News Release Details

NEWS RELEASE

April 22, 2020

Southfield, Michigan, April 22, 2020 (GLOBE NEWSWIRE) --  Sun Communities, Inc. (NYSE: SUI) (the “Company”), a real estate investment trust (“REIT”) that owns and operates, or has an interest in, manufactured housing (“MH”) and recreational vehicle (“RV”) communities, today reported its first quarter results for 2020 and provided an update on the effects of, and its response to, the COVID-19 pandemic.

Financial Results for the Three Months Ended March 31, 2020

For the three months ended March 31, 2020, total revenues increased $23.0 million, or 8.0 percent, to $310.3 million compared to $287.3 million for the same period in 2019. Net loss attributable to common stockholders was $16.1 million, or $0.17 per diluted common share, for the three months ended March 31, 2020, as compared to net income attributable to common stockholders of $34.3 million, or $0.40 per diluted common share, for the same period in 2019.

Non-GAAP Financial Measures and Portfolio Performance

• Core Funds from Operations (“Core FFO”)⁽¹⁾ for the three months ended March 31, 2020, was $1.22 per diluted share and OP unit (“Share”) as compared to $1.18 in the prior year, an increase of 3.4 percent.
   
• Same Community⁽²⁾ Net Operating Income (“NOI”)⁽¹⁾ increased by 6.7 percent for the three months ended March 31, 2020, as compared to the corresponding period in 2019.
   
• Revenue Producing Sites increased by 300 sites for the three months ended March 31, 2020, bringing total portfolio occupancy to 96.7 percent.
   
• MH rent collections for the month of April total approximately 98 percent as of April 21, 2020.

Gary Shiffman, Chief Executive Officer of Sun Communities stated, “We want to convey our best wishes for the health and safety of all of our stakeholders during these unprecedented times. Sun is deeply committed to prioritizing the welfare of its residents, guests and team members every day, and in light of the widespread concern over COVID-19 across the nation, we have re-doubled our efforts. We have moved swiftly to develop a rent deferral program for residents that have been adversely impacted by the pandemic and we have taken decisive measures to reduce controllable expenses and preserve the Company’s financial flexibility.”

Mr. Shiffman continued, “The ultimate impact of disruption from the virus will be determined by the length of time that the COVID-19 pandemic remains a threat and depends on a multitude of variables over which we have no control. It is important to remember the pandemic is not a permanent condition, but a point in time that has dramatically impacted consumers, businesses and travel. We know that with time, this disruption will cease, and we firmly believe the fundamental thesis of manufactured housing communities and recreational vehicle resorts remains intact. We offer unparalleled value to our residents and guests in housing and vacationing options. We are confident Sun is prepared to withstand these challenges and navigate this evolving situation with its strong balance sheet, superior properties and dedicated team members.”

COVID-19 and Impact on Operations

Since the declaration of COVID-19 as a pandemic at the beginning of March, the Company has adopted recommendations and protocols from the Centers for Disease Control, the World Health Organization and federal, state and local authorities where it operates, to ensure the safety and well-being of its team members, residents and guests.

The Company is continuing to provide essential services using social distancing techniques and minimal contact. The Company’s community and resort offices are partially staffed with reduced hours and open for essential services only. To promote social distancing, the Company is encouraging its residents to use its online rent payment portals and other payment methods. Amenities have been closed at the direction of state and local municipalities and to prevent social gathering.

Certain of the Company’s RV resorts remain open, where government regulations permit, however all indoor and outdoor activities have been suspended to encourage social distancing. Forty four RV resorts in the northern United States and Canada, that normally would commence operations in early spring, have had their openings delayed and do not yet have confirmed opening dates from local municipalities.

The Company has implemented measures to mitigate the impact of COVID-19 on the business. These efforts include increasing its cash position, bolstering liquidity and eliminating, reducing or deferring non-essential expenditures. Additionally, the Board of Directors and executive officers have elected to forgo base compensation for at least the second quarter. Cost containment measures have also included the additional furlough of team members and reductions in base compensation for non-furloughed team members. The Company will provide health benefit coverage to furloughed team members, if enrolled, at no cost to the team members.

The impact of stay-at-home orders and travel restrictions is expected to have a significant impact on the Company’s transient RV financial results including a reduction of revenue earned from the rental of sites, ancillary income and fee generation.  These reductions, combined with the potential impact on manufactured housing operations and home selling activities, offset by the Company’s implementation of cost saving measures, could have an estimated net reduction for the second quarter of 2020 of $15.0 - $18.0 million from the Company’s original expectations.

OPERATING HIGHLIGHTS

Portfolio Occupancy

Total portfolio occupancy was 96.7 percent at March 31, 2020, compared to 96.4 percent at March 31, 2019.

During the three months ended March 31, 2020, revenue producing sites increased by 300 sites, as compared to an increase of 571 revenue producing sites during the three months ended March 31, 2019.

Same Community⁽²⁾ Results

For the 367 communities owned and operated by the Company since January 1, 2019, NOI⁽¹⁾ for the three months ended March 31, 2020 increased 6.7 percent over the same period in 2019, as a result of a 5.2 percent increase in revenues and a 1.8 percent increase in operating expenses. Same Community occupancy⁽³⁾ increased to 98.4 percent at March 31, 2020 from 96.6 percent at March 31, 2019.

Home Sales

During the three months ended March 31, 2020, the Company sold 763 homes as compared to 798 homes sold during the same period in 2019.  New home sales volume was 119 and 125 for the three months ended March 31, 2020 and 2019, respectively. Rental home sales volume, which are included in total home sales, were 234 and 210 for the three months ended March 31, 2020 and 2019, respectively.

PORTFOLIO ACTIVITY

Acquisitions

During the three months ended March 31, 2020, the Company acquired the following communities:

Community Name

Type

Sites

Development sites

State

Total Purchase Price (in millions)

Month Acquired

Cape Cod (1)

RV

230

—

MA

$

13.5

January

Jellystone Natural Bridge

RV

299

—

VA

$

11.5

February

⁽¹⁾      In conjunction with the acquisition, we issued Series E Preferred Operating Partnership (“OP”) Units. As of March 31, 2020, 90,000 Series E Preferred OP Units were outstanding.

BALANCE SHEET AND CAPITAL MARKETS ACTIVITY

Debt Transactions

During the three months ended March 31, 2020, the Company completed a 15-year, $230.0 million term loan transaction that carries an interest rate of 3.0 percent.  The Company repaid a $99.6 million term loan due to mature in 2021 with an interest rate of 5.8 percent.  Also, during the quarter, the Company repaid four term loans secured by two properties with a weighted average interest rate of 5.8 percent totaling $19.9 million which were set to mature in 2020.

