Company Announcements

Sun Communities, Inc. Reports 2021 First Quarter Results

Source: OMX
Sun Communities, Inc. Reports 2021 First Quarter Results

Southfield, MI, April 26, 2021 (GLOBE NEWSWIRE) -- 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") communities, recreational vehicle ("RV") resorts and marinas, (collectively, the "properties"), today reported its first quarter results for 2021.

Financial Results for the Quarter Ended March 31, 2021

For the quarter ended March 31, 2021, total revenues increased $131.7 million, or 42.4 percent, to approximately $442.0 million compared to $310.3 million for the same period in 2020. Net income attributable to common stockholders was $24.8 million, or $0.23 per diluted common share, for the quarter ended March 31, 2021, as compared to net loss attributable to common stockholders of $16.1 million, or $0.17 per diluted common share, for the same period in 2020.

Non-GAAP Financial Measures and Portfolio Performance

  • Core Funds from Operations ("Core FFO")(1) for the quarter ended March 31, 2021, was $1.26 per diluted share and OP unit ("Share") as compared to $1.22 in the corresponding period in 2020, a 3.3 percent increase.

  • Same Community(2) Net Operating Income ("NOI")(1) increased by 2.7 percent for the quarter ended March 31, 2021, as compared to the corresponding period in 2020.

  • Same Community(2) Occupancy increased by 190 basis points to 98.8 percent, as compared to 96.9 percent at March 31, 2020.

  • MH and Annual RV Revenue Producing Sites increased by 514 sites in the quarter ended March 31, 2021, bringing total portfolio occupancy to 97.3 percent at March 31, 2021, as compared to an increase of 300 sites in the corresponding period in 2020 and total portfolio occupancy of 96.7 percent at March 31, 2020.

  • Home Sales Volume increased 9.4 percent for the quarter ended March 31, 2021, as compared to the same period in 2020.

  • Acquisitions totaled $183.0 million during and subsequent to the quarter ended March 31, 2021, including 2 MH communities, 6 RV resorts and 4 marinas.

Gary Shiffman, Chief Executive Officer stated, "Sun delivered a strong start to the year, as we continued to benefit from both the stability of our portfolio and the contribution of our growth initiatives across manufactured housing, RV resorts and marinas. Sustained demand for affordable housing and the desire for RV vacations are providing strong tailwinds, while marinas continue to exhibit durable customer retention and growth. With increased rates of vaccination and the beginning of a return to normalcy, we are seeing higher forward RV bookings providing better visibility into a stronger year ahead. Accordingly, we have increased our earnings guidance to reflect this confidence. To enhance our growth, we delivered approximately 350 ground-up development and expansion sites, and deployed $183.0 million into the acquisition of irreplaceable assets. As we execute on our investment strategies and further reinforce the high quality of our brand and offerings to our residents and guests, we are well positioned to continue to deliver industry-leading results."

OPERATING HIGHLIGHTS

Portfolio Occupancy

Total MH and annual RV occupancy was 97.3 percent at March 31, 2021, compared to 96.7 percent at March 31, 2020, an increase of 60 basis points.

During the quarter ended March 31, 2021, MH and annual RV revenue producing sites increased by 514 sites, as compared to an increase of 300 revenue producing sites during the quarter ended March 31, 2020.

Same Community(2) Results

For the 407 MH and RV properties owned and operated by the Company since January 1, 2020, NOI(1) for the quarter ended March 31, 2021 increased 2.7 percent over the same period in 2020, driven by a 3.5 percent increase in revenues. Same Community occupancy(3) increased to 98.8 percent at March 31, 2021 from 96.9 percent at March 31, 2020.

For the MH same community properties, NOI(1) increased by 4.9 percent in the quarter ended March 31, 2021, driven by a 5.1 percent increase in revenues and offset by a 5.7 percent increase in property operating expenses.

For the RV same community properties, NOI(1) declined by 4.0 percent in the quarter ended March 31, 2021, driven by a 0.2 percent decline in revenues and a 5.3 percent increase in property operating expenses. RV same community revenues were impacted by the continued Canadian border closure and the California shelter-in-place order that ran through early February 2021.

Home Sales

During the quarter ended March 31, 2021, the Company sold 835 homes as compared to 763 homes in the same period in 2020. The Company sold 149 and 119 new homes for the quarters ended March 31, 2021 and 2020, respectively, an increase of 25.2 percent. Pre-owned home sales were 686 in the first quarter 2021 as compared to 644 in the same period in 2020, an increase of 6.5 percent.

Marina Results

Marina NOI was $31.4 million for the quarter ended March 31, 2021. Refer to page 14 for additional information regarding the marina portfolio operating results.

PORTFOLIO ACTIVITY

Acquisitions

During and subsequent to the quarter ended March 31, 2021, the Company acquired the following communities, resorts and marinas:

Property Name Property Type Sites,
Wet Slips and
Dry Storage Spaces
 State / Providence Total
Purchase Price
(in millions)
 Month Acquired
Association Island KOA RV 294   NY $15.0   January
Blue Water Beach Resort RV 177   UT 9.0   February
Tranquility MHC MH 25   FL 1.3   February
Islamorada and Angler House(a) Marina 251   FL 18.0   February
Prime Martha’s Vineyard(a) Marina 390   MA 22.2   March
Pleasant Beach Campground RV 102   ON 1.6   March
Cherrystone Family Camping Resort RV 669   VA 59.9   March
Beachwood Resort RV 672   WA 7.0   March
Subtotal   2,580     134.0    
           
Acquisitions subsequent to quarter end          
Themeworld RV Resort RV 148   FL 25.0   April
Sylvan Glen Estates(b) MH 476   MI 24.0   April
Subtotal   624     49.0    
Total acquisitions   3,204     $183.0    

(a) Includes two marinas.

(b) In conjunction with the acquisition, the Company issued 240,000 Series J preferred OP units.

Construction Activity

During the quarter ended March 31, 2021, the Company completed the construction of nearly 250 sites in its newly opened ground-up development in San Diego, California, and over 100 expansion sites in a Texas MH community.

BALANCE SHEET, CAPITAL MARKETS ACTIVITY AND OTHER ITEMS

Debt

As of March 31, 2021, the Company had approximately $4.4 billion of debt outstanding. The weighted average interest rate was 3.4 percent and the weighted average maturity was 9.5 years. The Company had $105.1 million of unrestricted cash on hand. At March 31, 2021, the Company's net debt to trailing twelve month Recurring EBITDA(1) ratio was 6.1 times.

Equity Transaction

In March 2021, the Company completed a $1.1 billion underwritten public offering of an aggregate 8,050,000 shares at a public offering price of $140.00 per share, before underwriting discounts and commissions. The offering consisted of 4,000,000 shares offered directly by the Company and 4,050,000 shares offered under a forward equity sales agreement. The Company sold the 4,000,000 shares on March 9, 2021 and received net proceeds of $537.6 million which it used to pay down revolving debt. The Company expects to settle the remaining forward equity sales agreement by March 2022.

