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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_________________________________________________________ 
FORM 10-Q
_________________________________________________________ 
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 2022
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from             to            
Commission file number: 1-11718
_________________________________________________________ 
EQUITY LIFESTYLE PROPERTIES, INC.
(Exact Name of Registrant as Specified in Its Charter)
_________________________________________________________
Maryland36-3857664
(State or other jurisdiction of incorporation)(IRS Employer Identification Number)
Two North Riverside Plaza, Suite 800Chicago,Illinois60606
(Address of Principal Executive Offices)(Zip Code)

(312) 279-1400
Registrant's telephone number, including area code
Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading Symbol(s)Name of each exchange on which registered
Common Stock, $0.01 Par ValueELSNew York Stock Exchange
_________________________________________________________ 
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes      No  
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).    Yes      No  
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act. (Check one):
Large accelerated filer
Accelerated filer
Non-accelerated filer
Smaller reporting company
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes   ☐    No  
Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date: 186,011,525 shares of Common Stock as of April 21, 2022.




Equity LifeStyle Properties, Inc.
Table of Contents
 
  Page
Item 1.Financial Statements (unaudited)
Index To Financial Statements
Item 2.
Item 3.
Item 4.
Item 1.
Item 1A.
Item 2.
Item 3.
Item 4.
Item 5.
Item 6.
2



Part I – Financial Information

Item 1. Financial Statements

Equity LifeStyle Properties, Inc.
Consolidated Balance Sheets
(amounts in thousands, except share and per share data)
March 31, 2022December 31, 2021
(unaudited)
Assets
Investment in real estate:
Land$2,025,609 $2,019,787 
Land improvements3,962,367 3,912,062 
Buildings and other depreciable property1,083,942 1,057,215 
7,071,918 6,989,064 
Accumulated depreciation(2,150,238)(2,103,774)
Net investment in real estate4,921,680 4,885,290 
Cash and restricted cash38,120 123,398 
Notes receivable, net40,542 39,955 
Investment in unconsolidated joint ventures79,688 70,312 
Deferred commission expense47,859 47,349 
Other assets, net136,916 141,567 
Total Assets$5,264,805 $5,307,871 
Liabilities and Equity
Liabilities:
Mortgage notes payable, net$2,598,830 $2,627,783 
Term loan, net496,148 297,436 
Unsecured line of credit69,000 349,000 
Accounts payable and other liabilities166,435 172,285 
Deferred membership revenue182,181 176,439 
Accrued interest payable9,175 9,293 
Rents and other customer payments received in advance and security deposits132,412 118,696 
Distributions payable80,287 70,768 
Total Liabilities3,734,468 3,821,700 
Equity:
Stockholders' Equity:
Preferred stock, $0.01 par value, 10,000,000 shares authorized as of March 31, 2022 and December 31, 2021; none issued and outstanding.
  
Common stock, $0.01 par value, 600,000,000 shares authorized as of March 31, 2022 and December 31, 2021; 186,006,354 and 185,640,379 shares issued and outstanding as of March 31, 2022, and December 31, 2021, respectively.
1,916 1,913 
Paid-in capital1,619,164 1,593,362 
Distributions in excess of accumulated earnings(177,158)(183,689)
Accumulated other comprehensive income13,448 3,524 
Total Stockholders’ Equity1,457,370 1,415,110 
Non-controlling interests – Common OP Units72,967 71,061 
Total Equity1,530,337 1,486,171 
Total Liabilities and Equity$5,264,805 $5,307,871 









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


Equity LifeStyle Properties, Inc.
Consolidated Statements of Income and Comprehensive Income
(amounts in thousands, except per share data)
(unaudited)
 Quarters Ended March 31,
20222021
Revenues:
Rental income$285,065 $249,022 
Annual membership subscriptions15,157 13,654 
Membership upgrade sales current period, gross7,151 10,014 
Membership upgrade sales upfront payments, deferred, net(4,084)(7,427)
Other income13,542 10,521 
Gross revenues from home sales, brokered resales and ancillary services39,695 25,160 
Interest income1,759 1,767 
Income from other investments, net1,904 936 
Total revenues360,189 303,647 
Expenses:
Property operating and maintenance103,992 88,873 
Real estate taxes19,457 17,850 
Sales and marketing, gross4,914 6,176 
Membership sales commissions, deferred, net(583)(1,499)
Property management17,871 15,380 
Depreciation and amortization49,394 45,398 
Cost of home sales, brokered resales and ancillary services30,684 18,836 
Home selling expenses and ancillary operating expenses6,481 4,941 
General and administrative12,297 10,512 
Other expenses823 698 
Early debt retirement516 2,029 
Interest and related amortization27,464 26,275 
Total expenses273,310 235,469 
Loss on sale of real estate, net (59)
Income before equity in income of unconsolidated joint ventures86,879 68,119 
Equity in income of unconsolidated joint ventures171 868 
Consolidated net income87,050 68,987 
Income allocated to non-controlling interests – Common OP Units(4,144)(3,747)
Net income available for Common Stockholders$82,906 $65,240 
Consolidated net income$87,050 $68,987 
Other comprehensive income (loss):
Adjustment for fair market value of swap9,924 129 
Consolidated comprehensive income96,974 69,116 
Comprehensive income allocated to non-controlling interests – Common OP Units(4,616)(3,754)
Comprehensive income attributable to Common Stockholders$92,358 $65,362 
Earnings per Common Share – Basic$0.45 $0.36 
Earnings per Common Share – Fully Diluted$0.45 $0.36 
Weighted average Common Shares outstanding – Basic185,690 181,945 
Weighted average Common Shares outstanding – Fully Diluted195,246 192,685 





