• Closed on the acquisition of two RV resorts for a purchase price of $25.0 million.

• Raised the annual dividend to $1.75 per share in 2012, an increase of more than 17% compared to $1.50 per share in 2011.

• Exchanged 5,445,765 shares of Series A Preferred Stock for 5,445,765 Depositary Shares representing 1/100th of a share of Series C Preferred Stock.

• Redeemed 2,554,235 shares of Series A Preferred Stock.

• Amended the Company's unsecured Line of Credit to decrease the per annum interest rate and extend the maturity date to September 15, 2016.

• Paid off six mortgages totaling approximately $137.7 million, funded with cash and approximately $159.5 million of refinancing proceeds on three properties.

• Entered into equity distribution agreements with sales agents, pursuant to which the Company may sell, from time to time, common stock for an aggregate offering price up to $125 million.

Overview and Outlook
Occupancy in the Company's Properties as well as its ability to increase rental rates directly affects revenues. The Company's revenue streams are predominantly derived from customers renting its sites on a long-term basis.
The Company has approximately 96,900 annual sites, approximately 9,000 seasonal sites, which are leased to customers generally for three to six months, and approximately 9,600 transient sites, occupied by customers who lease sites on a short-term basis. The revenue from seasonal and transient sites is generally higher during the first and third quarters. The Company expects to service over 100,000 customers at its transient sites and the Company considers this revenue stream to be its most volatile as it is subject to weather conditions, gas prices, and other factors affecting the marginal RV customer's vacation and travel preferences. Finally, the Company has approximately 24,100 sites designated as right-to-use sites, which are primarily utilized to service the approximately 97,000 customers who have right-to-use contracts. The Company also has interests in Properties containing approximately 3,100 sites for which revenue is classified as Equity in income from unconsolidated joint ventures in the Consolidated Statements of Income and Comprehensive Income.

Community sites               74,100
Resort sites:
Annual                        22,800
Seasonal                       9,000
Transient                      9,600
Right-to-use (1)              24,100
Joint Ventures (2)             3,100
                             142,700


 _____________________

(2) Joint Ventures have approximately 2,700 annual sites, approximately 300 seasonal sites and approximately 100 transient sites.

A significant portion of the Company's rental agreements on community sites are directly or indirectly tied to published CPI statistics that are issued during June through September each year. The Company currently expects its 2013 Core community base rental income to increase approximately 2.6% as compared to 2012. The Company has already notified 72% of its community site customers of rent increases reflecting this revenue growth.
Nineteen of our 49 California Properties and one of our five Massachusetts Properties are affected by local rent control regulations. The impact of the rent control ordinances is to limit our ability to implement rent increases based on prevailing market conditions. The ordinances generally provide the ability to increase rates by a fraction of the increase in the CPI. The limit on rent increases may range from 60% to 100% of CPI with certain maximum limits depending on the jurisdiction.
The Company believes the disruption in the site-built housing market has impacted its home sales business. Customers' inability to sell their existing site-built homes and relocate to their retirement destination has significantly reduced new home sales