Reporting Changes

Refer to the Summary of 2021 Reporting Changes document, which can be found in the Investor Relations section of the Company’s website, for additional information regarding updated and expanded reporting implemented during the quarter.

2021 GUIDANCE

The Company is revising its 2021 guidance for the following metrics:

   Previous Range Revised Range  
   FY 2021E FY 2021E 2Q 2021E
Basic earnings per share  $1.66 - $1.82 $1.68 - $1.84 $0.53 - $0.57
Core FFO(1) per fully diluted Share  $5.79 - $5.95 $5.92 - $6.08 $1.57 - $1.63
        
 1Q21 2Q21 3Q21 4Q21
Seasonality of Core FFO(1) per fully diluted Share21.0% 26.6% 32.1% 20.3%

Seasonality of Core FFO(1) per fully diluted Share is based off of the midpoint of full year guidance.

   Previous Range Revised Range  
   FY 2021E FY 2021E 2Q 2021E
Same Community NOI(1) growth  5.6% - 6.6% 7.5% - 8.5% 16.4% - 17.4%

Guidance estimates include acquisitions completed through the date of this release and exclude any prospective acquisitions or capital markets activity. The settlement of the remaining 4,050,000 shares offered under the March 2021 forward equity sales agreement, is not included in guidance.

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 "Cautionary Statement Regarding Forward-Looking Statements."

EARNINGS CONFERENCE CALL

A conference call to discuss first quarter results will be held on Tuesday, April 27, 2021 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 May 11, 2021 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 13717209. The conference call will be available live on Sun Communities' website located at www.suncommunities.com. The replay will also be available on the website.

Sun Communities, Inc. is a REIT that, as of March 31, 2021, owned, operated, or had an interest in a portfolio of 562 developed MH, RV and marina properties comprising over 151,600 developed sites and nearly 38,800 wet slips and dry storage spaces in 39 states and Ontario, Canada.

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

CAUTIONARY STATEMENT REGARDING 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. For this purpose, any statements contained in this press release that relate to expectations, beliefs, projections, future plans and strategies, trends or prospective events or developments and similar expressions concerning matters that are not historical facts are deemed to be forward-looking statements. Words such as "forecasts," "intends," "intend," "intended," "goal," "estimate," "estimates," "expects," "expect," "expected," "project," "projected," "projections," "plans," "predicts," "potential," "seeks," "anticipates," "anticipated," "should," "could," "may," "will," "designed to," "foreseeable future," "believe," "believes," "scheduled," "guidance," "target" and similar expressions are intended to identify forward-looking statements, although not all forward looking statements contain these words. 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, both general and specific to the matters discussed in or incorporated herein, some of which are beyond the Company's control. These risks, uncertainties and other factors may cause the Company's actual results to be materially different from any future results expressed or implied by such forward-looking statements. In addition to the risks disclosed under "Risk Factors" contained in the Company's Annual Report on Form 10-K for the year ended December 31, 2020, and the Company's other filings with the Securities and Exchange Commission from time to time, such risks, uncertainties and other factors include but are not limited to:

  • outbreaks of disease, including the COVID-19 pandemic, and related stay at home orders, quarantine policies and restrictions on travel, trade and business operations;
  • changes in general economic conditions, the real estate industry and the markets in which the Company operates;
  • difficulties in the Company's ability to evaluate, finance, complete and integrate acquisitions, developments and expansions successfully;
  • the Company's liquidity and refinancing demands;
  • the Company's ability to obtain or refinance maturing debt;
  • the Company's ability to maintain compliance with covenants contained in its debt facilities;
  • availability of capital;
  • changes in foreign currency exchange rates, including between the U.S. dollar and each of the Canadian and Australian dollars;
  • the Company's ability to maintain rental rates and occupancy levels;
  • the Company's ability to maintain effective internal control over financial reporting and disclosure controls and procedures;
  • increases in interest rates and operating costs, including insurance premiums and real property taxes;
  • risks related to natural disasters such as hurricanes, earthquakes, floods, and wildfires;
  • general volatility of the capital markets and the market price of shares of the Company's capital stock;
  • the Company's ability to maintain its status as a REIT;
  • changes in real estate and zoning laws and regulations;
  • legislative or regulatory changes, including changes to laws governing the taxation of REITs;
  • litigation, judgments or settlements;
  • competitive market forces;
  • ability of purchasers of manufactured homes and boats to obtain financing; and
  • level of repossessions by manufactured home and lenders.

Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date the statement was made. The Company undertakes no obligation to publicly update or revise any forward-looking statements included in this press release, whether as a result of new information, future events, changes in its expectations or otherwise, except as required by law.

Although the Company believes that the expectations reflected in the forward-looking statements are reasonable, it cannot guarantee future results, levels of activity, performance or achievements. All written and oral forward-looking statements attributable to the Company or persons acting on its behalf are qualified in their entirety by these cautionary statements.

Investor Information

 


RESEARCH COVERAGE      
       
Firm Analyst Phone Email
Bank of America Merrill Lynch Joshua Dennerlein (646) 855-1681 joshua.dennerlein@baml.com
Berenberg Capital Markets Keegan Carl (646) 949-9052 keegan.carl@berenberg-us.com
BMO Capital Markets John Kim (212) 885-4115 johnp.kim@bmo.com
Citi Research Michael Bilerman (212) 816-1383 michael.bilerman@citi.com
  Nicholas Joseph (212) 816-1909 nicholas.joseph@citi.com
Evercore ISI Steve Sakwa (212) 446-9462 steve.sakwa@evercoreisi.com
  Samir Khanal (212) 888-3796 samir.khanal@evercoreisi.com
Green Street Advisors John Pawlowski (949) 640-8780 jpawlowski@greenstreetadvisors.com
Robert W. Baird & Co. Wesley Golladay (216) 737-7510 wgolladay@rwbaird.com
RBC Capital Markets Brad Heffern (512) 708-6311 brad.heffern@rbccm.com
Wells Fargo Todd Stender (562) 637-1371 todd.stender@wellsfargo.com
       
       
INQUIRIES      
       
Sun Communities welcomes questions or comments from stockholders, analysts, investment managers, media, or any prospective investor. Please address all inquiries to our Investor Relations department.
       