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


Equity LifeStyle Properties, Inc.
Consolidated Statements of Changes in Equity
(amounts in thousands)
(unaudited)
Common StockPaid-in CapitalDistributions in Excess of Accumulated EarningsAccumulated Other Comprehensive Income (Loss)Non-controlling Interests – Common OP UnitsTotal Equity
Balance as of December 31, 2021$1,913 $1,593,362 $(183,689)$3,524 $71,061 $1,486,171 
Exchange of Common OP Units for Common Stock— 67 — — (67) 
Issuance of Common Stock through employee stock purchase plan— 513 — — — 513 
Issuance of Common Stock3 28,367 — — — 28,370 
Compensation expenses related to restricted stock and stock options— 2,590 — — — 2,590 
Repurchase of Common Stock or Common OP Units— (3,449)— — — (3,449)
Adjustment for Common OP Unitholders in the Operating Partnership— (1,641)— — 1,641  
Adjustment for fair market value of swap— — — 9,924 — 9,924 
Consolidated net income— — 82,906 — 4,144 87,050 
Distributions— — (76,375)— (3,812)(80,187)
Other— (645)— — — (645)
Balance as of March 31, 2022$1,916 $1,619,164 $(177,158)$13,448 $72,967 $1,530,337 







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













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


Equity LifeStyle Properties, Inc.
Consolidated Statements of Cash Flows
(amounts in thousands)
(unaudited)
Quarters Ended March 31,
20222021
Cash Flows From Operating Activities:
Consolidated net income$87,050 $68,987 
Adjustments to reconcile consolidated net income to net cash provided by operating activities:
Loss on sale of real estate, net 59 
Early debt retirement516 2,029 
Depreciation and amortization50,237 46,119 
Amortization of loan costs1,213 1,111 
Debt premium amortization(60)(83)
Equity in income of unconsolidated joint ventures(171)(868)
Proceeds from insurance claims, net59 2,343 
Compensation expense related to incentive plans(1,529)2,939 
Revenue recognized from membership upgrade sales upfront payments(3,067)(2,587)
Commission expense recognized related to membership sales1,040 955 
Changes in assets and liabilities:
Notes receivable, net189 (1,366)
Deferred commission expense(1,550)(2,363)
Other assets, net23,168 17,884 
Accounts payable and other liabilities(1,923)11,781 
Deferred membership revenue8,494 12,687 
Rents and other customer payments received in advance and security deposits13,665 13,704 
Net cash provided by operating activities177,331 173,331 
Cash Flows From Investing Activities:
Real estate acquisitions, net(15,402)(295,599)
Proceeds from disposition of properties, net (7)
Investment in unconsolidated joint ventures(7,912) 
Distributions of capital from unconsolidated joint ventures374 731 
Proceeds from insurance claims1,405  
Capital improvements(83,647)(56,778)
Net cash used in investing activities(105,182)(351,653)























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



Equity LifeStyle Properties, Inc.
Consolidated Statements of Cash Flows (continued)
(amounts in thousands)
(unaudited)
Quarters Ended March 31,
20222021
Cash Flows From Financing Activities:
Proceeds from stock options and employee stock purchase plan513 732 
Gross proceeds from the issuance of common stock28,370  
Distributions:
Common Stockholders(67,295)(62,414)
Common OP Unitholders(3,373)(3,589)
Share based award tax withholding payments(3,449)(2,814)
Principal payments and mortgage debt repayment(29,592)(80,351)
Mortgage notes payable financing proceeds 270,000 
Term loan proceeds200,000 300,000 
Line of Credit repayment(319,000)(283,000)
Line of Credit proceeds39,000 111,000 
Debt issuance and defeasance costs(1,957)(3,658)
Other(644)(116)
Net cash (used in) provided by financing activities(157,427)245,790 
Net (decrease) increase in cash and restricted cash(85,278)67,468 
Cash and restricted cash, beginning of year123,398 24,060 
Cash and restricted cash, end of period$38,120 $91,528 

