Maryland
|
38-2730780
|
|
(State of Incorporation)
|
(I.R.S. Employer Identification No.)
|
|
27777 Franklin Rd.
|
||
Suite 200
|
||
Southfield, Michigan
|
48034
|
|
(Address of Principal Executive Offices)
|
(Zip Code)
|
(248) 208-2500
|
Large accelerated filer [ ]
|
Accelerated filer [ X ]
|
Non-accelerated filer [ ]
|
Smaller reporting company [ ]
|
Pages
|
||
PART I – FINANCIAL INFORMATION
|
||
Item 1.
|
Financial Statements (Unaudited):
|
|
Consolidated Balance Sheets ─ June 30, 2011 and December 31, 2010
|
3
|
|
Consolidated Statements of Operations ─ Periods Ended June 30, 2011 and 2010
|
4
|
|
Consolidated Statements of Comprehensive (Loss) Income ─ Periods Ended June 30, 2011 and 2010
|
5
|
|
Consolidated Statement of Stockholders’ Deficit ─ Six Months Ended June 30, 2011
|
5
|
|
Consolidated Statements of Cash Flows ─ Six Months Ended June 30, 2011 and 2010
|
6
|
|
Notes to Consolidated Financial Statements
|
7
|
|
Item 2.
|
Management’s Discussion and Analysis of Financial Condition and Results of Operations
|
22
|
Item 3.
|
Quantitative and Qualitative Disclosures about Market Risk
|
38
|
Item 4.
|
Controls and Procedures
|
38
|
PART II – OTHER INFORMATION
|
||
Item 1.
|
Legal Proceedings
|
39
|
Item 1A.
|
Risk Factors
|
39
|
Item 2.
|
Unregistered Sales of Equity Securities and Use of Proceeds
|
39
|
Item 6.
|
Exhibits
|
40
|
Signatures
|
42
|
(Unaudited)
|
||||||||
June 30, 2011
|
December 31, 2010
|
|||||||
ASSETS
|
||||||||
Investment property, net
|
$
|
1,167,485
|
$
|
1,032,326
|
||||
Cash and cash equivalents
|
4,007
|
8,420
|
||||||
Inventory of manufactured homes
|
4,389
|
2,309
|
||||||
Notes and other receivables
|
102,382
|
88,807
|
||||||
Other assets
|
44,532
|
30,829
|
||||||
TOTAL ASSETS
|
$
|
1,322,795
|
$
|
1,162,691
|
||||
LIABILITIES
|
||||||||
Debt
|
$
|
1,254,584
|
$
|
1,163,612
|
||||
Lines of credit
|
88,325
|
94,527
|
||||||
Other liabilities
|
45,334
|
36,936
|
||||||
TOTAL LIABILITIES
|
$
|
1,388,243
|
$
|
1,295,075
|
||||
Commitments and contingencies
|
||||||||
STOCKHOLDERS’ DEFICIT
|
||||||||
Preferred stock, $0.01 par value, 10,000 shares authorized, none issued
|
$
|
-
|
$
|
-
|
||||
Common stock, $0.01 par value, 90,000 shares authorized (June 30, 2011 and December 31, 2010, 23,304 and 21,716 shares issued respectively)
|
233
|
217
|
||||||
Additional paid-in capital
|
543,657
|
495,331
|
||||||
Accumulated other comprehensive loss
|
(1,842
|
)
|
(2,226
|
)
|
||||
Distributions in excess of accumulated earnings
|
(574,417
|
)
|
(549,625
|
)
|
||||
Treasury stock, at cost (June 30, 2011 and December 31, 2010, 1,802 shares)
|
(63,600
|
)
|
(63,600
|
)
|
||||
Total Sun Communities, Inc. stockholders' deficit
|
(95,969
|
)
|
(119,903
|
)
|
||||
Noncontrolling interests
|
||||||||
Preferred OP units
|
45,548
|
-
|
||||||
Common OP units
|
(15,027
|
)
|
(12,481
|
)
|
||||
TOTAL STOCKHOLDERS’ DEFICIT
|
(65,448
|
)
|
(132,384
|
)
|
||||
TOTAL LIABILITIES AND STOCKHOLDERS’ DEFICIT
|
$
|
1,322,795
|
$
|
1,162,691
|
Three Months Ended
June 30,
|
Six Months Ended
June 30,
|
|||||||||||||||
2011
|
2010
|
2011
|
2010
|
|||||||||||||
REVENUES
|
||||||||||||||||
Income from real property
|
$
|
52,264
|
$
|
49,948
|
$
|
106,100
|
$
|
101,955
|
||||||||
Revenue from home sales
|
8,146
|
9,598
|
16,381
|
17,635
|
||||||||||||
Rental home revenue
|
5,427
|
5,052
|
10,757
|
10,131
|
||||||||||||
Ancillary revenues, net
|
109
|
108
|
403
|
334
|
||||||||||||
Interest
|
2,291
|
1,973
|
4,359
|
3,769
|
||||||||||||
Other income (loss), net
|
25
|
62
|
(24
|
)
|
452
|
|||||||||||
Total revenues
|
68,262
|
66,741
|
137,976
|
134,276
|
||||||||||||
COSTS AND EXPENSES
|
||||||||||||||||
Property operating and maintenance
|
13,994
|
13,105
|
27,452
|
26,145
|
||||||||||||
Real estate taxes
|
4,098
|
4,183
|
8,213
|
8,363
|
||||||||||||
Cost of home sales
|
6,401
|
7,233
|
12,892
|
13,477
|
||||||||||||
Rental home operating and maintenance
|
3,754
|
3,594
|
7,427
|
7,217
|
||||||||||||
General and administrative - real property
|
4,833
|
5,627
|
9,311
|
9,117
|
||||||||||||
General and administrative - home sales and rentals
|
1,952
|
1,853
|
3,925
|
3,786
|
||||||||||||
Acquisition related costs
|
1,151
|
-
|
1,400
|
-
|
||||||||||||
Depreciation and amortization
|
18,121
|
16,832
|
34,800
|
33,523
|
||||||||||||
Interest
|
15,225
|
15,455
|
30,631
|
30,560
|
||||||||||||
Interest on mandatorily redeemable debt
|
829
|
819
|
1,655
|
1,636
|
||||||||||||
Total expenses
|
70,358
|
68,701
|
137,706
|
133,824
|
||||||||||||
(Loss) income before income taxes and equity income (loss) from affiliates
|
(2,096
|
)
|
(1,960
|
)
|
270
|
452
|
||||||||||
Benefit (provision) for state income taxes
|
259
|
(129
|
)
|
128
|
(261
|
)
|
||||||||||
Equity income (loss) from affiliates
|
850
|
(758
|
)
|
1,200
|
(1,577
|
)
|
||||||||||
Net (loss) income
|
(987
|
)
|
(2,847
|
)
|
1,598
|
(1,386
|
)
|
|||||||||
Less: Preferred return to preferred OP units
|
51
|
-
|
51
|
-
|
||||||||||||
Less: Amounts attributable to common noncontrolling interest
|
(148
|
)
|
(398
|
)
|
37
|
(274
|
)
|
|||||||||
Net (loss) income attributable to Sun Communities, Inc. common stockholders
|
$
|
(890
|
)
|
$
|
(2,449
|
)
|
$
|
1,510
|
$
|
(1,112
|
)
|
|||||
Weighted average common shares outstanding:
|
||||||||||||||||
Basic
|
21,090
|
19,031
|
21,068
|
18,848
|
||||||||||||
Diluted
|
21,090
|
19,031
|
23,155
|
18,848
|
||||||||||||
(Loss) earnings per share:
|
||||||||||||||||
Basic
|
$
|
(0.04
|
)
|
$
|
(0.13
|
)
|
$
|
0.07
|
$
|
(0.06
|
)
|
|||||
Diluted
|
$
|
(0.04
|
)
|
$
|
(0.13
|
)
|
$
|
0.07
|
$
|
(0.06
|
)
|
|||||
Cash dividends per common share
|
$
|
0.63
|
$
|
0.63
|
$
|
1.26
|
$
|
1.26
|
Three Months Ended
June 30,
|
Six Months Ended
June 30,
|
|||||||||||||||
2011
|
2010
|
2011
|
2010
|
|||||||||||||
Net (loss) income
|
$
|
(987
|
)
|
$
|
(2,847
|
)
|
$
|
1,598
|
$
|
(1,386
|
)
|
|||||
Unrealized gain (loss) on interest rate swaps
|
19
|
(325
|
)
|
422
|
(757
|
)
|
||||||||||
Total comprehensive (loss) income
|
(968
|
)
|
(3,172
|
)
|
2,020
|
(2,143
|
)
|
|||||||||
