Company Announcements

Sun Communities, Inc. Reports 2022 First Quarter Results

Source: OMX
Sun Communities, Inc. Reports 2022 First Quarter Results

Southfield, MI, April 25, 2022 (GLOBE NEWSWIRE) -- Sun Communities, Inc. (NYSE: SUI) (the "Company"), a real estate investment trust ("REIT") that owns and operates, or has an interest in, manufactured housing ("MH") communities, recreational vehicle ("RV") resorts and marinas (collectively, the "properties"), today reported its first quarter results for 2022.

Financial Results for the Quarter ended March 31, 2022

For the quarter ended March 31, 2022, total revenues increased by $106.5 million, or 24.1 percent, to $548.5 million compared to approximately $442.0 million for the same period in 2021. Net income attributable to common shareholders was $0.7 million, or $0.01 per diluted common share, compared to net income attributable to common shareholders of $24.8 million, or $0.23 per diluted common share, for the same period in 2021.

Non-GAAP Financial Measures and Portfolio Performance

  • Core Funds from Operations ("Core FFO")(1) for the quarter ended March 31, 2022, was $1.34 per diluted share and OP unit ("Share") as compared to $1.26 in the corresponding period in 2021, a 6.3 percent increase.

  • Same Property(2) Net Operating Income ("NOI")(1) for the Company's MH and RV properties increased by 7.7 percent for the quarter ended March 31, 2022, as compared to the corresponding period in 2021.

  • Same Property(2) NOI for the Company's marina properties increased by 1.2 percent for the quarter ended March 31, 2022, as compared to the corresponding period in 2021.

  • Acquisitions totaled $1.6 billion during and subsequent to the quarter ended March 31, 2022, including 41 properties in the United Kingdom ("UK") and four marinas in the United States.

"Our strong first quarter performance builds on the momentum of last year as we delivered 6.3 percent growth in Core FFO per Share," said Gary A. Shiffman, Chairman and CEO. "With sustained tailwinds, the demand for attainable housing and outdoor vacationing continues to reach new levels, and with our best-in-class offering, Sun is uniquely positioned to meet these customer needs. We are pleased to have completed the acquisition of Park Holidays and already have a growing pipeline of acquisition opportunities in the UK. Furthermore, we have been active in the capital markets as we amended and upsized our Senior Credit Facility, issued $600 million of senior notes with a favorable rate lock, and settled forward equity sale agreements, all of which enhanced our balance sheet position. Over the years, Sun has delivered consistent and cycle tested organic cash flow growth, and today the number of compelling investment opportunities is more exciting than ever across our MH, RV and marina platforms."

OPERATING HIGHLIGHTS

Portfolio Occupancy

Total MH and annual RV occupancy was 97.5 percent at March 31, 2022 as compared to 97.3 percent at March 31, 2021, an increase of 20 basis points.

During the quarter ended March 31, 2022, the number of MH and annual RV revenue producing sites increased by 670 sites as compared to an increase of 514 sites during the quarter ended March 31, 2021, a 30.4 percent increase.

Same Property(2) Results - MH and RV

For the 425 MH and RV properties owned and operated by the Company since January 1, 2021, the following table reflects the percentage increases, both in total, and by segment, for the quarter ended March 31, 2022:

 Total MH and RV
Same Property
 MH
Same Property
 RV
Same Property
Revenue        9.2        %         4.4        %         20.5        %
Expense        12.7        %         8.7        %         17.6        %
NOI        7.7        %         3.0        %         22.9        %


      

Same Property adjusted occupancy(3) increased to 98.5 percent at March 31, 2022 from 96.9 percent at March 31, 2021, an increase of 160 basis points.

