pressreleasesuppcover2020.jpg



Table of Contents                    

    

            
Summary - Earnings Press Release
i - vii
 
 
Investor Information
 
 
Portfolio Overview
 
 
Financial Information
 
Financial and Operating Highlights
Balance Sheets
Statements of Operations
5 
Outstanding Securities and Capitalization
 
 
Reconciliations to Non-GAAP Financial Measures
Reconciliation of Net Income to Funds from Operations
Reconciliation of Net Income to Recurring EBITDA
Reconciliation of Net Income to Net Operating Income
 
 
Non-GAAP and Other Financial Measures
Debt Analysis
 
 
Selected Financial Information
 
Real Property Operations – Same Community
Home Sales Summary
Rental Program Summary
Acquisitions and Other Summary
 
 
Other Information
 
Property Summary
17 - 18
Capital Improvements, Development, and Acquisitions
Operating Statistics for Manufactured Homes and Annual RV’s
Footnotes and Definitions
21 - 23
 
 




sunlogofilea33.jpg
NEWS RELEASE
February 19, 2020

Sun Communities, Inc. Reports 2019 Fourth Quarter Results and 2020 Guidance

Southfield, Michigan, February 19, 2020 Sun Communities, Inc. (NYSE: SUI) (the “Company”), a real estate investment trust (“REIT”) that owns and operates, or has an interest in, manufactured housing (“MH”) and recreational vehicle (“RV”) communities, today reported its fourth quarter results for 2019.

Financial Results for the Quarter and Year Ended December 31, 2019

For the quarter ended December 31, 2019, total revenues increased $27.8 million, or 10.2 percent, to $301.8 million compared to $274.0 million for the same period in 2018. Net income attributable to common stockholders was $28.5 million, or $0.31 per diluted common share, for the quarter ended December 31, 2019, as compared to net income attributable to common stockholders of $9.0 million, or $0.11 per diluted common share, for the same period in 2018.

For the year ended December 31, 2019, total revenues increased $137.2 million, or 12.2 percent, to $1.3 billion compared to $1.1 billion for the same period in 2018. Net income attributable to common stockholders was $160.3 million, or $1.80 per diluted common share, for the year ended December 31, 2019, as compared to net income attributable to common stockholders of $105.5 million, or $1.29 per diluted common share, for the same period in 2018.

Non-GAAP Financial Measures and Portfolio Performance

Core Funds from Operations (“Core FFO”)(1) for the quarter ended December 31, 2019, was $1.10 per diluted share and OP unit (“Share”) as compared to $1.03 in the prior year, an increase of 6.8 percent. Core FFO(1) for the year ended December 31, 2019, was $4.92 per Share as compared to $4.58 in the prior year, an increase of 7.4 percent.

Same Community(2) Net Operating Income (“NOI”)(1) increased by 7.6 percent and 7.3 percent for the quarter and year ended December 31, 2019, respectively, as compared to the corresponding periods in 2018.

Same Community Occupancy (3) increased by 220 basis points to 98.4 percent at December 31, 2019, as compared to 96.2 percent at December 31, 2018.

Revenue Producing Sites increased by 669 sites for the quarter and 2,674 sites for the year ended December 31, 2019, respectively, bringing total portfolio occupancy to 96.4 percent.

Gary Shiffman, Chief Executive Officer of Sun Communities stated, “Sun Communities again delivered industry leading growth as we successfully executed on our strategic initiatives and saw strong results across the business. Our organic growth has been a consistent earnings driver as we benefit from sustained consumer demand for our high-quality, affordable homes and RV vacation destinations. Capital deployment during 2019 of over $1.2 billion in accretive acquisitions, expansions, and ground up development provide incremental growth opportunities for the years ahead. In recognition of an outstanding year and a solid future, the Board of Directors for the fourth consecutive year approved an increase in our quarterly dividend. We are proud of our accomplishments and our team and remain committed to delivering superior value to our shareholders.”

i


OPERATING HIGHLIGHTS

Portfolio Occupancy

Total portfolio occupancy was 96.4 percent at December 31, 2019, compared to 96.1 percent at December 31, 2018.

During the quarter ended December 31, 2019, revenue producing sites increased by 669 sites, as compared to 722 revenue producing sites gained during the fourth quarter of 2018.

During the year ended December 31, 2019, revenue producing sites increased by 2,674 sites, as compared to an increase of 2,600 revenue producing sites during the year ended December 31, 2018, a 2.8 percent increase.

Same Community(2) Results

For the 345 communities owned and operated by the Company since January 1, 2018, NOI(1) for the quarter ended December 31, 2019 increased 7.6 percent over the same period in 2018, as a result of a 6.4 percent increase in revenues and a 3.6 percent increase in operating expenses. Same Community occupancy(3) increased to 98.4 percent at December 31, 2019 from 96.2 percent at December 31, 2018.

For the year ended December 31, 2019, NOI(1) increased 7.3 percent over 2018, as a result of a 6.2 percent increase in revenues and a 3.8 percent increase in operating expenses.

