Company Announcements

Sun Communities, Inc. Reports 2021 Second Quarter Results

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


NEWS RELEASE

July 26, 2021

Sun Communities, Inc. Reports 2021 Second Quarter Results

Southfield, MI, July 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 second quarter results for 2021.

Financial Results for the Quarter and Six Months Ended June 30, 2021

For the quarter ended June 30, 2021, total revenues increased $300.6 million, or 99.1 percent, to approximately $603.9 million compared to $303.3 million for the same period in 2020. Net income attributable to common stockholders increased $51.9 million or 88.0 percent, to approximately $110.8 million, or $0.98 per diluted common share, compared to net income attributable to common stockholders of $58.9 million, or $0.61 per diluted common share, for the same period in 2020.

For the six months ended June 30, 2021, total revenues increased $432.3 million, or 70.5 percent, to $1.0 billion compared to approximately $613.6 million for the same period in 2020. Net income attributable to common stockholders increased $92.7 million or 216.5 percent, to approximately $135.6 million, or $1.22 per diluted common share, compared to net income attributable to common stockholders of $42.8 million, or $0.45 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 June 30, 2021, was $1.80 per diluted share and OP unit ("Share") as compared to $1.12 in the corresponding period in 2020, a 60.7 percent increase.

  • Same Community(2) Net Operating Income ("NOI")(1) increased by 21.6 percent for the quarter ended June 30, 2021, as compared to the corresponding period in 2020.

  • Home Sales Volume increased 89.5 percent to 1,158 homes for the quarter ended June 30, 2021, as compared to 611 homes in the same period in 2020.

  • Acquisitions totaled $719.4 million during and subsequent to the quarter ended June 30, 2021, including 10 MH communities, two RV resorts and six marinas.

Gary Shiffman, Chief Executive Officer stated, "Sun's ongoing strong momentum continued through the second quarter, as we saw robust performance across RV, Manufactured Housing and Marinas. Our RV business is demonstrating the growing appeal of an RV vacation for consumers, marinas are in the midst of an active boating season and our results continue to track ahead of our underwriting, and in our manufactured housing business, we are benefiting from sustained demand for affordable housing. Furthermore, our RV forward bookings have continued to accelerate and we are pleased to again increase our guidance for the year."

Mr. Shiffman continued, "We have remained active in terms of new site deliveries and have more than 9,400 sites available for development, representing an attractive source of growth and value creation over time. We also deployed over $719 million in acquisitions, including six marinas as we begin to realize the meaningful consolidation opportunity we have in the marina industry. To support this ongoing growth, we are pleased to have received investment grade ratings and completed our inaugural unsecured bond issuance as we issued $600 million in senior unsecured notes. This additional financing option provides Sun enhanced financial flexibility to efficiently match fund our investment activities as we continue to realize compelling growth opportunities across all of our businesses."

OPERATING HIGHLIGHTS

Portfolio Occupancy

Total MH and annual RV occupancy was 97.4 percent at June 30, 2021, compared to 97.3 percent at June 30, 2020, an increase of 10 basis points.

During the quarter ended June 30, 2021, MH and annual RV revenue producing sites increased by 583 sites, as compared to an increase of 851 revenue producing sites during the quarter ended June 30, 2020.

During the six months ended June 30, 2021, MH and annual RV revenue producing sites increased by 1,097 sites, as compared to an increase of 1,151 revenue producing sites during the six months ended June 30, 2020.

Same Community(2) Results

For the 405 MH and RV properties owned and operated by the Company since January 1, 2020, the following table reflects the NOI(1) percentage increases, in total and by segment, for the quarter and six months ended June 30, 2021:

 Quarter Ended June 30, 2021
 Total Same Community MH RV
Revenue22.5 % 6.9 % 64.4 %
Expense24.7 % 11.8 % 41.9 %
NOI21.6 % 5.4 % 85.1 %


 Six Months Ended June 30, 2021
 Total Same Community MH RV
Revenue12.8 % 6.0 % 30.2 %
Expense15.2 % 8.7 % 24.2 %
NOI11.8 % 5.1 % 34.8 %

Same Community adjusted occupancy(3) increased to 98.8 percent at June 30, 2021 from 97.2 percent at June 30, 2020.

Home Sales

During the quarter ended June 30, 2021, the Company sold 1,158 homes as compared to 611 homes in the same period in 2020, an increase of 89.5 percent. The Company sold 227 and 140 new homes for the quarters ended June 30, 2021 and 2020, respectively, an increase of 62.1 percent. Pre-owned home sales were 931 in the second quarter 2021 as compared to 471 in the same period in 2020, an increase of 97.7 percent.

During the six months ended June 30, 2021, the Company sold 1,993 homes as compared to 1,374 homes in the same period in 2020, an increase of 45.1 percent. The Company sold 376 and 259 new homes for the six months ended June 30, 2021 and 2020, respectively, an increase of 45.2 percent. Pre-owned home sales were 1,617 in the six months ended June 30, 2021 as compared to 1,115 in the same period in 2020, an increase of 45.0 percent.

Marina Results

Marina NOI was $62.8 million and $94.2 million for the quarter and six months ended June 30, 2021, respectively. Refer to page 15 for additional information regarding the marina portfolio operating results.

PORTFOLIO ACTIVITY

Acquisitions and Dispositions

During and subsequent to the quarter ended June 30, 2021, the Company acquired the following communities, resorts and marinas:

Property Name Property Type Sites,
Wet Slips and
Dry Storage Spaces
 Development Sites State / Province Total
Purchase Price
(in millions)
 Month Acquired
ThemeWorld RV Resort RV 148   —   FL $25.0   April
Sylvan Glen Estates(a) MH 476   —   MI 24.0   April
Shelter Island Boatyard Marina 55   N/A CA 10.0   May
Lauderdale Marine Center Marina 202   N/A FL 340.2   May
Apponaug Harbor(b) Marina 378   N/A RI 6.6   June
Cabrillo Isle(c) Marina 483   N/A CA 46.9   June
Marathon Marina Marina 147   N/A FL 19.1   June
Subtotal   1,889   —     471.8    
             
Acquisitions subsequent to quarter end        
Allen Harbor Marina 165   N/A RI 4.0   July
Cisco Grove Campground & RV RV 18   407   CA 6.6   July
Four Leaf Portfolio(d) MH 2,714   171   MI / IN 215.0   July
Harborage Yacht Club Marina 300   N/A FL 22.0   July
Subtotal   3,197   578     247.6    
             
Total acquisitions   5,086   578     $719.4    

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

(b) Combined with an existing adjacent marina.