Same Property(2) Results - Marina

For the 101 Marina properties owned and operated by the Company since January 1, 2021, the following table reflects the percentage increases for the quarter ended March 31, 2022:

 Marina
Same Property
Revenue        7.7        %
Expense        15.2        %
NOI        1.2        %

PORTFOLIO ACTIVITY

Acquisitions and Dispositions

During and subsequent to the quarter ended March 31, 2022, the Company acquired the following properties:

Property Name Property Type Sites,
Wet Slips and
Dry Storage Spaces
 Development Sites State / Province or Country Total
Purchase Price
(in millions)
 Month Acquired
Harrison Yacht Yard(a) Marina         21                 —         MD $        5.8         January
Outer Banks Marina         196                 —         NC          5.0         January
Jarrett Bay Boatworks Marina         12                 —         NC          51.4         February
Tower Marine Marina         446                 —         MI          20.0         March
Sandy Bay MH         616                 570         UK          183.5         March
Subtotal           1,291                 570           $        265.7          
             
Acquisitions subsequent to quarter end        
Park Holidays(b) MH         15,906                 1,140         UK $        1,242.1         April
Christies Parks(c) MH         249                 —         UK          10.1         April
Bluewater Yacht Sales Marina         200                 —         Various          25.0         April
Jarrett Bay Bluewater Yacht Sales(a) Marina         —                 —         Various          17.6         April
Subtotal           16,355                 1,140           $        1,294.8          
             
Total acquisitions           17,646                 1,710           $        1,560.5          

(a) Combined with an existing marina.

(b) Includes 40 owned properties.

(c) Combined with an existing adjacent MH community.

During and subsequent to the quarter ended March 31, 2022, the Company acquired 45 properties totaling 17,646 sites, wet slips and dry storage spaces and 1,710 sites for expansion for a total purchase price of $1.6 billion.

During the quarter ended March 31, 2022, the Company sold two MH communities and one property containing both MH and RV sites located in Florida for $29.6 million. The gain from the sale of the properties was $13.4 million.
Development Activity

During the quarter ended March 31, 2022, the Company completed the construction of 25 expansion sites in one RV resort.

               

BALANCE SHEET, CAPITAL MARKETS ACTIVITY AND OTHER ITEMS

Debt

As of March 31, 2022, the Company had approximately $6.1 billion in debt outstanding. The weighted average interest rate was 3.0 percent and the weighted average maturity was 8.1 years. At March 31, 2022, the Company's net debt to trailing twelve month Recurring EBITDA(1) ratio was 5.9 times. The Company had $90.4 million of unrestricted cash on hand.

Senior Credit Facility Amendment

On April 7, 2022, in conjunction with the closing of the Park Holidays acquisition, Sun Communities Operating Limited Partnership (the "Operating Partnership") as borrower, and the Company, as guarantor, and certain lenders entered into Amendment No. 1 to the Fourth Amended and Restated Credit Agreement and Other Loan Documents (the "Credit Facility Amendment"), which amended the Operating Partnership's Senior Credit Facility.

The Credit Facility Amendment increased the aggregate amount of the Operating Partnership's Senior Credit Facility to $4.2 billion with the ability to upsize the total borrowings by an additional $800 million, subject to certain conditions. The increased aggregate amount under the Senior Credit Facility consists of the following: (a) a revolving loan in the amount up to $3.05 billion and (b) a term loan facility of $1.15 billion, with the ability to draw funds from the combined facilities in U.S. dollars, Pounds sterling, Euros, Canadian dollars and Australian dollars, subject to certain limitations. The Credit Facility Amendment extends the maturity date of the revolving loan facility to April 7, 2027, assuming the Operating Partnership's exercise of each of its two six-month extension options, and, further, the Credit Facility Amendment extends the maturity date of the term loan facility to April 7, 2025, which may not be extended.

Prior to the amendment, the Senior Credit Facility permitted aggregate borrowings of up to $2.0 billion, with an accordion feature that allowed for additional commitments of up to $1.0 billion, subject to the satisfaction of certain conditions.

