EQUITY LIFESTYLE PROPERTIES INC
For the period ended Jun 30, 2024. Filed Jul 30, 2024.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Jun 30, 2024 · Filed Jul 30, 2024
ELS$62.95-0.0%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-03-31; filed 2024-05-01.
0000895417-24-000067
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2024-06-30; filed 2024-07-30.
0000895417-24-000092
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 124 previous paragraphs and 156 current paragraphs.
90 unchanged; 29 reworded; 24 added; 4 removed; 1 previous and 13 current paragraphs rearranged.
Tables are not compared: 12 previous and 18 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (24)
Current report
Calculations prepared using actual results without rounding.
Current report
Core property operating revenues increased 4.6% and Core income from property operations, excluding property management increased 5.5% for the quarter ended June 30, 2024, compared to the same period in 2023. For the six months ended June 30, 2024, Core property operating revenues increased 5.2% and Core income from property operations, excluding property management increased 6.4% compared to the same period in 2023.
Current report
(3)Represents accelerated vesting of stock-based compensation expense of $6.3 million recognized during the quarter ended June 30, 2023 as a result of the passing of a member of our Board of Directors.
Current report
Comparison of the Quarter Ended June 30, 2024 to the Quarter Ended June 30, 2023
Current report
Utility and other income in our Core Portfolio for the quarter ended June 30, 2024 increased $2.0 million, or 6.6%, from the quarter ended June 30, 2023. The increase was primarily due to a $1.2 million and $0.8 million increase in utility income and pass-through income, respectively. The utility recovery rate (utility income divided by utility expenses) for 2024 and 2023 was approximately 46% and 45%, respectively.
Current report
Comparison of the Six Months Ended June 30, 2024 to the Six Months Ended June 30, 2023
Current report
Income from Property Operations
Current report
The following table summarizes certain financial and statistical data for the Core Portfolio and the total portfolio for the six months ended June 30, 2024 and 2023:
Current report
Property Operating Revenues
Current report
MH base rental income in our Core Portfolio for the six months ended June 30, 2024 increased $20.8 million, or 6.3%, from the same period in 2023, which reflects 6.1% growth from rate increases and 0.2% from occupancy gains. The average monthly base rental income per Site increased to approximately $850 for the six months ended June 30, 2024 from approximately $801 for the six months ended June 30, 2023. The average occupancy for the Core Portfolio was 94.9% for both the six months ended June 30, 2024 and June 30, 2023.
Current report
RV and marina base rental income in our Core Portfolio for the six months ended June 30, 2024 increased $8.2 million, or 4.0%, from the same period in 2023 primarily due to an increase in Annual RV and marina base rental income, partially offset by a decrease in Seasonal and Transient RV base rental income. The increase in Annual RV and marina base rental income was $10.0 million, or 7.3%. The decrease in Seasonal RV and marina base rental income was $0.9 million, or 2.4%. The decrease in Transient RV and marina base rental income was $0.9 million.
Current report
Property Operating Expenses
Current report
Property operating expenses, excluding property management, in our Core Portfolio for the six months ended June 30, 2024 increased $10.3 million, or 3.7%, from the same period in 2023, driven by increases in property operating and maintenance expenses of $4.6 million and real estate taxes of $3.8 million. Core property operating and maintenance expenses were higher during the six months ended June 30, 2024, compared to the same period in 2023 primarily due to increases in insurance of $2.5 million and higher utility expenses. The increase in Core real estate taxes was driven by higher real estate assessments in our Florida portfolio in 2023.
Current report
Home Sales and Rental Operations
Current report
Home Sales and Other
Current report
The following table summarizes certain financial and statistical data for Home Sales and Other Operations:
Current report
Rental Operations
Current report
The following table summarizes certain financial and statistical data for MH Rental Operations:
Current report
Rental operations revenues were $2.4 million or 12.1% lower during the six months ended June 30, 2024, compared to the six months ended June 30, 2023, primarily due to a decrease in the number of occupied rentals.
