Company Announcements

Sun Communities, Inc. Reports 2021 Third Quarter Results

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

Southfield, MI, Oct. 25, 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 third quarter results for 2021.

Financial Results for the Quarter and Nine Months Ended September 30, 2021

For the quarter ended September 30, 2021, total revenues increased $283.8 million, or 70.9 percent, to approximately $684.3 million compared to $400.5 million for the same period in 2020. Net income attributable to common stockholders increased $150.6 million, or 185.4 percent, to approximately $231.8 million, or $2.00 per diluted common share, compared to net income attributable to common stockholders of $81.2 million, or $0.83 per diluted common share, for the same period in 2020.

For the nine months ended September 30, 2021, total revenues increased $716.1 million, or 70.6 percent, to $1.7 billion compared to approximately $1.0 billion for the same period in 2020. Net income attributable to common stockholders increased $243.3 million, or 196.2 percent, to approximately $367.3 million, or $3.27 per diluted common share, compared to net income attributable to common stockholders of $124.0 million, or $1.29 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 September 30, 2021, was $2.11 per diluted share and OP unit ("Share") as compared to $1.60 in the corresponding period in 2020, a 31.9 percent increase.

  • Same Community(2) Net Operating Income ("NOI")(1) increased by 12.4 percent for the quarter ended September 30, 2021, as compared to the corresponding period in 2020.

  • Home Sales Volume increased 63.7 percent to 1,162 homes for the quarter ended September 30, 2021, as compared to 710 homes in the same period in 2020.

  • Acquisitions totaled $500.8 million during and subsequent to the quarter ended September 30, 2021, including 9 MH communities, 7 RV resorts and 6 marinas.

Gary Shiffman, Chief Executive Officer stated, "We are pleased with our third quarter results which highlight successful execution across all of our growth strategies. The RV segment continues to deliver strong results producing same community NOI growth of nearly 31 percent in the quarter, as we benefit from the demand for outdoor experiences coming from existing and new Sun customers. As the leading industry consolidator, we have completed $1.1 billion of acquisitions year-to-date, and believe our cycle tested ability to create value through acquisitions will continue to result in accretive growth. We have remained active in the capital markets to support this growth including completing our second bond offering of the year. Our talented team will continue to execute on opportunities across operations, acquisitions, expansions and ground-up developments, providing us with a confident outlook."

OPERATING HIGHLIGHTS

Portfolio Occupancy

Total MH and annual RV occupancy was 97.4 percent at September 30, 2021 as compared to 97.2 percent at September 30, 2020, an increase of 20 basis points.

During the quarter ended September 30, 2021, MH and annual RV revenue producing sites increased by 576 sites as compared to an increase of 776 sites during the quarter ended September 30, 2020.

During the nine months ended September 30, 2021, MH and annual RV revenue producing sites increased by 1,673 sites as compared to an increase of 1,927 sites during the nine months ended September 30, 2020.

Same Community(2) Results

For the 403 MH and RV properties owned and operated by the Company since January 1, 2020, the following table reflects the percentage increases, in total and by segment, for the quarter and nine months ended September 30, 2021:

 Quarter Ended September 30, 2021
 Total Same Community MH RV
Revenue12.8 % 5.2 % 24.2 %
Expense13.7 % 12.7 % 14.8 %
NOI12.4 % 2.6 % 30.6 %


 Nine Months Ended September 30, 2021
 Total Same Community MH RV
Revenue12.9 % 5.8 % 27.4 %
Expense14.6 % 10.2 % 20.0 %
NOI12.1 % 4.3 % 32.8 %

Same Community adjusted occupancy(3) increased to 98.9 percent at September 30, 2021 from 97.4 percent at September 30, 2020, an increase of 150 basis points.

Home Sales

The following table reflects the home sales volume increases for the quarter and nine months ended September 30, 2021:

 Quarter Ended Nine Months Ended
 September 30, 2021 September 30, 2020 Change % Change September 30, 2021 September 30, 2020 Change % Change
New home sales volume207   155   52   33.5 % 583   414   169   40.8 %
Pre-owned home sales volume955   555   400   72.1 % 2,572   1,670   902   54.0 %
Total home sales volume1,162   710   452   63.7 % 3,155   2,084   1,071   51.4 %

Marina Results

Marina NOI was $64.5 million and $158.7 million for the quarter and nine months ended September 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 September 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
Allen Harbor Marina 165   —   RI $4.0   July
Cisco Grove Campground & RV RV 18   407   CA 6.6   July
Four Leaf Portfolio(a) MH 2,545   340   MI / IN 215.0   July
Harborage Yacht Club Marina 300   —   FL 22.0   July
Zeman Portfolio(b) RV 686   —   IL / NJ 15.2   July
Southern Leisure Resort RV 496   —   FL 17.8   August
Sunroad Marina Marina 617   —   CA 84.4   August
Lazy Lakes RV RV 99   —   FL 9.8   August
Puerto del Rey Marina 1,450   —   Puerto Rico 92.3   September
Stingray Point Marina 219   —   VA 2.9   September
Detroit River Marina 440   —   MI 8.8   September
Jetstream RV Resort RV 202   —   TX 17.5   September
Subtotal   7,237   747     496.3    
             
Acquisitions subsequent to quarter end        
Beaver Brook Campground RV 204   150   ME 4.5   October
Subtotal   204   150     4.5    
             
Total acquisitions   7,441   897     $500.8    

(a) Includes nine MH communities.

(b) Includes two RV communities.

During and subsequent to the nine months ended September 30, 2021, the Company acquired 38 properties totaling 11,910 sites, wet slips and dry storage spaces and 897 sites for expansion for a total purchase price of $1.1 billion.

During the quarter ended September 30, 2021, the Company acquired three land parcels, which are located in Ft. Collins and Ft. Lupton, Colorado and Leighton, Michigan, approved for the development of over 500 MH sites, for total consideration of $7.7 million.

During the quarter ended September 30, 2021, the Company sold six MH communities located in Arizona, Illinois, Indiana and Missouri for $162.1 million.

Construction Activity

During the quarter ended September 30, 2021, the Company completed the construction of over 230 sites in two ground-up developments and over 90 expansion sites in two RV resorts.

During the nine months ended September 30, 2021, the Company completed the construction of over 580 sites in four ground-up developments and over 320 expansion sites in three MH communities and three RV resorts.

