Table of Contents
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| Summary - Earnings Press Release | |
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| Investor Information | |
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| Portfolio Overview | |
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| Financial Information | |
| Balance Sheets | |
| Statements of Operations | |
| Outstanding Securities and Capitalization | |
| Reconciliations to Non-GAAP Financial Measures | |
| Reconciliation of Net Income / (Loss) to Funds from Operations | |
| Reconciliation of Net Income / (Loss) to Recurring EBITDA | |
| Reconciliation of Net Income / (Loss) to Net Operating Income | |
| Non-GAAP and Other Financial Measures | |
| Financial Highlights | |
| Debt Analysis | |
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| Selected Financial Information | |
| Statements of Operations – Same Community | |
| Rental Program Summary | |
| Home Sales Summary | |
| Acquisitions Summary | |
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| Other Information | |
| Property Summary | |
| Capital Improvements, Development, and Acquisitions | |
| Operating Statistics for Manufactured Homes and Annual RV’s | |
| Footnotes and Definitions | |
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NEWS RELEASE
February 21, 2018
Sun Communities, Inc. Reports 2017 Fourth Quarter Results
Southfield, Michigan, February 21, 2018 – Sun Communities, Inc. (NYSE: SUI) (the “Company”), a real estate investment trust (“REIT”) that owns and operates, or has an interest in, manufactured housing (“MH”) and recreational vehicle (“RV”) communities, today reported its fourth quarter results.
Financial Results for the Quarter and Year Ended December 31, 2017
For the quarter ended December 31, 2017, total revenues increased $23.4 million, or 10.7 percent, to $242.0 million compared to $218.6 million for the same period in 2016. Net income attributable to common stockholders was $7.4 million, or $0.09 per diluted common share, as compared to net loss attributable to common stockholders of $1.6 million, or $0.02 net loss per diluted common share, in 2016.
For the year ended December 31, 2017, total revenues increased $148.8 million, or 17.9 percent, to $982.6 million compared to $833.8 million for the same period in 2016. Net income attributable to common stockholders was $65.0 million, or $0.85 per diluted common share, as compared to net income attributable to common stockholders of $17.4 million, or $0.26 per diluted common share, for the same period in 2016.
Non-GAAP Financial Measures and Portfolio Performance
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| • | Core Funds from Operations (“Core FFO”)(1) for the quarter ended December 31, 2017, was $0.98 per diluted share and OP unit (“Share”) as compared to $0.91 in the prior year, an increase of 7.7 percent. |
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| • | Core FFO(1) for the year ended December 31, 2017, was $4.17 per Share as compared to $3.79 in the prior year, an increase of 10.0 percent. |
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| • | Same Community Net Operating Income (“NOI”)(1) increased by 7.0 percent and 6.9 percent for the quarter and year ended December 31, 2017, respectively, as compared to the same periods in 2016. |
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| • | Home sales volumes increased 11.6 percent and 3.5 percent for the quarter and year ended December 31, 2017, respectively, as compared to the same periods in 2016. |
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| • | Revenue producing sites increased by 573 sites and 2,406 sites for the quarter and year ended December 31, 2017, respectively, as compared to 301 sites and 1,686 sites in the same periods in 2016. |
“Our strong 2017 results demonstrate our commitment to creating shareholder value by sustaining our high-quality portfolio and delivering best in class service to our residents and guests,” said Gary A. Shiffman, Chairman and Chief Executive Officer. “We begin 2018 with an optimistic outlook and an enthusiasm to once again deliver industry leading organic growth. Consistent annual rent increases, opportunities to capture occupancy gains, the ongoing development and lease up of our available expansion sites, and the opportunity to convert transient RV sites to annual leases over time provide us with a runway to deliver ongoing attractive results.”
OPERATING HIGHLIGHTS
Community Occupancy
Total portfolio occupancy was 95.8 percent at December 31, 2017, compared to 96.2 percent at December 31, 2016. The decline in occupancy is primarily attributable to vacant MH expansion sites that were completed during the fourth quarter.
During the fourth quarter of 2017, revenue producing sites increased by 573 sites, as compared to 301 revenue producing sites gained during the fourth quarter of 2016.
Revenue producing sites increased by 2,406 for the year ended December 31, 2017 as compared to 1,686 sites for the year ended December 31, 2016.
Same Community Results
For the 231 communities owned by the Company since January 1, 2016, NOI(1) for the quarter ended December 31, 2017 increased 7.0 percent over the same period in 2016, as a result of a 6.4 percent increase in revenues and a 4.9 percent increase in operating expenses. Same Community occupancy increased to 97.3 percent at December 31, 2017 from 95.4 percent(11)(12) at December 31, 2016.
For the year ended December 31, 2017, total revenues increased by 6.0 percent while total expenses increased by 3.8 percent, resulting in an increase to NOI(1) of 6.9 percent over the year ended December 31, 2016.
Home Sales
Total home sales were 850 for the quarter ended December 31, 2017, as compared to 762 homes sold during the same period in 2016, an 11.6 percent increase. During the year ended December 31, 2017, the Company sold 3,282 homes, compared to 3,172 homes sold for the same period ending 2016, an increase of 3.5 percent.
Rental homes sales, which are included in total home sales, were 340 and 231 for the quarter ended December 31, 2017 and 2016, respectively. Rental home sales were 1,168 and 1,089 for the year ended December 31, 2017 and 2016, respectively.
PORTFOLIO ACTIVITY
Acquisitions (2)
During the quarter ended December 31, 2017, the Company acquired a 201 site MH and RV resort located in Panama City Beach, Florida, for total consideration of $19.5 million. Additionally, the Company acquired a 383 site age-restricted MH community located in Port Orange, Florida, for total consideration of $32.5 million.
Catastrophic Weather
As previously announced, the Company’s communities in Florida and Georgia sustained damage from Hurricane Irma in September 2017, including complete asset impairments at three communities in the Florida Keys which will require redevelopment. Charges of $8.4 million were recognized as “Catastrophic weather related charges, net” in the Consolidated Statements of Operations for the year ended December 31, 2017. After quarter end, the Company received an advance from its insurer for $5.0 million related to losses from debris and tree removal, common area repairs and minor flooding damage.
For the year ended December 31, 2017, no insurance advances for lost earnings from the three Florida Keys communities were received. However, Core FFO(1) for the fourth quarter of 2017 and the Company’s full year 2018 guidance includes adjustments of $0.3 million and $1.3 million, respectively, for estimated loss of earnings in excess of the applicable business interruption deductible.
BALANCE SHEET AND CAPITAL MARKETS ACTIVITY
Debt Transactions
During the quarter ended December 31, 2017, the Company defeased a $38.6 million collateralized term loan with a 5.25 percent fixed interest rate. As a result of the transaction the Company recognized a loss on extinguishment of debt of $5.2 million. Concurrent with the defeasance, the Company entered into a new $100.0 million collateralized term loan encumbered by the same property with a 4.25 percent fixed rate of interest that will fully amortize over a 30-year term.
As of December 31, 2017, the Company had $3.1 billion of debt outstanding. The weighted average interest rate was 4.50 percent and the weighted average maturity was 8.9 years. The Company had $10.1 million of unrestricted cash on hand. At period-end the Company’s net debt to trailing twelve month Recurring EBITDA(1) ratio was 6.3 times.
Equity Transactions
As previously announced, during the quarter ended December 31, 2017, the Company redeemed its 7.125% Series A Cumulative Redeemable Preferred Stock. Holders received a cash payment of $25.14349 per share which included accrued and unpaid dividends. In the aggregate, the Company paid $85.5 million to redeem all of the 3,400,000 outstanding shares.
Additionally, during the quarter ended December 31, 2017, the Company issued 321,800 shares of common stock through its At-the-Market equity sales program at a weighted average price of $93.33 per share. Net proceeds from the sales were $29.7 million.
2018 Distributions
After quarter end, the Company announced a 6.0 percent annual distribution increase to $2.84 per common share from $2.68 per common share. This increase will begin with the first quarter distribution to be declared in March 2018 and paid in April 2018.
GUIDANCE 2018
The Company estimates full year 2018 net income per diluted share to be in the range of $1.26 to $1.42, and Core FFO(1) per Share to be in the range of $4.48 to $4.58. The Company estimates first quarter 2018 net income per diluted share to be in the range of $0.32 to $0.36, and Core FFO(1) per Share to be in the range of $1.12 to $1.14. Guidance does not include prospective acquisitions or capital markets activity.