Current report
Miscellaneous Other Income and Expenses
Current report
Total other income and expenses, net decreased $3.4 million during the six months ended June 30, 2024, compared to the six months ended June 30, 2023, primarily due to lower general and administrative expense primarily as a result of accelerated vesting of stock-based compensation expense in 2023 partially offset by interest and related amortization.
Current report
Casualty-related charges/(recoveries), net
Current report
•our ability to execute expansion/development opportunities in the face of changes impacting the supply chain or labor markets;
Current report
For further information on these and other factors that could impact us and the statements contained herein, refer to Part I. Item 1A. Risk Factors in the 2023 Form 10-K and Part II. Item 1A. Risk Factors herein.
Removed paragraphs (4)
Previous report
For the quarter ended March 31, 2024, net income available for Common Stockholders increased $27.5 million to $109.9 million, or $0.59 per fully diluted Common Share, compared to $82.4 million, or $0.44 per fully diluted Common Share, for the same period in 2023.
Previous report
For the quarter ended March 31, 2024, FFO available for Common Stock and Operating Partnership unit (“OP Unit”) holders increased $27.1 million, or $0.14 per fully diluted Common Share, to $167.4 million, or $0.86 per fully diluted Common Share, compared to $140.3 million, or $0.72 per fully diluted Common Share, for the same period in 2023.
Previous report
For the quarter ended March 31, 2024, Normalized FFO available for Common Stock and OP Unit holders increased $12.2 million, or $0.06 per fully diluted Common Share, to $152.7 million, or $0.78 per fully diluted Common Share, compared to $140.5 million, or $0.72 per fully diluted Common Share, for the same period in 2023.
Previous report
For the quarter ended March 31, 2024, our Core Portfolio property operating revenues increased 5.8% and property operating expenses, excluding property management, increased 3.9%, from the same period in 2023, resulting in an increase in income from property operations, excluding property management, of 7.1%, compared to the same period in 2023.
Reworded paragraphs (29)
Previous wording
We are a self-administered and self-managed real estate investment trust (“REIT”) with headquarters in Chicago, Illinois. We are a fully integrated owner of lifestyle-oriented properties (“Properties”) consisting of property operations and home sales and rental operations primarily within manufactured home (“MH”) and recreational vehicle (“RV”) communities and marinas. As of March 31, 2024, we owned or had an ownership interest in a portfolio of 451 Properties located throughout the United States and Canada containing 172,464 individual developed areas (“Sites”). These Properties are located in 35 states and British Columbia, with more than 110 Properties with lake, river or ocean frontage and more than 120 Properties within ten miles of the coastal United States.
Current wording
We are a self-administered and self-managed real estate investment trust (“REIT”) with headquarters in Chicago, Illinois. We are a fully integrated owner of lifestyle-oriented properties (“Properties”) consisting of property operations and home sales and rental operations primarily within manufactured home (“MH”) and recreational vehicle (“RV”) communities and marinas. As of June 30, 2024, we owned or had an ownership interest in a portfolio of 452 Properties located throughout the United States and Canada containing 172,866 individual developed areas (“Sites”). These Properties are located in 35 states and British Columbia, with more than 110 Properties with lake, river or ocean frontage and more than 120 Properties within ten miles of the coastal United States.
Previous wording
(1)Primarily utilized to service approximately 118,900 members. Includes approximately 6,100 Sites rented on an annual basis.
Current wording
(1)Primarily utilized to service approximately 117,100 members. Includes approximately 5,900 Sites rented on an annual basis.
Previous wording
(2)Includes approximately 2,000 annual Sites and 1,600 transient Sites.
Current wording
(2)Includes approximately 2,000 annual Sites and 1,800 transient Sites.
Previous wording
We continue to focus on the quality of occupancy growth by increasing the number of manufactured homeowners in our Core Portfolio. Our Core Portfolio average occupancy includes both homeowners and renters in our MH communities and was 94.9% for each of the quarters ended March 31, 2024, December 31, 2023 and March 31, 2023. For the quarter ended March 31, 2024, our Core Portfolio occupancy increased by 19 sites, which included an increase in homeowner occupancy of 123 sites and a decrease in rental occupancy of 104 compared to December 31, 2023. While we continue to focus on increasing the number of manufactured homeowners in our Core Portfolio, we also believe renting our vacant homes represents an attractive source of occupancy and an opportunity to potentially convert the renter to a new homebuyer in the future. We continue to expect there to be fluctuations in the sources of occupancy depending on local market conditions, availability of vacant sites and success with converting renters to homeowners. As of March 31, 2024, we had 2,158 occupied rental homes in our Core MH communities.
