NEWS RELEASE
October 23, 2017
Southfield,
Michigan, October 23, 2017 - 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.
Financial Results for the Quarter
and Nine Months Ended September 30, 2017
For the quarter ended
September 30, 2017, total revenues increased $18.5 million, or
7.4 percent, to $268.2 million compared to $249.7 million for the
same period in 2016. Net income attributable to common stockholders
was $24.1 million, or $0.31 per diluted common share, as compared
to net income attributable to common stockholders of $18.9 million,
or $0.27 net income per diluted common share, for the same period
in 2016.
For the nine months ended
September 30, 2017, total revenues increased $125.4 million,
or 20.4 percent, to $740.5 million compared to $615.1 million for
the same period in 2016. Net income attributable to common
stockholders was $57.6 million, or $0.76 per diluted common share,
as compared to net income attributable to common stockholders of
$19.0 million, or $0.30 per diluted common share, for the same
period in 2016.
Non-GAAP Financial Measures and
Portfolio Performance
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Funds from Operations ("FFO")(1)
excluding certain items was $1.13 per diluted share and OP unit
("Share") for both the quarter ended September 30, 2017 and
2016.
-
Same Community Net Operating Income
("NOI")(1) increased
by 7.7 percent and 6.8 percent for the quarter and nine months
ended September 30, 2017, respectively, as compared to the
same periods in 2016.
-
Revenue producing sites increased by 394 sites
for the quarter ended September 30, 2017, as compared to an
increase of 292 sites in the same period in
2016.
-
Home sales volumes of 2,432 for the nine months
ended September 30, 2017, increased from 2,410 for the same
period in 2016.
"Our strength in the third quarter
was driven by our continued ability to generate internal
growth. Our same community NOI increased by 7.7 percent in the
quarter boosted by a 160-basis point occupancy gain," said Gary A.
Shiffman, Chairman and Chief Executive Officer. "We have laid
the foundation for ongoing internal growth through our active
expansion site development program, and we are confident in the
consistent value-generation embedded in our platform. On the
acquisition front we added four high quality, age-restricted MH and
RV communities in California, further penetrating an important
market for us. We have a high degree of visibility into our
pipeline and expect to continue to deploy capital into similar
quality communities."
OPERATING
HIGHLIGHTS
Community
Occupancy
Total portfolio occupancy was 96.2
percent at both September 30, 2017 and September 30,
2016, including the impact of recently completed but vacant
expansion sites. During the quarter ended September 30, 2017,
revenue producing sites increased by 394 sites, as compared to 292
revenue producing sites gained during the third quarter of
2016.
Revenue producing sites increased
by 1,833 for the nine months ended September 30, 2017 as
compared to 1,385 revenue producing sites gained during the nine
months ended September 30, 2016.
Same Community
Results
For the 231 communities owned
since January 1, 2016, NOI(1) for
the quarter ended September 30, 2017 increased 7.7 percent
over the same period in 2016, driven by a 6.2 percent increase in
revenues and a 2.9 percent increase in operating expenses.
Same Community occupancy increased to 97.2 percent at
September 30, 2017 from 95.6 percent(9)(10) at
September 30, 2016.
For the nine months ended
September 30, 2017, total revenues increased by 5.9 percent
while total expenses increased by 3.5 percent, resulting in an
increase to NOI(1) of 6.8
percent over the nine months ended September 30, 2016.
Home
Sales
Total home sales were 805 for the
quarter ended September 30, 2017 as compared to 895 homes sold
during the same period in 2016, a 10.1 percent decrease. During the
nine months ended September 30, 2017, the Company sold 2,432
homes, compared to 2,410 homes sold for the same period ending
2016.
Rental homes sales, which are
included in total home sales, were 286 for both quarters ended
September 30, 2017 and 2016. Rental home sales were 828 and
858 for the nine months ended September 30, 2017 and 2016,
respectively.
PORTFOLIO
ACTIVITY
Acquisitions(2)
During the quarter ended
September 30, 2017, the Company acquired a 331 site
age-restricted RV resort located in Pismo Beach, California, for
total consideration of $21.4 million. Additionally, the Company
acquired three age-restricted MH communities during the quarter:
Lazy J Ranch, with 220 sites in Arcata, California; Ocean West,
with 130 sites in McKinleyville, California; and Caliente Sands,
with 118 sites in Cathedral City, California, for total
consideration of $32.8 million.
Catastrophic
Weather
On September 10, 2017, Hurricane
Irma hit Florida as a Category 4 hurricane and impacted 121 of the
Company's communities in Florida and three in Georgia. The Company
recognized charges totaling $23.1 million comprised of $12.7
million for debris and tree removal, common area repairs and minor
flooding damage, as well as $10.4 million for impaired assets at
three communities containing 190 total sites located in the Florida
Keys. These charges, which include management's best estimate of
the total repair expense the Company will incur, were partially
offset by estimated insurance recoveries of $15.3 million. The net
charges of $7.8 million have been classified as "Catastrophic
weather related charges" in the Consolidated Statements of
Operations. Expected insurance recoveries for loss of income
and redevelopment costs greater than the impairment charge related
to the three Florida Key communities cannot be estimated at this
time and are excluded from the insurance recovery estimate recorded
at September 30, 2017. The Company maintains property, casualty,
flood and business interruption insurance for its community
portfolio, subject to customary deductibles and limits.
BALANCE SHEET AND
CAPITAL MARKETS ACTIVITY
Debt
Transactions
As previously announced, during
the quarter ended September 30, 2017, the Company assumed a
$4.6 million collateralized term loan in connection with
acquisition activities. The term loan has a remaining term of 9.8
years and bears interest at 4.34 percent.
As of September 30, 2017, the
Company had approximately $3.0 billion of debt outstanding. The
weighted average interest rate was 4.56 percent and the weighted
average maturity was 8.4 years. The Company had $137.4 million of
unrestricted cash on hand. At period-end the Company's net
debt to trailing twelve month Recurring EBITDA(1) ratio
was 6.0 times.
Equity
Transactions
During the quarter ended
September 30, 2017, the Company entered into a new at the
market ("ATM") equity sales program that has an aggregate offering
price of up to $450.0 million. The new ATM program replaced
the Company's prior equity sales agreement that had an aggregate
offering price of up to $250.0 million.
After quarter end, the Company
announced a notice of redemption to the holders of its 7.125%
Series A Cumulative Redeemable Preferred Stock, which it has
elected to redeem on November 14, 2017. Holders will receive cash
in the amount of $25.00, plus all accrued and unpaid dividends,
which is equal to an aggregate payment of $25.14349 per share. In
the aggregate, the Company will pay $85.5 million to redeem all of
the shares.
GUIDANCE
2017
The Company is updating fourth
quarter 2017 guidance of FFO(1) per Share
to be in the range of $0.96 to $0.99 and anticipates FFO(1) per Share
of $4.15 to $4.18 for the full year 2017.
The Company also affirms 2017 full
year guidance of Same Community NOI(1) growth of
6.4 percent to 6.8 percent. Guidance does not include prospective
acquisitions or capital markets activity.
FFO(1) per Share
estimates assume certain non-core items are 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 Tuesday, October 24, 2017
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, 2017 and can be accessed toll-free by calling
844-512-2921 or by calling 412-317-6671. The Conference ID number
for the call and the replay is 13669386. 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, as of September 30, 2017, owned, operated, or had an
interest in a portfolio of 348 communities comprising approximately
120,000 developed sites in 29 states and Ontario, Canada.
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. 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 our 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 for the year ended
December 31, 2016.
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.
