UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8‑K
CURRENT REPORT
Pursuant to Section 13 OR 15(d) of The Securities Exchange Act of 1934
Date of Report: April 26, 2016
(Date of earliest event reported)
SUN COMMUNITIES, INC.
(Exact name of registrant as specified in its charter)
Maryland | 1-12616 | 38-2730780 | ||
(State or other jurisdiction of incorporation) | (Commission File Number) | (IRS Employer Identification No.) | ||
27777 Franklin Rd. | ||
Suite 200 | ||
Southfield, Michigan | 48034 | |
(Address of Principal Executive Offices) | (Zip Code) | |
(248) 208-2500 |
(Registrant’s telephone number, including area code)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
[ ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Item 2.02 | Results of Operations and Financial Condition |
On April 26, 2016, Sun Communities, Inc. (the "Company") issued a press release, furnished as Exhibit 99.1 and incorporated herein by reference, announcing its financial results for the period ended March 31, 2016, and certain other information.
The Company will hold an investor conference call and webcast at 11:00 a.m. ET on April 26, 2016 to disclose and discuss the financial results for the period ended March 31, 2016.
The information contained in this Item 2.02, including Exhibit 99.1, is being furnished and shall not be deemed to be “filed” for purposes of the Securities Exchange Act of 1934, as amended.
Item 9.01 | Financial Statements and Exhibits |
(d) | Exhibits. |
99.1 | Press release issued April 26, 2016 |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this Report to be signed on its behalf by the undersigned hereunto duly authorized.
SUN COMMUNITIES, INC. | |||
Dated: April 26, 2016 | By: | /s/ Karen J. Dearing | |
Karen J. Dearing, Executive Vice President, Chief Financial Officer, Secretary and Treasurer | |||
EXHIBIT INDEX
Exhibit No. | Description | |
99.1 | Press release issued April 26, 2016 | |
NEWS RELEASE
April 26, 2016
Sun Communities, Inc. Reports 2016 First Quarter Results
Southfield, Michigan, April 26, 2016 - Sun Communities, Inc. (NYSE: SUI) (the "Company"), a real estate investment trust ("REIT") that owns and operates manufactured housing ("MH") and recreational vehicle ("RV") communities, today reported its first quarter results.
Highlights: Three Months Ended March 31, 2016
• | Funds from operations ("FFO")(1) excluding certain items was $0.90 per diluted share and OP unit ("Share") for the three months ended March 31, 2016. |
• | Home sales increased by 40.9 percent as compared to the first quarter of 2015. |
• | Revenue producing sites increased by 592 sites for the quarter bringing total portfolio occupancy to 95.5 percent. |
• | Same community Net Operating Income ("NOI")(2) increased by 6.4 percent as compared to the three months ended March 31, 2015. |
• | Completed the purchase of two communities for $37.8 million. |
• | Announced the agreement to purchase Carefree Communities, Inc. ("Carefree") for $1.68 billion. |
• | Raised net proceeds of $385.3 million through the sale of 6,037,500 shares of common stock. |
"Our performance during the first quarter continues to demonstrate the strength of the Sun Communities portfolio and the attractive fundamentals of our business," said Gary A. Shiffman, Chairman and CEO. "We delivered yet another quarter of impressive NOI growth as we grew occupancy, converted RV transient sites to annual leases, and continued to fill expansion sites. This consistently strong performance is proving out our strategy of owning well located high quality communities while providing superior amenities and customer service. I am also particularly excited to further accelerate this growth with the integration of Carefree in the second half of the year. This highly complementary, best-in-class portfolio further enhances our geographic diversity, deepens our presence in key coastal markets, and extends the contribution from age-restricted communities."
Sun Communities, Inc. 1st Quarter 2016 Page 2
FINANCIAL HIGHLIGHTS
(amounts in thousands)
Three Months Ended March 31, | ||||||||||||||
2016 | 2015 | Change | % Change | |||||||||||
FFO per Share excluding certain items - fully diluted(1) | $ | 0.90 | $ | 0.90 | $ | — | — | % | ||||||
EBITDA (3) | $ | 90,220 | $ | 83,245 | $ | 6,975 | 8.4 | % | ||||||
Diluted Earnings Per Share | $ | 0.14 | $ | 0.13 | $ | 0.01 | 7.7 | % | ||||||
OPERATING HIGHLIGHTS
Community Occupancy
Total portfolio occupancy increased to 95.5 percent at March 31, 2016 from 92.9 percent at March 31, 2015 from a combination of occupancy gains and the disposition of properties with higher vacancy. During the first quarter of 2016, revenue producing sites increased by 592 sites, as compared to 499 revenue producing sites gained in the first quarter of 2015.
