Edgar Filing: AFFORDABLE RESIDENTIAL COMMUNITIES INC

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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM 8-K

Current Report Pursuant to Section 13
of the Securities Exchange Act of 1934

Date of Report (Date of Earliest Event reported)—May 17, 2004 (May 14, 2004)

AFFORDABLE RESIDENTIAL COMMUNITIES INC.
(Exact name of registrant as specified in its charter)

Maryland
(State of Incorporation)

001-31987
(Commission File Number)

84-1477939
(IRS Employer Identification No.)

600 Grant Street, Suite 900, Denver, Colorado, 80203
(Address of principal executive offices and zip code)

(303) 383-7500
(Registrant's Telephone Number)

Item 12. Results of Operations and Financial Condition

(a) On May 14, 2004, Affordable Residential Communities Inc. (the "Company") posted on the Company's website a supplemental presentation concerning the Company's results of operations for the first quarter of 2004. The supplemental presentation is attached hereto as Exhibit A to this Form 8-K and is furnished to, but not filed with, the Commission.

Signatures

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed by the undersigned hereunto duly authorized.

Date: May 17, 2004		AFFORDABLE RESIDENTIAL COMMUNITIES INC.
		By:	/s/ SCOTT D. JACKSON Scott D. Jackson Chairman and Chief Executive Officer

Exhibit A

First Quarter 2004
Earnings Release and
Supplemental Operating and Financial Data

Affordable Residential Communities
600 Grant Street, Suite 900
Denver, CO 80203
Phone: (866) 847-8931
Fax: (303) 294-0121
www.aboutarc.com

Table of Contents

Portfolio Map		1
Press Release Text		2
Financial Data
	Financial Highlights	5
	First Quarter Adjustments	6
	Balance Sheet	7
	Debt Analysis	8
	Statement of Operations	9
	Comprehensive Income	10
	Revolving Credit Facility	11
	Segment Detail	12
Same Community Data		13
Same Community—Percentage Growth		14
Total Real Estate Segment		15
Capital Expenditure Summary		16
Manufactured Home Purchases		17
Top 20 Markets		18
Acquisitions & Dispositions		19
Hometown Acquisition Data		20
Home Sales Data		21
Owned Home Data		22
Investor Inquiries		23
Exhibit I—Non-GAAP Financial Measures
	Definitions of Non-GAAP Measures	I-1
	FFO, FAD & EBITDA Reconciliation	I-2
	Total Real Estate Net Segment Income Reconciliation	I-3
	Same Community Net Segment Income Reconciliation	I-4

Note: This earnings release and supplemental operating and financial data report contains certain non-GAAP financial measures that we believe are helpful in understanding our business as further described in Exhibit I. These financial measures that principally include Funds From Operations, Funds Available for Distribution, Earnings Before Interest, Taxes, Depreciation and Amortization, and Net Segment Income should not be considered an alternative to Loss Available to Common Stockholders or any other GAAP measurement of performance or as an alternative to cash flows from operating, investing or financing activities. Furthermore, these non-GAAP financial measures are not intended to be a measure of cash flow or liquidity.

Portfolio Map

Press Release Text

Affordable Residential Communities Inc. Reports First Quarter 2004 Results

DENVER, May 4, 2004 (BUSINESS WIRE)—Affordable Residential Communities Inc. (NYSE: ARC) today announced results for the quarter ended March 31, 2004.

For the quarter ended March 31, 2004, funds from operations available to common stockholders (FFO)1 was $(21.7) million or $(0.74) per share. For the quarter ended March 31, 2004, net loss available to common stockholders was $35.0 million or $1.20 per share as compared to a net loss available to common stockholders of $8.4 million or $0.49 per share for the three months ended March 31, 2003. Our results in the quarter ended March 31, 2004 reflect the inclusion of one-time charges of $27.9 million or $0.88 per share related to our IPO, acquisition of certain assets from Hometown America LLC and the repayment of certain indebtedness, all of which were completed in February. Excluding these one-time charges, our FFO would have been $4.0 million or $0.14 per share. On a same community basis, revenue in our real estate segment was up 3.5% to $36.9 million from $35.7 million for the first quarter ended March 31, 2004 as compared to the first quarter ended March 31, 2003. Same community expenses increased 2.3% to $14.1 million from $13.8 million for the three months ended March 31, 2004 as compared to the three months ended March 31, 2003. As a result, same communities real estate net segment income 2 increased 4.2% to $22.8 million from $21.9 million for the three months ended March 31, 2004 as compared to the three months ended March 31, 2003.

See the attachment to this press release for reconciliation of FFO and real estate net segment income to net loss ($35.0) million, and FFO per share to net loss per share ($0.49) per share, the most directly comparable GAAP measures, and to Notes 1 and 2 for a definition of FFO and real estate net segment income.

Total portfolio occupancy averaged 81.4% for the three months ended March 31, 2004. Average occupancy for same communities decreased from 87.3% for the three months ended March 31, 2003 to 83.5% for the three months ended March 31, 2004 due mainly to the lack of available chattel lending and lenders moving repossessed homes out of the communities.

Our results in the first quarter of 2004 were impacted by a series of one-time charges related to our recent activities totaling $27.9 million or $0.88 per share. The primary components of the charges include: (i) restricted stock grant of $10.1 million, (ii) write-off of loan origination costs and exit fees associated with the repayment of indebtedness of $13.4 million and (iii) IPO related costs of $4.4 million. These costs will not impact future reporting periods.

"We are satisfied thus far with the integration of the Hometown portfolio. We have expanded our district management infrastructure from 7 districts to 12 districts to reflect the increase of approximately 26,000 homesites to our portfolio. We have not experienced any significant issues associated with this portfolio that were not previously identified through our due diligence process. Our new employees and communities are fully equipped and are undergoing training in ARC's systems and procedures," said Scott Jackson, Chairman and Chief Executive Officer. "Our capital expenditure projects are focused on preparing homesites for new home deliveries, addressing deferred maintenance issues and improving amenities in order to meet ARC's quality standards. In addition to the approximately 1,100 homes we acquired in the acquisition, we purchased or ordered approximately 500 new homes for these communities in the first quarter. We do not expect homesite upgrades and preparation to be a limiting factor in our ability to place rental homes and for-sale homes into these communities."

