ELS Reports First Quarter Results

Continued Strong Performance; Guidance Update

Equity LifeStyle Properties, Inc. (NYSE: ELS) (referred to herein as “we,” “us,” and “our”) today announced results for the quarter ended March 31, 2021. All per share results are reported on a fully diluted basis unless otherwise noted.

Financial Results for the Quarter Ended March 31, 2021

For the quarter ended March 31, 2021, total revenues increased $15.5 million, or 5.5 percent, to $296.0 million compared to $280.5 million for the same period in 2020. For the quarter ended March 31, 2021, net income available for Common Stockholders decreased $1.7 million, or $0.01 per Common Share, to $65.2 million, or $0.36 per Common Share, compared to $66.9 million, or $0.37 per Common Share, for the same period in 2020.

Non-GAAP Financial Measures and Portfolio Performance

For the quarter ended March 31, 2021, Funds from Operations (“FFO”) available for Common Stock and OP Unit holders increased $8.3 million, or $0.05 per Common Share, to $120.6 million, or $0.63 per Common Share, compared to $112.3 million, or $0.58 per Common Share, for the same period in 2020.

For the quarter ended March 31, 2021, Normalized Funds from Operations (“Normalized FFO”) available for Common Stock and OP Unit holders increased $9.3 million, or $0.05 per Common Share, to $122.6 million, or $0.64 per Common Share, compared to $113.3 million, or $0.59 per Common Share, for the same period in 2020.

For the quarter ended March 31, 2021, property operating revenues, excluding deferrals, increased $15.5 million to $285.2 million, compared to $269.7 million for the same period in 2020. For the quarter ended March 31, 2021, income from property operations, excluding deferrals and property management, increased $6.4 million to $170.3 million, compared to $163.9 million for the same period in 2020.

For the quarter ended March 31, 2021, Core property operating revenues, excluding deferrals, increased approximately 2.8 percent and Core income from property operations, excluding deferrals and property management, increased approximately 1.9 percent compared to the same period in 2020.

Business Updates

Page 1 of this Earnings Release and Supplemental Financial Information provides an update on operations and guidance.

Investment Activity

In February 2021, we completed the acquisition of a portfolio of 11 marinas, containing 3,986 slips and 181 RV sites located in Florida, North Carolina, South Carolina, Kentucky and Ohio. The purchase price of these properties was $262.0 million, which was funded with proceeds from the Loan discussed below.

Balance Sheet Activity

In February 2021, we entered into a $300.0 million unsecured term loan agreement ("Loan"). In March 2021, we entered into a three year LIBOR Swap Agreement ("Swap"), with a notional amount of $300.0 million, allowing us to trade LIBOR indexed variable rate debt for fixed rate debt. In April 2021, we closed on an amended revolving line of credit with borrowing capacity of $500.0 million and a $300.0 million term loan ("Term Loan"). We used the net proceeds from the Term Loan to repay the Loan. The Swap will fix the variable interest rate associated with the Term Loan at 1.8% per annum.

In March 2021, we entered into a secured financing transaction generating gross proceeds of $270.0 million. The loan is secured by two RV communities and one MH community, has a fixed interest rate of 2.4% per annum and matures in 10 years. The net proceeds from the transaction were used to repay two loans scheduled to mature in 2022, as well as to repay a portion of the outstanding balance on our existing line of credit. The two loans had an outstanding principal balance of $67.0 million and a weighted average interest rate of 5.10% per annum. As part of the transaction, we incurred $1.9 million of prepayment penalties.

About Equity LifeStyle Properties

We are a self-administered, self-managed real estate investment trust (“REIT”) with headquarters in Chicago. As of April 19, 2021, we own or have an interest in 434 quality properties in 33 states and British Columbia consisting of 165,507 sites.

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

Conference Call

A live webcast of our conference call discussing these results will take place tomorrow, Tuesday, April 20, 2021, at 10:00 a.m. Central Time. Please visit the Investor Relations section at www.equitylifestyleproperties.com for the link. A replay of the webcast will be available for two weeks at this site.