Same Community Results
For the 219 communities owned throughout 2016 and 2015, first quarter 2016 total revenues increased 6.6 percent and total expenses increased 7.2 percent, resulting in an increase in NOI(2) of 6.4 percent over the first quarter of 2015.
Rent increases in the same community portfolio were 3.4 percent. Same community occupancy increased by 2.5 percent to 96.1 percent at March 31, 2016 as compared to the same period last year.
Home Sales
Total home sales were 765 for the first quarter as compared to 543 homes sold during the first quarter of 2015, a 40.9 percent increase, driven by the sale of an additional 222 pre-owned homes.
Rental homes sales, which are included in total home sales, were 294 and 181 for the quarter ended March 31, 2016 and 2015, respectively, a 62.4 percent increase. The percentage of portfolio occupancy represented by home renters is 13.6 percent, compared to 14.0 percent for the quarter ended March 31, 2015.
Acquisitions (4)
The Company acquired one MH and one RV community during the quarter comprised of 740 sites, for total consideration of $37.8 million. The communities are located in Texas and Michigan and were funded from the 1031 exchange completed in November of 2015 leaving $87.1 million in escrow.
The Company has entered into an agreement to acquire the high quality, 103 community manufactured housing and recreational vehicle Carefree portfolio for $1.68 billion, which is comprised of over 27,000 total
Sun Communities, Inc. 1st Quarter 2016 Page 3
sites. This portfolio is located in prime coastal markets and 51 percent of the sites are age restricted. The acquisition is expected to close in or before July 2016.
The consummation of the acquisition is subject to customary closing conditions. As a result, there can be no assurances as to the actual closing or the timing of the closing.
BALANCE SHEET AND CAPITAL MARKETS ACTIVITY
As of March 31, 2016, the Company had approximately $2.3 billion of debt outstanding. The weighted average interest rate was 4.98 percent and the weighted average maturity was 8.2 years. The Company had $410.4 million of unrestricted cash on hand and $392.0 million available on its credit facility. Additionally, the Company had $87.1 million of restricted cash on the balance sheet as a result of the assets sold in November 2015. At period-end the Company’s net debt to trailing twelve month EBITDA(3) ratio was 5.5 times.
Debt Transactions
In anticipation of the Carefree acquisition, the Company entered into rate lock agreements to replace $850.0 million of the $1.0 billion Carefree floating and short term debt with fixed rate debt carrying a weighted average maturity of 10.3 years.
Capital Transaction
In March 2016, the Company raised net proceeds of approximately $385.3 million through an offering of 6,037,500 shares of common stock at a price of $66.50 per share.
The Company intends to use the net proceeds of the offering to fund a portion of the purchase price for the Carefree acquisition. The consummation of the acquisition is subject to customary closing conditions. If for any reason the acquisition is not consummated, the Company intends to use the net proceeds of the offering to repay borrowings outstanding under the Company's revolving line of credit, to fund possible future acquisitions of properties and for working capital and general corporate purposes.
GUIDANCE 2016
The Company anticipates the second quarter 2016 FFO to be in the range of $0.79 to $0.81 per Share. The second quarter guidance incorporates the capital markets activity that has occurred to date. The Company expects a quarterly impact from the equity offering of approximately $.08 per Share until the capital is deployed. Guidance does not include transactions that have not yet closed or prospective acquisitions or capital markets activity. The Company intends to provide updated 2016 guidance after the Carefree transaction closes.
The estimates and assumptions presented above represent a range of possible outcomes and may differ materially from actual results. The estimates and assumptions are forward looking based on the Company's current assessment of economic and market conditions, as well as other risks outlined below under the caption "Forward-Looking Statements."