Total Portfolio
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| Number of communities: 350 | | | | |
| | | 2017 Actual | | 2018E |
| | | (in Millions) | | Change % |
Income from real property (excluding transient revenue) | | $ | 664.3 |
| | 7.0% - 7.4% |
| Transient revenue | | 77.9 |
| | 8.9% - 10.0% |
| Income from real property | | $ | 742.2 |
| | 7.2% - 7.7% |
| Property operating and maintenance | | 210.3 |
| | 3.9% - 4.3% |
| Real estate taxes | | 52.3 |
| | 7.1% - 7.8% |
| Total property operating expenses | | $ | 262.6 |
| | 4.5% - 5.0% |
NOI(1) | | $ | 479.6 |
| | 8.4% - 9.4% |
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| | | 2017 Actual | | 2018E |
| | | (in Millions) | | Change % |
| Rental program, net | | $ | 28.5 |
| | 2.5% - 4.6% |
| Home sales gross profit | | 32.3 |
| | 0.9% - 5.3% |
| Ancillary revenues, net | | 10.4 |
| | (1.9%) - 0.0% |
| Interest, brokerage commissions, and other revenues, net | | 24.9 |
| | 2.4% - 3.6% |
| Home selling expenses | | 12.5 |
| | 21.6% - 22.4% |
| General and administrative | | 74.7 |
| | 1.3% - 2.9% |
| |
| Net Income per fully diluted share | | 2018E |
Weighted average common shares outstanding, fully diluted (in millions) (i) | | 78.9 |
| Q1 2018 Net income per fully diluted share | | $0.32 - $0.36 |
| Full Year 2018 Net income per fully diluted share | | $1.26 - $1.42 |
| | | |
| Core FFO per fully diluted share | | 2018E |
Weighted average common shares outstanding, fully diluted (in millions) - Core FFO(1) | | 84.0 |
Q1 2018 Core FFO(1) per fully diluted share | | $1.12 - $1.14 |
Full Year 2018 Core FFO(1) per fully diluted share | | $4.48 - $4.58 |
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(i) | Certain securities that are dilutive to the computation of Core FFO(1) per fully diluted share in the table above have been excluded from the computation of net income per fully diluted share, as inclusion of these securities would have been anti-dilutive to net income per fully diluted share. |
Supplementary Information:
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| | | | | | | | |
| | | 1Q18 | | 2Q18 | | 3Q18 | | 4Q18 |
Seasonality of Core FFO(1) | | 24.9% | | 23.1% | | 27.9% | | 24.1% |
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| | |
| | | 2018E |
| New home sales volume | | 500 - 560 |
| Pre-owned home sales volume | | 2,650 - 2,900 |
| Increase in revenue producing sites | | 2,700 - 2,900 |
Gross profit from rental home sales included above (non-FFO) (in millions) | | $14.5 |
Loss of earnings in 2018 from Florida Keys (in millions) | | $1.3 |
Same Community Portfolio(i):
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| Number of communities: 336 | | | | |
| | | 2017 Actual | | 2018E |
| | | (in Millions) | | Change % |
Income from real property (excluding transient revenue) | | $ | 629.3 |
| | 6.0% - 6.2% |
| Transient revenue | | 74.9 |
| | 4.9% - 5.7% |
Income from real property (ii) | | $ | 704.2 |
| | 5.9% - 6.1% |
Property operating and maintenance (ii) (iii) | | 172.3 |
| | 2.7% - 2.9% |
| Real estate taxes | | 51.7 |
| | 4.8% - 5.2% |
| Total property operating expenses | | $ | 224.0 |
| | 3.2% - 3.4% |
NOI(1) | | $ | 480.2 |
| | 7.0% - 7.5% |
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(i) | The amounts in the table above reflect constant currency, as Canadian currency figures included within the 2017 actual amounts have been translated at the assumed exchange rate used for 2018 guidance. |
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(ii) | The foregoing table nets $30.6 million of utility revenue against the related utility expense in property operating and maintenance expense. |
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(iii) | 2017 actual property operating and maintenance expense excludes $2.6 million of expenses incurred for recently acquired properties to bring the properties up to the Company’s operating standards that do not meet the Company’s capitalization policy. |
Supplementary Information:
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| | | 1Q18 | | 2Q18 | | 3Q18 | | 4Q18 |
Same Community NOI(1) Seasonality | | 25.5% | | 23.7% | | 26.1% | | 24.7% |
| | | | | | | | | |
| | | | | | | 2018E |
| Weighted average monthly rent increase | | | | | | 3.8 | % |
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 fourth quarter operating results will be held on Thursday, February 22, 2018 at 11:00 A.M. (ET). To participate, call toll-free 877-407-9039. Callers outside the U.S. or Canada can access the call at 201-689-8470. A replay will be available following the call through March 8, 2018 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 13673837. 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 December 31, 2017, owned, operated, or had an interest in a portfolio of 350 communities comprising approximately 122,000 developed sites in 29 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 (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 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.
Investor Information
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| RESEARCH COVERAGE | | | | | | |
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| 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 | | Ryan Burke | | (949) 640-8780 | | rburke@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 |
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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 Website | | www.suncommunities.com | | | | |
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| By Email | | investorrelations@suncommunities.com | | |
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| By Phone | | (248) 208-2500 | | | | |
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4th Quarter 2017 Supplemental Information 1 Sun Communities, Inc.
Portfolio Overview
(As of December 31, 2017)
4th Quarter 2017 Supplemental Information 2 Sun Communities, Inc.
Balance Sheets
(amounts in thousands)
|
| | | | | | | | |
| | | 12/31/2017 | | 12/31/2016 |
| ASSETS: | | | | |
| Land | | $ | 1,107,838 |
| | $ | 1,051,536 |
|
| Land improvements and buildings | | 5,102,014 |
| | 4,825,043 |
|
| Rental homes and improvements | | 528,074 |
| | 489,633 |
|
| Furniture, fixtures and equipment | | 144,953 |
| | 130,127 |
|
| Investment property | | 6,882,879 |
| | 6,496,339 |
|
| Accumulated depreciation | | (1,237,525 | ) | | (1,026,858 | ) |
| Investment property, net | | 5,645,354 |
| | 5,469,481 |
|
| Cash and cash equivalents | | 10,127 |
| | 8,164 |
|
| Inventory of manufactured homes | | 30,430 |
| | 21,632 |
|
| Notes and other receivables, net | | 163,496 |
| | 81,179 |
|
Collateralized receivables, net (3) | | 128,246 |
| | 143,870 |
|
| Other assets, net | | 134,304 |
| | 146,450 |
|
| Total assets | | $ | 6,111,957 |
| | $ | 5,870,776 |
|
| LIABILITIES: | | | | |
| Mortgage loans payable | | $ | 2,867,356 |
| | $ | 2,819,567 |
|
Secured borrowings (3) | | 129,182 |
| | 144,477 |
|
| Preferred OP units - mandatorily redeemable | | 41,443 |
| | 45,903 |
|
| Lines of credit | | 41,257 |
| | 100,095 |
|
| Distributions payable | | 55,225 |
| | 51,896 |
|
| Other liabilities | | 270,741 |
| | 279,667 |
|
| Total liabilities | | 3,405,204 |
| | 3,441,605 |
|
| Series A-4 preferred stock | | 32,414 |
| | 50,227 |
|
| Series A-4 preferred OP units | | 10,652 |
| | 16,717 |
|
| STOCKHOLDERS’ EQUITY: | | | | |
| Series A preferred stock | | — |
| | 34 |
|
| Common stock | | 797 |
| | 732 |
|
| Additional paid-in capital | | 3,758,533 |
| | 3,321,441 |
|
| Accumulated other comprehensive income (loss) | | 1,102 |
| | (3,181 | ) |
| Distributions in excess of accumulated earnings | | (1,162,001 | ) | | (1,023,415 | ) |
| Total SUI stockholders’ equity | | 2,598,431 |
| | 2,295,611 |
|
| Noncontrolling interests: | | | | |
| Common and preferred OP units | | 60,971 |
| | 69,598 |
|
| Consolidated variable interest entities | | 4,285 |
| | (2,982 | ) |
| Total noncontrolling interest | | 65,256 |
| | 66,616 |
|
| Total stockholders’ equity | | 2,663,687 |
| | 2,362,227 |
|
| Total liabilities & stockholders’ equity | | $ | 6,111,957 |
| | $ | 5,870,776 |
|
4th Quarter 2017 Supplemental Information 3 Sun Communities, Inc.