Home Sales

During the quarter ended December 31, 2019, the Company sold 808 homes as compared to 878 homes sold during the same period in 2018. New home sales volume was 140 for both the quarters ended December 31, 2019 and 2018. Rental home sales, which are included in total home sales, were 281 in 2019, as compared to 297 sold during 2018.

During the year ended December 31, 2019, 3,439 homes were sold compared to 3,629 for the same period in 2018. New home sales volume increased 8.6 percent to 571 new home sales for the year ended December 31, 2019, as compared to 526 homes during the same period in 2018. Rental home sales, which are included in total home sales, were 1,140 in 2019, an increase of 1.6 percent over the 1,122 sold during 2018.


ii


PORTFOLIO ACTIVITY

Acquisitions

During the quarter ended December 31, 2019, the Company acquired the following communities:
Community Name
 
Type
 
Sites
 
Expansion Sites
 
State
 
Total Purchase Price (in millions)
 
Month Acquired
Slickrock Campground
 
RV
 
193
 
 
UT
 
$8.3
 
December
Pandion Ridge
 
RV
 
142
 
351
 
AL
 
$19.1
 
November
Jensen Portfolio (1)
 
MH
 
5,230
 
466
 
Various
 
$343.6
 
October
(1) Contains 31 communities located in CT, GA, MD, NH, NJ, NY, NC and SC.

For the year ended December 31, 2019, the Company acquired 47 communities, totaling over 10,000 developed sites and over 900 sites available for expansion, for a total purchase price of approximately $815.2 million.

Subsequent to the year ended December 31, 2019, the Company acquired Cape Cod RV Resort located in East Falmouth, Massachusetts with 230 developed sites for a purchase price of $13.5 million. In conjunction with the acquisition, the Company’s operating partnership issued 90,000 Series E Preferred Units, at an issuance price of $100 per unit.

Construction Activity

During the quarter ended December 31, 2019, the Company completed the construction of 284 sites at the following ground-up developments:
Community Name
 
Type
 
State
 
Completed Construction Sites
 
Remaining Construction Sites (1)
 
Total Sites Once Completed (1)
Carolina Pines
 
RV
 
SC
 
109

 
351
 
846

Jellystone Golden Valley
 
RV
 
NC
 
69

 
133
 
315

River Run
 
RV
 
CO
 
106

 
823
 
1,150

(1) Remaining sites are approximate and may be adjusted as final construction is completed.

For the year ended December 31, 2019, the Company completed the construction of approximately 1,100 sites at four ground-up developments and one redevelopment community.

During the quarter ended December 31, 2019, the Company completed the construction of 864 expansion sites in nine communities. For the year ended December 31, 2019, the Company completed the construction of approximately 1,230 expansion sites in 16 communities.


iii


BALANCE SHEET AND CAPITAL MARKETS ACTIVITY

Series A-4 Preferred Stock and OP Units

On December 13, 2019, as previously announced and disclosed, all outstanding shares of the Company’s 6.50% Series A-4 Cumulative Convertible Preferred Stock, and all of its operating partnership’s Series A-4 Preferred OP Units, were converted into common stock and common OP units, respectively. All 1,031,747 shares of Series A-4 Preferred Stock were converted into 458,541 shares of common stock (net of fractional shares paid in cash). All 405,656 Series A-4 preferred OP units were converted into 180,277 common OP units (net of fractional units paid in cash).

Debt Transactions

During the quarter ended December 31, 2019, the Company completed a 21-year, $400.0 million term loan transaction that carries an interest rate of 4.0 percent.  Concurrently, the Company repaid a $17.0 million term loan due to mature in 2020 and $127.3 million in term loans due to mature in 2021.  The Company also repaid four term loans secured by three properties totaling $21.5 million which were set to mature in 2020.

As of December 31, 2019, the Company had $3.4 billion of debt outstanding. The weighted average interest rate was 4.0 percent and the weighted average maturity was 11.1 years. The Company had $22.1 million of unrestricted cash on hand. At period-end the Company’s net debt to trailing twelve month Recurring EBITDA(1) ratio was 5.5 times.

2020 Distributions

After quarter end, the Company announced a 5.3 percent annual distribution increase to $3.16 per common share from $3.00 per common share. This increase will begin with the first quarter distribution to be paid in April 2020. While the Company has adopted the new annual distribution policy, the amount of each quarterly distribution on the Company’s common stock will be subject to approval by its Board of Directors.


iv


GUIDANCE 2020

The estimates and assumptions presented below represent a range of possible outcomes and may differ materially from actual results. Guidance estimates include acquisitions completed through the date of this release, and exclude any prospective acquisitions or capital markets activity. 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.”