Sun Communities, Inc. 1st Quarter 2016 Page 4
EARNINGS CONFERENCE CALL
A conference call to discuss first quarter operating results will be held on Tuesday, April 26, 2016 at 11:00 A.M. (ET). To participate, call toll-free 877-407-4018. Callers outside the U.S. or Canada can access the call at 201-689-8471. A replay will be available following the call through May 3, 2016 and can be accessed toll-free by calling 877-870-5176 or by calling 858-384-5517. The Conference ID number for the call and the replay is 13634168. The conference call will be available live on Sun Communities' website www.suncommunities.com. Replay will also be available on the website.
Sun Communities, Inc. is a REIT that currently owns and operates a portfolio of 233 communities comprising approximately 89,400 developed sites.
For more information about Sun Communities, Inc., please visit the website at www.suncommunities.com.
CONTACT
Please address all inquiries to our investor relations department at our website www.suncommunities.com, by phone (248) 208-2500, by email investorrelations@suncommunities.com or by mail Sun Communities, Inc. Investor Relations, 27777 Franklin Road, Ste. 200, Southfield, MI 48034.
Sun Communities, Inc. 1st Quarter 2016 Page 5
Forward-Looking Statements
This press release contains various "forward-looking statements" within the meaning of the Securities Act of 1933, as amended, and the Securities Exchange Act of 1934, as amended, and the Company intends that such forward-looking statements will be subject to the safe harbors created thereby. Forward-looking statements can be identified by words such as "will," "may," "could," "expect," "anticipate," "believes," "intends," "should," "plans," "estimates," "approximate," "guidance," and similar expressions in this press release that predict or indicate future events and trends and that do not report historical matters.
These forward-looking statements reflect the Company’s current views with respect to future events and financial performance, but involve known and unknown risks, uncertainties, and other factors, some of which are beyond the Company's control. These risks, uncertainties, and other factors may cause the actual results of the Company to be materially different from any future results expressed or implied by such forward-looking statements. Such risks and uncertainties include national, regional and local economic climates, the ability to maintain rental rates and occupancy levels, competitive market forces, the performance of recent acquisitions, the ability to integrate future acquisitions smoothly and efficiently, changes in market rates of interest, the ability of manufactured home buyers to obtain financing, the level of repossessions by manufactured home lenders and those risks and uncertainties referenced under the headings entitled "Risk Factors" contained in the Company's 2015 Annual Report on Form 10-K, the Company's Quarterly Report on Form 10-Q for the Quarter ended March 31, 2016, and the Company’s other periodic filings with the Securities and Exchange Commission.
The forward-looking statements contained in this press release speak only as of the date hereof and the Company expressly disclaims any obligation to provide public updates, revisions or amendments to any forward-looking statements made herein to reflect changes in the Company’s assumptions, expectations of future events, or trends.
Sun Communities, Inc. 1st Quarter 2016 Page 6
(1) | Funds from operations attributable to Sun Communities, Inc. common stockholders and dilutive convertible securities ("FFO") is defined by the National Association of Real Estate Investment Trusts ("NAREIT") as net income (loss) (computed in accordance with generally accepted accounting principles "GAAP"), excluding gains (or losses) from sales of depreciable operating property, plus real estate-related depreciation and amortization, and after adjustments for unconsolidated partnerships and joint ventures. FFO is a non-GAAP financial measure that management believes is a useful supplemental measure of the Company's operating performance. Management generally considers FFO to be a useful measure for reviewing comparative operating and financial performance because, 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 year over year, reflects the impact to operations from trends in occupancy rates, rental rates and operating costs, providing perspective not readily apparent from net loss. Management believes that 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. FFO is computed in accordance with the Company's interpretation of standards established by NAREIT, which may not be comparable to FFO reported by other REITs that do not define the term in accordance with the current NAREIT definition or that interpret the current NAREIT definition differently than the Company. |
Because FFO excludes significant economic components of net income (loss) including depreciation and amortization, FFO should be used as an adjunct to net income (loss) and not as an alternative to net income (loss). The principal limitation of FFO is that it does not represent cash flow from operations as defined by GAAP and is a supplemental measure of performance that does not replace net income (loss) as a measure of performance or net cash provided by operating activities as a measure of liquidity. In addition, 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 only provides investors with an additional performance measure.