Forward-Looking Statements

In addition to historical information, this press release includes certain “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. When used, words such as "anticipate," "expect," "believe," "project," "intend," "may be" and "will be" and similar words or phrases, or the negative thereof, unless the context requires otherwise, are intended to identify forward-looking statements and may include without limitation, information regarding our expectations, goals or intentions regarding the future, and the expected effect of our acquisitions. These forward-looking statements are subject to numerous assumptions, risks and uncertainties, including, but not limited to:

• our ability to control costs and real estate market conditions, our ability to retain customers, the actual use of sites by customers and our success in acquiring new customers at our properties (including those that we may acquire);
• our ability to maintain historical or increase future rental rates and occupancy with respect to properties currently owned or that we may acquire;
• our ability to attract and retain customers entering, renewing and upgrading membership subscriptions;
• our assumptions about rental and home sales markets;
• our assumptions and guidance concerning 2021 growth rates and Net Income and Normalized FFO per share data;
• 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;
• our ability to obtain financing or refinance existing debt on favorable terms or at all;
• the effect of interest rates;
• the effect from any breach of our, or any of our vendors', data management systems;
• the dilutive effects of issuing additional securities;
• the outcome of pending or future lawsuits or actions brought against us, including those disclosed in our filings with the Securities and Exchange Commission; and
• other risks indicated from time to time in our filings with the Securities and Exchange Commission.

Our guidance acknowledges the existence of volatile economic conditions, which may impact our current guidance assumptions. Factors impacting 2021 guidance include, but are not limited to the following: (i) the mix of site usage within the portfolio; (ii) yield management on our short-term resort and marina sites; (iii) scheduled or implemented rate increases on community, resort and marina sites; (iv) scheduled or implemented rate increases in annual payments under membership subscriptions; (v) occupancy changes; (vi) our ability to attract and retain membership customers; (vii) our ability to integrate and operate recent acquisitions in accordance with our estimates; (viii) completion of pending transactions in their entirety and on assumed schedule; (ix) ongoing legal matters and related fees; and (x) costs to restore property operations and potential revenue losses following storms or other unplanned events. In addition, these forward-looking statements, including our 2021 guidance are subject to risks related to the COVID-19 pandemic, many of which are unknown, including the duration of the pandemic, the extent of the adverse health impact on the general population and on our residents, customers, and employees in particular, its impact on the employment rate and the economy, the extent and impact of governmental responses, and the impact of operational changes we have implemented and may implement in response to the pandemic.

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

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

Supplemental Financial Information

Operations and Guidance Update

We have continued our strong performance into 2021, as marked by these key operational and financial accomplishments:

• Normalized FFO per common share on a fully diluted basis was $0.64 for the quarter ended March 31, 2021, 8.1% higher than the quarter ended March 31, 2020.
• Core Portfolio generated growth of 1.9% in income from property operations, excluding deferrals and property management, for the first quarter of 2021 compared to the first quarter of 2020.
• MH occupancy within our Core Portfolio increased by 365 sites to 68,954 Sites as of March 31, 2021, with a weighted average occupancy of 95.3% for the quarter ended March 31, 2021 compared to 95.1% for the quarter ended March 31, 2020.
• Membership sales and expenses, consisting of membership upgrade sales and expenses, as well as commissions on camping and Trails Collection passes, contributed $3.8 million for the quarter ended March 31, 2021, an increase of $3.0 million, or 344%, compared to the first quarter of 2020.
• All properties continue to be open subject to seasons of operation. Amenities are available to our residents and customers subject to COVID-19 related state and local guidelines.
• As of April 15, 2021, the total collection rates from our MH and RV Annuals for the quarter ended March 31, 2021 were 98% and 99%, respectively. We continue to follow various state and local guidelines related to rent collections and eviction proceedings.
• We acquired one RV community and eleven marinas for $304.2 million.

Non-GAAP Financial Measures

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

Non-GAAP Financial Measures Definitions and Reconciliations

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

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

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

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

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

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

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

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

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

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

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