As of March 31, 2020, the Company had $3.9 billion of debt outstanding. The weighted average interest rate was 3.64 percent and the weighted average maturity was 10.6 years. The Company had $382.5 million of unrestricted cash on hand. At period-end the Company’s net debt to trailing twelve-month Recurring EBITDA⁽¹⁾ ratio was 5.6 times.

2020 Distributions

As previously announced, the Company increased its annual distribution by 5.3 percent to $3.16 per common share from $3.00 per common share. The increase began with the distribution declared in March 2020 that was paid after quarter end. While the Company has adopted the annual distribution policy, the amount of each quarterly distribution on the Company’s common stock will be subject to approval by its Board of Directors.

GUIDANCE 2020 UPDATE

The duration of the unprecedented COVID-19 crisis is unknown and its impact is continually evolving. Given the uncertainty surrounding the impact from the COVID-19 pandemic on its operations, the Company has withdrawn full year 2020 operational and financial guidance previously issued on February 19, 2020.

When the Company has more clarity on the suspension of travel restrictions and stay-at-home orders, it expects to provide updated guidance for the balance of 2020.

EARNINGS CONFERENCE CALL

A conference call to discuss first quarter operating results will be held on Thursday, April 23, 2020 at 11:00 A.M. (ET). To participate, call toll-free 877-407-9039. Callers outside the U.S. or Canada can access the call at 201-689-8470. A replay will be available following the call through May 7, 2020 and can be accessed toll-free by calling 844-512-2921 or 412-317-6671. The Conference ID number for the call and the replay is 13699860. The conference call will be available live on Sun Communities’ website located at www.suncommunities.com. The replay will also be available on the website.

Sun Communities, Inc. is a REIT that, as of March 31, 2020, owned, operated, or had an interest in a portfolio of 424 communities comprising nearly 142,000 developed sites in 33 states and Ontario, Canada.

For more information about Sun Communities, Inc., please visit www.suncommunities.com.

CONTACT

Please address all inquiries to our investor relations department at our website www.suncommunities.com, by phone to (248) 208-2500, by email to investorrelations@suncommunities.com or by mail to Sun Communities, Inc. Attn: Investor Relations, 27777 Franklin Road, Ste. 200, Southfield, MI 48034.

Forward-Looking Statements

This press release contains various “forward-looking statements” within the meaning of the Securities Act of 1933, as amended, and the Securities Exchange Act of 1934, as amended, and the Company intends that such forward-looking statements will be subject to the safe harbors created thereby. Forward-looking statements can be identified by words such as “will,” “may,” “could,” “expect,” “anticipate,” “believes,” “intends,” “should,” “plans,” “estimates,” “approximate,” “guidance,” and similar expressions in this press release that predict or indicate future events and trends and that do not report historical matters.

These forward-looking statements reflect the Company’s current views with respect to future events and financial performance, but involve known and unknown risks, uncertainties, and other factors, some of which are beyond the Company’s control. These risks, uncertainties, and other factors may cause the actual results of the Company to be materially different from any future results expressed or implied by such forward-looking statements. Such risks and uncertainties include the effects of the COVID-19 pandemic and related stay-at-home orders, quarantine policies and restrictions on travel, trade and business operations; national, regional and local economic climates; the ability to maintain rental rates and occupancy levels; competitive market forces; the performance of recent acquisitions; the ability to integrate future acquisitions smoothly and efficiently; changes in market rates of interest; changes in foreign currency exchange rates; the ability of manufactured home buyers to obtain financing and the level of repossessions by manufactured home lenders. Further details of potential risks that may affect the Company are described in its periodic reports filed with the U.S. Securities and Exchange Commission, including in the “Risk Factors” section of the Company’s Annual Report on Form 10-K.

The forward-looking statements contained in this press release speak only as of the date hereof and the Company expressly disclaims any obligation to provide public updates, revisions or amendments to any forward-looking statements made herein to reflect changes in the Company’s assumptions, expectations of future events, or trends.

Investor Information                                                            

RESEARCH COVERAGE
Firm		Analyst		Phone		Email
Bank of America Merrill Lynch		Joshua Dennerlein		(646) 855-1681		joshua.dennerlein@baml.com
BMO Capital Markets		John Kim		(212) 885-4115		johnp.kim@bmo.com
Citi Research		Michael Bilerman		(212) 816-1383		michael.bilerman@citi.com
		Nicholas Joseph		(212) 816-1909		nicholas.joseph@citi.com
Evercore ISI		Steve Sakwa		(212) 446-9462		steve.sakwa@evercoreisi.com
		Samir Khanal		(212) 888-3796		samir.khanal@evercoreisi.com
Green Street Advisors		John Pawlowski		(949) 640-8780		jpawlowski@greenstreetadvisors.com
RBC Capital Markets		Wes Golladay		(440) 715-2650		wes.golladay@rbccm.com
Robert W. Baird & Co.		Drew Babin		(610) 238-6634		dbabin@rwbaird.com
Wells Fargo		Todd Stender		(562) 637-1371		todd.stender@wellsfargo.com
INQUIRIES
Sun Communities welcomes questions or comments from stockholders, analysts, investment managers, media, or any prospective investor. Please address all inquiries to our Investor Relations department.
At Our Website		www.suncommunities.com
By Email		investorrelations@suncommunities.com
By Phone		(248) 208-2500

Portfolio Overview                                                                           
(As of March 31, 2020)

Financial and Operating Highlights                                                                                                           
(amounts in thousands, except for *)

	Quarter Ended
	3/31/2020				12/31/2019				9/30/2019				6/30/2019				3/31/2019
Financial Information
Total revenues	$	310,302			$	301,819			$	362,443			$	312,445			$	287,330
Net income / (loss)	$	(15,478	)		$	30,685			$	64,451			$	45,116			$	37,127
Net Income / (loss) attributable to Sun Communities Inc. common stockholders	$	(16,086	)		$	28,547			$	57,002			$	40,385			$	34,331
Basic earnings / (loss) per share*	$	(0.17	)		$	0.31			$	0.63			$	0.46			$	0.40
Diluted earnings / (loss) per share*	$	(0.17	)		$	0.31			$	0.63			$	0.46			$	0.40
Cash distributions declared per common share*	$	0.79			$	0.75			$	0.75			$	0.75			$	0.75
Recurring EBITDA (1)	$	156,552			$	144,738			$	179,953			$	151,502			$	147,714
FFO attributable to Sun Communities, Inc. common stockholders and dilutive convertible securities (1) (7)	$	95,046			$	105,533			$	119,496			$	108,112			$	106,779
Core FFO attributable to Sun Communities, Inc. common stockholders and dilutive convertible securities (1) (7)	$	117,267			$	104,534			$	137,369			$	108,002			$	106,259
FFO attributable to Sun Communities, Inc. common stockholders and dilutive convertible securities (1) (7) per share - fully diluted*	$	0.98			$	1.11			$	1.27			$	1.18			$	1.19
Core FFO attributable to Sun Communities, Inc. common stockholders and dilutive convertible securities (1) (7) per share - fully diluted*	$	1.22			$	1.10			$	1.46			$	1.18			$	1.18
Balance Sheet
Total assets	$	8,209,047			$	7,802,060			$	7,397,854			$	7,222,084			$	7,098,662
Total debt	$	3,926,494			$	3,434,402			$	3,271,341			$	3,107,775			$	3,448,117
Total liabilities	$	4,346,127			$	3,848,104			$	3,720,983			$	3,542,188			$	3,846,325