Current wording
We continue to focus on the quality of occupancy growth by increasing the number of manufactured homeowners in our Core Portfolio. Our Core Portfolio average occupancy includes both homeowners and renters in our MH communities and was 94.9% for each of the quarters ended June 30, 2024 and December 31, 2023 and 94.8% for the quarter ended June 30, 2023. For the quarter ended June 30, 2024, our Core Portfolio occupancy increased by 29 sites, which included an increase in homeowner occupancy of 171 sites and a decrease in rental occupancy of 142 compared to March 31, 2024. While we continue to focus on increasing the number of manufactured homeowners in our Core Portfolio, we also believe renting our vacant homes represents an attractive source of occupancy and an opportunity to potentially convert the renter to a new homebuyer in the future. We continue to expect there to be fluctuations in the sources of occupancy depending on local market conditions, availability of vacant sites and success with converting renters to homeowners. As of June 30, 2024, we had 2,016 occupied rental homes in our Core MH communities.
Previous wording
RV and marina base rental income in our Core Portfolio increased 5.8% for the quarter ended March 31, 2024, compared to the same period in 2023 driven primarily by an increase in Annual RV rental income. Core RV and marina base rental income from annuals represents 63.2% of total Core RV and marina base rental income and increased 8.0% for the quarter ended March 31, 2024, compared to the same period in 2023 due to an 8.7% increase in rate, offset by a 0.7% decrease in occupancy. Core seasonal and transient RV and marina base rental income increased 2.4% and 1.4%, respectively for the quarter ended March 31, 2024, compared to the same period in 2023 due to higher demand, particularly in our Florida portfolio.
Current wording
RV and marina base rental income in our Core Portfolio increased 2.0% for the quarter ended June 30, 2024, compared to the same period in 2023, driven primarily by an increase in Annual RV rental income. Core RV and marina base rental income from annuals represents 73.9% of total Core RV and marina base rental income and increased 6.6% for the quarter ended June 30, 2024, compared to the same period in 2023 due to an 8.3% increase in rate, offset by a 1.7% decrease in occupancy. Core seasonal and transient RV and marina base rental income decreased 16.7% and 5.6%, respectively, for the quarter ended June 30, 2024, compared to the same period in 2023 due to non-returning Hurricane Ian workers at our Florida properties, decreased reservation extensions at our Sun Belt locations due to a mild winter and returning competitor supply, partially offset by California properties recovering from weather disruption events in the second quarter of 2023.
Previous wording
Demand for our homes and communities remains strong as evidenced by factors including our high occupancy levels. We closed 191 new home sales during the quarter ended March 31, 2024, compared to 176 new home sales during the quarter ended March 31, 2023, an increase of 8.5%. The increase in new home sales during the quarter ended March 31, 2024 was primarily in the Florida and Arizona markets.
Current wording
Demand for our homes and communities remains strong as evidenced by factors including our high occupancy levels. We closed 255 new home sales during the quarter ended June 30, 2024, compared to 226 new home sales during the quarter ended June 30, 2023, an increase of 12.8%. The new home sales during the quarter ended June 30, 2024 were primarily in the Florida market.
Previous wording
Our gross investment in real estate increased $47.0 million to $7,753.3 million as of March 31, 2024 from $7,706.3 million as of December 31, 2023, primarily due to capital improvements during the quarter ended March 31, 2024.
Current wording
Our gross investment in real estate increased $98.8 million to $7,805.1 million as of June 30, 2024 from $7,706.3 million as of December 31, 2023, primarily due to capital improvements during the six months ended June 30, 2024.