(c) Acquired in connection with Safe Harbor Marinas acquisition. Transfer of the marinas was contingent on receiving third party consent.

(d) Contains nine MH communities.

During and subsequent to the six months ended June 30, 2021 the Company acquired 28 properties totaling 7,666 sites, wet slips and dry storage spaces, and 578 sites for development for a total purchase price of $853.4 million.

Subsequent to the quarter ended June 30, 2021, the Company sold two MH communities located in Indiana and Missouri for $67.5 million. The assets and liabilities associated with the transaction were classified as held for sale on the Consolidated Balance Sheets as of June 30, 2021.

Construction Activity

During the quarter ended June 30, 2021, the Company completed the construction of over 100 sites in two ground-up developments and over 120 expansion sites in two MH communities and one RV resort.

Year to date June 30, 2021, the Company completed the construction of over 350 sites in three ground-up development and over 230 expansion sites in three MH communities and one RV resort.

BALANCE SHEET, CAPITAL MARKETS ACTIVITY AND OTHER ITEMS

Debt

As of June 30, 2021, the Company had approximately $4.3 billion in debt outstanding. The weighted average interest rate was 3.5 percent and the weighted average maturity was 10.4 years. At June 30, 2021, the Company's net debt to trailing twelve month Recurring EBITDA(1) ratio was 5.1 times. The Company had $103.5 million of unrestricted cash on hand.

Senior Unsecured Notes

On June 14, 2021, the Company received investment grade ratings of BBB and Baa3 with a stable outlook from S&P Global and Moody's, respectively.

On June 28, 2021, Sun Communities Operating Limited Partnership ("SCOLP"), the Company's operating partnership, issued $600.0 million of senior unsecured notes with an interest rate of 2.7 percent and a ten-year term, due 2031. The net proceeds from the offering were $592.4 million, after deducting underwriters' discount and estimated offering expenses.

Credit Agreement

On June 14, 2021, SCOLP, as borrower, and the Company, as guarantor, entered into a new credit agreement with certain lenders. The new credit agreement combines and replaces SCOLP's $750.0 million credit facility which was scheduled to mature May 21, 2023, and the $1.8 billion credit facility of the Company's marina subsidiary, Safe Harbor Marinas, LLC (the "Safe Harbor Facility") which was scheduled to mature on October 11, 2024. The Safe Harbor Facility was terminated in connection with the execution of the new credit agreement and all amounts due and outstanding were repaid on or prior to the date of the New Credit Agreement. The Company recognized a loss on extinguishment of debt in its Consolidated Statement of Operations related to the termination of these prior credit facilities of $0.2 million and $7.9 million, respectively.

Pursuant to the New Credit Agreement, SCOLP may borrow up to $2.0 billion under a revolving loan (the "New Credit Facility") to fund the business of SCOLP and all its subsidiaries. The New Credit Facility has a four-year term ending June 14, 2025. Subject to the satisfaction of certain conditions, the term may be extended for two additional six-month periods, and additional borrowings not to exceed $1.0 billion is permitted. However, the maturity date with respect to $500.0 million of available borrowing under the New Credit Facility is October 11, 2024, which may not be extended. The New Credit Facility bears interest at a floating rate based on the Adjusted Eurocurrency Rate or Australian Bank Bill Swap Bid Rate (BBSY), plus a margin which can range from 0.725 percent to 1.400 percent. As of June 30, 2021, the margin based on our credit ratings was 0.850 percent on the New Credit Facility. The Company had $190.3 million of borrowings on the New Credit Facility as of June 30, 2021.
Equity Transactions

Public Equity Offering

In May and June 2021, the Company completed the physical settlement of the remaining 4,050,000 shares offered under the forward sale agreement pursuant to the Company's March 2021 equity offering of 8,050,000 shares. Net proceeds of $539.7 million after deducting expenses related to the offering, were used to acquire assets and pay down the Safe Harbor Facility.

At the Market Offering Sales Agreements

In June 2021, the Company entered into an At the Market Offering (ATM) Sales Agreement (the "Sales Agreement") with certain sales agents, forward sellers, pursuant to which the Company may sell, from time to time, up to an aggregate gross sales price of $500.0 million of its common stock. No shares were sold during the quarter ending June 30, 2021 under the ATM program. Upon entering into the Sales Agreement, the Company simultaneously terminated its previous ATM sales agreement entered into in July 2017.

2021 GUIDANCE

The Company is providing revised or initial 2021 guidance for the following metrics:

   Previous Range Revised Range  
   FY 2021E FY 2021E 3Q 2021E
Basic earnings per share  $1.68 - $1.84 $2.24 - $2.36 $0.90 - $0.96
Core FFO(1) per fully diluted Share  $5.92 - $6.08 $6.25 - $6.37 $2.00 - $2.06
        
 1Q21 2Q21 3Q21 4Q21
Seasonality of Core FFO(1) per fully diluted Share20.0% 28.5% 32.1% 19.4%

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 3Q 2021E
Same Community NOI(1) growth  7.5% - 8.5% 9.9% - 10.7% 11.2% - 12.0%

Guidance estimates include acquisitions completed through the date of this release and exclude any prospective acquisitions or capital markets activity.

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 second quarter results will be held on Tuesday, July 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 August 10, 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 13720116. 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 June 30, 2021, owned, operated, or had an interest in a portfolio of 569 developed MH, RV and marina properties comprising over 153,300 developed sites and nearly 41,300 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 in 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 and its senior unsecured notes;
  • 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;
  • the ability of purchasers of manufactured homes and boats to obtain financing; and
  • the level of repossessions by manufactured home 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
UBS Michael Goldsmith (212) 713-2951 michael.goldsmith@ubs.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 June 30, 2021)

 


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

 


 Quarter Ended
 6/30/2021 3/31/2021 12/31/2020 9/30/2020 6/30/2020
Financial Information         
Total revenues$603,863   $442,015   $384,265   $400,514   $303,266  
Net income$120,849   $27,941   $9,818   $89,756   $63,355  
Net income attributable to Sun Communities Inc. common stockholders$110,770   $24,782   $7,586   $81,204   $58,910  
Basic earnings per share*$0.98   $0.23   $0.07   $0.83   $0.61  
Diluted earnings per share*$0.98   $0.23   $0.07   $0.83   $0.61  
          
Cash distributions declared per common share*$0.83   $0.83   $0.79   $0.79   $0.79  
          