Less: Comprehensive (loss) income attributable to the noncontrolling interest
|
(147
|
)
|
(431
|
)
|
75
|
(351
|
)
|
|||||||||
Comprehensive (loss) income attributable to Sun Communities, Inc. common stockholders
|
$
|
(821
|
)
|
$
|
(2,741
|
)
|
$
|
1,945
|
$
|
(1,792
|
)
|
Common Stock
|
Additional Paid-in Capital
|
Accumulated Other Comprehensive Loss
|
Distributions in Excess of Accumulated Earnings
|
Treasury Stock
|
Total Sun Communities Stockholders' Deficit
|
Non-controlling Interest
|
Total Stockholders' Deficit
|
|||||||||||||||||||||||||
Balance as of December 31, 2010
|
$
|
217
|
$
|
495,331
|
$
|
(2,226
|
)
|
$
|
(549,625
|
)
|
$
|
(63,600
|
)
|
$
|
(119,903
|
)
|
$
|
(12,481
|
)
|
$
|
(132,384
|
)
|
||||||||||
Issuance of common stock from exercise of options, net
|
-
|
690
|
-
|
-
|
-
|
690
|
-
|
690
|
||||||||||||||||||||||||
Issuance and associated costs of common stock, net
|
16
|
47,081
|
-
|
-
|
-
|
47,097
|
-
|
47,097
|
||||||||||||||||||||||||
Issuance of preferred OP units
|
-
|
-
|
-
|
-
|
-
|
-
|
45,548
|
45,548
|
||||||||||||||||||||||||
Stock-based compensation - amortization and forfeitures
|
-
|
555
|
-
|
35
|
-
|
590
|
-
|
590
|
||||||||||||||||||||||||
Net income
|
-
|
-
|
-
|
1,561
|
-
|
1,561
|
37
|
1,598
|
||||||||||||||||||||||||
Unrealized gain on interest rate swaps and cap
|
-
|
-
|
384
|
-
|
-
|
384
|
38
|
422
|
||||||||||||||||||||||||
Cash distributions
|
-
|
-
|
-
|
(26,388
|
)
|
-
|
(26,388
|
)
|
(2,621
|
)
|
(29,009
|
)
|
||||||||||||||||||||
Balance as of June 30, 2011
|
$
|
233
|
$
|
543,657
|
$
|
(1,842
|
)
|
$
|
(574,417
|
)
|
$
|
(63,600
|
)
|
$
|
(95,969
|
)
|
$
|
30,521
|
$
|
(65,448
|
)
|
Six Months Ended June 30,
|
||||||||
2011
|
2010
|
|||||||
OPERATING ACTIVITIES:
|
||||||||
Net income (loss)
|
$
|
1,598
|
$
|
(1,386
|
)
|
|||
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
|
||||||||
Gain on disposal of assets and depreciated homes, net
|
(1,518
|
)
|
(1,654
|
)
|
||||
(Gain) loss on valuation of derivative instruments
|
(5
|
)
|
13
|
|||||
Stock compensation expense
|
634
|
1,301
|
||||||
Depreciation and amortization
|
35,736
|
34,187
|
||||||
Amortization of deferred financing costs
|
936
|
849
|
||||||
Equity loss from affiliates, net
|
-
|
1,577
|
||||||
Change in notes receivable from financed sales of inventory homes, net of repayments
|
(2,581
|
)
|
(2,599
|
)
|
||||
Change in inventory, other assets and other receivables, net
|
(7,859
|
)
|
(418
|
)
|
||||
Change in accounts payable and other liabilities
|
3,712
|
(418
|
)
|
|||||
NET CASH PROVIDED BY OPERATING ACTIVITIES
|
30,653
|
31,452
|
||||||
INVESTING ACTIVITIES:
|
||||||||
Investment in properties
|
(39,507
|
)
|
(20,652
|
)
|
||||
Acquisitions
|
(50,858
|
)
|
-
|
|||||
Proceeds related to disposition of assets and depreciated homes, net
|
677
|
195
|
||||||
Reduction of notes receivable and officer's notes, net
|
723
|
2,631
|
||||||
NET CASH USED FOR INVESTING ACTIVITIES
|
(88,965
|
)
|
(17,826
|
)
|
||||
FINANCING ACTIVITIES:
|
||||||||
Issuance and associated costs of common stock, OP units, and preferred OP units, net
|
47,097
|
13,795
|
||||||
Net proceeds from stock option exercise
|
690
|
-
|
||||||
Distributions to stockholders, OP unit holders, and preferred OP unit holders
|
(29,009
|
)
|
(26,519
|
)
|
||||
Borrowings on lines of credit
|
101,400
|
70,759
|
||||||
Payments on lines of credit
|
(107,602
|
)
|
(79,643
|
)
|
||||
Proceeds from issuance of other debt
|
172,483
|
17,104
|
||||||
Payments on other debt
|
(129,221
|
)
|
(7,832
|
)
|
||||
Payments for deferred financing costs
|
(1,939
|
)
|
(168
|
)
|
||||
NET CASH PROVIDED (USED) FOR FINANCING ACTIVITIES
|
53,899
|
(12,504
|
)
|
|||||
Net (decrease) increase in cash and cash equivalents
|
(4,413
|
)
|
1,122
|
|||||
Cash and cash equivalents, beginning of period
|
8,420
|
4,496
|
||||||
Cash and cash equivalents, end of period
|
$
|
4,007
|
$
|
5,618
|
||||
SUPPLEMENTAL INFORMATION:
|
||||||||
Cash paid for interest
|
$
|
25,441
|
$
|
26,534
|
||||
Cash paid for interest on mandatorily redeemable debt
|
$
|
1,657
|
$
|
1,636
|
||||
Cash paid for state income taxes
|
$
|
359
|
$
|
401
|
||||
Noncash investing and financing activities:
|
||||||||
Unrealized gain (loss) on interest rate swaps
|
$
|
422
|
$
|
(757
|
)
|
|||
Reduction in secured borrowing balance
|
$
|
4,739
|
$
|
2,978
|
||||
Acquisitions - preferred OP units issued
|
$
|
45,548
|
$
|
-
|
||||
Acquisitions - debt assumed
|
$
|
52,449
|
$
|
-
|
||||
Acquisitions - other noncash consideration
|
$
|
1,833
|
$
|
-
|
|
2.
|
Real Estate Acquisitions
|
At Acquisition Date
|
||||
Investment in property
|
$
|
137,559
|
||
Inventory of manufactured homes
|
1,150
|
|||
Notes
|
3,542
|
|||
In-place leases
|
9,107
|
|||
Other assets
|
1,116
|
|||
Other liabilities
|
(1,786
|
)
|
||
Assumed debt
|
(52,449
|
)
|
||
Total identifiable assets and liabilities assumed
|
$
|
98,239
|
||
Consideration
|
||||
Cash
|
29,761
|
|||
POP units
|
45,548
|
|||
New debt proceeds
|
22,930
|
|||
Fair value of total consideration transferred
|
$
|
98,239
|
Six Months Ended
|
||||||||
June 30,
|
||||||||
2011
|
2010
|
|||||||
Total revenues
|
$
|
150,255
|
$
|
146,758
|
||||
Net income attributable to Sun Communities, Inc. shareholders
|
$
|
3,112
|
$
|
432
|
||||
Net income per share attributable to Sun Communities, Inc. shareholders - basic
|
0.15
|
0.02
|
||||||
Net income per share attributable to Sun Communities, Inc. shareholders - diluted
|
0.13
|
0.02
|
Revenue
|
Earnings
|
|||||||
Actual from acquisition date to June 30, 2011
|
$
|
519
|
$
|
266
|
|
3.
|
Investment Property
|
June 30, 2011
|
December 31, 2010
|
|||||||
Land
|
$
|
124,073
|
$
|
116,837
|
||||
Land improvements and buildings
|
1,324,544
|
1,190,761
|
||||||
Rental homes and improvements
|
226,035
|
209,824
|
||||||
Furniture, fixtures, and equipment
|
36,971
|
36,716
|
||||||
Land held for future development
|
26,746
|
26,406
|
||||||
Investment property
|
1,738,369
|
1,580,544
|
||||||
Accumulated depreciation
|
(570,884
|
)
|
(548,218
|
)
|
||||
Investment property, net
|
$
|
1,167,485
|
$
|
1,032,326
|
|
4.