BALANCE SHEET, CAPITAL MARKETS ACTIVITY AND OTHER ITEMS

Debt

As of September 30, 2021, the Company had approximately $4.7 billion in debt outstanding. The weighted average interest rate was 3.3 percent and the weighted average maturity was 9.6 years. At September 30, 2021, the Company's net debt to trailing twelve month Recurring EBITDA(1) ratio was 4.9 times. The Company had $71.6 million of unrestricted cash on hand.

Senior Unsecured Notes

Subsequent to the quarter ended September 30, 2021, Sun Communities Operating Limited Partnership ("SCOLP"), the Company's operating partnership, issued $450.0 million of senior unsecured notes with an interest rate of 2.3 percent and a seven-year term, due November 1, 2028 (the "2028 Notes"), and $150.0 million of senior unsecured notes with an interest rate of 2.7 percent, with a 10-year term, due July 15, 2031 (the "2031 Notes"). The 2031 Notes are additional notes of the same series as the $600.0 million aggregate principal amount of 2.7 percent Senior Notes which are due July 15, 2031 that SCOLP issued on June 28, 2021. The net proceeds from the offering were approximately $595.5 million after deducting underwriters' discounts and estimated offering expenses.

Equity Transaction

At the Market Offering

In September 2021, the Company completed the sale of 107,400 forward shares of common stock for $21.4 million under the terms of its At the Market Offering Sales Agreement. The average price before underwriting discounts and commissions was $199.42 per share. The Company expects to settle the forward shares by September 2022.

2021 GUIDANCE

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

   Previous Range Revised Range  
   FY 2021E FY 2021E 4Q 2021E
Basic earnings per share  $2.24 - $2.36 $3.42 - $3.48 $0.15 - $0.21
Core FFO(1) per fully diluted Share  $6.25 - $6.37 $6.44 - $6.50 $1.24 - $1.30

Basic earnings per share and Core FFO(1) per fully diluted share and calculated independently for each quarter; as a result, the sum of the quarters may differ from the annual calculation. Full year 2021 guidance is based on the annual calculation.

   Previous Range Revised Range  
   FY 2021E FY 2021E 4Q 2021E
Same Community NOI(1) growth  9.9% - 10.7% 10.9% - 11.1% 7.2% - 8.0%

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 third quarter results will be held on Tuesday, October 26, 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 November 9, 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 13722742. The conference call will be available live on Sun Communities' website located at www.suncommunities.com. The replay will also be available on the website.

Sun Communities, Inc. is a REIT that, as of September 30, 2021, owned, operated, or had an interest in a portfolio of 584 developed MH, RV and marina properties comprising nearly 155,900 developed sites and nearly 44,900 wet slips and dry storage spaces in 38 states, Canada and Puerto Rico.

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, droughts 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 and boat 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
Barclays Anthony Powell (212) 526-8768 anthony.powell@barclays.com
  Allison Gelman (212) 526-3367 allison.gelman@barclays.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
       
       
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 September 30, 2021)

 


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

 


 Quarter Ended
 9/30/2021 6/30/2021 3/31/2021 12/31/2020 9/30/2020
Financial Information         
Total revenues$684,294   $603,863   $442,015   $384,265   $400,514  
Net income$250,161   $120,849   $27,941   $9,818   $89,756  
Net income attributable to Sun Communities Inc. common stockholders$231,770   $110,770   $24,782   $7,586   $81,204  
Basic earnings per share*$2.00   $0.98   $0.23   $0.07   $0.83  
Diluted earnings per share*$2.00   $0.98   $0.23   $0.07   $0.83  
          
Cash distributions declared per common share*$0.83   $0.83   $0.83   $0.79   $0.79  
          
Recurring EBITDA(1) $314,499   $268,225   $190,830   $168,527   $199,321  
FFO attributable to Sun Communities, Inc. common stockholders and dilutive convertible securities(1)(4)
$223,069   $198,017   $135,925   $110,849   $165,209  
Core FFO attributable to Sun Communities, Inc. common stockholders and dilutive convertible securities(1)(4)
$244,535   $209,620   $141,036   $124,872   $162,624  
FFO attributable to Sun Communities, Inc. common stockholders and dilutive convertible securities(1)(4) per share - fully diluted*$1.92   $1.70   $1.22   $1.03   $1.63  
Core FFO attributable to Sun Communities, Inc. common stockholders and dilutive convertible securities(1)(4) per share - fully diluted*$2.11   $1.80   $1.26   $1.16   $1.60  
          
Balance Sheet         
Total assets$12,583,296   $12,040,990   $11,454,209   $11,206,586   $8,335,717  
Total debt$4,689,437   $4,311,175   $4,417,935   $4,757,076   $3,340,613  
Total liabilities$5,488,469   $5,099,563   $5,101,512   $5,314,879   $3,791,922  


 Quarter Ended
 9/30/2021 6/30/2021 3/31/2021 12/31/2020 9/30/2020
Operating Information*         
Properties584 569 562 552 432
          
Manufactured home sites98,301 97,448 96,876 96,688 95,209
Annual RV sites29,640 28,807 28,441 27,564 26,817
Transient RV sites27,922 27,032 26,295 25,043 23,728
Total sites155,863 153,287 151,612 149,295 145,754
Marina wet slips and dry storage spaces44,859 41,275 38,753 38,152 N/A
          
MH occupancy96.6 % 96.7 % 96.5 % 96.6 % 96.4 %
Annual RV occupancy100.0 % 100.0 % 100.0 % 100.0 % 100.0 %
Blended MH and annual RV occupancy97.4 % 97.4 % 97.3 % 97.3 % 97.2 %
          
New home sales volume207 227 149 156 155
Pre-owned home sales volume955 931 686 626 555
Total home sales volume1,162 1,158 835 782 710


 Quarter Ended
 9/30/2021 6/30/2021 3/31/2021 12/31/2020 9/30/2020
Revenue Producing Site Net Gains(5)         
MH net leased sites144 226 127   247 349
RV net leased sites432 357 387   331 427
Total net leased sites576 583 514   578 776

Consolidated Balance Sheets
(amounts in thousands)

 