Investor
Information
RESEARCH COVERAGE |
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Firm |
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Analyst |
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Phone |
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Email |
Bank of America Merrill Lynch |
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Joshua Dennerlein |
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(646) 855-1681 |
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joshua.dennerlein@baml.com |
BMO Capital Markets |
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John Kim |
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(212) 885-4115 |
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johnp.kim@bmo.com |
Citi Research |
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Michael Bilerman |
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(212)
816-1383 |
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michael.bilerman@citi.com |
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Nicholas Joseph |
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(212)
816-1909 |
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nicholas.joseph@citi.com |
Evercore ISI |
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Gwen Clark |
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(212) 446-5611 |
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gwen.clark@evercoreisi.com |
Green Street Advisors |
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Ryan
Burke |
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(949)
640-8780 |
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rburke@greenstreetadvisors.com |
RBC Capital Markets |
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Neil Malkin |
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(440) 715-2651 |
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neil.malkin@rbccm.com |
Robert W. Baird & Co. |
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Drew Babin |
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(610) 238-6634 |
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dbabin@rwbaird.com |
Wells Fargo |
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Todd Stender |
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(562) 637-1371 |
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todd.stender@wellsfargo.com |
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INQUIRIES |
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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. |
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At Our
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www.suncommunities.com |
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By
Email |
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investorrelations@suncommunities.com |
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By
Phone |
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(248)
208-2500 |
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Portfolio
Overview
(As of September 30, 2017)
Balance
Sheets
(amounts in thousands)
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9/30/2017 |
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12/31/2016 |
ASSETS: |
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Land |
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$ |
1,079,708 |
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$ |
1,051,536 |
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Land
improvements and buildings |
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5,024,937 |
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4,825,043 |
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Rental homes and improvements |
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516,618 |
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489,633 |
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Furniture, fixtures and equipment |
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140,894 |
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130,127 |
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Investment property |
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6,762,157 |
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6,496,339 |
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Accumulated depreciation |
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(1,188,332 |
) |
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(1,026,858 |
) |
Investment property, net |
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5,573,825 |
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5,469,481 |
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Cash
and cash equivalents |
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137,448 |
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8,164 |
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Inventory of manufactured homes |
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25,741 |
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21,632 |
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Notes
and other receivables, net |
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145,760 |
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81,179 |
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Collateralized receivables, net (3) |
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134,015 |
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143,870 |
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Other
assets, net |
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141,047 |
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146,450 |
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Total assets |
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$ |
6,157,836 |
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$ |
5,870,776 |
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LIABILITIES: |
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Mortgage loans payable |
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$ |
2,822,640 |
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$ |
2,819,567 |
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Secured borrowings (3) |
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134,884 |
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144,477 |
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Preferred OP units - mandatorily redeemable |
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45,903 |
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45,903 |
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Lines
of credit |
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- |
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100,095 |
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Distributions payable |
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56,520 |
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51,896 |
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Other
liabilities |
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291,074 |
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279,667 |
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Total liabilities |
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3,351,021 |
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3,441,605 |
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Series
A-4 preferred stock |
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32,414 |
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50,227 |
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Series A-4 preferred OP units |
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10,832 |
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16,717 |
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STOCKHOLDERS' EQUITY: |
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Series A preferred stock |
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34 |
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34 |
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Common
stock |
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793 |
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732 |
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Additional paid-in capital |
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3,810,930 |
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3,321,441 |
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Accumulated other comprehensive income (loss) |
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1,531 |
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(3,181 |
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Distributions in excess of accumulated
earnings |
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(1,117,228 |
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(1,023,415 |
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Total SUI stockholders' equity |
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2,696,060 |
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2,295,611 |
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Noncontrolling interests: |
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Common
and preferred OP units |
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63,668 |
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69,598 |
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Consolidated variable interest entities |
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3,841 |
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(2,982 |
) |
Total
noncontrolling interest |
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67,509 |
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66,616 |
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Total stockholders' equity |
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2,763,569 |
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2,362,227 |
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Total
liabilities & stockholders' equity |
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$ |
6,157,836 |
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$ |
5,870,776 |
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Statements of Operations -
Quarter to Date
Comparison
(amounts in thousands, except per share
amounts)
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Three Months
Ended September 30, |
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2017 |
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2016 |
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Change |
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% Change |
REVENUES |
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Income from real property (excluding transient revenue) |
$ |
169,533 |
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$ |
158,020 |
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$ |
11,513 |
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7.3 |
% |
Transient revenue |
28,730 |
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26,304 |
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2,426 |
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9.2 |
% |
Revenue from home sales |
33,197 |
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31,211 |
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1,986 |
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6.4 |
% |
Rental
home revenue |
12,757 |
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12,031 |
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726 |
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6.0 |
% |
Ancillary revenues |
17,017 |
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16,446 |
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571 |
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3.5 |
% |
Interest |
5,920 |
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4,705 |
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1,215 |
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25.8 |
% |
Brokerage commissions and other revenues, net |
1,091 |