 
 
Net Income
 
Core FFO(1)
Weighted average common shares outstanding, fully diluted (in mm)(i)
 
92.5
 
96.9
First quarter 2020, per fully diluted share
 
$0.34 - $0.37
 
$1.18 - $1.21
Full year 2020, per fully diluted share
 
$1.79 - $1.91
 
$5.20 - $5.30

 
 
1Q20
 
2Q20
 
3Q20
 
4Q20
Seasonality of Core FFO(1)
 
22.9%
 
23.8%
 
30.8%
 
22.5%

Total Portfolio
Number of communities: 422
 
 
2019 Actual
 
2020E
 
 
(in Millions)
 
Change %
Income from real property (excluding transient revenue)
 
$
793.4

 
9.6% - 10.1%
Transient revenue
 
132.3

 
13.8% - 15.0%
Income from real property
 
$
925.7

 
10.2% - 10.8%
Property operating and maintenance
 
266.4

 
11.9% - 12.4%
Real estate taxes
 
61.9

 
11.6% - 12.1%
Total property operating expenses
 
$
328.3

 
11.9% - 12.3%
NOI(1)
 
$
597.4

 
9.1% - 10.2%

Same Community(2) Portfolio(ii) 
Number of communities: 367
 
 
2019 Actual
 
2020E
 
 
(in Millions)
 
Change %
Income from real property (excluding transient revenue)
 
$
740.7

 
6.3% - 6.5%
Transient revenue
 
116.9

 
2.4% - 3.0%
Income from real property(iii)
 
$
857.6

 
5.7% - 6.0%
Property operating and maintenance(iii)(iv)
 
217.0

 
3.6% - 4.6%
Real estate taxes
 
59.8

 
7.2% - 8.0%
Total property operating expenses
 
$
276.8

 
4.4% - 5.3%
NOI(1)
 
$
580.8

 
6.0% - 6.8%

Weighted average monthly rental rate increase
 
 
 
 
 
 
 
4.0%
 
 
 
 
 
 
 
 
 
 
 
1Q20
 
2Q20
 
3Q20
 
4Q20
Same Community NOI(1) Seasonality
 
24.4%
 
24.1%
 
27.1%
 
24.4%


v


Total Company Supplementary Information:
 
 
2019 Actual
 
2020E
 
 
(in Millions)
 
Change %
Rental program, net
 
$
35.6

 
6.5% - 7.9%
Ancillary revenues, net
 
$
19.4

 
11.3% - 13.4%
Home sales contribution to Core FFO(v), net of home selling expenses
 
$
6.5

 
27.7% - 33.8%
Interest income
 
$
17.9

 
(51.4)% - (50.8)%
Brokerage commissions and other revenues, net, and income from nonconsolidated affiliates
 
$
15.5

 
7.1% - 9.0%
General and administrative expenses
 
$
94.0

 
11.7% - 14.1%
Loss of earnings from Florida Keys included in core FFO
 
$
1.4

 
(13.5)%
 
 
2020E
Increase in revenue producing sites
 
2,500 - 2,700
Vacant expansion site deliveries
 
1,000 - 1,200
Vacant ground-up development site deliveries
 
550 - 750
 
 
 
New home sales volume
 
650 - 700
Pre-owned home sales volume
 
2,550 - 2,750

(i) Certain securities that are dilutive to the computation of Core FFO per fully diluted share in the table above have been excluded from the computation of net income per fully diluted share, as inclusion of these securities would have been anti-dilutive to net income per fully diluted share.
(ii) The amounts in the table reflect constant currency, as Canadian currency figures included within the 2019 actual amounts have been translated at the assumed exchange rate used for 2020 guidance.
(iii) Water and sewer utility revenue of $34.7 million and $36.2 million has been reclassified from Income from real property to net against the related expense in Property operating maintenance for 2019 and 2020 guidance, respectively.
(iv) For 2019, property operating and maintenance expense excludes $0.7 million of expenses incurred for recently acquired properties to bring the properties up to the Company’s operating standards that do not meet the Company’s capitalization policy.
(v) Includes gross profit from new and certain pre-owned home sales. Gross profit from pre-owned home sales of depreciated rental homes is excluded.


vi



EARNINGS CONFERENCE CALL

A conference call to discuss fourth quarter operating results will be held on Thursday, February 20, 2020 at 11:00 A.M. (ET). To participate, call toll-free 877-407-9039. Callers outside the U.S. or Canada can access the call at 201-689-8470. A replay will be available following the call through March 5, 2020 and can be accessed toll-free by calling 844-512-2921 or 412-317-6671. The Conference ID number for the call and the replay is 13697139. 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 December 31, 2019, owned, operated, or had an interest in a portfolio of 422 communities comprising over 141,000 developed sites in 33 states and Ontario, Canada.

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

CONTACT

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

Forward-Looking Statements

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

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

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

vii


Investor Information                        


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

4th Quarter 2019 Supplemental Information     1          Sun Communities, Inc.


Portfolio Overview                            
(As of December 31, 2019)
sunportfoliomapjan2020.jpg

4th Quarter 2019 Supplemental Information     2          Sun Communities, Inc.