At Our Website www.suncommunities.com    
       
By Email investorrelations@suncommunities.com  
       
By Phone (248) 208-2500    

Portfolio Overview
(As of March 31, 2021)

 


Financial and Operating Highlights
(amounts in thousands, except for *)

 


 Quarter Ended
 3/31/2021 12/31/2020 9/30/2020 6/30/2020 3/31/2020
Financial Information         
Total revenues$442,015   $384,265   $400,514   $303,266   $310,302   
Net income / (loss)$27,941   $9,818   $89,756   $63,355   $(15,478) 
Net income / (loss) attributable to Sun Communities Inc. common stockholders$24,782   $7,586   $81,204   $58,910   $(16,086) 
Basic earnings / (loss) per share*$0.23   $0.07   $0.83   $0.61   $(0.17) 
Diluted earnings / (loss) per share*$0.23   $0.07   $0.83   $0.61   $(0.17) 
          
Cash distributions declared per common share*$0.83   $0.79   $0.79   $0.79   $0.79   
          
Recurring EBITDA(1) $190,830   $168,527   $199,321   $148,650   $156,552   
FFO attributable to Sun Communities, Inc. common stockholders and dilutive convertible securities(1)(4)
$135,925   $110,849   $165,209   $118,092   $95,046   
Core FFO attributable to Sun Communities, Inc. common stockholders and dilutive convertible securities(1)(4)
$141,036   $124,872   $162,624   $110,325   $117,267   
FFO attributable to Sun Communities, Inc. common stockholders and dilutive convertible securities(1)(4) per share - fully diluted*$1.22   $1.03   $1.63   $1.20   $0.98   
Core FFO attributable to Sun Communities, Inc. common stockholders and dilutive convertible securities(1)(4) per share - fully diluted*$1.26   $1.16   $1.60   $1.12   $1.22   
          
Balance Sheet         
Total assets$11,454,209   $11,206,586   $8,335,717   $8,348,659   $8,209,047   
Total debt$4,417,935   $4,757,076   $3,340,613   $3,390,771   $3,926,494   
Total liabilities$5,101,512   $5,314,879   $3,791,922   $3,845,308   $4,346,127   


 Quarter Ended
 3/31/2021 12/31/2020 9/30/2020 6/30/2020 3/31/2020
Operating Information*         
Properties562   552   432   426   424  
          
Manufactured home sites96,876   96,688   95,209   94,232   93,834  
Annual RV sites28,441   27,564   26,817   26,240   26,148  
Transient RV sites26,295   25,043   23,728   22,360   21,880  
Total sites151,612   149,295   145,754   142,832   141,862  
Marina wet slips and dry storage spaces38,753   38,152 N/A N/A N/A
          
MH occupancy96.5 % 96.6 % 96.4 % 96.5 % 95.8 %
Annual RV occupancy100.0 % 100.0 % 100.0 % 100.0 % 100.0 %
Blended MH and annual RV occupancy97.3 % 97.3 % 97.2 % 97.3 % 96.7 %
          
New home sales149   156   155   140   119  
Pre-owned home sales686   626   555   471   644  
Total home sales835   782   710   611   763  


 Quarter Ended
 3/31/2021 12/31/2020 9/30/2020 6/30/2020 3/31/2020
Revenue Producing Site Gains(5)         
MH net leased sites127   247   349   759   287  
RV net leased sites387   331   427   92   13  
Total net leased sites514   578   776   851   300  

Consolidated Balance Sheets
(amounts in thousands)

 


  March 31, 2021 December 31, 2020
Assets    
Land $2,190,762    $2,119,364   
Land improvements and buildings 8,664,199    8,480,597   
Rental homes and improvements 652,559    637,603   
Furniture, fixtures and equipment 491,735    447,039   
Investment property 11,999,255    11,684,603   
Accumulated depreciation (2,088,105)  (1,968,812) 
Investment property, net 9,911,150    9,715,791   
Cash, cash equivalents and restricted cash 120,174    92,641   
Marketable securities 127,821    124,726   
Inventory of manufactured homes 43,242    46,643   
Notes and other receivables, net 249,009    221,650   
Goodwill 438,842    428,833   
Other intangible assets, net 300,554    305,611   
Other assets, net 263,417    270,691   
Total Assets $11,454,209    $11,206,586   
Liabilities    
Mortgage loans payable $3,430,420    $3,444,967   
Preferred Equity - Sun NG Resorts - mandatorily redeemable 35,249    35,249   
Preferred OP units - mandatorily redeemable 34,663    34,663   
Lines of credit and other debt 917,603    1,242,197   
Distributions payable 95,076    86,988   
Advanced reservation deposits and rent 280,301    187,730   
Accrued expenses and accounts payable 160,072    148,435   
Other liabilities 148,128    134,650   
Total Liabilities 5,101,512    5,314,879   
Commitments and contingencies    
Temporary equity 261,059    264,379   
Stockholders' Equity    
Common stock 1,118    1,076   
Additional paid-in capital 7,618,128    7,087,658   
Accumulated other comprehensive loss 4,033    3,178   
Distributions in excess of accumulated earnings (1,631,044)  (1,566,636) 
Total Sun Communities, Inc. stockholders' equity 5,992,235    5,525,276   
Noncontrolling interests    
Common and preferred OP units 82,502    85,968   
Consolidated variable interest entities 16,901    16,084   
Total noncontrolling interests 99,403    102,052   
Total Stockholders' Equity 6,091,638    5,627,328   
Total Liabilities, Temporary Equity and Stockholders' Equity $11,454,209    $11,206,586   

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

 


 Three Months Ended
 March 31, 2021 March 31, 2020 Change % Change
Revenues       
Real property (excluding transient)$298,077    $228,002    $70,075    30.7  %
Real property - transient32,536    30,347    2,189    7.2  %
Home sales52,199    40,587    11,612    28.6  %
Service, retail, dining and entertainment50,612    5,103    45,509    891.8  %
Interest2,631    2,350    281    12.0  %
Brokerage commissions and other, net5,960    3,913    2,047    52.3  %
Total Revenues442,015    310,302    131,713    42.4  %
Expenses       
Property operating and maintenance103,553    69,834    33,719    48.3  %
Real estate tax22,408    17,176    5,232    30.5  %
Home costs and selling41,590    34,039    7,551    22.2  %
Service, retail, dining and entertainment45,431    6,682    38,749    579.9  %
General and administrative38,203    25,349    12,854    50.7  %
Catastrophic event-related charges, net2,414    606    1,808    298.3  %
Business combination1,232    —    1,232    N/A
Depreciation and amortization123,304    83,689    39,615    47.3  %
Loss on extinguishment of debt—    3,279    (3,279)  (100.0)%
Interest39,517    32,416    7,101    21.9  %
Interest on mandatorily redeemable preferred OP units / equity1,036    1,041    (5)  (0.5)%
Total Expenses418,688    274,111    144,577    52.7  %
Income Before Other Items23,327    36,191    (12,864)  (35.5)%
Gain / (loss) on remeasurement of marketable securities3,661    (28,647)  32,308    112.8  %
Gain / (loss) on foreign currency translation25    (17,479)  17,504    100.1  %
Other expense, net(6)(1,099)  (972)  (127)  (13.1)%
Income / (loss) on remeasurement of notes receivable376    (2,112)  2,488    117.8  %
Income from nonconsolidated affiliates1,171    52    1,119    N/M
Income / (loss) on remeasurement of investment in nonconsolidated affiliates104    (2,191)  2,295    104.7  %
Current tax benefit / (expense)229    (450)  679    150.9  %
Deferred tax benefit147    130    17    13.1  %
Net Income / (Loss)27,941    (15,478)  43,419    280.5  %
Less: Preferred return to preferred OP units / equity2,864    1,570    1,294    82.4  %
Less: Income / (loss) attributable to noncontrolling interests295    (962)  1,257    130.7  %
Net Income / (Loss) Attributable to Sun Communities, Inc. Common Stockholders$24,782    $(16,086)  $40,868    254.1  %
        
Weighted average common shares outstanding - basic107,932    92,410    15,522    16.8  %
Weighted average common shares outstanding - diluted108,161    92,411    15,750    17.0  %
        
Basic earnings / (loss) per share$0.23    $(0.17)  $0.40    235.3  %
Diluted earnings / (loss) per share$0.23    $(0.17)  $0.40    235.3  %

N/M = Percentage change is not meaningful.