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984 |
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107 |
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10.9 |
% |
Total
revenues |
268,245 |
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249,701 |
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18,544 |
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7.4 |
% |
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EXPENSES |
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Property operating and maintenance |
59,249 |
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57,089 |
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2,160 |
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3.8 |
% |
Real
estate taxes |
13,053 |
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12,384 |
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669 |
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5.4 |
% |
Cost of home sales |
25,094 |
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21,935 |
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3,159 |
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14.4 |
% |
Rental
home operating and maintenance |
6,775 |
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6,350 |
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425 |
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6.7 |
% |
Ancillary expenses |
9,993 |
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9,449 |
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544 |
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5.8 |
% |
Home
selling expenses |
3,290 |
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2,643 |
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647 |
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24.5 |
% |
General and administrative |
18,267 |
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16,575 |
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1,692 |
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10.2 |
% |
Transaction costs |
2,167 |
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4,191 |
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(2,024 |
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(48.3 |
)% |
Depreciation and amortization |
64,232 |
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61,483 |
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2,749 |
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4.5 |
% |
Interest |
32,085 |
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33,800 |
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(1,715 |
) |
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(5.1 |
)% |
Interest on mandatorily redeemable preferred OP
units |
790 |
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789 |
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1 |
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0.1 |
% |
Total
expenses |
234,995 |
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226,688 |
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8,307 |
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3.7 |
% |
Income before other items |
33,250 |
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23,013 |
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10,237 |
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44.5 |
% |
Catastrophic weather related charges |
(7,756 |
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- |
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(7,756 |
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N/A |
Other income, net (4) |
3,345 |
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- |
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3,345 |
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N/A |
Current tax benefit / (expense) |
38 |
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(283 |
) |
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321 |
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113.4 |
% |
Deferred tax benefit |
81 |
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- |
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81 |
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N/A |
Income
from affiliate transactions |
- |
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|
500 |
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(500 |
) |
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100.0 |
% |
Net income |
28,958 |
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23,230 |
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|
5,728 |
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24.7 |
% |
Less:
Preferred return to preferred OP units |
(1,112 |
) |
|
(1,257 |
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|
145 |
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(11.5 |
)% |
Less: Amounts attributable to noncontrolling
interests |
(1,776 |
) |
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(879 |
) |
|
(897 |
) |
|
102.1 |
% |
Less:
Preferred stock distribution |
(1,955 |
) |
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(2,197 |
) |
|
242 |
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(11.0 |
)% |
NET INCOME ATTRIBUTABLE TO
SUI |
$ |
24,115 |
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$ |
18,897 |
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$ |
5,218 |
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27.6 |
% |
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Weighted average common shares outstanding: |
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Basic |
78,369 |
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68,655 |
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9,714 |
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14.2 |
% |
Diluted |
78,808 |
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69,069 |
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9,739 |
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14.1 |
% |
Earnings per share: |
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Basic |
$ |
0.31 |
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$ |
0.27 |
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$ |
0.04 |
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14.8 |
% |
Diluted |
$ |
0.31 |
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$ |
0.27 |
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$ |
0.04 |
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14.8 |
% |
Statements of Operations - Year
to Date
Comparison
(amounts in thousands, except per share
amounts)
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Nine Months
Ended September 30, |
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2017 |
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2016 |
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Change |
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% Change |
REVENUES: |
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Income from real property (excluding transient revenue) |
$ |
495,179 |
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$ |
406,221 |
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$ |
88,958 |
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21.9 |
% |
Transient revenue |
65,599 |
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47,339 |
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18,260 |
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38.6 |
% |
Revenue from home sales |
91,319 |
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|
81,987 |
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9,332 |
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11.4 |
% |
Rental
home revenue |
37,774 |
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|
35,696 |
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|
2,078 |
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5.8 |
% |
Ancillary revenues |
32,086 |
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28,442 |
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|
3,644 |
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12.8 |
% |
Interest |
15,609 |
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13,322 |
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|
2,287 |
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17.2 |
% |
Brokerage commissions and other revenues, net |
2,978 |
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|
2,137 |
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|
841 |
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39.4 |
% |
Total
revenues |
740,544 |
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|
615,144 |
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|
125,400 |
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20.4 |
% |
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EXPENSES: |
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Property operating and maintenance |
159,861 |
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|
125,357 |
|
|
34,504 |
|
|
27.5 |
% |
Real
estate taxes |
39,322 |
|
|
32,122 |
|
|
7,200 |
|
|
22.4 |
% |
Cost of home sales |
67,999 |
|
|
58,803 |
|
|
9,196 |
|
|
15.6 |
% |
Rental
home operating and maintenance |
16,821 |
|
|
17,637 |
|
|
(816 |
) |
|
(4.6 |
)% |
Ancillary expenses |
21,719 |
|
|
18,697 |
|
|
3,022 |
|
|
16.2 |
% |
Home
selling expenses |
9,391 |
|
|
7,240 |
|
|
2,151 |
|
|
29.7 |
% |
General and administrative |
56,188 |
|
|
46,910 |
|
|
9,278 |
|
|
19.8 |
% |
Transaction costs |
6,990 |
|
|
27,891 |
|
|
(20,901 |
) |
|
(74.9 |
)% |
Depreciation and amortization |
189,719 |
|
|
159,565 |
|
|
30,154 |
|
|
18.9 |
% |
Extinguishment of debt |
759 |
|
|
- |
|
|
759 |
|
|
N/A |
Interest |
95,765 |
|
|
88,522 |
|
|
7,243 |
|
|
8.2 |
% |
Interest on mandatorily redeemable preferred OP units |
2,361 |
|
|
2,363 |
|
|
(2 |
) |
|
(0.1 |
)% |
Total expenses |
666,895 |
|
|
585,107 |
|
|
81,788 |
|
|
14.0 |
% |
Income
before other items |
73,649 |
|
|
30,037 |
|
|
43,612 |
|
|
145.2 |
% |
Catastrophic weather related charges |
(8,124 |
) |
|
- |
|
|
(8,124 |
) |
|
N/A |
Other
income, net (4) |
5,340 |
|
|
- |
|
|
5,340 |
|
|
N/A |
Current tax expense |
(133 |
) |
|
(567 |
) |
|
434 |
|
|
76.5 |
% |
Deferred tax benefit |
745 |
|
|
- |
|
|
745 |
|
|
N/A |
Income from affiliate transactions |
- |
|
|
500 |
|
|
(500 |
) |
|
100.0 |
% |
Net
income |
71,477 |
|
|
29,970 |
|
|
41,507 |
|
|
138.5 |
% |
Less: Preferred return to preferred OP units |
(3,482 |
) |
|
(3,793 |
) |
|
311 |
|
|
(8.2 |
)% |
Less:
Amounts attributable to noncontrolling interests |
(4,179 |
) |
|
(460 |
) |
|
(3,719 |
) |
|
808.5 |
% |
Less: Preferred stock distribution |
(6,233 |
) |
|
(6,748 |
) |
|
515 |
|
|
(7.6 |
)% |
NET INCOME ATTRIBUTABLE TO SUI |
$ |
57,583 |
|
|
$ |
18,969 |
|
|
38,614 |
|
|
203.6 |
% |
|
|
|
|
|
|
|
|
Weighted average common shares outstanding: |
|
|
|
|
|
|
|
Basic |
75,234 |
|
|
63,716 |
|
|
11,518 |
|
|
18.1 |
% |
Diluted |
75,846 |
|
|
64,146 |
|
|
11,700 |
|
|
18.2 |
% |
Earnings per share: |
|
|
|
|
|
|
|
Basic |
$ |
0.76 |
|
|
$ |
0.30 |
|
|
$ |
0.46 |
|
|
153.3 |
% |
Diluted |
$ |
0.76 |
|
|
$ |
0.30 |
|
|
$ |
0.46 |
|
|
153.3 |
% |
Outstanding Securities and
Capitalization
(in thousands except for *)
Outstanding Securities - As of September
30, 2017 |
|
|
|
|
|
|
|
|
|
|
|
Number of Units/Shares
Outstanding |
|
Conversion Rate* |
|
If Converted |
|
Issuance Price per unit* |
|
Annual Distribution Rate* |
Convertible Securities |
|
|
|
|
|
|
|
|
|
Series A-1 preferred OP units |
349 |
|
2.4390 |
|
851 |
|
$100 |
|
6.0% |
Series
A-3 preferred OP units |
40 |
|
1.8605 |
|
74 |
|
$100 |
|
4.5% |
Series A-4 preferred OP units |
425 |
|
0.4444 |
|
189 |
|
$25 |
|
6.5% |
Series
C preferred OP units |
316 |
|
1.1100 |
|
351 |
|
$100 |
|
4.5% |
Common OP units |
2,757 |
|
1.0000 |
|
2,757 |
|
N/A |
|
Mirrors common shares
distributions |
Series
A-4 cumulative convertible preferred stock |
1,085 |
|
0.4444 |
|
482 |
|
$25 |
|
6.5% |
|
|
|
|
|
|
|
|
|
|
Non-Convertible Securities |
|
|
|
|
|
|
|
|
|
Preferred stock (SUI-PrA) |
3,400 |
|
N/A |
|
N/A |
|
$25 |
|
7.125% |
Common
shares |
79,341 |
|
N/A |
|
N/A |
|
N/A |
|
$2.68^ |
^ Annual distribution is based on the last quarterly