  September 30, 2021 December 31, 2020
Assets    
Land $2,457,236    $2,119,364   
Land improvements and buildings 9,469,247    8,480,597   
Rental homes and improvements 591,367    637,603   
Furniture, fixtures and equipment 590,829    447,039   
Investment property 13,108,679    11,684,603   
Accumulated depreciation (2,232,243)  (1,968,812) 
Investment property, net 10,876,436    9,715,791   
Cash, cash equivalents and restricted cash 85,619    92,641   
Marketable securities 160,321    124,726   
Inventory of manufactured homes 43,708    46,643   
Notes and other receivables, net 256,924    221,650   
Goodwill 461,609    428,833   
Other intangible assets, net 297,625    305,611   
Other assets, net 401,054    270,691   
Total Assets $12,583,296    $11,206,586   
Liabilities    
Secured debt $3,403,436    $3,489,983   
Unsecured debt 1,286,001    1,267,093   
Distributions payable 98,453    86,988   
Advanced reservation deposits and rent 223,471    187,730   
Accrued expenses and accounts payable 232,590    148,435   
Other liabilities 244,518    134,650   
Total Liabilities 5,488,469    5,314,879   
Commitments and contingencies    
Temporary equity 292,394    264,379   
Stockholders' Equity    
Common stock 1,160    1,076   
Additional paid-in capital 8,170,322    7,087,658   
Accumulated other comprehensive income 1,752    3,178   
Distributions in excess of accumulated earnings (1,475,634)  (1,566,636) 
Total Sun Communities, Inc. stockholders' equity 6,697,600    5,525,276   
Noncontrolling interests    
Common and preferred OP units 85,756    85,968   
Consolidated entities 19,077    16,084   
Total noncontrolling interests 104,833    102,052   
Total Stockholders' Equity 6,802,433    5,627,328   
Total Liabilities, Temporary Equity and Stockholders' Equity $12,583,296    $11,206,586   

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

 


 Three Months Ended Nine Months Ended
 September 30, 2021 September 30, 2020 Change % Change September 30, 2021 September 30, 2020 Change % Change
Revenues               
Real property (excluding transient)$352,553    $240,076    $112,477    46.9  % $979,537    $693,491    $286,046    41.2  %
Real property - transient126,072    80,412    45,660    56.8  % 235,606    136,473    99,133    72.6  %
Home sales81,099    47,662    33,437    70.2  % 215,146    126,779    88,367    69.7  %
Service, retail, dining and entertainment113,039    23,859    89,180    373.8  % 270,103    36,662    233,441    636.7  %
Interest2,690    2,624    66    2.5  % 8,040    7,609    431    5.7  %
Brokerage commissions and other, net8,841    5,881    2,960    50.3  % 21,740    13,068    8,672    66.4  %
Total Revenues684,294    400,514    283,780    70.9  % 1,730,172    1,014,082    716,090    70.6  %
Expenses               
Property operating and maintenance158,095    98,775    59,320    60.1  % 391,609    239,413    152,196    63.6  %
Real estate tax24,751    17,442    7,309    41.9  % 70,361    52,341    18,020    34.4  %
Home costs and selling56,567    39,899    16,668    41.8  % 156,920    105,989    50,931    48.1  %
Service, retail, dining and entertainment87,106    17,615    69,491    394.5  % 211,122    31,539    179,583    569.4  %
General and administrative43,276    26,834    16,442    61.3  % 126,606    78,710    47,896    60.9  %
Catastrophic event-related charges, net328    14    314    N/M 3,097    54    3,043    N/M
Business combination—    —    —    N/A 1,031    —    1,031    N/A
Depreciation and amortization127,091    88,499    38,592    43.6  % 378,068    259,453    118,615    45.7  %
Loss on extinguishment of debt—    —    —    N/A 8,108    5,209    2,899    55.7  %
Interest39,026    30,214    8,812    29.2  % 116,224    94,058    22,166    23.6  %
Interest on mandatorily redeemable preferred OP units / equity1,047    1,047    —    —  % 3,124    3,130    (6)  (0.2)%
Total Expenses537,287    320,339    216,948    67.7  % 1,466,270    869,896    596,374    68.6  %
Income Before Other Items147,007    80,175    66,832    83.4  % 263,902    144,186    119,716    83.0  %
Gain / (loss) on remeasurement of marketable securities12,072    1,492    10,580    709.1  % 43,227    (2,636)  45,863    N/M
Gain / (loss) on foreign currency translation(7,028)  5,023    (12,051)  (239.9)% (7,107)  (2,496)  (4,611)  184.7  %
Gain on dispositions of properties108,104    5,595    102,509    N/M 108,104    5,595    102,509    N/M
Other expense, net(6)(9,372)  (3,511)  (5,861)  (166.9)% (10,041)  (4,890)  (5,151)  105.3  %
Gain / (loss) on remeasurement of notes receivable92    (445)  537    (120.7)% 561    (2,311)  2,872    (124.3)%
Income from nonconsolidated affiliates962    1,204    (242)  (20.1)% 2,927    1,348    1,579    117.1  %
Loss on remeasurement of investment in nonconsolidated affiliates(119)  (446)  327    (73.3)% (130)  (1,505)  1,375    (91.4)%
Current tax benefit / (expense)(402)  107    (509)  (475.7)% (1,418)  (462)  (956)  206.9  %
Deferred tax benefit / (expense)(1,155)  562    (1,717)  (305.5)% (1,074)  804    (1,878)  (233.6)%
Net Income250,161    89,756    160,405    178.7  % 398,951    137,633    261,318    189.9  %
Less: Preferred return to preferred OP units / equity interests3,101    1,645    1,456    88.5  % 9,000    4,799    4,201    87.5  %
Less: Income attributable to noncontrolling interests15,290    6,907    8,383    121.4  % 22,629    8,806    13,823    157.0  %
Net Income Attributable to Sun Communities, Inc.$231,770    $81,204    $150,566    185.4  % $367,322    $124,028    $243,294    196.2  %
                
Weighted average common shares outstanding - basic115,136    97,542    17,594    18.0  % 111,717    95,270    16,447    17.3  %
Weighted average common shares outstanding - diluted118,072    97,549    20,523    21.0  % 114,291    95,273    19,018    20.0  %
                
Basic earnings per share$2.00    $0.83    $1.17    141.0  % $3.27    $1.29    $1.98    153.5  %
Diluted earnings per share$2.00    $0.83    $1.17    141.0  % $3.27    $1.29    $1.98    153.5  %

N/M = Percentage change is not meaningful.