Statements of Operations - Quarter to Date Comparison
(amounts in thousands, except per share amounts)
|
| | | | | | | | | | | | | | |
| | Three Months Ended December 31, |
| | 2017 | | 2016 | | Change | | % Change |
| REVENUES | | | | | | | |
Income from real property (excluding transient revenue) | $ | 169,102 |
| | $ | 156,533 |
| | $ | 12,569 |
| | 8.0 | % |
| Transient revenue | 12,348 |
| | 10,824 |
| | 1,524 |
| | 14.1 | % |
| Revenue from home sales | 36,089 |
| | 28,520 |
| | 7,569 |
| | 26.5 | % |
| Rental home revenue | 12,775 |
| | 12,084 |
| | 691 |
| | 5.7 | % |
| Ancillary revenues | 5,425 |
| | 4,982 |
| | 443 |
| | 8.9 | % |
| Interest | 5,571 |
| | 4,791 |
| | 780 |
| | 16.3 | % |
| Brokerage commissions and other revenues, net | 716 |
| | 900 |
| | (184 | ) | | (20.4 | )% |
| Total revenues | 242,026 |
| | 218,634 |
| | 23,392 |
| | 10.7 | % |
| | | | | | | | |
| EXPENSES | | | | | | | |
| Property operating and maintenance | 50,417 |
| | 47,917 |
| | 2,500 |
| | 5.2 | % |
| Real estate taxes | 12,966 |
| | 12,184 |
| | 782 |
| | 6.4 | % |
| Cost of home sales | 27,115 |
| | 21,617 |
| | 5,498 |
| | 25.4 | % |
| Rental home operating and maintenance | 5,179 |
| | 6,657 |
| | (1,478 | ) | | (22.2 | )% |
| Ancillary expenses | 5,352 |
| | 4,728 |
| | 624 |
| | 13.2 | % |
| Home selling expenses | 3,066 |
| | 2,504 |
| | 562 |
| | 22.4 | % |
| General and administrative | 18,523 |
| | 17,177 |
| | 1,346 |
| | 7.8 | % |
| Transaction costs | 2,811 |
| | 4,023 |
| | (1,212 | ) | | (30.1 | )% |
| Catastrophic weather related charges, net | 228 |
| | 1,172 |
| | (944 | ) | | (80.6 | )% |
| Depreciation and amortization | 71,817 |
| | 62,205 |
| | 9,612 |
| | 15.5 | % |
| Loss on extinguishment of debt | 5,260 |
| | 1,127 |
| | 4,133 |
| | 366.7 | % |
| Interest | 31,363 |
| | 30,641 |
| | 722 |
| | 2.4 | % |
| Interest on mandatorily redeemable preferred OP units | 753 |
| | 789 |
| | (36 | ) | | (4.6 | )% |
| Total expenses | 234,850 |
| | 212,741 |
| | 22,109 |
| | 10.4 | % |
| Income before other items | 7,176 |
| | 5,893 |
| | 1,283 |
| | 21.8 | % |
Other income / (expense), net (4) | 3,642 |
| | (4,676 | ) | | 8,318 |
| | 177.9 | % |
| Current tax expense | (313 | ) | | (116 | ) | | (197 | ) | | (169.8 | )% |
| Deferred tax (expense) / benefit | (163 | ) | | 400 |
| | (563 | ) | | (140.8 | )% |
| Net income | 10,342 |
| | 1,501 |
| | 8,841 |
| | 589.0 | % |
| Less: Preferred return to preferred OP units | (1,099 | ) | | (1,213 | ) | | 114 |
| | (9.4 | )% |
| Less: Amounts attributable to noncontrolling interests | (876 | ) | | 310 |
| | (1,186 | ) | | (382.6 | )% |
| Less: Preferred stock distribution | (929 | ) | | (2,198 | ) | | 1,269 |
| | (57.7 | )% |
| NET INCOME / (LOSS) ATTRIBUTABLE TO SUI | $ | 7,438 |
| | $ | (1,600 | ) | | $ | 9,038 |
| | 564.9 | % |
| | | | | | | | |
| Weighted average common shares outstanding: | | | | | | | |
| Basic | 78,633 |
| | 72,277 |
| | 6,356 |
| | 8.8 | % |
| Diluted | 79,107 |
| | 72,685 |
| | 6,422 |
| | 8.8 | % |
| Earnings / (loss) per share: | | | | | | | |
| Basic | $ | 0.09 |
| | $ | (0.02 | ) | | $ | 0.11 |
| | 550.0 | % |
| Diluted | $ | 0.09 |
| | $ | (0.02 | ) | | $ | 0.11 |
| | 550.0 | % |
4th Quarter 2017 Supplemental Information 4 Sun Communities, Inc.
Statements of Operations - Year to Date Comparison
(amounts in thousands, except per share amounts)
|
| | | | | | | | | | | | | | | |
| | | Year Ended December 31, |
| | | 2017 | | 2016 | | Change | | % Change |
| REVENUES: | | | | | | | | |
Income from real property (excluding transient revenue) | | $ | 664,281 |
| | $ | 562,754 |
| | $ | 101,527 |
| | 18.0 | % |
| Transient revenue | | 77,947 |
| | 58,163 |
| | 19,784 |
| | 34.0 | % |
| Revenue from home sales | | 127,408 |
| | 110,507 |
| | 16,901 |
| | 15.3 | % |
| Rental home revenue | | 50,549 |
| | 47,780 |
| | 2,769 |
| | 5.8 | % |
| Ancillary revenues | | 37,511 |
| | 33,424 |
| | 4,087 |
| | 12.2 | % |
| Interest | | 21,180 |
| | 18,113 |
| | 3,067 |
| | 16.9 | % |
| Brokerage commissions and other revenues, net | | 3,694 |
| | 3,037 |
| | 657 |
| | 21.6 | % |
| Total revenues | | 982,570 |
| | 833,778 |
| | 148,792 |
| | 17.9 | % |
| | | | | | | | | |
| EXPENSES: | | | | | | | | |
| Property operating and maintenance | | 210,278 |
| | 173,274 |
| | 37,004 |
| | 21.4 | % |
| Real estate taxes | | 52,288 |
| | 44,306 |
| | 7,982 |
| | 18.0 | % |
| Cost of home sales | | 95,114 |
| | 80,420 |
| | 14,694 |
| | 18.3 | % |
| Rental home operating and maintenance | | 22,000 |
| | 24,294 |
| | (2,294 | ) | | (9.4 | )% |
| Ancillary expenses | | 27,071 |
| | 23,425 |
| | 3,646 |
| | 15.6 | % |
| Home selling expenses | | 12,457 |
| | 9,744 |
| | 2,713 |
| | 27.8 | % |
| General and administrative | | 74,711 |
| | 64,087 |
| | 10,624 |
| | 16.6 | % |
| Transaction costs | | 9,801 |
| | 31,914 |
| | (22,113 | ) | | (69.3 | )% |
| Catastrophic weather related charges, net | | 8,352 |
| | 1,172 |
| | 7,180 |
| | 612.6 | % |
| Depreciation and amortization | | 261,536 |
| | 221,770 |
| | 39,766 |
| | 17.9 | % |
| Loss on extinguishment of debt | | 6,019 |
| | 1,127 |
| | 4,892 |
| | 434.1 | % |
| Interest | | 127,128 |
| | 119,163 |
| | 7,965 |
| | 6.7 | % |
| Interest on mandatorily redeemable preferred OP units | | 3,114 |
| | 3,152 |
| | (38 | ) | | (1.2 | )% |
| Total expenses | | 909,869 |
| | 797,848 |
| | 112,021 |
| | 14.0 | % |
| Income before other items | | 72,701 |
| | 35,930 |
| | 36,771 |
| | 102.3 | % |
Other income / (expense), net (4) | | 8,982 |
| | (4,676 | ) | | 13,658 |
| | 292.1 | % |
| Current tax expense | | (446 | ) | | (683 | ) | | 237 |
| | 34.7 | % |
| Deferred tax benefit | | 582 |
| | 400 |
| | 182 |
| | 45.5 | % |
| Income from affiliate transactions | | — |
| | 500 |
| | (500 | ) | | 100.0 | % |
| Net income | | 81,819 |
| | 31,471 |
| | 50,348 |
| | 160.0 | % |
| Less: Preferred return to preferred OP units | | (4,581 | ) | | (5,006 | ) | | 425 |
| | (8.5 | )% |
| Less: Amounts attributable to noncontrolling interests | | (5,055 | ) | | (150 | ) | | (4,905 | ) | | 3,270.0 | % |
| Less: Preferred stock distribution | | (7,162 | ) | | (8,946 | ) | | 1,784 |
| | (19.9 | )% |
| NET INCOME ATTRIBUTABLE TO SUI | | $ | 65,021 |
| | $ | 17,369 |
| | $ | 47,652 |
| | 274.4 | % |
| | | | | | | | | |
| Weighted average common shares outstanding: | | | | | | | | |
| Basic | | 76,084 |
| | 65,856 |
| | 10,228 |
| | 15.5 | % |
| Diluted | | 76,711 |
| | 66,321 |
| | 10,390 |
| | 15.7 | % |
| Earnings per share: | | | | | | | |
|
| Basic | | $ | 0.85 |
| | $ | 0.27 |
| | $ | 0.58 |
| | 214.8 | % |
| Diluted | | $ | 0.85 |
| | $ | 0.26 |
| | $ | 0.59 |
| | 226.9 | % |
4th Quarter 2017 Supplemental Information 5 Sun Communities, Inc.
Outstanding Securities and Capitalization
(in thousands except for *)
|
| | | | | | | | | |
| Outstanding Securities - As of December 31, 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 | 345 | | 2.4390 | | 841 | | $100 | | 6.0% |
| Series A-3 preferred OP units | 40 | | 1.8605 | | 74 | | $100 | | 4.5% |
| Series A-4 preferred OP units | 424 | | 0.4444 | | 188 | | $25 | | 6.5% |
| Series C preferred OP units | 316 | | 1.1100 | | 351 | | $100 | | 4.5% |
| Common OP units | 2,746 | | 1.0000 | | 2,746 | | N/A | | Mirrors common shares distributions |
| Series A-4 cumulative convertible preferred stock | 1,085 | | 0.4444 | | 482 | | $25 | | 6.5% |
| | | | | | | | | | |
| Non-Convertible Securities | | | | | | | | | |
| Common shares | 79,679 | | N/A | | N/A | | N/A | | $2.68^ |
| ^ Annual distribution is based on the last quarterly distribution annualized. |
|
| | | | | | | | | | | |
| Capitalization - As of December 31, 2017 | | | | | | |
| | | | | | | |
| Equity | | Shares | | Share Price* | | Total |
| Common shares | | 79,679 |
| | $ | 92.78 |
| | $ | 7,392,618 |
|
| Common OP units | | 2,746 |
| | $ | 92.78 |
| | 254,774 |
|
| Subtotal | | 82,425 |
| | | | $ | 7,647,392 |
|
| | | | | | | |
| Series A-1 preferred OP units | | 841 |
| | $ | 92.78 |
| | 78,028 |
|
| Series A-3 preferred OP units | | 74 |
| | $ | 92.78 |
| | 6,866 |
|
| Series A-4 preferred OP units | | 188 |
| | $ | 92.78 |
| | 17,443 |
|
| Series C preferred OP units | | 351 |
| | $ | 92.78 |
| | 32,566 |
|
| Total diluted shares outstanding | | 83,879 |
| | | | $ | 7,782,295 |
|
| |
| Debt |
| Mortgage loans payable | | | | | | $ | 2,867,356 |
|
Secured borrowings (3) | | | | | | 129,182 |
|
| Preferred OP units - mandatorily redeemable | | | | | | 41,443 |
|
| Lines of credit | | | | | | 41,257 |
|
| Total Debt | | | | | | $ | 3,079,238 |
|
| |
| Preferred |
| A-4 preferred stock | | 1,085 |
| | $ | 25.00 |
| | $ | 27,125 |
|
| Total Capitalization | | | | | | $ | 10,888,658 |
|
4th Quarter 2017 Supplemental Information 6 Sun Communities, Inc.