|
Transfers of Financial Assets
|
Number of Payments
|
Repurchase %
|
|||
Less than or equal to 15
|
100
|
%
|
||
Greater than 15 but less than 64
|
90
|
%
|
||
Greater than 64 but less than 120
|
65
|
%
|
||
120 or more
|
50
|
%
|
Beginning balance as of December 31, 2010
|
$
|
71,278
|
||
Financed sales of manufactured homes
|
10,927
|
|||
Principal payments and payoffs from our customers
|
(1,937
|
)
|
||
Repurchases
|
(2,802
|
)
|
||
Total activity
|
6,188
|
|||
Ending balance as of June 30, 2011
|
$
|
77,466
|
|
5.
|
Notes and Other Receivables
|
June 30, 2011
|
December 31, 2010
|
|||||||
Installment notes receivable on manufactured homes, net
|
$
|
14,011
|
$
|
9,420
|
||||
Collateralized receivables, net (see Note 4)
|
77,107
|
71,020
|
||||||
Other receivables, net
|
11,264
|
8,367
|
||||||
Total notes and other receivables
|
$
|
102,382
|
$
|
88,807
|
|
5.
|
Notes and Other Receivables, continued
|
Beginning balance as of December 31, 2010
|
$
|
9,466
|
||
Financed sales of manufactured homes
|
1,997
|
|||
Acquired notes (see Note 2)
|
3,542
|
|||
Principal payments and payoffs from our customers
|
(581
|
)
|
||
Repurchases
|
(316
|
)
|
||
Total activity
|
4,642
|
|||
Ending balance as of June 30, 2011
|
$
|
14,108
|
|
6.
|
Investment in Affiliates
|
|
6.
|
Investment in Affiliates, continued
|
Three Months Ended
|
Six Months Ended
|
|||||||||||||||
June 30,
|
June 30,
|
|||||||||||||||
2011
|
2010
|
2011
|
2010
|
|||||||||||||
Revenues
|
$
|
17,109
|
$
|
18,488
|
$
|
34,838
|
$
|
38,151
|
||||||||
Expenses
|
(20,866
|
)
|
(22,562
|
)
|
(41,954
|
)
|
(47,431
|
)
|
||||||||
Net loss
|
$
|
(3,757
|
)
|
$
|
(4,074
|
)
|
$
|
(7,116
|
)
|
$
|
(9,280
|
)
|
|
7.
|
Debt and Lines of Credit
|
Principal
Outstanding
|
Weighted Average
Years to Maturity
|
Weighted Average
Interest Rates
|
||||||||||||||||||||||
June 30,
2011
|
December 31, 2010
|
June 30,
2011
|
December 31, 2010
|
June 30,
2011
|
December 31, 2010
|
|||||||||||||||||||
Collateralized term loans - CMBS
|
$
|
470,063
|
$
|
463,286
|
5.4
|
3.6
|
5.3
|
%
|
5.1
|
%
|
||||||||||||||
Collateralized term loans - FNMA
|
366,881
|
369,147
|
11.8
|
3.4
|
3.7
|
%
|
4.1
|
%
|
||||||||||||||||
Preferred OP Units
|
48,322
|
48,322
|
9.7
|
10.2
|
6.9
|
%
|
6.9
|
%
|
||||||||||||||||
Secured borrowing (see Note 4)
|
77,466
|
71,278
|
13.2
|
13.4
|
11.3
|
%
|
11.3
|
%
|
||||||||||||||||
Mortgage notes, other
|
291,852
|
211,579
|
4.9
|
4.6
|
5.0
|
%
|
4.8
|
%
|
||||||||||||||||
Total debt
|
$
|
1,254,584
|
$
|
1,163,612
|
7.7
|
4.6
|
5.0
|
%
|
5.3
|
%
|
|
7.
|
Debt and Lines of Credit, continued
|
Total Due
|
Jul 2011 - Dec 2011
|
2012
|
2013
|
2014
|
2015
|
After 5 years
|
||||||||||||||||||||||
Lines of credit
|
$
|
88,325
|
$
|
71,400
|
$
|
7,925
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
9,000
|
||||||||||||||
Mortgage loans payable:
|
||||||||||||||||||||||||||||
Maturities
|
991,605
|
-
|
16,757
|
33,770
|
185,771
|
21,153
|
734,154
|
|||||||||||||||||||||
Principal amortization
|
137,191
|
7,964
|
16,543
|
17,043
|
15,196
|
13,314
|
67,131
|
|||||||||||||||||||||
Preferred OP Units
|
48,322
|
370
|
4,300
|
3,645
|
4,225
|
-
|
35,782
|
|||||||||||||||||||||
Secured borrowing
|
77,466
|
1,534
|
3,322
|
3,638
|
3,984
|
4,413
|
60,575
|
|||||||||||||||||||||
Total
|
$
|
1,342,909
|
$
|
81,268
|
$
|
48,847
|
$
|
58,096
|
$
|
209,176
|
$
|
38,880
|
$
|
906,642
|
|
9.
|
Other Income (Loss)
|
Three Months Ended
|
Six Months Ended
|
|||||||||||||||
June 30,
|
June 30,
|
|||||||||||||||
2011
|
2010
|
2011
|
2010
|
|||||||||||||
Brokerage commissions
|
$
|
146
|
$
|
135
|
$
|
294
|
$
|
274
|
||||||||
Other (loss) income, net
|
(121
|
)
|
(73
|
)
|
(318
|
)
|
178
|
|||||||||
Total other income (loss), net
|
$
|
25
|
$
|
62
|
$
|
(24
|
)
|
$
|
452
|
Three Months Ended June 30, 2011
|
Three Months Ended June 30, 2010
|
|||||||||||||||||||||||
Real Property Operations
|
Home Sales and Home Rentals
|
Consolidated
|
Real Property Operations
|
Home Sales and Home Rentals
|
Consolidated
|
|||||||||||||||||||
Revenues
|
$ | 52,264 | $ | 13,573 | $ | 65,837 | $ | 49,948 | $ | 14,650 | $ | 64,598 | ||||||||||||
Operating expenses/Cost of sales
|
18,092 | 10,155 | 28,247 | 17,288 | 10,827 | 28,115 | ||||||||||||||||||
Net operating income/Gross profit
|
34,172 | 3,418 | 37,590 | 32,660 | 3,823 | 36,483 | ||||||||||||||||||
Adjustments to arrive at net income (loss):
|
||||||||||||||||||||||||
Other revenues
|
2,316 | 109 | 2,425 | 2,035 | 108 | 2,143 | ||||||||||||||||||
General and administrative
|
(4,833 | ) | (1,952 | ) | (6,785 | ) | (5,627 | ) | (1,853 | ) | (7,480 | ) | ||||||||||||
Acquisition related costs
|
(1,151 | ) | - | (1,151 | ) | - | - | - | ||||||||||||||||
Depreciation and amortization
|
(12,462 | ) | (5,659 | ) | (18,121 | ) | (11,543 | ) | (5,289 | ) | (16,832 | ) | ||||||||||||
Interest expense
|
(15,781 | ) | (273 | ) | (16,054 | ) | (16,122 | ) | (152 | ) | (16,274 | ) | ||||||||||||
Equity income (loss) from affiliates, net
|
850 | - | 850 | (808 | ) | 50 | (758 | ) | ||||||||||||||||
Benefit (provision) for state income tax
|
259 | - | 259 | (129 | ) | - | (129 | ) | ||||||||||||||||
Net income (loss)
|
3,370 | (4,357 | ) | (987 | ) | 466 | (3,313 | ) | (2,847 | ) | ||||||||||||||
Less: Preferred return to preferred OP units
|
51 | - | 51 | - | - | - | ||||||||||||||||||
Less: Net income (loss) attributable to noncontrolling interest
|
243 | (391 | ) | (148 | ) | (67 | ) | (331 | ) | (398 | ) | |||||||||||||
Net income (loss) attributable to Sun Communities, Inc.
