Good day, everyone, and thank you all for joining us to discuss Equity LifeStyle Properties' Fourth Quarter and Year end 2017 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 Securities Laws. Our 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. In addition, during today's call we will discuss non-GAAP financial measures as defined by SEC Regulation G. Reconciliations of these non-GAAP financial measures to the comparable GAAP financial measures are included in our earnings release, our supplemental information and our historical SEC filings. 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. I am pleased to report the final results for 2017. We continued our record of strong core operations and FFO growth with an 8.5% growth in FFO. 2017 was a year marked by solid demand. We are pleased to report that quarter-over-quarter occupancy has now increased for eight consecutive years. Our MH portfolio increased occupancy by 475 sites, while increasing homeowners by over 800 sites or more than 1%. Our properties are well located in high growth markets. We saw continued strength in our ability to increase rent at our MH properties with the full year rate growth of 3.9%. Customers are experiencing our properties before making the purchase decision and rental conversion trends are positive. We finished the quarter with our strongest conversion rate for new and used home sales at 24% with an average of 20% for the full year. Our ownership transfers continue to increase year-over-year signifying a robust resale market in our properties. The demographic trend is in our favor with baby boomer relocation trends and overall population growth in some of our key states. Over the next five years, the U.S. population is predicted to grow 3.5%, while two of our key states, Florida and Arizona, are anticipated to grow almost double the U.S. average. ELS offers the newly retired boomer an opportunity to live in a community setting and take advantage of all the extensive amenities at our properties. Our RV properties performance well this year. For the year, our core RV income grew 5.9%. This growth was fueled by a 5.6% growth in annuals, a 9% growth in seasonals and a 4.5% growth in transient revenue. Our marketing programs continue to bear fruit. We increased our social media fan base by 27% to 436,000. Our marketing campaigns encourage the customer to book online and we have seen a 42% increase in revenue coming through online reservations as compared to 2016. Our customers continue to migrate towards booking on their mobile devices. For the year, mobile revenue increased 87% and now accounts for 32% of all revenue booked on our Web site. Turning to acquisitions. In the quarter we purchased two flagship RV resorts located on the Chesapeake Bay for a total of $134 million. The properties contained 1700 sites and have 80 acres of external expansion as well as between 400 and 500 expansion sites in the internal footprint. The properties have received multiple mega park of the year award and have long been on the top of our acquisition target list. I would like to thank our employees for continuing to deliver a great experience for our customers as this translates into repeat business and solid operating results. The effort of each employee is important and appreciated. I will now turn it over to Paul to walk through the numbers in detail.

Thanks, Marguerite and good morning everyone. I will review our fourth quarter and full year results, update our full year 2018 guidance and discuss our detailed our first quarter guidance. Before I begin, I will mention that our core results for 2017 as well as our guidance for 2018 reflect the designation of our Florida Keys properties as non-core properties. Our definition of core properties includes those owned and operated during comparative periods presented. We have made good progress towards reopening our RV assets in the Florida Keys but we decided to designate them as non-core properties in the fourth quarter because operations have been interrupted. While the change has minimal impact on core portfolio NOI growth rates, for both guidance and actual results we believe that provides a clear picture of the financial results of our business. Core property operating income was higher than guidance for the quarter and our core portfolio generated 5% growth in NOI for the full year. Full year normalized FFO per share was $3.60, 8.5% higher than 2016. Full year core base rental income growth was 4.8% with 3.9% coming from rate and 90 basis points coming from occupancy. We increased core occupancy 125 sites in the quarter including a decrease in rental home occupancy of 85 sites. At the end of the year, rental homes represented 6.7% of our core occupancy. Core resort base rental income growth was 7.9% in the fourth quarter compared to prior year. The outperformance to our expectations was driven by higher seasonal and transient revenues. Seasonal revenue growth in our resorts in the south and west was driven by strong rate growth of 7% to 8%, accompanied by increased occupancy. Our Florida RV resorts saw very strong demand for transient state during the quarter. Net activity in our…

[Operator Instructions] Our first question comes from the line of Samir Khanal with Evercore ISI.

