pressrelease3rdqtr.jpg



Table of Contents                    

    

            
Summary - Earnings Press Release
i - vi
 
 
Investor Information
 
 
Portfolio Overview
 
 
Financial Information
 
Balance Sheets
Statements of Operations
4 
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
Financial and Operating Highlights
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
 
 




sunlogofilea22.jpg
NEWS RELEASE
October 23, 2019

Sun Communities, Inc. Reports 2019 Third Quarter Results

Southfield, Michigan, October 23, 2019 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 third quarter results for 2019.

Financial Results for the Quarter and Nine Months Ended September 30, 2019

For the quarter ended September 30, 2019, total revenues increased $39.0 million, or 12.1 percent, to $362.4 million compared to $323.4 million for the same period in 2018. Net income attributable to common stockholders was $57.0 million, or $0.63 per diluted common share, for the quarter ended September 30, 2019, as compared to net income attributable to common stockholders of $46.1 million, or $0.56 per diluted common share, for the same period in 2018.

For the nine months ended September 30, 2019, total revenues increased $109.4 million, or 12.8 percent, to $962.2 million compared to $852.8 million for the same period in 2018. Net income attributable to common stockholders was $131.7 million, or $1.50 per diluted common share, for the nine months ended September 30, 2019, as compared to net income attributable to common stockholders of $96.5 million, or $1.19 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 September 30, 2019, was $1.46 per diluted share and OP unit (“Share”) as compared to $1.35 in the prior year, an increase of 8.1 percent.

Same Community(2) Net Operating Income (“NOI”)(1) increased by 7.2 percent for the quarter ended September 30, 2019, as compared to the same period in 2018.

Same Community(2) Occupancy increased by 210 basis points to 98.3 percent, as compared to 96.2 percent at September 30, 2018.

Revenue Producing Sites increased by 766 sites for the quarter ended September 30, 2019, bringing total portfolio occupancy to 96.7 percent.

Gary Shiffman, Chief Executive Officer of Sun Communities stated, “During the third quarter, we continued our consistent track record of delivering strong organic growth, as portfolio-wide occupancy gains along with tight cost controls contributed to 7.2 percent same community NOI growth. These results were further enhanced by the solid performance at our recent acquisitions. Despite a competitive acquisition environment, Sun has completed over $444.0 million of transactions year to date which will strengthen our growth over time.  We believe that our ability to address sellers’ needs for flexible exit and monetization strategies will continue to be a competitive advantage in our pursuit of accretive acquisitions.”


i


OPERATING HIGHLIGHTS

Portfolio Occupancy

Total portfolio occupancy was 96.7 percent at September 30, 2019, compared to 96.1 percent at September 30, 2018.

During the quarter ended September 30, 2019, revenue producing sites increased by 766 sites, as compared to 628 revenue producing sites gained during the third quarter of 2018, a 22.0 percent increase.

During the nine months ended September 30, 2019, revenue producing sites increased by 2,005 sites, as compared to an increase of 1,878 revenue producing sites during the nine months ended September 30, 2018, a 6.8 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 September 30, 2019, increased 7.2 percent over the same period in 2018, as a result of a 6.1 percent increase in revenues, and 3.9 percent increase in operating expenses. Same Community occupancy(3) increased to 98.3 percent at September 30, 2019 from 96.2 percent at September 30, 2018.

For the nine months ended September 30, 2019, NOI(1) increased 7.2 percent over the same period in 2018, as a result of a 6.2 percent increase in revenues, and a 3.9 percent increase in operating expenses.

Home Sales

During the quarter ended September 30, 2019, the Company sold 906 homes as compared to 971 homes sold during the same period in 2018. New home sales volume increased 14.4 percent to 167 new home sales for the quarter ended September 30, 2019, as compared to 146 homes in the same period in 2018. Rental home sales, which are included in total home sales, were 317 in 2019, as compared to 316 sold during 2018.

During the nine months ended September 30, 2019, 2,631 homes were sold compared to 2,751 for the same period in 2018. New home sales volume increased 11.7 percent to 431 new home sales for the nine months ended September 30, 2019, as compared to 386 homes during the same period in 2018. Rental home sales, which are included in total home sales, were 859 in 2019, an increase of 4.1 percent over the 825 sold during 2018.


ii


PORTFOLIO ACTIVITY

Acquisitions

During the quarter ended September 30, 2019, the Company acquired the following communities:
Community Name
 
Type
 
Sites
 
 
Expansion Sites
 
State
 
Total Purchase Price (in millions)
 
Month Acquired
Glen Ellis
 
RV
 
244

 
 
40

 
NH
 
$
6.0

 
September
Leisure Point Resort
 
MH / RV
 
502

(1) 
 

 
DE
 
$
44.5

 
September
Chincoteague Island
 
RV
 

 
 

 
VA
 
$
19.5

 
August
Reunion Lake
 
RV
 
202

 
 
69

 
LA
 
$
23.5

 
July
(1) Contains 201 MH sites and 301 RV sites.

