Good day, everyone, and thank you all for joining us to discuss Equity LifeStyle Properties Second Quarter 2013 Results. Our featured speakers today are Marguerite Nader, our CEO; and Paul Seavey, our CFO. In advance of today's call, management released earnings. Today's call will consist of opening remarks and a question-and-answer session with management relating to the company's earnings release. As a reminder, this call is being recorded. Certain matters discussed during this conference call may contain forward-looking statements in the meanings of the federal securities laws. Our forward-looking statements are subject to certain economic risks and uncertainty. The company assumes no obligation to update or supplement any statements that become untrue because of subsequent events. At this time, I would like to talk turn the call over to Marguerite Nader, our CEO.

Good morning, and thank you for joining us today. Our normalized FFO for the second quarter was $0.57 per share, which was approximately $700,000 ahead of guidance and represents a 9-plus percent growth rate from 2012. Our results for the quarter showed the strength of our business, which is supported by our quality real estate locations, stability of our cash flow and flexibility of our product offerings. Today, I'd like to comment on our operating business, our recent financing and then discuss transaction activity. On the MH side of our business, we continue to focus on increasing the number of ownership transactions in our portfolio. We see the impact of this focus as our used home sales volume within our MH footprint increased 22% this quarter. Our operating teams are using available tools, including additional marketing channels, to attract buyers. The RV industry has had some positive trends in 2013, including growth in sales of 13%. While the industry has seen strength in all categories of RV sales, there has been a significant increase in higher-end sales, with a 30% increase in sale of motor home. While these sales do not translate directly into our RV revenue, it is helpful to see sales following an upward trend. ELS continues to be focused on marketing to the 8 to 9 million installed base of RVers. We did see strength in our RV revenue this quarter, with an overall growth rate of 5.5% versus our projection of 2.5%. The majority of this growth was the result of increased seasonal and transient revenue. While our transient revenue represents less than 4% of the total revenue, it has the highest exposure to new customers. We have directed our marketing campaigns to gain exposure to a new customer base and, as always, we continue to…

Thank you, Marguerite, and good morning, everyone. I will discuss our second quarter results, provide an update on our refinancing activity and update guidance for the remainder of 2013. Keep in mind, we completed a stock split on July 15, so per-share results reflect our new share count. For the second quarter, we reported $0.57 of normalized FFO per share, approximately $700,000 ahead of guidance and consistent with the midpoint of our split-adjusted per-share guidance range. As stated in our press release, 11 of our Michigan assets are held-for-sale. Therefore, they are excluded from our core results. They are, however, reported as discontinued operations for the quarter, as well as in our historical comparisons and in third quarter and full year 2013 guidance. Overall, for the second quarter, core income from property operations performed better than expected, primarily as a result of strong performance in our RV portfolio. Core MH rents came in better than we had projected and was 3.2% higher than last year. The base rental income increase includes 2.4% rate growth and 80 basis points related to occupancy gains. We had core occupancy gains of 30 MH sites in the quarter. Our Core RV resort-based rental income growth was 5.5%. Our annual growth rate was 4.3%, consistent with our expectations. We had strong growth of 12.2% in seasonal income and 6.6% in transient income. Membership dues came in at $12 million for the quarter. During the quarter, we sold and activated approximately 5,100 new memberships. Year-to-date, we've generated approximately 7,700 new memberships through our various distribution channels. For the quarter, the net contribution from right-to-use contracts or membership upgrades was roughly breakeven, resulting from approximately $3.4 million in revenues and $3.3 million in expenses. We sold 782 upgrades at an average price of approximately $4,500. Core property…

[Operator Instructions] Your first question comes from the line of Gaurav Mehta from Cantor Fitzgerald. Gaurav Mehta - Cantor Fitzgerald & Co., Research Division: In your opening remarks, you talked about the used home sales outlook. Can you also talk about what you're seeing on the new home sales side? And have you seen any impact on the home sales as a result of the financing venture with Cavco that you announced in 1Q?

Sure. Let me just give you a little flavor for both the new and the used. In the quarter, we sold 23 homes at an average price of about $55,000. Those homes were mainly sold in Northern California, the Northeast and Florida. So while it's an increase from 2012, I think 2012 we had 3 or 4 homes -- new home sales, it's certainly not at the rate where we would want to be. We had -- we're struggling with new home sales, but we have had an increase in the used home sale portfolio, but these are lower-price point sales than in -- and they're typically a cash buyer. From a perspective of the deal that we've been working on with Cavco, we purchased 50 homes across 11 communities. Half of those homes were set in the second quarter and the remaining will be set in the third quarter. The homes took a little bit longer than anticipated to arrive at our communities, but we have sold 7 of those homes and have initiated around the same number of used loans, so the financing is available both on the used side and the new side. But obviously, we still need to find the right buyers, and we have that additional tool to improve that sale process. Gaurav Mehta - Cantor Fitzgerald & Co., Research Division: Okay. And I think in your supplement, you also mentioned that there were 2 third-party home sales in the second quarter. Can you just elaborate on that?