Can I ask you guys about the acquisition that you did, maybe around cap rates on the deal. I guess I was a little surprised at the midpoint to did not go up more than just a penny. I know you tapped the ATM but just trying to understand if there is any debt or sort of capital improvements associated with the assets that you acquired. Any color on that would be great.

Sure. So in the quarter I think in November we purchased the Bethpage and Grey's Point. These were really family held assets for the last 25 years and we have been interested in these assets for a long time. The going in cap rate is 5% and as I said, I think in my opening comments, there is upside potential in expansion sites. There is upside potential from both expansion sites and adding these two assets to our marketing campaigns and bringing awareness of these properties to our customer base. So between that, that contributed to us having the ability to increase guidance.

Okay. And then just out of curiosity, why did you tap the ATM to fund the acquisition? Why not just issue more debt? I mean pricing is pretty favorable still and you have a strong balance sheet and sort of very low leverage at this point.

I think our view was to do a mix of debt and equity on the deal which we have dialed into our guidance. And we reviewed our options and found it a very attractive option to tap the ATM and use equity to fund a portion of the deal.

Our next question comes from the line of Nick Joseph with Citi.

Just sticking on the acquisitions. In terms of, you mentioned expansion sites as a source of upside going forward for them, but in terms of the marketing platform what growth rate are you underwriting, I guess, this year and next on that versus kind of the core portfolio overall.

Well, I think as we really get in there and operate, and these are flagship operations and properties on the eastern seaboard which are new to us. So as we look at it I think it's going to probably grow in excess of what we have seen in our northern camp grounds. So we are pretty excited about that, about getting in and starting to operate them.

Thanks. And then just, do you have an update on the performance of the Marinas. I know you didn’t own them last year and another in a JV, but just relative kind of growth rate in the fourth quarter versus last year in the fourth quarter.

Yes. Actually the Loggerhead portfolio was not -- we didn’t own at the [Bay] [ph], also Suntex didn’t own it in the fourth quarter of last year, of '16. But we are pleased with the results of the Loggerhead portfolio for the limited time that we have been a partner. And so there is no real update on that other than that.

Thanks. Maybe just finally, you mentioned population growth expected across your footprint. Just wondering more broadly, your thoughts on, kind of tax reform and the impact it could have certainly in the home resale market where your potential tenants are moving from.

Yes. Nick, we think about the tax reform in a few different ways. Specific impact on ELS and then impact on the customer base. I think for ELS there is not much impact. We did take a look though at our customers and considered how it might impact their individual situation and put together some models of typical customers making taxable income assumptions about their income levels, the source of income, whether it was wages, dividends, capital gains and so forth. In most instances we see our typical customer getting some tax savings. The estimated dollar amount could be in a range from a couple of hundred to maybe a thousand dollars or more annually. Just by way of example, a married couple with no dependent children that has $50,000 of interest and dividend income annually could see $300 increase in their tax return, the refund I should say. And a married couple that has no dependent children but are on wages of the same amount would see a reduction closer to $700. So we think overall there is a modestly favorably impact on the customers when we think about the impact to their income.

And Nick, this is kind of a -- from a longer term, looking back over the last five years I think we have seen a decline in homes coming back to us of about 40% over the last five years. Really showing this strength of the resale market in our portfolio which in turn, I think, shows people are able to sell their home both up north and also in our portfolio.

Our next question comes from the line of Drew Babin with Robert W. Baird. Please go ahead.

I noticed in the supplemental 2018 guidance, it looks like the annual and seasonal RV revenues came in just marginally. I was just wondering if there is anything embedded in that. Whether it's the changing comp set with the Florida Keys properties, tougher comps or, just looking for some color.

Yes. So that change, it's impacted by a couple of things. First, the core portfolio is different because we designated the Keys properties as non-core. That change had almost no impact though on expectations, maybe ten basis points. But October guidance for 2018 results was based on the forecast that we had for fourth quarter of 2017. And we completed our preliminary forecast review in January. We increased the core RV revenue expectations for 2018 by almost $1 million. So because the core outperformed expectations in Q4 of '17, the impact does kind of look like a slight decline in growth rates but it's really an increase in overall revenue.