Reconciliations to Non-GAAP Financial Measures
4th Quarter 2017 Supplemental Information 7 Sun Communities, Inc.
Reconciliation of Net Income / (Loss) Attributable to Sun Communities, Inc. Common Stockholders to Funds from Operations
(amounts in thousands except for per share data)
|
| | | | | | | | | | | | | | | |
| | Three Months Ended December 31, | | Year Ended
December 31, |
| | 2017 | | 2016 | | 2017 | | 2016 |
| Net income / (loss) attributable to Sun Communities, Inc. common stockholders | $ | 7,438 |
| | $ | (1,600 | ) | | $ | 65,021 |
| | $ | 17,369 |
|
| Adjustments: | |
| | |
| | |
| | |
|
| Depreciation and amortization | 72,068 |
| | 62,351 |
| | 262,211 |
| | 221,576 |
|
| Amounts attributable to noncontrolling interests | 825 |
| | (296 | ) | | 4,535 |
| | (41 | ) |
| Preferred return to preferred OP units | 570 |
| | 604 |
| | 2,320 |
| | 2,462 |
|
| Preferred distribution to Series A-4 preferred stock | 441 |
| | — |
| | 2,107 |
| | — |
|
| Gain on disposition of assets, net | (4,733 | ) | | (3,487 | ) | | (16,075 | ) | | (15,713 | ) |
FFO attributable to Sun Communities, Inc. common stockholders and dilutive convertible securities (1) (6)
| 76,609 |
| | 57,572 |
| | 320,119 |
| | 225,653 |
|
| Adjustments: | | | | | | | |
| Transaction costs | 2,811 |
| | 4,023 |
| | 9,801 |
| | 31,914 |
|
Other acquisition related costs (5) | 98 |
| | 1,861 |
| | 2,810 |
| | 3,328 |
|
| Income from affiliate transactions | — |
| | — |
| | — |
| | (500 | ) |
| Loss on extinguishment of debt | 5,260 |
| | 1,127 |
| | 6,019 |
| | 1,127 |
|
| Catastrophic weather related charges, net | 228 |
| | 1,172 |
| | 8,352 |
| | 1,172 |
|
| Loss of earnings - catastrophic weather related | 292 |
| | — |
| | 292 |
| | — |
|
Other (income) / expense, net (4) | (3,642 | ) | | 4,676 |
| | (8,982 | ) | | 4,676 |
|
| Debt premium write-off | (905 | ) | | (839 | ) | | (1,343 | ) | | (839 | ) |
| Ground lease intangible write-off | 898 |
| | — |
| | 898 |
| | — |
|
| Deferred tax expense / (benefit) | 163 |
| | (400 | ) | | (582 | ) | | (400 | ) |
Core FFO attributable to Sun Communities, Inc. common stockholders and dilutive convertible securities (1) (6)
| $ | 81,812 |
| | $ | 69,192 |
| | $ | 337,384 |
| | $ | 266,131 |
|
| | | | | | | | |
| Weighted average common shares outstanding - basic: | 78,633 |
| | 72,277 |
| | 76,084 |
| | 65,856 |
|
| Add: | | | | | | | |
| Common stock issuable upon conversion of stock options | 2 |
| | 1 |
| | 2 |
| | 8 |
|
| Restricted stock | 472 |
| | 407 |
| | 625 |
| | 457 |
|
| Common OP units | 2,751 |
| | 2,793 |
| | 2,756 |
| | 2,844 |
|
| Common stock issuable upon conversion of Series A-1 preferred OP units | 847 |
| | 901 |
| | 869 |
| | 925 |
|
| 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 |
| | — |
| | 585 |
| | — |
|
| Weighted average common shares outstanding - fully diluted | 83,262 |
| | 76,454 |
| | 80,996 |
| | 70,165 |
|
| | | | | | | | |
FFO attributable to Sun Communities, Inc. common stockholders and dilutive convertible securities (1) (6) per share - fully diluted
| $ | 0.92 |
| | $ | 0.75 |
| | $ | 3.95 |
| | $ | 3.22 |
|
Core FFO attributable to Sun Communities, Inc. common stockholders and dilutive convertible securities (1) (6) per share - fully diluted
| $ | 0.98 |
| | $ | 0.91 |
| | $ | 4.17 |
| | $ | 3.79 |
|
4th Quarter 2017 Supplemental Information 8 Sun Communities, Inc.
Reconciliation of Net Income / (Loss) Attributable to Sun Communities, Inc. Common Stockholders to Recurring EBITDA
(amounts in thousands)
|
| | | | | | | | | | | | | | | |
| | Three Months Ended
December 31, | | Year Ended
December 31, |
| | 2017 | | 2016 | | 2017 | | 2016 |
| Net income / (loss) attributable to Sun Communities, Inc., common stockholders | $ | 7,438 |
| | $ | (1,600 | ) | | $ | 65,021 |
| | $ | 17,369 |
|
| Interest | 32,116 |
| | 31,430 |
| | 130,242 |
| | 122,315 |
|
| Depreciation and amortization | 71,817 |
| | 62,205 |
| | 261,536 |
| | 221,770 |
|
| Loss on extinguishment of debt | 5,260 |
| | 1,127 |
| | 6,019 |
| | 1,127 |
|
| Transaction costs | 2,811 |
| | 4,023 |
| | 9,801 |
| | 31,914 |
|
| Catastrophic weather related charges, net | 228 |
| | 1,172 |
| | 8,352 |
| | 1,172 |
|
Other (income) / expense, net (4) | (3,642 | ) | | 4,676 |
| | (8,982 | ) | | 4,676 |
|
| Current tax expense | 313 |
| | 116 |
| | 446 |
| | 683 |
|
| Deferred tax expense / (benefit) | 163 |
| | (400 | ) | | (582 | ) | | (400 | ) |
| Income from affiliate transactions | — |
| | — |
| | — |
| | (500 | ) |
| Preferred return to preferred OP units | 1,099 |
| | 1,213 |
| | 4,581 |
| | 5,006 |
|
| Amounts attributable to noncontrolling interests | 876 |
| | (310 | ) | | 5,055 |
| | 150 |
|
| Preferred stock distribution | 929 |
| | 2,198 |
| | 7,162 |
| | 8,946 |
|
RECURRING EBITDA (1) | $ | 119,408 |
| | $ | 105,850 |
|
| $ | 488,651 |
|
| $ | 414,228 |
|
4th Quarter 2017 Supplemental Information 9 Sun Communities, Inc.
Reconciliation of Net Income / (Loss) Attributable to Sun Communities, Inc. Common Stockholders to Net Operating Income
(amounts in thousands)
|
| | | | | | | | | | | | | | | |
| | Three Months Ended
December 31, | | Year Ended
December 31, |
| | 2017 | | 2016 | | 2017 | | 2016 |
| Net income / (loss) attributable to Sun Communities, Inc., common stockholders: | $ | 7,438 |
| | $ | (1,600 | ) | | $ | 65,021 |
| | $ | 17,369 |
|
| Other revenues | (6,287 | ) | | (5,691 | ) | | (24,874 | ) | | (21,150 | ) |
| Home selling expenses | 3,066 |
| | 2,504 |
| | 12,457 |
| | 9,744 |
|
| General and administrative | 18,523 |
| | 17,177 |
| | 74,711 |
| | 64,087 |
|
| Transaction costs | 2,811 |
| | 4,023 |
| | 9,801 |
| | 31,914 |
|
| Depreciation and amortization | 71,817 |
| | 62,205 |
| | 261,536 |
| | 221,770 |
|
| Loss on extinguishment of debt | 5,260 |
| | 1,127 |
| | 6,019 |
| | 1,127 |
|
| Interest expense | 32,116 |
| | 31,430 |
| | 130,242 |
| | 122,315 |
|
| Catastrophic weather related charges, net | 228 |
| | 1,172 |
| | 8,352 |
| | 1,172 |
|
Other (income) / expense, net (4) | (3,642 | ) | | 4,676 |
| | (8,982 | ) | | 4,676 |
|
| Current tax expense | 313 |
| | 116 |
| | 446 |
| | 683 |
|
| Deferred tax expense / (benefit) | 163 |
| | (400 | ) | | (582 | ) | | (400 | ) |
| Income from affiliate transactions | — |
| | — |
| | — |
| | (500 | ) |
| Preferred return to preferred OP units | 1,099 |
| | 1,213 |
| | 4,581 |
| | 5,006 |
|
| Amounts attributable to noncontrolling interests | 876 |
| | (310 | ) | | 5,055 |
| | 150 |
|
| Preferred stock distributions | 929 |
| | 2,198 |
| | 7,162 |
| | 8,946 |
|
NOI(1) / Gross Profit | $ | 134,710 |
|
| $ | 119,840 |
|
| $ | 550,945 |
|
| $ | 466,909 |
|
|
| | | | | | | | | | | | | | | |
| | Three Months Ended
December 31, | | Year Ended
December 31, |
| | 2017 | | 2016 | | 2017 | | 2016 |
Real Property NOI (1) | $ | 118,067 |
| | $ | 107,256 |
| | $ | 479,662 |
| | $ | 403,337 |
|
Rental Program NOI (1) | 23,623 |
| | 20,863 |
| | 92,382 |
| | 85,086 |
|
Home Sales NOI (1) / Gross Profit | 8,974 |
| | 6,903 |
| | 32,294 |
| | 30,087 |
|
Ancillary NOI (1) / Gross Profit | 73 |
| | 254 |
| | 10,440 |
| | 9,999 |
|
Site rent from Rental Program (included in Real Property NOI) (1)(7) | (16,027 | ) | | (15,436 | ) | | (63,833 | ) | | (61,600 | ) |
NOI (1) / Gross profit | $ | 134,710 |
| | $ | 119,840 |
| | $ | 550,945 |
| | $ | 466,909 |
|
4th Quarter 2017 Supplemental Information 10 Sun Communities, Inc.