The Senior Credit Facility bears interest at a floating rate based on Adjusted Term SOFR, the Adjusted Eurocurrency Rate, the Daily RFR Rate, the Australian Bank Bill Swap Bid Rate (BBSY), the Daily SONIA Rate or the Canadian Dollar Offered Rate, as applicable, plus, in all cases, a margin which can range from 0.725 percent to 1.6 percent, subject to certain adjustments. As of March 31, 2022, the margin based on the Operating Partnership's credit ratings would have been 0.85 percent on the revolving loan facility and 0.95 percent on the term loan facility.

Senior Unsecured Notes

On April 12, 2022, the Operating Partnership issued $600.0 million of senior unsecured notes with an interest rate of 4.2 percent and a 10-year term, due April 15, 2032 (the "2032 Notes"). The net proceeds from the offering were $592.3 million after deducting underwriters' discounts and estimated offering expenses. The Company used the net proceeds from the offering to repay borrowings outstanding under its Senior Credit Facility.

In connection with the 2032 Notes issuance, the Company settled four 10-year Treasury rate locks totaling $600.0 million and received a settlement payment of $35.3 million. This lowers the effective interest rate on the 2032 Notes from 4.2 percent to 3.6 percent.

Equity Transactions

Forward Share Settlements

In April 2022, the Company settled forward sale agreements with respect to 1,200,000 shares of common stock under its at the market offering sales program sold during the fourth quarter 2021, and 4,025,000 shares of common stock in connection with its November 2021 registered forward equity offering. The aggregate net proceeds from the settlement of these forward sale agreements was $934.9 million. The Company used the net proceeds to repay borrowings outstanding under its Senior Credit Facility.

At the Market Offering

During the quarter ended March 31, 2022, the Company entered into forward sale agreements with respect to 600,503 shares of common stock under its at the market offering program for $107.9 million. These forward sale agreements were not settled as of March 31, 2022, but the Company expects to settle them by the end of the first quarter 2023.

The following table presents the Company's outstanding unsettled forward equity agreements as of April 22, 2022:

Forward Equity
Agreements
 Shares
Sold
 Shares
Settled
 Shares Remaining  Net Proceeds Received
(in millions)
 Anticipated Net Proceeds Remaining
(in millions)
Q3 2021 ATM Forward Agreements         107,400                 —                 107,400         $        —         $        21.4        
Q4 2021 ATM Forward Agreements         1,712,709                 1,200,000                 512,709                  229.5                  100.3        
November 2021 Forward Offering         4,025,000                 4,025,000                 —                  705.4                  —        
Q1 2022 ATM Forward Agreements         600,503                 —                 600,503                  —                  108.4        
Total Forward Equity Agreements         6,445,612                 5,225,000                 1,220,612         $        934.9         $        230.1        

2022 GUIDANCE

The estimates and assumptions presented below represent a range of possible outcomes and may differ materially from actual results. These estimates include contributions from all acquisitions and capital markets activity completed through the date of this release. These estimates exclude prospective acquisitions and capital markets activity. The estimates and assumptions are forward-looking based on the Company's current assessment of economic and market conditions and are subject to the other risks outlined below under the caption Cautionary Statement Regarding Forward-Looking Statements.

The Company is providing revised or initial 2022 guidance for the following metrics:

 Previous Range Revised Range  
 FY 2022E FY 2022E 2Q 2022E
Basic earnings per share$2.70 - $2.86 $2.46 - $2.58 $0.86 - $0.90
Core FFO per fully diluted Share(1)(4)$7.07 - $7.23 $7.20 - $7.32 $1.97 - $2.01

Refer to page 8 for the reconciliation of Basic earnings per share to Core FFO per diluted Share(1)(4).

Basic earnings per share and Core FFO per fully diluted Share(1)(4) are calculated independently for each quarter; as a result, the sum of the quarters may differ from the annual calculation.

 1Q22 2Q22 3Q22 4Q22
Seasonality of Core FFO per fully diluted Share(1)(4)18.5% 27.4% 35.2% 18.9%

Seasonality of Core FFO per fully diluted Share(1)(4) is based off of the midpoint of full year guidance.