For the nine months ended September 30, 2019, the Company acquired 14 communities, totaling 5,058 sites, for a total purchase price of $444.2 million.

Pending Transaction - Jensen Portfolio

On August 22, 2019, the Company entered into an agreement to acquire a 31-community manufactured housing portfolio (the “Jensen Portfolio”) for $343.6 million. The Jensen Portfolio has 5,230 operating sites and 466 additional sites available for development. The 31 communities are located in eight states across the eastern United States. The purchase price will be paid through a combination of $274.8 million shares of common stock and cash consideration. We expect to acquire the Jensen Portfolio no later than October 31, 2019. However, the closing is subject to the satisfaction of customary closing conditions, including obtaining certain third party consents. If these conditions are not satisfied or waived, or if the merger agreement is otherwise terminated in accordance with its terms, then the acquisition will not be consummated.

Construction Activity

During the quarter ended September 30, 2019, the Company completed the construction of 485 sites at the following ground-up developments:
Community Name
 
Type
 
State
 
Completed Construction Sites
 
Remaining Construction Sites (1)
Carolina Pines
 
RV
 
SC
 
105

 
460
Jellystone Golden Valley
 
RV
 
NC
 
113

 
202
River Run Ranch
 
RV
 
CO
 
215

 
929
Smith Creek Crossing
 
MH
 
CO
 
52

 
258
(1) Remaining sites are approximate and may be adjusted as final construction is completed.

During the quarter ended September 30, 2019, the Company completed the construction of 177 expansion sites in three communities. Year to date, the Company has completed the construction of 365 expansion sites in 10 communities. The Company expects to complete the construction of an additional 800 to 1,000 expansion sites by year end.


iii


BALANCE SHEET AND CAPITAL MARKETS ACTIVITY

Series A-4 Preferred Stock and Series A-4 Preferred OP Units Conversion

The Company intends to convert 1,051,501 shares of Series A-4 preferred stock and 405,656 Series A-4 preferred OP units issued by the Operating Partnership into its common stock and common OP units. Each share of Series A-4 preferred stock is convertible into approximately 0.4444 shares of common stock and each Series A-4 preferred OP unit is convertible into approximately 0.4444 common OP units. The Company has the right under its charter and the Operating Partnership’s partnership agreement to convert these securities, if at any time after November 26, 2019, the volume weighted average of the daily volume weighted average price of a share of its common stock on the New York Stock Exchange is equal to or greater than $64.97 for at least 20 trading days in a period of 30 consecutive trading days (the “Pricing Target”). On October 17, 2019, the Company’s Board of Directors approved the conversion of all of the Series A-4 preferred stock and Series A-4 preferred OP units into common stock and common OP units, respectively, provided that the Pricing Target is satisfied on November 27, 2019. If the Pricing target is satisfied, the conversion is expected to occur on December 13, 2019.

Debt Transactions

As of September 30, 2019, the Company had $3.3 billion of debt outstanding. The weighted average interest rate was 4.3 percent and the weighted average maturity was 9.8 years. The Company had $26.2 million of unrestricted cash on hand. At period-end the Company’s net debt to trailing twelve month Recurring EBITDA(1) ratio was 5.3 times.

During the quarter ended September 30, 2019, the Company completed a $250.0 million ten-year term loan transaction which carries an interest rate of 2.925 percent.  Concurrently, the Company repaid a $134.0 million term loan which was due to mature in May 2023.




iv


GUIDANCE 2019

The Company is revising its 2019 guidance for the following metrics:
 
 
Previous Range
 FY 2019E
 
Revised Range
FY 2019E
 
4Q 2019E
Net Income per fully diluted share
 
$1.81 - $1.87
 
$1.77 - $1.81
 
$0.28 - $0.32
Core FFO (1) per fully diluted share
 
$4.84 - $4.90
 
$4.86 - $4.90
 
$1.04 - $1.08

Same Community(2) Portfolio
Number of communities: 345
 
2019E Change %
Income from real property
6.0% - 6.2%
Total property operating expenses
4.1% - 4.5%
Net operating income (1)
6.8% - 7.2%

Guidance estimates include the 31-community Jensen Portfolio acquisition, which is expected to close by October 31, 2019, and exclude any other prospective acquisitions and capital markets activity.