distribution annualized. |
Capitalization - As of September 30, 2017 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity |
|
Shares |
|
Share Price* |
|
Total |
Common shares |
|
79,341 |
|
|
$ |
85.68 |
|
|
$ |
6,797,937 |
|
Common
OP units |
|
2,757 |
|
|
$ |
85.68 |
|
|
236,220 |
|
Subtotal |
|
82,098 |
|
|
|
|
$ |
7,034,157 |
|
|
|
|
|
|
|
|
Series
A-1 preferred OP units |
|
851 |
|
|
$ |
85.68 |
|
|
72,914 |
|
Series A-3 preferred OP units |
|
74 |
|
|
$ |
85.68 |
|
|
6,340 |
|
Series
A-4 preferred OP units |
|
189 |
|
|
$ |
85.68 |
|
|
16,194 |
|
Series C preferred OP units |
|
351 |
|
|
$ |
85.68 |
|
|
30,074 |
|
Total
diluted shares outstanding |
|
83,563 |
|
|
|
|
$ |
7,159,679 |
|
|
Debt |
Mortgage loans payable |
|
|
|
|
|
$ |
2,822,640 |
|
Secured borrowings (3) |
|
|
|
|
|
134,884 |
|
Preferred OP units - mandatorily redeemable |
|
|
|
|
|
45,903 |
|
Lines
of credit |
|
|
|
|
|
- |
|
Total Debt |
|
|
|
|
|
$ |
3,003,427 |
|
|
Preferred |
Perpetual preferred |
|
3,400 |
|
|
$ |
25.00 |
|
|
$ |
85,000 |
|
A-4
preferred stock |
|
1,085 |
|
|
$ |
25.00 |
|
|
$ |
27,125 |
|
Total Capitalization |
|
|
|
|
|
$ |
10,275,231 |
|
Reconciliations to
Non-GAAP Financial Measures
Reconciliation of Net Income
Attributable to Sun Communities, Inc. Common Stockholders to Funds
from
Operations
(amounts in thousands except for per share
data)
|
Three Months
Ended September 30, |
|
Nine Months
Ended
September 30, |
|
2017 |
|
2016 |
|
2017 |
|
2016 |
Net income attributable to Sun Communities, Inc.
common stockholders |
$ |
24,115 |
|
|
18,897 |
|
|
$ |
57,583 |
|
|
$ |
18,969 |
|
Adjustments: |
|
|
|
|
|
|
|
Depreciation and amortization |
64,484 |
|
|
61,809 |
|
|
190,143 |
|
|
159,225 |
|
Amounts attributable to noncontrolling interests |
1,608 |
|
|
685 |
|
|
3,710 |
|
|
255 |
|
Preferred return to preferred OP units |
578 |
|
|
616 |
|
|
1,750 |
|
|
1,858 |
|
Preferred distribution to Series A-4 preferred stock |
441 |
|
|
683 |
|
|
1,666 |
|
|
- |
|
Gain on disposition of assets, net |
(4,309 |
) |
|
(4,667 |
) |
|
(11,342 |
) |
|
(12,226 |
) |
FFO
attributable to Sun Communities, Inc. common stockholders and
dilutive convertible securities (1)
(6)
|
86,917 |
|
|
78,023 |
|
|
243,510 |
|
|
168,081 |
|
Adjustments: |
|
|
|
|
|
|
|
Transaction costs |
2,167 |
|
|
4,191 |
|
|
6,990 |
|
|
27,891 |
|
Other acquisition related costs (5) |
343 |
|
|
1,467 |
|
|
2,712 |
|
|
1,467 |
|
Income
from affiliate transactions |
- |
|
|
(500 |
) |
|
- |
|
|
(500 |
) |
Extinguishment of debt |
- |
|
|
- |
|
|
759 |
|
|
- |
|
Catastrophic weather related charges |
7,756 |
|
|
- |
|
|
8,124 |
|
|
- |
|
Other income, net (4) |
(3,345 |
) |
|
- |
|
|
(5,340 |
) |
|
- |
|
Debt
premium write-off |
- |
|
|
- |
|
|
(438 |
) |
|
- |
|
Deferred tax benefit |
(81 |
) |
|
- |
|
|
(745 |
) |
|
- |
|
FFO
attributable to Sun Communities, Inc. common stockholders and
dilutive convertible securities excluding certain items (1)
(6)
|
$ |
93,757 |
|
|
$ |
83,181 |
|
|
$ |
255,572 |
|
|
$ |
196,939 |
|
|
|
|
|
|
|
|
|
Weighted average common shares outstanding - basic: |
78,369 |
|
|
68,655 |
|
|
75,241 |
|
|
63,716 |
|
Add: |
|
|
|
|
|
|
|
Common
stock issuable upon conversion of stock options |
2 |
|
|
8 |
|
|
2 |
|
|
10 |
|
Restricted stock |
437 |
|
|
406 |
|
|
610 |
|
|
437 |
|
Common
OP units |
2,761 |
|
|
2,856 |
|
|
2,758 |
|
|
2,861 |
|
Common stock issuable upon conversion of Series A-1
preferred OP units |
858 |
|
|
920 |
|
|
877 |
|
|
932 |
|
Common
stock issuable upon conversion of Series A-3 preferred OP
units |
75 |
|
|
75 |
|
|
75 |
|
|
75 |
|
Common stock issuable upon conversion of Series A-4
preferred stock |
482 |
|
|
747 |
|
|
620 |
|
|
- |
|
Weighted average common shares outstanding - fully diluted |
82,984 |
|
|
73,667 |
|
|
80,183 |
|
|
68,031 |
|
|
|
|
|
|
|
|
|
FFO
attributable to Sun Communities, Inc. common stockholders and
dilutive convertible securities (1) (6) per
share - fully diluted
|
$ |
1.05 |
|
|
$ |
1.06 |
|
|
$ |
3.04 |
|
|
$ |
2.47 |
|
FFO attributable to Sun Communities, Inc. common
stockholders and dilutive convertible securities (1) (6)
per share excluding certain items - fully diluted
|
$ |
1.13 |
|
|
$ |
1.13 |
|
|
$ |
3.19 |
|
|
$ |
2.89 |
|
Reconciliation of Net Income
Attributable to Sun Communities, Inc. Common Stockholders to
Recurring EBITDA
(amounts in thousands)
|
Three Months
Ended
September 30, |
|
Nine Months
Ended
September 30, |
|
2017 |
|
2016 |
|
2017 |
|
2016 |
Net income attributable to Sun Communities, Inc.,
common stockholders |
$ |
24,115 |
|
|
$ |
18,897 |
|
|
$ |
57,583 |
|
|
$ |
18,969 |
|
Interest |
32,085 |
|
|
33,800 |
|
|
95,765 |
|
|
88,522 |
|
Interest on mandatorily redeemable preferred OP
units |
790 |
|
|
789 |
|
|
2,361 |
|
|
2,363 |
|
Depreciation and amortization |
64,232 |
|
|
61,483 |
|
|
189,719 |
|
|
159,565 |
|
Extinguishment of debt |
- |
|
|
- |
|
|
759 |
|
|
- |
|
Transaction costs |
2,167 |
|
|
4,191 |
|
|
6,990 |
|
|
27,891 |
|
Catastrophic weather related charges |
7,756 |
|
|
- |
|
|
8,124 |
|
|
- |
|
Other
income, net (4) |
(3,345 |
) |
|
- |
|
|
(5,340 |
) |
|
- |
|
Current tax (benefit) / expense |
(38 |
) |
|
283 |
|
|
133 |
|
|
567 |
|
Deferred tax benefit |
(81 |
) |
|
- |
|
|
(745 |
) |
|
- |
|
Income from affiliate transactions |
- |
|
|
(500 |
) |
|
- |
|
|
(500 |
) |
Preferred return to preferred OP units |
1,112 |
|
|
1,257 |
|
|
3,482 |
|
|
3,793 |
|
Amounts attributable to noncontrolling
interests |
1,776 |
|
|
879 |
|
|
4,179 |
|
|
460 |
|
Preferred stock distribution |
1,955 |
|
|
2,197 |
|
|
6,233 |
|
|
6,748 |
|
RECURRING EBITDA (1) |
$ |
132,524 |
|
|
$ |
123,276 |
|
|
$ |
369,243 |
|
|
$ |
308,378 |
|
Reconciliation of Net Income
Attributable to Sun Communities, Inc. Common Stockholders to Net
Operating Income
(amounts in thousands)
|
Three Months
Ended
September 30, |
|
Nine Months
Ended
September 30, |
|
2017 |
|
2016 |
|
2017 |
|
2016 |
Net income attributable to Sun Communities, Inc.,
common stockholders: |
$ |
24,115 |
|
|
$ |
18,897 |
|
|
$ |
57,583 |
|
|
$ |
18,969 |
|
Other
revenues |
(7,011 |
) |
|
(5,689 |
) |
|
(18,587 |
) |
|
(15,459 |
) |
Home selling expenses |
3,290 |
|
|
2,643 |
|
|
9,391 |
|
|
7,240 |
|
General and administrative |
18,267 |
|
|
16,575 |
|
|
56,188 |
|
|
46,910 |
|
Transaction costs |
2,167 |
|
|
4,191 |
|
|
6,990 |
|
|
27,891 |
|
Depreciation and amortization |
64,232 |
|
|
61,483 |
|
|
189,719 |
|
|
159,565 |
|
Extinguishment of debt |
- |
|
|
- |
|
|
759 |
|
|
- |
|
Interest expense |
32,875 |
|
|
34,589 |
|
|
98,126 |
|
|
90,885 |
|
Catastrophic weather related charges |
7,756 |
|
|
- |
|
|
8,124 |
|
|
- |
|
Other
income, net (4) |
(3,345 |
) |
|
- |
|
|
(5,340 |
) |
|
- |
|
Current tax (benefit) / expense |
(38 |
) |
|
283 |
|
|
133 |
|
|
567 |
|
Deferred tax benefit |
(81 |
) |
|
- |
|
|
(745 |
) |
|
- |
|
Income from affiliate transactions |
- |
|
|
(500 |
) |
|
- |
|
|
(500 |
) |
Preferred return to preferred OP units |
1,112 |
|
|
1,257 |
|
|
3,482 |
|
|
3,793 |
|
Amounts attributable to noncontrolling
interests |
1,776 |
|
|
879 |
|
|
4,179 |
|
|
460 |
|
Preferred stock distributions |
1,955 |
|
|
2,197 |
|
|
6,233 |
|
|
6,748 |
|
NOI(1) / Gross
Profit |
$ |
147,070 |
|
|
$ |
136,805 |
|
|
$ |
416,235 |
|
|
$ |
347,069 |
|
|
Three Months
Ended
September 30, |
|
Nine Months
Ended
September 30, |
|
2017 |
|
2016 |
|
2017 |
|
2016 |
Real Property NOI (1) |
$ |
125,961 |
|
|
$ |
114,851 |
|
|
$ |
361,595 |
|
|
$ |
296,081 |
|
Rental
Program NOI (1) |
22,060 |
|
|
21,213 |
|
|
68,759 |
|
|
64,223 |
|
Home Sales NOI(1) / Gross
Profit |
8,103 |
|
|
9,276 |
|
|
23,320 |
|
|
23,184 |
|
Ancillary NOI(1) / Gross
Profit |
7,024 |
|
|
6,997 |
|
|
10,367 |
|
|
9,745 |
|
Site rent from Rental Program (included in Real
Property NOI) (1)(7) |
(16,078 |
) |
|
(15,532 |
) |
|
(47,806 |
) |
|
(46,164 |
) |
NOI(1) / Gross
profit |
$ |
147,070 |
|
|
$ |
136,805 |
|
|
$ |
416,235 |
|
|
$ |
347,069 |
|
Non-GAAP and Other
Financial Measures
Financial
Highlights
(amounts in thousands, except per share
data)
|
Quarter
Ended |
|
9/30/2017 |
|
6/30/2017 |
|
3/31/2017 |
|
12/31/2016 |
|
9/30/2016 |
OPERATING INFORMATION |
|
|
|
|
|
|
|
|
|
Total revenues |
$ |
268,245 |
|
|
$ |
237,899 |
|
|
$ |
234,400 |
|
|
$ |
218,634 |
|
|
$ |
249,701 |
|
Net
income |
$ |
28,958 |
|
|
$ |
16,974 |
|
|
$ |
25,545 |
|
|
$ |
1,501 |
|
|
$ |
23,230 |
|
Net income / (loss) attributable to common
stockholders |
$ |
24,115 |
|
|
$ |
12,364 |
|
|
$ |
21,104 |
|
|
$ |
(1,600 |
) |
|
$ |
18,897 |
|
Earnings / (loss) per share basic |
$ |
0.31 |
|
|
$ |
0.16 |
|
|
$ |
0.29 |
|
|
$ |
(0.02 |
) |
|
$ |
0.27 |
|
Earnings / (loss) per share diluted |
$ |
0.31 |
|
|
$ |
0.16 |
|
|
$ |
0.29 |
|
|
$ |
(0.02 |
) |
|
$ |
0.27 |
|
|
|
|
|
|
|
|
|
|
|
Recurring EBITDA (1) |
$ |
132,524 |
|
|
$ |
114,324 |
|
|
$ |
122,395 |
|
|
$ |
105,850 |
|
|
$ |
123,276 |
|
FFO
attributable to Sun Communities, Inc. common stockholders and
dilutive convertible securities(1) (6) |
$ |
86,917 |
|
|
$ |
73,202 |
|
|
$ |
83,391 |
|
|
$ |
57,572 |
|
|
$ |
78,023 |
|
FFO attributable to Sun Communities, Inc. common
stockholders and dilutive convertible securities excluding certain
items(1) (6) |
$ |
93,757 |
|
|
$ |
76,194 |
|
|
$ |
85,621 |
|
|
$ |
69,192 |
|
|
$ |
83,181 |
|
FFO
attributable to Sun Communities, Inc. common stockholders and
dilutive convertible securities (1) (6) per
share - fully diluted |
$ |
1.05 |
|
|
$ |
0.92 |
|
|
$ |
1.07 |
|
|
$ |
0.75 |
|
|
$ |
1.06 |
|
FFO attributable to Sun Communities, Inc. common
stockholders and dilutive convertible securities (1) (6)
per share excluding certain items - fully diluted |
$ |
1.13 |
|
|
$ |
0.96 |
|
|
$ |
1.10 |
|
|
$ |
0.91 |
|
|
$ |
1.13 |
|
|
|
|
|
|
|
|
|
|
|
BALANCE SHEETS |
|
|
|
|
|
|
|
|
|
Total assets |
$ |
6,157,836 |
|
|
$ |
6,178,713 |
|
|
$ |
5,902,447 |
|
|
$ |
5,870,776 |
|
|
$ |
5,904,706 |
|
Total
debt |
$ |
3,003,427 |
|
|
$ |
3,018,653 |
|
|
$ |
3,140,547 |
|
|
$ |
3,110,042 |
|
|
$ |
3,102,993 |
|
Total liabilities |
$ |
3,351,021 |
|
|
$ |
3,373,695 |
|
|
$ |
3,478,132 |
|
|
$ |
3,441,605 |
|
|
$ |
3,429,743 |
|
Debt
Analysis
(amounts in thousands)
|
Quarter
Ended |
|
9/30/2017 |
|
6/30/2017 |
|
3/31/2017 |
|
12/31/2016 |
|
9/30/2016 |
DEBT OUTSTANDING |
|
|
|
|
|
|
|
|
|
Mortgage loans payable |
$ |
2,822,640 |
|
|
$ |
2,832,819 |
|
|
$ |
2,774,645 |
|
|
$ |
2,819,567 |
|
|
$ |
2,854,831 |
|
Secured borrowings (3) |
134,884 |
|
|
139,496 |
|
|
141,671 |
|
|
144,477 |
|
|
144,522 |
|
Preferred OP units - mandatorily redeemable |
45,903 |
|
|
45,903 |
|
|
45,903 |
|
|
45,903 |
|
|
45,903 |
|
Lines
of credit (8) |
- |
|
|
435 |
|
|
178,328 |
|
|
100,095 |
|
|
57,737 |
|
Total debt |
$ |
3,003,427 |
|
|
$ |
3,018,653 |
|
|
$ |
3,140,547 |
|
|
$ |
3,110,042 |
|
|
$ |
3,102,993 |
|
|
|
|
|
|
|
|
|
|
|
% FIXED/FLOATING |
|
|
|
|
|
|
|
|
|
Fixed |
94.9 |
% |
|
94.9 |
% |
|
89.4 |
% |
|
91.8 |
% |
|
93.1 |
% |
Floating |
5.1 |
% |
|
5.1 |
% |
|
10.6 |
% |
|
8.2 |
% |
|
6.9 |
% |
Total |
100.0 |
% |
|
100.0 |
% |
|
100.0 |
% |
|
100.0 |
% |
|
100.0 |
% |
|
|
|
|
|
|
|
|
|
|
WEIGHTED AVERAGE INTEREST RATES |
|
|
|
|
|
|
|
|
|
Mortgage loans payable |
4.26 |
% |
|
4.26 |
% |
|
4.26 |
% |
|
4.24 |
% |
|
4.30 |
% |
Preferred OP units - mandatorily redeemable |
6.87 |
% |
|
6.87 |
% |
|
6.87 |
% |
|
6.87 |
% |
|
6.87 |
% |
Lines of credit (8) |
- |
% |
|
- |
% |
|
2.52 |
% |
|
2.14 |
% |
|
1.93 |
% |
Average before Secured borrowings |
4.30 |
% |
|
4.30 |
% |
|
4.19 |
% |
|
4.21 |
% |
|
4.29 |
% |
Secured borrowings (3) |
9.98 |
% |
|
9.99 |
% |
|
10.01 |
% |
|
10.03 |
% |
|
10.06 |
% |
Total
average |
4.56 |
% |
|
4.56 |
% |
|
4.45 |
% |
|
4.48 |
% |
|
4.56 |
% |
|
|
|
|
|
|
|
|
|
|
DEBT RATIOS |
|
|
|
|
|
|
|
|
|
Net Debt / Recurring EBITDA(1)
(TTM) |
6.0 |
|
|
6.0 |
|
|
7.0 |
|
|
7.5 |
|
|
7.7 |
|
Net
Debt / Enterprise Value |
28.3 |
% |
|
27.2 |
% |
|
32.8 |
% |
|
33.8 |
% |
|
32.8 |
% |
Net Debt + Preferred Stock / Enterprise Value |
29.4 |
% |
|
28.4 |
% |
|
34.2 |
% |
|
35.2 |
% |
|
34.2 |
% |
Net
Debt / Gross Assets |
39.0 |
% |
|
38.0 |
% |
|
44.8 |
% |
|
45.0 |
% |
|
44.1 |
% |
|
|
|
|
|
|
|
|
|
|
COVERAGE RATIOS |
|
|
|
|
|
|
|
|
|
Recurring EBITDA(1) (TTM) /
Interest |
3.5 |
|
3.4 |
|
3.3 |
|
3.2 |
|
3.1 |
Recurring EBITDA(1) (TTM) /
Interest + Pref.
