from other investments, net	4,353			1,866			2,487			133.3	%	1,865			4,353			(2,488		)	(57.2	)%
General and administrative	(17,707		)	(15,510		)	(2,197		)	(14.2	)%	(19,134		)	(17,707		)	(1,427		)	(8.1	)%
Transaction costs	—			(324		)	324			100.0	%
Other expenses	(710		)	(490		)	(220		)	(44.9	)%	(967		)	(710		)	(257		)	(36.2	)%
Early debt retirement												(1,491		)	—			(1,491		)	—	%
Interest and related amortization	(51,988		)	(49,701		)	(2,287		)	(4.6	)%	(52,417		)	(51,988		)	(429		)	(0.8	)%
Total other income and expenses, net	$	(128,959	)	$	(122,938	)	$	(6,021	)	(4.9	)%
Total other income and (expenses), net												$	(144,343	)	$	(128,959	)	$	(15,384	)	(11.9	)%

~~Other expenses,~~Total other income and (expenses), net increased ~~$6.0~~$15.4 million for ~~the six months ended June 30, 2018,~~2019, compared to ~~the six months ended June 30, 2017.~~2018. The increase ~~from the six months ended June 30, 2017~~ was primarily due to ~~increases~~an increase in depreciation ~~on real estate~~ and ~~rental homes, interest and related~~ amortization and ~~general and administrative expenses. These increase were partially offset by~~a decrease in income from other investments, net. The decrease in income from other investments, net was mainly due to $2.1 million of insurancerecovery revenue from reimbursement for capital expenditures related to Hurricane Irma in 2018. Additionally, we incurred $1.5 million of early debt retirement costs in 2019.

Gain on Sale of Real Estate, Net

On January 23, 2019, we closed on the sale of five all-age MH communities located in Indiana and Michigan, collectively containing 1,463 sites, for $89.7 million. We recognized a gain on sale of these Properties of $52.5 million during the ~~six months ended June 30, 2018.~~first quarter of 2019.

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, purchasing both new~~Properties, home purchases and ~~pre-owned homes, acquisitions of new Properties and distributions.~~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.

~~We have entered into an~~Our at-the-market (“ATM”) equity offering program ~~pursuant~~allows us to ~~which we may~~ sell, from time-to-time, shares of our ~~Common Stock,~~common stock, par value $0.01 per share, having an aggregate offering price of up to $200.0 million. As of June 30, ~~2018, $150.0~~2019, we have $140.7 million of common stock ~~remained~~ available for ~~issuance under~~issuance.

On April 30, 2019, our stockholders approved an amendment to our charter to increase the ~~ATM equity offering program. During July 2018, we sold 252,864~~number of shares of our common stock ~~as part of our ATM equity offering program at a weighted average price per share of $91.85, resulting in gross cash proceeds of approximately $23.2 million.~~that we are authorized to issue from 200,000,000 to 400,000,000 shares. As of ~~July 26, 2018, $126.8 million of common stock remain available for issuance under the ATM equity offering program.~~

~~In addition,~~June 30, 2019, we have available liquidity in the form of approximately ~~111.2~~309.0 million shares of authorized ~~but~~and unissued common stock and ~~approximately~~ 10.0 million shares of authorized and unissued preferred stock registered for sale under the Securities Act of 1933, as amended, by a shelf registration statement which was automatically effective when filed with the SEC. Our charter allows us to issue up to 200.0 million shares of Common Stock, par value $0.01 per share, and up to 10.0 million shares of preferred stock, par value $0.01 per share.amended.

One of our stated objectives is to maintain financial flexibility. Achieving this objective allows us to take advantage of strategic opportunities that may arise. 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. Our financing objectives continue to focus on accessing long-term low-cost secured debt.

We ~~believe that~~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 ~~June 30, 2018, we have sufficient liquidity,~~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 ~~form~~fair value of ~~$40.8 million~~the designated derivative are recorded in ~~unrestricted~~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 Activities.

We expect to meet our short-term liquidity requirements, including principal payments, capital improvements and dividend distributions for the next twelve months, mainly through available cash ~~and $400.0 million available on our LOC, to satisfy our near term obligations.~~as well as net cash provided by operating activities. Our LOC has a borrowing capacity of $400.0 million with the option to increase the borrowing capacity by $200.0 million, subject to certain conditions. The LOC bears interest at a rate of LIBOR plus 1.10% to 1.55%, requires an annual facility fee of 0.15% to 0.35% and matures on October 27, 2021.