Quarters Ended March 31,
20222021
Supplemental Information:
Cash paid for interest$26,839 $24,864 
Net investment in real estate – reclassification of rental homes$21,311 $12,751 
Other assets, net – reclassification of rental homes$(21,311)$(12,751)
Real estate acquisitions:
Investment in real estate$(15,075)$(303,292)
Notes receivable, net(772) 
Other assets, net (2,781)
Deferred revenue - sale of right-to-use contracts315  
Accrued expenses and accounts payable 1,251 
Other liabilities79  
Rents and other customer payments received in advance and security deposits51 9,223 
Real estate acquisitions, net$(15,402)$(295,599)
Real estate dispositions:
Investment in real estate$ $52 
Loss on sale of real estate, net (59)
Real estate dispositions, net$ $(7)












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


Equity LifeStyle Properties, Inc.
Notes to Consolidated Financial Statements

Note 1 – Organization and Basis of Presentation
Equity LifeStyle Properties, Inc. (“ELS”), a Maryland corporation, together with MHC Operating Limited Partnership (the “Operating Partnership”) and its other consolidated subsidiaries (the “Subsidiaries”), are referred to herein as “we,” “us,” and “our”. We are a fully integrated owner of lifestyle-oriented properties (“Properties”) consisting of property operations and home sales and rental operations primarily within manufactured home (“MH”) and recreational vehicle (“RV”) communities and marinas. We have a unique business model where we own the land which we lease to customers who own manufactured homes and cottages, RVs and/or boats either on a long-term or short-term basis. Our customers may lease individual developed areas (“Sites”) or enter into right-to-use contracts, also known as membership subscriptions, which provide them access to specific Properties for limited stays.
Our Properties are owned primarily by the Operating Partnership and managed internally by affiliates of the Operating Partnership. ELS is the sole general partner of the Operating Partnership, has exclusive responsibility and discretion in management and control of the Operating Partnership and held a 95.2% interest as of March 31, 2022. As the general partner with control, ELS is the primary beneficiary of, and therefore consolidates, the Operating Partnership.
Equity method of accounting is applied to entities in which ELS does not have a controlling interest or for variable interest entities in which ELS is not considered the primary beneficiary, but with respect to which it can exercise significant influence over operations and major decisions. Our exposure to losses associated with unconsolidated joint ventures is primarily limited to the carrying value of these investments. Accordingly, distributions from a joint venture in excess of our carrying value are recognized in earnings.
The accompanying unaudited interim consolidated financial statements have been prepared pursuant to Securities and Exchange Commission (“SEC”) rules and regulations for Quarterly Reports on Form 10-Q. Accordingly, they do not include all of the information and note disclosures required by U.S. Generally Accepted Accounting Principles (“GAAP”) for complete financial statements and should be read in conjunction with the consolidated financial statements and notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2021.
Intercompany balances and transactions have been eliminated. All adjustments to the unaudited interim consolidated financial statements are of a normal, recurring nature and, in the opinion of management, are necessary for a fair presentation of results for these interim periods. Revenues and expenses are subject to seasonal fluctuations and accordingly, quarterly interim results may not be indicative of full year results. Certain prior period amounts have been reclassified on our unaudited interim consolidated financial statements to conform with current year presentation.

Note 2 – Summary of Significant Accounting Policies
(a)    Revenue Recognition
Our revenue streams are predominantly derived from customers renting our Sites or entering into membership subscriptions. Leases with customers renting our Sites are accounted for as operating leases. The rental income associated with these leases is accounted for in accordance with the Accounting Standards Codification (“ASC”) 842, Leases, and is recognized over the term of the respective lease or the length of a customer’s stay. MH Sites are generally leased on an annual basis to residents who own or lease factory-built homes, including manufactured homes. RV and marina Sites are leased to those who generally have an RV, factory-built cottage, boat or other unit placed on the site, including those customers renting marina dry storage slips. Annual Sites are leased on an annual basis, including those Northern Properties that are open for the summer season. Seasonal Sites are leased to customers generally for one to six months. Transient Sites are leased to customers on a short-term basis. We do not separate expenses reimbursed by our customers (“utility recoveries”) from the associated rental income as we meet the practical expedient criteria to combine the lease and non-lease components. We assessed the criteria and concluded that the timing and pattern of transfer for rental income and the associated utility recoveries are the same and, as our leases qualify as operating leases, we account for and present rental income and utility recoveries as a single component under Rental income in our Consolidated Statements of Income and Comprehensive Income. In addition, customers may lease homes that are located in our communities. These leases are accounted for as operating leases. Rental income derived from customers leasing homes is also accounted for in accordance with ASC 842, Leases and is recognized over the term of the respective lease. The allowance for credit losses related to the collectability of lease receivables is presented as a reduction to Rental income. Lease receivables are presented within Other assets, net on the Consolidated Balance Sheets and are net of an allowance for credit losses. The estimate for credit losses is a result of our ongoing assessments and evaluations of collectability, including historical loss experience, current market conditions and future expectations in forecasting credit losses.
8