(2) | Investors in and analysts following the real estate industry utilize NOI as a supplemental performance measure. NOI is derived from revenues minus property operating expenses and real estate taxes. NOI does not represent cash generated from operating activities in accordance with GAAP and should not be considered to be an alternative to net income (loss) (determined in accordance with GAAP) as an indication of the Company's financial performance or to be an alternative to cash flow from operating activities (determined in accordance with GAAP) 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. The Company believes that net income (loss) is the most directly comparable GAAP measurement to NOI. Net income (loss) includes interest and depreciation and amortization which often have no effect on the market value of a property and therefore limit its use as a performance measure. In addition, such expenses are often incurred at a parent company level and therefore are not necessarily linked to the performance of a real estate asset. The Company believes that NOI is helpful to investors as a 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 management tool 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, and therefore, NOI is a measure of the operating performance of the properties of the Company rather than of the Company overall. |
(3) | EBITDA is defined as NOI plus other income, plus (minus) equity earnings (loss) from affiliates, minus general and administrative expenses. EBITDA includes EBITDA from discontinued operations. |
(4) | The consideration amounts presented with respect to acquired communities represent the economic transaction and do not contemplate the fair value purchase accounting required by GAAP. |
Sun Communities, Inc. 1st Quarter 2016 Page 7
Consolidated Balance Sheets
(in thousands, except per share amounts)
March 31, 2016 | December 31, 2015 | ||||||
ASSETS | |||||||
Land | $ | 456,380 | $ | 451,340 | |||
Land improvements and buildings | 3,586,969 | 3,535,909 | |||||
Rental homes and improvements | 469,217 | 460,480 | |||||
Furniture, fixtures and equipment | 104,855 | 102,746 | |||||
Land held for future development | 23,047 | 23,047 | |||||
Investment property | 4,640,468 | 4,573,522 | |||||
Accumulated depreciation | (889,941 | ) | (852,407 | ) | |||
Investment property, net (including $91,246 and $92,009 for consolidated variable interest entities at March 31, 2016 and December 31, 2015) | 3,750,527 | 3,721,115 | |||||
Cash and cash equivalents | 410,408 | 45,086 | |||||
Inventory of manufactured homes | 16,636 | 14,828 | |||||
Notes and other receivables, net | 54,124 | 47,972 | |||||
Collateralized receivables, net | 142,944 | 139,768 | |||||
Other assets, net | 188,247 | 213,030 | |||||
TOTAL ASSETS | $ | 4,562,886 | $ | 4,181,799 | |||
LIABILITIES | |||||||
Mortgage loans payable (including $63,450 and $64,082 for consolidated variable interest entities at March 31, 2016 and December 31, 2015) | $ | 2,114,818 | $ | 2,125,267 | |||
Secured borrowings on collateralized receivables | 143,664 | 140,440 | |||||
Preferred OP units - mandatorily redeemable | 45,903 | 45,903 | |||||
Lines of credit | 58,065 | 24,687 | |||||
Distributions payable | 45,351 | 41,265 | |||||
Other liabilities (including $4,213 and $4,091 for consolidated variable interest entities at March 31, 2016 and December 31, 2015) | 184,102 | 184,859 | |||||
TOTAL LIABILITIES | $ | 2,591,903 | $ | 2,562,421 | |||
Commitments and contingencies | |||||||
Series A-4 preferred stock, $0.01 par value. Issued and outstanding: 2,067 shares at March 31, 2016 and December 31, 2015 | $ | 61,732 | $ | 61,732 | |||
Series A-4 preferred OP units | $ | 20,762 | $ | 21,065 | |||
STOCKHOLDERS’ EQUITY | |||||||
Series A preferred stock, $0.01 par value. Issued and outstanding: 3,400 shares at March 31, 2016 and December 31, 2015 | $ | 34 | $ | 34 | |||
Common stock, $0.01 par value. Authorized: 180,000 shares; Issued and outstanding: 64,578 shares at March 31, 2016 and 58,395 shares at December 31, 2015 | 646 | 584 | |||||
Additional paid-in capital | 2,706,657 | 2,319,314 | |||||
Distributions in excess of accumulated earnings | (896,896 | ) | (864,122 | ) | |||
Total Sun Communities, Inc. stockholders' equity | 1,810,441 | 1,455,810 | |||||