Financial and Operating Highlights                                        
(amounts in thousands, except for *)
 
Quarter Ended
 
12/31/2019
 
9/30/2019
 
6/30/2019
 
3/31/2019
 
12/31/2018
Financial Information
 
 
 
 
 
 
 
 
 
Total revenues
$
301,819

 
$
362,443

 
$
312,445

 
$
287,330

 
$
274,003

Net income
$
30,685

 
$
64,451

 
$
45,116

 
$
37,127

 
$
10,672

Net Income attributable to Sun Communities Inc. common stockholders
$
28,547

 
$
57,002

 
$
40,385

 
$
34,331

 
$
9,039

Basic earnings per share*
$
0.31

 
$
0.63

 
$
0.46

 
$
0.40

 
$
0.11

Diluted earnings per share*
$
0.31

 
$
0.63

 
$
0.46

 
$
0.40

 
$
0.11

 
 
 
 
 
 
 
 
 
 
Cash distributions declared per common share*
$
0.75

 
$
0.75

 
$
0.75

 
$
0.75

 
$
0.71

 
 
 
 
 
 
 
 
 
 
Recurring EBITDA (1)
$
144,738

 
$
179,953

 
$
151,502

 
$
147,714

 
$
133,335

FFO attributable to Sun Communities, Inc. common stockholders and dilutive convertible securities (1) (7)
$
105,533

 
$
119,496

 
$
108,112

 
$
106,779

 
$
88,562

Core FFO attributable to Sun Communities, Inc. common stockholders and dilutive convertible securities (1) (7)
$
104,534

 
$
137,369

 
$
108,002

 
$
106,259

 
$
92,695

FFO attributable to Sun Communities, Inc. common stockholders and dilutive convertible securities (1) (7) per share - fully diluted*
$
1.11

 
$
1.27

 
$
1.18

 
$
1.19

 
$
0.98

Core FFO attributable to Sun Communities, Inc. common stockholders and dilutive convertible securities (1) (7) per share - fully diluted*
$
1.10

 
$
1.46

 
$
1.18

 
$
1.18

 
$
1.03

 
 
 
 
 
 
 
 
 
 
Balance Sheet
 
 
 
 
 
 
 
 
 
Total assets
$
7,802,060

 
$
7,397,854

 
$
7,222,084

 
$
7,098,662

 
$
6,710,026

Total debt
$
3,434,402

 
$
3,271,341

 
$
3,107,775

 
$
3,448,117

 
$
3,124,303

Total liabilities
$
3,848,104

 
$
3,720,983

 
$
3,542,188

 
$
3,846,325

 
$
3,479,112

 
Quarter Ended
 
12/31/2019
 
9/30/2019
 
6/30/2019
 
3/31/2019
 
12/31/2018
Operating Information*
 
 
 
 
 
 
 
 
 
Communities
422

 
389

 
382

 
379

 
371

 
 
 
 
 
 
 
 
 
 
Manufactured home sites
93,821

 
88,024

 
87,555

 
87,425

 
84,428

Annual RV sites
26,056

 
25,756

 
25,009

 
24,750

 
24,535

Transient RV sites
21,416

 
20,882

 
20,585

 
20,173

 
19,491

Total sites
141,293

 
134,662

 
133,149

 
132,348

 
128,454

 
 
 
 
 
 
 
 
 
 
MH occupancy
95.5
%
 
95.7
%
 
95.7
%
 
95.4
%
 
95.0
%
RV occupancy
100.0
%
 
100.0
%
 
100.0
%
 
100.0
%
 
100.0
%
Total blended MH and RV occupancy
96.4
%
 
96.7
%
 
96.6
%
 
96.4
%
 
96.1
%
 
 
 
 
 
 
 
 
 
 
New home sales
140

 
167

 
139

 
125

 
140

Pre-owned home sales
668

 
739

 
788

 
673

 
738

Total home sales
808

 
906

 
927

 
798

 
878

 
Three Months Ended
 
Year Ended
 
December 31, 2019
 
December 31, 2019
Net Leased Sites (24)
 
 
 
MH net leased sites
437

 
1,541

RV net leased sites
232

 
1,133

Total net leased sites
669

 
2,674


4th Quarter 2019 Supplemental Information     3          Sun Communities, Inc.


Balance Sheets                                                
(amounts in thousands)
 
 
December 31, 2019
 
December 31, 2018
Assets
 
 
 
 
Land
 
$
1,414,279

 
$
1,201,945

Land improvements and buildings
 
6,595,272

 
5,586,250

Rental homes and improvements
 
627,175

 
571,661

Furniture, fixtures and equipment
 
282,874

 
201,090

Investment property
 
8,919,600

 
7,560,946

Accumulated depreciation
 
(1,686,980
)
 
(1,442,630
)
Investment property, net
 
7,232,620

 
6,118,316

Cash, cash equivalents and restricted cash
 
34,830

 
62,262

Marketable securities
 
94,727

 
49,037

Inventory of manufactured homes
 
62,061

 
49,199

Notes and other receivables, net
 
157,926

 
160,077

Collateralized receivables, net (4)
 

 
106,924

Other assets, net
 
219,896

 
164,211

Total Assets
 
$
7,802,060

 
$
6,710,026

Liabilities
 
 
 
 
Mortgage loans payable
 
$
3,180,592

 
$
2,815,957

Secured borrowings on collateralized receivables (4)
 

 
107,731

Preferred Equity - Sun NG Resorts - mandatorily redeemable
 
35,249

 
35,277

Preferred OP units - mandatorily redeemable
 
34,663

 
37,338

Lines of credit (5)
 