Equity LifeStyle Properties, Inc.
Notes to Consolidated Financial Statements

Note 2 – Summary of Significant Accounting Policies (continued)
Annual membership subscriptions and membership upgrade sales are accounted for in accordance with ASC 606, Revenue from Contracts with Customers. Membership subscriptions provide our customers access to specific Properties for limited stays at a specified group of Properties. Payments are deferred and recognized on a straight-line basis over the one-year period during which access to Sites at certain Properties is provided. Membership subscription receivables are presented within Other assets, net on the Consolidated Balance Sheets and are net of an allowance for credit losses. Membership upgrades grant certain additional access rights to the customer and require non-refundable upfront payments. The non-refundable upfront payments are recognized on a straight-line basis over 20 years. Financed upgrade sales (also known as contract receivables) are presented within Notes receivable, net on the Consolidated Balance Sheets and are net of an allowance for credit losses.
Income from home sales is recognized when the earnings process is complete. The earnings process is complete when the home has been delivered, the purchaser has accepted the home and title has transferred. We have a limited program under which we purchase loans made by an unaffiliated lender to homebuyers at our Properties. Financed home sales (also known as chattel loans) are presented within Notes receivable, net on the Consolidated Balance Sheets and are net of an allowance for credit losses.
(b)    Restricted Cash
As of March 31, 2022 and December 31, 2021, restricted cash consists of $29.3 million for each period, primarily related to cash reserved for customer deposits and escrows for insurance and real estate taxes.

Note 3 – Leases
Lessor
The leases entered into between the customer and us for rental of a Site are renewable upon the consent of both parties or, in some instances, as provided by statute. Long-term leases that are non-cancelable by the tenants are in effect at certain Properties. Rental rate increases at these Properties are primarily a function of increases in the Consumer Price Index, taking into consideration certain conditions. Additionally, periodic market rate adjustments are made as deemed appropriate. In addition, certain state statutes allow entry into long-term agreements that effectively modify lease terms related to rent amounts and increases over the term of the agreements. The following table presents future minimum rents expected to be received under long-term non-cancelable tenant leases, as well as those leases that are subject to long-term agreements governing rent payments and increases:
(amounts in thousands)
As of March 31, 2022
2022$119,123 
2023161,093 
202498,692 
202540,813 
202621,539 
Thereafter66,894 
Total$508,154 

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




9


Equity LifeStyle Properties, Inc.
Notes to Consolidated Financial Statements

Note 3 – Leases (continued)
The following table summarizes our minimum future rental payments, excluding variable costs, which are discounted by our incremental borrowing rate to calculate the lease liability for our operating leases as of March 31, 2022:
As of March 31, 2022
(amounts in thousands)
Ground LeasesOffice and Other LeasesTotal
2022$1,603 $2,972 $4,575 
2023626 3,523 4,149 
2024632 3,097 3,729 
2025637 2,763 3,400 
2026615 2,543 3,158 
Thereafter4,325 13,140 17,465 
Total undiscounted rental payments8,438 28,038 36,476 
Less imputed interest(2,281)(4,506)(6,787)
Total lease liabilities$6,157 $23,532 $29,689 

Right-of-use (“ROU”) assets and lease liabilities from our operating leases, included within Other assets, net and Accounts payable and other liabilities on the Consolidated Balance Sheets, were $27.8 million and $29.7 million, respectively, as of March 31, 2022. The weighted average remaining lease term for our operating leases was ten years and the weighted average incremental borrowing rate was 3.8% at March 31, 2022.
ROU assets and lease liabilities from our operating leases, included within Other assets, net and Accounts payable and other liabilities on the Consolidated Balance Sheets, were $30.3 million and $30.7 million, respectively, as of December 31, 2021. The weighted average remaining lease term for our operating leases was seven years and the weighted average incremental borrowing rate was 3.8% at December 31, 2021.

Note 4 – Earnings Per Common Share
The following table sets forth the computation of basic and diluted earnings per share of common stock for the quarters ended March 31, 2022 and 2021:
Quarters Ended March 31,
(amounts in thousands, except per share data)20222021
Numerators:
Net income available for Common Stockholders – Basic$82,906 $65,240 
Amounts allocated to non controlling interest (dilutive securities)4,144 3,747 
Net income available for Common Stockholders – Fully Diluted$87,050 $68,987 
Denominators:
Weighted average Common Shares outstanding – Basic185,690 181,945 
Effect of dilutive securities:
Exchange of Common OP Units for Common Shares9,301 10,473 
Stock options and restricted stock255 267 
Weighted average Common Shares outstanding – Fully Diluted195,246 192,685 
Earnings per Common Share – Basic$0.45 $0.36 
Earnings per Common Share – Fully Diluted$0.45 $0.36 