Noncontrolling interests: | |||||||
Common and preferred OP units | 80,018 | 82,538 | |||||
Consolidated variable interest entities | (1,970 | ) | (1,767 | ) | |||
Total noncontrolling interest | 78,048 | 80,771 | |||||
TOTAL STOCKHOLDERS’ EQUITY | 1,888,489 | 1,536,581 | |||||
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY | $ | 4,562,886 | $ | 4,181,799 | |||
Sun Communities, Inc. 1st Quarter 2016 Page 8
Consolidated Statements of Operations
(in thousands, except per share amounts)
Three Months Ended March 31, | |||||||
2016 | 2015 | ||||||
REVENUES | |||||||
Income from real property | $ | 129,235 | $ | 119,525 | |||
Revenue from home sales | 24,737 | 16,834 | |||||
Rental home revenue | 11,708 | 11,129 | |||||
Ancillary revenues | 4,613 | 3,191 | |||||
Interest | 3,945 | 3,984 | |||||
Brokerage commissions and other income, net | 406 | 537 | |||||
Total revenues | 174,644 | 155,200 | |||||
COSTS AND EXPENSES | |||||||
Property operating and maintenance | 31,201 | 29,214 | |||||
Real estate taxes | 9,585 | 8,715 | |||||
Cost of home sales | 18,184 | 12,557 | |||||
Rental home operating and maintenance | 5,876 | 5,605 | |||||
Ancillary expenses | 3,508 | 2,546 | |||||
Home selling expenses | 2,278 | 1,690 | |||||
General and administrative | 13,792 | 11,628 | |||||
Transaction costs | 2,721 | 9,449 | |||||
Depreciation and amortization | 48,412 | 44,001 | |||||
Interest | 26,294 | 25,389 | |||||
Interest on mandatorily redeemable preferred OP units | 787 | 852 | |||||
Total expenses | 162,638 | 151,646 | |||||
Income before other gains | 12,006 | 3,554 | |||||
Gain on disposition of properties, net | — | 8,769 | |||||
Provision for income taxes | (228 | ) | (75 | ) | |||
Net income | 11,778 | 12,248 | |||||
Less: Preferred return to preferred OP units | 1,273 | 1,029 | |||||
Less: Amounts attributable to noncontrolling interests | 276 | 264 | |||||
Net income attributable to Sun Communities, Inc. | 10,229 | 10,955 | |||||
Less: Preferred stock distributions | 2,354 | 4,086 | |||||
Net income attributable to Sun Communities, Inc. common stockholders | $ | 7,875 | $ | 6,869 | |||
Weighted average common shares outstanding: | |||||||
Basic | 57,736 | 52,498 | |||||
Diluted | 58,126 | 52,892 | |||||
Earnings per share: | |||||||
Basic | $ | 0.14 | $ | 0.13 | |||
Diluted | $ | 0.14 | $ | 0.13 | |||
Sun Communities, Inc. 1st Quarter 2016 Page 9
Reconciliation of Net Income to FFO(1)
(in thousands, except per share amounts)
Three Months Ended March 31, | |||||||
2016 | 2015 | ||||||
Net income attributable to Sun Communities, Inc. common stockholders | $ | 7,875 | $ | 6,869 | |||
Adjustments: | |||||||
Preferred return to preferred OP units | 625 | 45 | |||||
Amounts attributable to noncontrolling interests | 349 | 78 | |||||
Depreciation and amortization | 48,077 | 44,264 | |||||
Gain on disposition of properties, net | — | (8,769 | ) | ||||
Gain on disposition of assets, net | (3,656 | ) | (1,702 | ) | |||
Funds from operations (FFO) attributable to Sun Communities, Inc. common stockholders and dilutive convertible securities (1)(6) | 53,270 | 40,785 | |||||
Adjustments: | |||||||
Transaction costs | 2,721 | 9,449 | |||||
FFO attributable to Sun Communities, Inc. common stockholders and dilutive convertible securities excluding certain items (1)(6) | $ | 55,991 | $ | 50,234 | |||
Weighted average common shares outstanding - basic: | 57,736 | 52,498 | |||||
Add: | |||||||
Common stock issuable upon conversion of stock options | 13 | 16 | |||||
Restricted stock | 377 | 378 | |||||
Common OP units | 2,863 | 2,560 | |||||
Common stock issuable upon conversion of Series A-1 preferred OP units | 945 | — | |||||
Common stock issuable upon conversion of Series A-3 preferred OP units | 75 | 75 | |||||
Weighted average common shares outstanding - fully diluted | 62,009 | 55,527 | |||||
FFO(1) attributable to Sun Communities, Inc. common stockholders and dilutive convertible securities per Share - fully diluted | $ | 0.86 | $ | 0.73 | |||
FFO (1) attributable to Sun Communities, Inc. common stockholders and dilutive convertible securities per Share excluding certain items - fully diluted | $ | 0.90 | $ | 0.90 | |||
(6) The effect of certain anti-dilutive convertible securities is excluded from these items.