	Quarter Ended
	3/31/2020			12/31/2019			9/30/2019			6/30/2019			3/31/2019
Operating Information*
Communities	424			422			389			382			379
Manufactured home sites	93,834			93,821			88,024			87,555			87,425
Annual RV sites	26,148			26,056			25,756			25,009			24,750
Transient RV sites	21,880			21,416			20,882			20,585			20,173
Total sites	141,862			141,293			134,662			133,149			132,348
MH occupancy	95.8	%		95.5	%		95.7	%		95.7	%		95.4	%
RV occupancy	100.0	%		100.0	%		100.0	%		100.0	%		100.0	%
Total blended MH and RV occupancy	96.7	%		96.4	%		96.7	%		96.6	%		96.4	%
New home sales	119			140			167			139			125
Pre-owned home sales	644			668			739			788			673
Total home sales	763			808			906			927			798

	Quarter Ended
	3/31/2020			12/31/2019			9/30/2019			6/30/2019			3/31/2019
Net Leased Sites (24)
MH net leased sites	287			437			296			410			398
RV net leased sites	13			232			470			258			173
Total net leased sites	300			669			766			668			571

Balance Sheets                                                                                                                                              
(amounts in thousands)

		(Unaudited)
		March 31, 2020				December 31, 2019
Assets
Land		$	1,418,985			$	1,414,279
Land improvements and buildings		6,697,376				6,595,272
Rental homes and improvements		640,709				627,175
Furniture, fixtures and equipment		285,922				282,874
Investment property		9,042,992				8,919,600
Accumulated depreciation		(1,754,591		)		(1,686,980		)
Investment property, net		7,288,401				7,232,620
Cash, cash equivalents and restricted cash		394,740				34,830
Marketable securities		55,602				94,727
Inventory of manufactured homes		64,436				62,061
Notes and other receivables, net		186,692				157,926
Other assets, net		219,176				219,896
Total Assets		$	8,209,047			$	7,802,060
Liabilities
Mortgage loans payable		$	3,273,808			$	3,180,592
Preferred Equity - Sun NG Resorts - mandatorily redeemable		35,249				35,249
Preferred OP units - mandatorily redeemable		34,663				34,663
Lines of credit (5)		582,774				183,898
Distributions payable		75,636				71,704
Advanced reservation deposits and rent		151,144				133,420
Accrued expenses and accounts payable		110,512				127,289
Other liabilities		82,341				81,289
Total Liabilities		4,346,127				3,848,104
Commitments and contingencies
Series D preferred OP units		50,387				50,913
Equity Interests - NG Sun LLC and NG Whitewater		26,063				27,091
Stockholders' Equity
Common stock		933				932
Additional paid-in capital		5,211,678				5,213,264
Accumulated other comprehensive loss		(8,325		)		(1,331		)
Distributions in excess of accumulated earnings		(1,479,424		)		(1,393,141		)
Total Sun Communities, Inc. stockholders' equity		3,724,862				3,819,724
Noncontrolling interests
Common and preferred OP units		52,234				47,686
Consolidated variable interest entities		9,374				8,542
Total noncontrolling interests		61,608				56,228
Total Stockholders' Equity		3,786,470				3,875,952
Total Liabilities, Temporary Equity and Stockholders' Equity		$	8,209,047			$	7,802,060

Statements of Operations - Quarter to Date Comparison
(amounts in thousands, except per share amounts) (Unaudited)

	Three Months Ended
	March 31, 2020				March 31, 2019				Change				% Change
Revenues
Income from real property (excluding transient revenue)	$	212,530			$	190,565			$	21,965			11.5	%
Transient revenue	25,255				24,518				737				3.0	%
Revenue from home sales	40,587				39,618				969				2.4	%
Rental home revenue	15,472				13,971				1,501				10.7	%
Ancillary revenue	10,195				10,178				17				0.2	%
Interest income	2,350				4,800				(2,450		)		(51.0	)%
Brokerage commissions and other revenues, net	3,913				3,680				233				6.3	%
Total Revenues	310,302				287,330				22,972				8.0	%
Expenses
Property operating and maintenance	64,057				57,909				6,148				10.6	%
Real estate taxes	17,176				15,330				1,846				12.0	%
Cost of home sales	30,032				29,277				755				2.6	%
Rental home operating and maintenance	5,494				4,832				662				13.7	%
Ancillary expenses	7,482				7,101				381				5.4	%
Home selling expenses	3,992				3,324				668				20.1	%
General and administrative expenses	25,517				21,887				3,630				16.6	%
Catastrophic weather-related charges, net	606				782				(176		)		(22.5	)%
Depreciation and amortization	83,689				76,556				7,133				9.3	%
Loss on extinguishment of debt	3,279				653				2,626				402.1	%
Interest expense	32,416				34,014				(1,598		)		(4.7	)%
Interest on mandatorily redeemable preferred OP units / equity	1,041				1,094				(53		)		(4.8	)%
Total Expenses	274,781				252,759				22,022				8.7	%
Income Before Other Items	35,521				34,571				950				2.7	%
Gain / (loss) on remeasurement of marketable securities	(28,647		)		267				(28,914		)		N/M (a)
Gain / (loss) on foreign currency translation	(17,479		)		1,965				(19,444		)		N/M (a)
Other expense, net (6)	(302		)		(67		)		(235		)		350.7	%
Loss on remeasurement of notes receivable	(2,112		)		—				(2,112		)		N/A
Income from nonconsolidated affiliates	52				388				(336		)		(86.6	)%
Loss on remeasurement of investment in nonconsolidated affiliates	(2,191		)		—				(2,191		)		N/A
Current tax expense	(450		)		(214		)		(236		)		110.3	%
Deferred tax benefit	130				217				(87		)		(40.1	)%
Net Income / (Loss)	(15,478		)		37,127				(52,605		)		(141.7	)%
Less: Preferred return to preferred OP units / equity	1,570				1,323				247				18.7	%
Less: Income / (loss) attributable to noncontrolling interests	(962		)		1,041				(2,003		)		(192.4	)%
Net Income / (Loss) Attributable to Sun Communities, Inc.	(16,086		)		34,763				(50,849		)		(146.3	)%
Less: Preferred stock distribution	—				432				(432		)		(100.0	)%
Net Income / (Loss) Attributable to Sun Communities, Inc. Common Stockholders	$	(16,086	)		$	34,331			$	(50,417	)		(146.9	)%
Weighted average common shares outstanding - basic	92,410				85,520				6,890				8.1	%
Weighted average common shares outstanding - diluted	92,935				86,033				6,902				8.0	%
Basic earnings / (loss) per share	$	(0.17	)		$	0.40			$	(0.57	)		(142.5	)%
Diluted earnings / (loss) per share	$	(0.17	)		$	0.40			$	(0.57	)		(142.5	)%