Distributions + Pref. Stock Distribution |
3.2 |
|
3.1 |
|
3.0 |
|
2.9 |
|
2.9 |
MATURITIES/PRINCIPAL AMORTIZATION NEXT FIVE
YEARS |
2017 |
|
2018 |
|
2019 |
|
2020 |
|
2021 |
Mortgage loans payable: |
|
|
|
|
|
|
|
|
|
Maturities |
$ |
- |
|
|
$ |
26,186 |
|
|
$ |
64,314 |
|
|
$ |
58,078 |
|
|
$ |
270,680 |
|
Weighted average rate of maturities |
- |
% |
|
6.13 |
% |
|
6.24 |
% |
|
5.92 |
% |
|
5.53 |
% |
Principal amortization |
13,369 |
|
|
55,143 |
|
|
55,937 |
|
|
56,588 |
|
|
55,578 |
|
Secured borrowings (3) |
1,354 |
|
|
5,736 |
|
|
6,235 |
|
|
6,795 |
|
|
7,298 |
|
Preferred OP units - mandatorily redeemable |
3,670 |
|
|
7,570 |
|
|
- |
|
|
- |
|
|
- |
|
Total |
$ |
18,393 |
|
|
$ |
94,635 |
|
|
$ |
126,486 |
|
|
$ |
121,461 |
|
|
$ |
333,556 |
|
Statements of
Operations - Same Community
(amounts in thousands except for Other
Information)
|
Three Months
Ended September 30, |
|
Nine Months
Ended September 30, |
|
2017 |
|
2016 |
|
Change |
% Change |
|
2017 |
|
2016 |
|
Change |
|
% Change |
REVENUES: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income from real property |
$ |
144,589 |
|
|
$ |
136,137 |
|
|
$ |
8,452 |
|
6.2 |
% |
|
$ |
404,353 |
|
|
$ |
381,979 |
|
|
$ |
22,374 |
|
|
5.9 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
PROPERTY OPERATING EXPENSES: |
|
|
|
|
|
|
|
|
|
|
|
Payroll and benefits |
13,070 |
|
|
12,596 |
|
|
474 |
|
3.8 |
% |
|
34,780 |
|
|
33,407 |
|
|
1,373 |
|
|
4.1 |
% |
Legal,
taxes & insurance |
1,325 |
|
|
1,178 |
|
|
147 |
|
12.5 |
% |
|
4,073 |
|
|
3,895 |
|
|
178 |
|
|
4.6 |
% |
Utilities |
8,961 |
|
|
8,821 |
|
|
140 |
|
1.6 |
% |
|
22,905 |
|
|
22,082 |
|
|
823 |
|
|
3.7 |
% |
Supplies and repair |
5,702 |
|
|
5,862 |
|
|
(160 |
) |
(2.7 |
)% |
|
14,712 |
|
|
14,474 |
|
|
238 |
|
|
1.6 |
% |
Other |
4,078 |
|
|
3,955 |
|
|
123 |
|
3.1 |
% |
|
10,550 |
|
|
10,412 |
|
|
138 |
|
|
1.3 |
% |
Real
estate taxes |
9,631 |
|
|
9,148 |
|
|
483 |
|
5.3 |
% |
|
29,104 |
|
|
27,943 |
|
|
1,161 |
|
|
4.2 |
% |
Property operating expenses |
42,767 |
|
|
41,560 |
|
|
1,207 |
|
2.9 |
% |
|
116,124 |
|
|
112,213 |
|
|
3,911 |
|
|
3.5 |
% |
NET OPERATING INCOME (NOI)(1) |
$ |
101,822 |
|
|
$ |
94,577 |
|
|
$ |
7,245 |
|
7.7 |
% |
|
$ |
288,229 |
|
|
$ |
269,766 |
|
|
$ |
18,463 |
|
|
6.8 |
% |
|
As of
September 30, |
|
|
2017 |
|
2016 |
|
Change |
|
% Change |
|
OTHER INFORMATION |
|
|
|
|
|
|
|
|
Number of properties |
231 |
|
|
231 |
|
|
- |
|
|
|
|
|
|
|
|
|
|
|
|
|
MH occupancy (9) |
96.7 |
% |
|
|
|
|
|
|
|
RV
occupancy (9) |
100.0 |
% |
|
|
|
|
|
|
|
MH & RV blended occupancy (9) |
97.2 |
% |
|
95.6 |
% |
(10) |
1.6 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
Sites available for development |
6,003 |
|
|
7,177 |
|
|
(1,174 |
) |
|
(16.4 |
)% |
|
|
|
|
|
|
|
|
|
|
Monthly base rent per site - MH |
$ |
514 |
|
|
$ |
497 |
|
|
$ |
17 |
|
|
3.5 |
% |
(12) |
Monthly base rent per site - RV (11) |
$ |
448 |
|
|
$ |
433 |
|
|
$ |
15 |
|
|
3.5 |
% |
(12) |
Monthly base rent per site - Total |
$ |
506 |
|
|
$ |
489 |
|
|
$ |
17 |
|
|
3.5 |
% |
(12) |
Rental Program Summary
(amounts in thousands except for *)
|
Three Months
Ended September 30, |
|
Nine Months
Ended September 30, |
|
2017 |
|
2016 |
|
Change |
|
% Change |
|
2017 |
|
2016 |
|
Change |
|
% Change |
REVENUES: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Rental home revenue |
$ |
12,757 |
|
|
$ |
12,031 |
|
|
$ |
726 |
|
|
6.0 |
% |
|
$ |
37,774 |
|
|
$ |
35,696 |
|
|
$ |
2,078 |
|
|
5.8 |
% |
Site
rent included in Income from real property |
16,078 |
|
|
15,532 |
|
|
546 |
|
|
3.5 |
% |
|
47,806 |
|
|
46,164 |
|
|
1,642 |
|
|
3.6 |
% |
Rental program revenue |
28,835 |
|
|
27,563 |
|
|
1,272 |
|
|
4.6 |
% |
|
85,580 |
|
|
81,860 |
|
|
3,720 |
|
|
4.5 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EXPENSES: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commissions |
891 |
|
|
551 |
|
|
340 |
|
|
61.7 |
% |
|
1,902 |
|
|
1,710 |
|
|
192 |
|
|
11.2 |
% |
Repairs and refurbishment |
3,306 |
|
|
3,349 |
|
|
(43 |
) |
|
(1.3 |
)% |
|
7,950 |
|
|
9,288 |
|
|
(1,338 |
) |
|
(14.4 |
)% |
Taxes and insurance |
1,546 |
|
|
1,446 |
|
|
100 |
|
|
6.9 |
% |
|
4,489 |
|
|
4,178 |
|
|
311 |
|
|
7.4 |
% |
Marketing and other |
1,032 |
|
|
1,004 |
|
|
28 |
|
|
2.8 |
% |
|
2,480 |
|
|
2,461 |
|
|
19 |
|
|
0.8 |
% |
Rental program operating and maintenance |
6,775 |
|
|
6,350 |
|
|
425 |
|
|
6.7 |
% |
|
16,821 |
|
|
17,637 |
|
|
(816 |
) |
|
(4.6 |
)% |
NET OPERATING INCOME (NOI) (1) |
$ |
22,060 |
|
|
$ |
21,213 |
|
|
$ |
847 |
|
|
4.0 |
% |
|
$ |
68,759 |
|
|
$ |
64,223 |
|
|
$ |
4,536 |
|
|
7.1 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Occupied rental home information as of September
30, 2017 and 2016: |
|
|
|
|
|
|
|
|
Number of occupied rentals, end of period* |
|
10,960 |
|
|
10,797 |
|
|
163 |
|
|
1.5 |
% |
Investment in occupied rental homes, end of period |
|
$ |
482,591 |
|
|
$ |
453,521 |
|
|
$ |
29,070 |
|
|
6.4 |
% |
Number of sold rental homes (YTD)* |
|
828 |
|
|
858 |
|
|
(30 |
) |
|
(3.5 |
)% |
Weighted average monthly rental rate, end of period* |
|
$ |
908 |
|
|
$ |
879 |
|
|
$ |
29 |
|
|
3.3 |
% |
Home Sales Summary
(amounts in thousands except for *)
|
Three Months
Ended September 30, |
|
Nine Months
Ended September 30, |
|
2017 |
|
2016 |
|
Change |
|
% Change |
|
2017 |
|
2016 |
|
Change |
|
% Change |
New home sales |
$ |
10,331 |
|
|
$ |
9,391 |
|
|
$ |
940 |
|
|
10.0 |
% |
|
$ |
24,760 |
|
|
$ |
20,472 |
|
|
$ |
4,288 |
|
|
21.0 |
% |
Pre-owned home sales |
22,866 |
|
|
21,820 |
|
|
1,046 |
|
|
4.8 |
% |
|
66,559 |
|
|
61,515 |
|
|
5,044 |
|
|
8.2 |
% |
Revenue from home sales |
33,197 |
|
|
31,211 |
|
|
1,986 |
|
|
6.4 |
% |
|
91,319 |
|
|
81,987 |
|
|
9,332 |
|
|
11.4 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
New home cost of sales |
8,699 |
|
|
7,896 |
|
|
803 |
|
|
10.2 |
% |
|
21,044 |
|
|
17,513 |
|
|
3,531 |
|
|
20.2 |
% |
Pre-owned home cost of sales |
16,395 |
|
|
14,039 |
|
|
2,356 |
|
|
16.8 |
% |
|
46,955 |
|
|
41,290 |
|
|
5,665 |
|
|
13.7 |
% |
Cost of home sales |
25,094 |
|
|
21,935 |
|
|
3,159 |
|
|
14.4 |
% |
|
67,999 |
|
|
58,803 |
|
|
9,196 |
|
|
15.6 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NOI / Gross Profit (1) |
$ |
8,103 |
|
|
$ |
9,276 |
|
|
$ |
(1,173 |
) |
|
(12.7 |
)% |
|
$ |
23,320 |
|
|
$ |
23,184 |
|
|
$ |
136 |
|
|
0.6 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross profit - new homes |