Sun Communities, Inc. 1st Quarter 2016 Page 10
Statement of Operations – Same Community
(in thousands except for Other Information)
Three Months Ended March 31, | ||||||||||||||
2016 | 2015 | Change | % Change | |||||||||||
REVENUES: | ||||||||||||||
Income from real property | $ | 114,545 | $ | 107,447 | $ | 7,098 | 6.6 | % | ||||||
PROPERTY OPERATING EXPENSES: | ||||||||||||||
Payroll and benefits | 8,877 | 8,157 | 720 | 8.8 | % | |||||||||
Legal, taxes & insurance | 1,685 | 1,625 | 60 | 3.7 | % | |||||||||
Utilities | 6,396 | 6,239 | 157 | 2.5 | % | |||||||||
Supplies and repair | 2,731 | 2,560 | 171 | 6.7 | % | |||||||||
Other | 2,890 | 2,621 | 269 | 10.3 | % | |||||||||
Real estate taxes | 8,993 | 8,263 | 730 | 8.8 | % | |||||||||
Property operating expenses | 31,572 | 29,465 | 2,107 | 7.2 | % | |||||||||
NET OPERATING INCOME ("NOI")(2) | $ | 82,973 | $ | 77,982 | $ | 4,991 | 6.4 | % | ||||||
As of March 31, | |||||||||||||||
OTHER INFORMATION | 2016 | 2015 | Change | % Change | |||||||||||
Number of properties | 219 | 219 | |||||||||||||
Overall occupancy (7) (8) | 96.1 | % | 93.6 | % | (10) | 2.5 | % | ||||||||
Sites available for development | 5,906 | 6,574 | (668 | ) | (10.2 | )% | |||||||||
Monthly base rent per site - MH | $ | 488 | $ | 472 | $ | 16 | 3.4 | % | |||||||
Monthly base rent per site - RV (9) | $ | 430 | $ | 416 | $ | 14 | 3.4 | % | |||||||
Monthly base rent per site - Total (9) | $ | 481 | $ | 465 | $ | 16 | 3.4 | % | |||||||
(7) Includes manufactured housing and annual/seasonal recreational vehicle sites and excludes transient recreational vehicle sites.
(8) Occupancy % excludes recently completed but vacant expansion sites.
(9) Monthly base rent per site pertains to annual/seasonal RV sites and excludes transient RV sites.
(10) Occupancy reflects current year gains from expansion sites and the conversion of transient RV guests to annual/seasonal RV contracts as vacant in 2015.
Sun Communities, Inc. 1st Quarter 2016 Page 11
Rental Program Summary
(amounts in thousands except for *)
Three Months Ended March 31, | ||||||||||||||
2016 | 2015 | Change | % Change | |||||||||||
REVENUES: | ||||||||||||||
Rental home revenue | $ | 11,708 | $ | 11,129 | $ | 579 | 5.2 | % | ||||||
Site rent included in Income from real property | 15,218 | 15,127 | 91 | 0.6 | % | |||||||||
Rental Program revenue | 26,926 | 26,256 | 670 | 2.6 | % | |||||||||
EXPENSES: | ||||||||||||||
Commissions | 775 | 834 | (59 | ) | (7.1 | )% | ||||||||
Repairs and refurbishment | 2,666 | 2,416 | 250 | 10.3 | % | |||||||||
Taxes and insurance | 1,565 | 1,476 | 89 | 6.0 | % | |||||||||
Marketing and other | 870 | 879 | (9 | ) | (1.0 | )% | ||||||||
Rental Program operating and maintenance | 5,876 | 5,605 | 271 | 4.8 | % | |||||||||
NET OPERATING INCOME ("NOI") (2) | $ | 21,050 | $ | 20,651 | $ | 399 | 1.9 | % | ||||||
Occupied rental home information as of March 31, 2016 and 2015: | ||||||||||||||
Number of occupied rentals, end of period* | 10,815 | 11,157 | (342 | ) | (3.1 | )% | ||||||||
Investment in occupied rental homes, end of period | $ | 447,378 | $ | 431,421 | $ | 15,957 | 3.7 | % | ||||||
Number of sold rental homes* | 294 | 181 | 113 | 62.4 | % | |||||||||