"We are pleased to have the IPO and the Hometown acquisition behind us," added Mr. Jackson. "Our full attention has now turned to our occupancy initiatives. We look forward to the

implementation of these programs in all of our communities and the on-going training of our new employees located in the Hometown communities. We remain confident in our rental home program with 438 net lease-ups, excluding the Hometown communities, in the first quarter. We have several additional occupancy initiatives including our in-community home sales program, our consumer finance program and our Hispanic marketing program. We are particularly excited about our focus on providing homes at affordable prices and our ability to finance the sale of these homes. We look forward to these activities positively impacting our performance going forward."

We completed our initial public offering on February 18, 2004. We issued 24.5 million shares of common stock at $19.00 per share, of which 2.3 million shares were offered by selling stockholders. On March 18, 2004, our underwriters exercised their over-allotment option to purchase 0.8 million shares of common stock at $19.00 per share. Concurrent with the IPO, we raised $125 million of gross proceeds through the issuance of 5.0 million shares of Series A Cumulative Redeemable Preferred Stock.

In connection with the IPO, we completed the acquisition of 90 communities from Hometown America for approximately $615.3 million comprising 26,406 homesites. This includes a small number of communities acquired post-closing upon the completion of the loan assumption process with the final three loan assumptions completed on April 9, 2004.

In conjunction with the IPO, we completed a $250 million finance facility to support our in-community home sales and in-community finance programs. The facility consists of two funding components: (i) a $225 million four-year facility to fund consumer loans and (ii) a $25 million facility to fund for-sale home inventory.

In addition, we closed on two communities on February 26, 2004 consisting of 401 homesites in the Nashville, TN market. These communities were acquired for approximately $7.4 million in cash and had occupancy at acquisition of 66% reflecting an initial capitalization rate of 8.7%. This acquisition affords us significant upside in terms of occupancy and rent growth. Nashville now represents a core market for us with five communities totaling 1,134 homesites.

On May 3, 2004 we placed a 36-community portfolio under contract. This portfolio consists of approximately 3,600 homesites that are approximately 88% occupied with an average rent of $254 per month. The portfolio will be purchased for approximately $65.0 million, including closing costs, and represents an in-place capitalization rate of approximately 8.5%. The acquisition comes with $28.5 million of existing debt that will be assumed by ARC and has an interest rate of 7.2%. The remainder of the consideration is expected to consist of cash and preferred operating partnership units. Taking into account the loan assumption process, we expect this portfolio to close in June 2004. The communities are located in the eastern half of the U.S. and fit well with our existing footprint. At this time, there is no guarantee we will close on this portfolio.

In addition, we have placed four communities under contract in Salt Lake City, UT. There are a total of 558 homesites with an average occupancy of 78.5%. These communities are each under separate contract for a total of $12.6 million with an in-place capitalization rate of 6.7%. These contracts are subject to completion of our due diligence and can be terminated by us.

A conference call to discuss first quarter results will be held Tuesday, May 4, 2004 at 12:00 p.m. Eastern Time. This call is being webcast by CCBN and can be accessed at ARC's website at www.aboutarc.com. The webcast is also being distributed over CCBN's Investor Distribution Network to both institutional and individual investors. Individual investors can listen to the call through CCBN's individual investor center at www.fulldisclosure.com or by visiting any of the investor sites in CCBN's Individual Investor Network. Institutional investors can access the call via CCBN's password-protected event management site, StreetEvents at www.streetevents.com.

Affordable Residential Communities Inc. currently owns and operates approximately 67,000 homesites located in 304 communities in 29 states. ARC is a fully integrated, self-administered, self-managed equity real estate investment trust (REIT) focused on the acquisition, renovation, repositioning and operation of primarily all-age manufactured home communities with headquarters in Denver, CO.

1. As defined by NAREIT, FFO represents net income (loss) (computed in accordance with GAAP), excluding gains (or losses) from sales of property, plus real estate related depreciation and amortization (excluding amortization of loan origination costs) and after adjustments for unconsolidated partnerships and joint ventures. We present FFO because we consider it an important supplemental measure of our operating performance and believe it is frequently used by securities analysts, investors and other interested parties in the evaluation of REITs, many of which present FFO when reporting their results. FFO is intended to exclude GAAP historical cost depreciation and amortization of real estate and related assets, which assumes that the value of real estate assets diminishes ratably over time. Historically, however, real estate values have risen or fallen with market conditions. Because FFO excludes depreciation and amortization unique to real estate and gains and losses from property dispositions, it provides a performance measure that, when compared year over year, reflects the impact to operations from trends in occupancy rates, rental rates, operating costs, development activities and interest costs, providing perspective not immediately apparent from net income. We compute FFO in accordance with standards established by the Board of Governors of NAREIT in its March 1995 White Paper (as amended in November 1999 and April 2002), which may differ from the methodology for calculating FFO utilized by other equity REITs and, accordingly, may not be comparable to such other REITs. Further, FFO does not represent amounts available for management's discretionary use because of needed capital replacement or expansion, debt service obligations, or other commitments and uncertainties. FFO should not be considered as an alternative to net income (loss) (computed in accordance with GAAP) as an indicator of our financial performance or to cash flow from operating activities (computed in accordance with GAAP) as an indicator of our liquidity, nor is it indicative of funds available to fund our cash needs, including our ability to pay dividends or make distributions.

2. Real estate net segment income provides a measure of rental operations that does not include property management, depreciation, amortization, interest expense and non-property specific expenses such as general and administrative expenses. We present real estate net segment income because we consider it an important supplemental measure of the operating performance of our communities and believe it is frequently used by lenders, securities analysts, investors and other interested parties in the evaluation of REITs, many of which present real estate net segment income when reporting their results. Real estate net segment income is defined as income from rental and other property and manufactured homes less expenses for property operations and real estate taxes. Real estate net segment income does not represent cash generated from operating activities in accordance with GAAP and is not necessarily indicative of cash available to fund cash needs, including the repayment of principal on debt and payment of dividends on common and preferred stock. Real estate net segment income should not be considered a substitute for net income (calculated in accordance with GAAP) nor a measure of results of operations or cash flows (calculated in accordance with GAAP) as a measure of liquidity.

The forward-looking statements contained in this news release are subject to certain risks and uncertainties including, but not limited to, general risks affecting the real estate industry; the Company's ability to maintain or increase rental rates and occupancy with respect to properties currently owned; the Company's assumptions on rental home and home sales and financing activity; completion of pending acquisitions, if any, and timing with respect thereto; the Company's growth and expansion into new markets or to integrate acquisitions successfully; and the effect of interest rates as well as other risks indicated from time to time in the Company's filings with the Securities and Exchange Commission. The Company expressly disclaims any intention or obligation to provide public updates, revisions or amendments to any forward-looking statements that become untrue because of subsequent events.