Core FFO(1) per Share estimates assume certain gain and loss items that management considers unrelated to the operational and financial performance of our core business will be adjusted from FFO(1). 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.”

EARNINGS CONFERENCE CALL

A conference call to discuss third quarter operating results will be held on Thursday, October 24, 2019 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 November 7, 2019 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 13694212. 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 September 30, 2019, owned, operated, or had an interest in a portfolio of 389 communities comprising over 134,000 developed sites in 32 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.


v



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.

vi


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
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

3rd Quarter 2019 Supplemental Information     1          Sun Communities, Inc.


Portfolio Overview                            
(As of September 30, 2019)
portfoliomap93019.jpg

3rd Quarter 2019 Supplemental Information     2          Sun Communities, Inc.


Balance Sheets                                                
(amounts in thousands)
 
 
(Unaudited)
 
 
 
 
September 30, 2019
 
December 31, 2018
Assets
 
 
 
 
Land
 
$
1,311,103

 
$
1,201,945

Land improvements and buildings
 
6,200,895

 
5,586,250

Rental homes and improvements
 
614,002

 
571,661

Furniture, fixtures and equipment
 
251,363

 
201,090

Investment property
 
8,377,363

 
7,560,946

Accumulated depreciation
 
(1,619,924
)
 
(1,442,630
)
Investment property, net
 
6,757,439

 
6,118,316

Cash and cash equivalents
 
26,198

 
50,311

Marketable securities
 
64,818

 
49,037

Inventory of manufactured homes
 
55,234

 
49,199

Notes and other receivables, net
 
174,934

 
160,077

Collateralized receivables, net (4)
 
93,054

 
106,924

Other assets, net
 
226,177

 
176,162

Total Assets
 
$
7,397,854

 
$
6,710,026

Liabilities
 
 
 
 
Mortgage loans payable
 
$
2,967,128

 
$
2,815,957

Secured borrowings on collateralized receivables (4)
 
93,669

 
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)
 
140,632

 
128,000

Distributions payable
 
69,726

 
63,249

Advanced reservation deposits and rent
 
137,797

 
133,698

Other liabilities
 
242,119

 
157,862

Total Liabilities
 
3,720,983

 
3,479,112

Commitments and contingencies
 
 
 
 
Series A-4 preferred stock
 
31,402

 
31,739

Series A-4 preferred OP units
 
9,540

 
9,877

Series D preferred OP units
 
51,248

 

Equity Interests - NG Sun LLC and NG Whitewater
 
27,461

 
21,976

Stockholders' Equity
 
 
 
 
Common stock
 
907

 
864

Additional paid-in capital
 
4,854,958

 
4,398,949

Accumulated other comprehensive loss
 
(2,825
)
 
(4,504
)
Distributions in excess of accumulated earnings
 
(1,353,214
)
 
(1,288,486
)
Total Sun Communities, Inc. stockholders' equity
 
3,499,826

 
3,106,823

Noncontrolling interests
 
 
 
 
Common and preferred OP units
 
49,540

 
53,354

Consolidated variable interest entities
 
7,854

 
7,145

Total noncontrolling interests
 
57,394

 
60,499

Total Stockholders' Equity
 
3,557,220

 
3,167,322

Total Liabilities, Temporary Equity and Stockholders' Equity
 
$
7,397,854


$
6,710,026



3rd Quarter 2019 Supplemental Information     3          Sun Communities, Inc.


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

 
Three Months Ended
 
Nine Months Ended
 
September 30, 2019
 
September 30, 2018
 
Change
 
% Change
 
September 30, 2019
 
September 30, 2018
 
Change
 
% Change
Revenues
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Income from real property (excluding transient revenue)
$
202,205

 
$
184,414

 
$
17,791

 
9.6
 %
 
$
588,272

 
$
536,704

 
$
51,568

 
9.6
 %
Transient revenue
54,218

 
45,193

 
9,025

 
20.0
 %
 
111,029

 
88,784

 
22,245

 
25.1
 %
Revenue from home sales
49,805

 
46,131

 
3,674

 
8.0
 %
 
136,665

 
122,248

 
14,417

 
11.8
 %
Rental home revenue
14,444

 
13,589

 
855

 
6.3
 %
 
42,827

 
39,957

 
2,870

 
7.2
 %
Ancillary revenue
31,999

 
27,608

 
4,391

 
15.9
 %
 
57,746

 
46,207

 
11,539

 
25.0
 %
Interest income
4,770

 
5,256

 
(486
)
 
(9.2
)%
 
14,489

 
15,849

 
(1,360
)
 