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


Equity LifeStyle Properties, Inc.
Notes to Consolidated Financial Statements

Note 5 – Common Stock and Other Equity Related Transactions (continued)
Distribution Amount Per ShareFor the Quarter EndedStockholder Record DatePayment Date
$0.3625March 31, 2021March 26, 2021April 9, 2021
$0.3625June 30, 2021June 25, 2021July 9, 2021
$0.3625September 30, 2021September 24, 2021October 8, 2021
$0.3625December 31, 2021December 31, 2021January 14, 2022
$0.4100March 31, 2022March 25, 2022April 8, 2022

Equity Offering Program
On February 24, 2022, we entered into our current at-the-market (“ATM”) equity offering program with certain sales agents, pursuant to which we may sell, from time-to-time, shares of our common stock, par value $0.01 per share, having an aggregate offering price of up to $500.0 million. Prior to the new program, the aggregate offering price was up to $200.0 million. As of March 31, 2022, the full capacity of our current ATM equity offering program remained available for issuance.
The following table presents the shares that were issued under our prior ATM equity offering program during the quarter ended March 31, 2022. There was no ATM equity activity during the quarter ended March 31, 2021.
Quarter Ended March 31,
(amounts in thousands, except share data)
2022
Shares of common stock sold328,123 
Weighted average price$86.46 
Total gross proceeds$28,370 
Commissions paid to sales agents$389 

Exchanges
Subject to certain limitations, OP Unit holders can request an exchange of any or all of their OP Units for shares of Common Stock at any time. Upon receipt of such a request, we may, in lieu of issuing shares of Common Stock, cause the Operating Partnership to pay cash. During the quarters ended March 31, 2022 and 2021, 8,640 and 8,560 OP Units, respectively, were exchanged for an equal number of shares of Common Stock.

Note 6 – Investment in Real Estate
Acquisitions
2022
On February 18, 2022, we completed the acquisition of Blue Mesa Recreational Ranch, a 385-site membership RV community located in Gunnison, Colorado, and Pilot Knob RV Resort a 247-site RV community located in Winterhaven, California for a combined purchase price of $15.9 million. The acquisition was funded with available cash.

11


Equity LifeStyle Properties, Inc.
Notes to Consolidated Financial Statements


Note 7 – Investments in Unconsolidated Joint Ventures
The following table summarizes our investment in unconsolidated joint ventures (investment amounts in thousands with the number of Properties shown parenthetically as of March 31, 2022 and December 31, 2021, respectively):
    Investment as ofIncome/(Loss) for
the quarters ended
InvestmentLocation Number of Sites
Economic
Interest
(a)
March 31, 2022December 31, 2021March 31, 2022March 31, 2021
MeadowsVarious (2,2)1,077 50 %$60 $ $260 $550 
LakeshoreFlorida (3,3)721 (b)2,599 2,638 135 152 
VoyagerArizona (1,1) 33 %
(c)
160 141 20 30 
ECHO JVVarious  50 %18,313 18,136 177 136 
RVCVarious 1,019 80 %53,085 49,397 (421) 
Mulberry FarmsVarious 50 %
(d)
5,471    
2,817 $79,688 $70,312 $171 $868 
_____________________
(a)The percentages shown approximate our economic interest as of March 31, 2022. Our legal ownership interest may differ.
(b)Includes two joint ventures in which we own a 65% interest in each and the Crosswinds joint venture in which we own a 49% interest.
(c)Consists of a 33% interest in the utility plant servicing Voyager RV Resort. On October 14, 2021, we completed the acquisition of the remaining 50% interest in Voyager RV Resort.
(d)On January 18, 2022, we acquired a 50% equity interest in an entity developing an age-restricted community in Prescott Valley, Arizona.
We received approximately $0.4 million and $0.7 million in distributions from our unconsolidated joint ventures for the quarters ended March 31, 2022 and 2021, respectively. Approximately $0.3 million and $0.7 million of the distributions made to us exceeded our basis in our unconsolidated joint ventures for the quarters ended March 31, 2022 and 2021, respectively, and as such, were recorded as income from unconsolidated joint ventures.

Note 8 – Borrowing Arrangements
Mortgage Notes Payable
Our mortgage notes payable is classified as Level 2 in the fair value hierarchy. The following table presents the fair value of our mortgage notes payable:
As of March 31, 2022As of December 31, 2021
(amounts in thousands)
Fair ValueCarrying ValueFair ValueCarrying Value
Mortgage notes payable, excluding deferred financing costs$3,065,711 $2,624,409 $2,743,527 $2,654,086 

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

12


Equity LifeStyle Properties, Inc.
Notes to Consolidated Financial Statements

Note 8 – Borrowing Arrangements (continued)
Unsecured Debt
During the quarter ended March 31, 2022 we entered into a $200.0 million senior unsecured term loan agreement. The maturity date is January 21, 2027, with an interest rate of Secured Overnight Financing Rate (“SOFR”) plus approximately 1.30% to 1.80%, depending on leverage levels.
The Line of Credit (“LOC”) had a balance of $69.0 million and $349.0 million outstanding as of March 31, 2022 and December 31, 2021, respectively. As of March 31, 2022, our LOC had a remaining borrowing capacity of $431.0 million. In conjunction with the closing of the secured refinancing transaction, we repaid the remaining balance on the LOC. As of April 26, 2022, there is no outstanding balance on the LOC.
As of March 31, 2022, we were in compliance in all material respects with the covenants in all our borrowing arrangements.