Recurring EBITDA(1) $268,225   $190,830   $168,527   $199,321   $148,650  
FFO attributable to Sun Communities, Inc. common stockholders and dilutive convertible securities(1)(4)
$198,017   $135,925   $110,849   $165,209   $118,092  
Core FFO attributable to Sun Communities, Inc. common stockholders and dilutive convertible securities(1)(4)
$209,620   $141,036   $124,872   $162,624   $110,325  
FFO attributable to Sun Communities, Inc. common stockholders and dilutive convertible securities(1)(4) per share - fully diluted*$1.70   $1.22   $1.03   $1.63   $1.20  
Core FFO attributable to Sun Communities, Inc. common stockholders and dilutive convertible securities(1)(4) per share - fully diluted*$1.80   $1.26   $1.16   $1.60   $1.12  
          
Balance Sheet         
Total assets$12,040,990   $11,454,209   $11,206,586   $8,335,717   $8,348,659  
Total debt$4,311,175   $4,417,935   $4,757,076   $3,340,613   $3,390,771  
Total liabilities$5,099,563   $5,101,512   $5,314,879   $3,791,922   $3,845,308  


 Quarter Ended
 6/30/2021 3/31/2021 12/31/2020 9/30/2020 6/30/2020
Operating Information*         
Properties569 562 552 432 426
          
Manufactured home sites97,448 96,876 96,688 95,209 94,232
Annual RV sites28,807 28,441 27,564 26,817 26,240
Transient RV sites27,032 26,295 25,043 23,728 22,360
Total sites153,287 151,612 149,295 145,754 142,832
Marina wet slips and dry storage spaces41,275 38,753 38,152 N/A N/A
          
MH occupancy96.7 % 96.5 % 96.6 % 96.4 % 96.5 %
Annual RV occupancy100.0 % 100.0 % 100.0 % 100.0 % 100.0 %
Blended MH and annual RV occupancy97.4 % 97.3 % 97.3 % 97.2 % 97.3 %
          
New home sales227 149 156 155 140
Pre-owned home sales931 686 626 555 471
Total home sales1,158 835 782 710 611


 Quarter Ended
 6/30/2021 3/31/2021 12/31/2020 9/30/2020 6/30/2020
Revenue Producing Site Gains(5)         
MH net leased sites226 127 247   349 759
RV net leased sites357 387 331   427 92
Total net leased sites583 514 578   776 851

Consolidated Balance Sheets
(amounts in thousands)

 


  June 30, 2021 December 31, 2020
Assets    
Land $2,412,629    $2,119,364   
Land improvements and buildings 8,995,041    8,480,597   
Rental homes and improvements 622,397    637,603   
Furniture, fixtures and equipment 529,549    447,039   
Investment property 12,559,616    11,684,603   
Accumulated depreciation (2,165,564)  (1,968,812) 
Investment property, net 10,394,052    9,715,791   
Cash, cash equivalents and restricted cash 119,612    92,641   
Marketable securities 153,049    124,726   
Inventory of manufactured homes 43,686    46,643   
Notes and other receivables, net 262,333    221,650   
Goodwill 448,317    428,833   
Other intangible assets, net 295,663    305,611   
Other assets, net 324,278    270,691   
Total Assets $12,040,990    $11,206,586   
Liabilities    
Secured debt $3,457,734    $3,489,983   
Unsecured debt 853,441    1,267,093   
Distributions payable 98,429    86,988   
Advanced reservation deposits and rent 290,913    187,730   
Accrued expenses and accounts payable 214,200    148,435   
Other liabilities 184,846    134,650   
Total Liabilities 5,099,563    5,314,879   
Commitments and contingencies    
Temporary equity 285,603    264,379   
Stockholders' Equity    
Common stock 1,159    1,076   
Additional paid-in capital 8,163,095    7,087,658   
Accumulated other comprehensive income 5,197    3,178   
Distributions in excess of accumulated earnings (1,614,243)  (1,566,636) 
Total Sun Communities, Inc. stockholders' equity 6,555,208    5,525,276   
Noncontrolling interests    
Common and preferred OP units 82,865    85,968   
Consolidated variable interest entities 17,751    16,084   
Total noncontrolling interests 100,616    102,052   
Total Stockholders' Equity 6,655,824    5,627,328   
Total Liabilities, Temporary Equity and Stockholders' Equity $12,040,990    $11,206,586   

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

 


 Three Months Ended Six Months Ended
 June 30, 2021 June 30, 2020 Change % Change June 30, 2021 June 30, 2020 Change % Change
Revenues               
Real property (excluding transient)$328,907    $225,413    $103,494    45.9  % $626,984    $453,415    $173,569    38.3  %
Real property - transient76,998    25,714    51,284    199.4  % 109,534    56,061    53,473    95.4  %
Home sales81,848    38,530    43,318    112.4  % 134,047    79,117    54,930    69.4  %
Service, retail, dining and entertainment106,452    7,700    98,752    N/M 157,064    12,803    144,261    N/M
Interest2,719    2,635    84    3.2  % 5,350    4,985    365    7.3  %
Brokerage commissions and other, net6,939    3,274    3,665    111.9  % 12,899    7,187    5,712    79.5  %
Total Revenues603,863    303,266    300,597    99.1  % 1,045,878    613,568    432,310    70.5  %
Expenses               
Property operating and maintenance129,961    70,804    59,157    83.6  % 233,514    140,638    92,876    66.0  %
Real estate tax23,202    17,723    5,479    30.9  % 45,610    34,899    10,711    30.7  %
Home costs and selling58,763    32,051    26,712    83.3  % 100,353    66,090    34,263    51.8  %
Service, retail, dining and entertainment78,585    7,242    71,343    N/M 124,016    13,924    110,092    N/M
General and administrative45,127    26,527    18,600    70.1  % 83,330    51,876    31,454    60.6  %
Catastrophic event-related charges, net355    (566)  921    162.7  % 2,769    40    2,729    N/M
Business combination, net(201)  —    (201)  N/A 1,031    —    1,031    N/A
Depreciation and amortization126,423    87,265    39,158    44.9  % 249,727    170,954    78,773    46.1  %
Loss on extinguishment of debt8,108    1,930    6,178    320.1  % 8,108    5,209    2,899    55.7  %
Interest37,681    31,428    6,253    19.9  % 77,198    63,844    13,354    20.9  %
Interest on mandatorily redeemable preferred OP units / equity1,041    1,042    (1)  (0.1)% 2,077    2,083    (6)  (0.3)%
Total Expenses509,045    275,446    233,599    84.8  % 927,733    549,557    378,176    68.8  %
Income Before Other Items94,818    27,820    66,998    240.8  % 118,145    64,011    54,134    84.6  %
Gain / (loss) on remeasurement of marketable securities27,494    24,519    2,975    12.1  % 31,155    (4,128)  35,283    N/M
Gain / (loss) on foreign currency translation(264)  10,374    (10,638)  (102.5)% (239)  (7,105)  6,866    (96.6)%
Other expense, net(6)(660)  (821)  161    19.6  % (1,759)  (1,793)  34    (1.9)%
Gain / (loss) on remeasurement of notes receivable93    246    (153)  (62.2)% 469    (1,866)  2,335    N/M
Income from nonconsolidated affiliates794    92    702    N/M 1,965    144    1,821    N/M
Gain / (loss) on remeasurement of investment in nonconsolidated affiliates(115)  1,132    (1,247)  (110.2)% (11)  (1,059)  1,048    (99.0)%
Current tax expense(1,245)  (119)  (1,126)  N/M (1,016)  (569)  (447)  78.6  %
Deferred tax benefit / (expense)(66)  112    (178)  N/M 81    242    (161)  (66.5)%
Net Income120,849    63,355    57,494    90.7  % 148,790    47,877    100,913    210.8  %
Less: Preferred return to preferred OP units / equity3,035    1,584    1,451    91.6  % 5,899    3,154    2,745    87.0  %
Less: Income attributable to noncontrolling interests7,044    2,861    4,183    146.2  % 7,339    1,899    5,440    286.5  %
Net Income Attributable to Sun Communities, Inc.$110,770    $58,910    $51,860    88.0  % $135,552    $42,824    $92,728    216.5  %
                