183,898

 
128,000

Distributions payable
 
71,704

 
63,249

Advanced reservation deposits and rent
 
133,420

 
133,698

Accrued expenses and accounts payable
 
127,289

 
106,281

Other liabilities
 
81,289

 
51,581

Total Liabilities
 
3,848,104

 
3,479,112

Commitments and contingencies
 
 
 
 
Series A-4 preferred stock
 

 
31,739

Series A-4 preferred OP units
 

 
9,877

Series D preferred OP units
 
50,913

 

Equity Interests - NG Sun LLC and NG Whitewater
 
27,091

 
21,976

Stockholders' Equity
 
 
 
 
Common stock
 
932

 
864

Additional paid-in capital
 
5,213,264

 
4,398,949

Accumulated other comprehensive loss
 
(1,331
)
 
(4,504
)
Distributions in excess of accumulated earnings
 
(1,393,141
)
 
(1,288,486
)
Total Sun Communities, Inc. stockholders' equity
 
3,819,724

 
3,106,823

Noncontrolling interests
 
 
 
 
Common and preferred OP units
 
47,686

 
53,354

Consolidated variable interest entities
 
8,542

 
7,145

Total noncontrolling interests
 
56,228

 
60,499

Total Stockholders' Equity
 
3,875,952

 
3,167,322

Total Liabilities, Temporary Equity and Stockholders' Equity
 
$
7,802,060


$
6,710,026



4th Quarter 2019 Supplemental Information     4          Sun Communities, Inc.


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

 
Three Months Ended
 
Year Ended
 
December 31, 2019
 
December 31, 2018
 
Change
 
% Change
 
December 31, 2019
 
December 31, 2018
 
Change
 
% Change
Revenues
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Income from real property
(excluding transient revenue)
$
205,131

 
$
183,059

 
$
22,072

 
12.1
 %
 
$
793,403

 
$
719,763

 
$
73,640

 
10.2
 %
Transient revenue
21,232

 
17,426

 
3,806

 
21.8
 %
 
132,261

 
106,210

 
26,051

 
24.5
 %
Revenue from home sales
45,271

 
43,783

 
1,488

 
3.4
 %
 
181,936

 
166,031

 
15,905

 
9.6
 %
Rental home revenue
14,745

 
13,700

 
1,045

 
7.6
 %
 
57,572

 
53,657

 
3,915

 
7.3
 %
Ancillary revenue
9,135

 
7,900

 
1,235

 
15.6
 %
 
66,881

 
54,107

 
12,774

 
23.6
 %
Interest income
3,368

 
5,003

 
(1,635
)
 
(32.7
)%
 
17,857

 
20,852

 
(2,995
)
 
(14.4
)%
Brokerage commissions and other revenues, net
2,937

 
3,132

 
(195
)
 
(6.2
)%
 
14,127

 
6,205

 
7,922

 
127.7
 %
Total Revenues
301,819

 
274,003

 
27,816

 
10.2
 %
 
1,264,037

 
1,126,825

 
137,212

 
12.2
 %
Expenses
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Property operating and maintenance
63,486

 
54,120

 
9,366

 
17.3
 %
 
266,378

 
236,097

 
30,281

 
12.8
 %
Real estate taxes
15,425

 
14,110

 
1,315

 
9.3
 %
 
61,880

 
56,555

 
5,325

 
9.4
 %
Cost of home sales
34,327

 
32,138

 
2,189

 
6.8
 %
 
134,357

 
123,333

 
11,024

 
8.9
 %
Rental home operating and maintenance
5,542

 
6,414

 
(872
)
 
(13.6
)%
 
21,995

 
23,304

 
(1,309
)
 
(5.6
)%
Ancillary expenses
9,144

 
9,058

 
86

 
0.9
 %
 
47,432

 
38,043

 
9,389

 
24.7
 %
Home selling expenses
3,752

 
4,403

 
(651
)
 
(14.8
)%
 
14,690

 
15,722

 
(1,032
)
 
(6.6
)%
General and administrative expenses
25,405

 
20,457

 
4,948

 
24.2
 %
 
93,964

 
81,429

 
12,535

 
15.4
 %
Catastrophic weather related charges, net
435

 
2,079

 
(1,644
)
 
(79.1
)%
 
1,737

 
92

 
1,645

 
1,788.0
 %
Depreciation and amortization
98,826

 
81,070

 
17,756

 
21.9
 %
 
328,067

 
287,262

 
40,805

 
14.2
 %
(Gain) / loss on extinguishment of debt
3,027

 
(65
)
 
3,092

 
(4,756.9
)%
 
16,505

 
1,190

 
15,315

 
1,287.0
 %
Interest expense
33,259

 
32,235

 
1,024

 
3.2
 %
 
133,153

 
130,556

 
2,597

 
2.0
 %
Interest on mandatorily redeemable preferred OP units / equity
1,207

 
1,143

 
64

 
5.6
 %
 
4,698

 
3,694

 
1,004

 
27.2
 %
Total Expenses
293,835

 
257,162

 
36,673

 
14.3
 %
 
1,124,856

 
997,277

 
127,579

 
12.8
 %
Income Before Other Items
7,984

 
16,841

 
(8,857
)
 