As part of our Unsecured Credit Facility, our LOC arrangement will mature prior to the expected discontinuation of LIBOR subsequent to 2021 and our $200.0 million term loan is scheduled to mature in April 2023. We ~~expect~~continue to ~~meet our short-term liquidity requirements, including distributions for~~monitor the ~~next twelve months, generally through available cash~~development and adoption of an alternative index to LIBOR to manage the transition and as ~~well as net cash provided by operating activities and availability under our existing LOC. We consider these resources~~it pertains to new arrangements to be ~~adequate~~entered in the future. Given over 90% of our current debt is secured and not subject to ~~meet~~LIBOR, we do not believe the discontinuation of LIBOR will have a significant impact on our ~~operating requirements for capital improvements, amortizing debt and payment of dividends and distributions.~~consolidated financial statements.

We expect to meet certain long-term liquidity requirements, ~~such as~~including scheduled debt maturities, property acquisitions and capital improvements by use of our ~~current cash balance,~~ long-term collateralized and uncollateralized borrowings including ~~borrowings under~~ the existing LOC and the issuance of debt securities or additional equity ~~securities,~~securities. We have no debt maturing in ~~addition to net cash provided by operating activities. As of June 30, 2018, we have~~2019 and approximately ~~$3.0~~$48.9 million of scheduled debt ~~maturities~~matures in ~~2018~~2020 (excluding scheduled principal payments on debt maturing in ~~2018~~2020 and beyond). ~~We expect to satisfy~~

For information regarding our ~~2018 maturities with existing cash~~debt activities and ~~anticipated operating cash flow.~~related borrowing arrangements, see Item 1. Financial Statements—Note 8. Borrowing Arrangements.

During the six months ended June 30, 2018, we closed on one loan, secured by two RV resorts, for gross proceeds of approximately $64.0 million. The loan carries an interest rate of 4.83% per annum and matures in 2038. In connection with the Serendipity acquisition, we assumed a loan of approximately $9.2 million and obtained additional financing of $8.8 million for total mortgage debt, secured by the manufactured home community, of $18.0 million with an interest rate of 4.75% that matures in 2039.

~~During the six months ended June 30, 2018, we paid off our unsecured LOC, including the balance at December 31, 2017 of approximately $30.0 million.~~

~~Management's Discussion (continued)~~

The table below summarizes our cash flow ~~activity for the six months ended June 30, 2018 and 2017~~ ~~(amounts in thousands)~~:activity:


	Six Months Ended June 30,						Six Months Ended June 30,
	2018			2017
(amounts in thousands)							2019			2018
Net cash provided by operating activities	$	226,026		$	212,982		$	244,685		$	229,965
Net cash used in investing activities	(121,894		)	(70,306		)	(75,881		)	(122,189		)
Net cash used in financing activities	(89,192		)	(131,276		)	(147,321		)	(89,192		)
Net increase in cash and restricted cash	$	14,940		$	11,400		$	21,483		$	18,584

Management's Discussion and Analysis (continued)

Operating Activities

Net cash provided by operating activities increased ~~$13.0~~$14.7 million to ~~$226.0~~$244.7 million for the six months ended June 30, ~~2018,~~2019, from ~~$213.0~~$230.0 million for the six months ended June 30, ~~2017.~~2018. The increase in net cash provided by operating activities was primarily due to higher income from property operations of ~~$12.1~~$16.6 million and an increase in rents and other customer payments received in advance and security deposits of approximately $5.3 million, partially offset by long term incentive compensation of approximately $4.2 million paid during the first quarter of 2019 and a net decrease in ~~insurance proceeds.~~other assets and accounts payable and other liabilities of approximately of $2.5 million.

Investing Activities

Net cash used in investing activities was ~~$121.9~~$75.9 million for the six months ended June 30, ~~2018~~2019 compared to ~~$70.3~~$122.2 million for the six months ended June 30, ~~2017.~~2018. The ~~increase~~decrease in net cash used in investing activities was primarily due to ~~an increase in real estate acquisitions and an increase in capital improvements. These increases were partially offset by receipt~~proceeds received of ~~$13.8~~$77.7 million ~~during six months ended June 30, 2018~~ as a result of the ~~repayment~~sale of five MH properties during the ~~short-term loan we issued to the Crosswinds~~first quarter of 2019 and distributions of capital from unconsolidated joint ~~venture at the time~~ventures of ~~closing.~~$5.2 million. This was partially offset by an increase of $40.1 million in capital improvements.

Capital Improvements

The table below summarizes capital improvement ~~activity~~activities:



	Six Months Ended June 30,
(amounts in thousands)	2019		2018
Recurring capital expenditures ⁽¹⁾	$	22,913	$	21,175
Property upgrades and development⁽²⁾	28,915		25,580
New home investments⁽³⁾⁽⁴⁾	67,086		31,701
Used home investments ⁽⁴⁾	1,452		1,807
Total property	120,366		80,263
Corporate	1,078		1,114
Total capital improvements	$	121,444	$	81,377

______________________


⁽¹⁾	Recurring capital expenditures are primarily comprised of common area improvements, furniture and mechanical improvements.