Weighted average common shares outstanding - basic112,082    95,859    16,223    16.9  % 110,007    94,134    15,873    16.9  %
Weighted average common shares outstanding - diluted112,082    95,860    16,222    16.9  % 112,593    94,525    18,068    19.1  %
                
Basic earnings per share$0.98    $0.61    $0.37    60.7  % $1.22    $0.45    $0.77    171.1  %
Diluted earnings per share$0.98    $0.61    $0.37    60.7  % $1.22    $0.45    $0.77    171.1  %

N/M = Percentage change is not meaningful.

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

 


Outstanding Securities - As of June 30, 2021
          
 Number of Units / Shares Outstanding Conversion Rate* If Converted(1) Issuance Price Per Unit* Annual Distribution Rate*
Non-convertible Securities         
Common shares115,889 N/A N/A N/A $3.32^
          
Convertible Securities         
Common OP units2,569 1.0000 2,569 N/A Mirrors common shares distributions
          
Series A-1 preferred OP units288 2.4390 703 $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%
Series J preferred OP units240 0.6061 145 $100 2.85%

^ 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 June 30, 2021      
       
Equity Shares Share Price* Total
Common shares 115,889   $171.40   $19,863,375  
Common OP units 2,569   $171.40   440,327  
Subtotal 118,458     $20,303,702  
       
Preferred OP units as converted 2,844   $171.40   487,462  
Total diluted shares outstanding 121,302     $20,791,164  
       
Debt      
Secured debt     $3,457,734  
Unsecured debt     853,441  
Total debt     $4,311,175  
       
Total Capitalization     $25,102,339  

Reconciliations to Non-GAAP Financial Measures

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

 


 Three Months Ended Six Months Ended
 June 30, 2021 June 30, 2020 June 30, 2021 June 30, 2020
Net Income Attributable to Sun Communities, Inc. Common Stockholders$110,770    $58,910    $135,552    $42,824   
Adjustments       
Depreciation and amortization126,227    87,296    249,303    171,048   
Depreciation on nonconsolidated affiliates31    19    61    19   
(Gain) / loss on remeasurement of marketable securities(27,494)  (24,519)  (31,155)  4,128   
(Gain) / loss on remeasurement of investment in nonconsolidated affiliates115    (1,132)  11    1,059   
(Gain) / loss on remeasurement of notes receivable(93)  (246)  (469)  1,866   
Income attributable to noncontrolling interests5,033    1,942    4,886    1,646   
Preferred return to preferred OP units478    —    958    1,000   
Interest expense on Aspen preferred OP units514    —    1,028    —   
Gain on disposition of assets, net(17,564)  (4,178)  (25,719)  (9,740) 
FFO Attributable to Sun Communities, Inc. Common Stockholders and Dilutive Convertible Securities(1)(4)$198,017    $118,092    $334,456    $213,850   
        
Adjustments       
Business combination expense and other acquisition related costs(7)2,284    504    4,237    889   
Loss on extinguishment of debt8,108    1,930    8,108    5,209   
Catastrophic event-related charges, net364    (567)  2,778    39   
Loss of earnings - catastrophic event-related—    —    200    300   
(Gain) / loss on foreign currency translation264    (10,374)  239    7,105   
Other expense, net517    552    1,233    854   
Deferred tax (benefits) / expenses66    188    (81)  58   
Core FFO Attributable to Sun Communities, Inc. Common Stockholders and Dilutive Convertible Securities(1)(4)$209,620    $110,325    $351,170    $228,304   
        
Weighted average common shares outstanding - basic112,082    95,859    110,007    94,134   
Add       
Common stock issuable upon conversion of stock options—       —      
Restricted stock580    305    372    390   
Common OP units2,577    2,448    2,586    2,430   
Common stock issuable upon conversion of certain preferred OP units1,174    —    1,180    815   
Weighted Average Common Shares Outstanding - Fully Diluted116,413    98,613    114,145    97,770   
        
FFO Attributable to Sun Communities, Inc. Common Stockholders and Dilutive Convertible Securities(1)(4) Per Share - Fully Diluted$1.70    $1.20    $2.93    $2.19   
        
Core FFO Attributable to Sun Communities, Inc. Common Stockholders and Dilutive Convertible Securities(1)(4) Per Share - Fully Diluted$1.80    $1.12    $3.08    $2.34   

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

 


