News Release Details

Sun Communities, Inc. Reports 2022 First Quarter Results

Apr 25, 2022

Southfield, MI, April 25, 2022 (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") communities, recreational vehicle ("RV") resorts and marinas (collectively, the "properties"), today reported its first quarter results for 2022.

Financial Results for the Quarter ended March 31, 2022

For the quarter ended March 31, 2022, total revenues increased by $106.5 million, or 24.1 percent, to $548.5 million compared to approximately $442.0 million for the same period in 2021. Net income attributable to common shareholders was $0.7 million, or $0.01 per diluted common share, compared to net income attributable to common shareholders of $24.8 million, or $0.23 per diluted common share, for the same period in 2021.

Non-GAAP Financial Measures and Portfolio Performance

  • Core Funds from Operations ("Core FFO")(1) for the quarter ended March 31, 2022, was $1.34 per diluted share and OP unit ("Share") as compared to $1.26 in the corresponding period in 2021, a 6.3 percent increase.

  • Same Property(2) Net Operating Income ("NOI")(1) for the Company's MH and RV properties increased by 7.7 percent for the quarter ended March 31, 2022, as compared to the corresponding period in 2021.

  • Same Property(2) NOI for the Company's marina properties increased by 1.2 percent for the quarter ended March 31, 2022, as compared to the corresponding period in 2021.

  • Acquisitions totaled $1.6 billion during and subsequent to the quarter ended March 31, 2022, including 41 properties in the United Kingdom ("UK") and four marinas in the United States.

"Our strong first quarter performance builds on the momentum of last year as we delivered 6.3 percent growth in Core FFO per Share," said Gary A. Shiffman, Chairman and CEO. "With sustained tailwinds, the demand for attainable housing and outdoor vacationing continues to reach new levels, and with our best-in-class offering, Sun is uniquely positioned to meet these customer needs. We are pleased to have completed the acquisition of Park Holidays and already have a growing pipeline of acquisition opportunities in the UK. Furthermore, we have been active in the capital markets as we amended and upsized our Senior Credit Facility, issued $600 million of senior notes with a favorable rate lock, and settled forward equity sale agreements, all of which enhanced our balance sheet position. Over the years, Sun has delivered consistent and cycle tested organic cash flow growth, and today the number of compelling investment opportunities is more exciting than ever across our MH, RV and marina platforms."

OPERATING HIGHLIGHTS

Portfolio Occupancy

Total MH and annual RV occupancy was 97.5 percent at March 31, 2022 as compared to 97.3 percent at March 31, 2021, an increase of 20 basis points.

During the quarter ended March 31, 2022, the number of MH and annual RV revenue producing sites increased by 670 sites as compared to an increase of 514 sites during the quarter ended March 31, 2021, a 30.4 percent increase.

Same Property(2) Results - MH and RV

For the 425 MH and RV properties owned and operated by the Company since January 1, 2021, the following table reflects the percentage increases, both in total, and by segment, for the quarter ended March 31, 2022:

  Total MH and RV
Same Property
  MH
Same Property
  RV
Same Property
Revenue         9.2         %           4.4         %           20.5         %
Expense         12.7         %           8.7         %           17.6         %
NOI         7.7         %           3.0         %           22.9         %


           

Same Property adjusted occupancy(3) increased to 98.5 percent at March 31, 2022 from 96.9 percent at March 31, 2021, an increase of 160 basis points.

Same Property(2) Results - Marina

For the 101 Marina properties owned and operated by the Company since January 1, 2021, the following table reflects the percentage increases for the quarter ended March 31, 2022:

  Marina
Same Property
Revenue         7.7         %
Expense         15.2         %
NOI         1.2         %

PORTFOLIO ACTIVITY

Acquisitions and Dispositions

During and subsequent to the quarter ended March 31, 2022, the Company acquired the following properties:

Property Name   Property Type   Sites,
Wet Slips and
Dry Storage Spaces
  Development Sites   State / Province or Country   Total
Purchase Price
(in millions)
  Month Acquired
Harrison Yacht Yard(a)   Marina           21                   —           MD   $         5.8           January
Outer Banks   Marina           196                   —           NC             5.0           January
Jarrett Bay Boatworks   Marina           12                   —           NC             51.4           February
Tower Marine   Marina           446                   —           MI             20.0           March
Sandy Bay   MH           616                   570           UK             183.5           March
Subtotal               1,291                   570               $         265.7            
                         
Acquisitions subsequent to quarter end                
Park Holidays(b)   MH           15,906                   1,140           UK   $         1,242.1           April
Christies Parks(c)   MH           249                   —           UK             10.1           April
Bluewater Yacht Sales   Marina           200                   —           Various             25.0           April
Jarrett Bay Bluewater Yacht Sales(a)   Marina           —                   —           Various             17.6           April
Subtotal               16,355                   1,140               $         1,294.8            
                         
Total acquisitions               17,646                   1,710               $         1,560.5            

(a) Combined with an existing marina.

(b) Includes 40 owned properties.

(c) Combined with an existing adjacent MH community.

During and subsequent to the quarter ended March 31, 2022, the Company acquired 45 properties totaling 17,646 sites, wet slips and dry storage spaces and 1,710 sites for expansion for a total purchase price of $1.6 billion.

During the quarter ended March 31, 2022, the Company sold two MH communities and one property containing both MH and RV sites located in Florida for $29.6 million. The gain from the sale of the properties was $13.4 million.
Development Activity

During the quarter ended March 31, 2022, the Company completed the construction of 25 expansion sites in one RV resort.

                             

BALANCE SHEET, CAPITAL MARKETS ACTIVITY AND OTHER ITEMS

Debt

As of March 31, 2022, the Company had approximately $6.1 billion in debt outstanding. The weighted average interest rate was 3.0 percent and the weighted average maturity was 8.1 years. At March 31, 2022, the Company's net debt to trailing twelve month Recurring EBITDA(1) ratio was 5.9 times. The Company had $90.4 million of unrestricted cash on hand.

Senior Credit Facility Amendment

On April 7, 2022, in conjunction with the closing of the Park Holidays acquisition, Sun Communities Operating Limited Partnership (the "Operating Partnership") as borrower, and the Company, as guarantor, and certain lenders entered into Amendment No. 1 to the Fourth Amended and Restated Credit Agreement and Other Loan Documents (the "Credit Facility Amendment"), which amended the Operating Partnership's Senior Credit Facility.

The Credit Facility Amendment increased the aggregate amount of the Operating Partnership's Senior Credit Facility to $4.2 billion with the ability to upsize the total borrowings by an additional $800 million, subject to certain conditions. The increased aggregate amount under the Senior Credit Facility consists of the following: (a) a revolving loan in the amount up to $3.05 billion and (b) a term loan facility of $1.15 billion, with the ability to draw funds from the combined facilities in U.S. dollars, Pounds sterling, Euros, Canadian dollars and Australian dollars, subject to certain limitations. The Credit Facility Amendment extends the maturity date of the revolving loan facility to April 7, 2027, assuming the Operating Partnership's exercise of each of its two six-month extension options, and, further, the Credit Facility Amendment extends the maturity date of the term loan facility to April 7, 2025, which may not be extended.

Prior to the amendment, the Senior Credit Facility permitted aggregate borrowings of up to $2.0 billion, with an accordion feature that allowed for additional commitments of up to $1.0 billion, subject to the satisfaction of certain conditions.

The Senior Credit Facility bears interest at a floating rate based on Adjusted Term SOFR, the Adjusted Eurocurrency Rate, the Daily RFR Rate, the Australian Bank Bill Swap Bid Rate (BBSY), the Daily SONIA Rate or the Canadian Dollar Offered Rate, as applicable, plus, in all cases, a margin which can range from 0.725 percent to 1.6 percent, subject to certain adjustments. As of March 31, 2022, the margin based on the Operating Partnership's credit ratings would have been 0.85 percent on the revolving loan facility and 0.95 percent on the term loan facility.

Senior Unsecured Notes

On April 12, 2022, the Operating Partnership issued $600.0 million of senior unsecured notes with an interest rate of 4.2 percent and a 10-year term, due April 15, 2032 (the "2032 Notes"). The net proceeds from the offering were $592.3 million after deducting underwriters' discounts and estimated offering expenses. The Company used the net proceeds from the offering to repay borrowings outstanding under its Senior Credit Facility.