⁽²⁾	Includes $2.5 million and $9.5 million of restoration and improvement capital expenditures related to Hurricane Irma for the six months ended June 30, 2019 and 2018, respectively.


⁽³⁾	Excludes new home investment 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 increased $58.1 million to $147.3 million for the six months ended June 30, ~~2018 and 2017~~ ~~(amounts in thousands)~~:

Six Months Ended
June 30,
2018 2017
Recurring capital expenditures ⁽¹⁾
$ 21,175
$ 18,808
Property upgrades and site development⁽²⁾
25,580
11,870
New home investments⁽³⁾⁽⁴⁾
31,701
19,542
Used home investments ⁽⁴⁾
1,807
2,191
Total property 80,263
52,411
Corporate 1,114
1,053
Total capital improvements $ 81,377
$ 53,464

~~______________________~~

⁽¹⁾~~Recurring capital expenditures are primarily comprised of common area improvements, furniture, and mechanical improvements.~~

⁽²⁾~~Includes $9.5 million of restoration and improvement capital expenditures related to Hurricane Irma for the six months ended June 30, 2018.~~

⁽³⁾ ~~Excludes new home investment associated with our ECHO JV.~~

⁽⁴⁾~~Net proceeds~~2019 from ~~new and used home sale activities are reflected within Operating Activities.~~

~~Financing Activities~~

~~Net cash used in financing activities was~~ $89.2 million for the six months ended June 30, ~~2018 compared to net cash used~~2018. The increase in ~~financing activities of $131.3 million for the six months ended June 30, 2017. The decrease in net~~ cash used in financing activities was primarily due to an increase in ~~new mortgage~~ debt ~~proceeds, net~~repayments and ~~a decrease in mortgage debt payoffs, compared to the six months ended June 30, 2017, partially offset by an increase in~~ distributions paid of $70.0 million and ~~the line of credit payoff of $30.0~~$13.2 million, respectively, during the six months ended June 30, 2019 as compared to the same period in the prior year. Proceeds of $59.3 million received from the sale of our common stock under our ATM equity offering program for the six months ended June 30, 2019 was offset by debt proceeds received during the six months ended June 30, 2018. These increases in cash used in financing activities during the six months ended June 30, 2019 were partially offset by a $30.0 million net payment related to the LOC during the six months ended June 30, 2018.

Contractual Obligations

Significant ongoing contractual obligations consist primarily of ~~long term~~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 the Contractual Obligations section of ~~Management's~~the "Management's Discussion and Analysis of Financial Condition and Results of ~~Operations~~Operations" in our ~~Annual Report on~~2018 Form ~~10-K for the year ended December 31, 2017 filed with the SEC on February 28, 2018.~~

~~Management's Discussion (continued)~~

~~Inflation~~

Substantially all of the leases at the Properties allow for monthly or annual rent increases. In addition, we have the opportunity to achieve rate increases, where justified by the market, as each lease matures. Such types of leases generally minimize our risks of inflation. In addition, our RV resort Properties are not generally subject to leases and rents are established for these Sites on an annual basis. Our right-to-use contracts generally provide for an annual dues increase, but dues may be frozen under the terms of certain contracts if the customer is over 61 years old.10-K.

Off-Balance Sheet Arrangements

As of June 30, ~~2018,~~2019, we have no off-balance sheet arrangements.

Critical Accounting Policies and Estimates

Refer to ~~Item 7,~~ ~~Management’s~~the "Management’s Discussion and Analysis of Financial Condition and Results of ~~Operations~~ ~~included~~Operations" in our ~~Annual Report on~~2018 Form 10-K ~~for the year ended December 31, 2017~~ for a discussion of our critical accounting ~~policies, which include impairment, revenue recognition and business combinations.~~policies. There have been no significant changes to our critical accounting policies and estimates during the ~~quarter~~six months ended June 30, ~~2018 compared with those contained in Item 7,~~ ~~Management’s~~2019.

Management's Discussion and Analysis ~~of Financial Condition and Results of Operations~~ included in our Annual Report on Form 10-K for the year ended December 31, 2017, except that we updated our revenue recognition policy related to right-to-use contracts pursuant to the adoption of ASU 2014-09 (see "~~Recently Adopted Accounting Pronouncements"~~ ~~within Note 2).~~(continued)

Forward-Looking Statements

This Quarterly Report on Form 10-Q for the quarter ended June 30, ~~2018~~2019 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 retain and attract customers renewing, upgrading and entering right-to-use contracts;

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 vendor's, data management systems;

the dilutive effects of issuing additional securities;

~~the effect of changes in accounting for Leases set forth under the Codification Topic~~ ~~"Leases"~~;

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.