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

 


Outstanding Securities - As of September 30, 2021
          
 Number of Units / Shares Outstanding Conversion Rate* If Converted(1) Issuance Price Per Unit* Annual Distribution Rate*
Non-convertible Securities         
Common shares115,959 N/A N/A N/A $3.32^
          
Convertible Securities         
Common OP units2,528 1.0000 2,528 N/A Mirrors common shares distributions
          
Series A-1 preferred OP units275 2.4390 672 $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 September 30, 2021      
       
Equity Shares Share Price* Total
Common shares 115,959   $185.10   $21,464,011  
Common OP units 2,528   $185.10   467,933  
Subtotal 118,487     $21,931,944  
       
Preferred OP units, as converted 2,813   $185.10   520,686  
Total diluted shares outstanding 121,300     $22,452,630  
       
Debt      
Secured debt     $3,403,436  
Unsecured debt     1,286,001  
Total debt     $4,689,437  
       
Total Capitalization     $27,142,067  

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 Nine Months Ended
 September 30, 2021 September 30, 2020 September 30, 2021 September 30, 2020
Net Income Attributable to Sun Communities, Inc. Common Stockholders$231,770    $81,204    $367,322    $124,028   
Adjustments       
Depreciation and amortization126,814    88,495    377,367    259,543   
Depreciation on nonconsolidated affiliates30       91    28   
(Gain) / loss on remeasurement of marketable securities(12,072)  (1,492)  (43,227)  2,636   
Loss on remeasurement of investment in nonconsolidated affiliates119    446    130    1,505   
(Gain) / loss on remeasurement of notes receivable(92)  445    (561)  2,311   
Income attributable to noncontrolling interests4,616    6,196    13,678    7,725   
Preferred return to preferred OP units—    498    —    1,498   
Interest expense on Aspen preferred OP units514    514    1,542    1,542   
Gain on dispositions of properties(108,104)  (5,595)  (108,104)  (5,595) 
Gain on dispositions of assets, net(20,526)  (5,511)  (46,245)  (15,251) 
FFO Attributable to Sun Communities, Inc. Common Stockholders and Dilutive Convertible Securities(1)(4)$223,069    $165,209    $561,993    $379,970   
        
Adjustments       
Business combination expense and other acquisition related costs(7)2,477    402    6,714    1,291   
Loss on extinguishment of debt—    —    8,108    5,209   
Catastrophic event-related charges, net318    15    3,096    54   
(Gain) / loss on earnings - catastrophic event-related200    (300)  400    —   
(Gain) / loss on foreign currency translation7,028    (5,024)  7,107    2,496   
Other adjustments, net(8)11,443    2,322    11,505    2,819   
Core FFO Attributable to Sun Communities, Inc. Common Stockholders and Dilutive Convertible Securities(1)(4)$244,535    $162,624    $598,923    $391,839   
        
Weighted average common shares outstanding - basic115,136    97,542    111,717    95,270   
Add       
Common shares dilutive effect from forward equity sale—       —      
Common stock issuable upon conversion of stock options—       —      
Restricted stock438    390    414    395   
Common OP units—    2,476    2,574    2,445   
Common stock issuable upon conversion of certain preferred OP units388    1,213    396    1,220   
Weighted Average Common Shares Outstanding - Fully Diluted115,962    101,628    115,101    99,333   
        
FFO Attributable to Sun Communities, Inc. Common Stockholders and Dilutive Convertible Securities(1)(4) Per Share - Fully Diluted$1.92    $1.63    $4.88    $3.83   
        
Core FFO Attributable to Sun Communities, Inc. Common Stockholders and Dilutive Convertible Securities(1)(4) Per Share - Fully Diluted$2.11    $1.60    $5.20    $3.94   

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

 


 Three Months Ended Nine Months Ended
 September 30, 2021 September 30, 2020 September 30, 2021 September 30, 2020
Net Income Attributable to Sun Communities, Inc. Common Stockholders$231,770    $81,204    $367,322    $124,028   
Interest income(2,690)  (2,624)  (8,040)  (7,609) 
Brokerage commissions and other revenues, net(8,841)  (5,881)  (21,740)  (13,068) 
General and administrative expense43,276    26,834    126,606    78,710   
Catastrophic event-related charges, net328    14    3,097    54   
Business combination expense—    —    1,031    —   
Depreciation and amortization127,091    88,499    378,068    259,453   
Loss on extinguishment of debt—    —    8,108    5,209   
Interest expense39,026    30,214    116,224    94,058   
Interest on mandatorily redeemable preferred OP units / equity1,047    1,047    3,124    3,130   
(Gain) / loss on remeasurement of marketable securities(12,072)  (1,492)  (43,227)  2,636   
(Gain) / loss on foreign currency translation7,028    (5,023)  7,107    2,496   
Gain on dispositions of properties(108,104)  (5,595)  (108,104)  (5,595) 
Other expense, net(6)9,372    3,511    10,041    4,890   
(Gain) / loss on remeasurement of notes receivable(92)  445    (561)  2,311   
Income from nonconsolidated affiliates(962)  (1,204)  (2,927)  (1,348) 
Loss on remeasurement of investment in nonconsolidated affiliates119    446    130    1,505   
Current tax (benefit) / expense402    (107)  1,418    462   
Deferred tax (benefit) / expense1,155    (562)  1,074    (804) 
Preferred return to preferred OP units / equity interests3,101    1,645    9,000    4,799   
Income attributable to noncontrolling interests15,290    6,907    22,629    8,806   
NOI(1)$346,244    $218,278    $870,380    $564,123   


 Three Months Ended Nine Months Ended
 September 30, 2021 September 30, 2020 September 30, 2021 September 30, 2020
Real Property NOI(1)$295,779   $204,271   $753,173   $538,210  
Home Sales NOI(1)24,532   7,763   58,226   20,790  
Service, retail, dining and entertainment NOI(1)25,933   6,244   58,981   5,123  
NOI(1)$346,244   $218,278   $870,380   $564,123  

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

 