$ |
1,632 |
|
|
$ |
1,495 |
|
|
$ |
137 |
|
|
9.2 |
% |
|
$ |
3,716 |
|
|
$ |
2,959 |
|
|
$ |
757 |
|
|
25.6 |
% |
Gross
margin % - new homes |
15.8 |
% |
|
15.9 |
% |
|
(0.1 |
)% |
|
|
|
15.0 |
% |
|
14.5 |
% |
|
0.5 |
% |
|
|
Average selling price - new homes* |
$ |
101,284 |
|
|
$ |
90,298 |
|
|
$ |
10,986 |
|
|
12.2 |
% |
|
$ |
95,598 |
|
|
$ |
89,397 |
|
|
$ |
6,201 |
|
|
6.9 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross profit - pre-owned homes |
$ |
6,471 |
|
|
$ |
7,781 |
|
|
$ |
(1,310 |
) |
|
(16.8 |
)% |
|
$ |
19,604 |
|
|
$ |
20,225 |
|
|
$ |
(621 |
) |
|
(3.1 |
)% |
Gross
margin % - pre-owned homes |
28.3 |
% |
|
35.7 |
% |
|
(7.4 |
)% |
|
|
|
29.5 |
% |
|
32.9 |
% |
|
(3.4 |
)% |
|
|
Average selling price - pre-owned homes* |
$ |
32,526 |
|
|
$ |
27,585 |
|
|
$ |
4,941 |
|
|
17.9 |
% |
|
$ |
30,630 |
|
|
$ |
28,205 |
|
|
$ |
2,425 |
|
|
8.6 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Home sales volume: |
|
|
|
|
|
|
|
|
New home sales* |
102 |
|
|
104 |
|
|
(2 |
) |
|
(1.9 |
)% |
|
259 |
|
|
229 |
|
|
30 |
|
|
13.1 |
% |
Pre-owned home sales* |
703 |
|
|
791 |
|
|
(88 |
) |
|
(11.1 |
)% |
|
2,173 |
|
|
2,181 |
|
|
(8 |
) |
|
(0.4 |
)% |
Total homes sold* |
805 |
|
|
895 |
|
|
(90 |
) |
|
(10.1 |
)% |
|
2,432 |
|
|
2,410 |
|
|
22 |
|
|
0.9 |
% |
Acquisitions Summary - Properties
Acquired in 2017 and 2016
(amounts in thousands except for statistical
data)
|
|
Three Months Ended
September 30, 2017 |
|
Nine Months Ended
September 30, 2017 |
REVENUES: |
|
|
|
|
Income from real property |
|
$ |
45,760 |
|
|
$ |
133,443 |
|
PROPERTY AND OPERATING EXPENSES: |
|
|
|
|
Payroll and benefits |
|
6,098 |
|
|
16,360 |
|
Legal,
taxes & insurance |
|
596 |
|
|
1,266 |
|
Utilities |
|
6,890 |
|
|
17,755 |
|
Supplies and repair |
|
1,999 |
|
|
4,912 |
|
Other |
|
2,616 |
|
|
9,566 |
|
Real
estate taxes |
|
3,422 |
|
|
10,218 |
|
Property operating expenses |
|
21,621 |
|
|
60,077 |
|
|
|
|
|
|
NET OPERATING INCOME (NOI)
(1) |
|
$ |
24,139 |
|
|
$ |
73,366 |
|
|
|
|
|
|
|
|
|
|
As of September 30, 2017 |
Other information: |
|
|
|
|
Number of properties |
|
|
|
117 |
|
Occupied sites (13) |
|
|
|
22,526 |
|
Developed sites (13) |
|
|
|
23,156 |
|
Occupancy % (13) |
|
|
|
97.3 |
% |
Transient sites |
|
|
|
7,208 |
|
Monthly base rent per site - MH |
|
|
|
$ |
619 |
|
Monthly base rent per site - RV (11) |
|
|
|
$ |
415 |
|
Monthly base rent per site - Total (11) |
|
|
|
$ |
512 |
|
Ancillary revenues, net (in
thousands) |
|
|
|
$ |
2,384 |
|
|
|
|
|
|
Home sales: |
|
|
|
|
Gross profit from home sales (in
thousands) |
|
|
|
$ |
3,266 |
|
New
homes sales |
|
|
|
64 |
|
Pre-owned homes sales |
|
|
|
209 |
|
|
|
|
|
|
Occupied rental home information: |
|
|
|
|
Rental program NOI (1) (in thousands) |
|
|
|
$ |
611 |
|
Number
of occupied rentals, end of period |
|
|
|
366 |
|
Investment in occupied rental homes (in thousands) |
|
|
|
$ |
10,679 |
|
Weighted average monthly rental rate |
|
|
|
$ |
890 |
|
Property Summary |
|
|
|
|
|
|
|
|
|
|
(includes MH and Annual RV's) |
|
|
|
|
|
|
|
|
|
|
|
|
|
COMMUNITIES |
|
9/30/2017 |
|
6/30/2017 |
|
3/31/2017 |
|
12/31/2016 |
|
9/30/2016 |
FLORIDA |
|
|
|
|
|
|
|
|
|
|
Communities |
|
121 |
|
|
121 |
|
|
121 |
|
|
121 |
|
|
121 |
|
Developed sites (13) |
|
36,587 |
|
|
36,661 |
|
|
36,533 |
|
|
36,326 |
|
|
36,050 |
|
Occupied (13) |
|
35,414 |
|
|
35,479 |
|
|
35,257 |
|
|
35,021 |
|
|
34,745 |
|
Occupancy % (13) |
|
96.8 |
% |
|
96.8 |
% |
|
96.5 |
% |
|
96.4 |
% |
|
96.4 |
% |
Sites for development |
|
1,469 |
|
|
1,368 |
|
|
1,359 |
|
|
1,461 |
|
|
1,455 |
|
MICHIGAN |
|
|
|
|
|
|
|
|
|
|
Communities |
|
68 |
|
|
68 |
|
|
67 |
|
|
67 |
|
|
67 |
|
Developed sites (13) |
|
25,498 |
|
|
25,496 |
|
|
25,024 |
|
|
24,512 |
|
|
24,388 |
|
Occupied (13) |
|
23,996 |
|
|
23,924 |
|
|
23,443 |
|
|
23,248 |
|
|
23,218 |
|
Occupancy % (13) |
|
94.1 |
% |
|
93.8 |
% |
|
93.7 |
% |
|
94.8 |
% |
|
95.2 |
% |
Sites for development |
|
1,752 |
|
|
1,752 |
|
|
1,798 |
|
|
2,414 |
|
|
2,453 |
|
TEXAS |
|
|
|
|
|
|
|
|
|
|
Communities |
|
21 |
|
|
21 |
|
|
21 |
|
|
21 |
|
|
21 |
|
Developed sites (13) |
|
6,410 |
|
|
6,312 |
|
|
6,292 |
|
|
6,186 |
|
|
6,088 |
|
Occupied (13) |
|
6,041 |
|
|
6,021 |
|
|
5,943 |
|
|
5,862 |
|
|
5,774 |
|
Occupancy % (13) |
|
94.2 |
% |
|
95.4 |
% |
|
94.5 |
% |
|
94.8 |
% |
|
94.8 |
% |
Sites for development |
|
1,277 |
|
|
1,345 |
|
|
1,387 |
|
|
1,474 |
|
|
1,455 |
|
CALIFORNIA |
|
|
|
|
|
|
|
|
|
|
Communities |
|
27 |
|
|
23 |
|
|
23 |
|
|
22 |
|
|
22 |
|
Developed sites (13) |
|
5,693 |
|
|
4,894 |
|
|
4,865 |
|
|
4,862 |
|
|
4,863 |
|
Occupied (13) |
|
5,630 |
|
|
4,834 |
|
|
4,804 |
|
|
4,793 |
|
|
4,792 |
|
Occupancy % (13) |
|
98.9 |
% |
|
98.8 |
% |
|
98.7 |
% |
|
98.6 |
% |
|
98.5 |
% |
Sites for development |
|
379 |
|
|
367 |
|
|
411 |
|
|
332 |
|
|
332 |
|
ONTARIO, CANADA |
|
|
|
|
|
|
|
|
|
|
Communities |
|
15 |
|
|
15 |
|
|
15 |
|
|
15 |
|
|
15 |
|
Developed sites (13) |
|
3,620 |
|
|
3,564 |
|
|
3,451 |
|
|
3,368 |
|
|
3,453 |
|
Occupied (13) |
|
3,620 |
|
|
3,564 |
|
|
3,451 |
|
|
3,368 |
|
|
3,453 |
|
Occupancy % (13) |
|
100.0 |
% |
|
100.0 |
% |
|
100.0 |
% |
|
100.0 |
% |
|
100.0 |
% |
Sites for development |
|
1,628 |
|
|
1,628 |
|
|
1,628 |
|
|
1,599 |
|
|
2,029 |
|
ARIZONA |
|
|
|
|
|
|
|
|
|
|
Communities |
|
11 |
|
|
11 |
|
|
11 |
|
|
11 |
|
|
11 |
|
Developed sites (13) |
|
3,602 |
|
|
3,589 |
|
|
3,582 |
|
|
3,565 |
|
|
3,567 |
|
Occupied (13) |
|
3,410 |
|
|
3,383 |
|
|
3,370 |
|
|
3,338 |
|
|
3,305 |
|
Occupancy % (13) |
|
94.7 |
% |
|
94.3 |
% |
|
94.1 |
% |
|
93.6 |
% |
|
92.7 |
% |
Sites for development |
|
269 |
|
|
269 |
|
|
269 |
|
|
358 |
|
|
358 |
|
INDIANA |
|
|
|
|
|
|
|
|
|
|
Communities |
|
11 |
|
|
11 |
|
|
11 |
|
|
11 |
|
|
11 |
|
Developed sites (13) |
|
2,900 |
|
|
2,900 |
|
|
2,900 |
|
|
2,900 |
|
|
2,900 |
|
Occupied (13) |
|
2,759 |
|
|
2,758 |
|
|
2,741 |
|
|
2,724 |
|
|
2,712 |
|
Occupancy % (13) |
|
95.1 |
% |
|
95.1 |
% |
|
94.5 |
% |
|
93.9 |
% |
|
93.5 |
% |
Sites for development |
|
330 |
|
|
330 |
|
|
330 |
|
|
316 |
|
|
316 |
|
OHIO |
|
|
|
|
|
|
|
|
|
|
Communities |
|
9 |
|
|
9 |
|
|
9 |
|
|
9 |
|
|
9 |
|
Developed sites (13) |
|
2,757 |
|
|
2,735 |
|
|
2,719 |
|
|
2,715 |
|
|
2,719 |
|
Occupied (13) |
|
2,676 |
|
|
2,643 |
|
|
2,623 |
|
|
2,595 |
|
|
2,602 |
|
Occupancy % (13) |
|
97.1 |
% |
|
96.6 |
% |
|
96.5 |
% |
|
95.6 |
% |
|
95.7 |
% |