In connection with the 2032 Notes issuance, the Company settled four 10-year Treasury rate locks totaling $600.0 million and received a settlement payment of $35.3 million. This lowers the effective interest rate on the 2032 Notes from 4.2 percent to 3.6 percent.

Equity Transactions

Forward Share Settlements

In April 2022, the Company settled forward sale agreements with respect to 1,200,000 shares of common stock under its at the market offering sales program sold during the fourth quarter 2021, and 4,025,000 shares of common stock in connection with its November 2021 registered forward equity offering. The aggregate net proceeds from the settlement of these forward sale agreements was $934.9 million. The Company used the net proceeds to repay borrowings outstanding under its Senior Credit Facility.

At the Market Offering

During the quarter ended March 31, 2022, the Company entered into forward sale agreements with respect to 600,503 shares of common stock under its at the market offering program for $107.9 million. These forward sale agreements were not settled as of March 31, 2022, but the Company expects to settle them by the end of the first quarter 2023.

The following table presents the Company's outstanding unsettled forward equity agreements as of April 22, 2022:

Forward Equity
Agreements
  Shares
Sold
  Shares
Settled
  Shares Remaining   Net Proceeds Received
(in millions)
  Anticipated Net Proceeds Remaining
(in millions)
Q3 2021 ATM Forward Agreements           107,400                   —                   107,400           $         —           $         21.4        
Q4 2021 ATM Forward Agreements           1,712,709                   1,200,000                   512,709                     229.5                     100.3        
November 2021 Forward Offering           4,025,000                   4,025,000                   —                     705.4                     —        
Q1 2022 ATM Forward Agreements           600,503                   —                   600,503                     —                     108.4        
Total Forward Equity Agreements           6,445,612                   5,225,000                   1,220,612           $         934.9           $         230.1        

2022 GUIDANCE

The estimates and assumptions presented below represent a range of possible outcomes and may differ materially from actual results. These estimates include contributions from all acquisitions and capital markets activity completed through the date of this release. These estimates exclude prospective acquisitions and capital markets activity. The estimates and assumptions are forward-looking based on the Company's current assessment of economic and market conditions and are subject to the other risks outlined below under the caption Cautionary Statement Regarding Forward-Looking Statements.

The Company is providing revised or initial 2022 guidance for the following metrics:

  Previous Range   Revised Range    
  FY 2022E   FY 2022E   2Q 2022E
Basic earnings per share $2.70 - $2.86   $2.46 - $2.58   $0.86 - $0.90
Core FFO per fully diluted Share(1)(4) $7.07 - $7.23   $7.20 - $7.32   $1.97 - $2.01

Refer to page 8 for the reconciliation of Basic earnings per share to Core FFO per diluted Share(1)(4).

Basic earnings per share and Core FFO per fully diluted Share(1)(4) are calculated independently for each quarter; as a result, the sum of the quarters may differ from the annual calculation.

  1Q22   2Q22   3Q22   4Q22
Seasonality of Core FFO per fully diluted Share(1)(4) 18.5 %   27.4 %   35.2 %   18.9 %

Seasonality of Core FFO per fully diluted Share(1)(4) is based off of the midpoint of full year guidance.

  Previous Range   Revised Range    
  FY 2022E   FY 2022E   2Q 2022E
MH and RV Same Property NOI(1) growth 6.0% - 6.8%   6.5% - 7.3%   3.5% - 4.3%
Marina Same Property NOI(1) growth 6.0% - 7.4%   6.0% - 7.4%   5.7% - 7.3%

Park Holidays Acquisition Assumptions

The acquisition of Park Holidays was on April 8, 2022.

The following table presents updated estimates based on the actual closing date:

    Previous Range   Revised Range
    March - December 2022   April - December 2022
EBITDA(a)   $99.5 - $104.6   $95.3 - $100.4
Income Tax Expense   $20.6 - $21.3   $19.7 - $20.4

(a) Estimated EBITDA contribution is inclusive of general and administrative expenses of $29.1 - $30.5 million in the previous range and $26.1 - $27.5 million in the revised range, respectively.

The following table shows Park Holidays' estimated full year EBITDA seasonality if the transaction had closed on January 1, 2022:

  1Q22   2Q22   3Q22   4Q22
Seasonality of Park Holidays' EBITDA 6.7 %   31.6 %   49.9 %   11.8 %

EARNINGS CONFERENCE CALL

A conference call to discuss first quarter results will be held on Tuesday, April 26, 2022 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 10, 2022 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 13727742. 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, 2022, owned, operated, or had an interest in a portfolio of 603 developed MH, RV and marina properties comprising nearly 159,300 developed sites and over 45,700 wet slips and dry storage spaces in 39 states, Canada, Puerto Rico and the UK.

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

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

This press release contains various "forward-looking statements" within the meaning of the Securities Act of 1933, as amended (the "Securities Act"), and the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and we intend that such forward-looking statements will be subject to the safe harbors created thereby. For this purpose, any statements contained in this filing that relate to expectations, beliefs, projections, future plans and strategies, trends or prospective events or developments and similar expressions concerning matters that are not historical facts are deemed to be forward-looking statements. Words such as "forecasts," "intends," "intend," "intended," "goal," "estimate," "estimates," "expects," "expect," "expected," "project," "projected," "projections," "plans," "predicts," "potential," "seeks," "anticipates," "anticipated," "should," "could," "may," "will," "designed to," "foreseeable future," "believe," "believes," "scheduled," "guidance," "target" and similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain these words. These forward-looking statements reflect our current views with respect to future events and financial performance, but involve known and unknown risks and uncertainties, both general and specific to the matters discussed in this filing. These risks and uncertainties may cause our actual results to be materially different from any future results expressed or implied by such forward-looking statements. In addition to the risks described under "Risk Factors" contained in the Company's Annual Report on Form 10-K for the year ended December 31, 2021 and in the Company's other filings with the Securities and Exchange Commission from time to time, such risks, uncertainties and other factors include but are not limited to:

  • Outbreaks of disease, including the COVID-19 pandemic, and related stay-at-home orders, quarantine policies and restrictions on travel, trade and business operations;
  • Changes in general economic conditions, including, inflation, deflation, and energy costs, the real estate industry and the markets in which the Company operates;
  • Difficulties in the Company's ability to evaluate, finance, complete and integrate acquisitions, developments and expansions successfully;
  • The Company's liquidity and refinancing demands;
  • The Company's ability to obtain or refinance maturing debt;
  • The Company's ability to maintain compliance with covenants contained in its debt facilities and its senior unsecured notes;
  • Availability of capital;
  • Changes in foreign currency exchange rates, including between the U.S. dollar and each of the Canadian dollar, Australian dollar and Pounds sterling;
  • The Company's ability to maintain rental rates and occupancy levels;
  • The Company's ability to maintain effective internal control over financial reporting and disclosure controls and procedures;
  • Increases in interest rates and operating costs, including insurance premiums and real property taxes;
  • Risks related to natural disasters such as hurricanes, earthquakes, floods, droughts and wildfires;
  • General volatility of the capital markets and the market price of shares of our capital stock;
  • The Company's ability to maintain our status as a REIT;
  • Changes in real estate and zoning laws and regulations;
  • Legislative or regulatory changes, including changes to laws governing the taxation of REITs;
  • Litigation, judgments or settlements;
  • Competitive market forces;
  • The ability of purchasers of manufactured homes and boats to obtain financing; and
  • The level of repossessions by manufactured home and boat lenders.

Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date the statement was made. The Company undertakes no obligation to publicly update or revise any forward-looking statements included or incorporated by reference into this filing, whether as a result of new information, future events, changes in the Company's expectations or otherwise, except as required by law.

Although the Company believes that the expectations reflected in the forward-looking statements are reasonable, the Company cannot guarantee future results, levels of activity, performance or achievements. All written and oral forward-looking statements attributable to the Company or persons acting on the Company's behalf are qualified in their entirety by these cautionary statements.