Weighted average monthly rental rate, end of period* | $ | 865 | $ | 834 | $ | 31 | 3.7 | % | ||||||
Sun Communities, Inc. 1st Quarter 2016 Page 12
Homes Sales Summary
(amounts in thousands except for *)
Three Months Ended March 31, | ||||||||||||||
2016 | 2015 | Change | % Change | |||||||||||
New home sales | $ | 5,469 | $ | 5,246 | $ | 223 | 4.3 | % | ||||||
Pre-owned home sales | 19,268 | 11,588 | 7,680 | 66.3 | % | |||||||||
Revenue from home sales | 24,737 | 16,834 | 7,903 | 46.9 | % | |||||||||
New home cost of sales | 4,844 | 4,191 | 653 | 15.6 | % | |||||||||
Pre-owned home cost of sales | 13,340 | 8,366 | 4,974 | 59.5 | % | |||||||||
Cost of home sales | 18,184 | 12,557 | 5,627 | 44.8 | % | |||||||||
NOI / Gross Profit (2) | $ | 6,553 | $ | 4,277 | $ | 2,276 | 53.2 | % | ||||||
Gross profit – new homes | $ | 625 | $ | 1,055 | $ | (430 | ) | (40.8 | )% | |||||
Gross margin % – new homes | 11.4 | % | 20.1 | % | (8.7 | )% | ||||||||
Average selling price - new homes* | $ | 82,864 | $ | 79,484 | $ | 3,380 | 4.3 | % | ||||||
Gross profit – pre-owned homes | $ | 5,928 | $ | 3,222 | $ | 2,706 | 84.0 | % | ||||||
Gross margin % – pre-owned homes | 30.8 | % | 27.8 | % | 3.0 | % | ||||||||
Average selling price - pre-owned homes* | $ | 27,565 | $ | 24,294 | $ | 3,271 | 13.5 | % | ||||||
Home sales volume: | ||||||||||||||
New home sales* | 66 | 66 | — | — | % | |||||||||
Pre-owned home sales* | 699 | 477 | 222 | 46.5 | % | |||||||||
Total homes sold* | 765 | 543 | 222 | 40.9 | % | |||||||||
Sun Communities, Inc. 1st Quarter 2016 Page 13
Acquisition Summary - Properties Acquired in 2015 and 2016
(amounts in thousands except for statistical data)
Three Months Ended March 31, 2016 | |||
REVENUES: | |||
Income from real property (excluding transient revenue) | $ | 6,950 | |
Transient revenue | 1,364 | ||
Revenue from home sales | 1,842 | ||
Rental home revenue | 49 | ||
Ancillary revenues | 525 | ||
Total revenues | 10,730 | ||
COSTS AND EXPENSES: | |||
Property operating and maintenance | 2,218 | ||
Real estate taxes | 589 | ||
Cost of home sales | 1,439 | ||
Rental home operating and maintenance | 22 | ||
Ancillary expense | 473 | ||
Total expenses | 4,741 | ||
NET OPERATING INCOME ("NOI") (2) | $ | 5,989 | |
As of March 31, 2016 | |||
Other information: | |||
Number of properties | 14 | ||
Developed sites | 6,075 | ||
Occupied sites (11) | 4,033 | ||
Occupancy % (11) | 92.9 | % | |
Monthly base rent per site - MH | $ | 512 | |
Monthly base rent per site - RV (9) | $ | 497 | |
Monthly base rent per site - Total (9) | $ | 512 | |
Home sales volume: | |||
New homes | 10 | ||
Pre-owned homes | 31 | ||
Occupied rental home information: | |||
Number of occupied rentals, end of period | 65 | ||
Investment in occupied rental homes (in thousands) | $ | 2,765 | |
Weighted average monthly rental rate | $ | 835 | |
(9) Monthly base rent per site pertains to annual/seasonal recreational vehicle sites and excludes transient recreational vehicle sites.
(11) Includes manufactured housing and annual/seasonal recreational vehicle sites, and excludes transient recreational vehicle sites, which are included in total developed sites.
Sun Communities, Inc. 1st Quarter 2016 Page 14