volumes since 2007. In addition, while the majority of customers historically paid cash to purchase new homes in our communities, the Company believes the lack of affordable chattel financing is impacting customer purchase decisions in the current economic environment. Current programs available for Chattel Loan financing provide subsidized financing to customers with the community owner carrying the obligation for guaranteeing customer defaults. Financing continues to have stringent underwriting criteria, sizable down payments, short loan amortization and high interest rates.
In this environment, the Company believes that customer demand for rentals, which do not require a down payment, is high. The Company is adapting to this by renting its vacant new homes. This may represent an attractive source of occupancy if the Company can transition from renters to new homebuyers in the future. The Company is also focusing on smaller, more energy efficient and more affordable homes in its manufactured home Properties.
The Company's manufactured home rental operations have been increasing since 2007. For the year ended December 31, 2012, occupied manufactured home rentals increased to 5,824, or 542.1%, from 907 for the year ended December 31, 2007. Net operating income, net of depreciation expense of approximately $6.1 million, increased to approximately $36.8 million, of which approximately $36.2 million of rental operations revenue was included in community base rental income, for the year ended December 31, 2012 from approximately $5.9 million, of which approximately $5.4 million of rental operations revenue was included in community base rental income, for the year ended December 31, 2007. Beginning in 2008, depreciation on the rental units started after being reclassified to Buildings and other depreciable property. The Company believes that unlike the home sales business, at this time the Company competes effectively with other types of rentals (i.e. apartments). The Company continues to evaluate home rental operations and may continue to invest in additional units.
In the Company's resort Properties, the Company continues to work on extending customer stays. The Company has had success lengthening customer stays. In the spring of 2010, the Company introduced low-cost membership products that focus on the installed base of almost eight million RV owners. Such products may include right-to-use contracts that entitle the customer to use certain properties (the "Agreements"). The Company is offering a Zone Park Pass ("ZPP"), which can be purchased for one to four zones of the United States and required annual payments in 2012 of $499. Beginning on February 1, 2012, the required annual payments increased to $525. This replaces high cost products that were typically entered into at Properties after tours and lengthy sales presentations. The Company historically incurred significant costs to generate leads, conduct tours and make the sales presentations. A single zone ZPP requires no upfront payment while passes for additional zones require modest upfront payments. Since inception the Company has entered into approximately 22,000 ZPP's. For the year ended December 31, 2012, the Company entered into approximately 10,100 ZPP's, or a 36.5% increase from approximately 7,400 for the year ended December 31, 2011. In 2012, the Company initiated a program with RV dealers to feature the Company's ZPP as part of the dealers' sales and marketing efforts. In return, the Company provides the dealer with a ZPP membership to give to the dealers' customers in connection with the purchase of an RV. Since the inception of the ZPP program with the RV dealers, the Company has activated 1,289 ZPPs and recorded approximately $140,000 of revenue through December 31, 2012.
Existing membership customers may be offered an upgrade Agreement from time-to-time. An upgrade Agreement is currently distinguishable from a new agreement that a customer would enter into by, depending on the type of upgrade, offering (1) increased length of consecutive stay by 50% (i.e. up to 21 days);
(2) ability to make earlier advance reservations; (3) discounts on rental units;
(4) access to additional Properties, which may include use of sites at non-membership RV Properties and (5) membership in discount travel programs. Each upgrade contract requires a nonrefundable upfront payment. The Company may finance the nonrefundable upfront payment under any Agreement. The Company actively seeks to acquire additional Properties and currently is engaged in negotiations relating to the possible acquisition of a number of Properties. At any time these negotiations are at varying stages, which may include contracts outstanding, to acquire certain Properties, which are subject to satisfactory completion of the Company's due diligence review.

Property Acquisitions, Joint Ventures and Dispositions The following chart lists the Properties or portfolios acquired, invested in, or sold since January 1, 2011:

Property                                                Transaction Date         Sites
Total Sites as of January 1, 2011                                                 111,002
Property or Portfolio (# of Properties in parentheses):
Acquisitions:
2011 Acquisition Properties (35)                             July 1, 2011          12,044
2011 Acquisition Properties (16)                           August 1, 2011           7,817
2011 Acquisition Properties (7)                         September 1, 2011           3,105
2011 Acquisition Properties (2)                           October 3, 2011           1,573
2011 Acquisition Properties (1)                          October 11, 2011             521
2011 Acquisition Properties (7)                          October 21, 2011           2,810
2011 Acquisition Properties (7)                          December 7, 2011           2,259
Victoria Palms (1)                                      December 28, 2012           1,122
Alamo Palms Resort (1)                                  December 28, 2012             643
Expansion Site Development and other:
Sites added (reconfigured) in 2011                                                      1
Sites added (reconfigured) in 2012                                                    (55 )
Dispositions:
Cascade (1)                                              December 7, 2012            (163 )
Total Sites as of December 31, 2012                                               142,679