(8.6
)%
Brokerage commissions and other revenues, net
5,002

 
1,222

 
3,780

 
309.3
 %
 
11,190

 
3,073

 
8,117

 
264.1
 %
Total Revenues
362,443

 
323,413

 
39,030

 
12.1
 %
 
962,218

 
852,822

 
109,396

 
12.8
 %
Expenses
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Property operating and maintenance
79,095

 
71,656

 
7,439

 
10.4
 %
 
202,892

 
181,977

 
20,915

 
11.5
 %
Real estate taxes
15,399

 
14,533

 
866

 
6.0
 %
 
46,455

 
42,445

 
4,010

 
9.4
 %
Cost of home sales
36,318

 
33,692

 
2,626

 
7.8
 %
 
100,030

 
91,195

 
8,835

 
9.7
 %
Rental home operating and maintenance
6,008

 
6,236

 
(228
)
 
(3.7
)%
 
15,887

 
16,778

 
(891
)
 
(5.3
)%
Ancillary expenses
18,707

 
15,361

 
3,346

 
21.8
 %
 
38,288

 
28,985

 
9,303

 
32.1
 %
Home selling expenses
3,988

 
4,043

 
(55
)
 
(1.4
)%
 
10,938

 
11,319

 
(381
)
 
(3.4
)%
General and administrative expenses
22,975

 
19,763

 
3,212

 
16.3
 %
 
68,559

 
60,972

 
7,587

 
12.4
 %
Catastrophic weather related charges, net
341

 
173

 
168

 
97.1
 %
 
1,302

 
(1,987
)
 
3,289

 
(165.5
)%
Depreciation and amortization
76,532

 
71,982

 
4,550

 
6.3
 %
 
229,241

 
206,192

 
23,049

 
11.2
 %
Loss on extinguishment of debt
12,755

 
528

 
12,227

 
2,315.7
 %
 
13,478

 
1,255

 
12,223

 
973.9
 %
Interest expense
32,219

 
33,932

 
(1,713
)
 
(5.0
)%
 
99,894

 
98,321

 
1,573

 
1.6
 %
Interest on mandatorily redeemable preferred OP units / equity
1,216

 
1,142

 
74

 
6.5
 %
 
3,491

 
2,551

 
940

 
36.8
 %
Total Expenses
305,553

 
273,041

 
32,512

 
11.9
 %
 
830,455

 
740,003

 
90,452

 
12.2
 %
Income Before Other Items
56,890

 
50,372

 
6,518

 
12.9
 %
 
131,763

 
112,819

 
18,944

 
16.8
 %
Remeasurement of marketable securities
12,661

 

 
12,661

 
N/A

 
16,548

 

 
16,548

 
N/A

Other income / (expense), net (6)
(4,408
)
 
1,231

 
(5,639
)
 
(458.1
)%
 
(1,489
)
 
(3,214
)
 
1,725

 
(53.7
)%
Income from nonconsolidated affiliates
77

 
126

 
(49
)
 
(38.9
)%
 
814

 
59

 
755

 
1,279.7
 %
Current tax expense
(420
)
 
(213
)
 
(207
)
 
97.2
 %
 
(906
)
 
(612
)
 
(294
)
 
48.0
 %
Deferred tax benefit / (expense)
(349
)
 
199

 
(548
)
 
(275.4
)%
 
(36
)
 
434

 
(470
)
 
(108.3
)%
Net Income
64,451

 
51,715

 
12,736

 
24.6
 %
 
146,694

 
109,486

 
37,208

 
34.0
 %
Less: Preferred return to preferred OP units / equity
(1,599
)
 
(1,152
)
 
447

 
38.8
 %
 
(4,640
)
 
(3,335
)
 
1,305

 
39.1
 %
Less: Amounts attributable to noncontrolling interests
(5,422
)
 
(4,071
)
 
1,351

 
33.2
 %
 
(9,048
)
 
(8,392
)
 
656

 
7.8
 %
Net Income attributable to Sun Communities, Inc.
57,430


46,492

 
10,938

 
23.5
 %
 
133,006

 
97,759

 
35,247

 
36.1
 %
Less: Preferred stock distribution
(428
)
 
(432
)
 
(4
)
 
(0.9
)%
 
(1,288
)
 
(1,305
)
 
(17
)
 
(1.3
)%
Net Income attributable to Sun Communities, Inc. common stockholders
$
57,002

 
$
46,060

 
$
10,942

 
23.8
 %
 
$
131,718

 
$
96,454

 
$
35,264

 
36.6
 %
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Weighted average common shares outstanding - basic
89,847