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

 


Outstanding Securities - As of March 31, 2021
          
 Number of Units / Shares Outstanding Conversion Rate* If Converted(1) Issuance Price Per Unit* Annual Distribution Rate*
Non-convertible Securities         
Common shares111,835 N/A N/A N/A $3.32^
          
Convertible Securities         
Common OP units2,582 1.0000 2,582 N/A Mirrors common shares distributions
          
Series A-1 preferred OP units290 2.4390 708 $100 6.00%
Series A-3 preferred OP units40 1.8605 75 $100 4.50%
Series C preferred OP units306 1.1100 340 $100 5.00%
Series D preferred OP units489 0.8000 391 $100 4.00%
Series E preferred OP units90 0.6897 62 $100 5.25%
Series F preferred OP units90 0.6250 56 $100 3.00%
Series G preferred OP units241 0.6452 155 $100 3.20%
Series H preferred OP units581 0.6098 355 $100 3.00%
Series I preferred OP units922 0.6098 562 $100 3.00%

^ Annual distribution is based on the last quarterly distribution annualized.

(1)  Calculation may yield minor differences due to fractional shares paid in cash to the stockholder at conversion.

Capitalization - As of March 31, 2021      
       
Equity Shares Share Price* Total
Common shares 111,835   $150.04   $16,779,723  
Common OP units 2,582   $150.04   387,403  
Subtotal 114,417     $17,167,126  
       
Preferred OP units as converted 2,704   $150.04   $405,708  
Total diluted shares outstanding 117,121     17,572,834  
       
Debt      
Mortgage loans payable     $3,430,420  
Preferred Equity - Sun NG Resorts - mandatorily redeemable     35,249  
Preferred OP units - mandatorily redeemable     34,663  
Lines of credit and other debt     917,603  
Total debt     $4,417,935  
       
Total Capitalization     $21,990,769  

Reconciliations to Non-GAAP Financial Measures

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

 


 Three Months Ended
 March 31, 2021 March 31, 2020
Net Income / (Loss) Attributable to Sun Communities, Inc. Common Stockholders$24,782    $(16,086) 
Adjustments   
Depreciation and amortization123,076    83,752   
Depreciation on nonconsolidated affiliates30    —   
(Gain) / loss on remeasurement of marketable securities(3,661)  28,647   
(Gain) / loss on remeasurement of investment in nonconsolidated affiliates(104)  2,191   
(Gain) / loss on remeasurement of notes receivable(376)  2,112   
Loss attributable to noncontrolling interests(147)  (882) 
Preferred return to preferred OP units480    874   
Gain on disposition of assets, net(8,155)  (5,562) 
FFO Attributable to Sun Communities, Inc. Common Stockholders and Dilutive Convertible Securities(1)(4)$135,925    $95,046   
    
Adjustments   
Business combination expense and other acquisition related costs(7)1,953    385   
Loss on extinguishment of debt—    3,279   
Catastrophic event-related charges, net2,414    606   
Loss of earnings - catastrophic event-related200    300   
(Gain) / loss on foreign currency translation(25)  17,479   
Other expense, net(6)716    302   
Deferred tax benefits(147)  (130) 
Core FFO Attributable to Sun Communities, Inc. Common Stockholders and Dilutive Convertible Securities(1)(4)$141,036    $117,267   
    
Weighted average common shares outstanding - basic107,932    92,410   
Add   
Common shares dilutive effect: March 2021 forward equity offering229    —   
Common stock issuable upon conversion of stock options—      
Restricted stock191    524   
Common OP units2,596    2,412   
Common stock issuable upon conversion of certain preferred OP units791    1,166   
Weighted Average Common Shares Outstanding - Fully Diluted111,739    96,513   
    
FFO Attributable to Sun Communities, Inc. Common Stockholders and Dilutive Convertible Securities(1)(4)
Per Share - Fully Diluted
$1.22    $0.98   
    
Core FFO Attributable to Sun Communities, Inc. Common Stockholders and Dilutive Convertible Securities(1)(4) Per Share - Fully Diluted
$1.26    $1.22   

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

 


 Three Months Ended
 March 31, 2021 March 31, 2020
Net Income / (Loss) Attributable to Sun Communities, Inc. Common Stockholders$24,782    $(16,086) 
Interest income(2,631)  (2,350) 
Brokerage commissions and other revenues, net(5,960)  (3,913) 
General and administrative expense38,203    25,349   
Catastrophic event-related charges, net2,414    606   
Business combination expense1,232    —   
Depreciation and amortization123,304    83,689   
Loss on extinguishment of debt—    3,279   
Interest expense39,517    32,416   
Interest on mandatorily redeemable preferred OP units / equity1,036    1,041   
(Gain) / loss on remeasurement of marketable securities(3,661)  28,647   
(Gain) / loss on foreign currency translation(25)  17,479   
Other expense, net(6)1,099    972   
(Income) / loss on remeasurement of notes receivable(376)  2,112   
Income from nonconsolidated affiliates(1,171)  (52) 
(Income) / loss on remeasurement of investment in nonconsolidated affiliates(104)  2,191   
Current tax (benefit) / expense(229)  450   
Deferred tax benefit(147)  (130) 
Preferred return to preferred OP units / equity2,864    1,570   
Income / (loss) attributable to noncontrolling interests295    (962) 
NOI(1)$220,442    $176,308   


 Three Months Ended
 March 31, 2021 March 31, 2020
Real Property NOI(1)$204,652   $171,339   
Home Sales NOI(1)10,609   6,548   
Service, retail, dining and entertainment NOI(1)5,181   (1,579) 
NOI(1)$220,442   $176,308   

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

 