Investor Information

 


RESEARCH COVERAGE            
             
Firm   Analyst   Phone   Email
Bank of America Merrill Lynch   Joshua Dennerlein   (646) 855-1681   joshua.dennerlein@bofa.com
Barclays   Allison Gelman   (212) 526-3367   allison.gelman@barclays.com
    Anthony Powell   (212) 526-8768   anthony.powell@barclays.com
Berenberg Capital Markets   Keegan Carl   (646) 949-9052   keegan.carl@berenberg-us.com
BMO Capital Markets   John Kim   (212) 885-4115   jp.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   Samir Khanal   (212) 888-3796   samir.khanal@evercoreisi.com
    Steve Sakwa   (212) 446-9462   steve.sakwa@evercoreisi.com
Green Street Advisors   John Pawlowski   (949) 640-8780   jpawlowski@greenstreetadvisors.com
JMP Securities   Aaron Hecht   (415) 835-3963   ahecht@jmpsecurities.com
RBC Capital Markets   Brad Heffern   (512) 708-6311   brad.heffern@rbccm.com
Robert W. Baird & Co.   Wesley Golladay   (216) 737-7510   wgolladay@rwbaird.com
UBS   Michael Goldsmith   (212) 713-2951   michael.goldsmith@ubs.com
             
             
INQUIRIES            
             
The Company welcomes questions or comments from shareholders, 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, 2022)

 


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

 


  Quarter Ended
  3/31/2022   12/31/2021   9/30/2021   6/30/2021   3/31/2021  
Financial Information                    
Total revenues $         548.5           $         542.4           $         684.3           $         603.9           $         442.0          
Net income $         1.5           $         14.8           $         250.2           $         120.8           $         28.0          
Net income attributable to Sun Communities Inc. common stockholders $         0.7           $         12.8           $         231.8           $         110.8           $         24.8          
Basic earnings per share* $         0.01           $         0.11           $         2.00           $         0.98           $         0.23          
Diluted earnings per share* $         0.01           $         0.11           $         2.00           $         0.98           $         0.23          
                     
Cash distributions declared per common share* $         0.88           $         0.83           $         0.83           $         0.83           $         0.83          
                     
FFO attributable to Sun Communities, Inc. common stockholders and dilutive convertible securities(1)(4) $         155.3           $         152.3           $         223.1           $         198.0           $         135.9          
FFO attributable to Sun Communities, Inc. common stockholders and dilutive convertible securities(1)(4) per share - fully diluted* $         1.28           $         1.28           $         1.92           $         1.70           $         1.22          
Core FFO attributable to Sun Communities, Inc. common stockholders and dilutive convertible securities(1)(4) $         162.8           $         155.8           $         244.5           $         209.6           $         141.0          
Core FFO attributable to Sun Communities, Inc. common stockholders and dilutive convertible securities(1)(4) per share - fully diluted* $         1.34           $         1.31           $         2.11           $         1.80           $         1.26          
Recurring EBITDA(1) $         221.0           $         208.6           $         314.5           $         268.2           $         190.8          
                     
Balance Sheet                    
Total assets $         13,914.2           $         13,494.1           $         12,583.3           $         12,041.0           $         11,454.2          
Total debt $         6,076.5           $         5,671.8           $         4,689.4           $         4,311.2           $         4,417.9          
Total liabilities $         6,980.7           $         6,474.6           $         5,488.5           $         5,099.6           $         5,101.5          


  Quarter Ended  
  3/31/2022   12/31/2021   9/30/2021   6/30/2021   3/31/2021  
Operating Information*                    
Properties         603             602             584             569             562    
                     
Manufactured home sites         98,895             98,621             98,301             97,448             96,876    
Annual RV sites         31,121             30,540             29,640             28,807             28,441    
Transient RV sites         29,267             29,847             27,922             27,032             26,295    
Total sites         159,283             159,008             155,863             153,287             151,612    
Marina wet slips and dry storage spaces(a)         45,725             45,155             43,615             40,179             39,338    
                     
MH occupancy         96.7         %           96.6         %           96.6         %           96.7         %           96.5         %  
Annual RV occupancy         100.0         %           100.0         %           100.0         %           100.0         %           100.0         %  
Blended MH and annual RV occupancy         97.5         %           97.4         %           97.4         %           97.4         %           97.3         %  
                     
New home sales volume         148             149             207             227             149    
Pre-owned home sales volume         689             784             955             931             686    
Total home sales volume         837             933             1,162             1,158             835    

(a) Total wet slips and dry storage spaces are adjusted each quarter based on site configuration and usability.

  Quarter Ended  
  3/31/2022   12/31/2021   9/30/2021   6/30/2021   3/31/2021  
Revenue Producing Site Net Gains(5)*                    
MH net leased sites         65           321           144                   226           127  
RV net leased sites         605           489           432                   357           387  
Total net leased sites         670           810           576                   583           514  

Consolidated Balance Sheets
(amounts in millions)

 


    March 31, 2022   December 31, 2021
Assets        
Land   $         2,708.0             $         2,556.3          
Land improvements and buildings             10,169.4                       9,958.3          
Rental homes and improvements             583.1                       591.7          
Furniture, fixtures and equipment             684.8                       656.4          
Investment property             14,145.3                       13,762.7          
Accumulated depreciation     (2,441.5 )             (2,337.2 )
Investment property, net             11,703.8                       11,425.5          
Cash, cash equivalents and restricted cash             102.6                       78.2          
Marketable securities             158.3                       186.9          
Inventory of manufactured homes             63.3                       51.1          
Notes and other receivables, net             513.6                       469.6          
Goodwill             512.7                       495.4          
Other intangible assets, net             334.2                       306.8          
Other assets, net             525.7                       480.6          
Total Assets   $         13,914.2             $         13,494.1          
Liabilities        
Secured debt   $         3,366.6             $         3,380.7          
Unsecured debt             2,709.9                       2,291.1          
Distributions payable             104.5                       98.4          
Advanced reservation deposits and rent             335.1                       242.8          
Accrued expenses and accounts payable             228.0                       237.5          
Other liabilities             236.6                       224.1          
Total Liabilities             6,980.7                       6,474.6          
Commitments and contingencies        
Temporary equity             283.9                       288.9          
Shareholders' Equity        
Common stock             1.2                       1.2          
Additional paid-in capital             8,169.4                       8,175.6          
Accumulated other comprehensive income             25.9                       3.1          
Distributions in excess of accumulated earnings             (1,654.6 )             (1,556.0 )
Total Sun Communities, Inc. shareholders' equity             6,541.9                       6,623.9          
Noncontrolling interests        
Common and preferred OP units             86.8                       86.8          
Consolidated entities             20.9                       19.9          
Total noncontrolling interests             107.7                       106.7          
Total Shareholders' Equity             6,649.6                       6,730.6          
Total Liabilities, Temporary Equity and Shareholders' Equity   $         13,914.2             $         13,494.1          

Statements of Operations - Quarter to Date Comparison
(In millions, except for per share amounts) (Unaudited)

 