 Three Months Ended Six Months Ended
 June 30, 2021 June 30, 2020 June 30, 2021 June 30, 2020
Net Income Attributable to Sun Communities, Inc. Common Stockholders$110,770    $58,910    $135,552    $42,824   
Interest income(2,719)  (2,635)  (5,350)  (4,985) 
Brokerage commissions and other revenues, net(6,939)  (3,274)  (12,899)  (7,187) 
General and administrative expense45,127    26,527    83,330    51,876   
Catastrophic event-related charges, net355    (566)  2,769    40   
Business combination expense, net(201)  —    1,031    —   
Depreciation and amortization126,423    87,265    249,727    170,954   
Loss on extinguishment of debt8,108    1,930    8,108    5,209   
Interest expense37,681    31,428    77,198    63,844   
Interest on mandatorily redeemable preferred OP units / equity1,041    1,042    2,077    2,083   
(Gain) / loss on remeasurement of marketable securities(27,494)  (24,519)  (31,155)  4,128   
(Gain) / loss on foreign currency translation264    (10,374)  239    7,105   
Other expense, net(6)660    821    1,759    1,793   
(Gain) / loss on remeasurement of notes receivable(93)  (246)  (469)  1,866   
Income from nonconsolidated affiliates(794)  (92)  (1,965)  (144) 
(Gain) / loss on remeasurement of investment in nonconsolidated affiliates115    (1,132)  11    1,059   
Current tax expense1,245    119    1,016    569   
Deferred tax (benefit) / expense66    (112)  (81)  (242) 
Preferred return to preferred OP units / equity3,035    1,584    5,899    3,154   
Income attributable to noncontrolling interests7,044    2,861    7,339    1,899   
NOI(1)$303,694    $169,537    $524,136    $345,845   


 Three Months Ended Six Months Ended
 June 30, 2021 June 30, 2020 June 30, 2021 June 30, 2020
Real Property NOI(1)$252,742   $162,600   $457,394   $333,939   
Home Sales NOI(1)23,085   6,479   33,694   13,027   
Service, retail, dining and entertainment NOI(1)27,867   458   33,048   (1,121) 
NOI(1)$303,694   $169,537   $524,136   $345,845   

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

 


 Three Months Ended Six Months Ended
 June 30, 2021 June 30, 2020 June 30, 2021 June 30, 2020
Net Income Attributable to Sun Communities, Inc. Common Stockholders$110,770    $58,910    $135,552    $42,824   
Adjustments       
Depreciation and amortization126,423    87,265    249,727    170,954   
Loss on extinguishment of debt8,108    1,930    8,108    5,209   
Interest expense37,681    31,428    77,198    63,844   
Interest on mandatorily redeemable preferred OP units / equity1,041    1,042    2,077    2,083   
Current tax expense1,245    119    1,016    569   
Deferred tax (benefit) / expense66    (112)  (81)  (242) 
Income from nonconsolidated affiliates(794)  (92)  (1,965)  (144) 
Less: Gain on dispositions of assets, net(17,564)  (4,178)  (25,719)  (9,740) 
EBITDAre(1)$266,976    $176,312    $445,913    $275,357   
Adjustments       
Catastrophic event-related charges, net355    (566)  2,769    40   
Business combination expense(201)  —    1,031    —   
(Gain) / loss on remeasurement of marketable securities(27,494)  (24,519)  (31,155)  4,128   
(Gain) / loss on foreign currency translation264    (10,374)  239    7,105   
Other expense, net(6)660    821    1,759    1,793   
(Gain) / loss on remeasurement of notes receivable(93)  (246)  (469)  1,866   
(Gain) / loss on remeasurement of investment in nonconsolidated affiliates115    (1,132)  11    1,059   
Preferred return to preferred OP units / equity3,035    1,584    5,899    3,154   
Income attributable to noncontrolling interests7,044    2,861    7,339    1,899   
Plus: Gain on dispositions of assets, net17,564    4,178    25,719    9,740   
Recurring EBITDA(1) $268,225    $148,919    $459,055    $306,141   

Non-GAAP and Other Financial Measures

Debt Analysis
(amounts in thousands)

 


 Quarter Ended
 6/30/2021 3/31/2021 12/31/2020 9/30/2020 6/30/2020
Debt Outstanding         
Mortgage term loans$3,418,097   $3,430,420   $3,444,967   $3,191,380   $3,205,507  
Collateralized term loan39,637   42,510   45,016   47,546   50,006  
Total secured debt3,457,734   3,472,930   3,489,983   3,238,926   3,255,513  
Senior unsecured notes591,688   —   —   —   —  
Line of credit and other debt191,841   875,093   1,197,181   31,775   65,346  
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  
Total unsecured debt853,441   945,005   1,267,093   101,687   135,258  
Total debt$4,311,175   $4,417,935   $4,757,076   $3,340,613   $3,390,771  
          
% Fixed / Floating         
Fixed94.7 % 79.3 % 74.0 % 97.6 % 96.6 %
Floating5.3 % 20.7 % 26.0 % 2.4 % 3.4 %
Total100.0 % 100.0 % 100.0 % 100.0 % 100.0 %
          
Weighted Average Interest Rates         
Mortgage term loans3.78 % 3.78 % 3.78 % 3.88 % 3.88 %
Collateralized term loan1.30 % 1.29 % 1.31 % 1.31 % 1.31 %
Senior unsecured notes2.70 % — % — % — % — %
Line of credit and other debt(8)0.93 % 1.77 % 2.11 % 1.34 % 2.57 %
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 %
Total average3.52 % 3.39 % 3.37 % 3.86 % 3.86 %
          
Debt Ratios         
Net Debt / Recurring EBITDA(1) (TTM)5.1   6.1   6.9   5.0   4.8  
Net Debt / Enterprise Value16.8 % 19.7 % 21.4 % 18.3 % 17.8 %
Net Debt / Gross Assets29.6 % 31.8 % 35.5 % 31.6 % 29.7 %
          
Coverage Ratios         
Recurring EBITDA(1) (TTM) / Interest5.6 5.0 4.9 4.8 4.5
Recurring EBITDA(1) (TTM) / Interest + Pref. Distributions + Pref. Stock Distribution5.5 4.8 4.8 4.6 4.4


Maturities / Principal Amortization Next Five Years2021 2022 2023 2024 2025
Mortgage term loans         
Maturities$—   $82,155   $185,619   $315,330   $50,529  
Principal amortization30,083   61,411   60,788   57,344   53,933  
Collateralized term loan4,621   10,000   25,016   —   —  
Line of credit and other debt—   1,509   —   —   190,332  
Preferred Equity - Sun NG Resorts - mandatorily redeemable—   —   —   33,428   1,821  
Preferred OP units - mandatorily redeemable—   —   —   27,373   —  
Total$34,704   $155,075   $271,423   $433,475   $296,615  
          
Weighted average rate of maturities— % 4.46 % 4.08 % 4.47 % 4.04 %

Same Community(2)
(amounts in thousands)