Previous wording
The following table reconciles net income available for Common Stockholders to income from property operations for the quarters ended March 31, 2024 and 2023:
Current wording
The following table reconciles net income available for Common Stockholders to income from property operations for the quarters and six months ended June 30, 2024 and 2023:
Previous wording
The following table presents a calculation of FFO available for Common Stock and OP Unitholders and Normalized FFO available for Common Stock and OP Unitholders for the quarters ended March 31, 2024 and 2023:
Current wording
The following table presents a calculation of FFO available for Common Stock and OP Unitholders and Normalized FFO available for Common Stock and OP Unitholders for the quarters and six months ended June 30, 2024 and 2023:
Previous wording
This section discusses the comparison of our results of operations for the quarters ended March 31, 2024 and March 31, 2023 and our operating activities, investing activities and financing activities for the quarters ended March 31, 2024 and March 31, 2023. Our Core Portfolio consists of our Properties owned and operated during all of 2023 and 2024. Our Non-Core Portfolio includes all Properties that were not owned and operated during all of 2023 and 2024, including six properties in Florida impacted by Hurricane Ian and two properties in California that were impacted by storm and flooding events. For the comparison of our results of operations for the quarters ended March 31, 2023 and March 31, 2022 and discussion of our operating activities, investing activities and financing activities for the quarters ended March 31, 2023 and March 31, 2022, refer to Part I. Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations of the Quarterly Report on Form 10-Q/A for the fiscal quarter ended March 31, 2023, filed with the SEC on January 23, 2024.
Current wording
This section discusses the comparison of our results of operations for the quarters and six months ended June 30, 2024 and June 30, 2023 and our operating activities, investing activities and financing activities for the six months ended June 30, 2024 and June 30, 2023. Our Core Portfolio consists of our Properties owned and operated during all of 2023 and 2024. Our Non-Core Portfolio includes all Properties that were not owned and operated during all of 2023 and 2024, including six properties in Florida impacted by Hurricane Ian and two properties in California that were impacted by storm and flooding events. For the comparison of our results of operations for the quarters and six months ended June 30, 2023 and June 30, 2022 and discussion of our operating activities, investing activities and financing activities for the six months ended June 30, 2023 and June 30, 2022, refer to Part I. Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations of the Quarterly Report on Form 10-Q/A for the fiscal quarter ended June 30, 2023, filed with the SEC on January 23, 2024.
Previous wording
(2)Membership upgrade sales revenue is net of deferrals of $3.6 million and $4.5 million for the quarters ended March 31, 2024 and March 31, 2023, respectively.
Current wording
(2)Membership upgrade sales revenue is net of deferrals of $4.7 million and $5.7 million for the quarters ended June 30, 2024 and June 30, 2023, respectively.
Previous wording
(4)Membership sales and marketing expense is net of sales commission deferrals of $0.4 million and $0.7 million for the quarters ended March 31, 2024 and March 31, 2023, respectively.
Current wording
(4)Membership sales and marketing expense is net of sales commission deferrals of $0.9 million for both the quarters ended June 30, 2024 and June 30, 2023.
Previous wording
Total portfolio income from property operations for the quarter ended March 31, 2024, increased $13.2 million, or 7.4%, from the quarter ended March 31, 2023, driven by an increase of $13.5 million, or 7.8%, from our Core Portfolio, offset by a decrease of $0.3 million from our Non-Core Portfolio. The increase in income from property operations from our Core Portfolio was primarily due to higher property operating revenues, primarily in MH base rental income, RV and marina base rental income, partially offset by an increase in real estate taxes and property operating and maintenance expenses.
Current wording
Total portfolio income from property operations for the quarter ended June 30, 2024, increased $5.2 million, or 3.2%, from the quarter ended June 30, 2023, driven by an increase of $9.4 million, or 6.2%, from our Core Portfolio, offset by a decrease of $4.2 million from our Non-Core Portfolio. The increase in income from property operations from our Core Portfolio was primarily due to higher property operating revenues, primarily in MH base rental income, RV and marina base rental income and utility and other income, partially offset by an increase in property operating and maintenance expenses and real estate taxes.