 
81,599

 
8,248

 
10.1
 %
 
87,499

 
80,022

 
7,477

 
9.3
 %
Weighted average common shares outstanding - diluted
90,332

 
82,081

 
8,251

 
10.1
 %
 
87,931

 
80,024

 
7,907

 
9.9
 %
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Basic earnings per share
$
0.63

 
$
0.56

 
$
0.07

 
12.5
 %
 
$
1.49

 
$
1.19

 
$
0.30

 
25.2
 %
Diluted earnings per share
$
0.63

 
$
0.56

 
$
0.07

 
12.5
 %
 
$
1.50

 
$
1.19

 
$
0.31

 
26.1
 %

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


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

Outstanding Securities - As of September 30, 2019
 
 
 
 
 
 
 
 
 
 
 
Number of Units/Shares Outstanding
 
Conversion Rate*
 
If Converted
 
Issuance Price per unit*
 
Annual Distribution Rate*
Non-convertible securities
 
 
 
 
 
 
 
 
 
Common shares
90,683
 
N/A
 
N/A
 
N/A
 
$3.00^
 
 
 
 
 
 
 
 
 
 
Convertible securities
 
 
 
 
 
 
 
 
 
Series A-1 preferred OP units
316
 
2.4390
 
771
 
$100
 
6.0%
Series A-3 preferred OP units
40
 
1.8605
 
75
 
$100
 
4.5%
Series A-4 preferred OP units
406
 
0.4444
 
180
 
$25
 
6.5%
Series C preferred OP units
310
 
1.1100
 
345
 
$100
 
4.5%
Series D preferred OP units
489
 
0.8000
 
391
 
$100
 
3.8%
Common OP units
2,282
 
1.0000
 
2,282
 
N/A
 
Mirrors common shares distributions
Series A-4 preferred stock
1,052
 
0.4444
 
468
 
$25
 
6.5%
^ Annual distribution is based on the last quarterly distribution annualized.
Capitalization - As of September 30, 2019
 
 
 
 
 
 
 
 
 
 
 
 
 
Equity
 
Shares
 
Share Price*
 
Total
Common shares
 
90,683

 
$
148.45

 
$
13,461,891

Common OP units
 
2,282

 
$
148.45

 
338,763

Subtotal
 
92,965

 
 
 
$
13,800,654

 
 
 
 
 
 
 
Series A-1 preferred OP units
 
771

 
$
148.45

 
$
114,455

Series A-3 preferred OP units
 
75

 
$
148.45

 
11,134

Series A-4 preferred OP units
 
180

 
$
148.45

 
26,721

Series C preferred OP units
 
345

 
$
148.45

 
51,215

Series D preferred OP units
 
391

 
$
148.45

 
58,044

Total diluted shares outstanding
 
94,727

 
 
 
$
14,062,223

 
Debt
Mortgage loans payable
 
 
 
 
 
$
2,967,128

Secured borrowings on collateralized receivables (4)
 
 
 
 
 
93,669

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

Preferred OP units - mandatorily redeemable
 
 
 
 
 
34,663

Lines of credit (5)
 
 
 
 
 
140,632

Total debt
 
 
 
 
 
$
3,271,341

 
Preferred
Series A-4 preferred stock
 
1,052

 
$
25.00

 
$
26,300

Total Capitalization
 
 
 
 
 
$
17,359,864


3rd Quarter 2019 Supplemental Information     5          Sun Communities, Inc.






















Reconciliations to Non-GAAP Financial Measures

















3rd Quarter 2019 Supplemental Information     6          Sun Communities, Inc.


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

 
Three Months Ended
 
Nine Months Ended
 
September 30, 2019
 
September 30, 2018
 
September 30, 2019
 
September 30, 2018
Net income attributable to Sun Communities, Inc. common stockholders
$
57,002

 
$
46,060

 
$
131,718

 
$
96,454

Adjustments
 
 
 
 
 
 
 
Depreciation and amortization
76,692

 
72,269

 
229,698

 
206,892

Remeasurement of marketable securities
(12,661
)
 

 
(16,548
)
 

Amounts attributable to noncontrolling interests
4,839

 
4,311

 
7,720

 
7,724

Preferred return to preferred OP units
530

 
549

 
1,594

 
1,654

Preferred distribution to Series A-4 preferred stock
428

 
432

 
1,288

 
1,305

Gain on disposition of assets, net
(7,334
)
 
(6,603
)
 
(21,083
)
 
(16,977
)
FFO attributable to Sun Communities, Inc. common stockholders and dilutive convertible securities (1) (7)
$
119,496

 
$
117,018

 
$
334,387

 
$
297,052

Adjustments
 
 
 
 
 
 
 