|
$ | 3,076 | $ | (3,966 | ) | $ | (890 | ) | $ | 533 | $ | (2,982 | ) | $ | (2,449 | ) |
Six Months Ended June 30, 2011
|
Six Months Ended June 30, 2010
|
|||||||||||||||||||||||
Real Property Operations
|
Home Sales and Home Rentals
|
Consolidated
|
Real Property Operations
|
Home Sales and Home Rentals
|
Consolidated
|
|||||||||||||||||||
Revenues
|
$ | 106,100 | $ | 27,138 | $ | 133,238 | $ | 101,955 | $ | 27,766 | $ | 129,721 | ||||||||||||
Operating expenses/Cost of sales
|
35,665 | 20,319 | 55,984 | 34,508 | 20,694 | 55,202 | ||||||||||||||||||
Net operating income/Gross profit
|
70,435 | 6,819 | 77,254 | 67,447 | 7,072 | 74,519 | ||||||||||||||||||
Adjustments to arrive at net income (loss):
|
||||||||||||||||||||||||
Other revenues
|
4,335 | 403 | 4,738 | 4,221 | 334 | 4,555 | ||||||||||||||||||
General and administrative
|
(9,311 | ) | (3,925 | ) | (13,236 | ) | (9,117 | ) | (3,786 | ) | (12,903 | ) | ||||||||||||
Acquisition related costs
|
(1,400 | ) | - | (1,400 | ) | - | - | - | ||||||||||||||||
Depreciation and amortization
|
(23,583 | ) | (11,217 | ) | (34,800 | ) | (22,930 | ) | (10,593 | ) | (33,523 | ) | ||||||||||||
Interest expense
|
(31,803 | ) | (483 | ) | (32,286 | ) | (31,960 | ) | (236 | ) | (32,196 | ) | ||||||||||||
Equity income (loss) from affiliates, net
|
1,200 | - | 1,200 | (1,627 | ) | 50 | (1,577 | ) | ||||||||||||||||
Benefit (provision) for state income tax
|
128 | - | 128 | (261 | ) | - | (261 | ) | ||||||||||||||||
Net income (loss)
|
10,001 | (8,403 | ) | 1,598 | 5,773 | (7,159 | ) | (1,386 | ) | |||||||||||||||
Less: Preferred return to preferred OP units
|
51 | - | 51 | - | - | - | ||||||||||||||||||
Less: Net income (loss) attributable to noncontrolling interest
|
798 | (761 | ) | 37 | 452 | (726 | ) | (274 | ) | |||||||||||||||
Net income (loss) attributable to Sun Communities, Inc.
|
$ | 9,152 | $ | (7,642 | ) | $ | 1,510 | $ | 5,321 | $ | (6,433 | ) | $ | (1,112 | ) |
June 30, 2011
|
December 31, 2010
|
|||||||||||||||||||||||
Real Property Operations
|
Home Sales and Home Rentals
|
Consolidated
|
Real Property Operations
|
Home Sales and Home Rentals
|
Consolidated
|
|||||||||||||||||||
Identifiable assets:
|
||||||||||||||||||||||||
Investment property, net
|
$
|
1,013,549
|
$
|
153,936
|
1,167,485
|
$
|
890,867
|
$
|
141,459
|
$
|
1,032,326
|
|||||||||||||
Cash and cash equivalents
|
4,099
|
(92
|
)
|
4,007
|
8,385
|
35
|
8,420
|
|||||||||||||||||
Inventory of manufactured homes
|
-
|
4,389
|
4,389
|
-
|
2,309
|
2,309
|
||||||||||||||||||
Notes and other receivables
|
97,717
|
4,665
|
102,382
|
84,932
|
3,875
|
88,807
|
||||||||||||||||||
Other assets
|
41,797
|
2,735
|
44,532
|
28,408
|
2,421
|
30,829
|
||||||||||||||||||
Total assets
|
$
|
1,157,162
|
$
|
165,633
|
$
|
1,322,795
|
$
|
1,012,592
|
$
|
150,099
|
$
|
1,162,691
|
|
11.
|
Derivative Instruments and Hedging Activities
|
Type
|
Purpose
|
Effective Date
|
Maturity Date
|
Notional
(in millions)
|
Based on
|
Variable Rate
|
Fixed Rate
|
Spread
|
Effective Fixed Rate
|
|||||||||
Swap
|
Floating to Fixed Rate
|
09/04/02
|
07/03/12
|
25.0
|
3 Month LIBOR
|
0.3030%
|
4.7000%
|
0.9000%
|
5.6000%
|
|||||||||
Swap
|
Floating to Fixed Rate
|
01/02/09
|
01/02/14
|
20.0
|
3 Month LIBOR
|
0.3030%
|
2.1450%
|
0.9000%
|
3.0450%
|
|||||||||
Cap
|
Cap Floating Rate
|
04/28/09
|
05/01/12
|
152.4
|
3 Month LIBOR
|
0.2458%
|
11.0000%
|
0.0000%
|
N/A
|
|
11.
|
Derivative Instruments and Hedging Activities, continued
|
Asset Derivatives
|
Liability Derivatives
|
|||||||||||||||||
Balance Sheet Location
|
Fair Value
|
Balance Sheet Location
|
Fair Value
|
|||||||||||||||
Derivatives designated as hedging instruments
|
June 30, 2011
|
December 31, 2010
|
June 30, 2011
|
December 31, 2010
|
||||||||||||||
Interest rate swaps and cap agreement
|
Other assets
|
$
|
-
|
$
|
-
|
Other liabilities
|
$
|
1,738
|
$
|
2,166
|
||||||||
Total derivatives designated as hedging instruments
|
$
|
-
|
$
|
-
|
$
|
1,738
|
$
|
2,166
|
Derivatives in
cash flow hedging
|
Amount of Gain or (Loss) Recognized in OCI (Effective Portion)
|
Location of Gain or (Loss) Reclassified from Accumulated OCI into Income (Effective Portion)
|
Amount of Gain or (Loss) Reclassified from Accumulated OCI into Income (Effective Portion)
|
Location of Gain or (Loss) Recognized in Income on Derivative (Ineffective Portion and Amount Excluded from Effectiveness Testing)
|
Amount of Gain or (Loss) Recognized in Income on Derivative (Ineffective Portion and Amount Excluded from Effectiveness Testing)
|
|||||||||||||||||||||
Three Months Ended June 30,
|
Three Months Ended June 30,
|
Three Months Ended June 30,
|
||||||||||||||||||||||||
2011
|
2010
|
2011
|
2010
|
2011
|
2010
|
|||||||||||||||||||||
Interest rate swaps and cap agreement
|
$
|
19
|
$
|
(325
|
)
|
Interest expense
|
$
|
-
|
$
|
-
|
Interest expense
|
$
|
1
|
$
|
(7
|
)
|
||||||||||
Total
|
$
|
19
|
$
|
(325
|
)
|
Total
|
$
|
-
|
$
|
-
|
Total
|
$
|
1
|
$
|
(7
|
)
|
|
11.
|
Derivative Instruments and Hedging Activities, continued
|
Derivatives in
cash flow hedging
|
Amount of Gain or (Loss) Recognized in OCI
(Effective Portion)
|
Location of Gain or (Loss) Reclassified from Accumulated OCI into Income (Effective Portion)
|
Amount of Gain or (Loss) Reclassified from Accumulated OCI into Income (Effective Portion)
|
Location of Gain or (Loss) Recognized in Income on Derivative (Ineffective Portion and Amount Excluded from Effectiveness Testing)
|
Amount of Gain or (Loss) Recognized in Income on Derivative (Ineffective Portion and Amount Excluded from Effectiveness Testing)
|
|||||||||||||||||||||
Six Months Ended June 30,
|
Six Months Ended June 30,
|
Six Months Ended June 30,
|
||||||||||||||||||||||||
2011
|
2010
|
2011
|
2010
|
2011
|
2010
|
|||||||||||||||||||||
Interest rate swaps and cap agreement
|
$
|
422
|
$
|
(757
|
)
|
Interest expense
|
$
|
-
|
$
|
-
|
Interest expense
|
$
|
5
|
$
|
(13
|
)
|
||||||||||
Total
|
$
|
422
|
$
|
(757
|
)
|
Total
|
$
|
-
|
$
|
-
|
Total
|
$
|
5
|
$
|
(13
|
)
|
|
12.
|
Income Taxes
|
|
12.
|
Income Taxes, continued
|
|
13.