^(a) Percentage change is not meaningful, (“N/M”)

Outstanding Securities and Capitalization
(amounts in thousands except for *)

Outstanding Securities - As of March 31, 2020
	Number of Units/Shares Outstanding		Conversion Rate*		If Converted		Issuance Price per unit*			Annual Distribution Rate*
Non-convertible Securities
Common shares	93,327		N/A		N/A		N/A			$3.16^
Convertible Securities
Series A-1 preferred OP units	303		2.4390		738		$	100		6.0	%
Series A-3 preferred OP units	40		1.8605		75		$	100		4.5	%
Series C preferred OP units	310		1.1100		345		$	100		4.5	%
Series D preferred OP units	489		0.8000		391		$	100		3.8	%
Series E preferred OP units	90		0.6897		62		$	100		5.25	%
Common OP units	2,408		1.0000		2,408		N/A			Mirrors common shares distributions
^ Annual distribution is based on the last quarterly distribution annualized.

Capitalization - As of March 31, 2020
Equity		Shares			Share Price*				Total
Common shares		93,327			$	124.85			$	11,651,876
Common OP units		2,408			$	124.85			300,639
Subtotal		95,735							$	11,952,515
Series A-1 preferred OP units		738			$	124.85			$	92,139
Series A-3 preferred OP units		75			$	124.85			9,364
Series C preferred OP units		345			$	124.85			43,073
Series D preferred OP units		391			$	124.85			48,816
Series E preferred OP units		62			$	124.85			7,741
Total diluted shares outstanding		97,346							$	12,153,648
Debt
Mortgage loans payable									$	3,273,808
Preferred Equity - Sun NG Resorts - mandatorily redeemable									35,249
Preferred OP units - mandatorily redeemable									34,663
Lines of credit (5)									582,774
Total debt									$	3,926,494
Total Capitalization									$	16,080,142

Reconciliations to Non-GAAP Financial Measures

Reconciliation of Net Income / (Loss) Attributable to Sun Communities, Inc. Common Stockholders to FFO⁽¹⁾
(amounts in thousands except for per share data)

	Three Months Ended
	March 31, 2020				March 31, 2019
Net Income / (Loss) Attributable To Sun Communities, Inc. Common Stockholders	$	(16,086	)		$	34,331
Adjustments
Depreciation and amortization	83,752				76,712
(Gain) / loss on remeasurement of marketable securities	28,647				(267		)
Loss on remeasurement of investment in nonconsolidated affiliates	2,191				—
Loss on remeasurement of notes receivable	2,112				—
Income / (loss) attributable to noncontrolling interests	(882		)		723
Preferred return to preferred OP units	874				527
Preferred distribution to Series A-4 preferred stock	—				432
Gain on disposition of assets, net	(5,562		)		(5,679		)
FFO Attributable To Sun Communities, Inc. Common Stockholders And Dilutive Convertible Securities (1) (7)	$	95,046			$	106,779
Adjustments
Other acquisition related costs (8)	385				160
Loss on extinguishment of debt	3,279				653
Catastrophic weather-related charges, net	606				782
Loss of earnings - catastrophic weather related (9)	300				—
(Gain) / loss on foreign currency translation	17,479				(1,965		)
Other expense, net (6)	302				67
Deferred tax benefits	(130		)		(217		)
Core FFO Attributable To Sun Communities, Inc. Common Stockholders And Dilutive Convertible Securities (1) (7)	$	117,267			$	106,259
Weighted average common shares outstanding - basic	92,410				85,520
Add
Common OP units	2,412				2,722
Common stock issuable upon conversion of stock options	1				1
Restricted stock	524				512
Common stock issuable upon conversion of Series A-3 preferred OP units	75				75
Common stock issuable upon conversion of Series A-1 preferred OP units	746				803
Common stock issuable upon conversion of Series C preferred OP units	345				—
Common stock issuable upon conversion of Series A-4 preferred stock	—				472
Weighted Average Common Shares Outstanding - Fully Diluted	96,513				90,105
FFO Attributable To Sun Communities, Inc. Common Stockholders And Dilutive Convertible Securities (1) (7) Per Share - Fully Diluted	$	0.98			$	1.19
Core FFO Attributable To Sun Communities, Inc. Common Stockholders And Dilutive Convertible Securities (1) (7) Per Share - Fully Diluted	$	1.22			$	1.18

Reconciliation of Net Income / (Loss) Attributable to Sun Communities, Inc. Common Stockholders to Recurring EBITDA ⁽¹⁾
(amounts in thousands)

	Three Months Ended
	March 31, 2020				March 31, 2019
Net Income / (Loss) Attributable to Sun Communities, Inc. Common Stockholders	$	(16,086	)		$	34,331
Adjustments
Depreciation and amortization	83,689				76,556
Loss on extinguishment of debt	3,279				653
Interest expense	32,416				34,014
Interest on mandatorily redeemable preferred OP units / equity	1,041				1,094
Current tax expense	450				214
Deferred tax benefit	(130		)		(217		)
Income from nonconsolidated affiliates	(52		)		(388		)
Less: Gain on dispositions of assets, net	(5,562		)		(5,679		)
EBITDAre (1)	$	99,045			$	140,578
Adjustments
Catastrophic weather related charges, net	606				782
(Gain) / loss on remeasurement of marketable securities	28,647				(267		)
(Gain) / loss on foreign currency translation	17,479				(1,965		)
Other expense, net (6)	302				67
Loss on remeasurement of notes receivable	2,112				—
Loss on remeasurement of investment in nonconsolidated affiliates	2,191				—
Preferred return to preferred OP units / equity	1,570				1,323
Income / (loss) attributable to noncontrolling interests	(962		)		1,041
Preferred stock distribution	—				432
Plus: Gain on dispositions of assets, net	5,562				5,679
Recurring EBITDA (1)	$	156,552			$	147,670

Reconciliation of Net Income / (Loss) Attributable to Sun Communities, Inc. Common Stockholders to NOI ⁽¹⁾
(amounts in thousands)