(52.6
)%
 
139,181

 
129,548

 
9,633

 
7.4
 %
Gain / (loss) on remeasurement of marketable securities
17,692

 
(3,639
)
 
21,331

 
(586.2
)%
 
34,240

 
(3,639
)
 
37,879

 
(1,040.9
)%
Other income / (expense), net (6)
4,946

 
(3,239
)
 
8,185

 
(252.7
)%
 
3,457

 
(6,453
)
 
9,910

 
(153.6
)%
Income / (loss) from nonconsolidated affiliates
(6
)
 
619

 
(625
)
 
(101.0
)%
 
1,374

 
790

 
584

 
73.9
 %
Current tax benefit / (expense)
(189
)
 
17

 
(206
)
 
(1,211.8
)%
 
(1,095
)
 
(595
)
 
(500
)
 
84.0
 %
Deferred tax benefit
258

 
73

 
185

 
253.4
 %
 
222

 
507

 
(285
)
 
(56.2
)%
Net Income
30,685

 
10,672

 
20,013

 
187.5
 %
 
177,379

 
120,158

 
57,221

 
47.6
 %
Less: Preferred return to preferred OP units / equity
(1,418
)
 
(1,151
)
 
267

 
23.2
 %
 
(6,058
)
 
(4,486
)
 
1,572

 
35.0
 %
Less: Amounts attributable to noncontrolling interests
(720
)
 
(51
)
 
669

 
1,311.8
 %
 
(9,768
)
 
(8,443
)
 
1,325

 
15.7
 %
Net Income attributable to Sun Communities, Inc.
28,547


9,470

 
19,077

 
201.4
 %
 
161,553

 
107,229

 
54,324

 
50.7
 %
Less: Preferred stock distribution

 
(431
)
 
(431
)
 
(100.0
)%
 
(1,288
)
 
(1,736
)
 
(448
)
 
(25.8
)%
Net Income attributable to Sun Communities, Inc. common stockholders
$
28,547

 
$
9,039

 
$
19,508

 
215.8
 %
 
$
160,265

 
$
105,493

 
$
54,772

 
51.9
 %
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Weighted average common shares outstanding - basic
91,342

 
85,481

 
5,861

 
6.9
 %
 
88,460

 
81,387

 
7,073

 
8.7
 %
Weighted average common shares outstanding - diluted
91,893

 
85,982

 
5,911

 
6.9
 %
 
88,915

 
82,040

 
6,875

 
8.4
 %
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Basic earnings per share
$
0.31

 
$
0.11

 
$
0.20

 
181.8
 %
 
$
1.80

 
$
1.29

 
$
0.51

 
39.5
 %
Diluted earnings per share
$
0.31

 
$
0.11

 
$
0.20

 
181.8
 %
 
$
1.80

 
$
1.29

 
$
0.51

 
39.5
 %

4th Quarter 2019 Supplemental Information     5          Sun Communities, Inc.


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

Outstanding Securities - As of December 31, 2019
 
 
 
 
 
 
 
 
 
 
 
Number of Units/Shares Outstanding
 
Conversion Rate*
 
If Converted
 
Issuance Price per unit*
 
Annual Distribution Rate*
Non-convertible securities
 
 
 
 
 
 
 
 
 
Common shares
93,180
 
N/A
 
N/A
 
N/A
 
$3.00^
 
 
 
 
 
 
 
 
 
 
Convertible securities
 
 
 
 
 
 
 
 
 
Series A-1 preferred OP units
309
 
2.4390
 
754
 
$100
 
6.0%
Series C preferred OP units
310
 
1.1100
 
345
 
$100
 
4.5%
Series D preferred OP units
489
 
0.8000
 
392
 
$100
 
3.8%
Series A-3 preferred OP units
40
 
1.8605
 
75
 
$100
 
4.5%
Common OP units
2,420
 
1.0000
 
2,420
 
N/A
 
Mirrors common shares distributions
^ Annual distribution is based on the last quarterly distribution annualized.
Capitalization - As of December 31, 2019
 
 
 
 
 
 
 
 
 
 
 
 
 
Equity
 
Shares
 
Share Price*
 
Total
Common shares
 
93,180

 
$
150.10

 
$
13,986,318

Common OP units
 
2,420

 
$
150.10

 
363,242

Subtotal
 
95,600

 
 
 
$
14,349,560

 
 
 
 
 
 
 
Series A-1 preferred OP units
 
754

 
$
150.10

 
$
113,175

Series C preferred OP units
 
345

 
$
150.10

 
51,785

Series D preferred OP units
 
392

 
$
150.10

 
58,839

Series A-3 preferred OP units
 
75

 
$
150.10

 
11,258

Total diluted shares outstanding
 
97,166

 
 
 
$
14,584,617

 
 
 
 
 
 
 
Debt
 
 
 
 
 
 
Mortgage loans payable
 
 
 
 
 
$
3,180,592

Preferred Equity - Sun NG Resorts - mandatorily redeemable
 
 
 
 
 
35,249

Preferred OP units - mandatorily redeemable
 
 
 
 
 
34,663

Lines of credit (5)
 
 
 
 
 
183,898

Total debt
 
 
 
 
 
$
3,434,402

 
 
 
 
 
 
 
Total Capitalization
 
 
 
 
 
$
18,019,019


4th Quarter 2019 Supplemental Information     6          Sun Communities, Inc.






