Sites for development |
|
75 |
|
|
75 |
|
|
75 |
|
|
- |
|
|
- |
|
COLORADO |
|
|
|
|
|
|
|
|
|
|
Communities |
|
8 |
|
|
8 |
|
|
8 |
|
|
8 |
|
|
7 |
|
Developed sites (13) |
|
2,335 |
|
|
2,335 |
|
|
2,335 |
|
|
2,335 |
|
|
2,335 |
|
Occupied (13) |
|
2,318 |
|
|
2,326 |
|
|
2,329 |
|
|
2,325 |
|
|
2,323 |
|
Occupancy % (13) |
|
99.3 |
% |
|
99.6 |
% |
|
99.7 |
% |
|
99.6 |
% |
|
99.5 |
% |
Sites for development |
|
670 |
|
|
656 |
|
|
656 |
|
|
656 |
|
|
304 |
|
OTHER STATES |
|
|
|
|
|
|
|
|
|
|
Communities |
|
57 |
|
|
57 |
|
|
56 |
|
|
56 |
|
|
55 |
|
Developed sites (13) |
|
14,957 |
|
|
14,891 |
|
|
14,567 |
|
|
14,313 |
|
|
14,415 |
|
Occupied (13) |
|
14,532 |
|
|
14,439 |
|
|
14,130 |
|
|
13,919 |
|
|
13,991 |
|
Occupancy % (13) |
|
97.2 |
% |
|
97.0 |
% |
|
97.0 |
% |
|
97.3 |
% |
|
97.1 |
% |
Sites for development |
|
2,540 |
|
|
2,582 |
|
|
1,977 |
|
|
1,727 |
|
|
1,723 |
|
TOTAL - PORTFOLIO |
|
|
|
|
|
|
|
|
|
|
Communities |
|
348 |
|
|
344 |
|
|
342 |
|
|
341 |
|
|
339 |
|
Developed sites (13) |
|
104,359 |
|
|
103,377 |
|
|
102,268 |
|
|
101,082 |
|
|
100,778 |
|
Occupied (13) |
|
100,396 |
|
|
99,371 |
|
|
98,091 |
|
|
97,193 |
|
|
96,915 |
|
MH
& RV blended occupancy % (13) |
|
96.2 |
% |
|
96.1 |
% |
|
95.9 |
% |
|
96.2 |
% |
|
96.2 |
% |
Sites for development |
|
10,389 |
|
|
10,372 |
|
|
9,890 |
|
|
10,337 |
|
|
10,425 |
|
%
Communities age restricted |
|
33.6 |
% |
|
32.8 |
% |
|
33.0 |
% |
|
33.1 |
% |
|
33.3 |
% |
|
|
|
|
|
|
|
|
|
|
|
TRANSIENT RV PORTFOLIO SUMMARY |
|
|
|
|
|
|
|
|
|
|
Location |
|
|
|
|
|
|
|
|
|
|
Florida |
|
6,133 |
|
|
6,244 |
|
|
6,467 |
|
|
6,497 |
|
|
7,232 |
|
Texas |
|
1,392 |
|
|
1,403 |
|
|
1,412 |
|
|
1,407 |
|
|
1,446 |
|
Ontario, Canada |
|
1,262 |
|
|
1,314 |
|
|
1,451 |
|
|
1,500 |
|
|
1,485 |
|
New Jersey |
|
1,016 |
|
|
1,028 |
|
|
1,059 |
|
|
1,042 |
|
|
1,047 |
|
Arizona |
|
1,012 |
|
|
1,025 |
|
|
1,032 |
|
|
1,049 |
|
|
1,047 |
|
California |
|
808 |
|
|
808 |
|
|
840 |
|
|
513 |
|
|
478 |
|
New
York |
|
623 |
|
|
630 |
|
|
588 |
|
|
830 |
|
|
484 |
|
Maine |
|
529 |
|
|
533 |
|
|
543 |
|
|
555 |
|
|
556 |
|
Indiana |
|
520 |
|
|
520 |
|
|
520 |
|
|
502 |
|
|
501 |
|
Michigan |
|
258 |
|
|
260 |
|
|
210 |
|
|
204 |
|
|
203 |
|
Ohio |
|
147 |
|
|
169 |
|
|
194 |
|
|
198 |
|
|
194 |
|
Other locations |
|
2,215 |
|
|
2,253 |
|
|
1,966 |
|
|
1,997 |
|
|
1,801 |
|
Total
transient RV sites |
|
15,915 |
|
|
16,187 |
|
|
16,282 |
|
|
16,294 |
|
|
16,474 |
|
Capital Improvements,
Development, and Acquisitions
(amounts in thousands except for *)
|
Recurring |
|
|
|
|
|
|
|
|
|
|
|
Capital |
Recurring |
|
|
|
|
|
|
|
|
|
Expenditures |
Capital |
Lot |
|
|
Expansion
& |
Revenue |
|
|
Average/Site* |
|
Expenditures (14) |
|
Modifications (15) |
|
Acquisitions (16) |
|
Development (17) |
|
Producing
(18) |
YTD 2017 |
|
$ |
192 |
|
|
$ |
12,551 |
|
|
$ |
18,085 |
|
|
$ |
136,117 |
|
|
$ |
55,888 |
|
|
$ |
1,250 |
|
2016 |
|
$ |
211 |
|
|
$ |
17,613 |
|
|
$ |
19,040 |
|
|
$ |
1,822,564 |
|
|
$ |
47,958 |
|
|
$ |
2,631 |
|
2015 |
|
$ |
230 |
|
|
$ |
20,344 |
|
|
$ |
13,961 |
|
|
$ |
1,214,482 |
|
|
$ |
28,660 |
|
|
$ |
4,497 |
|
Operating Statistics for
Manufactured Homes and Annual RV's
|
Resident |
Net
Leased |
New
Home |
Pre-owned |
Brokered |
LOCATIONS |
Move-outs |
Sites
(19) |
Sales |
Home
Sales |
Re-sales |
Florida |
|
783 |
|
|
553 |
|
|
118 |
|
|
281 |
|
|
934 |
|
Michigan |
|
364 |
|
|
458 |
|
|
25 |
|
|
1,012 |
|
|
98 |
|
Texas |
|
175 |
|
|
179 |
|
|
21 |
|
|
248 |
|
|
26 |
|
California |
|
26 |
|
|
16 |
|
|
6 |
|
|
16 |
|
|
26 |
|
Arizona |
|
39 |
|
|
72 |
|
|
19 |
|
|
18 |
|
|
135 |
|
Ontario, Canada |
|
161 |
|
|
252 |
|
|
24 |
|
|
31 |
|
|
191 |
|
Indiana |
|
37 |
|
|
35 |
|
|
1 |
|
|
165 |
|
|
15 |
|
Ohio |
|
80 |
|
|
81 |
|
|
- |
|
|
89 |
|
|
4 |
|
Colorado |
|
9 |
|
|
(7 |
) |
|
4 |
|
|
102 |
|
|
38 |
|
Other
locations |
|
441 |
|
|
194 |
|
|
41 |
|
|
211 |
|
|
115 |
|
Nine Months Ended September 30, 2017 |
|
2,115 |
|
|
1,833 |
|
|
259 |
|
|
2,173 |
|
|
1,582 |
|
|
Resident |
Net
Leased |
New
Home |
Pre-owned |
Brokered |
TOTAL FOR YEAR ENDED |
Move-outs |
Sites
(19) |
Sales |
Home
Sales |
Re-sales |
2016 |
|
1,722 |
|
|
1,686 |
|
|
329 |
|
|
2,843 |
|
|
1,655 |
|
2015 |
|
1,344 |
|
|
1,905 |
|
|
273 |
|
|
2,210 |
|
|
1,244 |
|
|
Resident |
Resident |
PERCENTAGE TRENDS |
Move-outs |
Re-sales |
2017 (TTM) |
|
1.9 |
% |
|
6.4 |
% |
2016 |
|
2.0 |
% |
|
6.1 |
% |
2015 |
|
2.0 |
% |
|
5.9 |
% |
Footnotes and Definitions
(1) Investors in and analysts following the
real estate industry utilize funds from operations ("FFO"), net
operating income ("NOI"), and recurring earnings before interest,
tax, depreciation and amortization ("Recurring EBITDA") as
supplemental performance measures. We believe FFO, NOI, and
Recurring EBITDA are appropriate measures given their wide use by
and relevance to investors and analysts. FFO, reflecting the
assumption that real estate values rise or fall with market
conditions, principally adjusts for the effects of GAAP
depreciation/amortization of real estate assets. NOI provides
a measure of rental operations and does not factor in
depreciation/amortization and non-property specific expenses such
as general and administrative expenses. Recurring EBITDA, a
metric calculated as EBITDA exclusive of certain nonrecurring
items, provides a further tool to evaluate ability to incur and
service debt and to fund dividends and other cash needs.
Additionally, FFO, NOI, and Recurring EBITDA are commonly used in
various ratios, pricing multiples/yields and returns and valuation
calculations used to measure financial position, performance and
value.
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 period over period,
reflects the impact to operations from trends in occupancy rates,
rental rates, and operating costs, providing perspective not
readily apparent from net income (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. The Company also uses FFO excluding certain items,
which excludes certain gain and loss items that management
considers unrelated to the operational and financial performance of
our core business. We believe that this provides investors
with another financial measure of our operating performance that is
more comparable when evaluating period over period results.
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
that, when combined with measures computed in accordance with GAAP