	Three Months Ended
	March 31, 2020				March 31, 2019
Net Income / (Loss) Attributable to Sun Communities, Inc. Common Stockholders	$	(16,086	)		$	34,331
Other revenues	(6,263		)		(8,480		)
Home selling expenses	3,992				3,324
General and administrative expenses	25,517				21,887
Catastrophic weather-related charges, net	606				782
Depreciation and amortization	83,689				76,556
Loss on extinguishment of debt	3,279				653
Interest expense	32,416				34,014
Interest on mandatorily redeemable preferred OP units / equity	1,041				1,094
(Gain) / loss on remeasurement of marketable securities	28,647				(267		)
(Gain) / loss on foreign currency translation	17,479				(1,965		)
Other expense, net (6)	302				67
Loss on remeasurement of notes receivable	2,112				—
Income from nonconsolidated affiliates	(52		)		(388		)
Loss on remeasurement of investment in nonconsolidated affiliates	2,191				—
Current tax expense	450				214
Deferred tax benefit	(130		)		(217		)
Preferred return to preferred OP units / equity	1,570				1,323
Income / (loss) attributable to noncontrolling interests	(962		)		1,041
Preferred stock distribution	—				432
NOI (1) / Gross Profit	$	179,798			$	164,401

	Three Months Ended
	March 31, 2020				March 31, 2019
Real Property NOI (1)	$	156,552			$	141,844
Home Sales NOI (1) / Gross Profit	10,555				10,341
Rental Program NOI (1)	27,985				26,017
Ancillary NOI (1) / Gross Profit	2,713				3,077
Site rent from Rental Program (included in Real Property NOI) (1) (10)	(18,007		)		(16,878		)
NOI (1) / Gross Profit	$	179,798			$	164,401

Non-GAAP and Other Financial Measures

Debt Analysis
(amounts in thousands)

	Quarter Ended
	3/31/2020				12/31/2019				9/30/2019				6/30/2019				3/31/2019
Debt Outstanding
Mortgage loans payable	$	3,273,808			$	3,180,592			$	2,967,128			$	2,863,485			$	2,879,017
Secured borrowings on collateralized receivables (4)	—				—				93,669				98,299				102,676
Preferred Equity - Sun NG Resorts - mandatorily redeemable	35,249				35,249				35,249				35,249				35,249
Preferred OP units - mandatorily redeemable	34,663				34,663				34,663				34,663				34,663
Lines of credit (5)	582,774				183,898				140,632				76,079				396,512
Total debt	$	3,926,494			$	3,434,402			$	3,271,341			$	3,107,775			$	3,448,117
% Fixed / Floating
Fixed	85.2		%		94.7		%		95.7		%		97.6		%		88.5		%
Floating	14.8		%		5.3		%		4.3		%		2.4		%		11.5		%
Total	100.0		%		100.0		%		100.0		%		100.0		%		100.0		%
Weighted Average Interest Rates
Mortgage loans payable	3.91		%		4.05		%		4.13		%		4.24		%		4.24		%
Preferred Equity - Sun NG Resorts - mandatorily redeemable	6.00		%		6.00		%		6.00		%		6.00		%		6.00		%
Preferred OP units - mandatorily redeemable	5.93		%		6.50		%		6.50		%		6.50		%		6.50		%
Lines of credit (5)	1.85		%		2.71		%		3.23		%		3.34		%		3.73		%
Average before secured borrowings (4)	3.64		%		4.03		%		4.14		%		4.27		%		4.22		%
Secured borrowings on collateralized receivables (4)	—		%		—		%		9.92		%		9.93		%		9.94		%
Total average	3.64		%		4.03		%		4.30		%		4.44		%		4.39		%
Debt Ratios
Net Debt / Recurring EBITDA (1) (TTM)	5.6				5.5				5.3				5.2				6.0
Net Debt / Enterprise Value	22.6		%		19.0		%		18.7		%		20.2		%		24.1		%
Net Debt / Gross Assets	35.6		%		36.0		%		36.0		%		35.1		%		39.8		%
Coverage Ratios
Recurring EBITDA (1) (TTM) / Interest	4.5				4.4				4.4				4.2				4.1
Recurring EBITDA (1) (TTM) / Interest + Pref. Distributions + Pref. Stock Distribution	4.3				4.2				4.2				4.0				3.9

Maturities / Principal Amortization Next Five Years	2020				2021				2022				2023				2024
Mortgage loans payable
Maturities	$	—			$	51,053			$	82,155			$	185,618			$	315,330
Principal amortization	44,024				60,499				61,326				60,604				57,082
Preferred Equity - Sun NG Resorts - mandatorily redeemable	—				—				35,249				—				—
Preferred OP units - mandatorily redeemable	—				—				—				—				27,373
Lines of credit (5)	7,206				13,977				10,000				551,912				—
Total	$	51,230			$	125,529			$	188,730			$	798,134			$	399,785
Weighted average rate of maturities	—		%		5.97		%		4.46		%		4.08		%		4.47		%

Real Property Operations – Same Community⁽²⁾                                                     
(amounts in thousands except for Other Information)

	Three Months Ended
	March 31, 2020				March 31, 2019				Change				% Change
Financial Information
Income from real property (11)	$	214,672			$	204,138			$	10,534			5.2	%
Property operating expenses
Payroll and benefits	18,812				18,424				388				2.1	%
Legal, taxes, and insurance	2,888				2,339				549				23.5	%
Utilities (11)	15,110				15,720				(610		)		(3.9	)%
Supplies and repair (12)	6,129				6,302				(173		)		(2.7	)%
Other	5,567				5,405				162				3.0	%
Real estate taxes	15,964				15,160				804				5.3	%
Property operating expenses	64,470				63,350				1,120				1.8	%
Real Property NOI (1)	$	150,202			$	140,788			$	9,414			6.7	%

	As of
	March 31, 2020				March 31, 2019				Change				% Change
Other Information
Number of properties	367				367				-
MH occupancy (3)	96.1		%
RV occupancy (3)	100.0		%
MH & RV blended occupancy (3)	97.0		%
Adjusted MH occupancy (3)	97.9		%
Adjusted RV occupancy (3)	100.0		%
Adjusted MH & RV blended occupancy (3)	98.4		%		96.6		%		1.8		%
Monthly base rent per site - MH	$	589			$	567			$	22			4.0	%	(14)
Monthly base rent per site - RV (13)	$	495			$	467			$	28			5.8	%	(14)
Monthly base rent per site - Total (13)	$	567			$	544			$	23			4.3	%	(14)

Home Sales Summary           
(amounts in thousands except for *)