  Three Months Ended
  March 31, 2022   March 31, 2021   Change   % Change
Revenues              
Real property (excluding transient) $         343.2             $         298.1             $         45.1                     15.1         %
Real property - transient           45.0                       32.5                       12.5                     38.5         %
Home sales           64.7                       52.2                       12.5                     23.9         %
Service, retail, dining and entertainment           80.8                       50.6                       30.2                     59.7         %
Interest           6.8                       2.6                       4.2                     161.5         %
Brokerage commissions and other, net           8.0                       6.0                       2.0                     33.3         %
Total Revenues           548.5                       442.0                       106.5                     24.1         %
Expenses              
Property operating and maintenance           129.3                       103.6                       25.7                     24.8         %
Real estate tax           26.1                       22.4                       3.7                     16.5         %
Home costs and selling           45.9                       41.6                       4.3                     10.3         %
Service, retail, dining and entertainment           70.5                       45.4                       25.1                     55.3         %
General and administrative           55.7                       38.2                       17.5                     45.8         %
Catastrophic event-related charges, net           —                       2.4                       (2.4 )   N/M
Business combinations           0.5                       1.2                       (0.7 )           (58.3)        %
Depreciation and amortization           148.5                       123.9                       24.6                     19.9         %
Loss on extinguishment of debt           0.3                       —                       0.3             N/A
Interest           45.2                       39.5                       5.7                     14.4         %
Interest on mandatorily redeemable preferred OP units / equity           1.0                       1.0                       —                     —         %
Total Expenses           523.0                       419.2                       103.8                     24.8         %
Income Before Other Items           25.5                       22.8                       2.7                     11.8         %
Gain / (loss) on remeasurement of marketable securities           (34.5 )             3.7                       (38.2 )   N/M
Loss on foreign currency translation           (2.2 )             —                       (2.2 )   N/A
Gain on dispositions of properties           13.4                       —                       13.4             N/A
Other expense, net(6)           (0.6 )             (0.5 )             (0.1 )           (20.0)        %
Gain on remeasurement of notes receivable           0.2                       0.4                       (0.2 )           (50.0)        %
Income from nonconsolidated affiliates           0.9                       1.2                       (0.3 )           (25.0)        %
Gain on remeasurement of investment in nonconsolidated affiliates           0.1                       0.1                       —                     —         %
Current tax benefit / (expense)           (1.3 )             0.2                       (1.5 )   N/M
Deferred tax benefit           —                       0.1                       (0.1 )   N/M
Net Income           1.5                       28.0                       (26.5 )           (94.6)        %
Less: Preferred return to preferred OP units / equity interests           3.0                       2.9                       0.1                     3.4         %
Less: Income / (loss) attributable to noncontrolling interests           (2.2 )             0.3                       (2.5 )   N/M
Net Income Attributable to Sun Communities, Inc. $         0.7             $         24.8             $         (24.1 )           (97.2)        %
               
Weighted average common shares outstanding - basic           115.3                       107.9                       7.4                     6.9         %
Weighted average common shares outstanding - diluted           115.9                       108.2                       7.7                     7.1         %
               
Basic earnings per share $         0.01             $         0.23             $         (0.22 )           (95.7)        %
Diluted earnings per share $         0.01             $         0.23             $         (0.22 )           (95.7)        %

N/M = Percentage change is not meaningful.

N/A = Percentage change is not applicable.

Outstanding Securities and Capitalization
(amounts in millions, units / shares outstanding in thousands, except for *)

 


Outstanding Securities - As of March 31, 2022
                   
  Number of Units / Shares Outstanding   Conversion Rate*   If Converted(a)   Issuance Price*
Per Unit
  Annual Distribution Rate
Non-convertible Securities                  
Common shares 116,207   N/A   N/A   N/A   $3.52^
                   
Convertible Securities                  
Common OP units 2,551   1.0000   2,551   N/A   Mirrors common shares distributions
                   
Series A-1 preferred OP units 272   2.4390   664   $ 100   6.00 %
Series A-3 preferred OP units 40   1.8605   75   $ 100   4.50 %
Series C preferred OP units 306   1.1100   340   $ 100   5.00 %
Series D preferred OP units 489   0.8000   391   $ 100   4.00 %
Series E preferred OP units 85   0.6897   59   $ 100   5.50 %
Series F preferred OP units 90   0.6250   56   $ 100   3.00 %
Series G preferred OP units 241   0.6452   155   $ 100   3.20 %
Series H preferred OP units 581   0.6098   355   $ 100   3.00 %
Series I preferred OP units 922   0.6098   562   $ 100   3.00 %
Series J preferred OP units 240   0.6061   145   $ 100   2.85 %

^ Annual distribution is based on the last quarterly distribution annualized.

(a) Calculation may yield minor differences due to fractional shares paid in cash to the stockholder at conversion.

Capitalization - As of March 31, 2022            
             
Equity   Shares   Share Price*   Total
Common shares           116,207           $         175.29           $         20,369.9        
Common OP units           2,551           $         175.29                     447.2        
Subtotal           118,758               $         20,817.1        
             
Preferred OP units, as converted           2,802           $         175.29                     491.2        
Total diluted shares outstanding           121,560               $         21,308.3        
             
Debt            
Secured debt           $         3,366.6        
Unsecured debt                     2,709.9        
Total debt           $         6,076.5        
             
Total Capitalization           $         27,384.8        

Reconciliations to Non-GAAP Financial Measures

Reconciliation of Net Income Attributable to Sun Communities, Inc. Common Shareholders to FFO(1) (amounts in millions, except for per share data)

 


  Three Months Ended
  March 31, 2022   March 31, 2021
Net Income Attributable to Sun Communities, Inc. Common Shareholders $         0.7             $         24.8          
Adjustments      
Depreciation and amortization           148.3                       123.8          
(Gain) / loss on remeasurement of marketable securities           34.5                       (3.7 )
Gain on remeasurement of investment in nonconsolidated affiliates           (0.1 )             (0.1 )
Gain on remeasurement of notes receivable           (0.2 )             (0.4 )
Loss attributable to noncontrolling interests           (2.2 )             (0.1 )
Preferred return to preferred OP units           2.8                       0.5          
Gain on dispositions of properties           (13.4 )             —          
Gain on dispositions of assets, net           (15.1 )             (8.2 )
FFO Attributable to Sun Communities, Inc. Common Shareholders and Dilutive Convertible Securities(1)(4) $         155.3             $         136.6          
       
Adjustments      
Business combination expense and other acquisition related costs(7)           3.1                       1.9          
Loss on extinguishment of debt           0.3                       —          
Catastrophic event-related charges, net           —                       2.4          
Loss of earnings - catastrophic event-related           —                       0.2          
Loss on foreign currency translation           2.2                       —          
Other adjustments, net(8)           1.9                       (0.1 )
Core FFO Attributable to Sun Communities, Inc. Common Shareholders and Dilutive Convertible Securities(1)(4) $         162.8             $         141.0          
       
Weighted average common shares outstanding - basic           115.3                       107.9          
Add      
Common shares dilutive effect from forward equity sale           0.2                       0.2          
Restricted stock           0.4                       0.2          
Common OP units           2.5                       2.6          
Common stock issuable upon conversion of certain preferred OP units           2.8                       0.8          
Weighted Average Common Shares Outstanding - Fully Diluted           121.2                       111.7          
       
FFO Attributable to Sun Communities, Inc. Common Shareholders and Dilutive Convertible Securities(1)(4) Per Share - Fully Diluted $         1.28             $         1.22          
       
Core FFO Attributable to Sun Communities, Inc. Common Shareholders and Dilutive Convertible Securities(1)(4) Per Share - Fully Diluted $         1.34             $         1.26          

Reconciliation of Basic Earnings per Share to Core FFO per Fully Diluted Share(1)(4) for Expected Full Year and Second Quarter 2022

  FY 2022E   Q2 2022E
  Low   High   Low   High
Basic earnings per share $         2.46             $         2.58             $         0.86             $         0.90          
Depreciation and amortization           4.65                       4.65                       1.12                       1.12          
Gain on sale of assets           (0.46 )             (0.46 )             (0.09 )             (0.09 )
NCI and preferred return to preferred OP units           0.09                       0.09                       0.03                       0.03          
Other adjustments*           0.46                       0.46                       0.05                       0.05          
Core FFO per fully diluted Share(1)(4) $         7.20             $         7.32             $         1.97             $         2.01          

* Other adjustments include the categories presented in the reconciliation of Net Income to Core FFO table in the supplemental.