Non-GAAP and Other Financial Measures
4th Quarter 2017 Supplemental Information 11 Sun Communities, Inc.
Financial Highlights
(amounts in thousands, except per share data)
|
| | | | | | | | | | | | | | | | | | | |
| | Quarter Ended |
| | 12/31/2017 | | 9/30/2017 | | 6/30/2017 | | 3/31/2017 | | 12/31/2016 |
| OPERATING INFORMATION | | | | | | | | | |
| Total revenues | $ | 242,026 |
| | $ | 268,245 |
| | $ | 237,899 |
| | $ | 234,400 |
| | $ | 218,634 |
|
| Net income | $ | 10,342 |
| | $ | 28,958 |
| | $ | 16,974 |
| | $ | 25,545 |
| | $ | 1,501 |
|
| Net income / (loss) attributable to common stockholders | $ | 7,438 |
| | $ | 24,115 |
| | $ | 12,364 |
| | $ | 21,104 |
| | $ | (1,600 | ) |
| Earnings / (loss) per share basic | $ | 0.09 |
| | $ | 0.31 |
| | $ | 0.16 |
| | $ | 0.29 |
| | $ | (0.02 | ) |
| Earnings / (loss) per share diluted | $ | 0.09 |
| | $ | 0.31 |
| | $ | 0.16 |
| | $ | 0.29 |
| | $ | (0.02 | ) |
| | | | | | | | | | |
Recurring EBITDA (1) | $ | 119,408 |
| | $ | 132,524 |
| | $ | 114,324 |
| | $ | 122,395 |
| | $ | 105,850 |
|
FFO attributable to Sun Communities, Inc. common stockholders and dilutive convertible securities (1) (6) | $ | 76,609 |
| | $ | 86,917 |
| | $ | 73,202 |
| | $ | 83,391 |
| | $ | 57,572 |
|
Core FFO attributable to Sun Communities, Inc. common stockholders and dilutive convertible securities (1) (6) | $ | 81,812 |
| | $ | 93,757 |
| | $ | 76,194 |
| | $ | 85,621 |
| | $ | 69,192 |
|
FFO attributable to Sun Communities, Inc. common stockholders and dilutive convertible securities (1) (6) per share - fully diluted
| $ | 0.92 |
| | $ | 1.05 |
| | $ | 0.92 |
| | $ | 1.07 |
| | $ | 0.75 |
|
Core FFO attributable to Sun Communities, Inc. common stockholders and dilutive convertible securities (1) (6) per share - fully diluted
| $ | 0.98 |
| | $ | 1.13 |
| | $ | 0.96 |
| | $ | 1.10 |
| | $ | 0.91 |
|
| | | | | | | | | | |
| BALANCE SHEETS | | | | | | | | | |
| Total assets | $ | 6,111,957 |
| | $ | 6,157,836 |
| | $ | 6,178,713 |
| | $ | 5,902,447 |
| | $ | 5,870,776 |
|
| Total debt | $ | 3,079,238 |
| | $ | 3,003,427 |
| | $ | 3,018,653 |
| | $ | 3,140,547 |
| | $ | 3,110,042 |
|
Total liabilities | $ | 3,405,204 |
| | $ | 3,351,021 |
| | $ | 3,373,695 |
| | $ | 3,478,132 |
| | $ | 3,441,605 |
|
4th Quarter 2017 Supplemental Information 12 Sun Communities, Inc.
Debt Analysis
(amounts in thousands)
|
| | | | | | | | | | | | | | | | | | | |
| | Quarter Ended |
| | 12/31/2017 | | 9/30/2017 | | 6/30/2017 | | 3/31/2017 | | 12/31/2016 |
| DEBT OUTSTANDING | | | | | | | | | |
| Mortgage loans payable | $ | 2,867,356 |
| | $ | 2,822,640 |
| | $ | 2,832,819 |
| | $ | 2,774,645 |
| | $ | 2,819,567 |
|
Secured borrowings (3) | 129,182 |
| | 134,884 |
| | 139,496 |
| | 141,671 |
| | 144,477 |
|
| Preferred OP units - mandatorily redeemable | 41,443 |
| | 45,903 |
| | 45,903 |
| | 45,903 |
| | 45,903 |
|
Lines of credit (8) | 41,257 |
| | — |
| | 435 |
| | 178,328 |
| | 100,095 |
|
| Total debt | $ | 3,079,238 |
| | $ | 3,003,427 |
| | $ | 3,018,653 |
| | $ | 3,140,547 |
| | $ | 3,110,042 |
|
| | | | | | | | | | |
| % FIXED/FLOATING | | | | | | | | | |
| Fixed | 93.7 | % | | 94.9 | % | | 94.9 | % | | 89.4 | % | | 91.8 | % |
| Floating | 6.3 | % | | 5.1 | % | | 5.1 | % | | 10.6 | % | | 8.2 | % |
| Total | 100.0 | % | | 100.0 | % | | 100.0 | % | | 100.0 | % | | 100.0 | % |
| | | | | | | | | | |
| WEIGHTED AVERAGE INTEREST RATES | | | | | | | | | |
| Mortgage loans payable | 4.25 | % | | 4.26 | % | | 4.26 | % | | 4.26 | % | | 4.24 | % |
| Preferred OP units - mandatorily redeemable | 6.75 | % | | 6.87 | % | | 6.87 | % | | 6.87 | % | | 6.87 | % |
Lines of credit (8) | 2.79 | % | | — | % | | — | % | | 2.52 | % | | 2.14 | % |
Average before Secured borrowings (3) | 4.26 | % |
| 4.30 | % |
| 4.30 | % |
| 4.19 | % |
| 4.21 | % |
Secured borrowings (3) | 9.97 | % | | 9.98 | % | | 9.99 | % | | 10.01 | % | | 10.03 | % |
| Total average | 4.50 | % | | 4.56 | % | | 4.56 | % | | 4.45 | % | | 4.48 | % |
| | | | | | | | | | |
| DEBT RATIOS | | | | | | | | | |
Net Debt / Recurring EBITDA (1) (TTM) | 6.3 |
| | 6.0 |
| | 6.0 |
| | 7.0 |
| | 7.5 |
|
| Net Debt / Enterprise Value | 28.2 | % | | 28.3 | % | | 27.2 | % | | 32.8 | % | | 33.8 | % |
| Net Debt + Preferred Stock / Enterprise Value | 28.5 | % | | 29.4 | % | | 28.4 | % | | 34.2 | % | | 35.2 | % |
| Net Debt / Gross Assets | 41.8 | % | | 39.0 | % | | 38.0 | % | | 44.8 | % | | 45.0 | % |
| | | | | | | | | | |
| COVERAGE RATIOS | | | | | | | | | |
Recurring EBITDA (1) (TTM) / Interest | 3.6 |
| | 3.5 |
| | 3.4 |
| | 3.3 |
| | 3.2 |
|
Recurring EBITDA (1) (TTM) / Interest + Pref. Distributions + Pref. Stock Distribution | 3.3 |
| | 3.2 |
| | 3.1 |
| | 3.0 |
| | 2.9 |
|
|
| | | | | | | | | | | | | | | | | | | |
| MATURITIES/PRINCIPAL AMORTIZATION NEXT FIVE YEARS | 2018 | | 2019 | | 2020 | | 2021 | | 2022 |
| Mortgage loans payable: | | | | | | | | | |
| Maturities | $ | 26,186 |
| | $ | 64,314 |
| | $ | 58,078 |
| | $ | 270,680 |
| | $ | 82,544 |
|
| Weighted average rate of maturities | 6.13 | % | | 6.24 | % | | 5.92 | % | | 5.53 | % | | 4.46 | % |
| Principal amortization | 55,564 |
| | 56,904 |
| | 57,593 |
| | 56,612 |
| | 54,001 |
|
Secured borrowings (3) | 5,541 |
| | 6,036 |
| | 6,583 |
| | 7,069 |
| | 7,302 |
|
| Preferred OP units - mandatorily redeemable | 6,780 |
| | — |
| | — |
| | — |
| | — |
|
| Lines of credit | — |
| | 4,009 |
| | — |
| | 37,800 |
| | — |
|
| Total | $ | 94,071 |
| | $ | 131,263 |
| | $ | 122,254 |
| | $ | 372,161 |
| | $ | 143,847 |
|
4th Quarter 2017 Supplemental Information 13 Sun Communities, Inc.