Other acquisition related costs (8)
375

 
345

 
902

 
781

Loss on extinguishment of debt
12,755

 
528

 
13,478

 
1,255

Catastrophic weather related charges, net
363

 
173

 
1,339

 
(1,987
)
Loss of earnings - catastrophic weather related (9)
(377
)
 
325

 

 
975

Other (income) / expense (6)
4,408

 
(1,231
)
 
1,489

 
3,214

Ground lease intangible write-off

 

 

 
817

Deferred tax (benefit) / expense
349

 
(199
)
 
36

 
(434
)
Core FFO attributable to Sun Communities, Inc. common stockholders and dilutive convertible securities (1) (7)
$
137,369

 
$
116,959

 
$
351,631

 
$
301,673

 
 
 
 
 
 
 
 
Weighted average common shares outstanding - basic
89,847

 
81,599

 
87,499

 
80,022

Add
 
 
 
 
 
 
 
Common stock issuable upon conversion of stock options
1

 
2

 
1

 
2

Restricted stock
484

 
480

 
431

 
633

Common OP units
2,284

 
2,731

 
2,498

 
2,735

Common stock issuable upon conversion of Series A-4 preferred stock
467

 
472

 
467

 
472

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
780

 
813

 
792

 
825

Common stock issuable upon conversion of Aspen preferred OP units

 
448

 

 

Weighted average common shares outstanding - fully diluted
93,938

 
86,620

 
91,763

 
84,764

 
 
 
 
 
 
 
 
FFO attributable to Sun Communities, Inc. common stockholders and dilutive convertible securities (1) (7) per share - fully diluted
$
1.27

 
$
1.35

 
$
3.64

 
$
3.50

Core FFO attributable to Sun Communities, Inc. common stockholders and dilutive convertible securities (1) (7) per share - fully diluted
$
1.46

 
$
1.35

 
$
3.83

 
$
3.56


3rd Quarter 2019 Supplemental Information     7          Sun Communities, Inc.


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


 
Three Months Ended
 
Nine Months Ended
 
September 30, 2019
 
September 30, 2018
 
September 30, 2019
 
September 30, 2018
Net Income attributable to Sun Communities, Inc. common stockholders
$
57,002

 
$
46,060

 
$
131,718

 
$
96,454

Adjustments
 
 
 
 
 
 
 
Depreciation and amortization
76,532

 
71,982

 
229,241

 
206,192

Loss on extinguishment of debt
12,755

 
528

 
13,478

 
1,255

Interest expense
33,435

 
35,074

 
103,385

 
100,872

Current tax expense
420

 
213

 
906

 
612

Deferred tax (benefit) / expense
349

 
(199
)
 
36

 
(434
)
Income from nonconsolidated affiliates
(77
)
 
(126
)
 
(814
)
 
(59
)
Less: Gain on dispositions of assets, net
(7,334
)
 
(6,603
)
 
(21,083
)
 
(16,977
)
EBITDAre (1)
$
173,082

 
$
146,929

 
$
456,867

 
$
387,915

Adjustments
 
 
 
 
 
 
 
Catastrophic weather related charges, net
341

 
173

 
1,302

 
(1,987
)
Remeasurement of marketable securities
(12,661
)
 

 
(16,548
)
 

Other (income) / expense, net (6)
4,408

 
(1,231
)
 
1,489

 
3,214

Preferred return to preferred OP units / equity
1,599

 
1,152

 
4,640

 
3,335

Amounts attributable to noncontrolling interests
5,422

 
4,071

 
9,048

 
8,392

Preferred stock distribution
428

 
432

 
1,288

 
1,305

Plus: Gain on dispositions of assets, net
7,334

 
6,603

 
21,083

 
16,977

Recurring EBITDA (1)
$
179,953

 
$
158,129


$
479,169


$
419,151




3rd Quarter 2019 Supplemental Information     8          Sun Communities, Inc.


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


 
Three Months Ended
 
Nine Months Ended
 
September 30, 2019
 
September 30, 2018
 
September 30, 2019
 
September 30, 2018
Net Income attributable to Sun Communities, Inc. common stockholders
$
57,002

 
$
46,060

 
$
131,718

 
$
96,454

Other revenues
(9,772
)
 
(6,478
)
 
(25,679
)
 
(18,922
)
Home selling expenses
3,988

 
4,043

 
10,938

 
11,319

General and administrative expenses
22,975

 
19,763

 
68,559

 
60,972

Catastrophic weather related charges, net
341

 
173

 
1,302

 
(1,987
)
Depreciation and amortization
76,532

 
71,982

 
229,241

 
206,192

Loss on extinguishment of debt
12,755

 
528

 
13,478

 
1,255

Interest expense
33,435

 
35,074

 
103,385

 
100,872

Remeasurement of marketable securities
(12,661
)
 