Note 9 – Derivative Instruments and Hedging
Cash Flow Hedges of Interest Rate Risk
We record all derivatives at fair value. Our objective in utilizing interest rate derivatives is to add stability to our interest expense and to manage our exposure to interest rate movements. We do not enter into derivatives for speculative purposes.
We have a three-year LIBOR Swap Agreement (the “Swap”) allowing us to trade the variable interest rate associated with our variable rate debt for a fixed interest rate. The Swap has a notional amount of $300.0 million of outstanding principal with a fixed interest rate of 0.39% per annum and matures on March 25, 2024. Based on the leverage as of March 31, 2022, our spread over LIBOR was 1.40% resulting in an estimated all-in interest rate of 1.79% per annum.
Our derivative financial instrument was classified as Level 2 in the fair value hierarchy. The following table presents the fair value of our derivative financial instrument:
As of March 31,As of December 31,
(amounts in thousands)Balance Sheet Location20222021
Interest Rate SwapOther assets, net$13,448 $3,524 

The following table presents the effect of our derivative financial instrument on the Consolidated Statements of Income and Comprehensive Income:
Derivatives in Cash Flow Hedging RelationshipAmount of (gain)/loss recognized
in OCI on derivative
for the quarters ended March 31,
Location of (gain)/ loss reclassified from
accumulated OCI into income
Amount of (gain)/loss reclassified from
accumulated OCI into income
for the quarters ended March 31,
(amounts in thousands)20222021(amounts in thousands)20222021
Interest Rate Swap$(9,661)$(112)Interest Expense$263 $17 

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

13


Equity LifeStyle Properties, Inc.
Notes to Consolidated Financial Statements


Note 10 – Equity Incentive Awards
Our 2014 Equity Incentive Plan (the “2014 Plan”) was adopted by the Board of Directors on March 11, 2014 and approved by our stockholders on May 13, 2014.
During the quarter ended March 31, 2022, 79,078 shares of restricted stock were awarded to certain members of our management team. Of these shares, 50% are time-based awards, vesting in equal installments over a three-year period on January 27, 2023, January 26, 2024 and January 31, 2025, respectively, and have a grant date fair value of $3.0 million. The remaining 50% are performance-based awards vesting in equal installments on January 27, 2023, January 26, 2024 and January 31, 2025, respectively, upon meeting performance conditions as established by the Compensation Committee in the year of the vesting period. They are valued using the closing price at the grant date when all the key terms and conditions are known to all parties. The 13,178 shares of restricted stock subject to 2022 performance goals have a grant date fair value of $1.0 million.
Stock based compensation expense, reported in General and administrative expense on the Consolidated Statements of Income and Comprehensive Income, was $2.6 million for each of the quarters ended March 31, 2022 and 2021.