Reconciliation of Net Income Attributable to Sun Communities, Inc. Common Shareholders to NOI(1)
(amounts in millions)

 


  Three Months Ended
  March 31, 2022   March 31, 2021
Net Income Attributable to Sun Communities, Inc. Common Shareholders $         0.7             $         24.8          
Interest income           (6.8 )             (2.6 )
Brokerage commissions and other revenues, net           (8.0 )             (6.0 )
General and administrative expense           55.7                       38.2          
Catastrophic event-related charges, net           —                       2.4          
Business combination expense           0.5                       1.2          
Depreciation and amortization           148.5                       123.9          
Loss on extinguishment of debt           0.3                       —          
Interest expense           45.2                       39.5          
Interest on mandatorily redeemable preferred OP units / equity           1.0                       1.0          
(Gain) / loss on remeasurement of marketable securities           34.5                       (3.7 )
Loss on foreign currency translation           2.2                       —          
Gain on disposition of properties           (13.4 )             —          
Other expense, net(6)           0.6                       0.5          
Gain on remeasurement of notes receivable           (0.2 )             (0.4 )
Income from nonconsolidated affiliates           (0.9 )             (1.2 )
Gain on remeasurement of investment in nonconsolidated affiliates           (0.1 )             (0.1 )
Current tax (benefit) / expense           1.3                       (0.2 )
Deferred tax benefit           —                       (0.1 )
Preferred return to preferred OP units / equity interests           3.0                       2.9          
Less: Income / (loss) attributable to noncontrolling interests           (2.2 )             0.3          
NOI(1) $         261.9             $         220.4          


  Three Months Ended
  March 31, 2022   March 31, 2021
Real Property NOI(1) $         232.8           $         204.6        
Home Sales NOI(1)           18.8                     10.6        
Service, retail, dining and entertainment NOI(1)           10.3                     5.2        
NOI(1) $         261.9           $         220.4        

Reconciliation of Net Income Attributable to Sun Communities, Inc. Common Shareholders to Recurring EBITDA(1)
(amounts in millions)

 


  Three Months Ended
  March 31, 2022   March 31, 2021
Net Income Attributable to Sun Communities, Inc. Common Shareholders $         0.7             $         24.8          
Adjustments      
Depreciation and amortization           148.5                       123.9          
Loss on extinguishment of debt           0.3                       —          
Interest expense           45.2                       39.5          
Interest on mandatorily redeemable preferred OP units / equity           1.0                       1.0          
Current tax (benefit) / expense           1.3                       (0.2 )
Deferred tax benefit           —                       (0.1 )
Income from nonconsolidated affiliates           (0.9 )             (1.2 )
Less: Gain on dispositions of properties           (13.4 )             —          
Less: Gain on dispositions of assets, net           (15.1 )             (8.2 )
EBITDAre(1) $         167.6             $         179.5          
Adjustments      
Catastrophic event-related charges, net           —                       2.4          
Business combination expense           0.5                       1.2          
(Gain) / loss on remeasurement of marketable securities           34.5                       (3.7 )
Loss on foreign currency translation           2.2                       —          
Other expense, net(6)           0.6                       0.5          
Gain on remeasurement of notes receivable           (0.2 )             (0.4 )
Gain on remeasurement of investment in nonconsolidated affiliates           (0.1 )             (0.1 )
Preferred return to preferred OP units / equity interests           3.0                       2.9          
(Income) / loss attributable to noncontrolling interests           (2.2 )             0.3          
Plus: Gain on dispositions of assets, net           15.1                       8.2          
Recurring EBITDA(1) $         221.0             $         190.8          

Non-GAAP and Other Financial Measures

Debt Analysis
(amounts in millions, except for *)

 


  Quarter Ended
  3/31/2022   12/31/2021   9/30/2021   6/30/2021   3/31/2021
Debt Outstanding                  
Secured debt $         3,366.6             $         3,380.7             $         3,403.4             $         3,457.7             $         3,472.9          
Unsecured debt                  
Senior unsecured notes           1,186.7                       1,186.4                       591.3                       591.7                       —          
Line of credit and other debt(9)           1,453.3                       1,034.8                       624.8                       191.9                       875.1          
Preferred Equity - Sun NG Resorts - mandatorily redeemable           35.2                       35.2                       35.2                       35.2                       35.2          
Preferred OP units - mandatorily redeemable           34.7                       34.7                       34.7                       34.7                       34.7          
Total unsecured debt           2,709.9                       2,291.1                       1,286.0                       853.5                       945.0          
Total debt $         6,076.5             $         5,671.8             $         4,689.4             $         4,311.2             $         4,417.9          
                   
% Fixed / Floating*                  
Fixed           76.2         %             81.8         %             86.7         %             94.7         %             79.3         %
Floating           23.8         %             18.2         %             13.3         %             5.3         %             20.7         %
Total           100.0         %             100.0         %             100.0         %             100.0         %             100.0         %
                   
Weighted Average Interest Rates*                  
Secured debt           3.78         %             3.78         %             3.78         %             3.75         %             3.75         %
Senior unsecured notes           2.55         %             2.55         %             2.70         %             2.70         %             —         %
Line of credit and other debt(9)           1.25         %             0.98         %             0.98         %             0.93         %             1.77         %
Preferred Equity - Sun NG Resorts - mandatorily redeemable           6.00         %             6.00         %             6.00         %             6.00         %             6.00         %
Preferred OP units - mandatorily redeemable           5.93         %             5.93         %             5.93         %             5.93         %             5.93         %
Total average           2.96         %             3.04         %             3.30         %             3.52         %             3.39         %
                   
Debt Ratios*                  
Net Debt / Recurring EBITDA(1) (TTM)           5.9                       5.7                       4.9                       5.1                       6.1          
Net Debt / Enterprise Value           21.9         %             18.0         %             17.1         %             16.8         %             19.7         %
Net Debt / Gross Assets           36.6         %             35.4         %             31.2         %             29.6         %             31.8         %
                   
Coverage Ratios*                  
Recurring EBITDA(1) (TTM) / Interest   6.2       6.2       6.1       5.6       5.0  
Recurring EBITDA(1) (TTM) / Interest + Pref. Distributions + Pref. Stock Distribution   6.0       6.0       6.0       5.5       4.8  


Maturities / Principal Amortization Next Five Years   2022       2023       2024       2025       2026  
Secured debt                  
Maturities $         70.7             $         185.6             $         315.3             $         50.5             $         521.6          
Principal amortization           46.0                       60.9                       57.4                       54.0                       45.9          
Line of credit and other debt(9)           6.8                       10.0                       213.0                       1,223.5                       —          
Preferred Equity - Sun NG Resorts - mandatorily redeemable           —                       —                       33.4                       1.8                       —          
Preferred OP units - mandatorily redeemable           —                       —                       27.4                       —                       —          
Total $         123.5             $         256.5             $         646.5             $         1,329.8             $         567.5          
                   
Weighted average rate of maturities*           4.48         %             4.08         %             4.47         %             4.04         %             3.75         %

Same Property(2) Summary - MH / RV
(amounts in millions)

 


                                               
  Three Months Ended
  Total Same Property - MH/RV   MH   RV
  March 31, 2022   March 31, 2021   Change   % Change(a)   March 31, 2022   March 31, 2021   Change   % Change(a)   March 31, 2022   March 31, 2021   Change   % Change(a)
Financial Information                                              
Revenue                                              
Real property (excluding transient) $         233.1           $         218.7           $         14.4                   6.6         %   $         182.4           $         174.9           $         7.5                     4.3         %   $         50.7           $         43.8           $         6.9                     15.5         %
Real property - transient           39.1                     30.3                     8.8                   28.9         %             0.5                     0.6                     (0.1 )           (23.1)        %             38.6                     29.7                     8.9                     30.0         %
Other           7.6                     7.2                     0.4                   5.5         %             4.9                     4.4                     0.5                     11.1         %             2.7                     2.8                     (0.1 )           (3.3)        %
Total Operating           279.8                     256.2                     23.6                   9.2         %             187.8                     179.9                     7.9                     4.4         %             92.0                     76.3                     15.7                     20.5         %
Expense                                              
Property Operating(10)(11)           88.9                     78.9                     10.0                   12.7         %             47.7                     43.9                     3.8                     8.7         %             41.2                     35.0                     6.2                     17.6         %
Real Property NOI(1) $         190.9           $         177.3           $         13.6                   7.7         %   $         140.1           $         136.0           $         4.1                     3.0         %   $         50.8           $         41.3           $         9.5                     22.9         %

(a) Percentages are calculated based on unrounded numbers.

                                               


  As of        
  March 31, 2022   March 31, 2021   Change   % Change
Other Information              
Number of properties           425                       425                       —              
               
MH occupancy           97.3         %            
RV occupancy           100.0         %            
MH & RV blended occupancy(3)           97.9         %            
               
Adjusted MH occupancy(3)           98.1         %            
Adjusted RV occupancy(3)           100.0         %            
Adjusted MH & RV blended occupancy(3)           98.5         %             96.9         %             1.6         %    
               
Sites available for development           7,645                       8,243                       (598         )    
               
Monthly base rent per site - MH $         620             $         597             $         23             3.8%(14)
Monthly base rent per site - RV(13) $         553             $         522             $         31             6.0%(14)
Monthly base rent per site - Total(13) $         604             $         580             $         24             4.2%(14)

Same Property(2) Summary - Marina
(amounts in millions)

 


  Three Months Ended
Financial Information March 31, 2022   March 31, 2021   Change   % Change(a)
Revenue              
Real property (excluding transient) $         45.8           $         43.3           $         2.5                   5.6         %
Real property - transient           1.4                     0.9                     0.5                   58.7         %
Other           2.3                     1.7                     0.6                   34.3         %
Total Operating           49.5                     45.9                     3.6                   7.7         %
Expense              
Property Operating(12)           24.4                     21.1                     3.3                   15.2         %
Real Property NOI $         25.1           $         24.8           $         0.3                   1.2         %

(a) Percentages are calculated based on unrounded numbers.