 


                        
 Three Months Ended
 Total Same Community MH RV
 June 30, 2021 June 30, 2020 Change % Change June 30, 2021 June 30, 2020 Change % Change June 30, 2021 June 30, 2020 Change % Change
Financial Information                       
Revenue                       
Real property (excluding transient)$219,693   $205,449   $14,244   6.9 % $174,158   $166,473   $7,685   4.6 % $45,535   $38,976   $6,559   16.8 %
Real property - transient51,481   21,510   29,971   139.3 % 362   173   189   109.2 % 51,119   21,337   29,782   139.6 %
Other10,798   3,219   7,579   235.4 % 4,869   1,130   3,739   330.9 % 5,929   2,089   3,840   183.8 %
Total Operating281,972   230,178   51,794   22.5 % 179,389   167,776   11,613   6.9 % 102,583   62,402   40,181   64.4 %
Expense                       
Property Operating(9)(10)87,459   70,159   17,300   24.7 % 44,984   40,226   4,758   11.8 % 42,475   29,933   12,542   41.9 %
Real Property NOI(1)$194,513   $160,019   $34,494   21.6 % $134,405   $127,550   $6,855   5.4 % $60,108   $32,469   $27,639   85.1 %


 Six Months Ended
 Total Same Community MH RV
 June 30, 2021 June 30, 2020 Change % Change June 30, 2021 June 30, 2020 Change % Change June 30, 2021 June 30, 2020 Change % Change
Financial Information                       
Revenue                       
Real property (excluding Transient)$435,054   $410,667   $24,387   5.9 % $346,900   $331,301   $15,599    4.7  % $88,154   $79,366   $8,788   11.1 %
Real property - transient76,883   49,869   27,014   54.2 % 962   1,101   (139)  (12.6)% 75,921   48,768   27,153   55.7 %
Other17,793   9,071   8,722   96.2 % 9,695   4,940   4,755    96.3  % 8,098   4,131   3,967   96.0 %
Total Operating529,730   469,607   60,123   12.8 % 357,557   337,342   20,215    6.0  % 172,173   132,265   39,908   30.2 %
Expense                       
Property Operating(9)(10)159,973   138,879   21,094   15.2 % 87,989   80,911   7,078    8.7  % 71,984   57,968   14,016   24.2 %
Real Property NOI(1)$369,757   $330,728   $39,029   11.8 % $269,568   $256,431   $13,137    5.1  % $100,189   $74,297   $25,892   34.8 %

Same Community(2) (continued)

 


 As of     
 June 30, 2021 June 30, 2020 Change % Change
Other Information       
Number of properties405   405   —     
        
MH occupancy97.4 %      
RV occupancy100.0 %      
MH & RV blended occupancy(3)98.0 %      
        
Adjusted MH occupancy(3)98.5 %      
Adjusted RV occupancy(3)100.0 %      
Adjusted MH & RV blended occupancy(3)98.8 % 97.2 % 1.6  %  
        
Sites available for development7,246   7,553   (307)   
        
Monthly base rent per site - MH$601   $583   $18    3.1%(12)
Monthly base rent per site - RV(11)$527   $504   $23    4.7%(12)
Monthly base rent per site - Total(11)$584   $565   $19    3.3%(12)

Marina Summary
(amounts in thousands except for statistical data)

 


     
  Three Months Ended Six Months Ended
  June 30, 2021 June 30, 2021
Financial Information    
Revenues    
Real property (excluding transient) $61,914   $108,020
Real property - transient 4,257   5,125
Other 3,671   5,319
Total Operating 69,842   118,464
Expenses    
Property Operating(a) 28,246   51,821
Real Property NOI 41,596   66,643
Service, retail, dining and entertainment    
Service, retail, dining and entertainment revenue 82,238   126,592
Service, retail, dining and entertainment expense 61,017   99,026
Service, Retail, Dining and Entertainment NOI 21,221   27,566
     
Marina NOI $62,817   $94,209
     
Other Information - Marinas   June 30, 2021
Number of properties(b)   114
Total wet slips and dry storage   41,275

(a) Marina results net $3.7 million and $6.3 million of certain utility revenue against the related utility expense in property operating and maintenance expense for the quarter and six months ended June 30, 2021.

(b) Marina properties comprised of eight 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 Six Months Ended
  June 30, 2021 June 30, 2021
Financial Information    
Revenues    
Real property (excluding transient) $8,522 $15,820  
Real property - transient 21,259 27,525  
Other income 2,767 3,122  
Total Operating 32,548 46,467  
Expenses    
Property Operating(a) 15,915 25,475  
Real Property NOI $16,633 $20,992  
     
Other Information - MH and RVs   June 30, 2021
Number of properties   50  
Occupied sites   5,474  
Developed sites   6,322  
Occupancy %   86.6 %
Transient sites   8,122  

(a) MH and RV Acquisitions and Other results net $1.1 million and $2.3 million of certain utility revenue against the related utility expense in property operating and maintenance expense for the quarter and six months ended June 30, 2021.

Home Sales Summary
(amounts in thousands except for *)

 


                
 Three Months Ended Six Months Ended
 June 30, 2021 June 30, 2020 Change % Change June 30, 2021 June 30, 2020 Change % Change
Financial Information               
New Homes               
New home sales$34,761   $19,206   $15,555   81.0 % $57,733   $34,802   $22,931   65.9 %
New home cost of sales28,269   15,707   12,562   80.0 % 46,943   28,317   18,626   65.8 %
Gross Profit – new homes6,492   3,499   2,993   85.5 % 10,790   6,485   4,305   66.4 %
Gross margin % – new homes18.7 % 18.2 % 0.5 %   18.7 % 18.6 % 0.1 %  
Average selling price – new homes*$153,132   $137,186   $15,946   11.6 % $153,545   $134,371   $19,174   14.3 %
                
Pre-owned Homes               
Pre-owned home sales$47,087   $19,324   $27,763   143.7 % $76,314   $44,315   $31,999   72.2 %
Pre-owned home cost of sales25,945   13,474   12,471   92.6 % 44,529   30,896   13,633   44.1 %
Gross Profit – pre-owned homes21,142   5,850   15,292   261.4 % 31,785   13,419   18,366   136.9 %
Gross margin % – pre-owned homes44.9 % 30.3 % 14.6 %   41.7 % 30.3 % 11.4 %  
Average selling price – pre-owned homes*$50,577   $41,028   $9,549   23.3 % $47,195   $39,744   $7,451   18.7 %
                