 Three Months Ended Nine Months Ended
 September 30, 2021 September 30, 2020 September 30, 2021 September 30, 2020
Net Income Attributable to Sun Communities, Inc. Common Stockholders$231,770    $81,204    $367,322    $124,028   
Adjustments       
Depreciation and amortization127,091    88,499    378,068    259,453   
Loss on extinguishment of debt—    —    8,108    5,209   
Interest expense39,026    30,214    116,224    94,058   
Interest on mandatorily redeemable preferred OP units / equity1,047    1,047    3,124    3,130   
Current tax (benefit) / expense402    (107)  1,418    462   
Deferred tax (benefit) / expense1,155    (562)  1,074    (804) 
Income from nonconsolidated affiliates(962)  (1,204)  (2,927)  (1,348) 
Less: Gain on dispositions of assets, net(20,526)  (5,511)  (46,245)  (15,251) 
Less: Gain on dispositions of properties(108,104)  (5,595)  (108,104)  (5,595) 
EBITDAre(1)$270,899    $187,985    $718,062    $463,342   
Adjustments       
Catastrophic event-related charges, net328    14    3,097    54   
Business combination expense—    —    1,031    —   
(Gain) / loss on remeasurement of marketable securities(12,072)  (1,492)  (43,227)  2,636   
(Gain) / loss on foreign currency translation7,028    (5,023)  7,107    2,496   
Other expense, net(6)9,372    3,511    10,041    4,890   
(Gain) / loss on remeasurement of notes receivable(92)  445    (561)  2,311   
Loss on remeasurement of investment in nonconsolidated affiliates119    446    130    1,505   
Preferred return to preferred OP units / equity interests3,101    1,645    9,000    4,799   
Income attributable to noncontrolling interests15,290    6,907    22,629    8,806   
Plus: Gain on dispositions of assets, net20,526    5,511    46,245    15,251   
Recurring EBITDA(1) $314,499    $199,949    $773,554    $506,090   

Non-GAAP and Other Financial Measures

Debt Analysis
(amounts in thousands)

 


 Quarter Ended
 9/30/2021 6/30/2021 3/31/2021 12/31/2020 9/30/2020
Debt Outstanding         
Secured debt$3,403,436   $3,457,734   $3,472,930   $3,489,983   $3,238,926  
Unsecured debt         
Senior unsecured notes591,252   591,688   —   —   —  
Line of credit and other debt(9)624,837   191,841   875,093   1,197,181   31,775  
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 debt1,286,001   853,441   945,005   1,267,093   101,687  
Total debt$4,689,437   $4,311,175   $4,417,935   $4,757,076   $3,340,613  
          
% Fixed / Floating         
Fixed86.7 % 94.7 % 79.3 % 74.0 % 97.6 %
Floating13.3 % 5.3 % 20.7 % 26.0 % 2.4 %
Total100.0 % 100.0 % 100.0 % 100.0 % 100.0 %
          
Weighted Average Interest Rates         
Secured debt3.78 % 3.75 % 3.75 % 3.75 % 3.84 %
Senior unsecured notes2.70 % 2.70 % — % — % — %
Line of credit and other debt(9)0.98 % 0.93 % 1.77 % 2.11 % 1.34 %
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 average3.30 % 3.52 % 3.39 % 3.37 % 3.86 %
          
Debt Ratios         
Net Debt / Recurring EBITDA(1) (TTM)4.9   5.1   6.1   6.9   5.0  
Net Debt / Enterprise Value17.1 % 16.8 % 19.7 % 21.4 % 18.3 %
Net Debt / Gross Assets31.2 % 29.6 % 31.8 % 35.5 % 31.6 %
          
Coverage Ratios         
Recurring EBITDA(1) (TTM) / Interest6.1 5.6 5.0 4.9 4.8
Recurring EBITDA(1) (TTM) / Interest + Pref. Distributions + Pref. Stock Distribution6.0 5.5 4.8 4.8 4.6


Maturities / Principal Amortization Next Five Years2021 2022 2023 2024 2025
Secured debt         
Maturities$—   $82,155   $185,619   $315,330   $50,529  
Principal amortization15,194   61,411   60,788   57,344   53,933  
Line of credit and other debt(9)331   10,000   10,000   10,000   594,506  
Preferred Equity - Sun NG Resorts - mandatorily redeemable—   —   —   33,428   1,821  
Preferred OP units - mandatorily redeemable—   —   —   27,373   —  
Total$15,525   $153,566   $256,407   $443,475   $700,789  
          
Weighted average rate of maturities— % 4.46 % 4.08 % 4.47 % 4.04 %

Same Community(2) Summary
(amounts in thousands)

 


                        
 Three Months Ended
 Total Same Community MH RV
 September 30, 2021 September 30, 2020 Change % Change September 30, 2021 September 30, 2020 Change % Change September 30, 2021 September 30, 2020 Change % Change
Financial Information                       
Revenue                       
Real property (excluding transient)$220,291   $207,407   $12,884   6.2 % $173,979   $167,051   $6,928    4.1  % $46,312   $40,356   $5,956   14.8 %
Real property - transient87,049   67,408   19,641   29.1 % 238   242   (4)  (1.7)% 86,811   67,166   19,645   29.2 %
Other13,352   9,375   3,977   42.4 % 4,845   2,863   1,982    69.2  % 8,507   6,512   1,995   30.6 %
Total Operating320,692   284,190   36,502   12.8 % 179,062   170,156   8,906    5.2  % 141,630   114,034   27,596   24.2 %
Expense                       
Property Operating(10)(11)102,413   90,048   12,365   13.7 % 49,567   43,996   5,571    12.7  % 52,846   46,052   6,794   14.8 %
Real Property NOI(1)$218,279   $194,142   $24,137   12.4 % $129,495   $126,160   $3,335    2.6  % $88,784   $67,982   $20,802   30.6 %


 Nine Months Ended
 Total Same Community MH RV
 September 30, 2021 September 30, 2020 Change % Change September 30, 2021 September 30, 2020 Change % Change September 30, 2021 September 30, 2020 Change % Change
Financial Information                       
Revenue                       
Real property (excluding Transient)$652,978   $615,711   $37,267   6.1 % $518,511   $495,989   $22,522    4.5  % $134,467   $119,722   $14,745   12.3 %
Real property - transient163,932   117,277   46,655   39.8 % 1,200   1,343   (143)  (10.6)% 162,732   115,934   46,798   40.4 %
Other31,077   18,424   12,653   68.7 % 14,472   7,778   6,694    86.1  % 16,605   10,646   5,959   56.0 %
Total Operating847,987   751,412   96,575   12.9 % 534,183   505,110   29,073    5.8  % 313,804   246,302   67,502   27.4 %
Expense                       
Property Operating(10)(11)261,754   228,314   33,440   14.6 % 136,927   124,297   12,630    10.2  % 124,827   104,017   20,810   20.0 %
Real Property NOI(1)$586,233   $523,098   $63,135   12.1 % $397,256   $380,813   $16,443    4.3  % $188,977   $142,285   $46,692   32.8 %

Same Community(2) Summary (continued)

 


 As of     
 September 30, 2021 September 30, 2020 Change % Change
Other Information       
Number of properties403   403   —     
        
MH occupancy97.5 %      
RV occupancy100.0 %      
MH & RV blended occupancy(3)98.1 %      
        