	Three Months Ended
	March 31, 2020				March 31, 2019				Change				% Change
Financial Information
New homes
New home sales	$	15,596			$	15,381			$	215			1.4	%
New home cost of sales	12,610				13,146				(536		)		(4.1	)%
NOI (1) / Gross Profit  – new homes	2,986				2,235				751				33.6	%
Gross margin % – new homes	19.1		%		14.5		%		4.6		%
Average selling price – new homes*	$	131,059			$	123,048			$	8,011			6.5	%
Pre-owned homes
Pre-owned home sales	$	24,991			$	24,237			$	754			3.1	%
Pre-owned home cost of sales	17,422				16,131				1,291				8.0	%
NOI (1) / Gross Profit – pre-owned homes	7,569				8,106				(537		)		(6.6	)%
Gross margin % – pre-owned homes	30.3		%		33.4		%		(3.1		)%
Average selling price – pre-owned homes*	$	38,806			$	36,013			$	2,793			7.8	%
Total home sales
Revenue from home sales	40,587				39,618				969				2.4	%
Cost of home sales	30,032				29,277				755				2.6	%
NOI (1) / Gross Profit – home sales	$	10,555			$	10,341			$	214			2.1	%
Statistical Information
New home sales volume*	119				125				(6		)		(4.8	)%
Pre-owned home sales volume*	644				673				(29		)		(4.3	)%
Total home sales volume *	763				798				(35		)		(4.4	)%

               

Rental Program Summary    
(amounts in thousands except for *)

	Three Months Ended
	March 31, 2020				March 31, 2019				Change				% Change
Financial Information
Revenues
Rental home revenue	$	15,472			$	13,971			$	1,501			10.7	%
Site rent from Rental Program (1) (10)	18,007				16,878				1,129				6.7	%
Rental Program revenue	33,479				30,849				2,630				8.5	%
Expenses
Repairs and refurbishment	2,953				2,349				604				25.7	%
Taxes and insurance	2,013				1,864				149				8.0	%
Other	528				619				(91		)		(14.7	)%
Rental Program operating and maintenance	5,494				4,832				662				13.7	%
Rental Program NOI (1)	$	27,985			$	26,017			$	1,968			7.6	%
Other Information
Number of sold rental homes*	234				210				24				11.4	%
Number of occupied rentals, end of period*	11,431				11,170				261				2.3	%
Investment in occupied rental homes, end of period	$	596,319			$	547,844			$	48,475			8.8	%
Weighted average monthly rental rate, end of period*	$	1,009			$	963			$	46			4.8	%

Acquisitions and Other Summary ⁽¹⁵⁾
(amounts in thousands except for statistical data)

		Three Months Ended
		March 31, 2020
Financial Information
Revenues
Income from real property		$	14,148
Property and operating expenses
Payroll and benefits		2,518
Legal, taxes & insurance		292
Utilities		1,699
Supplies and repairs		901
Other		1,176
Real estate taxes		1,212
Property operating expenses		7,798
Net operating income (NOI) (1)		$	6,350
Other Information		March 31, 2020
Number of properties		57
Occupied sites		7,730
Developed sites		8,327
Occupancy %		92.8		%
Transient sites		3,300

Property Summary
(includes MH and Annual RVs)
COMMUNITIES		3/31/2020			12/31/2019			9/30/2019			6/30/2019			3/31/2019
FLORIDA
Communities		125			125			125			125			125
Developed sites (16)		39,380			39,230			39,067			38,879			38,878
Occupied (16)		38,526			38,346			38,155			37,944			37,932
Occupancy % (16)		97.8	%		97.7	%		97.7	%		97.6	%		97.6	%
Sites for development		1,527			1,527			1,633			1,638			1,685
MICHIGAN
Communities		72			72			72			72			72
Developed sites (16)		27,883			27,905			27,906			27,891			27,777
Occupied (16)		26,863			26,785			26,677			26,591			26,430
Occupancy % (16)		96.3	%		96.0	%		95.6	%		95.3	%		95.2	%
Sites for development		1,115			1,115			1,115			1,115			1,202
TEXAS
Communities		23			23			23			23			23
Developed sites (16)		7,627			7,615			7,098			6,997			6,953
Occupied (16)		7,076			7,006			6,834			6,683			6,529
Occupancy % (16)		92.8	%		92.0	%		96.3	%		95.5	%		93.9	%
Sites for development		555			555			1,086			1,100			1,107
CALIFORNIA
Communities		31			31			31			31			31
Developed sites (16)		5,986			5,981			5,963			5,946			5,949
Occupied (16)		5,948			5,941			5,917			5,896			5,902
Occupancy % (16)		99.4	%		99.3	%		99.2	%		99.2	%		99.2	%
Sites for development		302			302			302			56			56
ARIZONA
Communities		13			13			13			13			13
Developed sites (16)		4,268			4,263			4,239			4,235			4,238
Occupied (16)		3,923			3,892			3,852			3,842			3,830
Occupancy % (16)		91.9	%		91.3	%		90.9	%		90.7	%		90.4	%
Sites for development		—			—			—			—			—
ONTARIO, CANADA
Communities		15			15			15			15			15
Developed sites (16)		3,977			4,031			4,022			3,929			3,832
Occupied (16)		3,977			4,031			4,022			3,929			3,832
Occupancy % (16)		100.0	%		100.0	%		100.0	%		100.0	%		100.0	%
Sites for development		1,608			1,611			1,675			1,675			1,675
INDIANA
Communities		11			11			11			11			11
Developed sites (16)		3,087			3,087			3,089			3,089			3,089
Occupied (16)		2,914			2,900			2,870			2,849			2,823
Occupancy % (16)		94.4	%		93.9	%		92.9	%		92.2	%		91.4	%
Sites for development		277			277			277			277			277
OHIO
Communities		9			9			9			9			9
Developed sites (16)		2,768			2,770			2,770			2,770			2,770
Occupied (16)		2,702			2,716			2,703			2,705			2,704
Occupancy % (16)		97.6	%		98.1	%		97.6	%		97.7	%		97.6	%
Sites for development		59			59			59			59			59
COLORADO
Communities		10			10			10			8			8
Developed sites (16)		2,423			2,423			2,423			2,335			2,335
Occupied (16)		2,318			2,322			2,325			2,323			2,323
Occupancy % (16)		95.7	%		95.8	%		96.0	%		99.5	%		99.5	%
Sites for development		1,867			1,867			1,973			2,129			2,129
OTHER STATES
Communities		115			113			80			75			72
Developed sites (16)		22,583			22,572			17,203			16,493			16,354
Occupied (16)		21,749			21,678			16,657			16,026			15,826
Occupancy % (16)		96.3	%		96.0	%		96.8	%		97.2	%		96.8	%
Sites for development		2,980			2,980			2,437			2,705			2,987
TOTAL - PORTFOLIO
Communities		424			422			389			382			379
Developed sites (16)		119,982			119,877			113,780			112,564			112,175
Occupied (16)		115,996			115,617			110,012			108,788			108,131
Occupancy % (16)		96.7	%	(17)	96.4	%		96.7	%		96.6	%		96.4	%
Sites for development (18)		10,290			10,293			10,557			10,754			11,177
% Communities age restricted		34.0	%		34.1	%		30.8	%		31.4	%		31.7	%
TRANSIENT RV PORTFOLIO SUMMARY
Location
Florida		5,311			5,465			5,506			5,693			5,650
California		1,947			1,952			1,970			1,985			1,975
Texas		1,612			1,623			1,642			1,693			1,717
Maryland		1,488			1,488			1,426			1,380			1,375
Arizona		1,392			1,397			1,421			1,424			1,421
Ontario, Canada		1,009			939			937			1,043			1,131
New York		916			923			924			935			929
New Jersey		875			864			868			875			906
Maine		828			811			821			848			857
Utah		750			753			560			562			562
Virginia		630			324			329			358			369
Michigan		590			570			569			584			611
Other states		4,532			4,307			3,909			3,205			2,670
Total transient RV sites		21,880			21,416			20,882			20,585			20,173

