UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report: August 14, 2008
(Date of earliest event reported)
EQUITY LIFESTYLE PROPERTIES, INC.
(Exact name of registrant as specified in its charter)
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| Maryland
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1-11718
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36-3857664 |
(State or other jurisdiction of
incorporation or organization)
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(Commission File No.)
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(IRS Employer Identification
Number) |
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Two North Riverside Plaza, Chicago, Illinois
(Address of principal executive offices)
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60606
(Zip Code) |
(312) 279-1400
(Registrant’s telephone number, including area code)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy
the filing obligation of the registrant under any of the following provisions (see General
Instruction A.2. below):
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Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
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Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
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Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
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Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
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| Item 1.02 |
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Termination of a Material Definitive Agreement |
On August 14, 2008, Equity LifeStyle Properties, Inc. (the “Company”) issued a news release
announcing the acquisition of substantially all of the assets and certain liabilities of Privileged
Access, LP (“Privileged Access”) for a $2.0 million unsecured note payable, which matures on August
14, 2010 and accrues interest at 10 percent per annum. Privileged Access is an RV and vacation
membership business with approximately 130,000 members, which leased approximately 24,300 sites at
82 of the Company’s properties, with annual rental payments of approximately $25.5 million.
Concurrent with the acquisition, all leases and previous arrangements between the Company and
Privileged Access were terminated, including the Company’s Second Amended and Restated Lease (the
“TT Lease”) with a subsidiary of Privileged Access (the “Lessee”) for the lease of 60 membership
resort properties known as the Thousand Trails properties. The TT Lease included various
provisions, including annual fixed rent of approximately $22.2 million. In addition, the Company
terminated the Amended and Restated Option to Purchase Lessee (the “Option Agreement”), whereby the
Company was granted an option, exercisable in our sole discretion, to purchase the Lessee for its
fair market value. Mr. Joe B. McAdams, the Company’s President, is the 100% owner of Privileged
Access, LP. The Company received a fairness opinion regarding the terms of the transaction. The
Company did not incur any early termination penalties related to this transaction.
The foregoing descriptions of the TT Lease and the Option Agreement are summaries, and do not
purport to be complete and are qualified in their entirety by reference to the TT Lease and the
Option Agreement, copies of which were filed as Exhibits 10.1 and 10.2, respectively, to the
Company’s Form 8-K filed with the United States Securities and Exchange Commission on January 7,
2008.
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| Item 2.02 |
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Results of Operations and Financial Condition |
On August 14, 2008, the Company issued a press release with respect to certain matters
described herein, which press release is attached to this Current Report on Form 8-K as Exhibit
99.1. This press release stated that the Company will provide additional guidance as to the impact
of this transaction on its business in the third quarter 2008 earnings press release and related
conference call. As a result of the acquisition, nonrefundable up front payments from the sale of
membership or right-to-use contracts will be deferred and recognized as revenue in subsequent years
in accordance with generally accepted accounting principles. These non-cash deferral adjustments
may have a significant negative impact on reported net income, although there is expected to be no
material impact on funds from operations.
On August 14, 2008, the Company acquired substantially all of the assets and certain
liabilities of Privileged Access, as previously described in Item 1.02 “Termination of a Material
Definitive Agreement” of this Form 8-K.
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| Item 9.01 |
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Financial Statements and Exhibits |
(c) Exhibits
The information contained in the attached exhibit is unaudited and should be read in
conjunction with the Registrant’s annual and quarterly reports filed with the Securities and
Exchange Commission.
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Exhibit 99.1 |
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Equity LifeStyle Properties, Inc. press release dated August 14, 2008, “ELS
Acquires Privileged Access Operations” |