|
(Loss) Earnings Per Share
|
Three Months Ended
|
Six Months Ended
|
|||||||||||||||
June 30,
|
June 30,
|
|||||||||||||||
Numerator
|
2011
|
2010
|
2011
|
2010
|
||||||||||||
Basic (loss) earnings: net (loss) income attributable to common stockholders
|
$
|
(890
|
)
|
$
|
(2,449
|
)
|
$
|
1,510
|
$
|
(1,112
|
)
|
|||||
Add: preferred return to preferred OP units
|
-
|
-
|
51
|
-
|
||||||||||||
Add: amounts attributable to common noncontrolling interest
|
-
|
-
|
37
|
-
|
||||||||||||
Diluted (loss) earnings: net (loss) income available to common stockholders and unitholders
|
$
|
(890
|
)
|
$
|
(2,449
|
)
|
$
|
1,598
|
$
|
(1,112
|
)
|
|||||
Denominator
|
||||||||||||||||
Weighted average common shares outstanding
|
238
|
18,469
|
20,875
|
18,848
|
||||||||||||
Weighted average unvested restricted stock outstanding
|
-
|
-
|
193
|
-
|
||||||||||||
Basic weighted average common shares and unvested restricted stock outstanding
|
238
|
18,469
|
21,068
|
18,848
|
||||||||||||
Add: dilutive securities
|
-
|
-
|
2,087
|
-
|
||||||||||||
Diluted weighted average common shares and securities
|
238
|
18,469
|
23,155
|
18,848
|
||||||||||||
(Loss) earnings per share available to common stockholders:
|
||||||||||||||||
Basic
|
$
|
(0.04
|
)
|
$
|
(0.13
|
)
|
$
|
0.07
|
$
|
(0.06
|
)
|
|||||
Diluted
|
$
|
(0.04
|
)
|
$
|
(0.13
|
)
|
$
|
0.07
|
$
|
(0.06
|
)
|
June 30,
|
||||||||
2011
|
2010
|
|||||||
Stock options
|
78
|
150
|
||||||
Unvested restricted stock
|
-
|
146
|
||||||
Common OP units
|
-
|
2,111
|
||||||
Preferred OP units
|
49
|
-
|
||||||
Convertible preferred OP units
|
526
|
526
|
||||||
Total securities
|
653
|
2,933
|
|
14.
|
Fair Value of Financial Instruments
|
June 30, 2011
|
December 31, 2010
|
|||||||||||||||
Financial assets
|
Carrying Value
|
Fair Value
|
Carrying Value
|
Fair Value
|
||||||||||||
Derivative instruments
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
-
|
||||||||
Installment notes on manufactured homes, net
|
14,011
|
14,011
|
9,420
|
9,420
|
||||||||||||
Collateralized receivables, net
|
77,107
|
77,107
|
71,020
|
71,020
|
||||||||||||
Financial liabilities
|
||||||||||||||||
Derivative instruments
|
$
|
1,738
|
$
|
1,738
|
$
|
2,166
|
$
|
2,166
|
||||||||
Long term debt (excluding secured borrowing)
|
1,177,118
|
1,169,658
|
1,092,335
|
1,098,519
|
||||||||||||
Secured borrowing
|
77,466
|
77,466
|
71,278
|
71,278
|
||||||||||||
Lines of credit
|
88,325
|
88,325
|
94,527
|
94,527
|
|
14.
|
Fair Value of Financial Instruments, continued
|
Assets
|
Total Fair Value
|
Level 1
|
Level 2
|
Level 3
|
||||||||||||
Derivative instruments
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
-
|
||||||||
Total assets
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
-
|
||||||||
Liabilities
|
||||||||||||||||
Derivative instruments
|
$
|
1,738
|
$
|
-
|
$
|
1,738
|
$
|
-
|
||||||||
Total liabilities
|
$
|
1,738
|
$
|
-
|
$
|
1,738
|
$
|
-
|
|
15.
|
Recent Accounting Pronouncements
|
|
16.
|
Commitments and Contingencies
|
|
16.
|
Commitments and Contingencies, continued
|
Three Months Ended
|
||||||||||||||||
June 30,
|
||||||||||||||||
Financial Information (in thousands)
|
2011
|
2010
|
Change
|
% Change
|
||||||||||||
Income from Real Property
|
$
|
52,264
|
$
|
49,948
|
$
|
2,316
|
4.6
|
%
|
||||||||
Property operating expenses:
|
||||||||||||||||
Payroll and benefits
|
4,126
|
3,933
|
193
|
4.9
|
%
|
|||||||||||
Legal, taxes, & insurance
|
850
|
767
|
83
|
10.8
|
%
|
|||||||||||
Utilities
|
5,811
|
5,436
|
375
|
6.9
|
%
|
|||||||||||
Supplies and repair
|
2,293
|
2,303
|
(10
|
)
|
-0.4
|
%
|
||||||||||
Other
|
914
|
666
|
248
|
37.2
|
%
|
|||||||||||
Real estate taxes
|
4,098
|
4,183
|
(85
|
)
|
-2.0
|
%
|
||||||||||
Property operating expenses
|
18,092
|
17,288
|
804
|
4.7
|
%
|
|||||||||||
Real Property NOI
|
$
|
34,172
|
$
|
32,660
|
$
|
1,512
|
4.6
|
%
|
As of June 30,
|
||||||||||||
Other Information
|
2011
|
2010
|
Change
|
|||||||||
Number of properties
|
155
|
136
|
19
|
|||||||||
Developed sites
|
53,611
|
47,564
|
6,047
|
|||||||||
Occupied sites (1)
|
43,336
|
38,369
|
4,967
|
|||||||||
Occupancy % (1)
|
85.0
|
%
|
84.3
|
%
|
0.7
|
%
|
||||||
Weighted average monthly rent per site (2)
|
$
|
420
|
$
|
409
|
$
|
11
|
||||||
Sites available for development
|
6,237
|
6,072
|
165
|
(1)
|
Occupied sites and occupancy % include manufactured housing and permanent recreational vehicle sites, and exclude seasonal recreational vehicle sites.
|
(2)
|
Average rent relates only to manufactured housing sites, and excludes permanent and seasonal recreational vehicle sites as well as Kentland and Orange City.
|
Three Months Ended
|
||||||||||||||||
June 30,
|
||||||||||||||||
Financial Information (in thousands)
|
2011
|
2010
|
Change
|
% Change
|
||||||||||||
Income from Real Property
|
$
|
48,799
|
$
|
47,227
|
$
|
1,572
|
3.3
|
%
|
||||||||
Property operating expenses:
|
||||||||||||||||
Payroll and benefits
|
4,100
|
3,933
|
167
|
4.2
|
%
|
|||||||||||
Legal, taxes, & insurance
|
841
|
767
|
74
|
9.6
|
%
|
|||||||||||
Utilities
|
2,784
|
2,693
|
91
|
3.4
|
%
|
|||||||||||
Supplies and repair
|
2,283
|
2,303
|
(20
|
)
|
-0.9
|
%
|
||||||||||
Other
|
923
|
688
|
235
|
34.2
|
%
|
|||||||||||
Real estate taxes
|
4,039
|
4,183
|
(144
|
)
|
-3.4
|
%
|
||||||||||
Property operating expenses
|
14,970
|
14,567
|
403
|
2.8
|
%
|
|||||||||||
Real Property NOI
|
$
|
33,829
|
$
|
32,660
|
$
|
1,169
|
3.6
|
%
|
As of June 30,
|
||||||||||||
Other Information
|
2011
|
2010
|
Change
|
|||||||||
Number of properties
|
136
|
136
|
-
|
|||||||||
Developed sites
|
47,677
|
47,564
|
113
|
|||||||||
Occupied sites (1)
|
38,928
|
38,369
|
559
|
|||||||||
Occupancy % (1)
|
85.3
|
%
|
84.3
|
%
|
1.0
|
%
|
||||||
Weighted average monthly rent per site (2)
|
$
|
420
|
$
|
409
|
$
|
11
|
||||||
Sites available for development
|
5,439
|
5,574
|
(135
|
)
|
(1)
|
Occupied sites and occupancy % include manufactured housing and permanent recreational vehicle sites, and exclude seasonal recreational vehicle sites.
|
(2)
|
Average rent relates only to manufactured housing sites, and excludes permanent and seasonal recreational vehicle sites.