Adjusted MH occupancy(3)98.5 %      
Adjusted RV occupancy(3)100.0 %      
Adjusted MH & RV blended occupancy(3)98.9 % 97.4 % 1.5  %  
        
Sites available for development7,092   7,453   (361)   
        
Monthly base rent per site - MH$606   $586   $20    3.4%(13)
Monthly base rent per site - RV(12)$528   $503   $25    5.0%(13)
Monthly base rent per site - Total(12)$588   $567   $21    3.7%(13)

Marina Summary
(amounts in thousands except for statistical data)

 


     
  Three Months Ended Nine Months Ended
  September 30, 2021 September 30, 2021
Financial Information    
Revenues    
Real property (excluding transient) $72,888   $180,908
Real property - transient 6,251   11,376
Other 5,815   11,134
Total Operating 84,954   203,418
Expenses    
Property Operating(a) 33,995   85,816
Real Property NOI 50,959   117,602
Service, retail, dining and entertainment    
Revenue 74,110   200,702
Expense 60,606   159,632
NOI 13,504   41,070
     
Marina NOI $64,463   $158,672
     
Other Information - Marinas   September 30, 2021
Number of properties(b)   120
Total wet slips and dry storage   44,859

(a) Marina results net $4.3 million and $10.5 million of certain utility revenue against the related utility expense in property operating and maintenance expense for the quarter and nine months ended September 30, 2021.

(b) Marina properties consisted of 14 properties acquired in 2021 and 106 properties acquired in 2020.

MH and RV Acquisitions and Other Summary(14)
(amounts in thousands except for statistical data)

 


     
  Three Months Ended Nine Months Ended
  September 30, 2021 September 30, 2021
Financial Information    
Revenues    
Real property (excluding transient) $11,060 $29,248  
Real property - transient 32,772 60,298  
Other 4,168 7,357  
Total Operating 48,000 96,903  
Expenses    
Property Operating(a) 21,459 47,565  
Real Property NOI $26,541 $49,338  
     
Other Information - MH and RVs   September 30, 2021
Number of properties   61  
Occupied sites   7,312  
Developed sites   8,357  
Occupancy %   87.5 %
Transient sites   9,293  

(a) MH and RV Acquisitions and Other results net $1.7 million and $4.1 million of certain utility revenue against the related utility expense in property operating and maintenance expense for the quarter and nine months ended September 30, 2021.

Home Sales Summary
(amounts in thousands except for *)

 


                
 Three Months Ended Nine Months Ended
 September 30, 2021 September 30, 2020 Change % Change September 30, 2021 September 30, 2020 Change % Change
Financial Information               
New Homes               
New home sales$31,433   $23,734   $7,699    32.4  % $89,166   $58,536   $30,630    52.3 %
New home cost of sales25,856   19,294   6,562    34.0  % 72,799   47,611   25,188    52.9 %
Gross Profit – new homes5,577   4,440   1,137    25.6  % 16,367   10,925   5,442    49.8 %
Gross margin % – new homes17.7 % 18.7 % (1.0)%   18.4 % 18.7 % (0.3)%  
Average selling price – new homes*$151,850   $153,123   $(1,273)  (0.8)% $152,943   $141,391   $11,552    8.2 %
                
Pre-owned Homes               
Pre-owned home sales$49,666   $23,928   $25,738    107.6  % $125,980   $68,243   $57,737    84.6 %
Pre-owned home cost of sales25,840   16,943   8,897    52.5  % 70,369   47,839   22,530    47.1 %
Gross Profit – pre-owned homes23,826   6,985   16,841    241.1  % 55,611   20,404   35,207    172.5 %
Gross margin % – pre-owned homes48.0 % 29.2 % 18.8  %   44.1 % 29.9 % 14.2  %  
Average selling price – pre-owned homes*$52,006   $43,114   $8,892    20.6  % $48,981   $40,864   $8,117    19.9 %
                
Total Home Sales               
Revenue from home sales$81,099   $47,662   $33,437    70.2  % $215,146   $126,779   $88,367    69.7 %
Cost of home sales51,696   36,237   15,459    42.7  % 143,168   95,450   47,718    50.0 %
Home selling expenses4,871   3,662   1,209    33.0  % 13,752   10,539   3,213    30.5 %
Home Sales NOI(1)$24,532   $7,763   $16,769    216.0  % $58,226   $20,790   $37,436    180.1 %
                
Statistical Information               
New home sales volume*207   155   52    33.5  % 583   414   169    40.8 %
Pre-owned home sales volume*955   555   400    72.1  % 2,572   1,670   902    54.0 %
Total home sales volume*1,162   710   452    63.7  % 3,155   2,084   1,071    51.4 %

Rental Program Summary
(amounts in thousands except for *)

 


                
 Three Months Ended Nine Months Ended
 September 30, 2021 September 30, 2020 Change % Change September 30, 2021 September 30, 2020 Change % Change
Financial Information               
Revenues               
Home rent$16,369   $16,171   $198    1.2  % $50,451   $46,607   $3,844    8.2  %
Site rent17,584   19,101   (1,517)  (7.9)% 55,350   55,699   (349)  (0.6)%
Total33,953   35,272   (1,319)  (3.7)% 105,801   102,306   3,495    3.4  %
                
Expenses               
Rental Program operating and maintenance5,547   5,328   219    4.1  % 15,332   14,576   756    5.2  %
Rental Program NOI(1)$28,406   $29,944   $(1,538)  (5.1)% $90,469   $87,730   $2,739    3.1  %
                
Other Information               
Number of sold rental homes*307   225   82    36.4  % 799   581   218    37.5  %
Number of occupied rentals, end of period*        10,123   11,729   (1,606)  (13.7)%
Investment in occupied rental homes, end of period        $559,021   $625,922   $(66,901)  (10.7)%
Weighted average monthly rental rate, end of period*        $1,114   $1,032   $82    7.9  %