Previous wording
MH base rental income in our Core Portfolio for the quarter ended March 31, 2024 increased $10.5 million, or 6.4%, from the quarter ended March 31, 2023, which reflects 6.3% growth from rate increases and 0.1% from occupancy gains. The average monthly base rental income per Site in our Core Portfolio increased to approximately $847 for the quarter ended March 31, 2024 from approximately $797 for the quarter ended March 31, 2023. The average occupancy for our Core Portfolio was 94.9% for both the quarters ended March 31, 2024 and March 31, 2023.
Current wording
MH base rental income in our Core Portfolio for the quarter ended June 30, 2024 increased $10.3 million, or 6.2%, from the quarter ended June 30, 2023, which reflects 6.0% growth from rate increases and 0.2% from occupancy gains. The average monthly base rental income per Site in our Core Portfolio increased to approximately $854 for the quarter ended June 30, 2024 from approximately $806 for the quarter ended June 30, 2023. The average occupancy for our Core Portfolio was 94.9% and 94.8% for the quarters ended June 30, 2024 and June 30, 2023, respectively.
Previous wording
RV and marina base rental income in our Core Portfolio for the quarter ended March 31, 2024 increased $6.3 million, or 5.8%, from the quarter ended March 31, 2023, driven primarily by an increase in Annual RV and marina base rental income. The increase in Annual RV and marina base rental income of 8.0% was driven by an increase in rate of 8.7%, offset by a decline of 0.7% in occupancy. The increase in Seasonal and Transient RV and marina base rental income of 2.4% and 1.4%, respectively, for the quarter ended March 31, 2024, compared to the same period in 2023, was due to higher demand, particularly in our Florida portfolio.
Current wording
RV and marina base rental income in our Core Portfolio for the quarter ended June 30, 2024 increased $1.9 million, or 2.0%, from the quarter ended June 30, 2023, driven primarily by an increase in Annual RV and marina base rental income. The increase in Annual RV and marina base rental income was partially offset by decreases in Seasonal and Transient RV and marina base rental income of 16.7% and 5.6%, respectively, for the quarter ended June 30, 2024, compared to the same period in 2023.
Previous wording
Property operating expenses, excluding property management, in our Core Portfolio for the quarter ended March 31, 2024 increased $5.3 million, or 3.9%, from the quarter ended March 31, 2023, driven by increases in real estate taxes of $2.6 million and property operating and maintenance expenses of $1.8 million. Core real estate taxes were higher in 2024, primarily in the South and North regions, driven by tax increases that were effective in 2023. Property operating and maintenance expenses were higher in 2024 primarily due to an increase in insurance expense of $1.9 million due to higher insurance premiums following our property and casualty insurance renewal in the second quarter of 2023.
Current wording
Property operating expenses, excluding property management, in our Core Portfolio for the quarter ended June 30, 2024 increased $5.0 million, or 3.4%, from the quarter ended June 30, 2023, driven by increases in property operating and maintenance expenses of $2.7 million and real estate taxes of $1.2 million. Core property operating and maintenance expenses were higher in 2024 primarily due to an increase in utility expense of $1.5 million. Real estate taxes were higher in 2024, primarily in the South and North regions, driven by tax increases that were effective in 2023.
Previous wording
Gross revenues from new home sales decreased $0.6 million and Cost of new home sales decreased $1.3 million during the quarter ended March 31, 2024, compared to the quarter ended March 31, 2023, primarily due to lower average selling prices and lower average cost of home sales, respectively.
Current wording
Gross revenues from new home sales decreased $0.3 million and Cost of new home sales decreased $1.2 million during the quarter ended June 30, 2024, compared to the quarter ended June 30, 2023, primarily due to lower average selling prices and lower average cost of home sales, respectively.
Previous wording
(1)Consists of Site rental income and home rental income. Approximately $5.6 million and $6.4 million for the quarters ended March 31, 2024 and March 31, 2023, respectively, of Site rental income is included in MH base rental income in the Core Portfolio Income from Property Operations table. The remainder of home rental income is included in Rental home income in our Core Portfolio Income from Property Operations table.