Reconciliations to Non-GAAP Financial Measures

















4th Quarter 2019 Supplemental Information     7          Sun Communities, Inc.


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

 
Three Months Ended
 
Year Ended
 
December 31, 2019
 
December 31, 2018
 
December 31, 2019
 
December 31, 2018
Net income attributable to Sun Communities, Inc. common stockholders
$
28,547

 
$
9,039

 
$
160,265

 
$
105,493

Adjustments
 
 
 
 
 
 
 
Depreciation and amortization
98,950

 
81,314

 
328,646

 
288,206

(Gain) / loss on remeasurement of marketable securities
(17,692
)
 
3,639

 
(34,240
)
 
3,639

Amounts attributable to noncontrolling interests
482

 
15

 
8,474

 
7,740

Preferred return to preferred OP units
519

 
552

 
2,610

 
2,206

Preferred distribution to Series A-4 preferred stock

 
432

 
1,288

 
1,737

Gain on disposition of assets, net
(5,273
)
 
(6,429
)
 
(26,356
)
 
(23,406
)
FFO attributable to Sun Communities, Inc. common stockholders and dilutive convertible securities (1) (7)
$
105,533

 
$
88,562

 
$
440,687

 
$
385,615

Adjustments
 
 
 
 
 
 
 
Other acquisition related costs (8)
244

 
220

 
1,146

 
1,001

(Gain) / loss on extinguishment of debt
3,027

 
(65
)
 
16,505

 
1,190

Catastrophic weather related charges, net
398

 
2,079

 
1,737

 
92

Loss of earnings - catastrophic weather related (9)

 
(1,267
)
 

 
(292
)
Other (income) / expense (6)
(4,946
)
 
3,239

 
(3,457
)
 
6,453

Other adjustments (a)
278

 
(73
)
 
314

 
310

Core FFO attributable to Sun Communities, Inc. common stockholders and dilutive convertible securities (1) (7)
$
104,534

 
$
92,695

 
$
456,932

 
$
394,369

 
 
 
 
 
 
 
 
Weighted average common shares outstanding - basic
91,342

 
85,481

 
88,460

 
81,387

Add
 
 
 
 
 
 
 
Common stock issuable upon conversion of stock options
1

 
2

 
1

 
2

Restricted stock
550

 
499

 
454

 
651

Common stock issuable upon conversion of Series A-4 preferred stock
292

 
472

 
423

 
472

Common stock issuable upon conversion of Series A-4 preferred OP units
143

 

 
172

 

Common OP units
2,300

 
2,727

 
2,448

 
2,733

Common stock issuable upon conversion of Series A-3 preferred OP units
75

 
75

 
75

 
75

Common stock issuable upon conversion of Series A-1 preferred OP units
760

 
810

 
784

 
821

Weighted average common shares outstanding - fully diluted
95,463

 
90,066

 
92,817

 
86,141

 
 
 
 
 
 
 
 
FFO attributable to Sun Communities, Inc. common stockholders and dilutive convertible securities (1) (7) per share - fully diluted
$
1.11

 
$
0.98

 
$
4.75

 
$
4.48

Core FFO attributable to Sun Communities, Inc. common stockholders and dilutive convertible securities (1) (7) per share - fully diluted
$
1.10

 
$
1.03

 
$
4.92

 
$
4.58

(a) Other adjustments include early retirement compensation expense, ground lease intangible write-off, and deferred tax benefits. 

4th Quarter 2019 Supplemental Information     8          Sun Communities, Inc.


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


 
Three Months Ended
 
Year Ended
 
December 31, 2019
 
December 31, 2018
 
December 31, 2019
 
December 31, 2018
Net Income attributable to Sun Communities, Inc. common stockholders
$
28,547

 
$
9,039

 
$
160,265

 
$
105,493

Adjustments
 
 
 
 
 
 
 
Depreciation and amortization
98,826

 
81,070

 
328,067

 
287,262

(Gain) / loss on extinguishment of debt
3,027

 
(65
)
 
16,505

 
1,190

Interest expense
34,466

 
33,378

 
137,851

 
134,250

Current tax (benefit) / expense
189

 
(17
)
 
1,095

 
595

Deferred tax benefit
(258
)
 
(73
)
 
(222
)
 
(507
)
(Income) / loss from nonconsolidated affiliates
6

 
(619
)
 
(1,374
)
 
(790
)
Less: Gain on dispositions of assets, net
(5,273
)
 
(6,429
)
 
(26,356
)
 
(23,406
)
EBITDAre (1)
$
159,530

 
$
116,284

 
$
615,831

 
$
504,087

Adjustments
 
 
 
 
 
 
 
Catastrophic weather related charges, net
435

 
2,079

 
1,737

 
92

(Gain) / loss on remeasurement of marketable securities
(17,692
)
 
3,639

 
(34,240
)
 
3,639

Other (income) / expense, net (6)
(4,946
)
 
3,239

 
(3,457
)
 
6,453

Preferred return to preferred OP units / equity
1,418

 
1,151

 
6,058

 
4,486

Amounts attributable to noncontrolling interests
720

 
51

 
9,768

 
8,443

Preferred stock distribution

 
431

 
1,288

 
1,736

Plus: Gain on dispositions of assets, net
5,273

 
6,429

 
26,356

 
23,406

Recurring EBITDA (1)
$
144,738

 
$
133,303


$
623,341


$
552,342




4th Quarter 2019 Supplemental Information     9          Sun Communities, Inc.