And those are the Cavco deals. And actually, when I was talking about 7, the 7 that are sold are not necessarily closed. But the 2 that were sold that are part of those -- the 23 are part of the Cavco deal. Gaurav Mehta - Cantor Fitzgerald & Co., Research Division: Okay, that's helpful. Second question I have is on the guidance. It seems like within your 2013 guidance, you lowered rental home income guidance. Is that because of the Michigan assets that you're selling?

Inside the Core, yes. We have about 1,000 rentals in the Michigan portfolio, and those are no longer in our rental home portfolio. Gaurav Mehta - Cantor Fitzgerald & Co., Research Division: Okay. And then lastly, can you provide details on rent control initiative? It seems like it's higher than what we have seen in the past, at $1.6 million for the second quarter. So what's included in that line item?

As I mentioned, we have an accrual in there for $1.4 million in legal fees associated with the Ninth Circuit's overturn of the prior decision in that case. And that includes the legal fees as well as a small amount of interest that's payable to the plaintiff.

Your next question comes from the line of Nicholas Joseph from Citigroup.

Can you talk about the marketing process for the asset sales? How long have you been marketing the assets, and how was the demand?

We've been marketing them, a few of them, I would say, over the last several months, and we were able to work with a buyer who wanted to have a larger portfolio transaction. He knew we had 11 properties -- we actually have 13 manufactured home communities in Michigan, and was interested in taking the 11 properties. And the 2 properties that they -- they're not under contract to buy is because they are tied up in CMBS financing. It would be difficult to transfer those assets.

Okay. And then did you disclose the cap rate on the transaction for the 11?

Yes. We bought those Michigan properties, I think it was 24 months ago, at an approximate cap rate of between 11% and 12%. And we have it under contract at a 9-plus percent cap rate right now. And I think -- when you think about our -- our interest in selling Michigan was twofold. It was -- first of all, it's not in our core market and it's not in an area we're looking to increase exposure. So I think the analysis becomes more than just a cap rate analysis.

All right. And then could you just give us an update on the program partnering with the RV dealerships? It's been about a year since that program started. So do you have any statistics on renewals?

Sure. We have -- I think we have about 4,500 memberships that are in the sale -- that are embedded in the sale of the RVs to date. The program -- we like the program because 40% of the sales come from first-time home buyer -- or first-time RV buyers. And really, I think in this past -- in the second quarter, there was a de minimis number of transactions or memberships that were sold last year. So it's really in the third and fourth quarter when those memberships are going to come up for renewal.

And your next question comes from the line of Jana Galan from Bank of America Merrill Lynch.

I was wondering if you could comment on the transaction market, if you're seeing more RV or MH in the market than you saw at this time last quarter, and just if you're seeing any movement in cap rates?

Sure. We're seeing -- I think it's consistent with what we've seen in the past, that it's a relatively choppy pattern. I think just as a -- in terms of a data point, you may have seen Dave Knapp and Colleen Edwards of Carefree RV. They've recently announced the sale of the majority of their portfolio. It's an RV portfolio of 61 RV properties. We bought the encore portfolio from Dave and Colleen, I think in 2004. It was the start of our RV platform. This was good real estate mainly located in Central Florida, and they had an -- they were interested in staying in as owners. So I think they got a good execution on that, where they're continuing to maintain a piece of the business and operate the business. So that shifts in terms of the data point, what's out there in terms of transactions that have closed.

And I know this is tiny, but you listed about $200,000 transaction costs. I was curious if that was related to the disposition, or is that potentially some due diligence on some deals that you didn't pursue?

I think it's a little bit of both.

Your next question comes from the line of David Harris with Imperial capital.

Great timing on the mortgage. Can you just run through with me why you didn't choose to do a more major recap refinancing along the lines of -- that the company undertook several years ago?

Yes. When we looked at it, we considered our options and went through them with the board. And the primary challenge associated with a larger recapitalization was, in part, the cost of the transaction in terms of the total defeasance costs we would incur, as well as potential limitation on flexibility and the availability of the long-term capital. We believe that there was an appetite for life companies to put out long-term capital along the lines that they have. But at the same time, there were not a lot of transactions that we could look to that really demonstrate that life companies were executing on those types of deals. So I think that we took advantage of an opportunity and have managed our future maturities to a level that $300 million on an annual basis is a manageable number for us to handle, as far as refinancing.

So if we think about the move in long-term rates, I mean, I'm in the camp that believes we've turned a 30-year cycle here and rates are going up. Is there any more to do whilst we remain fairly -- still fairly close to the bottom?

We're looking to get through the transaction that we've announced. I think that -- as I said, the appetite on the part of the life companies is they're interested as well in getting through this transaction. And to the extent that we see that appetite continue to be strong and rates continue to be low, we may execute on that in the future.