Total Home Sales               
Revenue from home sales$81,848   $38,530   $43,318   112.4 % $134,047   $79,117   $54,930   69.4 %
Cost of home sales54,214   29,181   25,033   85.8 % 91,472   59,213   32,259   54.5 %
Home selling expenses4,549   2,870   1,679   58.5 % 8,881   6,877   2,004   29.1 %
Home Sales NOI(1)$23,085   $6,479   $16,606   256.3 % $33,694   $13,027   $20,667   158.6 %
                
Statistical Information               
New home sales volume*227   140   87   62.1 % 376   259   117   45.2 %
Pre-owned home sales volume*931   471   460   97.7 % 1,617   1,115   502   45.0 %
Total home sales volume*1,158   611   547   89.5 % 1,993   1,374   619   45.1 %

Rental Program Summary
(amounts in thousands except for *)

 


                
 Three Months Ended Six Months Ended
 June 30, 2021 June 30, 2020 Change % Change June 30, 2021 June 30, 2020 Change % Change
Financial Information               
Revenues               
Home rent$17,060   $14,968   $2,092   14.0 % $34,082   $30,436   $3,646    12.0  %
Site rent18,649   18,591   58   0.3 % 37,766   36,598   1,168    3.2  %
Total35,709   33,559   2,150   6.4 % 71,848   67,034   4,814    7.2  %
                
Expenses               
Rental Program operating and maintenance4,561   4,425   136   3.1 % 9,785   9,248   537    5.8  %
Rental Program NOI(1)$31,148   $29,134   $2,014   6.9 % $62,063   $57,786   $4,277    7.4  %
                
Other Information               
Number of sold rental homes*281   122   159   130.3 % 492   356   136    38.2  %
Number of occupied rentals, end of period*        10,951   11,785   (834)  (7.1)%
Investment in occupied rental homes, end of period        $601,798   $621,327   $(19,529)  (3.1)%
Weighted average monthly rental rate, end of period*        $1,076   $1,018   $58    5.7  %

Rental Program NOI is included in Real Property NOI. 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        
           
           
  6/30/2021 3/31/2021 12/31/2020 9/30/2020 6/30/2020
FLORIDA          
Properties 129   128   128   127   125  
MH & Annual RV Developed sites(14) 40,171   40,011   39,803   39,517   39,241  
Occupied MH & Annual RV(14) 39,402   39,283   39,063   38,743   38,453  
MH & Annual RV Occupancy %(14) 98.1 % 98.2 % 98.1 % 98.0 % 98.0 %
Transient RV sites 5,895   5,823   6,011   5,993   5,547  
Sites for development 1,414   1,497   1,497   1,427   1,427  
MICHIGAN          
Properties 75   74   74   74   72  
MH & Annual RV Developed sites(14) 29,600   29,092   29,086   29,086   27,901  
Occupied MH & Annual RV(14) 28,671   28,145   28,109   28,033   27,191  
MH & Annual RV Occupancy %(14) 96.9 % 96.7 % 96.6 % 96.4 % 97.5 %
Transient RV sites 509   541   546   546   572  
Sites for development 1,182   1,182   1,182   1,182   1,182  
CALIFORNIA          
Properties 36   36   35   34   32  
MH & Annual RV Developed sites(14) 6,736   6,734   6,675   6,372   6,364  
Occupied MH & Annual RV(14) 6,613   6,609   6,602   6,290   6,272  
MH & Annual RV Occupancy %(14) 98.2 % 98.1 % 98.9 % 98.7 % 98.6 %
Transient RV sites 2,416   2,418   2,231   2,236   1,978  
Sites for development 127   127   373   373   264  
TEXAS           
Properties 25   24   24   24   23  
MH & Annual RV Developed sites(14) 7,947   7,928   7,766   7,659   7,641  
Occupied MH & Annual RV(14) 7,731   7,671   7,572   7,427   7,289  
MH & Annual RV Occupancy %(14) 97.3 % 96.8 % 97.5 % 97.0 % 95.4 %
Transient RV sites 1,835   1,773   1,810   1,917   1,590  
Sites for development 1,194   1,275   1,378   1,378   565  
ONTARIO, CANADA          
Properties 16   16   15   15   15  
MH & Annual RV Developed sites(14) 4,302   4,199   4,090   4,067   3,980  
Occupied MH & Annual RV(14) 4,302   4,199   4,090   4,067   3,980  
MH & Annual RV Occupancy %(14) 100.0 % 100.0 % 100.0 % 100.0 % 100.0 %
Transient RV sites 870   964   966   920   1,007  
Sites for development 1,525   1,525   1,525   1,593   1,593  
CONNECTICUT          
Properties 16   16   16   16   16  
MH & Annual RV Developed sites(14) 1,901   1,897   1,897   1,898   1,898  
Occupied MH & Annual RV(14) 1,757   1,746   1,739   1,736   1,735  
MH & Annual RV Occupancy %(14) 92.4 % 92.0 % 91.7 % 91.5 % 91.4 %
Transient RV sites 104   108   108   107   107  
Sites for development —   —   —   —   —  
ARIZONA          
Properties 14   14   14   13   13  
MH & Annual RV Developed sites(14) 4,401   4,391   4,323   4,274   4,259  
Occupied MH & Annual RV(14) 4,116   4,101   4,030   3,957   3,932  
MH & Annual RV Occupancy %(14) 93.5 % 93.4 % 93.2 % 92.6 % 92.3 %
Transient RV sites 1,260   1,270   1,337   1,386   1,401  
Sites for development —   —   —   —   —  
           