Since January 1, 2011 the gross investment in real estate increased from $2,585 million to $4,172 million as of December 31, 2012, due primarily to the aforementioned acquisitions and dispositions of Properties during the period. On November 9, 2012, the Company entered a letter of intent with Morgan RV Resorts ("Morgan"), which granted the Company a right of exclusive dealing ("Exclusivity Right") and a right of first refusal ("ROFR") with respect to the purchase of 15 of Morgan's RV resorts. On December 13, 2012, Sun Communities, Inc. announced in an SEC filing that certain of its affiliates (collectively, "Sun") had entered into a contract with Morgan to purchase eleven of those same properties, as a result of which the Company subsequently exercised its ROFR. In a suit initiated by Sun on December 26, 2012 against the Company and Morgan in the Oakland County (Michigan) Circuit Court, the parties are litigating the issue of who has the right to the properties. On February 12, 2013, Sun announced in an SEC filing that it had closed its purchase from Morgan on ten of the eleven properties at issue. The litigation is not expected to have a material adverse impact on our results of operations or financial condition. Markets
The following table identifies the Company's largest markets by number of sites and provides information regarding the Company's Properties (excluding five Properties owned through Joint Ventures).

                                                          Percent of Total
              Number of                    Percent of    Property Operating
Major Market Properties    Total Sites    Total Sites       Revenues (1)
Florida             117         50,959          36.5 %              39.4 %
Northeast            66         23,703          17.0 %              14.4 %
Midwest              47         16,744          12.0 %              10.5 %
Arizona              39         13,851           9.9 %               9.4 %
California           48         13,688           9.8 %              15.2 %
Texas                17          8,965           6.4 %               2.3 %
Northwest            24          5,645           4.0 %               3.4 %
Colorado             10          3,454           2.5 %               3.2 %
Other                10          2,595           1.9 %               2.2 %
Total               378        139,604         100.0 %             100.0 %


 _____________________

Results of Operations
Comparison of Year Ended December 31, 2012 to Year Ended December 31, 2011 Income from Property Operations
The following table summarizes certain financial and statistical data for the Property Operations for all Properties owned and operated for the same period in both years ("Core Portfolio") and the Total Portfolio for the years ended December 31, 2012 and 2011(amounts in thousands). The Core Portfolio may change from time-to-time depending on acquisitions, dispositions and significant transactions or unique situations. The Core Portfolio in this comparison of the year ended December 31, 2012 to December 31, 2011 includes all Properties acquired on or prior to December 31, 2010 and which were owned and operated by the Company during the years ended December 31, 2012 and December 31, 2011. Growth percentages exclude the impact of GAAP deferrals of up-front payments from right-to-use contracts entered and related commissions.

                                             Core Portfolio                                          Total Portfolio
                                                       Increase /         %                                    Increase /         %
                             2012          2011        (Decrease)      Change        2012          2011        (Decrease)      Change
Community base rental
income                    $ 274,362     $ 266,584     $     7,778        2.9  %   $ 414,170     $ 318,851     $    95,319       29.9  %
Rental home income            8,125         6,340           1,785       28.2  %      14,065         7,970           6,095       76.5  %
Resort base rental income   133,749       130,432           3,317        2.5  %     134,327       130,489           3,838        2.9  %
Right-to-use annual
payments                     47,662        49,122          (1,460 )     (3.0 )%      47,662        49,122          (1,460 )     (3.0 )%
Right-to-use contracts
current period, gross        13,433        17,856          (4,423 )    (24.8 )%      13,433        17,856          (4,423 )    (24.8 )%
Utility and other income     51,657        49,552           2,105        4.2  %      64,432        53,843          10,589       19.7  %
Property operating
revenues, excluding
deferrals                   528,988       519,886           9,102        1.8  %     688,089       578,131         109,958       19.0  %

Property operating and
maintenance                 188,542       186,947           1,595        0.9  %     226,952       200,623          26,329       13.1  %
Rental home operating and
maintenance                   4,662         3,896             766       19.7  %       7,359         4,850           2,509       51.7  %
Real estate taxes            32,719        32,111             608        1.9  %      47,623        37,619          10,004       26.6  %
Sales and marketing,
gross                        10,841        11,218            (377 )     (3.4 )%      10,846        11,219            (373 )     (3.3 )%
Property operating
expenses, excluding
deferrals and Property
management                  236,764       234,172           2,592        1.1  %     292,780       254,311          38,469       15.1  %
Income from property
operations, excluding
deferrals and Property
management                  292,224       285,714           6,510        2.3  %     395,309       323,820          71,489       22.1  %
Property management          33,087        33,158             (71 )     (0.2 )%      38,460        35,076           3,384        9.6  %
Income from property
operations, excluding
deferrals                 $ 259,137     $ 252,556     $     6,581        2.6  %   $ 356,849     $ 288,744     $    68,105       23.6  %