Capital Improvements, Development, and Acquisitions   
(amounts in thousands except for *)

	Recurring Capital Expenditures Average/Site*			Recurring Capital Expenditures (19)			Lot Modifications (20)			Acquisitions (21)			Expansion & Development (22)			Revenue Producing/Expense Reduction projects (23)
YTD 2020	$	50		$	5,889		$	7,923		$	37,076		$	60,218		$	4,351
2019	$	345		$	30,382		$	31,135		$	930,668		$	281,808		$	9,638
2018	$	263		$	24,265		$	22,867		$	414,840		$	152,672		$	3,864

Operating Statistics for MH and Annual RVs

LOCATIONS		Resident Move-outs			Net Leased Sites (24)			New Home Sales			Pre-owned Home Sales			Brokered  Re-sales
Florida		376			180			40			63			358
Michigan		215			78			8			298			31
Ontario, Canada		375			(54	)		6			6			21
Texas		79			70			11			77			11
Arizona		20			31			14			6			42
Indiana		25			14			1			63			3
Ohio		47			(14	)		—			30			2
California		25			7			7			3			22
Colorado		4			(4	)		—			7			8
Other states		580			(8	)		32			91			61
Three Months Ended March 31, 2020		1,746			300			119			644			559

TOTAL FOR YEAR ENDED		Resident Move-outs			Net Leased Sites (24)			New Home Sales			Pre-owned Home Sales			Brokered  Re-sales
2019		4,139			2,674			571			2,868			2,231
2018		3,435			2,600			526			3,103			2,147

PERCENTAGE TRENDS		Resident Move-outs			Resident  Re-sales
2020 (TTM)		2.8	%		6.8	%
2019		2.6	%		6.6	%
2018		2.4	%		7.2	%

Footnotes and Definitions                                                                

(1)Investors in and analysts following the real estate industry utilize funds from operations (“FFO”), net operating income (“NOI”), and earnings before interest, tax, depreciation and amortization (“EBITDA”) as supplemental performance measures. The Company believes that FFO, NOI, and EBITDA are appropriate measures given their wide use by and relevance to investors and analysts. Additionally, FFO, NOI, and EBITDA are commonly used in various ratios, pricing multiples, yields and returns and valuation calculations used to measure financial position, performance and value.

•   FFO, reflecting the assumption that real estate values rise or fall with market conditions, principally adjusts for the effects of generally accepted accounting principles (“GAAP”) depreciation and amortization of real estate assets. 

•   NOI provides a measure of rental operations that does not factor in depreciation, amortization and non-property specific expenses such as general and administrative expenses. 

•   EBITDA provides a further measure to evaluate ability to incur and service debt and to fund dividends and other cash needs.

FFO is defined by the National Association of Real Estate Investment Trusts (“NAREIT”) as GAAP net income (loss), excluding gains (or losses) from sales of depreciable operating property, plus real estate-related depreciation and amortization, and after adjustments for unconsolidated partnerships and joint ventures. FFO is a non-GAAP financial measure that management believes is a useful supplemental measure of the Company’s operating performance. By excluding gains and losses related to sales of previously depreciated operating real estate assets, impairment and excluding real estate asset depreciation and amortization (which can vary among owners of identical assets in similar condition based on historical cost accounting and useful life estimates), FFO provides a performance measure that, when compared period-over-period, reflects the impact to operations from trends in occupancy rates, rental rates, and operating costs, providing perspective not readily apparent from GAAP net income (loss). Management believes the use of FFO has been beneficial in improving the understanding of operating results of REITs among the investing public and making comparisons of REIT operating results more meaningful. The Company also uses FFO excluding certain gain and loss items that management considers unrelated to the operational and financial performance of our core business (“Core FFO”). The Company believes that Core FFO provides enhanced comparability for investor evaluations of period-over-period results.

The Company believes that GAAP net income (loss) is the most directly comparable measure to FFO. The principal limitation of FFO is that it does not replace GAAP net income (loss) as a performance measure or GAAP cash flow from operations as a liquidity measure. Because FFO excludes significant economic components of GAAP net income (loss) including depreciation and amortization, FFO should be used as a supplement to GAAP net income (loss) and not as an alternative to it. Further, 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. FFO is calculated in accordance with the Company’s interpretation of standards established by NAREIT, which may not be comparable to FFO reported by other REITs that interpret the NAREIT definition differently.

NOI is derived from revenues minus property operating expenses and real estate taxes. NOI is a non-GAAP financial measure that the Company believes is helpful to investors as a supplemental measure of operating performance because it is an indicator of the return on property investment and provides a method of comparing property performance over time. The Company uses NOI as a key measure when evaluating performance and growth of particular properties and/or groups of properties. The principal limitation of NOI is that it excludes depreciation, amortization, interest expense and non-property specific expenses such as general and administrative expenses, all of which are significant costs. Therefore, NOI is a measure of the operating performance of the properties of the Company rather than of the Company overall.

The Company believes that GAAP net income (loss) is the most directly comparable measure to NOI. NOI should not be considered to be an alternative to GAAP net income (loss) as an indication of the Company’s financial performance or GAAP cash flow from operating activities as a measure of the Company’s liquidity; nor is it indicative of funds available for the Company’s cash needs, including its ability to make cash distributions. Because of the inclusion of items such as interest, depreciation, and amortization, the use of GAAP net income (loss) as a performance measure is limited as these items may not accurately reflect the actual change in market value of a property, in the case of depreciation and in the case of interest, may not necessarily be linked to the operating performance of a real estate asset, as it is often incurred at a parent company level and not at a property level.