Financial Highlights

				Three Months Ended
				03/31/04			03/31/03			Change
				($ in thousands, except per share data)
*Operating Data*
	Total revenue			$	45,470		$	42,842		6.1	%
	Same community real estate net segment income(c)			$	22,801		$	21,874		4.2	%
		Avg. monthly real estate revenue per occupied homesite			370			343		8.0	%
		Avg. monthly homeowner rental income per homeowner occupied homesite			285			273		4.2	%
		Weighted average occupied homesites			33,228			34,682		(4.2	)%
	EBITDA(c)			$	6,583		$	16,194		(32.1	)%
	Adjusted EBITDA(a)(c)				21,070			16,194		30.1	%
	Funds from operations available to common stockholders and OP unitholders (c)			$	(23,609	)	$	1,572		(1601.8	)%
		FFO per share—diluted			(0.74	)		0.08		(1030.5	)%
		FFO payout ratio			NA			NA		NA
	Recurring capital expenditures			$	520		$	1,325		(60.8	)%
	Scheduled principal amortization of indebtedness				1,936			2,246		(13.8	)%
	Funds available for distribution ("FAD") (c)			$	(26,065	)	$	(1,999	)	1203.9	%
		FAD per share—diluted			(0.82	)		(0.10	)	707.9	%
		FAD payout ratio			NA			NA		NA
	Net income (loss) to common stockholders			$	(34,969	)	$	(8,401	)	316.2	%
		Earnings (loss) per share—basic			(1.20	)		(0.50	)	139.2	%
		Earnings (loss) per share—diluted			(1.20	)		(0.50	)	139.2	%
		Distributions per common share (through March 31, 2004)		$	0.1493	(b)		NA		NA
		Distributions per preferred share (through April 30, 2004)			0.4182	(b)		NA		NA
		Interest expensed		$	14,684		$	13,880		5.8	%
		Interest capitalized			544			0		NA

			Total interest incurred	$	15,228		$	13,880
		EBITDA/interest			0.43x			1.17x
		EBITDA/interest + preferred stock dividend			0.40x			1.17x
*Share Detail*
	Average number of common shares outstanding				29,233			16,973		72.2	%
	Average number of OP units outstanding				2,560			2,726		(6.1	)%

		Diluted shares outstanding			31,793			19,699		61.4	%

		03/31/04			12/31/03			Change
*Balance Sheet Data*
	Total assets	$	1,770,503		$	1,125,833		57.3	%
	Total debt		933,942			789,574		18.3	%
	Market equity value, end of period		802,234			NA		NA
	Debt/total assets		52.8	%		70.1	%	(24.8	)%
	Debt/total market capitalization		53.8	%		NA		NA
*Other Data*
	Total properties (at period end)		301			211
	Total homesites (at period end)		66,548			39,943
	Occupied homesites (at period end)		53,353			34,881
	Occupancy percentage—total portfolio		80.2	%		87.3	%

(a): Adjusted EBITDA reflects the add-back of $27.9 million in one-time costs related to the IPO and the early termination of certain indebtedness.
(b): Reflects partial period.
(c): See Exhibit I for definition and reconciliation to nearest GAAP measure.

First Quarter Adjustments

			3/31/04
			($ in thousands; except per share data)
FFO available to common stockholders & OP unitholders(a)			$	(23,609	)
	Plus:
		Restricted stock grants		10,070
		IPO related costs		4,417
		Early termination of debt		13,427

	Adjusted FFO(a)		$	4,305
	Plus:
		Preferred dividend		1,232
		Depreciation on F, F & E		369
		Amortization of loan origination fees		868
		Net interest expense		14,296

	Adjusted EBITDA(a)		$	21,070

Adjusted FFO(a)			$	4,305
	FFO per share—diluted			0.14
	FFO payout ratio			150.4	%
Recurring capital expenditures			$	520
Scheduled principal amortization of indebtedness				1,936
Adjusted FAD(a)			$	1,849
	FAD per share—diluted			0.06
	FAD payout ratio			350.1	%
Adjusted EBITDA/interest				1.38x
Adjusted EBITDA/interest + preferred dividend				1.28x
Distributions payable on common shares and OP units			$	6,474

(a): See Exhibit I for definition and reconciliation to nearest GAAP measure.

Balance Sheet

				Period Ending
				03/31/04			12/31/03
				($ in thousands)
*Assets*
	Rental property
		Land		$	211,432		$	125,977
		Land improvements and buildings			1,230,974			738,807
		Manufactured homes and improvements			163,430			136,589
		Furniture, equipment and vehicles			9,200			8,896

			Rental property, gross		1,615,036			1,010,269
		Accumulated depreciation			(116,441	)		(103,221	)

			Rental property, net		1,498,595			907,048
		Cash and cash equivalents			87,986			26,631
		Restricted cash			1,435			13,669
		Tenant, notes and other receivables, net			14,190			8,392
		Inventory			3,085			3,878
		Loan origination costs, net			15,108			11,921
		Loan reserves			29,643			32,414
		Goodwill			86,126			86,126
		Lease intangibles and customer relationships, net			24,668			11,626
		Prepaid expenses and other assets			9,667			24,128

			Total assets	$	1,770,503		$	1,125,833

*Liabilities and Stockholders' Equity*
	Notes payable and preferred interest			$	933,942		$	789,574
	Accounts payable and accrued expenses				32,492			20,174
	Tenant deposits and other liabilities				12,024			8,101

		Total liabilities			978,458			817,849
	Minority interest				37,175			42,639
	Stockholders' equity
		Preferred stock			119,108			—
		Common stock			410			170
		Paid-in capital			791,916			378,018
		Unearned compensation			(1,760	)		—
		Accumulated other comprehensive expense			(518	)		—
		Retained deficit			(154,286	)		(112,843	)

			Total stockholders' equity		754,870			265,345

			Total liabilities and stockholders' equity	$	1,770,503		$	1,125,833

Debt Analysis

			Debt Amount		% of Total Debt		Interest Rate		Maturity Date
			($ in thousands)
*Fixed Rate Debt*
	Senior fixed rate mortgage due 2012		$	306,040	32.8	%	7.350	%	2012
	Senior fixed rate mortgage due 2014			215,313	23.1	%	5.530	%	2014
	Senior fixed rate mortgage due 2009			100,676	10.8	%	5.050	%	2009
	Various individual fixed rate mortgages			123,942	13.3	%	6.121	%	2004-2031
	Existing other loans			1,106	0.1	%	8.670	%	2005