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        
           
           
  9/30/2021 6/30/2021 3/31/2021 12/31/2020 9/30/2020
FLORIDA          
Properties 131   129   128   128   127  
MH & Annual RV Developed sites(15) 40,500   40,171   40,011   39,803   39,517  
Occupied MH & Annual RV(15) 39,747   39,402   39,283   39,063   38,743  
MH & Annual RV Occupancy %(15) 98.1 % 98.1 % 98.2 % 98.1 % 98.0 %
Transient RV sites 6,163   5,895   5,823   6,011   5,993  
Sites for development 1,414   1,414   1,497   1,497   1,427  
MICHIGAN          
Properties 83   75   74   74   74  
MH & Annual RV Developed sites(15) 31,997   29,600   29,092   29,086   29,086  
Occupied MH & Annual RV(15) 30,782   28,671   28,145   28,109   28,033  
MH & Annual RV Occupancy %(15) 96.2 % 96.9 % 96.7 % 96.6 % 96.4 %
Transient RV sites 554   509   541   546   546  
Sites for development 1,481   1,182   1,182   1,182   1,182  
CALIFORNIA          
Properties 37   36   36   35   34  
MH & Annual RV Developed sites(15) 6,760   6,736   6,734   6,675   6,372  
Occupied MH & Annual RV(15) 6,642   6,613   6,609   6,602   6,290  
MH & Annual RV Occupancy %(15) 98.3 % 98.2 % 98.1 % 98.9 % 98.7 %
Transient RV sites 2,410   2,416   2,418   2,231   2,236  
Sites for development 534   127   127   373   373  
TEXAS           
Properties 26   25   24   24   24  
MH & Annual RV Developed sites(15) 8,004   7,947   7,928   7,766   7,659  
Occupied MH & Annual RV(15) 7,805   7,731   7,671   7,572   7,427  
MH & Annual RV Occupancy %(15) 97.5 % 97.3 % 96.8 % 97.5 % 97.0 %
Transient RV sites 2,131   1,835   1,773   1,810   1,917  
Sites for development 1,066   1,194   1,275   1,378   1,378  
ONTARIO, CANADA          
Properties 16   16   16   15   15  
MH & Annual RV Developed sites(15) 4,361   4,302   4,199   4,090   4,067  
Occupied MH & Annual RV(15) 4,361   4,302   4,199   4,090   4,067  
MH & Annual RV Occupancy %(15) 100.0 % 100.0 % 100.0 % 100.0 % 100.0 %
Transient RV sites 807   870   964   966   920  
Sites for development 1,525   1,525   1,525   1,525   1,593  
CONNECTICUT          
Properties 16   16   16   16   16  
MH & Annual RV Developed sites(15) 1,901   1,901   1,897   1,897   1,898  
Occupied MH & Annual RV(15) 1,760   1,757   1,746   1,739   1,736  
MH & Annual RV Occupancy %(15) 92.6 % 92.4 % 92.0 % 91.7 % 91.5 %
Transient RV sites 104   104   108   108   107  
Sites for development —   —   —   —   —  
MAINE          
Properties 13   13   13   13    
MH & Annual RV Developed sites(15) 2,220   2,204   2,190   2,190   1,092  
Occupied MH & Annual RV(15) 2,136   2,127   2,119   2,121   1,089  
MH & Annual RV Occupancy %(15) 96.2 % 96.5 % 96.8 % 96.8 % 99.7 %
Transient RV sites 776   792   805   805   819  
Sites for development 30   30   30   30   30  
           
           
           
ARIZONA          
Properties 12   14   14   14   13  
MH & Annual RV Developed sites(15) 4,071   4,401   4,391   4,323   4,274  
Occupied MH & Annual RV(15) 3,853   4,116   4,101   4,030   3,957  
MH & Annual RV Occupancy %(15) 94.6 % 93.5 % 93.4 % 93.2 % 92.6 %
Transient RV sites 1,237   1,260   1,270   1,337   1,386  
Sites for development —   —   —   —   —  
INDIANA          
Properties 12   12   12   12   11  
MH & Annual RV Developed sites(15) 3,057   3,087   3,087   3,087   3,087  
Occupied MH & Annual RV(15) 2,963   2,970   2,961   2,950   2,957  
MH & Annual RV Occupancy %(15) 96.9 % 96.2 % 95.9 % 95.6 % 95.8 %
Transient RV sites 1,089   1,089   1,089   1,089   534  
Sites for development 204   277   277   277   277  
COLORADO          
Properties 10   10   10   10   10  
MH & Annual RV Developed sites(15) 2,552   2,453   2,453   2,453   2,453  
Occupied MH & Annual RV(15) 2,431   2,420   2,395   2,380   2,365  
MH & Annual RV Occupancy %(15) 95.3 % 98.7 % 97.6 % 97.0 % 96.4 %
Transient RV sites 987   987   962   962   930  
Sites for development 1,629   1,225   1,250   1,250   1,282  
NEW HAMPSHIRE          
Properties 10   10   10   10   10  
MH & Annual RV Developed sites(15) 1,777   1,777   1,776   1,777   1,833  
Occupied MH & Annual RV(15) 1,769   1,769   1,769   1,767   1,822  
MH & Annual RV Occupancy %(15) 99.5 % 99.5 % 99.6 % 99.4 % 99.4 %
Transient RV sites 602   602   456   460   404  
Sites for development 111   151   151   151   151  
NEW YORK          
Properties 10   10   10      
MH & Annual RV Developed sites(15) 1,457   1,457   1,452   1,419   1,414  
Occupied MH & Annual RV(15) 1,432   1,428   1,415   1,380   1,371  
MH & Annual RV Occupancy %(15) 98.3 % 98.0 % 97.5 % 97.3 % 97.0 %
Transient RV sites 1,684   1,684   1,689   1,422   900  
Sites for development 371   371   371   371   371  
OHIO           
Properties          
MH & Annual RV Developed sites(15) 2,796   2,797   2,797   2,790   2,790  
Occupied MH & Annual RV(15) 2,753   2,770   2,760   2,755   2,758  
MH & Annual RV Occupancy %(15) 98.5 % 99.0 % 98.7 % 98.7 % 98.9 %
Transient RV sites 129   128   128   135   135  
Sites for development 22   22   22   22   22  
OTHER STATES           
Properties 79   80   80   77   73  
MH & Annual RV Developed sites(15) 16,488   17,422   17,310   16,896   16,484  
Occupied MH & Annual RV(15) 16,178   16,934   16,796   16,394   15,977  
MH & Annual RV Occupancy %(15) 98.1 % 97.2 % 97.0 % 97.0 % 96.9 %
Transient RV sites 9,249   8,861   8,269   7,161   6,901  
Sites for development 1,925   1,925   1,969   1,969   2,044  
           