such as net income (loss), cash flow from operating activities,
investing activities and financing activities, provide investors
with an indication of our ability to service debt and to fund
acquisitions and other expenditures. Other REITs may use
different methods for calculating FFO, accordingly, our FFO may not
be comparable to other REITs.
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. Because of the inclusion of items such as interest,
depreciation, and amortization, the use of net income (loss) as a
performance measure is limited as these items may not accurately
reflect the actual change in market value of a property, in the
case of depreciation and in the case of interest, may not
necessarily be linked to the operating performance of a real estate
asset, as it is often incurred at a parent company level and not at
a property level. 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, therefore, NOI is a measure of the operating
performance of the properties of the Company rather than of the
Company overall.
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. The Company believes that net income
(loss) is the most directly comparable GAAP measurement to
EBITDA.
(2) The consideration
amounts presented with respect to acquired communities represent
the economic transaction and do not meet the fair value purchase
accounting required by GAAP.
(3) This is a transferred
asset transaction which has been classified as collateralized
receivables and the cash received from this transaction has been
classified as a secured borrowing. The interest income and interest
expense accrue at the same rate/amount.
(4) Other income, net
for the quarter ended September 30, 2017, is comprised of a foreign
currency translation gain of $3.4 million partially offset by
contingent liability re-measurement of $0.1 million. For the
nine months ended September 30, 2017, Other income, net is
comprised of a foreign currency translation gain of $6.4 million,
partially offset by contingent liability re-measurement of $1.1
million.
(5) These costs represent
the first year expenses incurred to bring acquired properties up to
the Company's operating standards, including items such as tree
trimming and painting costs that do not meet the Company's
capitalization policy.
(6) The effect of certain
anti-dilutive convertible securities is excluded from these
items.
(7) The renter's monthly
payment includes the site rent and an amount attributable to the
leasing of the home. The site rent is reflected in Real Property
NOI. For purposes of management analysis, the site rent is included
in the Rental Program revenue to evaluate the incremental revenue
gains associated with implementation of the Rental Program, and to
assess the overall growth and performance of the Rental Program and
financial impact on our operations.
(8) Lines of credit also
includes the Company's MH floor plan facility. The effective
interest rate on the MH floor plan facility was 7.0 percent for all
periods presented. However, the Company pays no interest if the
floor plan balance is repaid within 60 days.
(9) MH occupancy excludes recently
completed but vacant expansion sites. RV occupancy includes annual
sites and excludes transient RV sites.
(10) The occupancy percentage for
2016 has been adjusted to reflect incremental growth
period-over-period from filled expansion sites and the conversion
of transient RV sites to annual RV sites.
(11) Monthly base rent per site
pertains to annual RV sites and excludes transient RV sites.
(12) Calculated using actual
results without rounding.
(13) Includes MH and annual RV
sites, and excludes transient RV sites.
(14) Includes capital expenditures
necessary to maintain asset quality, including purchasing and
replacing assets used to operate the community. These capital
expenditures include items such as: major road, driveway, and pool
improvements; clubhouse renovations; adding or replacing street
lights; playground equipment; signage; maintenance facilities;
manager housing and property vehicles. The minimum capitalized
amount is five hundred dollars.
(15) Includes capital expenditures
which improve the asset quality of the community. These costs
are incurred when an existing older home moves out, and the site is
prepared for a new home, more often than not, a multi-sectional
home. These activities which are mandated by strict
manufacturer's installation requirements and state building code
include items such as new foundations, driveways, and utility
upgrades.
(16) Acquisitions represent the
purchase price of existing operating communities and land parcels
to develop expansions or new communities. Acquisitions for the nine
months ended September 30, 2017 also include $65.9 million of
capital improvements identified during due diligence that are
necessary to bring the community up to the Company's standards.
These include items such as: upgrading clubhouses; landscaping; new
street light systems; new mail delivery systems; pool renovation
including larger decks, heaters, and furniture; new maintenance
facilities; and new signage including main signs and internal road
signs. These are considered acquisition costs and although
identified during due diligence, they often require 24 to 36 months
after closing to complete.
(17) Expansion and development
costs consist primarily of construction costs and costs necessary
to complete home site improvements.
(18) Capital costs related to
revenue generating activities, consist primarily of garages, sheds,
and sub-metering of water, sewer and electricity. Revenue
generating attractions at our RV resorts are also included here
and, occasionally, a special capital project requested by residents
and accompanied by an extra rental increase will be classified as
revenue producing.
(19)
Net leased sites do not include occupied sites acquired during that
year.
Certain financial information has
been revised to reflect reclassifications in prior periods to
conform to current period presentation.
3rd Quarter 2017 Press Release and
Supplemental
This
announcement is distributed by Nasdaq Corporate Solutions on behalf
of Nasdaq Corporate Solutions clients.
The issuer of this announcement warrants that they are solely
responsible for the content, accuracy and originality of the
information contained therein.
Source: Sun Communities via Globenewswire
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