Statements of Operations – Same Community
(amounts in thousands except for Other Information)
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Three Months Ended December 31, | | Year Ended December 31, |
| | 2017 | | 2016 | | Change | % Change | | 2017 | | 2016 | | Change | | % Change |
| REVENUES: | | | | | | | | | | | | | | |
Income from real property (9) | $ | 129,589 |
| | $ | 121,791 |
| | $ | 7,798 |
| 6.4 | % | | $ | 533,942 |
| | $ | 503,770 |
| | $ | 30,172 |
| | 6.0 | % |
| | | | | | | | | | | | | | | |
| PROPERTY OPERATING EXPENSES: | | | | | | | | | | | |
| Payroll and benefits | 10,460 |
| | 9,671 |
| | 789 |
| 8.2 | % | | 45,240 |
| | 43,078 |
| | 2,162 |
| | 5.0 | % |
| Legal, taxes & insurance | 1,489 |
| | 1,279 |
| | 210 |
| 16.4 | % | | 5,562 |
| | 5,174 |
| | 388 |
| | 7.5 | % |
Utilities (9) | 6,821 |
| | 6,393 |
| | 428 |
| 6.7 | % | | 29,726 |
| | 28,475 |
| | 1,251 |
| | 4.4 | % |
Supplies and repair (10) | 4,397 |
| | 4,255 |
| | 142 |
| 3.3 | % | | 19,109 |
| | 18,729 |
| | 380 |
| | 2.0 | % |
| Other | 3,146 |
| | 3,576 |
| | (430 | ) | (12.0 | )% | | 13,696 |
| | 13,988 |
| | (292 | ) | | (2.1 | )% |
| Real estate taxes | 9,295 |
| | 8,765 |
| | 530 |
| 6.1 | % | | 38,399 |
| | 36,708 |
| | 1,691 |
| | 4.6 | % |
| Property operating expenses | 35,608 |
| | 33,939 |
| | 1,669 |
| 4.9 | % | | 151,732 |
| | 146,152 |
| | 5,580 |
| | 3.8 | % |
NET OPERATING INCOME (NOI)(1) | $ | 93,981 |
| | $ | 87,852 |
| | $ | 6,129 |
| 7.0 | % | | $ | 382,210 |
| | $ | 357,618 |
| | $ | 24,592 |
| | 6.9 | % |
|
| | | | | | | | | | | | | | | |
| | As of December 31, | |
| | 2017 | | 2016 | | Change | | % Change | |
| OTHER INFORMATION | | | | | | | | |
| Number of properties | 231 |
| | 231 |
| | — |
| | | |
| | | | | | | | | |
MH occupancy (11) | 96.9 | % | | | | | | | |
RV occupancy (11) | 100.0 | % | | | | | | | |
MH & RV blended occupancy % (11) | 97.3 | % | | 95.4 | % | (12) | 1.9 | % | | | |
| | | | | | | | | |
| Sites available for development | 5,087 |
| | 6,263 |
| | (1,176 | ) | | (18.8 | )% | |
| | | | | | | | | |
| Monthly base rent per site - MH | $ | 518 |
| | $ | 500 |
| | $ | 18 |
| | 3.6 | % | (14) |
Monthly base rent per site - RV (13) | $ | 459 |
| | $ | 441 |
| | $ | 18 |
| | 4.2 | % | (14) |
| Monthly base rent per site - Total | $ | 510 |
| | $ | 492 |
| | $ | 18 |
| | 3.6 | % | (14) |
4th Quarter 2017 Supplemental Information 14 Sun Communities, Inc.
Rental Program Summary
(amounts in thousands except for *)
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Three Months Ended December 31, | | Year Ended December 31, |
| | 2017 | | 2016 | | Change | | % Change | | 2017 | | 2016 | | Change | | % Change |
| REVENUES: | | | | | | | | | | | | | | | |
| Rental home revenue | $ | 12,775 |
| | $ | 12,084 |
| | $ | 691 |
| | 5.7 | % | | $ | 50,549 |
| | $ | 47,780 |
| | $ | 2,769 |
| | 5.8 | % |
| Site rent included in Income from real property | 16,027 |
| | 15,436 |
| | 591 |
| | 3.8 | % | | 63,833 |
| | 61,600 |
| | 2,233 |
| | 3.6 | % |
| Rental program revenue | 28,802 |
| | 27,520 |
| | 1,282 |
| | 4.7 | % | | 114,382 |
| | 109,380 |
| | 5,002 |
| | 4.6 | % |
| | | | | | | | | | | | | | | | |
| EXPENSES: | | | | | | | | | | | | | | | |
| Commissions | 718 |
| | 532 |
| | 186 |
| | 35.0 | % | | 2,620 |
| | 2,242 |
| | 378 |
| | 16.9 | % |
| Repairs and refurbishment | 1,914 |
| | 3,537 |
| | (1,623 | ) | | (45.9 | )% | | 9,864 |
| | 12,825 |
| | (2,961 | ) | | (23.1 | )% |
| Taxes and insurance | 1,613 |
| | 1,556 |
| | 57 |
| | 3.7 | % | | 6,102 |
| | 5,734 |
| | 368 |
| | 6.4 | % |
| Marketing and other | 934 |
| | 1,032 |
| | (98 | ) | | (9.5 | )% | | 3,414 |
| | 3,493 |
| | (79 | ) | | (2.3 | )% |
| Rental program operating and maintenance | 5,179 |
| | 6,657 |
| | (1,478 | ) | | (22.2 | )% | | 22,000 |
| | 24,294 |
|
| (2,294 | ) | | (9.4 | )% |
NET OPERATING INCOME (NOI) (1) | $ | 23,623 |
| | $ | 20,863 |
| | $ | 2,760 |
| | 13.2 | % | | $ | 92,382 |
| | $ | 85,086 |
| | $ | 7,296 |
| | 8.6 | % |
| | | | | | | | | | | | | | | | |
|
| | | | | | | | | | | | | | | |
| Occupied rental home information as of December 31, 2017 and 2016: | | | | | | | | |
| Number of occupied rentals, end of period* | | 11,074 |
| | 10,733 |
| | 341 |
| | 3.2 | % |
| Investment in occupied rental homes, end of period | | $ | 494,945 |
| | $ | 457,691 |
| | $ | 37,254 |
| | 8.1 | % |
| Number of sold rental homes (YTD)* | | 1,168 |
| | 1,089 |
| | 79 |
| | 7.3 | % |
| Weighted average monthly rental rate, end of period* | | $ | 917 |
| | $ | 882 |
| | $ | 35 |
| | 4.0 | % |
4th Quarter 2017 Supplemental Information 15 Sun Communities, Inc.
Home Sales Summary
(amounts in thousands except for *)
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Three Months Ended December 31, | | Year Ended December 31, |
| | 2017 | | 2016 | | Change | | % Change | | 2017 | | 2016 | | Change | | % Change |
| New home sales | $ | 12,155 |
| | $ | 10,505 |
| | $ | 1,650 |
| | 15.7 | % | | $ | 36,915 |
| | $ | 30,977 |
| | $ | 5,938 |
| | 19.2 | % |
| Pre-owned home sales | 23,934 |
| | 18,015 |
| | 5,919 |
| | 32.9 | % | | 90,493 |
| | 79,530 |
| | 10,963 |
| | 13.8 | % |
| Revenue from home sales | 36,089 |
| | 28,520 |
| | 7,569 |
| | 26.5 | % | | 127,408 |
| | 110,507 |
| | 16,901 |
| | 15.3 | % |
| | | | | | | | | | | | | | | | |
| New home cost of sales | 10,534 |
| | 9,289 |
| | 1,245 |
| | 13.4 | % | | 31,578 |
| | 26,802 |
| | 4,776 |
| | 17.8 | % |
| Pre-owned home cost of sales | 16,581 |
| | 12,328 |
| | 4,253 |
| | 34.5 | % | | 63,536 |
| | 53,618 |
| | 9,918 |
| | 18.5 | % |
| Cost of home sales | 27,115 |
| | 21,617 |
| | 5,498 |
| | 25.4 | % | | 95,114 |
| | 80,420 |
| | 14,694 |
| | 18.3 | % |
| | | | | | | | | | | | | | | | |
NOI / Gross Profit (1) | $ | 8,974 |
| | $ | 6,903 |
| | $ | 2,071 |
| | 30.0 | % | | $ | 32,294 |
| | $ | 30,087 |
| | $ | 2,207 |
| | 7.3 | % |
| | | | | | | | | | | | | | | | |
| Gross profit – new homes | $ | 1,621 |
| | $ | 1,216 |
| | $ | 405 |
| | 33.3 | % | | $ | 5,337 |
| | $ | 4,175 |
| | $ | 1,162 |
| | 27.8 | % |
| Gross margin % – new homes | 13.3 | % | | 11.6 | % | | 1.7 | % | | | | 14.5 | % | | 13.5 | % | | 1.0 | % | | |
Average selling price – new homes* | $ | 118,010 |
|
| $ | 105,050 |
| | $ | 12,960 |
| | 12.3 | % | | $ | 101,975 |
|
| $ | 94,156 |
| | $ | 7,819 |
| | 8.3 | % |
| | | | | | | | | | | | | | | | |
| Gross profit – pre-owned homes | $ | 7,353 |
| | $ | 5,687 |
| | $ | 1,666 |
| | 29.3 | % | | $ | 26,957 |
| | $ | 25,912 |
| | $ | 1,045 |
| | 4.0 | % |
| Gross margin % – pre-owned homes | 30.7 | % | | 31.6 | % | | (0.9 | )% | | | | 29.8 | % | | 32.6 | % | | (2.8 | )% | | |
Average selling price – pre-owned homes* | $ | 32,040 |
|
| $ | 27,213 |
| | $ | 4,827 |
| | 17.7 | % | | $ | 30,991 |
|
| $ | 27,974 |
|
| $ | 3,017 |
| | 10.8 | % |
| | | | | | | | | | | | | | | | |
| Home sales volume: | | | | | | | | |
New home sales* | 103 |
| | 100 |
| | 3 |
| | 3.0 | % | | 362 |
| | 329 |
| | 33 |
| | 10.0 | % |
Pre-owned home sales* | 747 |
| | 662 |
| | 85 |
| | 12.8 | % | | 2,920 |
| | 2,843 |
| | 77 |
| | 2.7 | % |
Total homes sold* | 850 |
| | 762 |
| | 88 |
| | 11.6 | % | | 3,282 |
| | 3,172 |
| | 110 |
| | 3.5 | % |
4th Quarter 2017 Supplemental Information 16 Sun Communities, Inc.