Okay. That’s very helpful. And one last one, just on the -- I guess the overall cadence of expansion sites being delivered with the new portfolio. I am not sure whether the Chesapeake acquisitions are going to provide any opportunities this year but expansions that are underway elsewhere. Is there may be a quarterly number of sites we should model in in terms of just increase in available site count.

Yes. I mean with respect to the Chesapeake Bay there, we won't have those expansions on line this year. I think that what we are planning for 2018 is about 700 sites and we will be breaking it down quarterly as they become available.

And our next question comes from the line of John Kim with BMO.

On the recent acquisitions, can you just discuss how competitive the sale process was and if it was the usual players or if there are any new entrants in the market.

I would say the process was very competitive. Like I had mentioned, this is something that, these are assets that we have highly sought after for a long time. But once it was clear that they were going to be sold, there was a process, a lot of people were interested. And I think it just boiled down to some relationships which is really what a lot of the deals and how they kind of come together happen. But as far as new players, really the same players that have been interested in other assets I would say.

Okay. And then local media reports referenced a purchase option for an additional 46 acres nearby. Was that part of the $134 million acquisition price or is that a separate transaction.

No, that’s all part of the acquisition price.

Okay. And I don’t know if you gave it already but what is the timing for the expansions and do you already have the approvals in place.

There are approvals in place for some of the internal expansions and the timing is over the next few years.

Marguerite, in your opening remarks you referenced your occupancy increasing for, I think you said 8 consecutive years. Can you just comment on how much runway is left? What is the peak occupancy in your mind and also when do you think you will hit it?

This is Patrick. Just for a perspective, our historical high watermark is 95%. We are currently at 94.5%, so we are roughly 350 occupied sites away from that high watermark. And just at a high level across the portfolio. Florida is obviously our largest market with half of our current vacancy, roughly 1800 vacant sites in the Florida market. And if we look at that market, Tampa, Clearwater, Fort Myers on the Gulf coast, Fort Lauderdale, [indiscernible] on the East Coast are in the 97% occupancy range. And as you move north up to Orlando, up the coast to Vero and Daytona, you run into occupancy rates more in the low to mid 90% range. So there is additional runway in Florida for us to continue to add occupancy. California and Arizona, both highly occupied markets for us, 97%, 98%. We have seen strength particularly in the last few quarters on rental conversions, particularly with new homes in both of those markets. So that continues to contribute to overall quality of our occupancy growth, as well there is some opportunity to continue to contribute to occupancy. Likewise, Colorado has been doing very well for us over the last several quarters and there is so more opportunity there. And if you look at the broader portfolio about 40% of our portfolio is 99% to 100% occupied. So that starts obviously getting into a structural vacancy concept but below that we have a lot of opportunity in those key markets that I highlighted to continue to grow occupancy. And I would envision that we are going to eclipse the 95% mark but that all assumes that market holds together and consumer confidence holds tight.

Okay. And then my final question is on Tropical Palms RV resort. You have taken over operation of the asset recently. It's out of your same store pool, but I was just wondering if you could elaborate on your plans for additional CapEx or an investment you plan to do at this asset.

Sure. It's Patrick again. Our view of that asset is it's obviously in a premier location. High profile in the Greater Orlando and Disneyworld market. And we have seen very consistent demand there with our onsite team from an operations perspective and our asset management team. We are continuing to invest in not only the common area amenities but also many of the rental units that we had at that property. So there is a multiyear plan we have to continue to keep that property positioned competitively in that very strong market.

And John, we have owned this property since 2004 and we operated it for a few years and then we had a third party operate it for a while. So we are very familiar with the asset and I think we have operated it now for almost a year and a couple of months. So it will be in the same store pool in 2018.

What kind of returns do you typically expect on investment?

Investment on...

Like additional CapEx on something like this.

Well, I think it depends. It depends what we are talking about. I mean there is obviously revenue producing CapEx when you put in a cabin or an amenity base that generates additional revenue. So I think the range is pretty wide in what we would expect.