 
(16,548
)
 

Other (income) / expense, net (6)
4,408

 
(1,231
)
 
1,489

 
3,214

Income from nonconsolidated affiliates
(77
)
 
(126
)
 
(814
)
 
(59
)
Current tax expense
420

 
213

 
906

 
612

Deferred tax (benefit) / expense
349

 
(199
)
 
36

 
(434
)
Preferred return to preferred OP units / equity
1,599

 
1,152

 
4,640

 
3,335

Amounts attributable to noncontrolling interests
5,422

 
4,071

 
9,048

 
8,392

Preferred stock distribution
428

 
432

 
1,288

 
1,305

NOI (1) / Gross Profit
$
197,144


$
175,457


$
532,987


$
472,520


 
Three Months Ended
 
Nine Months Ended
 
September 30, 2019
 
September 30, 2018
 
September 30, 2019
 
September 30, 2018
Real Property NOI (1)
$
161,929

 
$
143,418

 
$
449,954

 
$
401,066

Home Sales NOI (1) / Gross Profit
13,487

 
12,439

 
36,635

 
31,053

Rental Program NOI (1)
25,706

 
23,750

 
78,266

 
72,424

Ancillary NOI (1) / Gross Profit
13,292

 
12,247

 
19,458

 
17,222

Site rent from Rental Program (included in Real Property NOI) (1) (10)
(17,270
)
 
(16,397
)
 
(51,326
)
 
(49,245
)
NOI (1) / Gross Profit
$
197,144

 
$
175,457

 
$
532,987

 
$
472,520







3rd Quarter 2019 Supplemental Information     9          Sun Communities, Inc.























Non-GAAP and Other Financial Measures

















3rd Quarter 2019 Supplemental Information     10          Sun Communities, Inc.


Financial and Operating Highlights                                        
(amounts in thousands, except for *)
 
Quarter Ended
 
9/30/2019
 
6/30/2019
 
3/31/2019
 
12/31/2018
 
9/30/2018
Financial Information
 
 
 
 
 
 
 
 
 
Total revenues
$
362,443

 
$
312,445

 
$
287,330

 
$
274,004

 
$
323,538

Net income
$
64,451

 
$
45,116

 
$
37,127

 
$
10,672

 
$
51,715

Net Income attributable to Sun Communities Inc.
$
57,002

 
$
40,385

 
$
34,331

 
$
9,039

 
$
46,060

Basic earnings per share*
$
0.63

 
$
0.46

 
$
0.40

 
$
0.11

 
$
0.56

Diluted earnings per share*
$
0.63

 
$
0.46

 
$
0.40

 
$
0.11

 
$
0.56

 
 
 
 
 
 
 
 
 
 
Cash distributions declared per common share*
$
0.75

 
$
0.75

 
$
0.75

 
$
0.71

 
$
0.71

 
 
 
 
 
 
 
 
 
 
Recurring EBITDA (1)
$
179,953

 
$
151,502

 
$
147,714

 
$
133,335

 
$
158,129

FFO attributable to Sun Communities, Inc. common stockholders and dilutive convertible securities (1) (7)
$
119,496

 
$
108,112

 
$
106,779

 
$
88,562

 
$
117,018

Core FFO attributable to Sun Communities, Inc. common stockholders and dilutive convertible securities (1) (7)
$
137,369

 
$
108,002

 
$
106,259

 
$
92,695

 
$
116,959

FFO attributable to Sun Communities, Inc. common stockholders and dilutive convertible securities (1) (7) per share - fully diluted*
$
1.27

 
$
1.18

 
$
1.19

 
$
0.98

 
$
1.35

Core FFO attributable to Sun Communities, Inc. common stockholders and dilutive convertible securities (1) (7) per share - fully diluted*
$
1.46

 
$
1.18

 
$
1.18

 
$
1.03

 
$
1.35

 
 
 
 
 
 
 
 
 
 
Balance Sheet
 
 
 
 
 
 
 
 
 
Total assets
$
7,397,854

 
$
7,222,084

 
$
7,098,662

 
$
6,710,026

 
$
6,653,726

Total debt
$
3,271,341

 
$
3,107,775

 
$
3,448,117

 
$
3,124,303

 
$
3,004,929

Total liabilities
$
3,720,983

 
$
3,542,188

 
$
3,846,325

 
$
3,479,112

 
$
3,367,285

 
Quarter Ended
 
9/30/2019
 
6/30/2019
 
3/31/2019
 
12/31/2018
 
9/30/2018
Operating Information*
 
 
 
 
 
 
 
 
 