           
MAINE          
Properties 13   13   13      
MH & Annual RV Developed sites(14) 2,204   2,190   2,190   1,092   1,074  
Occupied MH & Annual RV(14) 2,127   2,119   2,121   1,089   1,069  
MH & Annual RV Occupancy %(14) 96.5 % 96.8 % 96.8 % 99.7 % 99.5 %
Transient RV sites 792   805   805   819   837  
Sites for development 30   30   30   30   30  
INDIANA          
Properties 12   12   12   11   11  
MH & Annual RV Developed sites(14) 3,087   3,087   3,087   3,087   3,087  
Occupied MH & Annual RV(14) 2,970   2,961   2,950   2,957   2,961  
MH & Annual RV Occupancy %(14) 96.2 % 95.9 % 95.6 % 95.8 % 95.9 %
Transient RV sites 1,089   1,089   1,089   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   2,453   2,441  
Occupied MH & Annual RV(14) 2,420   2,395   2,380   2,365   2,327  
MH & Annual RV Occupancy %(14) 98.7 % 97.6 % 97.0 % 96.4 % 95.3 %
Transient RV sites 987   962   962   930   574  
Sites for development 1,225   1,250   1,250   1,282   1,566  
NEW HAMPSHIRE          
Properties 10   10   10   10   10  
MH & Annual RV Developed sites(14) 1,777   1,776   1,777   1,833   1,827  
Occupied MH & Annual RV(14) 1,769   1,769   1,767   1,822   1,816  
MH & Annual RV Occupancy %(14) 99.5 % 99.6 % 99.4 % 99.4 % 99.4 %
Transient RV sites 602   456   460   404   410  
Sites for development 151   151   151   151   151  
NEW YORK          
Properties 10   10        
MH & Annual RV Developed sites(14) 1,457   1,452   1,419   1,414   1,403  
Occupied MH & Annual RV(14) 1,428   1,415   1,380   1,371   1,358  
MH & Annual RV Occupancy %(14) 98.0 % 97.5 % 97.3 % 97.0 % 96.8 %
Transient RV sites 1,684   1,689   1,422   900   911  
Sites for development 371   371   371   371   371  
OHIO           
Properties          
MH & Annual RV Developed sites(14) 2,797   2,797   2,790   2,790   2,778  
Occupied MH & Annual RV(14) 2,770   2,760   2,755   2,758   2,736  
MH & Annual RV Occupancy %(14) 99.0 % 98.7 % 98.7 % 98.9 % 98.5 %
Transient RV sites 128   128   135   135   147  
Sites for development 22   22   22   22   22  
OTHER STATES           
Properties 80   80   77   73   74  
MH & Annual RV Developed sites(14) 17,422   17,310   16,896   16,484   16,578  
Occupied MH & Annual RV(14) 16,934   16,796   16,394   15,977   16,046  
MH & Annual RV Occupancy %(14) 97.2 % 97.0 % 97.0 % 96.9 % 96.8 %
Transient RV sites 8,861   8,269   7,161   6,901   6,745  
Sites for development 1,925   1,969   1,969   2,044   2,294  
           
TOTAL - MH AND RV PORTFOLIO           
Properties 455   452   446   432   426  
MH & Annual RV Developed sites(14) 126,255   125,317   124,252   122,026   120,472  
Occupied MH & Annual RV(14) 123,010   121,969   120,952   118,592   117,165  
MH & Annual RV Occupancy %(14) 97.4 %(15)97.3 % 97.3 % 97.2 % 97.3 %
Transient RV sites 27,032   26,295   25,043   23,728   22,360  
Sites for development(16) 9,443   9,676   10,025   10,130   9,742  
% Communities age restricted 32.5 % 32.7 % 33.2 % 33.6 % 34.0 %


Marina Property Summary(a)      
       
       
  6/30/2021 03/31/2021 12/31/2020
FLORIDA      
Properties 18   16   14  
Total wet slips and dry storage spaces 4,186   3,837   3,585  
CONNECTICUT      
Properties 11   11   11  
Total wet slips and dry storage spaces 3,262   3,262   3,262  
RHODE ISLAND      
Properties 11   11   11  
Total wet slips and dry storage spaces 3,207   2,829   2,829  
MASSACHUSETTS      
Properties      
Total wet slips and dry storage spaces 2,650   2,650   2,223  
NEW YORK      
Properties      
Total wet slips and dry storage spaces 2,629   2,629   2,629  
MARYLAND      
Properties      
Total wet slips and dry storage spaces 2,110   2,110   2,110  
OTHER STATES      
Properties 49   47   47  
Total wet slips and dry storage spaces 23,231   22,693   22,693  
TOTAL - MARINA PORTFOLIO      
Properties 114   110   106  
Total wet slips and dry storage spaces 41,275   40,010   39,331  

(a) Total wet slips and dry storage spaces are adjusted each quarter based on site 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$178  $149  $21,697  $5,909  $16,945  $692,344  $90,380  $36,357  
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 1,251   319   116   126   972  
Michigan 241   113   29   807   124  
Ontario, Canada 471   121   43     221  
Texas 177   159   44   213   39  
Arizona 60   86   15   23   132  
Indiana 34   20     147    
Ohio 58   15     59    
California 68   11   14     82  
Colorado   40   34   16   21  
Connecticut 19   18   20     25  
New York 87   24        
New Hampshire —       —   22  
Maine 73          
Other states 702   163   39   208   110  
Six Months Ended June 30, 2021 3,242   1,097   376   1,617   1,774  


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 2.1 % 8.1 %
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 119,933 developed sites, of which 117,536 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 118,907 developed sites, of which 117,536 were occupied. The number of developed sites excludes RV transient sites and over 1,000 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 Six Months Ended
 June 30, 2021 June 30, 2020 June 30, 2021 June 30, 2020
Foreign currency remeasurement income / (loss)$181    $(195)  $159    $(415) 
Contingent consideration expense(72)  (84)  (143)  (166) 
Long term lease termination expense—    (273)  —    (273) 
GTSC repair reserve(144)  (269)  (525)  (939) 
Non-cash lease amortization expense(625)  —    (1,250)  —   
Other expenses, net$(660)  $(821)  $(1,759)  $(1,793) 

(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)   Line of credit and other debt includes borrowings under the Company's $2.0 billion New Credit Facility and a $12.0 million MH floor plan facility. The effective interest rate on the MH floor plan facility was 7.0 percent for the quarters ended June 30 and March 31, 2021, and 6.0 percent for the quarters ended December 31, September 30 and June 30, 2020. However, the Company pays no interest if the floor plan balance is repaid within 60 days.

(9)   Same Community results net $16.8 million and $14.3 million of certain utility revenue against the related utility expense in property operating and maintenance expense for the three months ended June 30, 2021 and 2020, respectively. Same Community results net $33.2 million and $29.1 million of utility revenue against the related utility expense in property operating and maintenance expense for the six months ended June 30, 2021 and 2020, respectively.

(10)   Same Community supplies and repair expense excludes $0.5 million and $0.9 million for the three and six months ended June 30, 2020, respectively, 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 eight properties acquired and five 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, seven 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 June 30, 2021, total portfolio MH occupancy was 96.7 percent inclusive of the impact of nearly 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 77.9 percent for expansion, 19.8 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)   Lot modification capital expenditures are MH expenditures necessary to 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 six months ended June 30, 2021 include $70.7 million of capital improvements identified during due diligence that are necessary to bring the communities, resorts and marinas 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