		Total fixed rate debt		747,077	80.0	%	6.314	%
*Variable Rate Debt(a)*
	Senior variable rate mortgage			184,011	19.7	%	4.090	%	2006
	Consumer finance credit facility			0	0.0	%	0.000	%	2008
	Floorplan lines of credit			2,643	0.3	%	7.750	%	2004
	Revolving credit facility			0	0.0	%	0.000	%	2006
	Other loans			211	0.0	%	4.000	%	2004

		Total variable rate debt		186,865	20.0	%	4.142	%
		Total debt	$	933,942	100.0	%	5.879	%

*% Fixed/Variable*
	Fixed		$	747,077	80.0	%	6.314	%
	Variable			186,865	20.0	%	4.142	%

		Total debt	$	933,942	100.0	%	5.879	%

			2004		2005		2006		2007		2008		Thereafter
*Maturity Schedule(b)*
	Senior fixed rate mortgages		$	6,028	$	8,068	$	8,574	$	9,111	$	9,622	$	580,627
	Various individual fixed rate mortgages			11,963		3,870		14,090		1,864		25,155		60,692
	Senior variable rate mortgage			0		0		184,011		0		0		0
	Consumer finance line of credit			0		0		0		0		0		0
	Floorplan lines of credit			2,643		0		0		0		0		0
	Revolving line of credit			0		0		0		0		0		0
	Other debt			270		1,047		0		0		0		0

		Total debt maturities	$	20,903	$	12,985	$	206,675	$	10,975	$	34,777	$	641,319

(a): In February 2004, we entered into a two-year $100 million swap and purchased interest rate caps covering our senior variable rate mortgage.
(b): Does not include debt premium.

Statement of Operations

					03/31/04
					($ in thousands; except per share data)
*Revenue*
	Communities				$	44,573
	Retail sales					754
	Consumer finance and insurance					134
	Corporate and other					9

			Total revenue			45,470
*Operating Expenses*
	Communities					17,024
	Retail sales					934
	Consumer finance and insurance					170
	Corporate and other					84
	Property management					1,454
	IPO related costs(a)					4,417
	General and administrative(a)					14,804

			Total expenses			38,887

				EBITDA(b)		6,583
	Early termination of debt(a)					13,427
	Depreciation & amortization					15,660
	Net interest expense					14,296

Income (loss) before minority interest						(36,800	)
	Minority interest					3,063

Income (loss) before preferred stock dividend						(33,737	)
	Preferred stock dividend					(1,232	)

Income (loss) available to common stockholders					$	(34,969	)

*FFO Calculation(b)*
	Income (loss) before minority interest(a)				$	(36,800	)
		Plus: Depreciation and amortization				15,660
		Less: Amortization of loan origination fees				(868	)
		Depreciation on F, F & E				(369	)
		Preferred stock dividends				(1,232	)

		FFO available to common stockholders & OP unitholders(b)			$	(23,609	)

		Less: Recurring capital expenditures			$	(520	)
		Scheduled principal amortization of indebtedness				(1,936	)

	Funds available for distribution ("FAD")(b)				$	(26,065	)

	FFO per share/unit				$	(0.74	)
	FAD per share/unit				$	(0.82	)
	Distribution per share/unit				$	0.15
	Weighted average common shares and OP units					31,793

(a): Includes certain one-time costs related to the IPO and the repayment of certain indebtedness.
(b): See Exhibit I for definition and reconciliation to nearest GAAP measure.

Comprehensive Income

		Three Months Ended 03/31/04
		($ in thousands)
Net income (loss)		$	(34,969	)
Unrealized income (loss) on interest rate swap			(518	)

	Comprehensive income (loss)	$	(35,487	)

Revolving Credit Facility

	03/31/04
	($ in thousands)
Commitment amount	$	125,000

Borrowing base availability	$	66,884
Amount outstanding at period end	$	0
Excess availability	$	66,884

Segment Detail

			Three Months Ended
			03/31/04(a)			12/31/03
			($ in thousands)
*Revenue*
	Total real estate revenue		$	44,573		$	36,589
	Retail homes sales revenue			754			1,757
	Finance and insurance revenue			134			675
	Corporate and other			9			998

		Segment revenue		45,470			40,019
*Expenses*
	Property operations expense			13,541			13,290
	Real estate taxes			3,483			2,826
	Retail homes sales expense			934			2,142
	Finance and insurance expense			170			542
	Corporate and other			84			798

		Segment expenses		18,212			19,598
*Net Segment Income*
	Real estate income			27,549			20,473
	Retail homes sales income			(180	)		(385	)
	Finance and insurance income			(36	)		133
	Corporate and other			(75	)		200

		Net segment income	$	27,258		$	20,421

*Other Data*
	EBITDA(b)		$	6,583		$	16,194
	FFO available to common stockholders and OP unitholders(b)		$	(23,609	)	$	1,572
	Net income (loss)		$	(34,969	)	$	(8,401	)
	One-time charges		$	27,914		$	0

(a): Results include one-time charges of $27.9 million related to the IPO and the repayment of certain indebtedness.
(b): See Exhibit I for definition and reconciliation to nearest GAAP measure.

Same Community Data

				2004			2003
				1st Qtr			4th Qtr			3rd Qtr			2nd Qtr			1st Qtr
				($ in thousands)
*For the full quarter noted:*
	Average total homesites				39,804			39,804			39,804			39,788			39,729
	Average total rental homes				6,356			5,861			5,473			5,065			4,844
	Average occupied homesites—homeowners				28,189			28,870			29,629			30,333			30,854
	Average occupied homesites—home renters				5,039			4,784			4,574			4,226			3,828

		Average occupied homesites—total			33,228			33,654			34,203			34,559			34,682
	Average occupancy—rental homes				79.3	%		81.6	%		83.6	%		83.4	%		79.0	%
	Average occupancy—total				83.5	%		84.5	%		85.9	%		86.9	%		87.3	%
*For the full quarter noted:*
	Real estate revenue
		Homeowner rental income		$	24,088		$	24,036		$	24,346		$	24,744		$	25,314
		Home renter rental income			8,890			8,561			8,293			7,903			6,781
		Other			129			123			46			10			54

			Rental income		33,107			32,720			32,685			32,657			32,149
		Utility and other income			3,792			3,535			3,657			3,399			3,501

			Total real estate revenue		36,899			36,255			36,342			36,056			35,650

	Real estate expenses
		Property operations expenses			11,117			13,099			12,079			11,253			11,138
		Real estate taxes			2,981			2,781			2,547			2,524			2,638