 Three Months Ended
 March 31, 2021 March 31, 2020
Net Income / (Loss) Attributable to Sun Communities, Inc. Common Stockholders$24,782    $(16,086) 
Adjustments   
Depreciation and amortization123,304    83,689   
Loss on extinguishment of debt—    3,279   
Interest expense39,517    32,416   
Interest on mandatorily redeemable preferred OP units / equity1,036    1,041   
Current tax expense / (benefit)(229)  450   
Deferred tax benefit(147)  (130) 
Income from nonconsolidated affiliates(1,171)  (52) 
Less: Gain on dispositions of assets, net(8,155)  (5,562) 
EBITDAre(1)$178,937    $99,045   
Adjustments   
Catastrophic event-related charges, net2,414    606   
Business combination expense1,232    —   
(Gain) / loss on remeasurement of marketable securities(3,661)  28,647   
(Gain) / loss on foreign currency translation(25)  17,479   
Other expense, net(6)1,099    972   
(Income) / loss on remeasurement of notes receivable(376)  2,112   
(Gain) / loss on remeasurement of investment in nonconsolidated affiliates(104)  2,191   
Preferred return to preferred OP units / equity2,864    1,570   
Income / (loss) attributable to noncontrolling interests295    (962) 
Plus: Gain on dispositions of assets, net8,155    5,562   
Recurring EBITDA(1) $190,830    $157,222   

Non-GAAP and Other Financial Measures

Debt Analysis
(amounts in thousands)

 


 Quarter Ended
 3/31/2021 12/31/2020 9/30/2020 6/30/2020 3/31/2020
Debt Outstanding         
Mortgage loans payable$3,430,420   $3,444,967   $3,191,380   $3,205,507   $3,273,808  
Preferred Equity - Sun NG Resorts - mandatorily redeemable35,249   35,249   35,249   35,249   35,249  
Preferred OP units - mandatorily redeemable34,663   34,663   34,663   34,663   34,663  
Lines of credit and other debt917,603   1,242,197   79,321   115,352   582,774  
Total debt$4,417,935   $4,757,076   $3,340,613   $3,390,771   $3,926,494  
          
% Fixed / Floating         
Fixed79.3 % 74.0 % 97.6 % 96.6 % 85.2 %
Floating20.7 % 26.0 % 2.4 % 3.4 % 14.8 %
Total100.0 % 100.0 % 100.0 % 100.0 % 100.0 %
          
Weighted Average Interest Rates         
Mortgage loans payable3.78 % 3.78 % 3.88 % 3.88 % 3.91 %
Preferred Equity - Sun NG Resorts - mandatorily redeemable6.00 % 6.00 % 6.00 % 6.00 % 6.00 %
Preferred OP units - mandatorily redeemable5.93 % 5.93 % 5.93 % 5.93 % 5.93 %
Lines of credit and other debt(8)1.75 % 2.08 % 1.32 % 2.03 % 1.85 %
Total average3.39 % 3.37 % 3.86 % 3.86 % 3.64 %
          
Debt Ratios         
Net Debt / Recurring EBITDA(1) (TTM)6.1   6.9   5.0   4.8   5.6  
Net Debt / Enterprise Value19.7 % 21.4 % 18.3 % 17.8 % 22.6 %
Net Debt / Gross Assets31.8 % 35.5 % 31.6 % 29.7 % 35.6 %
          
Coverage Ratios         
Recurring EBITDA(1) (TTM) / Interest5.0 4.9 4.8 4.5 4.5
Recurring EBITDA(1) (TTM) / Interest + Pref. Distributions + Pref. Stock Distribution4.8 4.8 4.6 4.4 4.3


Maturities / Principal Amortization Next Five Years2021 2022 2023 2024 2025
Mortgage loans payable         
Maturities$—   $82,155   $185,618   $315,330   $50,528  
Principal amortization44,810   61,364   60,739   57,293   53,879  
Preferred Equity - Sun NG Resorts - mandatorily redeemable—   —   —   33,428   1,821  
Preferred OP units - mandatorily redeemable—   —   —   27,373   —  
Lines of credit and other debt7,494   13,233   377,876   519,000   —  
Total$52,304   $156,752   $624,233   $952,424   $106,228  
          
Weighted average rate of maturities— % 4.46 % 4.08 % 4.47 % 4.04 %

Same Community(2)
(amounts in thousands except for Other Information)

 


                        
 Three Months Ended
 Total Same Community MH RV
 March 31, 2021 March 31, 2020 Change % Change March 31, 2021 March 31, 2020 Change % Change March 31, 2021 March 31, 2020 Change % Change
Financial Information                       
Revenue                       
Real property (excluding Transient)$215,471   $205,218   $10,253    5.0  % $172,741   $164,828   $7,913    4.8  % $42,729   $40,390   $2,339    5.8  %
Real property - transient25,907   28,870   (2,963)  (10.3)% 601   928   (327)  (35.2)% 25,306   27,942   (2,636)  (9.4)%
Other7,047   5,895   1,152    19.5  % 4,826   3,810   1,016    26.7  % 2,222   2,085   137    6.6  %
Total Operating248,425   239,983   8,442    3.5  % 178,168   169,566   8,602    5.1  % 70,257   70,417   (160)  (0.2)%
Expense                       
Property Operating (9)(10)73,015   69,189   3,826    5.5  % 43,005   40,685   2,320    5.7  % 30,010   28,504   1,506    5.3  %
Real Property NOI(1)$175,410   $170,794   $4,616    2.7  % $135,163   $128,881   $6,282    4.9  % $40,247   $41,913   $(1,666)  (4.0)%


 As of     
 March 31, 2021 March 31, 2020 Change % Change
Other Information       
Number of properties407   407   —    
        
MH occupancy97.3 %      
RV occupancy100.0 %      
MH & RV blended occupancy(3)97.9 %      
        
Adjusted MH occupancy(3)98.4 %      
Adjusted RV occupancy(3)100.0 %      
Adjusted MH & RV blended occupancy(3)98.8 % 96.9 % 1.9 %  
        
Sites available for development7,373   6,975   398    
        
Monthly base rent per site - MH$599   $580   $19   3.2%(12)
Monthly base rent per site - RV(11)$524   $499   $25   5.0%(12)
Monthly base rent per site - Total(11)$582   $562   $20   3.5%(12)

Marina Summary
(amounts in thousands except for statistical data)

 


   
  Three Months Ended
  March 31, 2021
Financial Information  
Revenues  
Real property (excluding Transient) $46,106  
Real property - transient 868  
Other 1,649  
Total Operating 48,623  
Expenses  
Property Operating 23,575  
Real Property NOI 25,048  
Service, retail, dining and entertainment  
Service, retail, dining and entertainment revenue 44,354  
Service, retail, dining and entertainment expense 38,009  
Service, Retail, Dining and Entertainment NOI 6,345  
   
Marina NOI $31,393  
   
Other Information - Marinas March 31, 2021
Number of properties(a) 110
Total wet slips and dry storage 38,753

(a) Marina properties comprised of four properties acquired in 2021 and 106 properties acquired in 2020.