Acquisitions Summary - Properties Acquired in 2017 and 2016
(amounts in thousands except for statistical data)
|
| | | | | | | | |
| | | Three Months Ended
December 31, 2017 | | Year Ended
December 31, 2017 |
| REVENUES: | | | | |
| Income from real property | | $ | 44,082 |
| | $ | 177,525 |
|
| PROPERTY AND OPERATING EXPENSES: | | | | |
| Payroll and benefits | | 5,475 |
| | 21,835 |
|
| Legal, taxes & insurance | | 435 |
| | 1,701 |
|
| Utilities | | 5,308 |
| | 23,063 |
|
| Supplies and repair | | 1,745 |
| | 6,657 |
|
| Other | | 3,362 |
| | 12,928 |
|
| Real estate taxes | | 3,671 |
| | 13,889 |
|
| Property operating expenses | | 19,996 |
| | 80,073 |
|
| | | | | |
NET OPERATING INCOME (NOI) (1) | | $ | 24,086 |
| | $ | 97,452 |
|
| | | | | |
| | | | | As of December 31, 2017 |
| Other information: | | | | |
| Number of properties | | | | 119 |
|
Occupied sites (15) | | | | 23,275 |
|
Developed sites (15) | | | | 23,832 |
|
Occupancy % (15) | | | | 97.7 | % |
| Transient sites | | | | 7,135 |
|
| Monthly base rent per site - MH | | | | $ | 635 |
|
Monthly base rent per site - RV (13) | | | | $ | 422 |
|
Monthly base rent per site - Total (13) | | | | $ | 520 |
|
Ancillary revenues, net (in thousands) | | | | $ | 2,663 |
|
| | | | | |
| Home sales: | | | | |
Gross profit from home sales (in thousands) | | | | $ | 4,857 |
|
| New homes sales | | | | 95 |
|
| Pre-owned homes sales | | | | 266 |
|
| | | | | |
| Occupied rental home information: | | | | |
Rental program NOI (1) (in thousands) | | | | $ | 934 |
|
| Number of occupied rentals, end of period | | | | 392 |
|
Investment in occupied rental homes (in thousands) | | | | $ | 13,871 |
|
| Weighted average monthly rental rate | | | | $ | 894 |
|
4th Quarter 2017 Supplemental Information 17 Sun Communities, Inc.
|
| | | | | | | | | | | | | | | |
| Property Summary | | | | | | | | | | |
| (includes MH and Annual RV’s) |
| | | | | | | | | | | |
| COMMUNITIES | | 12/31/2017 | | 9/30/2017 | | 6/30/2017 | | 3/31/2017 | | 12/31/2016 |
| FLORIDA | | | | | | | | | | |
| Communities | | 123 |
| | 121 |
| | 121 |
| | 121 |
| | 121 |
|
Developed sites (15) | | 37,254 |
| | 36,587 |
| | 36,661 |
| | 36,533 |
| | 36,326 |
|
Occupied (15) | | 36,170 |
| | 35,414 |
| | 35,479 |
| | 35,257 |
| | 35,021 |
|
Occupancy % (15) | | 97.1 | % | | 96.8 | % | | 96.8 | % | | 96.5 | % | | 96.4 | % |
| Sites for development | | 1,485 |
| | 1,469 |
| | 1,368 |
| | 1,359 |
| | 1,461 |
|
| MICHIGAN | | | | | | | | | | |
| Communities | | 68 |
| | 68 |
| | 68 |
| | 67 |
| | 67 |
|
Developed sites (15) | | 25,881 |
| | 25,498 |
| | 25,496 |
| | 25,024 |
| | 24,512 |
|
Occupied (15) | | 24,147 |
| | 23,996 |
| | 23,924 |
| | 23,443 |
| | 23,248 |
|
Occupancy % (15) | | 93.3 | % | | 94.1 | % | | 93.8 | % | | 93.7 | % | | 94.8 | % |
| Sites for development | | 1,371 |
| | 1,752 |
| | 1,752 |
| | 1,798 |
| | 2,414 |
|
| TEXAS | | | | | | | | | | |
| Communities | | 21 |
| | 21 |
| | 21 |
| | 21 |
| | 21 |
|
Developed sites (15) | | 6,601 |
| | 6,410 |
| | 6,312 |
| | 6,292 |
| | 6,186 |
|
Occupied (15) | | 6,152 |
| | 6,041 |
| | 6,021 |
| | 5,943 |
| | 5,862 |
|
Occupancy % (15) | | 93.2 | % | | 94.2 | % | | 95.4 | % | | 94.5 | % | | 94.8 | % |
| Sites for development | | 1,100 |
| | 1,277 |
| | 1,345 |
| | 1,387 |
| | 1,474 |
|
| CALIFORNIA | | | | | | | | | | |
| Communities | | 27 |
| | 27 |
| | 23 |
| | 23 |
| | 22 |
|
Developed sites (15) | | 5,692 |
| | 5,693 |
| | 4,894 |
| | 4,865 |
| | 4,862 |
|
Occupied (15) | | 5,639 |
| | 5,630 |
| | 4,834 |
| | 4,804 |
| | 4,793 |
|
Occupancy % (15) | | 99.1 | % | | 98.9 | % | | 98.8 | % | | 98.8 | % | | 98.6 | % |
| Sites for development | | 389 |
| | 379 |
| | 367 |
| | 411 |
| | 332 |
|
| ONTARIO, CANADA | | | | | | | | | | |
| Communities | | 15 |
| | 15 |
| | 15 |
| | 15 |
| | 15 |
|
Developed sites (15) | | 3,634 |
| | 3,620 |
| | 3,564 |
| | 3,451 |
| | 3,368 |
|
Occupied (15) | | 3,634 |
| | 3,620 |
| | 3,564 |
| | 3,451 |
| | 3,368 |
|
Occupancy % (15) | | 100.0 | % | | 100.0 | % | | 100.0 | % | | 100.0 | % | | 100.0 | % |
| Sites for development | | 1,696 |
| | 1,628 |
| | 1,628 |
| | 1,628 |
| | 1,599 |
|
| ARIZONA | | | | | | | | | | |
| Communities | | 11 |
| | 11 |
| | 11 |
| | 11 |
| | 11 |
|
Developed sites (15) | | 3,786 |
| | 3,602 |
| | 3,589 |
| | 3,582 |
| | 3,565 |
|
Occupied (15) | | 3,446 |
| | 3,410 |
| | 3,383 |
| | 3,370 |
| | 3,338 |
|
Occupancy % (15) | | 91.0 | % | | 94.7 | % | | 94.3 | % | | 94.1 | % | | 93.6 | % |
| Sites for development | | — |
| | 269 |
| | 269 |
| | 269 |
| | 358 |
|
| INDIANA | | | | | | | | | | |
| Communities | | 11 |
| | 11 |
| | 11 |
| | 11 |
| | 11 |
|
Developed sites (15) | | 2,900 |
| | 2,900 |
| | 2,900 |
| | 2,900 |
| | 2,900 |
|
Occupied (15) | | 2,756 |
| | 2,759 |
| | 2,758 |
| | 2,741 |
| | 2,724 |
|
Occupancy % (15) | | 95.0 | % | | 95.1 | % | | 95.1 | % | | 94.5 | % | | 93.9 | % |
| Sites for development | | 466 |
| | 330 |
| | 330 |
| | 330 |
| | 316 |
|
4th Quarter 2017 Supplemental Information 18 Sun Communities, Inc.