TOTAL - MH AND RV PORTFOLIO           
Properties 464   455   452   446   432  
MH & Annual RV Developed sites(15) 127,941   126,255   125,317   124,252   122,026  
Occupied MH & Annual RV(15) 124,612   123,010   121,969   120,952   118,592  
MH & Annual RV Occupancy %(15) 97.4 %(16)97.4 % 97.3 % 97.3 % 97.2 %
Transient RV sites 27,922   27,032   26,295   25,043   23,728  
Sites for development(17) 10,312   9,443   9,676   10,025   10,130  
% Communities age restricted 32.3 % 32.5 % 32.7 % 33.2 % 33.6 %


Marina Property Summary(a)        
         
         
  9/30/2021 06/30/2021 3/31/2021 12/31/2020
FLORIDA        
Properties 19   18   16   14  
Total wet slips and dry storage spaces 4,493   4,186   3,837   3,585  
RHODE ISLAND        
Properties 12   11   11   11  
Total wet slips and dry storage spaces 3,417   3,207   2,829   2,829  
CONNECTICUT        
Properties 11   11   11   11  
Total wet slips and dry storage spaces 3,278   3,262   3,262   3,262  
MASSACHUSETTS        
Properties        
Total wet slips and dry storage spaces 2,650   2,650   2,650   2,223  
NEW YORK        
Properties        
Total wet slips and dry storage spaces 2,630   2,629   2,629   2,629  
MARYLAND        
Properties        
Total wet slips and dry storage spaces 2,139   2,110   2,110   2,110  
OTHER STATES        
Properties 53   49   47   47  
Total wet slips and dry storage spaces 26,252   23,389   22,851   22,851  
TOTAL - MARINA PORTFOLIO        
Properties 120   114   110   106  
Total wet slips and dry storage spaces 44,859   41,433   40,168   39,489  

(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 *)

 


            


  Nine Months Ended  Year Ended Year Ended
  September 30, 2021 December 31, 2020 December 31, 2019
  MH / RV Marina MH / RV Marina MH / RV
Recurring Capital Expenditures Average / Site* $258   $259   $265   N/A $345  
Recurring Capital Expenditures(18) $31,484   $10,292   $31,398   $2,074   $30,382  
Lot Modifications(19) $20,274   N/A $29,414   N/A $22,837  
Acquisitions(20)(a) $508,773   $711,366   $571,930   $2,533,741   $938,966  
Expansion and Development(21) $135,758   $9,866   $248,146   $—   $281,808  
Growth Projects(22) $19,900   $37,771   $28,315   $—   $9,638  

(a)  Acquisitions includes intangibles and goodwill included in purchase price.

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 1,851   572    153   177   1,415  
Michigan 327   154    43   1,334   196  
Ontario, Canada 526   180    93     420  
Texas 278   233    71   344   69  
Arizona 88   124    30   35   171  
Indiana 46   31      220   13  
Ohio 68   (2)    109   15  
California 100   22    23     109  
Colorado   51    43   23   36  
Connecticut 26   21    29     44  
New York 90   25    10      
New Hampshire —        —   37  
Maine 80   15    10      
Other states 837   245    66   298   176  
Nine Months Ended September 30, 2021 4,320   1,673    583   2,572   2,713  


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 2.9 % 8.3 %
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 for 2021 is derived from 119,584 developed sites, of which 117,300 were occupied. The adjusted MH and RV blended occupancy percentage is derived from 118,641 developed sites, of which 117,300 were occupied. The number of developed sites excludes RV transient sites and over 900 recently completed but vacant MH expansion sites.

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.

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

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

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

 Three Months Ended Nine Months Ended
 September 30, 2021 September 30, 2020 September 30, 2021 September 30, 2020
Contingent consideration expense$(9,196)  $(2,724)  $(9,339)  $(2,890) 
Long term lease termination expense—    (160)  —    (433) 
Repair reserve on repossessed homes(176)  (627)  (702)  (1,567) 
Other expenses, net$(9,372)  $(3,511)  $(10,041)  $(4,890) 

(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)   Other adjustments, net was as follows (in thousands):

 Three Months Ended Nine Months Ended
 September 30, 2021 September 30, 2020 September 30, 2021 September 30, 2020
Contingent consideration expense$9,196   $2,724    $9,339   $2,890   
Long term lease termination expense—   160    —   433   
Deferred tax (benefit) / expense1,155   (562)  1,074   (804) 
RV rebranding non-recurring cost1,092   —    1,092   —   
deferred compensation amortization upon retirement—   —    —   300   
Other adjustments, net$11,443   $2,322    $11,505   $2,819   

(9)   Line of credit and other debt includes borrowings under the Company's $2.0 billion credit facility, a $12.0 million MH floor plan facility, and a $35.3 million unsecured term loan which had been secured prior to July 1, 2021.

(10)   Same Community results net $19.1 million and $18.3 million of certain utility revenue against the related utility expense in property operating and maintenance expense for the three months ended September 30, 2021 and 2020, respectively. Same Community results net $52.2 million and $47.3 million of utility revenue against the related utility expense in property operating and maintenance expense for the nine months ended September 30, 2021 and 2020, respectively.

(11)   Same Community supplies and repair expense excludes $0.4 million and $1.2 million for the three and nine months ended September 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.

(12)   Monthly base rent per site pertains to annual RV sites and excludes transient RV sites.

(13)   Calculated using actual results without rounding.

(14)   MH and RV acquisitions and other is comprised of 21 properties acquired in 2021, one property acquired in which the Company has an interest in, but does not operate in 2021, 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, two properties undergoing redevelopment, and other miscellaneous transactions and activity.

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

(16)   As of September 30, 2021, total portfolio MH occupancy was 96.6 percent inclusive of the impact of nearly 1,200 recently constructed but vacant MH expansion sites, and annual RV occupancy was 100.0 percent.

(17)   Total sites for development were comprised of approximately 73.1 percent for expansion, 20.8 percent for greenfield development and 6.1 percent for redevelopment.

(18)   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.

(19)   Lot modification capital expenditures are incurred to modify the foundational structures required to set a new home after a previous home has been removed. These expenditures are necessary to create a revenue stream from a new site renter and often improve the quality of the community. Other lot modification expenditures include land improvements added to annual RV sites to aid in the conversion of transient RV guests to annual contracts.

(20)   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 nine months ended September 30, 2021 include $54.3 million at our MH and RV properties and $69.9 million at our marina properties. Expenditures consist 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; lot modifications; 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.

(21)   Expansion and development expenditures consist primarily of construction costs such as roads, activities, and amenities, and costs necessary to complete home and RV site improvements, such as driveways, sidewalks and landscaping at our MH communities and RV resorts. Expenditures also include costs to rebuild after damage has been incurred at MH, RV or marina properties.

(22)   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