|
|
HOME SALES AND RENTALS
|
Three Months Ended
|
||||||||||||||||
June 30,
|
||||||||||||||||
Financial Information
|
2011
|
2010
|
Change
|
% Change
|
||||||||||||
Rental home revenue
|
$
|
5,427
|
$
|
5,052
|
$
|
375
|
7.4
|
%
|
||||||||
Site rent from Rental Program (1)
|
7,745
|
7,118
|
627
|
8.8
|
%
|
|||||||||||
Rental Program revenue
|
13,172
|
12,170
|
1,002
|
8.2
|
%
|
|||||||||||
Expenses
|
||||||||||||||||
Payroll and commissions
|
472
|
438
|
34
|
7.8
|
%
|
|||||||||||
Repairs and refurbishment
|
1,785
|
1,744
|
41
|
2.4
|
%
|
|||||||||||
Taxes and insurance
|
815
|
812
|
3
|
0.4
|
%
|
|||||||||||
Marketing and other
|
682
|
600
|
82
|
13.7
|
%
|
|||||||||||
Rental Program operating and maintenance
|
3,754
|
3,594
|
160
|
4.5
|
%
|
|||||||||||
Rental Program NOI
|
$
|
9,418
|
$
|
8,576
|
$
|
842
|
9.8
|
%
|
||||||||
Other Information
|
||||||||||||||||
Number of occupied rentals, end of period*
|
6,444
|
5,953
|
491
|
8.2
|
%
|
|||||||||||
Investment in occupied rental homes
|
$
|
213,602
|
$
|
190,320
|
$
|
23,283
|
12.2
|
%
|
||||||||
Number of sold rental homes*
|
200
|
214
|
(14
|
)
|
-6.5
|
%
|
||||||||||
Weighted average monthly rental rate*
|
$
|
747
|
$
|
729
|
$
|
18
|
2.5
|
%
|
(1)
|
The renter’s monthly payment includes the site rent and an amount attributable to the leasing of the home. The site rent is reflected in the Real Property Operations segment. For purposes of management analysis, the site rent is included in the Rental Program revenue to evaluate the incremental revenue gains associated with implementation of the Rental Program, and assess the overall growth and performance of the Rental Program and financial impact to our operations.
|
Three Months Ended
|
||||||||||||||||
June 30,
|
||||||||||||||||
Financial Information
|
2011
|
2010
|
Change
|
% Change
|
||||||||||||
New home sales
|
$
|
650
|
$
|
763
|
$
|
(113
|
)
|
-14.8
|
%
|
|||||||
Pre-owned home sales
|
7,496
|
8,835
|
(1,339
|
)
|
-15.2
|
%
|
||||||||||
Revenue from homes sales
|
8,146
|
9,598
|
(1,452
|
)
|
-15.1
|
%
|
||||||||||
New home cost of sales
|
557
|
604
|
(47
|
)
|
-7.8
|
%
|
||||||||||
Pre-owned home cost of sales
|
5,844
|
6,629
|
(785
|
)
|
-11.8
|
%
|
||||||||||
Cost of home sales
|
6,401
|
7,233
|
(832
|
)
|
-11.5
|
%
|
||||||||||
NOI / Gross profit
|
$
|
1,745
|
$
|
2,365
|
$
|
(620
|
)
|
-26.2
|
%
|
|||||||
Gross profit – new homes
|
93
|
159
|
(66
|
)
|
-41.5
|
%
|
||||||||||
Gross margin % – new homes
|
14.3
|
%
|
20.8
|
%
|
-6.5
|
%
|
||||||||||
Gross profit – pre-owned homes
|
1,652
|
2,206
|
(554
|
)
|
-25.1
|
%
|
||||||||||
Gross margin % – pre-owned homes
|
22.0
|
%
|
25.0
|
%
|
-3.0
|
%
|
||||||||||
Statistical Information
|
||||||||||||||||
Home sales volume:
|
||||||||||||||||
New home sales
|
9
|
11
|
(2
|
)
|
-18.2
|
%
|
||||||||||
Pre-owned home sales
|
353
|
396
|
(43
|
)
|
-10.9
|
%
|
||||||||||
Total homes sold
|
362
|
407
|
(45
|
)
|
-11.1
|
%
|
Three Months Ended
|
||||||||
June 30,
|
||||||||
2011
|
2010
|
|||||||
Real Property NOI
|
$
|
34,172
|
$
|
32,660
|
||||
Rental Program NOI
|
9,418
|
8,576
|
||||||
Home Sales NOI/Gross Profit
|
1,745
|
2,365
|
||||||
Site rent from Rental Program (included in Real Property NOI)
|
(7,745
|
)
|
(7,118
|
)
|
||||
NOI/Gross profit
|
37,590
|
36,483
|
||||||
Adjustments to arrive at net loss:
|
||||||||
Other revenues
|
2,425
|
2,143
|
||||||
General and administrative
|
(6,785
|
)
|
(7,480
|
)
|
||||
Acquisition related costs
|
(1,151
|
)
|
-
|
|||||
Depreciation and amortization
|
(18,121
|
)
|
(16,832
|
)
|
||||
Interest expense
|
(16,054
|
)
|
(16,274
|
)
|
||||
Benefit (provision) for state income taxes
|
259
|
(129
|
)
|
|||||
Equity income (loss) from affiliates, net
|
850
|
(758
|
)
|
|||||
Net loss
|
(987
|
)
|
(2,847
|
)
|
||||
Less: preferred return to preferred OP units
|
51
|
-
|
||||||
Less: amounts attributable to common noncontrolling interests
|
(148
|
)
|
(398
|
)
|
||||
Net loss attributable to Sun Communities, Inc. common stockholders
|
$
|
(890
|
)
|
$
|
(2,449
|
)
|
Six Months Ended
|
||||||||||||||||
June 30,
|
||||||||||||||||
Financial Information (in thousands)
|
2011
|
2010
|
Change
|
% Change
|
||||||||||||
Income from Real Property
|
$
|
106,100
|
$
|
101,955
|
$
|
4,145
|
4.1
|
%
|
||||||||
Property operating expenses:
|
||||||||||||||||
Payroll and benefits
|
8,091
|
7,756
|
335
|
4.3
|
%
|
|||||||||||
Legal, taxes, & insurance
|
1,551
|
1,377
|
174
|
12.6
|
%
|
|||||||||||
Utilities
|
12,091
|
11,765
|
326
|
2.8
|
%
|
|||||||||||
Supplies and repair
|
3,736
|
3,603
|
133
|
3.7
|
%
|
|||||||||||
Other
|
1,983
|
1,644
|
339
|
20.6
|
%
|
|||||||||||
Real estate taxes
|
8,213
|
8,363
|
(150
|
)
|
-1.8
|
%
|
||||||||||
Property operating expenses
|
35,665
|
34,508
|
1,157
|
3.4
|
%
|
|||||||||||
Real Property NOI
|
$
|
70,435
|
$
|
67,447
|
$
|
2,988
|
4.4
|
%
|
As of June 30,
|
||||||||||||
Other Information
|
2011
|
2010
|
Change
|
|||||||||
Number of properties
|
155
|
136
|
19
|
|||||||||
Developed sites
|
53,611
|
47,564
|
6,047
|
|||||||||
Occupied sites (1)
|
43,336
|
38,369
|
4,967
|
|||||||||
Occupancy % (1)
|
85.0
|
%
|
84.3
|
%
|
0.7
|
%
|
||||||
Weighted average monthly rent per site (2)
|
$
|
420
|
$
|
409
|
$
|
11
|
||||||
Sites available for development
|
6,237
|
6,072
|
165
|
(1)
|
Occupied sites and occupancy % include manufactured housing and permanent recreational vehicle sites, and exclude seasonal recreational vehicle sites.
|
(2)
|
Average rent relates only to manufactured housing sites, and excludes permanent and seasonal recreational vehicle sites as well as Kentland and Orange City.
|
Six Months Ended
|
||||||||||||||||
June 30,
|
||||||||||||||||
Financial Information (in thousands)
|
2011
|
2010
|
Change
|
% Change
|
||||||||||||
Income from Real Property
|
$
|
99,463
|
$
|
96,361
|
$
|
3,102
|
3.2
|
%
|
||||||||
Property operating expenses:
|
||||||||||||||||
Payroll and benefits
|
8,064
|
7,756
|
308
|
4.0
|
%
|
|||||||||||
Legal, taxes, & insurance
|
1,542
|
1,377
|
165
|
12.0
|
%
|
|||||||||||
Utilities
|
5,915
|
6,172
|
(257
|
)
|
-4.2
|
%
|
||||||||||
Supplies and repair
|
3,726
|
3,603
|
123
|
3.4
|
%
|
|||||||||||
Other
|
1,970
|
1,643
|
327
|
19.9
|
%
|
|||||||||||
Real estate taxes
|
8,154
|
8,363
|
(209
|
)
|
-2.5
|
%
|
||||||||||
Property operating expenses
|
29,371
|
28,914
|
457
|
1.6
|
%
|
|||||||||||
Real Property NOI
|
$
|
70,092
|
$
|
67,447
|
$
|
2,645
|
3.9
|
%
|
As of June 30,
|
||||||||||||
Other Information
|
2011
|
2010
|
Change
|
|||||||||
Number of properties
|
136
|
136
|
-
|
|||||||||
Developed sites
|
47,677
|
47,564
|
113
|
|||||||||
Occupied sites (1)
|
38,928
|
38,369
|
559
|
|||||||||
Occupancy % (1)
|
85.3
|
%
|
84.3
|
%
|
1.0
|
%
|
||||||
Weighted average monthly rent per site (2)
|
$
|
420
|
$
|
409
|
$
|
11
|
||||||
Sites available for development
|
5,439
|
5,574
|
(135
|
)
|
(1)
|
Occupied sites and occupancy % include manufactured housing and permanent recreational vehicle sites, and exclude seasonal recreational vehicle sites.