               


  As of        
  March 31, 2022   March 31, 2021   Change   % Change
Other Information              
Number of properties         101                   101                   —                   —         %

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

 


   
  Three Months Ended
  March 31, 2022
Financial Information  
Revenues  
Real property (excluding transient) $         27.8  
Real property - transient           4.5  
Other           2.0  
Total Operating           34.3  
Expenses  
Property Operating(a)           17.6  
Real Property NOI $         16.7  
   
Other Information March 31, 2022
Number of properties           77          
Occupied sites           5,245          
Developed sites           5,898          
Occupancy %           88.9         %
Transient sites           7,518          
Wet slip and dry storage spaces           10,002          

(a) Acquisitions and Other results net $20.4 million of certain utility revenue against the related utility expense in property operating and maintenance expense for the quarter ended March 31, 2022.

Home Sales Summary
(amounts in millions, except for *)

 


               
  Three Months Ended
  March 31, 2022   March 31, 2021   Change   % Change
Financial Information              
New Homes              
New home sales $         26.6             $         23.0             $         3.6                     15.7         %
New home cost of sales           21.6                       18.7                       2.9                     15.5         %
Gross profit – new homes           5.0                       4.3                       0.7                     16.3         %
Gross margin % – new homes           18.8         %             18.7         %             0.1         %    
Average selling price – new homes* $         179,730             $         154,174             $         25,556                     16.6         %
               
Pre-owned Homes              
Pre-owned home sales $         38.1             $         29.2             $         8.9                     30.5         %
Pre-owned home cost of sales           19.8                       18.6                       1.2                     6.5         %
Gross profit – pre-owned homes           18.3                       10.6                       7.7                     72.6         %
Gross margin % – pre-owned homes           48.0         %             36.4         %             11.6         %    
Average selling price – pre-owned homes* $         55,298             $         42,605             $         12,693                     29.8         %
               
Total Home Sales              
Revenue from home sales $         64.7             $         52.2             $         12.5                     23.9         %
Cost of home sales           41.4                       37.3                       4.1                     11.0         %
Home selling expenses           4.5                       4.3                       0.2                     4.7         %
Home Sales NOI(1) $         18.8             $         10.6             $         8.2                     77.4         %
               
Other Information              
New home sales volume*           148                       149                       (1         )           (0.7)        %
Pre-owned home sales volume*           689                       686                       3                     0.4         %
Total home sales volume*           837                       835                       2                     0.2         %

Rental Program Summary
(amounts in millions, except for *)

 


               
  Three Months Ended
  March 31, 2022   March 31, 2021   Change   % Change
Financial Information              
Revenues              
Home rent $         16.1           $         17.0           $         (0.9 )           (5.3)        %
Site rent           16.1                     19.1                     (3.0 )           (15.7)        %
Total           32.2                     36.1                     (3.9 )           (10.8)        %
               
Expenses              
Rental Program operating and maintenance           4.9                     5.2                     (0.3 )           (5.8)        %
Rental Program NOI(1) $         27.3           $         30.9           $         (3.6 )           (11.7)        %
               
Other Information              
Number of sold rental homes*           177                     211                     (34 )           (16.1)        %
Number of occupied rentals, end of period*           9,467                     11,473                     (2,006 )           (17.5)        %
Investment in occupied rental homes, end of period $         541.9           $         621.9           $         (80.0 )           (12.9)        %
Weighted average monthly rental rate, end of period* $         1,139           $         1,055           $         84                     8.0         %

Rental Program NOI is included in Real Property NOI. Rental Program NOI is separately reviewed to assess the overall growth and performance of the Rental Program and its financial impact on the Company's operations.

Marina Summary
(amounts in millions, except for statistical data)

 


                 
    Three Months Ended
    March 31, 2022   March 31, 2021   Change   % Change
Financial Information                
Revenues                
Real property (excluding transient)   $         67.0           $         46.1           $         20.9                   45.3         %
Real property - transient             2.5                     0.9                     1.6                   177.8         %
Other             2.9                     1.6                     1.3                   81.3         %
Total Operating             72.4                     48.6                     23.8                   49.0         %
Expenses                
Property Operating             33.2                     23.6                     9.6                   40.7         %
Real Property NOI             39.2                     25.0                     14.2                   56.8         %
Service, retail, dining and entertainment                
Revenue             71.2                     44.4                     26.8                   60.4         %
Expense             59.8                     38.0                     21.8                   57.4         %
NOI             11.4                     6.4                     5.0                   78.1         %
                 
Marina NOI   $         50.6           $         31.4           $         19.2                   61.1         %
                 
Statistical information                
Number of properties             128             110             18           16.4         %
Total wet slips and dry storage spaces             45,725             39,338             6,387           16.2         %

The Marina Real Property NOI is included in Real Property NOI. The Marina NOI is separately reviewed to assess the overall growth and performance of the Marina and its financial impact on the Company's operations.

We have reclassified utility revenue of $4.3 million and $2.6 million for the three months ended March 31, 2022 and 2021, to reflect the utility expenses associated with our marina properties portfolio net of recovery.

MH and RV Property Summary(16)                
                     
                     
    3/31/2022   12/31/2021   9/30/2021   6/30/2021   3/31/2021
FLORIDA                    
Properties           129                     132                     131                     129                     128          
MH & Annual RV Developed sites           40,774                     40,783                     40,500                     40,171                     40,011          
Occupied MH & Annual RV           40,046                     40,019                     39,747                     39,402                     39,283          
MH & Annual RV Occupancy %           98.2         %           98.1         %           98.1         %           98.1         %           98.2         %
Transient RV sites           5,648                     5,950                     6,163                     5,895                     5,823          
Sites for development           1,243                     1,268                     1,414                     1,414                     1,497          
MICHIGAN                    
Properties           84                     84                     83                     75                     74          
MH & Annual RV Developed sites           32,318                     32,257                     31,997                     29,600                     29,092          
Occupied MH & Annual RV           31,132                     31,061                     30,782                     28,671                     28,145          
MH & Annual RV Occupancy %           96.3         %           96.3         %           96.2         %           96.9         %           96.7         %
Transient RV sites           806                     869                     554                     509                     541          
Sites for development           1,422                     1,422                     1,481                     1,182                     1,182          
CALIFORNIA                    
Properties           36                     36                     37                     36                     36          
MH & Annual RV Developed sites           6,759                     6,787                     6,760                     6,736                     6,734          
Occupied MH & Annual RV           6,691                     6,672                     6,642                     6,613                     6,609          
MH & Annual RV Occupancy %           99.0         %           98.3         %           98.3         %           98.2         %           98.1         %
Transient RV sites           2,174                     2,147                     2,410                     2,416                     2,418          
Sites for development           694                     534                     534                     127                     127          
TEXAS                     
Properties           30                     30                     26                     25                     24          
MH & Annual RV Developed sites           8,257                     8,192                     8,004                     7,947                     7,928          
Occupied MH & Annual RV           8,071                     8,006                     7,805                     7,731                     7,671          
MH & Annual RV Occupancy %           97.7         %           97.7         %           97.5         %           97.3         %           96.8         %
Transient RV sites           2,475                     2,576                     2,131                     1,835                     1,773          
Sites for development           1,184                     1,184                     1,066                     1,194                     1,275          
ONTARIO, CANADA                    
Properties           16                     16                     16                     16                     16          
MH & Annual RV Developed sites           4,410                     4,363                     4,361                     4,302                     4,199          
Occupied MH & Annual RV           4,410                     4,363                     4,361                     4,302                     4,199          
MH & Annual RV Occupancy %           100.0         %           100.0         %           100.0         %           100.0         %           100.0         %
Transient RV sites           827                     874                     807                     870                     964          
Sites for development           1,429                     1,429                     1,525                     1,525                     1,525          
CONNECTICUT                    
Properties           16                     16                     16                     16                     16          
MH & Annual RV Developed sites           1,896                     1,902                     1,901                     1,901                     1,897          
Occupied MH & Annual RV           1,756                     1,765                     1,760                     1,757                     1,746          
MH & Annual RV Occupancy %           92.6         %           92.8         %           92.6         %           92.4         %           92.0         %
Transient RV sites           109                     103                     104                     104                     108          
Sites for development           —                     —                     —                     —                     —          
MAINE                    
Properties           15                     15                     13                     13                     13          
MH & Annual RV Developed sites           2,449                     2,424                     2,220                     2,204                     2,190          
Occupied MH & Annual RV           2,365                     2,339                     2,136                     2,127                     2,119          
MH & Annual RV Occupancy %           96.6         %           96.5         %           96.2         %           96.5         %           96.8         %
Transient RV sites           981                     1,007                     776                     792                     805          
Sites for development           180                     180                     30                     30                     30          
                     
