Good day, everyone, and thank you for joining us to discuss Equity LifeStyle Properties third quarter 2015 results. Our featured speakers today are Marguerite Nader, our President and CEO; Paul Seavey, our Executive Vice President and CFO; and Patrick Waite, our Executive Vice President and COO. 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 meaning of the federal security laws. All forward-looking statements are subject to certain economic risk 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 turn the call over to Marguerite Nader, our President and CEO.

Good morning and thank you for joining us today. Today, we will be focused on a detailed review of the third quarter, our initial 2016 guidance and our recommended dividend increase for 2016. Our third quarter results show the strength in our real estate footprint. Baby boomers are turning 65 at a rate of 10,000 everyday, and we have seen an increasing number of these baby boomers calling ELS home. In the third quarter, we had our 24 successive quarter of occupancy growth, and our occupancy at our MH properties is 93%. The quarter continued to show the positive trends we have been seeing throughout the recent past, including an ability to grow both the absolute number of occupied sites as well as improve the quality of our occupancy to increased homeowners and a reduction of renters. These new customers are coming to our properties, experiencing the lifestyle and generally paying cash for a home that would be their second home or retirement destination location. We have been focused on converting existing renters to owners, and are pleased with the trend we are seeing. In the quarter, 11% of our new and used home sales were conversions of rentals to homeowners. This substantiates our longstanding belief that once a customer enjoys our lifestyle offerings, they are increasingly willing to commit further. Within our RV platform, our properties performed better than anticipated. We issued guidance last year anticipating a 4.3% increase in RV revenue for 2015. We've updated that projection throughout the year and now project to finish the year with a growth rate of 7.7%. The seasonal and transient traffic, while not always easy to forecast, has generated strong demand this year. From a marketing perspective, we have now completed our summer marketing campaign. We focused on the 100 days…

Thanks, Marguerite, and good morning, everyone. I will review our third quarter results, walk through our detailed guidance assumptions for the remainder of 2015 and discuss our preliminary guidance for 2016. We reported $0.77 normalized FFO per share for the third quarter, $0.01 ahead of our guidance. Overall, core property operations performed in line with guidance, although increased revenues were offset by higher than expected expenses. During the quarter we recognized approximately $1.4 million of income from a joint venture distribution following refinancing of a property. Core base rental income was slightly higher than forecast, up 3.6%, with 3% coming from REIT and 60 basis points coming from occupancy. We gained 131 sites during the quarter and have increased occupancy by 339 sites since yearend. We sold 123 new homes during the quarter, including 52 through our Echo joint venture. Year-to-date, we have sold 352 new homes. Our core RV revenues were higher than guidance, as a result of better than expected seasonal and transient revenues. As expected, annuals posted strong growth of 5.9%, driven by rate increases. Our seasonal and transient revenues increased 12.5% and 9% respectively for the quarter compared to last year. Our summer seasonal business experienced strong demand and increased occupancy in Florida as well as increased rate in Florida and California. Transient revenue performance was solid over the July 4 and Labor Day holidays. In addition, we saw continued demand for cabin rentals across the RV platform. During the quarter in our membership business, we sold approximately 4,180 annual memberships, an increase of almost 15% over last year. We also activated more than 4,400 memberships through our RV dealer program. During the quarter, our net member count increased by 3,850. Utility and other income include some non-recurring income related to insurance recovery from past property-related…

[Operator Instructions] Your first question comes from the line of Jana Galan representing Bank of America Merrill Lynch.

I was hoping you could provide an update on the Chattel lending environment, and also if you can maybe speak to the s slowdown in used home sales this quarter?

Sure. On the Chattel, Jana, I think that we've talked a bit recently about the program that Fannie and Freddie have talked about introducing. I think that that program is at this point in the discussion stages. That they are I think trying to develop something that would answer what might be viewed to be a duty to serve, as far as low income housing. Some of the features of the program that they've talked about are quite different from what's standard in our industry today, the length of lease and so forth. And so I think that it will be a while, before they really have a program that they are truly ready to rollout. Beyond that, I think things are pretty much status quo in the Chattel financing front.