Communities
389

 
382

 
379

 
371

 
370

 
 
 
 
 
 
 
 
 
 
Manufactured home sites
88,024

 
87,555

 
87,425

 
84,428

 
84,033

Annual RV sites
25,756

 
25,009

 
24,750

 
24,535

 
24,109

Transient RV sites
20,882

 
20,585

 
20,173

 
19,491

 
19,432

Total sites
134,662

 
133,149

 
132,348

 
128,454

 
127,574

 
 
 
 
 
 
 
 
 
 
MH occupancy
95.7
%
 
95.7
%
 
95.4
%
 
95.0
%
 
94.9
%
RV occupancy
100.0
%
 
100.0
%
 
100.0
%
 
100.0
%
 
100.0
%
Total blended MH and RV occupancy
96.7
%
 
96.6
%
 
96.4
%
 
96.1
%
 
96.1
%
 
 
 
 
 
 
 
 
 
 
New home sales
167

 
139

 
125

 
140

 
146

Pre-owned home sales
739

 
788

 
673

 
738

 
825

Total home sales
906

 
927

 
798

 
878

 
971

 
Three Months Ended
 
Nine Months Ended
 
September 30, 2019
 
September 30, 2019
Net Lease Sites (24)
 
 
 
MH net lease sites
296

 
1,104

RV net lease sites
470

 
901

Total net leased sites
766

 
2,005


3rd Quarter 2019 Supplemental Information     11          Sun Communities, Inc.


Debt Analysis    
(amounts in thousands)

 
Quarter Ended
 
9/30/2019
 
6/30/2019
 
3/31/2019
 
12/31/2018
 
9/30/2018
Debt Outstanding
 
 
 
 
 
 
 
 
 
Mortgage loans payable
$
2,967,128

 
$
2,863,485

 
$
2,879,017

 
$
2,815,957

 
$
2,819,225

Secured borrowings on collateralized receivables (4)
93,669

 
98,299

 
102,676

 
107,731

 
113,089

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

 
35,249

 
35,249

 
35,277

 
35,277

Preferred OP units - mandatorily redeemable
34,663

 
34,663

 
34,663

 
37,338

 
37,338

Lines of credit (5)
140,632

 
76,079

 
396,512

 
128,000

 

Total debt
$
3,271,341

 
$
3,107,775

 
$
3,448,117

 
$
3,124,303

 
$
3,004,929

 
 
 
 
 
 
 
 
 
 
% Fixed / Floating
 
 
 
 
 
 
 
 
 
Fixed
95.7
%
 
97.6
%
 
88.5
%
 
95.9
%
 
100.0
%
Floating
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
4.13
%
 
4.24
%
 
4.24
%
 
4.22
%
 
4.23
%
Preferred Equity - Sun NG Resorts - mandatorily redeemable
6.00
%
 
6.00
%
 
6.00
%
 
6.00
%
 
6.00
%
Preferred OP units - mandatorily redeemable
6.50
%
 
6.50
%
 
6.50
%
 
6.61
%
 
6.61
%
Lines of credit (5)
3.23
%
 
3.34
%
 
3.73
%
 
3.77
%
 
%
Average before Secured borrowings (4)
4.14
%
 
4.27
%
 
4.22
%
 
4.25
%
 
4.28
%
Secured borrowings on collateralized receivables (4)
9.92
%
 
9.93
%
 
9.94
%
 
9.94
%
 
9.95
%
Total average
4.30
%
 
4.44
%
 
4.39
%
 
4.45
%
 
4.40
%
 
 
 
 
 
 
 
 
 
 
Debt Ratios
 
 
 
 
 
 
 
 
 
Net Debt / Recurring EBITDA (1) (TTM)
5.3

 
5.2

 
6.0

 
5.6

 
5.4

Net Debt / Enterprise Value
18.7
%
 
20.2
%
 
24.1
%
 
25.2
%
 
24.1
%
Net Debt / Gross Assets
36.0
%
 
35.1
%
 
39.8
%
 
37.7
%
 
35.9
%
 
 
 
 
 
 
 
 
 
 
Coverage Ratios
 
 
 
 
 
 
 
 
 
Recurring EBITDA (1) (TTM) / Interest
4.4

 
4.2

 
4.1

 
4.0

 
3.9

Recurring EBITDA (1) (TTM) / Interest + Pref. Distributions + Pref. Stock Distribution
4.2

 
4.0

 
3.9

 
3.9

 
3.8


Maturities / Principal Amortization Next Five Years
Remaining 2019
 
2020
 
2021
 
2022
 
2023
Mortgage loans payable
 
 
 
 
 
 
 
 
 
Maturities