And our next question comes from the line of Ryan Lumb with Green Street Advisors.

So expense growth in the core portfolio in the fourth quarter came in a bit above guidance given for the quarter, third quarter. Just wondering if you can give some more color on what the delta was there during the fourth quarter.

Yes. As I mentioned, the main drivers of it were administrative and then advertising and promotion cost. The advertising promotion in some respect offsets the incremental million, little over a million dollars of RV revenue that we have relative to guidance in the quarter. And then the administrative cost related to certain legal matters at some of our properties.

Okay. And then earlier this month, Skyline and Champion Homes announced plans to merge and become the largest builder of manufactured homes in the U.S. Any thoughts on what the impact might be for you or the industry more broadly.

Yes, it's Patrick. We have relationships with both those manufacturers. Over the last seven to ten years we have seen consolidation across the manufacturing platform including with another large manufacturing out there, Kabco Homes. We purchase from all of them. So I don’t that if it will particularly change the landscape for us with respect to the volume of homes that we purchase and who we purchase them from. That’s largely dictated by the geographic distribution of the manufacturing plants of the individual manufacturers.

And I think there is really strength in the MH industry. I think there is 81,000 shipments this year and we have seen double digit growth in shipments for each of the last five years. And when you look at just folks in other states that are of impact to us, California, Arizona, Florida, they have double in shipments over the last five years. So there is a lot of activity going on on the manufacturing front.

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

Just as we look at the occupancies reaching these fairly high levels, I think the emphasis that we look at at least, is on the rate growth. In Q4 you did 3.7% MH growth, I guess, I the base rent. If that’s the average, what's the range around that average? How high can you push rates in just MH alone? Just saying how high you can push it in the MH business.

It really depends obviously on a market by market basis. You look at our MH growth rate for this quarter of 4.8%, it's the highest level we have seen since 1997. And so I think that as we look at and go through our market surveys on a market by market basis to determine where we have the ability to push rates and then growing occupancy is obviously the other lever. And as Patrick pointed out, we have a lot of properties that are 99% occupied but the key there is that they have also been that way for many years. So these are sustainable levels in the business where the customer is putting down considerable capital to live in the property.

Thanks, Marguerite. And any update home sales? Just want to hear what the foot traffic sounds like and any volume numbers.

Well, traffic has been good. Our leads year-over-year increased almost 20%. The deal that is from the marketing platform, focusing on re-launching our Web site. It's fully responsive to mobile devices and we have strong SEO. We also have those remarketing ads that track you around the Internet once you have visited our site. And from just a workflow perspective at the property level, we are holding monthly national open houses coordinated with our national marketing platform. And we have improvements in lead management. So we see consistent demand. New home sales overall were up a little bit more than 20% for the quarter year-over-year. That is in part is based on, as I mentioned earlier, strength in Arizona and California with respect to new rental conversions. But we have also seen strength in a couple of our flagship resorts in Phoenix where we had expansion sections and we are seeing good demand in selling new homes.

That’s helpful. And just finally back to the extension site, that discussion. Just as a reminder, can you discuss the economics and returns of spending capital. It seems like it's such an excellent use of allocating capital to extension sites. When you look at the cost per site, how long it takes to get it entitled payback period IRR. Can you just talk maybe about some of the metrics and returns when you entitle land next to an existing community.

Sure. Generally it costs between $25,000 to $30,000 to build a site out. And that kind of depends on certainly the area, the location we are at and if there is additional amenities that need to be put it. And then we generally get about $6000 in revenue and in terms of the timing that happen relatively quickly. As an example of what Patrick just mentioned at the property in Mesa, we are building them and filling them effectively. So the return happens quite quickly.

And IRRs in the 15%, 18% range, is that fair?

I think that’s fair.

Thank you. And since we have no more questions on the line at this time, I would like to turn it back over to Marguerite Nader for closing comments.

Thank you all for joining us today. Paul Seavey is around for any further questions. Thanks very much.

Ladies and gentlemen, thank you for your participation in today's conference. This does conclude the program and you may now disconnect. Everyone have a great day.