I'll touch on used homes. We sold 357 used homes in the quarter, and that's a decrease of 67 to the third quarter of 2014, when we sold more than 400 used homes. So over the last few quarters, used homes have settled into a range of about 350 used home sales per quarter, and I'd expected that to be relatively consistent go forward. The reason for that reduced run rate in used home sales is largely an improved economy and current residents having success selling their homes as opposed to homes coming back clustering the market downturn. For the quarter, sales of existing residence, so that's residence or resident, are up by 11% year-over-year, while homes coming back to us are down by 80. So that combination really results in less used home inventory in our portfolio and a reduction in used home sales.

And Marguerite, if you can just comment on the acquisition pipeline and kind of cap rates you're seeing in the market now?

I think, as you know, for the year we've closed down three assets for a total of about $24 million, $25 million. I think the cap rate on those assets that we brought were about a 6 cap. And then just with respect to other transactions, it's really the same, as what we talked about in the past, which is we're working with interested buyers, difficult to judge timing. Some of the sellers are at the point of trying to make the best determination for a state planning, et cetera. So it's difficult to judge, when the kind of close ins would happen.

Your next question comes from the line of Nick Joseph representing Citigroup.

Just sticking with the accusation pipeline, are you seeing more one-off deals today or portfolios coming to market?

I think, in general, we're seeing more one-off deals. And this is really sellers that have been deciding it for a while, whether or not they would sell their asset or kind of pass it along to their family. And it's a question of whether or not their family wants to run the asset. So that's kind of what we're seeing in terms of just our discussions with potential sellers.

Then, with the stock trading well above consensus NAV and Paul mentioned the all-in debt costs are still low. How does your cost to capital plan to how aggressive you want to be in acquisitions?

Well, it certainly plays into it to the extent as we are talking to one-off owners and portfolio owners, we look at our stock and we look to whether or not that's part of the transaction. I think the last time we did an OP unit deal was a couple of years ago and probably the Riverside transaction, part of that $100 million transaction that we did. But we continue to look for the ways to use our stock to include it as part of our purchase.

So then in terms of the MH portfolio, what percentage of that do you have full control over annual site rent increases versus what percentage is governed by CPI or prospectuses?

In terms of just CPI based on our MH, about a-third of our portfolio is CPI based. Half of those have floors inside the CPI. And then the remaining is really divided between market rate and rent control. There's a small section of rent control about 9%.

And so for 2016 guidance, I think you said 3% rate growth. What is it for the actual market rate? That percentage of your portfolio, what's your 2016 guidance assume for that growth?

We don't have it broken down like that. Nick, we'd have to get back to you as to how that breaks down, because we kind of have it all rolled up. But we can get back to you on that.

Your next question comes from the line of Paul Adornato representing BMO Capital Markets.

You mentioned that transient revenues are increasing. I think you said 6% better on the three big holiday weekends over the summer. I was wondering if you could tell us what was your occupancy or how much capacity do you have on those weekends? And remind us of the pricing policies, if you have dynamic pricing for the busy times?

I guess, if you look at the holiday weekends last year they were about I think a 12% increase year-over-year, so 14% to 13%. This year the holiday weekends were about 6%. But when you kind of roll it altogether, the transient was up 9% in both years. And that was really a function of us taking some of the holiday weekend activity that we had from the previous year and really being able to spread it out, so that it encompass more than just the holiday weekends. And we really concentrated on those 100 days of campaign between Memorial Day and Labor Day. So we were able to do that and able to increase rates. And in terms of just pricing power and the ability to increase those rates, we spend a lot of time focused on where we're at in terms of reservation pace, where we have the ability to increase rates, and what we can do to increase rates in terms of what's the customer experience in order to be able to achieve those rates.

And for residents that own a second home in your communities, do you allow subletting and is there a role for you to play in subletting places, when they are not in use?

We do generally allow subletting. We have, they're called third-party rental programs. And they've been, I think I would kind of call it, hit-or-miss in terms of success. It depends on the property, where we may have the third-party rental program, which kind of acts as a little bit of a snowbird rental program. Someone for one reason or another, they're may not be able to come down to their home for particular winter and then they want to sublet out their home. But it's a great way for us to just bring more people into the property, expose people to our properties. So we would look to broaden those programs. Although, they're not something that you'd see a big boost in revenue, it's more just from a marketing perspective being able to expose our properties to more people.

Your next question comes from the line of Ryan Burke representing Green Street Advisors.