MH and RV Acquisitions and Other Summary(13)
(amounts in thousands except for statistical data)

 


   
  Three Months Ended
  March 31, 2021
Financial Information  
Revenues  
Real property (excluding transient) $7,189  
Real property - transient 5,761  
Other income 302  
Total Operating 13,252  
Expenses  
Property Operating 9,058  
Real Property NOI $4,194  
   
Other Information - MH and RVs March 31, 2021
Number of properties 45  
Occupied sites 4,864  
Developed sites 5,730  
Occupancy % 84.9 %
Transient sites 6,598  

Home Sales Summary
(amounts in thousands except for *)

 


        
 Three Months Ended
 March 31, 2021 March 31, 2020 Change % Change
Financial Information       
New Homes       
New home sales$22,972   $15,596   $7,376    47.3 %
New home cost of sales18,674   12,610   6,064    48.1 %
Gross Profit – new homes4,298   2,986   1,312    43.9 %
Gross margin % – new homes18.7 % 19.1 % (0.4)%  
Average selling price – new homes*$154,174   $131,059   $23,115    17.6 %
        
Pre-owned Homes       
Pre-owned home sales$29,227   $24,991   $4,236    17.0 %
Pre-owned home cost of sales18,584   17,422   1,162    6.7 %
Gross Profit – pre-owned homes10,643   7,569   3,074    40.6 %
Gross margin % – pre-owned homes36.4 % 30.3 % 6.1  %  
Average selling price – pre-owned homes*$42,605   $38,806   $3,799    9.8 %
        
Total Home Sales       
Revenue from home sales$52,199   $40,587   $11,612    28.6 %
Cost of home sales37,258   30,032   7,226    24.1 %
Home selling expenses4,332   4,007   325    8.1 %
NOI(1) – home sales$10,609   $6,548   $4,061    62.0 %
        
Statistical Information       
New home sales volume*149   119   30    25.2 %
Pre-owned home sales volume*686   644   42    6.5 %
Total home sales volume*835   763   72    9.4 %

Rental Program Summary
(amounts in thousands except for *)

 


        
 Three Months Ended
 March 31, 2021 March 31, 2020 Change % Change
Financial Information       
Revenues       
Home rent$17,022   $15,469   $1,553    10.0  %
Site rent19,117   18,007   1,110    6.2  %
Total36,139   33,476   2,663    8.0  %
        
Expenses       
Rental Program operating and maintenance5,224   4,823   401    8.3  %
Rental Program NOI(1)$30,915   $28,653   $2,262    7.9  %
        
Other Information       
Number of sold rental homes*211   234   (23)  (9.8)%
Number of occupied rentals, end of period*11,473   11,431   42    0.4  %
Investment in occupied rental homes, end of period$621,869   $596,319   $25,550    4.3  %
Weighted average monthly rental rate, end of period*$1,055   $1,009   $46    4.6  %

The Rental Program NOI is included in Real Property NOI. The Rental Program NOI is separately reviewed to assess the overall growth and performance of the Rental Program and its financial impact on the Company's operations.

MH and RV Property Summary        
           
           
  3/31/2021 12/31/2020 9/30/2020 6/30/2020 3/31/2020
FLORIDA          
Properties 128   128   127   125   125  
MH & Annual RV Developed sites(14) 40,011   39,803   39,517   39,241   39,380  
Occupied MH & Annual RV(14) 39,283   39,063   38,743   38,453   38,526  
MH & Annual RV Occupancy %(14) 98.2 % 98.1 % 98.0 % 98.0 % 97.8 %
Transient RV sites 5,823   6,011   5,993   5,547   5,311  
Sites for development 1,497   1,497   1,427   1,427   1,527  
MICHIGAN          
Properties 74   74   74   72   72  
MH & Annual RV Developed sites(14) 29,092   29,086   29,086   27,901   27,883  
Occupied MH & Annual RV(14) 28,145   28,109   28,033   27,191   26,863  
MH & Annual RV Occupancy %(14) 96.7 % 96.6 % 96.4 % 97.5 % 96.3 %
Transient RV sites 541   546   546   572   590  
Sites for development 1,182   1,182   1,182   1,182   1,115  
CALIFORNIA          
Properties 36   35   34   32   31  
MH & Annual RV Developed sites(14) 6,734   6,675   6,372   6,364   5,986  
Occupied MH & Annual RV(14) 6,609   6,602   6,290   6,272   5,948  
MH & Annual RV Occupancy %(14) 98.1 % 98.9 % 98.7 % 98.6 % 99.4 %
Transient RV sites 2,418   2,231   2,236   1,978   1,947  
Sites for development 127   373   373   264   302  
TEXAS           
Properties 24   24   24   23   23  
MH & Annual RV Developed sites(14) 7,928   7,766   7,659   7,641   7,627  
Occupied MH & Annual RV(14) 7,671   7,572   7,427   7,289   7,076  
MH & Annual RV Occupancy %(14) 96.8 % 97.5 % 97.0 % 95.4 % 92.8 %
Transient RV sites 1,773   1,810   1,917   1,590   1,612  
Sites for development 1,275   1,378   1,378   565   555  
ONTARIO, CANADA          
Properties 16   15   15   15   15  
MH & Annual RV Developed sites(14) 4,199   4,090   4,067   3,980   3,977  
Occupied MH & Annual RV(14) 4,199   4,090   4,067   3,980   3,977  
MH & Annual RV Occupancy %(14) 100.0 % 100.0 % 100.0 % 100.0 % 100.0 %
Transient RV sites 964   966   920   1,007   1,009  
Sites for development 1,525   1,525   1,593   1,593   1,608  
CONNECTICUT          
Properties 16   16   16   16   16  
MH & Annual RV Developed sites(14) 1,897   1,897   1,898   1,898   1,892  
Occupied MH & Annual RV(14) 1,746   1,739   1,736   1,735   1,721  
MH & Annual RV Occupancy %(14) 92.0 % 91.7 % 91.5 % 91.4 % 91.0 %
Transient RV sites 108   108   107   107   113  
Sites for development —   —   —   —   —  
ARIZONA          
Properties 14   14   13   13   13  
MH & Annual RV Developed sites(14) 4,391   4,323   4,274   4,259   4,268  
Occupied MH & Annual RV(14) 4,101   4,030   3,957   3,932   3,923  
MH & Annual RV Occupancy %(14) 93.4 % 93.2 % 92.6 % 92.3 % 91.9 %
Transient RV sites 1,270   1,337   1,386   1,401   1,392  
Sites for development —   —   —   —   —  
           