Note 11 – Commitments and Contingencies
We are involved in various legal and regulatory proceedings (“Proceedings”) arising in the ordinary course of business. The Proceedings include, but are not limited to, legal claims made by employees, vendors and customers, and notices, consent decrees, information requests, additional permit requirements and other similar enforcement actions by governmental agencies relating to our utility infrastructure, including water and wastewater treatment plants and other waste treatment facilities and electrical systems. Additionally, in the ordinary course of business, our operations are subject to audit by various taxing authorities. Management believes these Proceedings taken together do not represent a material liability. In addition, to the extent any such Proceedings or audits relate to newly acquired Properties, we consider any potential indemnification obligations of sellers in our favor.
The Operating Partnership operates and manages Westwinds, a 720 site mobilehome community, and Nicholson Plaza, an adjacent shopping center, both located in San Jose, California pursuant to ground leases that expire on August 31, 2022 and do not contain extension options. The master lessor of these ground leases, The Nicholson Family Partnership (the “Nicholsons”), has expressed a desire to redevelop Westwinds, and in a written communication, they claimed that we were obligated to deliver the property free and clear of any and all subtenancies upon the expiration of the ground leases on August 31, 2022. In connection with any redevelopment, the City of San Jose’s conversion ordinance requires, among other things, that the landowner provide relocation, rental and purchase assistance to the impacted residents.
We believe the Nicholsons’ demand is unlawful, and on December 30, 2019, the Operating Partnership, together with certain interested parties, filed a complaint in California Superior Court for Santa Clara County, seeking declaratory relief pursuant to which it requested that the Court determine, among other things, that the Operating Partnership has no obligation to deliver the property free and clear of the mobilehome residents upon the expiration of the ground leases. The Operating Partnership and the interested parties filed an amended complaint on January 29, 2020. The Nicholsons filed a demand for arbitration on January 28, 2020, which they subsequently amended, pursuant to which they request (i) a declaration that the Operating Partnership, as the “owner and manager” of Westwinds, is “required by the Ground Leases, and State and local law to deliver the Property free of any encumbrances or third-party claims at the expiration of the lease terms,” (ii) that the Operating Partnership anticipatorily breached the ground leases by publicly repudiating any such obligation and (iii) that the Operating Partnership is required to indemnify the Nicholsons with respect to the claims brought by the interested parties in the Superior Court proceeding.
On February 3, 2020, the Nicholsons filed a motion in California Superior Court to compel arbitration and to stay the Superior Court litigation, which motion was heard on June 25, 2020. On July 29, 2020, the Superior Court issued a final order denying the Nicholsons' motion to compel arbitration. The Nicholsons filed a notice of appeal on August 7, 2020. On February 4, 2022, the California Court of Appeal affirmed the Superior Court’s order denying the Nicholsons' motion to compel arbitration. On February 22, 2022, the Nicholsons filed a petition for rehearing, which the Court of Appeal denied on March 2, 2022. On March 16, 2022, the Nicholsons filed a petition for review with the California Supreme Court.
The arbitration is stayed pursuant to an agreement between MHC and the Nicholsons. We intend to continue to vigorously defend our interests in this matter. As of March 31, 2022, we have not made an accrual, as we are unable to predict the outcome of this matter or reasonably estimate any possible loss.
14


Equity LifeStyle Properties, Inc.
Notes to Consolidated Financial Statements

Note 12 – Reportable Segments

We have identified two reportable segments: (i) Property Operations and (ii) Home Sales and Rentals Operations. The Property Operations segment owns and operates land lease Properties and the Home Sales and Rentals Operations segment purchases, sells and leases homes at the Properties. The distribution of the Properties throughout the United States reflects our belief that geographic diversification helps insulate the portfolio from regional economic influences.
All revenues were from external customers and there is no customer who contributed 10% or more of our total revenues during the quarters ended March 31, 2022 or 2021.
The following tables summarize our segment financial information for the quarters ended March 31, 2022 and 2021:
Quarter Ended March 31, 2022
(amounts in thousands)Property
Operations
Home Sales
and Rentals
Operations
Consolidated
Operations revenues$325,426 $31,100 $356,526 
Operations expenses(154,988)(27,828)(182,816)
Income from segment operations170,438 3,272 173,710 
Interest income1,377 380 1,757 
Depreciation and amortization(46,877)(2,517)(49,394)
Income (loss) from operations$124,938 $1,135 $126,073 
Reconciliation to consolidated net income:
Corporate interest income2 
Income from other investments, net1,904 
General and administrative(12,297)
Other expenses(823)
Interest and related amortization(27,464)
Equity in income of unconsolidated joint ventures171 
Early debt retirement(516)
Consolidated net income$87,050 
Total assets$5,012,335 $252,470 $5,264,805 
Capital improvements$54,990 $28,657 $83,647 
Quarter Ended March 31, 2021
(amounts in thousands)Property
Operations
Home Sales
and Rentals
Operations
Consolidated
Operations revenues$280,998 $19,946 $300,944 
Operations expenses(132,980)(17,577)(150,557)
Income from segment operations148,018 2,369 150,387 
Interest income1,148 615 1,763 
Depreciation and amortization(42,778)(2,620)(45,398)
Gain on sale of real estate, net(59) (59)
Income (loss) from operations$106,329 $364 $106,693 
Reconciliation to consolidated net income:
Corporate interest income4 
Income from other investments, net936 
General and administrative(10,512)
Other expenses(698)
Interest and related amortization(26,275)
Equity in income of unconsolidated joint ventures868 
Early debt retirement(2,029)
Consolidated net income$68,987 
Total assets$4,524,713 $261,002 $4,785,715 
Capital improvements$36,468 $20,310 $56,778 

15


Equity LifeStyle Properties, Inc.
Notes to Consolidated Financial Statements

Note 12 – Reportable Segments (continued)

The following table summarizes our financial information for the Property Operations segment for the quarters ended March 31, 2022 and 2021:
 Quarters Ended March 31,
(amounts in thousands)20222021
Revenues:
Rental income$281,104 $244,729 
Annual membership subscriptions15,157 13,654 
Membership upgrade sales current period, gross7,151 10,014 
Membership upgrade sales upfront payments, deferred, net(4,084)(7,427)
Other income13,542 10,521 
Gross revenues from ancillary services12,556 9,507 
Total property operations revenues325,426 280,998 
Expenses:
Property operating and maintenance102,590 87,630 
Real estate taxes19,457 17,850 
Sales and marketing, gross4,914 6,176 
Membership sales commissions, deferred, net(583)(1,499)
Cost of ancillary services5,721 3,808 
Ancillary operating expenses5,018 3,635 
Property management17,871 15,380 
Total property operations expenses154,988 132,980 
Income from property operations segment$170,438 $148,018 