			Total real estate expenses		14,098			15,880			14,626			13,777			13,776

			Real estate net segment income(a)	$	22,801		$	20,375		$	21,716		$	22,279		$	21,874

	Average monthly real estate revenue per total occupied homesite(b)			$	370		$	359		$	354		$	348		$	343

	Average monthly homeowner rental income per homeowner occupied homesite(c)			$	285		$	278		$	274		$	272		$	273

	Average monthly real estate revenue per total homesite(d)			$	309		$	304		$	304		$	302		$	299

	Average monthly home renter income per occupied rental home(e)			$	588		$	597		$	604		$	623		$	590

*At end of quarter:*
	Total communities owned				209			209			209			209			209
	Total homesites				39,804			39,804			39,804			39,804			39,741
	Occupied homesites				33,156			33,300			33,967			34,427			34,693
	Total rental homes owned				6,763			5,875			5,830			5,203			4,903
	Occupied rental homes				5,318			4,803			4,725			4,411			3,998

(a): See Exhibit I for definition and reconciliation to nearest GAAP measure.
(b): Average monthly real estate revenue per occupied homesite is defined as total real estate revenue divided by average total occupied homesites divided by the number of months in the period.
(c): Average monthly homeowner rental income per homeowner occupied homesite is defined as homeowner rental income divided by average homeowner occupied homesites divided by the number of months in the period.
(d): Average monthly real estate revenue per total homesite is defined as total real estate revenue divided by average total homesites divided by the number of months in the period.
(e): Average monthly home renter income per occupied rental home is defined as total home renter rental income divided by average occupied rental homes divided by the number of months in the period.

Same Community—Percentage Growth

				Three Months Ended 03/31/04 vs. 03/31/03
*Real Estate Revenue*
	Homeowner rental income			(4.8	)%
	Home renter rental income			31.1	%
	Other			138.9	%

		Rental income		3.0	%
	Utility and other income			8.3	%

		Total real estate revenue		3.5	%

*Real Estate Expenses*
	Property operations expenses			(0.2	)%
	Real estate taxes			13.0	%

		Total real estate expenses		2.3	%

			Net real estate segment income	4.2	%

Total Real Estate Segment

					2004			2003
					1st Qtr			4th Qtr			3rd Qtr			2nd Qtr			1st Qtr
					($ in thousands)
*For the full quarter noted:*
	Average total homesites					52,837			40,435			40,300			40,729			39,824
	Average total rental homes					7,063			5,938			5,535			5,145			4,825
	Average occupied homesites—homeowners					37,599			29,191			29,872			30,806			31,021
	Average occupied homesites—home renters					5,424			4,853			4,614			4,327			3,754

		Average occupied homesites—total				43,023			34,044			34,486			35,133			34,775
	Average occupancy—rental homes					76.8	%		81.7	%		83.4	%		84.1	%		77.8	%
	Average occupancy—total					81.4	%		84.2	%		85.6	%		86.3	%		87.3	%
*For the full quarter noted:*
	Real estate revenue
		Homeowner rental income			$	31,130		$	23,764		$	24,550		$	24,977		$	25,325
		Home renter rental income				9,239			9,241			8,431			7,840			6,792
		Other				200			98			44			32			54

			Rental income			40,569			33,103			33,025			32,849			32,171
		Utility and other income				4,004			3,486			3,689			3,509			3,508

			Total real estate revenue			44,573			36,589			36,714			36,358			35,679

	Real estate expenses
		Property operations expenses			$	13,541		$	13,274		$	12,219		$	11,356		$	11,146
		Real estate taxes				3,483			2,842			2,588			2,512			2,640

			Total real estate expenses			17,024			16,116			14,807			13,868			13,786

				Real estate net segment income(a)	$	27,549		$	20,473		$	21,907		$	22,490		$	21,893

	Average monthly real estate revenue per total occupied homesite(b)				$	345		$	358		$	355		$	345		$	342

	Average monthly homeowner rental income per homeowner occupied homesite(c)				$	276		$	271		$	274		$	270		$	272

	Average monthly real estate revenue per total homesite(d)				$	281		$	302		$	304		$	298		$	299

	Average monthly home renter income per occupied rental home(e)				$	568		$	635		$	609		$	604		$	603

*At end of quarter:*
	Total communities owned					301			212			212			212			211
	Total homesites					66,548			40,435			40,435			40,812			39,943
	Occupied homesites					53,353			33,670			34,282			35,116			34,881
	Total rental homes owned					8,127			6,061			6,003			5,243			4,912
	Occupied rental homes					6,103			4,908			4,843			4,438			4,006

(a): See Exhibit I for definition and reconciliation to nearest GAAP measure.
(b): Average monthly real estate revenue per occupied homesite is defined as total real estate revenue divided by average total occupied homesites divided by the number of months in the period.
(c): Average monthly homeowner rental income per homeowner occupied homesite is defined as homeowner rental income divided by average homeowner occupied homesites divided by the number of months in the period.
(d): Average monthly real estate revenue per total homesite is defined as total real estate revenue divided by average total homesites divided by the number of months in the period.
(e): Average monthly home renter income per occupied rental home is defined as total home renter rental income divided by average occupied rental homes divided by the number of months in the period.

Capital Expenditure Summary

		Three Months Ended
		03/31/04		03/31/03
		($ in thousands)
Recurring capital expenditures (a)		$	520	$	1,325
	Recurring capital expenditures per average per site per annum		39		133
Homesite upgrades(b)			1,042		1,482
Expansion and development(c)			1,955		1,781
Utility recapture(d)			—		—

	Total capital improvements	$	3,517	$	4,588

(a): Includes capital expenditures necessary to maintain asset quality, including purchasing and replacing assets used to operate the community. These capital expenditures include repairs of roads, driveways, and pools, renovation of clubhouses and replacement or installation of street lights, playground equipment, signage, maintenance facilities, manager housing and property vehicles. These capital expenditures do not include water meters, sheds, homes or community acquisitions. Our minimum capitalizable amount of a project is $500.
(b): Includes capital expenditures that improve homesites for placement of a new home typically when an existing older home moves out and the site is prepared for a new home. Many of these activities are governed by manufacturers' installation requirements and State building codes and include grading, electrical, concrete, landscaping, drainage and water/sewer lines. We estimate that the new home will be in the community for an average of at least 20 years although we depreciate these costs over 10 years.
(c): These are the costs to develop and expand communities following acquisition. They include costs for engineering, driveways, paving, utilities, and amenities. They also include capitalized interest and capitalized internal costs in the first quarter of 2004 of $694.
(d): Revenue producing includes costs related to revenue generating activities, consisting primarily of sub-metering of water and sewer service.