The 2.9% increase in Core community base rental income primarily reflects a 2.3% increase in rates and a 0.6% increase in occupancy. The average monthly base rent per site increased to $567 in 2012 from $554 in 2011. The average occupancy increased to 91.5% in 2012 from 90.9% in 2011.
Resort base rental income is comprised of the following (amounts in thousands):

                                     Core Portfolio                                          Total Portfolio
                                                Increase/                                               Increase/
                     2012          2011        (Decrease)     % Change       2012          2011        (Decrease)      % Change
Annual            $  86,753     $  83,324     $     3,429        4.1  %   $  87,222     $  83,328     $     3,894         4.7  %
Seasonal             20,982        20,670             312        1.5  %      21,077        20,718             359         1.7  %
Transient            26,014        26,438            (424 )     (1.6 )%      26,028        26,443            (415 )      (1.6 )%
Resort base
rental income     $ 133,749     $ 130,432     $     3,317        2.5  %   $ 134,327     $ 130,489     $     3,838         2.9  %

The increase in rental home income and rental home operating and maintenance are discussed in further detail in the Rental Operations table below.
During the year ended December 31, 2012, utility and other income includes the accelerated recognition of $2.1 million of revenue related to the early termination of a multi-year cable service agreement.
The decrease in right-to-use annual payments is primarily due to net attrition in the member base.

The Core Portfolio and Total Portfolio property operating revenues for the year ended December 31, 2012 were negatively impacted by the temporary cessation of the entry of right-to-use contracts (membership upgrades) in connection with third party sales force training and the roll out of new membership upgrade products during the year ended December 31, 2012. As a result, membership upgrade sales, which are included in right-to-use contracts current period, gross, were down $4.4 million compared to the year ended December 31, 2011. The decrease in right-to-use contracts for the year ended December 31, 2012 was offset by a $0.4 million decrease in sales and marketing expenses, resulting in a net decline of $4.0 million from these activities compared to the year ended December 31, 2011.
The following growth rate percentages are before property management (amounts in thousands):

                                           Core Portfolio                                        Total Portfolio
                                                      Increase/         %                                    Increase/         %
                           2012          2011         (Decrease)     Change       2012          2011         (Decrease)     Change
Property operating
revenues, excluding
Right-to-use contracts
current period, gross   $ 515,555     $ 502,030     $     13,525       2.7 %   $ 674,656     $ 560,275     $    114,381      20.4 %
Property operating
expenses, excluding
Sales and marketing,
gross                     225,923       222,954            2,969       1.3 %     281,934       243,092           38,842      16.0 %
Income from property
operations, excluding
Right-to-use contracts
current period, gross
and Sales and
marketing, gross        $ 289,632     $ 279,076     $     10,556       3.8 %   $ 392,722     $ 317,183           75,539      23.8 %

The increase in Total Portfolio income from property operations is primarily due to the acquisition of the 2011 Acquisition Properties on various dates during the six months ended December 31, 2011. (See Note 19 in the notes to the Consolidated Financial Statements contained in this Form 10-K for details regarding the 2011 Acquisition.)
Home Sales Operations
The following table summarizes certain financial and statistical data for the Home Sales Operations for the years ended December 31, 2012 and 2011 (amounts in thousands, except sales volumes).