EBITDA as defined by NAREIT (referred to as “EBITDAre”) is calculated as GAAP net income (loss), plus interest expense, plus income tax expense, plus depreciation and amortization, plus or minus losses or gains on the disposition of depreciated property (including losses or gains on change of control), plus impairment write-downs of depreciated property and of investments in unconsolidated affiliates caused by a decrease in value of depreciated property in the affiliate, and adjustments to reflect the entity’s share of EBITDAre of unconsolidated affiliates. EBITDAre is a non-GAAP financial measure that the Company uses to evaluate its ability to incur and service debt, fund dividends and other cash needs and cover fixed costs. Investors utilize EBITDAre as a supplemental measure to evaluate and compare investment quality and enterprise value of REITs. The Company also uses EBITDAre excluding certain gain and loss items that management considers unrelated to measurement of the Company’s performance on a basis that is independent of capital structure (“Recurring EBITDA”).

The Company believes that GAAP net income (loss) is the most directly comparable measure to EBITDAre. EBITDAre is not intended to be used as a measure of the Company’s cash generated by operations or its dividend-paying capacity, and should therefore not replace GAAP net income (loss) as an indication of the Company’s financial performance or GAAP cash flow from operating, investing and financing activities as measures of liquidity.

(2)  Same Community results reflect constant currency for comparative purposes. Canadian currency figures in the prior comparative period have been translated at 2020 actual exchange rates.

(3)   The Same Community occupancy percentage is 96.1 percent for MH, 100.0 percent for RV, and 97.0 percent for the blended MH and RV. The MH and RV blended occupancy is derived from 111,655 developed sites, of which 108,266 were occupied. The Same Community occupancy percentage for 2019 has been adjusted to reflect incremental period-over-period growth from filled expansion sites and the conversion of transient RV sites to annual RV sites. The adjusted Same Community occupancy percentage for 2020 is derived from 110,001 developed sites, of which 108,266 were occupied. The number of developed sites excludes RV transient sites and approximately 1,700 recently completed but vacant MH expansion sites.

(4)  This is a transferred asset transaction which has been classified as collateralized receivables and the cash received from this transaction has been classified as a secured borrowing. The interest income and interest expense accrue at the same rate and amount. In November 2019, the Company derecognized the transferred financial assets and secured borrowing as legal isolation criteria to be accounted for as a true sale were satisfied pursuant to the terms of the purchase agreement.

(5)  Lines of credit includes the Company’s MH floor plan facility. The effective interest rate on the MH floor plan facility was 7.0 percent for all periods presented. However, the Company pays no interest if the floor plan balance is repaid within 60 days.

(6)   Other expense, net was as follows (in thousands)

	Three Months Ended
	March 31, 2020				March 31, 2019
Foreign currency remeasurement loss	$	(220	)		$	4
Contingent liability remeasurement loss	(82		)		(71		)
Other expense, net	$	(302	)		$	(67	)

(7)  The effect of certain anti-dilutive convertible securities is excluded from these items.

(8)   These costs represent the expenses incurred to bring recently acquired properties up to the Company’s operating standards, including items such as tree trimming and painting costs that do not meet the Company’s capitalization policy.

(9)   Core FFO⁽¹⁾ includes an adjustment of $0.3 million for the three months ended March 31, 2020, for estimated loss of earnings in excess of the applicable business interruption deductible in relation to the Company’s Florida Keys communities that required redevelopment due to damages sustained from Hurricane Irma in September 2017.

(10) The renter’s monthly payment includes the site rent and an amount attributable to the home lease. The site rent is reflected in Real Property Operations’ segment revenue. For purposes of management analysis, site rent is included in Rental Program revenue to evaluate the incremental revenue gains associated with the Rental Program, and to assess the overall growth and performance of the Rental Program and financial impact on the Company’s operations.

(11) Same Community results net $9.0 million and $8.5 million of certain utility revenue against the related utility expense in property operating expense for the three months ended March 31, 2020 and 2019, respectively.

(12) Same Community supplies and repair expense excludes $0.1 million for the three months ended March 31, 2019, of expenses incurred for recently acquired properties to bring the properties up to the Company’s operating standards, including items such as tree trimming and painting costs that do not meet the Company’s capitalization policy.

(13) Monthly base rent per site pertains to annual RV sites and excludes transient RV sites.

(14) Calculated using actual results without rounding.

(15) Acquisitions and other is comprised of 2 properties acquired and 3 properties that we have an interest in, but do not operate in 2020, forty-two properties acquired in 2019, one property being operated under a temporary use permit, three Florida Keys properties that require redevelopment as a result of damage sustained from Hurricane Irma in 2017, five recently opened ground-up developments, one property undergoing redevelopment, and other miscellaneous transactions and activity.

(16) Includes MH and annual RV sites, and excludes transient RV sites, as applicable.

(17) As of March 31, 2020, total portfolio MH occupancy was 95.8 percent inclusive of the impact of approximately 1,900 recently constructed but vacant MH expansion sites, and annual RV occupancy was 100.0 percent.

(18) Total sites for development were comprised of approximately 76.3 percent for expansion, 17.6 percent for greenfield development and 6.1 percent for redevelopment.

(19) Recurring capital expenditures are necessary to maintain asset quality, including purchasing and replacing assets used to operate the community. These capital expenditures include items such as: major road, driveway, pool improvements; clubhouse renovations; adding or replacing street lights; playground equipment; signage; maintenance facilities; manager housing and property vehicles. The minimum capitalized amount is five hundred dollars.

(20) Lot modification capital expenditures improve the asset quality of the community. These costs are incurred when an existing older home moves out, and the site is prepared for a new home, more often than not, a multi-sectional home. These activities, which are mandated by strict manufacturer’s installation requirements and state building code, include items such as new foundations, driveways, and utility upgrades.

(21) Capital expenditures related to acquisitions represent the purchase price of existing operating communities and land parcels to develop expansions or new communities. These costs for the three months ended March 31, 2020 include $10.9 million of capital improvements identified during due diligence that are necessary to bring the communities to the Company’s operating standards.  For the years ended December 31, 2019 and 2018, these costs were $50.7 million and $94.6 million, respectively. These include items such as: upgrading clubhouses; landscaping; new street light systems; new mail delivery systems; pool renovation including larger decks, heaters, and furniture; new maintenance facilities; and new signage including main signs and internal road signs. These are considered acquisition costs and although identified during due diligence, often require 24 to 36 months after closing to complete.

(22) Expansion and development expenditures consist primarily of construction costs and costs necessary to complete home site improvements, such as driveways, sidewalks and landscaping.

(23) Capital costs related to revenue generating activities consist primarily of garages, sheds, sub-metering of water, sewer and electricity. Revenue generating attractions at our RV resorts are also included here and, occasionally, a special capital project requested by residents and accompanied by an extra rental increase will be classified as revenue producing.

(24) Net leased sites do not include occupied sites acquired during that year.

        Certain financial information has been revised to reflect reclassifications in prior periods to conform to current period presentation.

Attachment

• Exhibit 99.1 Press Release and Supplemental Package 2020.03.31

Source: Sun Communities, Inc.