Manufactured Home Purchases

		Three Months Ended
		03/31/04		03/31/03
		($ in thousands)
Manufactured home purchases(a)(b)		$	18,001	$	2,011

	Number of manufactured homes purchased(b)		1,172		175

(a): Includes expenditures for manufactured homes in the period and home setup expenditures.
(b): Excludes manufactured homes purchased in the Hometown acquisition.

Top 20 Markets

									Rental Income Per Occupied Homesite Per Month (c)
					Occupancy
Market(a)		Number of Total Homesites(b)	Percentage of Total Homesites		Occupancy
Market(a)		Number of Total Homesites(b)	Percentage of Total Homesites		03/31/04		12/31/03		03/31/04 (d)		12/31/03 (e)
Dallas—Ft. Worth, TX		7,369	11.1	%	78.0	%	79.4	%	$	347	$	324
Atlanta, GA		5,074	7.6	%	83.5	%	79.7	%		323		322
Salt Lake City, UT		3,310	5.0	%	93.1	%	93.6	%		349		332
Front Range of CO		3,301	5.0	%	91.6	%	92.5	%		419		410
Jacksonville, FL		2,525	3.8	%	81.3	%	81.5	%		329		314
Kansas City—Lawrence—Topeka, MO—KS		2,436	3.7	%	89.3	%	89.7	%		274		269
Wichita, KS		2,315	3.5	%	69.7	%	72.7	%		282		270
Orlando, FL		1,996	3.0	%	87.6	%	85.3	%		326		321
Oklahoma City, OK		1,911	2.9	%	81.3	%	81.1	%		288		280
St. Louis, MO—IL		1,881	2.8	%	81.4	%	82.7	%		276		267
Greensboro—Winston Salem, NC		1,416	2.1	%	72.0	%	69.8	%		257		272
Davenport—Moline—Rock Island, IA—IL		1,410	2.1	%	84.5	%	85.2	%		258		253
Montgomery, AL		1,288	1.9	%	55.8	%	54.9	%		188		188
Charleston—North Charleston, SC		1,233	1.9	%	78.4	%	77.0	%		239		228
Elkhart—Goshen, IN		1,225	1.8	%	79.7	%	78.9	%		305		297
Inland Empire, CA		1,223	1.8	%	90.6	%	90.8	%		412		415
Nashville, TN		1,134	1.7	%	70.8	%	70.1	%		262		265
Southeast Florida		1,124	1.7	%	94.4	%	91.5	%		473		462
Raleigh—Durham—Chapel Hill, NC		1,095	1.6	%	85.1	%	84.9	%		321		309
Tampa—Lakeland—Winter Haven, FL		1,005	1.5	%	75.5	%	74.5	%		262		257

	Subtotal—top 20 markets	44,271	66.5	%	82.0	%	81.9	%		324		314
All other markets		22,277	33.5	%	76.5	%	76.7	%		302		288

	Total/weighted average	66,548	100.0	%	80.2	%	80.1	%	$	317	$	306

(a): Markets are defined by our management.
(b): Results as of March 31, 2004, reflect acquisitions made during the quarter and exclude three communities which were acquired on April 9, 2004 upon the completion of the loan assumption process.
(c): Rental Income is defined as homeowner rental income, home renter rental income and other rental income.
(d): For the Hometown communities, March data was used to calculate "Rental Income Per Occupied Homesite Per Month." For Weatherly Estates I and II, acquired February 26, 2004, March data was used to calculate "Rental Income Per Occupied Homesite Per Month."
(e): For the quarter ended December 31, 2003, the results are pro forma for the Hometown acquisition and include all 90 communities.

Acquisitions & Dispositions

Acquisitions

Acquisition Date	Market	Number of Communities	Number of Homesites	Allocated Purchase Price		Debt Assumed		Cash		Fair Market Value of OP Units/shares
($ in thousands)
02/18/04	Various(a)	90	26,406	$	615,270	$	92,434	$	522,836	$	0
02/26/04	Nashville, TN	2	401		7,400		0		7,400		0

Dispositions

Disposition Date		Market		Number of Communities		Number of Homesites		Gross Sales Price		Gain/(Loss) on Sale
None

(a): Reflects the initial purchase price allocation of the Hometown acquisition including the three Hometown communities closed on April 9, 2004.

Hometown Acquisition Data

			03/31/04
# of Communities(a)				87
# of Homesites(a)				25,712
Total occupied homesites				19,555
	Occupancy %			76.1	%
	Homeowner occupied homesites			18,849
	Renter occupied homes			706

		Total occupied homesites		19,555
	Vacant homesites			6,157

		Total homesites		25,712

*% of Total Homesites*
	Homeowner occupied homesites			73.3	%
	Renter occupied homes			2.7	%
	Vacant homesites			23.9	%

		Total homesites		100.0	%

*% of Occupied Homesites*
	Homeowner occupied homesites			96.4	%
	Renter occupied homes			3.6	%

		Occupied homesites		100.0	%

Number of owned homes				1,487
	Renter occupied homes			706
	Non-revenue producing homes			781
Number of repossessed homes				478
	as a % of total homesites			1.9	%
	as a % of homeowner occupied homesites			2.5	%
*Financial Data*
	Bad debt as a % of total real estate revenue			NM
	Revenue contribution		$	7,645
	Expense contribution			2,722

		Net real estate segment income contribution	$	4,923

(a): Does not reflect three communities acquired upon the completion of the loan assumption process on April 9, 2004.

Home Sales Data

			Three Months Ended 03/31/04
*Unit Data*
	New homes sold			15
	Used homes sold			12

		Total homes sales		27

*Other Data*
	Average all-in home sales price—new homes		$	28,700
	Average all-in home sales price—used homes			12,624
	Average all-in home sales price—total		$	21,555

Owned Home Data

			As of and for the three months ended
			03/31/04			12/31/03
Renter occupied homes				6,103		4,908
Non-revenue producing homes				2,024		1,153

	Total home inventory			8,127		6,061

*Home Inventory Change Detail*
	Home inventory (BoP)			6,061		6,003
		Home purchases/(Sales)		2,066		58
	Home inventory (EoP)			8,127		6,061
	Renter occupied homes (BoP)			4,908		4,843
		Leasing activity, net(a)		1,195		65
	Renter occupied homes (EoP)			6,103		4,908
	Non-revenue producing (BoP)			1,153		1,160
		Home purchases/(sales + leased)		871		(7	)
	Non-revenue producing (EoP)			2,024		1,153
*Home Inventory Composition*
	New home inventory			21.5	%
	Used home inventory			78.5	%

		Total home inventory		100.0	%

		Average age—ARC homes		2.9	years
		Average age—HTA homes		6.5	years
		Average age—All homes		3.6	years
*Home Inventory Financial Data*
	Gross asset value including setup costs ($000's)		$	163,430
		Gross asset value per home		20,110
	Current asset value including setup costs ($000's)		$	143,789
		Current asset value per home		17,693
*Total Non-Revenue Producing Inventory*
	Available for rent or for sale			1,317
	In-transit/in-process			707

		Total non-revenue producing inventory		2,024
	Homes on order			377

(a): Includes occupied homes acquired in the Hometown acquisition.