           
MAINE          
Properties 13   13        
MH & Annual RV Developed sites(14) 2,190   2,190   1,092   1,074   1,083  
Occupied MH & Annual RV(14) 2,119   2,121   1,089   1,069   1,079  
MH & Annual RV Occupancy %(14) 96.8 % 96.8 % 99.7 % 99.5 % 99.6 %
Transient RV sites 805   805   819   837   828  
Sites for development 30   30   30   30   30  
INDIANA          
Properties 12   12   11   11   11  
MH & Annual RV Developed sites(14) 3,087   3,087   3,087   3,087   3,087  
Occupied MH & Annual RV(14) 2,961   2,950   2,957   2,961   2,914  
MH & Annual RV Occupancy %(14) 95.9 % 95.6 % 95.8 % 95.9 % 94.4 %
Transient RV sites 1,089   1,089   534   534   534  
Sites for development 277   277   277   277   277  
COLORADO          
Properties 10   10   10   10   10  
MH & Annual RV Developed sites(14) 2,453   2,453   2,453   2,441   2,423  
Occupied MH & Annual RV(14) 2,395   2,380   2,365   2,327   2,318  
MH & Annual RV Occupancy %(14) 97.6 % 97.0 % 96.4 % 95.3 % 95.7 %
Transient RV sites 962   962   930   574   291  
Sites for development 1,250   1,250   1,282   1,566   1,867  
NEW HAMPSHIRE          
Properties 10   10   10   10   10  
MH & Annual RV Developed sites(14) 1,776   1,777   1,833   1,827   1,816  
Occupied MH & Annual RV(14) 1,769   1,767   1,822   1,816   1,806  
MH & Annual RV Occupancy %(14) 99.6 % 99.4 % 99.4 % 99.4 % 99.4 %
Transient RV sites 456   460   404   410   421  
Sites for development 151   151   151   151   151  
NEW YORK          
Properties 10          
MH & Annual RV Developed sites(14) 1,452   1,419   1,414   1,403   1,400  
Occupied MH & Annual RV(14) 1,415   1,380   1,371   1,358   1,355  
MH & Annual RV Occupancy %(14) 97.5 % 97.3 % 97.0 % 96.8 % 96.8 %
Transient RV sites 1,689   1,422   900   911   916  
Sites for development 371   371   371   371   371  
OHIO           
Properties          
MH & Annual RV Developed sites(14) 2,797   2,790   2,790   2,778   2,768  
Occupied MH & Annual RV(14) 2,760   2,755   2,758   2,736   2,702  
MH & Annual RV Occupancy %(14) 98.7 % 98.7 % 98.9 % 98.5 % 97.6 %
Transient RV sites 128   135   135   147   152  
Sites for development 22   22   22   22   59  
OTHER STATES           
Properties 80   77   73   74   73  
MH & Annual RV Developed sites(14) 17,310   16,896   16,484   16,578   16,392  
Occupied MH & Annual RV(14) 16,796   16,394   15,977   16,046   15,788  
MH & Annual RV Occupancy %(14) 97.0 % 97.0 % 96.9 % 96.8 % 96.3 %
Transient RV sites 8,269   7,161   6,901   6,745   6,764  
Sites for development 1,969   1,969   2,044   2,294   2,428  
           
TOTAL - MH AND ANNUAL RV PORTFOLIO           
Properties 452   446   432   426   424  
MH & Annual RV Developed sites(14) 125,317   124,252   122,026   120,472   119,982  
Occupied MH & Annual RV(14) 121,969   120,952   118,592   117,165   115,996  
MH & Annual RV Occupancy %(14) 97.3 %(15)97.3 % 97.2 % 97.3 % 96.7 %
Transient RV sites 26,295   25,043   23,728   22,360   21,880  
Sites for development(16) 9,676   10,025   10,130   9,742   10,290  
% Communities age restricted 32.7 % 33.2 % 33.6 % 34.0 % 34.0 %


Marina Property Summary(a)    
     
     
  3/31/2021 12/31/2020
FLORIDA    
Properties 16   14  
Total wet slips and dry storage spaces 3,796   3,564  
CONNECTICUT    
Properties 11   11  
Total wet slips and dry storage spaces 3,257   3,254  
RHODE ISLAND    
Properties 11   11  
Total wet slips and dry storage spaces 2,676   2,656  
MASSACHUSETTS    
Properties    
Total wet slips and dry storage spaces 2,613   2,193  
NEW YORK    
Properties    
Total wet slips and dry storage spaces 2,524   2,524  
MARYLAND    
Properties    
Total wet slips and dry storage spaces 2,104   2,106  
OTHER STATES    
Properties 47   47  
Total wet slips and dry storage spaces 21,783   21,855  
TOTAL - MARINA PORTFOLIO    
Properties 110   106  
Total wet slips and dry storage spaces 38,753   38,152  

(a) Total wet slips and dry storage spaces are adjusted each quarter based on sites configuration and usability.

Capital Improvements, Development and Acquisitions
(amounts in thousands except for *)

 


  Recurring
Capital Expenditures
Average / MH & RV Site*
Recurring Capital Expenditures Average / Marina Site*Recurring
Capital Expenditures - MH / RV(17)
Recurring Capital Expenditures - Marina(17) Lot
Modifications(18)
Acquisitions(19) Expansion
and
Development(20)
Growth Projects(21)
YTD 2021$86  $79  $10,544  $3,144  $7,260  $173,307  $46,859  $18,051  
2020$265  N/A$31,398  $2,074  $29,789  $3,105,296  $248,146  $28,315  
2019$345  N/A$30,382  N/A$31,135  $930,668  $281,808  $9,638  

Operating Statistics for MH and Annual RVs

 


Locations Resident Move-outs Net Leased Sites(5) New Home Sales Pre-owned Home Sales Brokered
Re-sales
Florida 505   212    59   48   448  
Michigan 140   36    11   351   48  
Ontario, Canada 325   18    11   —   64  
Texas 82   99    14   86   18  
Arizona 20   71    11     60  
Indiana 17   11      68    
Ohio 38      —   19    
California 32          34  
Colorado —   15    12      
Connecticut 11        —    
New York 54      —      
New Hampshire —        —   10  
Maine 54   (2)      —  
Other states 510   25    10   92   46  
Three Months Ended March 31, 2021 1,788   514    149   686   758  


Total For Year Ended Resident Move-outs  Net Leased Sites(5) New Home Sales Pre-owned Home Sales Brokered
Re-sales
2020 5,365   2,505   570   2,296   2,557  
2019 4,139   2,674   571   2,868   2,231  


Percentage Trends Resident Move-outs  Resident
Re-sales
2021 TTM 3.2 % 7.2 %
2020 3.3 % 6.9 %
2019 2.6 % 6.6 %

Footnotes and Definitions

 

(1)   Investors in and analysts following the real estate industry utilize funds from operations ("FFO"), net operating income ("NOI"), and earnings before interest, tax, depreciation and amortization ("EBITDA") as supplemental performance measures. The Company believes that FFO, NOI, and EBITDA are appropriate measures given their wide use by and relevance to investors and analysts. Additionally, FFO, NOI, and EBITDA are commonly used in various ratios, pricing multiples, yields and returns and valuation calculations used to measure financial position, performance and value.

  • FFO, reflecting the assumption that real estate values rise or fall with market conditions, principally adjusts for the effects of generally accepted accounting principles ("GAAP") depreciation and amortization of real estate assets.
  • NOI provides a measure of rental operations that does not factor in depreciation, amortization and non-property specific expenses such as general and administrative expenses.
  • EBITDA provides a further measure to evaluate ability to incur and service debt and to fund dividends and other cash needs.