Current wording
(1)Consists of Site rental income and home rental income. Approximately $5.2 million and $6.1 million for the quarters ended June 30, 2024 and June 30, 2023, respectively, of Site rental income is included in MH base rental income in the Core Portfolio Income from Property Operations table. The remainder of home rental income is included in Rental home income in our Core Portfolio Income from Property Operations table.
Previous wording
Rental operations revenues were $1.2 million, or 11.7%, lower during the quarter ended March 31, 2024, compared to the quarter ended March 31, 2023, primarily due to a decrease in the number of occupied rentals.
Current wording
Rental operations revenues were $1.2 million, or 12.5%, lower during the quarter ended June 30, 2024, compared to the quarter ended June 30, 2023, primarily due to a decrease in the number of occupied rentals.
Previous wording
Total other income and expenses, net increased $1.7 million for the quarter ended March 31, 2024, compared to the quarter ended March 31, 2023, primarily due to higher interest and related amortization expense as a result of an increase in interest rates, as well as increases in depreciation and amortization and general and administrative expenses.
Current wording
Total other income and expenses, net decreased $5.1 million for the quarter ended June 30, 2024, compared to the quarter ended June 30, 2023, primarily due to lower general and administrative expenses as a result of an accelerated stock-based compensation expense in 2023, partially offset by higher interest and related amortization.
Previous wording
During the quarters ended March 31, 2024 and March 31, 2023, we recognized expenses of approximately $0.5 million and $8.5 million, respectively, related to debris removal and cleanup costs related to Hurricane Ian and we recognized an offsetting insurance recovery revenue accrual of $0.5 million and $8.5 million, respectively, related to the expected insurance recovery. During the quarter ended March 31, 2024, we also recognized excess insurance recovery revenue of approximately $14.8 million within Casualty-related charges/(recoveries), net for reimbursement of capital expenditures. The debris and cleanup costs and offsetting recovery accrual and reimbursement of capital expenditures are reflected in Casualty-related charges/(recoveries), net on the Consolidated Statements of Income and Comprehensive Income.
Current wording
During the quarters ended June 30, 2024 and June 30, 2023, we recognized expenses of approximately $0.7 million and $1.8 million, respectively, related to debris removal and cleanup costs related to Hurricane Ian and we recognized an offsetting insurance recovery revenue accrual of $0.7 million and $1.8 million, respectively, related to the expected insurance recovery. During the quarters ended June 30, 2024 and June 30, 2023, we also recognized insurance recovery revenue in excess of expenses and business interruption proceeds of approximately $6.2 million and zero, respectively, within Casualty-related charges/(recoveries), net. The debris and cleanup costs and offsetting recovery accrual and reimbursement of capital expenditures are reflected in Casualty-related charges/(recoveries), net on the Consolidated Statements of Income and Comprehensive Income.
Previous wording
Utility and other income in our Core Portfolio for the quarter ended March 31, 2024 increased $1.7 million, or 5.6%, from the quarter ended March 31, 2023. The increase was primarily due to a $1.1 million and $0.6 million increase in other property income and pass-through income, respectively. The increase in other property income compared to the same period last year was mainly due to $0.8 million of amenity and other income. The increase in pass-through income was driven by increased real estate tax pass-throughs to customers.
Current wording
Utility and other income in our Core Portfolio for the six months ended June 30, 2024 increased $3.6 million, or 6.1%, from the same period in 2023. The increase was primarily due to an increase in utility income, pass-through income and other property income. The utility recovery rate (utility income divided by utility expenses) for 2024 and 2023 was approximately 46% and 45%, respectively. The increase in pass-through income was due to increases in real estate tax pass-throughs to customers in Florida.