                                             2012          2011        Variance      % Change
Gross revenues from new home sales        $   1,698     $   2,278     $    (580 )      (25.5 )%
Cost of new home sales                       (1,441 )      (2,133 )         692        (32.4 )%
Gross profit from new home sales                257           145           112         77.2  %

Gross revenues from used home sales           6,868         3,810         3,058         80.3  %
Cost of used home sales                      (8,034 )      (3,550 )      (4,484 )      126.3  %
Gross (loss) profit from used home sales     (1,166 )         260        (1,426 )     (548.5 )%

Brokered resale revenues and ancillary
services revenues, net                        3,114         3,464          (350 )      (10.1 )%
Home selling expenses                        (1,411 )      (1,589 )         178        (11.2 )%
Income from home sales operations and
other                                     $     794     $   2,280     $  (1,486 )      (65.2 )%
Home sales volumes:
New home sales (1)                               34            51           (17 )      (33.3 )%
Used home sales (2)                           1,412           893           519         58.1  %
Brokered home resale                            914           711           203         28.6  %


 _____________________

(2) Includes third party home sales of one for the year ended December 31, 2011.

Income from home sales operations decreased primarily as a result of decreased profit on used home sales and a decrease in ancillary revenues.

Rental Operations
The following table summarizes certain financial and statistical data for
manufactured home Rental Operations for the years ended December 31, 2012 and
2011 (dollars in thousands).
                                             2012          2011        Variance      % Change
Manufactured homes:
New Home                                  $  18,382     $  12,416     $   5,966         48.1 %
Used Home                                    31,846        19,460        12,386         63.6 %
Rental operations revenue (1)                50,228        31,876        18,352         57.6 %
Rental home operating and maintenance        (7,359 )      (4,850 )      (2,509 )       51.7 %
Income from rental operations                42,869        27,026        15,843         58.6 %
Depreciation on rental homes                 (6,091 )      (4,276 )      (1,815 )       42.4 %
Income from rental operations, net of
depreciation                              $  36,778     $  22,750     $  14,028         61.7 %

Gross investment in new manufactured home
rental units                              $ 108,145     $  84,647     $  23,498         27.8 %
Gross investment in used manufactured
home rental units                         $  75,705     $  58,787     $  16,918         28.8 %

Net investment in new manufactured home
rental units                              $  98,553     $  78,121     $  20,432         26.2 %
Net investment in used manufactured home
rental units                              $  68,547     $  54,653     $  13,894         25.4 %

Number of occupied rentals-new, end of
period                                        1,890         1,352           538         39.8 %
Number of occupied rentals-used, end of
period                                        3,934         3,071           863         28.1 %


 _____________________

The increase in income from rental operations and depreciation expense is primarily due to the increase in the number of rental units resulting from purchase of additional rental units during 2012 and the acquisition of the 2011 Acquisition Properties on various dates during the six months ended December 31, 2011.
In the ordinary course of business, the Company acquires used homes from customers through purchase, lien, sale or abandonment. In a vibrant new home sale market older homes may be removed from sites and replaced with new homes. In the current environment, however, used homes are rented either in the condition received or after warranted rehabilitation. The Company continues to evaluate rental units and based on improved market conditions may invest in new homes.
Other Income and Expenses
The following table summarizes other income and expenses for the years ended December 31, 2012 and 2011 (amounts in thousands).

                                                 2012           2011        Variance      % Change
Depreciation on real estate and rental homes $ (104,917 )   $  (84,257 )   $ (20,660 )       24.5  %
Amortization of in-place leases                 (45,122 )      (28,479 )     (16,643 )       58.4  %
Interest income                                  10,009          7,000         3,009         43.0  %
Income from other investments, net                6,793          6,452           341          5.3  %
General and administrative                      (26,744 )      (23,833 )      (2,911 )       12.2  %
Acquisition costs                                  (180 )      (18,493 )      18,313        (99.0 )%
Rent control initiatives and other               (1,456 )       (2,043 )         587        (28.7 )%
Interest and related amortization              (124,524 )      (99,668 )     (24,856 )       24.9  %
Total other expenses, net                    $ (286,141 )   $ (243,321 )   $ (42,820 )       17.6  %

Depreciation on real estate and rental homes, amortization of in-place leases and interest income increased primarily due to the purchase of the 2011 Acquisition Properties on various dates during the six months ended December 31, 2011. General and administrative increased primarily due to increased professional fees due to certain litigation matters (see Note 18 in the Notes to Consolidated Financial Statements contained in this Form 10-K). The decrease in . . .