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.


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 onin our 2018 Form ~~10-K for the year ended December 31, 2017.~~10-K. There have been no material changes in the assumptions used or results obtained regarding market risk since December 31, ~~2017.~~2018.


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 ~~and accounting~~ officer), has evaluated the effectiveness of our disclosure controls and procedures as of June 30, ~~2018.~~2019. 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 June 30, ~~2018.~~2019. 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 June 30, ~~2018,~~2019, 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.

Part II – Other Information


Item 1.	Legal Proceedings

See Item 1. Financial Statements—Note ~~9 of~~11. Commitments and Contingencies accompanying the Consolidated Financial Statements ~~contained herein.~~in this Quarterly Report on Form 10-Q.


Item 1A.	Risk Factors

There have been no material changes to the risk factors discussed in “Item 1A. Risk Factors” in our ~~Annual Report on~~2018 Form ~~10-K for the year ended December 31, 2017 and in our Quarterly Report on Form 10-Q for the quarter ended March 31, 2018.~~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



3.1	Articles of Amendment of Equity LifeStyle Properties, Inc. effective May 2, 2019 (Included as an exhibit to our Report on Form 8-K dated May 2, 2019 and incorporated herein by reference).
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~~101.INS	~~The following materials from Equity LifeStyle Properties, Inc.’s Quarterly Report on Form 10-Q for~~XBRL Instance Document - the ~~quarter ended June 30, 2018 formatted~~instance document does not appear in the Interactive Data File because its XBRL (Extensible Business Reporting Language): (i) Consolidated Balance Sheets, (ii) Consolidated Statements of Income and Comprehensive Income, (iii) Consolidated Statements of Changes in Equity, (iv) Consolidated Statements of Cash Flow and (v) Notes to Consolidated Financial Statements, filed herewith.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

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: July ~~26, 2018~~30, 2019	By:	/s/ Marguerite Nader
		Marguerite Nader
		President and Chief Executive Officer
		(Principal Executive Officer)

Date: July ~~26, 2018~~30, 2019	By:	/s/ Paul Seavey
		Paul Seavey
		Executive Vice President, Chief Financial Officer and Treasurer
		(Principal Financial ~~and~~Officer)

Date: July 30, 2019	By:	/s/ Valerie Henry
		Valerie Henry
		Vice President, Chief Accounting Officer
		(Principal Accounting Officer)

4037



(amounts in thousands)	Balance at December 31, 2017			Adjustment due to ASU 2014-09 Adoption			Balance at January 1, 2018
Assets
Deferred commission expense	$	31,443		$	8,200		$	39,643
Liabilities
Deferred revenue-upfront payment from right-to-use contracts	$	85,596		$	23,386		$	108,982
Equity
Distribution in excess of accumulated earnings	$	(211,980	)	$	(15,186	)	$	(227,166	)



(amounts in thousands, except per share data)	As Reported			Balances Without Adoption of ASU 2014-09 (a)			Effect of Change Higher/(Lower)
Revenues
Right-to-use contract upfront payments, deferred, net	$	(2,021	)	$	(1,286	)	$	735
Total revenues	$	240,502		$	241,237		$	(735	)

Expenses
Right-to-use contract commissions, deferred, net	$	(262	)	$	(43	)	$	219
Total expenses	$	192,946		$	193,165		$	(219	)

Consolidated net income	$	49,169		$	49,685		$	(516	)
Net income available for Common Stockholders	$	46,137		$	46,629		$	(492	)
Earnings per Common Share - Basic	$	0.52		$	0.53		$	(0.01	)
Earnings per Common Share - Fully Diluted	$	0.52		$	0.53		$	(0.01	)



	Quarters Ended				Six Months Ended
	June 30,				June 30,
(amounts in thousands, except per share data)	2018		2017		2018		2017
Numerator:
Net Income Available for Common Stockholders:
Net income available for Common Stockholders – basic	$	46,137	$	39,498	$	106,359	$	96,385
Amounts allocated to dilutive securities	3,024		2,649		6,979		6,539
Net income available for Common Stockholders – fully diluted	$	49,161	$	42,147	$	113,338	$	102,924
Denominator:
Weighted average Common Shares outstanding – basic	88,549		86,763		88,537		86,408
Effect of dilutive securities:
Exchange of Common OP Units for Common Shares	5,826		5,886		5,827		6,235
Stock options and restricted shares	248		414		236		398
Weighted average Common Shares outstanding – fully diluted	94,623		93,063		94,600		93,041

Earnings per Common Share – Basic:
Net income available for Common Stockholders	$	0.52	$	0.46	$	1.20	$	1.12

Earnings per Common Share – Fully Diluted:
Net income available for Common Stockholders	$	0.52	$	0.45	$	1.20	$	1.11