Previous wording
We also utilize interest rate swaps to add stability to our interest expense and to manage our exposure to interest rate movements. Interest rate swaps designated as cash flow hedges involve the receipt of variable amounts from a counterparty in exchange for making fixed-rate payments over the life of the agreements without exchange of the underlying notional amount. The changes in the fair value of the designated derivative are recorded in Accumulated other comprehensive income (loss) on the Consolidated Balance Sheets and subsequently reclassified into earnings on the Consolidated Statements of Income and
Current wording
We also utilize interest rate swaps to add stability to our interest expense and to manage our exposure to interest rate movements. Interest rate swaps designated as cash flow hedges involve the receipt of variable amounts from a counterparty in exchange for making fixed-rate payments over the life of the agreements without exchange of the underlying notional amount. The changes in the fair value of the designated derivative are recorded in Accumulated other comprehensive income (loss) on the Consolidated Balance Sheets and subsequently reclassified into earnings on the Consolidated Statements of Income and Comprehensive Income in the period that the hedged forecasted transaction affects earnings. For additional information regarding our interest rate swaps, see Part I. Item 1. Financial Statements—Note 8. Derivative Instruments and Hedging.
Previous wording
We expect to meet our short-term liquidity requirements, including principal payments, capital improvements and dividend distributions for the next twelve months, generally through available cash, net cash provided by operating activities, issuances of equity under our ATM equity offering program and our LOC. As of March 31, 2024, our LOC had a borrowing capacity of $493.9 million.
Current wording
We expect to meet our short-term liquidity requirements, including principal payments, capital improvements and dividend distributions for the next twelve months, generally through available cash, net cash provided by operating activities, issuances of equity under our ATM equity offering program and our LOC. As of June 30, 2024, our LOC had a borrowing capacity of $485.9 million.
Previous wording
Net cash provided by operating activities increased $39.8 million to $198.7 million for the quarter ended March 31, 2024 from $159.0 million for the quarter ended March 31, 2023. The increase in net cash provided by operating activities was primarily due to net increases in manufactured homes, net, accounts payable and other liabilities and other assets, net, partially offset by a reduction in proceeds from insurance claims, net.
Current wording
Net cash provided by operating activities increased $75.1 million to $341.9 million for the six months ended June 30, 2024 from $266.8 million for the six months ended June 30, 2023. The increase in net cash provided by operating activities was primarily due to net increases in manufactured homes, net, accounts payable and other liabilities and other assets, net, partially offset by a reduction in proceeds from insurance claims, net.
Previous wording
Net cash used in investing activities decreased $15.1 million to $51.3 million for the quarter ended March 31, 2024 from $66.4 million for the quarter ended March 31, 2023. The decrease was due to a decrease in spending on acquisitions of $8.8 million, a decrease in investments in unconsolidated joint ventures of $0.4 million and a decrease in capital improvement spending of $6.3 million.
Current wording
Net cash used in investing activities decreased $49.0 million to $104.6 million for the six months ended June 30, 2024 from $153.6 million for the six months ended June 30, 2024. The decrease was due to a decrease in capital improvement spending of $31.8 million, a decrease in spending on acquisitions of $9.2 million, and an increase in Hurricane Ian proceeds in 2024 compared to same period in 2023.
Previous wording
(3)Includes $5.6 million of restoration and improvement capital expenditures related to Hurricane Ian for the quarter ended March 31, 2024.
Current wording
(3)Includes $10.4 million of restoration and improvement capital expenditures related to Hurricane Ian for the six months ended June 30, 2024.
Previous wording
Net cash used in financing activities increased $45.9 million to $130.1 million for the quarter ended March 31, 2024 from $84.2 million for the quarter ended March 31, 2023. The increase was primarily due to a line of credit, net repayment of $39.0 million.
Current wording
Net cash used in financing activities increased $124.1 million to $231.6 million for the six months ended June 30, 2024 from $107.5 million for the six months ended June 30, 2023. The increase was primarily due to a higher line of credit, net repayment of $24.0 million and a decrease in mortgage note financing proceeds of $88.8 million.