                     
ARIZONA                    
Properties           12                     12                     12                     14                     14          
MH & Annual RV Developed sites           4,184                     4,123                     4,071                     4,401                     4,391          
Occupied MH & Annual RV           3,994                     3,917                     3,853                     4,116                     4,101          
MH & Annual RV Occupancy %           95.5         %           95.0         %           94.6         %           93.5         %           93.4         %
Transient RV sites           1,124                     1,185                     1,237                     1,260                     1,270          
Sites for development           —                     —                     —                     —                     —          
INDIANA                    
Properties           12                     12                     12                     12                     12          
MH & Annual RV Developed sites           3,184                     3,174                     3,057                     3,087                     3,087          
Occupied MH & Annual RV           3,049                     3,047                     2,963                     2,970                     2,961          
MH & Annual RV Occupancy %           95.8         %           96.0         %           96.9         %           96.2         %           95.9         %
Transient RV sites           992                     1,002                     1,089                     1,089                     1,089          
Sites for development           177                     177                     204                     277                     277          
NEW JERSEY                    
Properties           11                     11                     9                     8                     8          
MH & Annual RV Developed sites           2,599                     2,554                     2,551                     2,396                     2,366          
Occupied MH & Annual RV           2,599                     2,554                     2,551                     2,396                     2,366          
MH & Annual RV Occupancy %           100.0         %           100.0         %           100.0         %           100.0         %           100.0         %
Transient RV sites           1,395                     1,436                     899                     762                     794          
Sites for development           262                     262                     262                     262                     262          
COLORADO                    
Properties           10                     10                     10                     10                     10          
MH & Annual RV Developed sites           2,552                     2,552                     2,552                     2,453                     2,453          
Occupied MH & Annual RV           2,450                     2,442                     2,431                     2,420                     2,395          
MH & Annual RV Occupancy %           96.0         %           95.7         %           95.3         %           98.7         %           97.6         %
Transient RV sites           987                     987                     987                     987                     962          
Sites for development           1,744                     1,744                     1,629                     1,225                     1,250          
NEW HAMPSHIRE                    
Properties           10                     10                     10                     10                     10          
MH & Annual RV Developed sites           1,743                     1,748                     1,777                     1,777                     1,776          
Occupied MH & Annual RV           1,736                     1,740                     1,769                     1,769                     1,769          
MH & Annual RV Occupancy %           99.6         %           99.5         %           99.5         %           99.5         %           99.6         %
Transient RV sites           655                     650                     602                     602                     456          
Sites for development           111                     111                     111                     151                     151          
NEW YORK                    
Properties           10                     10                     10                     10                     10          
MH & Annual RV Developed sites           1,495                     1,482                     1,457                     1,457                     1,452          
Occupied MH & Annual RV           1,466                     1,455                     1,432                     1,428                     1,415          
MH & Annual RV Occupancy %           98.1         %           98.2         %           98.3         %           98.0         %           97.5         %
Transient RV sites           1,646                     1,659                     1,684                     1,684                     1,689          
Sites for development           371                     371                     371                     371                     371          
VIRGINIA                    
Properties           10                     10                     9                     9                     8          
MH & Annual RV Developed sites           1,259                     1,253                     1,238                     1,198                     1,179          
Occupied MH & Annual RV           1,255                     1,251                     1,237                     1,194                     1,177          
MH & Annual RV Occupancy %           99.7         %           99.8         %           99.9         %           99.7         %           99.8         %
Transient RV sites           2,181                     2,182                     1,956                     1,996                     1,365          
Sites for development           367                     367                     162                     162                     162          
OHIO                     
Properties           9                     9                     9                     9                     9          
MH & Annual RV Developed sites           2,796                     2,796                     2,796                     2,797                     2,797          
Occupied MH & Annual RV           2,755                     2,759                     2,753                     2,770                     2,760          
MH & Annual RV Occupancy %           98.5         %           98.7         %           98.5         %           99.0         %           98.7         %
Transient RV sites           129                     129                     129                     128                     128          
Sites for development           22                     22                     22                     22                     22          
OTHER STATES / COUNTRY                    
Properties           65                     64                     61                     63                     64          
MH & Annual RV Developed sites           13,341                     12,771                     12,699                     13,828                     13,765          
Occupied MH & Annual RV           12,996                     12,443                     12,390                     13,344                     13,253          
MH & Annual RV Occupancy %           97.4         %           97.4         %           97.6         %           96.5         %           96.3         %
Transient RV sites           7,138                     7,091                     6,394                     6,103                     6,110          
Sites for development           2,171                     1,601                     1,501                     1,501                     1,545          
                     
TOTAL - MH AND RV PORTFOLIO                    
Properties           475                     477                     464                     455                     452          
MH & Annual RV Developed sites           130,016                     129,161                     127,941                     126,255                     125,317          
Occupied MH & Annual RV           126,771                     125,833                     124,612                     123,010                     121,969          
MH & Annual RV Occupancy %           97.5         % (17)         97.4         %           97.4         %           97.4         %           97.3         %
Transient RV sites           29,267                     29,847                     27,922                     27,032                     26,295          
Sites for development(18)           11,377                     10,672                     10,312                     9,443                     9,676          
MH Communities age restricted           120                     121                     121                     120                     120          


Marina Property Summary(a)                    
                     
                     
    3/31/2022   12/31/2021   9/30/2021   6/30/2021   3/31/2021
FLORIDA                    
Properties           20                   20                   19                   18                   16        
Total wet slips and dry storage spaces           5,235                   5,233                   4,825                   4,528                   4,274        
RHODE ISLAND                    
Properties           12                   12                   12                   11                   11        
Total wet slips and dry storage spaces           3,465                   3,485                   3,485                   3,302                   3,302        
CONNECTICUT                    
Properties           11                   11                   11                   11                   11        
Total wet slips and dry storage spaces           3,307                   3,299                   3,299                   3,299                   3,299        
CALIFORNIA                    
Properties           9                   9                   8                   7                   5        
Total wet slips and dry storage spaces           4,118                   3,940                   3,527                   2,884                   2,297        
MARYLAND                    
Properties           9                   9                   8                   8                   8        
Total wet slips and dry storage spaces           2,665                   2,645                   2,409                   2,409                   2,409        
MASSACHUSETTS                    
Properties           9                   9                   9                   9                   9        
Total wet slips and dry storage spaces           2,518                   2,546                   2,546                   2,546                   2,546        
NEW YORK                    
Properties           8                   8                   8                   8                   8        
Total wet slips and dry storage spaces           2,822                   2,783                   2,783                   2,783                   2,783        
OTHER STATES                    
Properties           50                   47                   45                   42                   42        
Total wet slips and dry storage spaces           21,595                   21,224                   20,741                   18,428                   18,428        
TOTAL - MARINA PORTFOLIO                    
Properties           128                   125                   120                   114                   110        
Total wet slips and dry storage spaces           45,725                   45,155                   43,615                   40,179                   39,338        

(a) Total wet slips and dry storage spaces are adjusted each quarter based on site configuration and usability.