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


 
Three Months Ended
 
Year Ended
 
December 31, 2019
 
December 31, 2018
 
December 31, 2019
 
December 31, 2018
Net Income attributable to Sun Communities, Inc. common stockholders
$
28,547

 
$
9,039

 
$
160,265

 
$
105,493

Other revenues
(6,305
)
 
(8,135
)
 
(31,984
)
 
(27,057
)
Home selling expenses
3,752

 
4,403

 
14,690

 
15,722

General and administrative expenses
25,405

 
20,457

 
93,964

 
81,429

Catastrophic weather related charges, net
435

 
2,079

 
1,737

 
92

Depreciation and amortization
98,826

 
81,070

 
328,067

 
287,262

Gain / (loss) on extinguishment of debt
3,027

 
(65
)
 
16,505

 
1,190

Interest expense
34,466

 
33,378

 
137,851

 
134,250

(Gain) / loss on remeasurement of marketable securities
(17,692
)
 
3,639

 
(34,240
)
 
3,639

Other (income) / expense, net (6)
(4,946
)
 
3,239

 
(3,457
)
 
6,453

(Income) / loss from nonconsolidated affiliates
6

 
(619
)
 
(1,374
)
 
(790
)
Current tax (benefit) / expense
189

 
(17
)
 
1,095

 
595

Deferred tax benefit
(258
)
 
(73
)
 
(222
)
 
(507
)
Preferred return to preferred OP units / equity
1,418

 
1,151

 
6,058

 
4,486

Amounts attributable to noncontrolling interests
720

 
51

 
9,768

 
8,443

Preferred stock distribution

 
431

 
1,288

 
1,736

NOI (1) / Gross Profit
$
167,590


$
150,028


$
700,011


$
622,436


 
Three Months Ended
 
Year Ended
 
December 31, 2019
 
December 31, 2018
 
December 31, 2019
 
December 31, 2018
Real Property NOI (1)
$
147,452

 
$
132,255

 
$
597,406

 
$
533,321

Home Sales NOI (1) / Gross Profit
10,944

 
11,645

 
47,579

 
42,698

Rental Program NOI (1)
26,682

 
23,656

 
104,382

 
95,968

Ancillary NOI (1) / Gross Profit
(9
)
 
(1,158
)
 
19,449

 
16,064

Site rent from Rental Program (included in Real Property NOI) (1) (10)
(17,479
)
 
(16,370
)
 
(68,805
)
 
(65,615
)
NOI (1) / Gross Profit
$
167,590

 
$
150,028

 
$
700,011

 
$
622,436







4th Quarter 2019 Supplemental Information     10          Sun Communities, Inc.























Non-GAAP and Other Financial Measures

















4th Quarter 2019 Supplemental Information     11          Sun Communities, Inc.


Debt Analysis    
(amounts in thousands)

 
Quarter Ended
 
12/31/2019
 
9/30/2019
 
6/30/2019
 
3/31/2019
 
12/31/2018
Debt Outstanding
 
 
 
 
 
 
 
 
 
Mortgage loans payable
$
3,180,592

 
$
2,967,128

 
$
2,863,485

 
$
2,879,017

 
$
2,815,957

Secured borrowings on collateralized receivables (4)

 
93,669

 
98,299

 
102,676

 
107,731

Preferred Equity - Sun NG Resorts - mandatorily redeemable
35,249

 
35,249

 
35,249

 
35,249

 
35,277

Preferred OP units - mandatorily redeemable
34,663

 
34,663

 
34,663

 
34,663

 
37,338

Lines of credit (5)
183,898

 
140,632

 
76,079

 
396,512

 
128,000

Total debt
$
3,434,402

 
$
3,271,341

 
$
3,107,775

 
$
3,448,117

 
$
3,124,303

 
 
 
 
 
 
 
 
 
 
% Fixed / Floating
 
 
 
 
 
 
 
 
 
Fixed
94.7
%
 
95.7
%
 
97.6
%
 
88.5
%
 
95.9
%
Floating
5.3
%
 
4.3
%
 
2.4
%
 
11.5
%
 
4.1
%
Total
100.0
%
 
100.0
%
 
100.0
%
 
100.0
%
 
100.0
%
 
 
 
 
 
 
 
 
 
 
Weighted Average Interest Rates
 
 
 
 
 
 
 
 
 
Mortgage loans payable
4.05
%
 
4.13
%
 
4.24
%
 
4.24
%
 
4.22
%
Preferred Equity - Sun NG Resorts - mandatorily redeemable
6.00