Previous wording
This Quarterly Report on Form 10-Q includes certain “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. When used, words such as “anticipate,” “expect,” “believe,” “project,” “intend,” “may be” and “will be” and similar words or phrases, or the negative thereof, unless the context requires otherwise, are intended to identify forward-looking statements and may include without limitation, information regarding our expectations, goals or intentions regarding the future, and the expected effect of our acquisitions. These forward-looking statements are subject to numerous assumptions, risks and uncertainties, including, but not limited to:
Current wording
This Quarterly Report on Form 10-Q includes certain “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. When used, words such as “anticipate,” “expect,” “believe,” “project,” “estimate,” “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 that could cause actual results or outcomes to differ materially from those expressed in a forward-looking statement due to a number of factors, including, but not limited to:
Rearranged current paragraphs (13)
Current report — wording carried from elsewhere
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
Current report — wording carried from elsewhere
(1)Rental income consists of the following total portfolio income items: 1) MH base rental income, 2) Rental home income, 3) RV and marina base rental income and 4) Utility income, which is calculated by subtracting Other income on the Consolidated Statements of Income and Comprehensive Income from Utility and other income in this table. The difference between the sum of the total portfolio income items and Rental income on the Consolidated Statements of Income and Comprehensive Income is bad debt expense, which is presented in Property operating maintenance expense in this table.
Current report — wording carried from elsewhere
(2)Membership upgrade sales revenue is net of deferrals of $8.3 million and $10.1 million for the six months ended June 30, 2024 and June 30, 2023, respectively.
Current report — wording carried from elsewhere
(3)Includes bad debt expense for all periods presented.
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(4)Membership sales and marketing expense is net of sales commission deferrals of $1.3 million and $1.6 million the six months ended June 30, 2024 and June 30, 2023, respectively.
Current report — wording carried from elsewhere
(5)See Part I. Item 2. Management's Discussion and Analysis—Non-GAAP Financial Measures for definitions and reconciliation of these Non-GAAP measures to Net Income available for Common Shareholders.
Current report — wording carried from elsewhere
Total Portfolio income from property operations for the six months ended June 30, 2024 increased $18.4 million, or 5.4%, from the same period in 2023, driven by an increase of $22.9 million, or 7.0%, from our Core Portfolio, offset by a decrease of $4.5 million from our Non-Core Portfolio. The increase in income from property operations from our Core Portfolio was primarily due to higher property operating revenues, primarily in MH base rental income, RV and marina base rental income and Utility and other income, partially offset by an increase in property operating and maintenance expenses and real estate taxes.
Current report — wording carried from elsewhere
RV and marina base rental income is comprised of the following:
Current report — wording carried from elsewhere
Gross revenues from new home sales decreased $0.9 million and Cost of new home sales decreased $2.4 million during the six months ended June 30, 2024, compared to the six months ended June 30, 2023, primarily due to lower average selling prices and lower average cost of home sales.
Current report — wording carried from elsewhere
(1)Consists of Site rental income and home rental income in our Core Portfolio. Approximately $10.8 million and $12.5 million of Site rental income for the six months ended June 30, 2024 and 2023, respectively, are included in MH base rental income within the Core Portfolio Income from Property Operations table. The remainder of home rental income is included in Rental home income within the Core Portfolio Income from Property Operations table.
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(2)Presented in Depreciation and amortization in the Consolidated Statements of Income and Comprehensive Income.
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The following table summarizes other income and expenses, net:
Current report — wording carried from elsewhere
During the six months ended June 30, 2024 and June 30, 2023, we recognized expenses of approximately $1.2 million and $10.3 million, respectively, related to debris removal and cleanup costs related to Hurricane Ian and we recognized an offsetting insurance recovery revenue of $1.2 million and $10.3 million, respectively, related to the expected insurance recovery. During the six months ended June 30, 2024 and June 30, 2023, we also recognized insurance recovery revenue in excess of expenses and business interruption proceeds of approximately $21.0 million and zero, respectively, within Casualty-related charges/(recoveries), net. The debris and cleanup costs and offsetting recovery accrual and reimbursement of capital expenditures are reflected in Casualty-related charges/(recoveries), net on the Consolidated Statements of Income and Comprehensive Income.
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Previous report — wording carried elsewhere
Comprehensive Income in the period that the hedged forecasted transaction affects earnings. For additional information regarding our interest rate swaps, see Part I. Item 1. Financial Statements—Note 8. Derivative Instruments and Hedgingand Note 13. Subsequent Events.