Back to the Fannie and Freddie question, it obviously sounds like that's in the very early stages. But can you discuss what the implications maybe for your age restricted buyer, if and when a program does take shape? Does it change their propensity to pay all cash do you think?

I don't think it does. Part of what remains to be seen is exactly how the program executes. There is no secondary market today. So if they're developing a program, it's unclear exactly what the product is that they're going to be able to deliver and what the pricing on that is. And given that the vast majority of our customers are paying cash today, and they're accustomed to conventional mortgage financing and rates, it seems unlikely that they're going to be interested in the chattel financing product, generally speaking.

And then can you provide some color on your plans for expansion activity? Paul, I think you mentioned it in regards to your guidance. What have you done in 2015? And what are your expectations for 2016?

What we have is, I think we talked about ViewPoint historically, which is a property in Phoenix that we've done some expansion activity this year. We have also I think you might have remembered a few years ago, we did a home sale development at Thousand Trails property about an hour outside of Houston on Lake Conroe. We have built additional sites there, looking to put homes on those sites now. We have also started as beginning stages of developing land adjacent to one of our premier RV asset in Mesa, next to Monte Vista Village. So those three are kind of the ones that we're working on right now and we will continue to continue to update those in 2016.

And what number of sites would you expect that would add in 2016?

That would be about 600 to 700 sites.

And last question just on rate growth, and Nick asked this, I'd like to approach it a little bit of a different way. If you do expect a 3% rate growth, including exposure to CPI and to rent control, are you able to estimate what that growth rate would have been had you had no exposure to those issues?

So if the CPI wasn't the factor in the third of leases that do have CPI, is that what you're asking?

Correct. How much higher was that 3% rate growth?

We don't have a number. We can certainly get that for you.

Your next question comes from the line of Todd Stender representing Wells Fargo.

For the renter to homeowner conversions you made in Q3, what was the average cost of their rent versus the cost to own? I'm just kind of getting a sense of what or how far out of balance it is right now?

The cost to rent versus the cost to own, so the average rental right now in our portfolio is $840 a month; that's comprised of a site rent of $610 a month and a home rent of $230. Since the large, large percentage of our homes sales are all cash, like 80%, 85%, you just see a drop off of the home piece, so you would go from roughly $800 a month to about $600 a month.

And just kind of circling back to the investment pipeline, can you break out the mix of what you're looking at right now, I guess, in terms of both age restricted and all age MH? And then how much time are you spending on continuing to add to your RV portfolio?

I'd say, the mix inside the MH is basically all age restricted, to the extent that there is something in all age in some desirable locations that maybe something we would be looking at. But it's roughly I think the pipeline or just the people that we're talking with, potential sellers that we're talking with is roughly fifty-fifty on MH and RV.

And how about quality, Marguerite, any comments based on the stuff you're looking at right now, one? And two, any catalyst you can kind of point to? And maybe we'll see a little more acquisition activity, either for you guys or for your competition over the next couple quarters?

I think that in terms of quality I think the properties that we're looking at are of similar quality to our portfolio, and that so we would continue to want to do to build on the quality of our portfolio. And in terms of catalyst, I think as I said in the beginning, just relative to these one-off owners, they're just making some life decisions as to when is the right time to kind of pass the range, so I'm not sure when that would happen. And as to catalyst for two other deals, some other larger portfolio deals, I think it's a matter of when is the right time for the sellers to kind of take some chips off the table.

And then finally, just looking at, I guess, one of your most recent deals, the Miami RV acquisition you made at the end of Q2. Any anecdotal comments you can make about that? Just trying to get a sense of the speed and what you're able to drive occupancy and rate once you do take over an RV resort?

That particular property is trending better than our pro forma, really mainly just putting our kind of marketing efforts into line, and getting people. It's the right season, people are now coming down, so we're able to see it for be able to bring the people down from the north, customers down from the north and offer them another alternative. So we think our ownership with that particular property, and the fact that we have kind of that marketing engine has been very helpful. End of Q&A

Since we have no more questions on line, at this time, I would now like to turn the call back to Marguerite Nader for closing comments.

Thank you all very much. Paul Seavey will be around for any additional questions.

Thank you. Ladies and gentlemen, thank you for your participation in today's conference. This concludes the presentation. You may now disconnect. Good day.