|
| | | | | | | | | | | | | | | |
| Property Summary | | | | | | | | | | |
| (includes MH and Annual RV’s) |
| | | | | | | | | | | |
| COMMUNITIES | | 12/31/2017 | | 9/30/2017 | | 6/30/2017 | | 3/31/2017 | | 12/31/2016 |
| OHIO | | | | | | | | | | |
| Communities | | 9 |
| | 9 |
| | 9 |
| | 9 |
| | 9 |
|
Developed sites (15) | | 2,759 |
| | 2,757 |
| | 2,735 |
| | 2,719 |
| | 2,715 |
|
Occupied (15) | | 2,676 |
| | 2,676 |
| | 2,643 |
| | 2,623 |
| | 2,595 |
|
Occupancy % (15) | | 97.0 | % | | 97.1 | % | | 96.6 | % | | 96.5 | % | | 95.6 | % |
| Sites for development | | 75 |
| | 75 |
| | 75 |
| | 75 |
| | — |
|
| COLORADO | | | | | | | | | | |
| Communities | | 8 |
| | 8 |
| | 8 |
| | 8 |
| | 8 |
|
Developed sites (15) | | 2,335 |
| | 2,335 |
| | 2,335 |
| | 2,335 |
| | 2,335 |
|
Occupied (15) | | 2,325 |
| | 2,318 |
| | 2,326 |
| | 2,329 |
| | 2,325 |
|
Occupancy % (15) | | 99.6 | % | | 99.3 | % | | 99.6 | % | | 99.7 | % | | 99.6 | % |
| Sites for development | | 650 |
| | 670 |
| | 656 |
| | 656 |
| | 656 |
|
| OTHER STATES | | | | | | | | | | |
| Communities | | 57 |
| | 57 |
| | 57 |
| | 56 |
| | 56 |
|
Developed sites (15) | | 15,194 |
| | 14,957 |
| | 14,891 |
| | 14,567 |
| | 14,313 |
|
Occupied (15) | | 14,587 |
| | 14,532 |
| | 14,439 |
| | 14,130 |
| | 13,919 |
|
Occupancy % (15) | | 96.0 | % | | 97.2 | % | | 97.0 | % | | 97.0 | % | | 97.3 | % |
| Sites for development | | 2,385 |
| | 2,540 |
| | 2,582 |
| | 1,977 |
| | 1,727 |
|
| TOTAL - PORTFOLIO | | | | | | | | | | |
| Communities | | 350 |
| | 348 |
| | 344 |
| | 342 |
| | 341 |
|
Developed sites (15) | | 106,036 |
| | 104,359 |
| | 103,377 |
| | 102,268 |
| | 101,082 |
|
Occupied (15) | | 101,532 |
| | 100,396 |
| | 99,371 |
| | 98,091 |
| | 97,193 |
|
Occupancy % (15)(16) | | 95.8 | % | | 96.2 | % | | 96.1 | % | | 95.9 | % | | 96.2 | % |
| Sites for development | | 9,617 |
| | 10,389 |
| | 10,372 |
| | 9,890 |
| | 10,337 |
|
| % Communities age restricted | | 33.7 | % | | 33.6 | % | | 32.8 | % | | 33.0 | % | | 33.1 | % |
| | | | | | | | | | | |
| TRANSIENT RV PORTFOLIO SUMMARY | | | | | | | | | | |
| Location | | | | | | | | | | |
| Florida | | 6,074 |
| | 6,133 |
| | 6,244 |
| | 6,467 |
| | 6,497 |
|
| Texas | | 1,373 |
| | 1,392 |
| | 1,403 |
| | 1,412 |
| | 1,407 |
|
| Ontario, Canada | | 1,248 |
| | 1,262 |
| | 1,314 |
| | 1,451 |
| | 1,500 |
|
| Arizona | | 1,096 |
| | 1,012 |
| | 1,025 |
| | 1,032 |
| | 1,049 |
|
| New Jersey | | 917 |
| | 1,016 |
| | 1,028 |
| | 1,059 |
| | 1,042 |
|
| California | | 806 |
| | 808 |
| | 808 |
| | 840 |
| | 513 |
|
| New York | | 614 |
| | 623 |
| | 630 |
| | 588 |
| | 830 |
|
| Maine | | 596 |
| | 529 |
| | 533 |
| | 543 |
| | 555 |
|
| Indiana | | 520 |
| | 520 |
| | 520 |
| | 520 |
| | 502 |
|
| Michigan | | 256 |
| | 258 |
| | 260 |
| | 210 |
| | 204 |
|
| Ohio | | 145 |
| | 147 |
| | 169 |
| | 194 |
| | 198 |
|
| Other locations | | 2,211 |
| | 2,215 |
| | 2,253 |
| | 1,966 |
| | 1,997 |
|
| Total transient RV sites | | 15,856 |
| | 15,915 |
| | 16,187 |
| | 16,282 |
| | 16,294 |
|
4th Quarter 2017 Supplemental Information 19 Sun Communities, Inc.
Capital Improvements, Development, and Acquisitions
(amounts in thousands except for *)
|
| | | | | | | | | | | | | | | | | | | | | | | | |
| | Recurring | | | | | | | | | | |
| | Capital | Recurring | | | | | | | | |
| | Expenditures | Capital | Lot | | | Expansion & | Revenue |
| | | Average/Site* |
| Expenditures (17) | | Modifications (18) | | Acquisitions (19) | | Development (20) | | Producing (21) |
| 2017 | | $ | 214 |
| | $ | 14,166 |
| | $ | 18,049 |
| | $ | 204,375 |
| | $ | 88,331 |
| | $ | 1,990 |
|
| 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 |
|
4th Quarter 2017 Supplemental Information 20 Sun Communities, Inc.
Operating Statistics for Manufactured Homes and Annual RV’s
|
| | | | | | | | | | | | | | | |
| | Resident | Net Leased | New Home | Pre-owned | Brokered |
| LOCATIONS | Move-outs | Sites (22) | Sales | Home Sales | Re-sales |
| Florida | | 1,133 |
| | 746 |
| | 165 |
| | 349 |
| | 1,175 |
|
| Michigan | | 459 |
| | 609 |
| | 34 |
| | 1,394 |
| | 134 |
|
| Texas | | 225 |
| | 290 |
| | 25 |
| | 335 |
| | 30 |
|
| Ontario, Canada | | 179 |
| | 266 |
| | 28 |
| | 36 |
| | 226 |
|
| Arizona | | 60 |
| | 108 |
| | 29 |
| | 23 |
| | 183 |
|
| Indiana | | 54 |
| | 32 |
| | 1 |
| | 217 |
| | 19 |
|
| Ohio | | 89 |
| | 81 |
| | — |
| | 117 |
| | 5 |
|
| Colorado | | 10 |
| | — |
| | 6 |
| | 146 |
| | 54 |
|
| California | | 33 |
| | 25 |
| | 12 |
| | 18 |
| | 42 |
|
| Other locations | | 497 |
| | 249 |
| | 62 |
| | 285 |
| | 138 |
|
| Year Ended December 31, 2017 | | 2,739 |
| | 2,406 |
| | 362 |
| | 2,920 |
| | 2,006 |
|
|
| | | | | | | | | | | | | | | |
| | Resident | Net Leased | New Home | Pre-owned | Brokered |
| TOTAL FOR YEAR ENDED | Move-outs | Sites (22) | 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 | | 1.9 | % | | 6.6 | % |
| 2016 | | 2.0 | % | | 6.1 | % |
| 2015 | | 2.0 | % | | 5.9 | % |
4th Quarter 2017 Supplemental Information 21 Sun Communities, Inc.
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 gain and loss items that management considers unrelated to the operational and financial performance of our core business (“Core FFO”). 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
4th Quarter 2017 Supplemental Information 22 Sun Communities, Inc.
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 / (expense), net was as follows (in thousands):
|
| | | | | | | | | | | | | | | |
| | Three Months Ended December 31, | | Year Ended
December 31, |
| | 2017 | | 2016 | | 2017 | | 2016 |
| Contingent liability remeasurement gain / (loss) | $ | 4,139 |
| | (181 | ) | | $ | 3,035 |
| | $ | (181 | ) |
| Foreign currency translation gain / (loss) | (497 | ) | | (5,005 | ) | | 5,947 |
| | (5,005 | ) |
| Gain on acquisition of property | — |
| | 510 |
| | — |
| | 510 |
|
| Other income / (expense), net | $ | 3,642 |
| | $ | (4,676 | ) | | $ | 8,982 |
| | $ | (4,676 | ) |
(5) These costs represent the expenses incurred to bring recently 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 home lease. Site rent is reflected in Real Property NOI. For purposes of management analysis, site rent is included in 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 the Company’s operations.
(8) Lines of credit 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) Same Community results net $6.8 million and $6.4 million of utility revenue against the related utility expense in property operating and maintenance expense for the three months ended December 31, 2017 and 2016, respectively, and $26.9 million and $25.8 million for the years ended December 31, 2017 and 2016, respectively.
(10) Same Community property operating and maintenance expense for the year ended December 31, 2016, excludes $0.1 million of expenses incurred for recently acquired properties to bring the 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.
(11) The Same Community occupancy percentage for 2017 is derived from 80,407 developed sites, of which 78,257 were occupied. The number of developed sites excludes RV transient sites and approximately 1,800 recently completed but vacant MH expansion sites.
(12) The Same Community 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.
(13) Monthly base rent per site pertains to annual RV sites and excludes transient RV sites.
(14) Calculated using actual results without rounding.
4th Quarter 2017 Supplemental Information 23 Sun Communities, Inc.
(15) Includes MH and annual RV sites, and excludes transient RV sites, as applicable.
(16) At December 31, 2017, total portfolio MH occupancy was 94.6 percent (including the impact of approximately 1,800 recently completed but vacant expansion sites) and annual RV occupancy was 100.0 percent.
(17) 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, 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.
(18) 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.
(19) Acquisitions represent the purchase price of existing operating communities and land parcels to develop expansions or new communities. Acquisitions for the twelve months ended December 31, 2017 also include $84.0 million of capital improvements identified during due diligence that are necessary to bring the community 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, often require 24 to 36 months after closing to complete.
(20) Expansion and development costs consist primarily of construction costs and costs necessary to complete home site improvements.
(21) Capital costs related to revenue generating activities consist primarily of garages, sheds, 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.
(22) 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.
4th Quarter 2017 Supplemental Information 24 Sun Communities, Inc.