Investor Inquiries

Common stock symbol:		ARC
Preferred stock symbol:		ARC Pr A
Exchange Traded:		NYSE

		Q1 2004(a)
*Common Stock Dividend Information*
	Declaration date		03/10/04
	Record date		03/31/04
	Payment date		04/15/04
	Distributions per share	$	0.1493
*Preferred Stock Dividend Information*
	Declaration date		03/10/04
	Record date		04/15/04
	Payment date		04/30/04
	Distributions per share	$	0.4182

(a): Distributions reflect partial period.

Inquiries:

Affordable Residential Communities welcomes any questions or comments from our investors, prospective investors, analysts, investment managers or media professionals. Please direct all inquiries to one of the following contact points:

At our website:		www.aboutarc.com
By phone:		(866) 847-8931
By fax:		(303) 294-0121
By e-mail:		investor.relations@aboutarc.com
By mail:		Affordable Residential Communities Inc. Investor Relations Department 600 Grant Street Suite 900 Denver, CO 80203

Definitions of Non-GAAP Measures

Investors in and analysts following the real estate industry use funds from operations ("FFO"), net segment income, earnings before interest, taxes, depreciation and amortization ("EBITDA") and funds available for distribution ("FAD") as supplemental performance measures. While the we believe that net income (as defined by GAAP) is the most appropriate measure, we also believe that FFO, net segment income, EBITDA and FAD are widely used by and relevance to investors, analysts and lenders and are appropriate supplemental measures. FFO reflects the assumption that real estate values rise or fall with market conditions and principally adjusts for the effects of GAAP depreciation and amortization of real estate assets. Net segment income provides a measure of rental operations and excludes deductions for depreciation and amortization and non-property specific expenses such as general and administrative expenses. EBITDA provides a measure to evaluate our ability to incur and service debt and to fund dividends and other cash needs. FAD provides a measure to evaluate our ability to fund dividends. In addition, FFO, net segment income, EBITDA and FAD are commonly used in various ratios, pricing multiples/yields and returns and valuation calculations used to measure financial position, performance and value.

FFO is defined by the National Association of Real Estate Investment Trusts ("NAREIT") as "net income (computed in accordance with generally accepted accounting principles) excluding gains (or losses) from sales of property, plus rental property depreciation and amortization, and after adjustments for unconsolidated partnerships and joint ventures." Industry analysts consider FFO to be an appropriate supplemental measure of the operating performance of an equity REIT primarily because the computation of FFO excludes historical cost depreciation as an expense and thereby facilitates the comparison of REITs which have different cost bases in their assets. Historical cost accounting for real estate assets implicitly assumes that the value of real estate assets diminishes predictably over time, whereas real estate values have instead historically risen or fallen based upon market conditions. FFO does not represent cash flow from operations as defined by GAAP and is a supplemental measure of performance that does not replace net income as a measure of performance or net cash provided by operating activities as a measure of liquidity. In addition, FFO is not intended as a measure of a REIT's ability to meet debt principal repayments and other cash requirements, nor as a measure of working capital. Please see the Reconciliation of Net Income to Funds from Operations set forth above.

Net segment income is defined as income from real estate operations and other segments of the Company, less expenses for property operations, real estate taxes, cost of manufactured homes sold, and retail home sales, finance, insurance and other operations.

EBITDA is defined as net loss available to common stockholders adjusted to exclude preferred stock dividend expense, income from discontinued operations net of minority interest, minority interest, interest income, interest expense, depreciation and amortization and early termination of debt expenses. It is a measure of net segment income less property management, general and administrative expenses and IPO related costs.

FAD is defined as FFO less non-revenue producing, recurring capital expenditures and scheduled principal amortization of indebtedness.

FFO, net segment income, EBITDA and FAD do not represent cash generated from operating activities in accordance with GAAP and are not necessarily indicative of cash available to fund cash needs, including the repayment of principal on indebtedness and payment of dividends and distributions. FFO, net segment income, EBITDA and FAD should not be considered as substitutes for net income (calculated in accordance with GAAP), as a measure of results of operations or cash flows (calculated in accordance with GAAP) as a measure of liquidity. FFO, net segment income, EBITDA and FAD as calculated by the Company may not be comparable to similarly titled, but differently calculated, measures of other REITs or to the definition of FFO published by NAREIT.

I-1

FFO, FAD and EBITDA Reconciliations

		Three Months Ended
		03/31/04			03/31/03
		($ in thousands, except per share data)
*Funds from operations ("FFO") and adjusted funds from operations*
Net income (loss) before preferred stock dividend and minority interest		$	(36,800	)	$	(9,895	)
	Plus: Depreciation and amortization		15,660			12,556
	Income (loss) from discontinued operations		—			146
	Depreciation from discontinued operations		—			110
	Less: Amortization of loan origination fees		(868	)		(1,008	)
	Depreciation expense on furniture, equipment and vehicles		(369	)		(337	)
	Preferred stock dividend		(1,232	)		0

FFO available to common stockholders and OP unitholders			(23,609	)		1,572
	Plus: Restricted stock grants		10,070			—
	IPO related costs		4,417			—
	Early termination of debt		13,427			—

Adjusted FFO		$	4,305		$	1,572

*Funds available for distribution ("FAD") and adjusted FAD*
FFO available to common stockholders & OP unitholders		$	(23,609	)	$	1,572
	Less: Recurring capital expenditures		(520	)		(1,325	)
	Scheduled principal amortization of indebtedness		(1,936	)		(2,246	)

FAD			(26,065	)		(1,999	)
	Plus: Restricted stock grants		10,070			—
	IPO related costs		4,417			—
	Early termination of debt		13,427			—

Adjusted FAD		$	1,849		$	(1,999	)