|
(2)
|
Average rent relates only to manufactured housing sites, and excludes permanent and seasonal recreational vehicle sites.
|
|
HOME SALES AND RENTALS
|
Six Months Ended
|
||||||||||||||||
June 30,
|
||||||||||||||||
Financial Information
|
2011
|
2010
|
Change
|
% Change
|
||||||||||||
Rental home revenue
|
$
|
10,757
|
$
|
10,131
|
$
|
626
|
6.2
|
%
|
||||||||
Site rent from Rental Program (1)
|
15,317
|
14,134
|
1,183
|
8.4
|
%
|
|||||||||||
Rental Program revenue
|
26,074
|
24,265
|
1,809
|
7.5
|
%
|
|||||||||||
Expenses
|
||||||||||||||||
Payroll and commissions
|
944
|
938
|
6
|
0.6
|
%
|
|||||||||||
Repairs and refurbishment
|
3,591
|
3,348
|
243
|
7.3
|
%
|
|||||||||||
Taxes and insurance
|
1,551
|
1,595
|
(44
|
)
|
-2.8
|
%
|
||||||||||
Marketing and other
|
1,341
|
1,336
|
5
|
0.4
|
%
|
|||||||||||
Rental Program operating and maintenance
|
7,427
|
7,217
|
210
|
2.9
|
%
|
|||||||||||
Rental Program NOI
|
$
|
18,647
|
$
|
17,048
|
$
|
1,599
|
9.4
|
%
|
||||||||
Other Information
|
||||||||||||||||
Number of occupied rentals, end of period*
|
6,444
|
5,953
|
491
|
8.2
|
%
|
|||||||||||
Investment in occupied rental homes
|
$
|
213,602
|
$
|
190,320
|
$
|
23,283
|
12.2
|
%
|
||||||||
Number of sold rental homes*
|
416
|
392
|
24
|
6.1
|
%
|
|||||||||||
Weighted average monthly rental rate*
|
$
|
747
|
$
|
729
|
$
|
18
|
2.5
|
%
|
(1)
|
The renter’s monthly payment includes the site rent and an amount attributable to the leasing of the home. The site rent is reflected in the Real Property Operations segment. For purposes of management analysis, the site rent is included in the Rental Program revenue to evaluate the incremental revenue gains associated with implementation of the Rental Program, and assess the overall growth and performance of the Rental Program and financial impact to our operations.
|
Six Months Ended
|
||||||||||||||||
June 30,
|
||||||||||||||||
Financial Information
|
2011
|
2010
|
Change
|
% Change
|
||||||||||||
New home sales
|
$
|
731
|
$
|
1,660
|
$
|
(929
|
)
|
-56.0
|
%
|
|||||||
Pre-owned home sales
|
15,650
|
15,975
|
(325
|
)
|
-2.0
|
%
|
||||||||||
Revenue from homes sales
|
16,381
|
17,635
|
(1,254
|
)
|
-7.1
|
%
|
||||||||||
New home cost of sales
|
605
|
1,378
|
(773
|
)
|
-56.1
|
%
|
||||||||||
Pre-owned home cost of sales
|
12,287
|
12,099
|
188
|
1.6
|
%
|
|||||||||||
Cost of home sales
|
12,892
|
13,477
|
(585
|
)
|
-4.3
|
%
|
||||||||||
NOI / Gross profit
|
$
|
3,489
|
$
|
4,158
|
$
|
(669
|
)
|
-16.1
|
%
|
|||||||
Gross profit – new homes
|
126
|
282
|
(156
|
)
|
-55.3
|
%
|
||||||||||
Gross margin % – new homes
|
17.2
|
%
|
17.0
|
%
|
0.2
|
%
|
||||||||||
Gross profit – pre-owned homes
|
3,363
|
3,876
|
(513
|
)
|
-13.2
|
%
|
||||||||||
Gross margin % – pre-owned homes
|
21.5
|
%
|
24.3
|
%
|
-2.8
|
%
|
||||||||||
Statistical Information
|
||||||||||||||||
Home sales volume:
|
||||||||||||||||
New home sales
|
10
|
26
|
(16
|
)
|
-61.5
|
%
|
||||||||||
Pre-owned home sales
|
709
|
706
|
3
|
0.4
|
%
|
|||||||||||
Total homes sold
|
719
|
732
|
(13
|
)
|
-1.8
|
%
|
Six Months Ended
|
||||||||
June 30,
|
||||||||
2011
|
2010
|
|||||||
Real Property NOI
|
$
|
70,435
|
$
|
67,447
|
||||
Rental Program NOI
|
18,647
|
17,048
|
||||||
Home Sales NOI/Gross Profit
|
3,489
|
4,158
|
||||||
Site rent from Rental Program (included in Real Property NOI)
|
(15,317
|
)
|
(14,134
|
)
|
||||
NOI/Gross profit
|
77,254
|
74,519
|
||||||
Adjustments to arrive at net income (loss):
|
||||||||
Other revenues
|
4,738
|
4,555
|
||||||
General and administrative
|
(13,236
|
)
|
(12,903
|
)
|
||||
Acquisition related costs
|
(1,400
|
)
|
-
|
|||||
Depreciation and amortization
|
(34,800
|
)
|
(33,523
|
)
|
||||
Interest expense
|
(32,286
|
)
|
(32,196
|
)
|
||||
Benefit (provision) for state income taxes
|
128
|
(261
|
)
|
|||||
Equity income (loss) from affiliates, net
|
1,200
|
(1,577
|
)
|
|||||
Net income (loss)
|
1,598
|
(1,386
|
)
|
|||||
Less: preferred return to preferred OP units
|
51
|
-
|
||||||
Less: amounts attributable to common noncontrolling interests
|
37
|
(274
|
)
|
|||||
Net income (loss) attributable to Sun Communities, Inc. common stockholders
|
$
|
1,510
|
$
|
(1,112
|
)
|
Three Months Ended
|
Six Months Ended
|
|||||||||||||||
June 30,
|
June 30,
|
|||||||||||||||
2011
|
2010
|
2011
|
2010
|
|||||||||||||
Net (loss) income attributable to Sun Communities, Inc. common stockholders
|
$
|
(890
|
)
|
$
|
(2,449
|
)
|
$
|
1,510
|
$
|
(1,112
|
)
|
|||||
Adjustments:
|
||||||||||||||||
Preferred return to preferred OP units
|
51
|
-
|
51
|
-
|
||||||||||||
Amounts attributable to common noncontrolling interest
|
(148
|
)
|
(398
|
)
|
37
|
(274
|
)
|
|||||||||
Depreciation and amortization
|
17,418
|
16,808
|
34,315
|
33,842
|
||||||||||||
Loss (gain) on disposition of assets, net
|
320
|
(806
|
)
|
(366
|
)
|
(1,655
|
)
|
|||||||||
Funds from operations ("FFO")
|
$
|
16,751
|
$
|
13,155
|
$
|
35,547
|
$
|
30,801
|
||||||||
Adjustments:
|
||||||||||||||||
Michigan Business tax reversal
|
-
|
-
|
-
|
(740
|
)
|
|||||||||||
Equity affiliate adjustment (1)
|
-
|
808
|
-
|
1,627
|
||||||||||||
Acquisition related costs
|
1,151
|
-
|
1,400
|
-
|
||||||||||||
Benefit for state income taxes (2)
|
(398
|
)
|
(13
|
)
|
(407
|
)
|
(24
|
)
|
||||||||
Adjusted funds from operations ("AFFO")
|
$
|
17,504
|
$
|
13,950
|
$
|
36,540
|
$
|
31,664
|
||||||||
Weighted average common shares outstanding:
|
21,090
|
19,031
|
20,875
|
18,848
|
||||||||||||
Add:
|
||||||||||||||||
OP units
|
2,075
|
2,113
|
2,078
|
2,126
|
||||||||||||
Restricted stock
|
238
|
157
|
192
|
167
|
||||||||||||
Common stock issuable upon conversion of preferred OP units
|
98
|
-
|
49
|
-
|
||||||||||||
Common stock issuable upon conversion of stock options
|
17
|
11
|
9
|
7
|
||||||||||||
Weighted average common shares outstanding - diluted (FFO and AFFO)
|
23,518
|
21,312
|
23,203
|
21,148
|
||||||||||||
Funds from operations per share - diluted
|
$
|
0.71
|
$
|
0.62
|
$
|
1.53
|
$
|
1.46
|
||||||||
Adjusted funds from operations per share - diluted
|
$
|
0.74
|
$
|
0.66
|
$
|
1.57
|
$
|
1.50
|
(1)
|
This amount represents our equity loss from affiliates in 2010. Origen declared cash dividends of $0.8 and $1.2 million for the three and six months ended June 30, 2011, respectively, which remain in FFO and AFFO.