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

 


    Three Months Ended   Year Ended
    March 31, 2022   December 31, 2021   December 31, 2020
Financial information   MH / RV   Marina   MH / RV   Marina   MH / RV   Marina
Acquisitions(19)(a)   $         214.2           $         127.0           $         944.3           $         852.9           $         571.9           $         2,533.7        
Expansion and Development(20)             45.1                     2.3                     191.8                     9.9                     248.2                     —        
Recurring Capital Expenditures(21)             11.5                     4.3                     45.3                     19.3                     31.4                     2.1        
Lot Modifications(22)             6.4           N/A             28.8           N/A             29.4           N/A
Growth Projects(23)             7.2                     15.5                     25.6                     51.4                     28.3                     —        
Rebranding(24)             3.7           N/A             6.1           N/A   N/A   N/A
Total   $         288.1           $         149.1           $         1,241.9           $         933.5           $         909.2           $         2,535.8        
                         
Other Information                        
Recurring Capital Expenditures Average / Site*   $         90           $         109           $         371           $         491           $         265           N/A

(a)  Acquisitions include intangibles and goodwill included in purchase price.

Operating Statistics for MH and Annual RVs

 


Locations   Resident Move-outs   Net Leased Sites(5)   New Home Sales   Pre-owned Home Sales   Brokered
Re-sales
Florida           264                   343                     49                   75                   451        
Michigan           156                   71                     13                   385                   60        
Ontario, Canada           213                   47                     7                   2                   59        
Texas           96                   65                     14                   79                   30        
Arizona           20                   77                     18                   4                   53        
Indiana           12                   2                     —                   56                   5        
Ohio           20                   (4 )           —                   28                   2        
California           25                   19                     7                   1                   34        
Colorado           1                   8                     9                   7                   12        
Connecticut           16                   (9 )           6                   —                   6        
New York           41                   11                     3                   2                   2        
New Hampshire           —                   (4 )           —                   1                   11        
Maine           41                   26                     2                   4                   4        
New Jersey           89                   45                     —                   —                   4        
Virginia           86                   4                     —                   3                   1        
Other states           285                   (31 )           20                   42                   34        
Three Months Ended March 31, 2022           1,365                   670                     148                   689                   768        


Total For Year Ended   Resident Move-outs   Net Leased Sites(5)   New Home Sales   Pre-owned Home Sales   Brokered
Re-sales
2021           5,276                   2,483                   732                   3,356                   3,528        
2020           5,365                   2,505                   570                   2,296                   2,557        


Percentage Trends   Resident Move-outs   Resident
Re-sales
2022 TTM           2.8         %           7.5         %
2021           2.7         %           8.4         %
2020           3.3         %           6.9         %

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, real estate related impairments, and after adjustments for nonconsolidated 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. Furthermore, 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 nonconsolidated affiliates caused by a decrease in value of depreciated property in the affiliate, and adjustments to reflect the entity's share of EBITDAre of nonconsolidated 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 Property results for our MH and RV properties reflect constant currency for comparative purposes. Canadian currency figures in the prior comparative period have been translated at 2022 average exchange rates.

(3)   The Same Property MH and RV blended occupancy for 2022 is derived from 124,118 developed sites, of which 121,526 were occupied. The Same Property adjusted MH and RV blended occupancy percentage is derived from 123,346 developed sites, of which 121,526 were occupied. The number of developed sites excludes RV transient sites and nearly 1,100 recently completed but vacant MH expansion sites.

The Same Property adjusted MH and RV blended occupancy percentage for 2021 has been adjusted to reflect incremental period-over-period growth from newly rented expansion sites and the conversion of transient RV sites to annual RV sites.

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

(5)   Revenue producing site net gains do not include occupied sites acquired during that year.

(6)   Other expenses, net was as follows (in millions):

  Three Months Ended
  March 31, 2022   March 31, 2021
Contingent consideration expense $         —             $         (0.1 )
Repair reserve on repossessed homes           (0.6 )             (0.4 )
Other expenses, net $         (0.6 )   $         (0.5 )

(7)   Business combination expense and other acquisition related costs represent (a) 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, and (b) nonrecurring integration expenses associated with new acquisitions during the three months ended March 31, 2022 and 2021, and (c) dead deal costs related to acquisitions and (d) costs associated with the termination of the bridge loan commitment during the three months ended March 31, 2022 related to the acquisition of Park Holidays.

(8)   Other adjustments, net was as follows (in millions):

  Three Months Ended
  March 31, 2022   March 31, 2021
Contingent consideration expense $         —           $         0.1          
Deferred tax benefit           —                     (0.2 )
RV rebranding non-recurring cost           1.9                     —          
Other adjustments, net $         1.9           $         (0.1 )

(9)   Line of credit and other debt includes borrowings under the Company's $2.0 billion Senior Credit Facility and a $28.4 million unsecured term loan which had been secured prior to July 1, 2021.

Line of credit and other debt previously included borrowings under the Company's $2.0 billion credit facility, the debt under the Company's $12.0 million MH floor plan facility which was terminated in October 2021, and the unsecured term loan which had been secured prior to July 1, 2021.

(10)   Same Property results for our MH and RV properties net $19.6 million and $17.3 million of certain utility revenue against the related utility expense in property operating and maintenance expense for the three months ended March 31, 2022 and 2021, respectively.

(11)   Same Property supplies and repair expense for our MH and RV properties excludes $0.4 million for the three months ended March 31, 2021, 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.

(12)   Same Property results for our marina properties net $2.5 million and $2.6 million of utility revenue against the related utility expense in property operating and maintenance expense for the three months ended March 31, 2022 and 2021, respectively.

(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 recent acquisitions, recently opened ground-up development projects in stabilization and properties undergoing redevelopment.

(16)   MH and annual RV developed sites, Occupied MH and annual RV, and MH and annual RV occupancy percentage includes MH and annual RV sites, and excludes transient RV sites, as applicable.

(17)   As of March 31, 2022, total portfolio MH occupancy was 96.7 percent inclusive of the impact of over 1,000 recently constructed but vacant MH expansion sites, and annual RV occupancy was 100.0 percent.

(18)   Total sites for development were comprised of approximately 72.8 percent for expansion, 22.4 percent for greenfield development and 4.8 percent for redevelopment.

(19)   Capital expenditures related to acquisitions represent the purchase price of existing operating properties (including marinas) and land parcels to develop expansions or new properties. Expenditures consist of capital improvements identified during due diligence that are necessary to bring the communities, resorts and marinas to the Company's operating standards. These costs for the three months ended March 31, 2022 include $20.0 million at our MH and RV properties and $42.6 million at our marina properties. For the years ended December 31, 2021 and 2020, these costs were $75.8 million at our MH and RV properties and $100.7 million at our marina properties, and $40.6 million at our MH and RV properties, 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; lot modifications; 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.

(20)   Expansion and development expenditures consist primarily of construction costs such as roads, activities, and amenities, and costs necessary to complete home and RV site improvements, such as driveways, sidewalks and landscaping at our MH communities and RV resorts. Expenditures also include costs to rebuild after damage has been incurred at MH, RV or marina properties, and research and development.

(21)   Property recurring capital expenditures are necessary to maintain asset quality, including purchasing and replacing assets used to operate the communities, resorts and marinas. Recurring capital expenditures at our MH and RV properties 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. Recurring capital expenditures at our marinas include items such as: dredging, dock repairs and improvements, and equipment maintenance and upgrades. The minimum capitalized amount is five hundred dollars.

(22)   Lot modification capital expenditures are incurred to modify the foundational structures required to set a new home after a previous home has been removed. These expenditures are necessary to create a revenue stream from a new site renter and often improve the quality of the community. Other lot modification expenditures include land improvements added to annual RV sites to aid in the conversion of transient RV guests to annual contracts.

(23)   Growth projects consist of revenue generating or expense reducing activities at MH communities, RV resorts and marinas. This includes, but is not limited to, utility efficiency and renewable energy projects, site, slip or amenity upgrades such as the addition of a garage, shed or boat lift, and other special capital projects that substantiate an incremental rental increase.

(24)   Rebranding includes new signage at our RV resorts and costs of building an RV mobile application and updated website.

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

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Source: Sun Communities, Inc.