*EBITDA and adjusted EBITDA*
Net loss available to common stockholders		$	(34,969	)	$	(8,401	)
	Plus: Preferred stock dividend		1,232			0
	Income from discontinued operations, net of minority interest		0			(126	)
	Minority interest		(3,063	)		(1,368	)
	Interest income		(388	)		(347	)
	Interest expense		14,684			13,880
	Depreciation and amortization		15,660			12,556
	Early termination of debt		13,427			0

EBITDA			6,583			(8,401	)
	Plus: Restricted stock grants		10,070			—
	IPO related costs		4,417			0

Adjusted EBITDA		$	21,070		$	(8,401	)

I-2

Total Real Estate Net Segment Income Reconciliation

			2004			2003
			1st Qtr			4th Qtr			3rd Qtr			2nd Qtr			1st Qtr
			($ in thousands)
Net segment income:
	Real estate		$	27,549		$	20,473		$	21,907		$	22,490		$	21,893
	Retail home sales and finance			(180	)		(385	)		(712	)		(336	)		(319	)
	Insurance			(36	)		32			10			(3	)		94
	Corporate and other			(75	)		200			57			77			81

				27,258			20,320			21,262			22,228			21,749
Other expenses:
	Property management			1,454			1,673			1,286			1,382			1,186
	General and administrative			14,804			5,112			3,672			3,681			4,369
	Initial public offering ("IPO") related costs			4,417			—			—			—			—
	Early terminiation of debt			13,427			—			—			—			—
	Depreciation and amortization			15,660			11,257			12,045			12,929			12,556
	Retail home sales asset impairment and other expense			—			—			1,385			—			—
	Interest expense			14,684			15,028			14,481			14,629			13,880

		Total other expenses		64,446			33,070			32,869			32,621			31,991

	Interest income			388			343			344			403			347

		Loss before allocation to mirority interest		(36,800	)		(12,407	)		(11,263	)		(9,990	)		(9,895	)
	Minority interest			3,063			1,707			1,559			1,384			1,368

		Net loss from continuing operations		(33,737	)		(10,700	)		(9,704	)		(8,606	)		(8,527	)
	Income from discontinued operations			—			—			46			93			146
	Gain on sale of discontinued operations			—			—			3,333			—			—
	Minority interest in discontinued operations			—			—			(468	)		(13	)		(20	)

		Net loss		(33,737	)		(10,700	)		(6,793	)		(8,526	)		(8,401	)
	Preferred stock dividend			(1,232	)		—			—			—			—

		Net loss available to common stockholders	$	(34,969	)	$	(10,700	)	$	(6,793	)	$	(8,526	)	$	(8,401	)

I-3

Same Community Net Segment Income Reconciliation

			2004			2003
			1st Qtr			4th Qtr			3rd Qtr			2nd Qtr			1st Qtr
			($ in thousands)
Net segment income:
Real estate(a)			$	22,801		$	20,375		$	21,716		$	22,279		$	21,874
	Retail home sales and finance (b)			—			—			—			—			—
	Insurance			(36	)		32			10			(3	)		94
	Corporate and other			(75	)		200			57			77			81

				22,690			20,607			21,783			22,353			22,049
Other expenses:
	Property management			1,354	(c)		1,673			1,286			1,382			1,186
	General and administrative			4,689	(d)		5,120			3,671			3,680			4,369
	Initial public offering ("IPO") related costs			—			—			—			—			—
	Early termination of debt			—			—			—			—			—
	Depreciation and amortization(e)			12,916			11,114			12,079			12,606			12,543
	Retail home sales asset impairment and other expense			—			—			—			—			—
	Interest expense(f)			12,977			14,889			14,257			14,394			13,866

		Total other expenses		31,936			32,796			31,293			32,062			31,964

	Interest income(g)			300			309			344			403			347

		Loss before allocation to minority interest		(8,946	)		(11,880	)		(9,166	)		(9,306	)		(9,568	)
	Minority interest(h)			720			1,634			1,269			1,289			1,323

		Net loss from continuing operations		(8,226	)		(10,246	)		(7,897	)		(8,017	)		(8,245	)
	Income from discontinued operations			—			—			—			—			—
	Gain on sale of discontinued operations			—			—			—			—			—
	Minority interest in discontinued operations			—			—			—			—			—

		Net loss		(8,226	)		(10,246	)		(7,897	)		(8,017	)		(8,245	)
	Preferred stock dividend			—			—			—			—			—

		Net loss available to common stockholders	$	(8,226	)	$	(10,246	)	$	(7,897	)	$	(8,017	)	$	(8,245	)

(a): Same communities real estate net segment income excludes results of communities acquired in the Hometown and other acquisitions after January 1, 2003 and the community sold before March 31, 2004.
(b): Excludes segment results as a result of the restructuring in September 2003 in which we closed all stand-alone retail stores existing on January 1, 2003 at which time we had no significant in-community sales operations.
(c): Excludes additional property management expenses incurred in connection with the Hometown acquisition.
(d): Excludes restricted stock expenses of $10,115 recognized in connection with the IPO and vested in the three months ended March 31, 2004.

I-4

(e): Excludes the following costs recognized in the Hometown and other acquisitions:

Depreciation of rental and other property and manufactured homes acquired	$	2,272	$	110	$	89	$	33	$	11
Amortization of lease intangibles and customer relationships acquired		472		14		4		4		2

	$	2,744	$	124	$	93	$	37	$	13

(f): Excludes the pro rata portion of interest expense on mortgage loans secured by properties acquired in the Hometown and other acquisitions as follows:

		$	1,707		$	75		$	87		$	72		$	14

(g): Excludes interest earned on additional cash received in connection with the IPO, the financing transaction and the Hometown acquisition
(h): Minority interest computed at the same rate as reflected in reported results.

I-5

QuickLinks

Item 12. Results of Operations and Financial Condition

Signatures

Exhibit A

Table of Contents
Portfolio Map
Press Release Text
Financial Highlights
First Quarter Adjustments
Balance Sheet
Debt Analysis
Statement of Operations
Comprehensive Income
Revolving Credit Facility
Segment Detail
Same Community Data
Same Community—Percentage Growth
Total Real Estate Segment
Capital Expenditure Summary
Manufactured Home Purchases
Top 20 Markets
Acquisitions & Dispositions
Hometown Acquisition Data
Home Sales Data
Owned Home Data
Investor Inquiries
Definitions of Non-GAAP Measures
FFO, FAD and EBITDA Reconciliations
Total Real Estate Net Segment Income Reconciliation
Same Community Net Segment Income Reconciliation