Okay, but -- I think your last slug of mortgage takedown is, what, December? So what I'm hearing is you're not likely to move on a new initiative until the new year?

Right. That's -- the last portion of it actually comes in April of 2014.

[Operator Instructions] And your next question comes from the line of Todd Stender with Wells Fargo.

Just in looking at the price you paid for the Hometown properties that are queued up for sale, I believe you said $125 million and you signed for $165 million?

That's correct.

If you go through some of the metrics, there's obviously some value creation there. Can you talk about where the occupancies were in July of '11 and where they are now?

It's really just -- the occupancy is essentially flat to where we were in 2011. I think in my -- in the earlier discussion, we talked about just the cap rate. There was some cap rate compression. So it went from an 11%, 12% cap to a 9%-plus cap. So that was really the valuation creation.

But then the rates -- it seems the rates are essentially flat?

Right.

Okay. Are the properties encumbered? Are there mortgages on them?

There is. There's a loan on one that's -- there's a loan on one of the mortgages -- one of the properties. It's about $8 million.

And it's a single buyer, you indicated?

It is a single buyer, yes. A private operator.

Okay. And what's behind these? Are there other properties acquired in the Hometown transaction that you expect to tee up as well?

No. I mean, this is -- I think this is consistent with what we've said through the last couple of years and when we bought the properties, that these are assets that we would be interested in disposing of, if given the right opportunity. But there aren't other assets within that portfolio that we would look to be selling.

And they're all considered in the all-age category?

Yes.

[Operator Instructions] Your next question comes from the line of Nicholas Joseph from Citigroup.

It's actually Michael Bilerman speaking. Marguerite, I was wondering if we can sort of go back to balance sheet strategy and dividend policy. And a number of times over the last couple of years when we've talked about the dividend and the extraordinarily low payout, but obviously great growth in that dividend over time, one of the hesitations that you've had and prior management has had about raising that dividend was looking at the near-term maturities, which -- that you've now solved. And so I wonder, we're sitting here today with still a well below 50% payout, which will grow even further as we head into next year. You're generating excess proceeds from the dispositions relative to the acquisitions you have targeted. You're still generating and it's a growing number, free cash flow per year. How are you and how is the board thinking about that dividend?

We talk about, with the board, the dividend, at every board meeting. And certainly, it's always been discussed relative to the 2014 and '15 maturities and solving for those. I think our last board meeting in May, we had discussions which resulted in what we decided to do in terms of the restructuring of the debt. So I would see us consistent with what we've done in the past, Michael. I would say that we would be making an announcement in our October press release regarding the dividend for 2014.

But I guess the removal of the debt risk and one of the reasons why you wanted to maintain this much free cash flow, should we expect a more -- a payout ratio or a suggestion to the board by management, a payout ratio more along the lines of where the REIT industry is, which is, call it, 70% to 75%?

Yes.

I think that it's not -- for us, as we've said in the past, it's not going to be so much what is the payout ratio as it is how do we maintain financial flexibility. And I think, as Marguerite said and as you just suggested, we'll go through our budget process and then we'll evaluate the factors that we evaluate on a regular basis, principal amortization, CapEx, working capital requirements, and then make the recommendation. But obviously, the 2015 maturities, we've taken that off the table as far as a risk factor.

And how does the amortization compare on the new loans that you have relative to the amortization that you had on the prior in terms of the cash usage?

There's an uptick. We'll be at -- just under $40 million annually, as compared to about $30 million today.

But a significant reduction in cost, so you probably -- from an interest perspective?

Correct, correct.

And then just on the acquisitions, the $100 million that you have teed up, what sort of yields are those coming in at?

We're still in due diligence on those assets, but I would anticipate that the yield would be around 6%.

Okay. And just on Michigan properties. If you go back to the Hometown proxy, the Michigan assets, the 13 that were listed there, the 6,900 sites had a stated purchase price of $119 million. The Clinton asset you didn't acquire, which I believe was $30 million. And so I guess that would be $90 million for 13 assets. And you're saying the 11 have a book value of $125 million. I'm just trying to reconcile those 2 numbers.

It also includes -- the home notes are part of the transaction. And they were not -- and what you're -- I think what you're referring to was just the real estate.

Okay, so how much -- so the $90 million is effectively for the 13 assets you have bought. The 11 assets probably have a value somewhere around $75 million, and then there's $50 million of the notes. Is that the way to think about it?

I have to -- Michael, I don't have the breakdown between the $165 million. I can get that for you offline.

Ladies and gentlemen, this will conclude today's question-and-answer portion of today's conference. I would now like to turn the call back over to Marguerite Nader for closing remarks.

Okay. Thank you very much. Paul Seavey is available for questions following the call.

Ladies and gentlemen, that concludes today's conference. Thank you for your participation, and you may now disconnect. Have a wonderful day.