|
(2)
|
The state income tax benefit for the periods ended June 30, 2011 and 2010 represents the reversal of the Michigan Business Tax provision previously recorded. These taxes do not impact AFFO and would be payable from prospective proceeds of such sales.
|
2011
|
$71.8 million inclusive of the balance outstanding on the unsecured line of credit
|
2012
|
$29.0 million inclusive of the balance outstanding on the floor plan facility
|
2013
|
$37.4 million
|
2014
|
$190.0 million
|
2015
|
$21.2 million
|
|
(a)
|
Under the supervision and with the participation of our management, including the Chief Executive Officer, Gary A. Shiffman, and Chief Financial Officer, Karen J. Dearing, we evaluated the effectiveness of the design and operation of our disclosure controls and procedures as of the end of the period covered by this quarterly report, pursuant to Rule 13a-15 of the Securities Exchange Act of 1934 (the “Exchange Act”). Based upon that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures as of the end of the period covered by this report were effective to ensure that information we are required to disclose in our filings with the SEC under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms, and to ensure that information we are required to disclose in the reports that we file under the Exchange Act is accumulated and communicated to our management, including our principal executive officer and principal financial officer, as appropriate to allow timely decisions regarding required disclosure.
|
|
(b)
|
There have been no changes in our internal control over financial reporting during the quarterly period ended June 30, 2011 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
|
Exhibit No.
|
Description
|
Method of Filing
|
|
2.1
|
Master Contribution Agreement dated April 1, 2011 by and among Sun Communities, Inc., Sun Communities Operating Limited Partnership, and Kentland Corporation, Wilbur A. Lettinga, William B. Lettinga and Michael Lettinga
|
(1)
|
|
2.2
|
Contribution Agreement (Tamarac Village) dated as of May 5, 2011 by and among Tamarac Village Holding Company MHP Holding Company #2, LLC, Tamarac Village Holding Company MHP Holding Company #1, LLC, Tamarac Village Mobile Home Park Limited Partnership, and Sun Communities Operating Limited Partnership (form of Contribution Agreement for the following properties: Apple Carr Village, Brookside Village, Dutton Mill Village, Hickory Hills Village, Holiday West Village, Leisure Village, Oak Island Village, Southwood Village, Sycamore Village, Warren Dunes Village and Waverly Shores Village)
|
(1)
|
|
2.3
|
Contribution Agreement (Country Meadows Village) dated as of May 5, 2011 by and among Country Meadows Village Holding Company MHP Holding Company #2, LLC, Country Meadows Village Holding Company MHP Holding Company #1, LLC, Country Meadows Village Mobile Home Park Limited Partnership, and Sun Communities Operating Limited Partnership (form of Contribution Agreement for the following properties: Cider Mill Village, Country Hills Village, Hidden Ridge RV Park, Pinebrook Village and Windsor Woods Village)
|
(1)
|
|
2.4
|
Membership Interest Purchase Agreement dated as of June 23, 2011 by and among Wilbur A. Lettinga, William B. Lettinga, Michael Lettinga and Sun Home Services, Inc.
|
(1)
|
|
4.1
|
Registration Rights Agreement dated June 23, 2011 among Sun Communities, Inc., and the holders of Series A-1 Preferred Units that are parties thereto
|
(1)
|
|
10.1
|
Two Hundred Seventy Fifth Amendment to the Second Amended and Restated Limited Partnership Agreement of Sun Communities Operating Limited Partnership dated as of June 23, 2011
|
(1)
|
|
10.2
|
Term Loan Agreement dated June 23, 2011 among Cider Mill Village Mobile Home Park, LLC, Country Hills Village Mobile Home Park, LLC, Country Meadows Village Mobile Home Park, LLC, Sun Orange City LLC and Bank of America, N.A.
|
(1)
|
|
10.3
|
Promissory Note, dated June 23, 2011, in the original principal amount of $15,530,000, made by Cider Mill Village Mobile Home Park, LLC, Country Hills Village Mobile Home Park, LLC, Country Meadows Village Mobile Home Park, LLC and Sun Orange City LLC in favor of Bank of America, N.A.
|
(1)
|
|
10.4
|
Term Loan Agreement dated June 23, 2011 among Pinebrook Village Mobile Home Park, LLC, Windsor Woods Village Mobile Home Park, LLC and Bank of America, N.A.
|
(1)
|
|
10.5
|
Promissory Note, dated June 23, 2011, in the original principal amount of $7,400,000, made by Pinebrook Village Mobile Home Park, LLC, Windsor Woods Village Mobile Home Park, LLC in favor of Bank of America, N.A.
|
(1)
|
|
10.6
|
Loan Agreement dated May 10, 2011 among Sun Knollwood LLC, Sun Gwinnett LLC and Sun River Ridge II LLC, as Borrowers, and Bank of America, N.A., as Lender
|
(2)
|
|
10.7
|
Promissory Note dated May 10, 2011 in the principal amount of $23,625,000 by Sun Knollwood LLC, Sun Gwinnett LLC and Sun River Ridge II LLC, as Borrowers, in favor of Bank of America, N.A., as Lender
|
(2)
|
|
31.1
|
Certification of Chief Executive Officer pursuant to Securities Exchange Act Rules 13a-14(a)/15(d)-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
(3)
|
|
31.2
|
Certification of Chief Financial Officer pursuant to Securities Exchange Act Rules 13a-14(a)/15(d)-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
(3)
|
|
32.1
|
Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
|
(3)
|
|
101(4)
|
The following Sun Communities, Inc. financial information for the quarter ended June 30, 2011, formatted in XBRL (eXtensible Business Reporting Language): (i) Consolidated Balance Sheets (unaudited), (ii) Consolidated Statements of Operations (unaudited), (iii) Consolidated Statements of Comprehensive (Loss) Income (unaudited), (iv) Consolidated Statements of Stockholders’ Deficit (unaudited), (v) Consolidated Statements of Cash Flows (unaudited) and (vi) Notes to Consolidated Financial Statements (unaudited)
|
(3)
|
(1)
|
Incorporated by reference to Sun Communities, Inc.’s Current Report on Form 8-K dated June 23, 2011
|
(2)
|
Incorporated by reference to Sun Communities, Inc.’s Current Report on Form 8-K dated May 10, 2011
|
(3)
|
Filed herewith.
|
(4)
|
Users of this data are advised that pursuant to Rule 406T of Regulation S-T, the Interactive Data Files on Exhibit 101 hereto are deemed not filed or part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, as amended, are deemed not filed for purposes of Section 18 of the Securities and Exchange Act of 1934, as amended, and otherwise are not subject to liability under those sections.
|
SUN COMMUNITIES, INC.
|
|||
Dated: July 28, 2011
|
By:
|
/s/ Karen J. Dearing
|
|
Karen J. Dearing, Chief Financial Officer and Secretary
(Duly authorized officer and principal financial officer)
|
1.
|
I have reviewed this quarterly report on Form 10-Q of Sun Communities, Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
|
a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
|
b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
|
c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
|
d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting
|
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent function):
|
|
a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
|
b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
Dated: July 28, 2011
|
/s/ Gary A. Shiffman
|
||
Gary A. Shiffman, Chief Executive Officer
|
1.
|
I have reviewed this quarterly report on Form 10-Q of Sun Communities, Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
|
a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
|
b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
|
c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
|
d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting
|
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent function):
|
|
a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
|
b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
Dated: July 28, 2011
|
/s/ Karen J. Dearing
|
||
Karen J. Dearing, Chief Financial Officer
|
Signature
|
Date
|
|
/s/ Gary A. Shiffman
|
July 28, 2011
|
|
Gary A. Shiffman, Chief Executive Officer
|
||
/s/ Karen J. Dearing
|
July 28, 2011
|
|
Karen J. Dearing, Chief Financial Officer
|
||