The following table summarizes our financial information for the Home Sales and Rentals Operations segment for the quarters ended March 31, 2022 and 2021:
 Quarters Ended March 31,
(amounts in thousands)20222021
Revenues:
Rental income (a)
$3,961 $4,293 
Gross revenue from home sales and brokered resales27,139 15,653 
Total revenues31,100 19,946 
Expenses:
Rental home operating and maintenance1,402 1,243 
Cost of home sales and brokered resales24,963 15,028 
Home selling expenses1,463 1,306 
Total expenses27,828 17,577 
Income from home sales and rentals operations segment$3,272 $2,369 
______________________
(a)Rental income within Home Sales and Rentals Operations does not include base rent related to the rental home Sites. Base rent is included within property operations.


Note 13 – Subsequent Events
On April 18, 2022, we closed on a secured refinancing transaction generating gross proceeds of $200.0 million. The loan is secured by one MH community, has a fixed interest rate of 3.36% per annum and has a maturity date of May 1, 2034. The net proceeds from the transaction were used to repay all debt scheduled to mature in 2022 and to repay amounts outstanding on the LOC.
16


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





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Management's Discussion and Analysis (continued)

The following table shows the breakdown of our Sites by type (amounts are approximate):
 Total Sites as of March 31, 2022
MH Sites73,400 
RV Sites:
Annual34,000 
Seasonal12,700 
Transient14,700 
Marina Slips6,900 
Membership (1)
25,500 
Joint Ventures (2)
2,800 
Total170,000 
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(1)Primarily utilized to service the approximately 128,100 members. Includes approximately 6,200 Sites rented on an annual basis.
(2)Includes approximately 1,800 annual Sites and 1,000 transient Sites.
In our Home Sales and Rentals Operations business, our revenue streams include home sales, home rentals and brokerage services and ancillary activities. We generate revenue through home sales and rental operations by selling or leasing manufactured homes and cottages that are located in Properties owned and managed by us. We believe renting our vacant homes represents an attractive source of occupancy and an opportunity to convert the renter to a homebuyer in the future. We also sell and rent homes through our joint venture, ECHO Financing, LLC (the “ECHO JV”). Additionally, home sale brokerage services are offered to our residents who may choose to sell their homes rather than relocate them when moving from a Property. At certain Properties, we operate ancillary facilities, such as golf courses, pro shops, stores and restaurants.
In the manufactured housing industry, options for home financing, also known as chattel financing, are limited. Chattel financing options available today include community owner-funded programs or third-party lender programs that provide subsidized financing to customers and often require the community owner to guarantee customer defaults. Third-party lender programs have stringent underwriting criteria, sizable down payment requirements, short term loan amortization and high interest rates. We have a limited program under which we purchase loans made by an unaffiliated lender to homebuyers at our Properties.
In addition to net income computed in accordance with U.S. Generally Accepted Accounting Principles (“GAAP”), we assess and measure our overall financial and operating performance using certain Non-GAAP supplemental measures, which include: (i) FFO, (ii) Normalized FFO, (iii) Income from property operations, (iv) Income from property operations, excluding deferrals and property management, (v) Core Portfolio income from property operations, excluding deferrals and property management (operating results for Properties owned and operated in both periods under comparison), and (vi) Income from rental operations, net of depreciation. We use these measures internally to evaluate the operating performance of our portfolio and provide a basis for comparison with other real estate companies. Definitions and reconciliations of these measures to the most comparable GAAP measures are included below in this discussion.
COVID-19 Pandemic Update
Since the COVID-19 pandemic began, we have taken actions to prioritize the safety and security of our employees, residents and customers, while maintaining our high-quality standards in service to our residents and customers. We have implemented and may continue to implement Centers for Disease Control and Prevention (“CDC”) and local public health department guidelines and protocols for social distancing and enhanced community and office cleaning procedures. Our Properties continue to be open subject to seasons of operations and state and local guidelines. Our property offices are open to residents and customers and we are complying with CDC recommended protocols.
We attribute the solid performance of our business to the fundamentals of our business model. The property locations and the lifestyle we offer have broad appeal to customers interested in enjoying an outdoor experience. We believe this is particularly relevant in a COVID-19 impacted environment. We intend to continue to monitor the evolving situation and we may take further actions that alter our business operations as may be required and that are in the best interests of our employees, residents, customers and shareholders. The extent of the impact that COVID-19 will have on our business going forward, including our financial condition, results of operations and cash flows, is dependent on multiple factors, many of which are unknown.


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Management's Discussion and Analysis (continued)

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