FFO is defined by the National Association of Real Estate Investment Trusts ("NAREIT") as GAAP net income (loss), excluding gains (or losses) from sales of depreciable operating property, plus real estate related depreciation and amortization, real estate related impairments, and after adjustments for nonconsolidated 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. 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 GAAP net income (loss). Management believes 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. 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"). The Company believes that Core FFO provides enhanced comparability for investor evaluations of period-over-period results.

The Company believes that GAAP net income (loss) is the most directly comparable measure to FFO. The principal limitation of FFO is that it does not replace GAAP net income (loss) as a performance measure or GAAP cash flow from operations as a liquidity measure. Because FFO excludes significant economic components of GAAP net income (loss) including depreciation and amortization, FFO should be used as a supplement to GAAP net income (loss) and not as an alternative to it. Further, 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 is calculated in accordance with the Company's interpretation of standards established by NAREIT, which may not be comparable to FFO reported by other REITs that interpret the NAREIT definition differently.

NOI is derived from revenues minus property operating expenses and real estate taxes. NOI is a non-GAAP financial measure that the Company believes is helpful to investors as a supplemental 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 measure 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.

The Company believes that GAAP net income (loss) is the most directly comparable measure to NOI. NOI should not be considered to be an alternative to GAAP net income (loss) as an indication of the Company's financial performance or GAAP cash flow from operating activities 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. Because of the inclusion of items such as interest, depreciation, and amortization, the use of GAAP 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.

EBITDA as defined by NAREIT (referred to as "EBITDAre") is calculated as GAAP net income (loss), plus interest expense, plus income tax expense, plus depreciation and amortization, plus or minus losses or gains on the disposition of depreciated property (including losses or gains on change of control), plus impairment write-downs of depreciated property and of investments in nonconsolidated affiliates caused by a decrease in value of depreciated property in the affiliate, and adjustments to reflect the entity's share of EBITDAre of nonconsolidated affiliates. EBITDAre is a non-GAAP financial measure that the Company uses to evaluate its ability to incur and service debt, fund dividends and other cash needs and cover fixed costs. Investors utilize EBITDAre as a supplemental measure to evaluate and compare investment quality and enterprise value of REITs. The Company also uses EBITDAre excluding certain gain and loss items that management considers unrelated to measurement of the Company's performance on a basis that is independent of capital structure ("Recurring EBITDA").

The Company believes that GAAP net income (loss) is the most directly comparable measure to EBITDAre. EBITDAre is not intended to be used as a measure of the Company's cash generated by operations or its dividend-paying capacity, and should therefore not replace GAAP net income (loss) as an indication of the Company's financial performance or GAAP cash flow from operating, investing and financing activities as measures of liquidity.

(2)   Same Community results reflect constant currency for comparative purposes. Canadian currency figures in the prior comparative period have been translated at 2021 average exchange rates.

(3)   The MH and RV blended occupancy is derived from 119,587 developed sites, of which 117,105 were occupied. The adjusted MH and RV blended occupancy percentage for 2020 has been adjusted to reflect incremental period-over-period growth from newly rented expansion sites and the conversion of transient RV sites to annual RV sites. The adjusted MH and RV blended occupancy percentage for 2021 is derived from 118,526 developed sites, of which 117,105 were occupied. The number of developed sites excludes RV transient sites and over 1,050 recently completed but vacant MH expansion sites.

(4)   The effect of certain anti-dilutive convertible securities is excluded from these items.

(5)   Revenue producing site gains do not include occupied sites acquired during that year.

(6)   Other expense, net was as follows (in thousands):

 Three Months Ended
 March 31, 2021 March 31, 2020
Foreign currency remeasurement loss$(20)  $(220) 
Contingent consideration expense(71)  (82) 
GTSC repair reserve(383)  (670) 
Non-cash lease amortization expense(625)  —   
Other expense, net$(1,099)  $(972) 

(7)   Other acquisition related 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. These costs also include nonrecurring integration expenses associated with a new acquisition.

(8)   Lines of credit and other debt includes the Company's MH floor plan facility. The effective interest rate on the MH floor plan facility was 7.0 percent for the quarter ended March 31, 2021, 6.0 percent for the quarters ended December 31, September 30 and June 30, 2020, and 7.0 percent for the quarter ended March 31, 2020. However, the Company pays no interest if the floor plan balance is repaid within 60 days.

(9)   Same Community results net $16.5 million and $14.8 million of certain utility revenue against the related utility expense in property operating and maintenance expense for the quarter ended March 31, 2021 and 2020, respectively.

(10)   Same Community supplies and repair expense excludes $0.4 million for the quarter ended March 31, 2020, 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)   Monthly base rent per site pertains to annual RV sites and excludes transient RV sites.

(12)   Calculated using actual results without rounding.

(13)   MH and RV acquisitions and other is comprised of six properties acquired and three properties that the Company has an interest in, but does not operate in 2021, 23 properties acquired in 2020, two Florida Keys properties that require redevelopment as a result of damage sustained from Hurricane Irma in 2017, six recently opened ground-up developments, one property undergoing redevelopment, four properties previously classified as held for sale and other miscellaneous transactions and activity.

(14)   Includes MH and annual RV sites, and excludes transient RV sites, as applicable.

(15)   As of March 31, 2021, total portfolio MH occupancy was 96.5 percent inclusive of the impact of over 1,200 recently constructed but vacant MH expansion sites, and annual RV occupancy was 100.0 percent.

(16)   Total sites for development were comprised of approximately 77.3 percent for expansion, 20.4 percent for greenfield development and 2.3 percent for redevelopment.

(17)   Property recurring capital expenditures are necessary to maintain asset quality, including purchasing and replacing assets used to operate the communities, resorts and marinas. Recurring capital expenditures at our MH and RV properties 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. Recurring capital expenditures at our marinas include items such as: dredging, dock repairs and improvements, and equipment maintenance and upgrades.The minimum capitalized amount is five hundred dollars.

(18)   MH lot modification capital expenditures 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)   Capital expenditures related to acquisitions represent the purchase price of existing operating properties (including marinas) and land parcels to develop expansions or new properties. These costs for the quarter ended March 31, 2021 include $16.1 million of capital improvements identified during due diligence that are necessary to bring the communities to the Company's operating standards. For the years ended December 31, 2020 and 2019, these costs were $40.6 million and $50.7 million, respectively. 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 expenditures consist primarily of construction costs and costs necessary to complete home and RV site improvements, such as driveways, sidewalks and landscaping at our MH communities and RV resorts.

(21)   Growth projects consist of revenue generating or expense reducing activities at MH communities, RV resorts and marinas. This includes, but is not limited to, utility efficiency and renewable energy projects, site, slip or amenity upgrades such as the addition of a garage, shed or boat lift, and other special capital projects that substantiate an incremental rental increase.

Certain financial information has been revised to reflect reclassifications in prior periods to conform to current period presentation.

Attachment