 Previous Range Revised Range  
 FY 2022E FY 2022E 2Q 2022E
MH and RV Same Property NOI(1) growth6.0% - 6.8% 6.5% - 7.3% 3.5% - 4.3%
Marina Same Property NOI(1) growth6.0% - 7.4% 6.0% - 7.4% 5.7% - 7.3%

Park Holidays Acquisition Assumptions

The acquisition of Park Holidays was on April 8, 2022.

The following table presents updated estimates based on the actual closing date:

  Previous Range Revised Range
  March - December 2022 April - December 2022
EBITDA(a) $99.5 - $104.6 $95.3 - $100.4
Income Tax Expense $20.6 - $21.3 $19.7 - $20.4

(a) Estimated EBITDA contribution is inclusive of general and administrative expenses of $29.1 - $30.5 million in the previous range and $26.1 - $27.5 million in the revised range, respectively.

The following table shows Park Holidays' estimated full year EBITDA seasonality if the transaction had closed on January 1, 2022:

 1Q22 2Q22 3Q22 4Q22
Seasonality of Park Holidays' EBITDA6.7% 31.6% 49.9% 11.8%

EARNINGS CONFERENCE CALL

A conference call to discuss first quarter results will be held on Tuesday, April 26, 2022 at 11:00 A.M. (ET). To participate, call toll-free (877) 407-9039. Callers outside the U.S. or Canada can access the call at (201) 689-8470. A replay will be available following the call through May 10, 2022 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 13727742. The conference call will be available live on Sun Communities' website located at www.suncommunities.com. The replay will also be available on the website.

Sun Communities, Inc. is a REIT that, as of March 31, 2022, owned, operated, or had an interest in a portfolio of 603 developed MH, RV and marina properties comprising nearly 159,300 developed sites and over 45,700 wet slips and dry storage spaces in 39 states, Canada, Puerto Rico and the UK.

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 (the "Securities Act"), and the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and we intend that such forward-looking statements will be subject to the safe harbors created thereby. For this purpose, any statements contained in this filing 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 our current views with respect to future events and financial performance, but involve known and unknown risks and uncertainties, both general and specific to the matters discussed in this filing. These risks and uncertainties may cause our actual results to be materially different from any future results expressed or implied by such forward-looking statements. In addition to the risks described under "Risk Factors" contained in the Company's Annual Report on Form 10-K for the year ended December 31, 2021 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, including, inflation, deflation, and energy costs, 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 dollar, Australian dollar and Pounds sterling;
  • 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 our capital stock;
  • The Company's ability to maintain our 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 or incorporated by reference into this filing, whether as a result of new information, future events, changes in the Company's expectations or otherwise, except as required by law.

Although the Company believes that the expectations reflected in the forward-looking statements are reasonable, the Company 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 the Company's 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@bofa.com
Barclays Allison Gelman (212) 526-3367 allison.gelman@barclays.com
  Anthony Powell (212) 526-8768 anthony.powell@barclays.com
Berenberg Capital Markets Keegan Carl (646) 949-9052 keegan.carl@berenberg-us.com
BMO Capital Markets John Kim (212) 885-4115 jp.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 Samir Khanal (212) 888-3796 samir.khanal@evercoreisi.com
  Steve Sakwa (212) 446-9462 steve.sakwa@evercoreisi.com
Green Street Advisors John Pawlowski (949) 640-8780 jpawlowski@greenstreetadvisors.com
JMP Securities Aaron Hecht (415) 835-3963 ahecht@jmpsecurities.com
RBC Capital Markets Brad Heffern (512) 708-6311 brad.heffern@rbccm.com
Robert W. Baird & Co. Wesley Golladay (216) 737-7510 wgolladay@rwbaird.com
UBS Michael Goldsmith (212) 713-2951 michael.goldsmith@ubs.com
       
       
INQUIRIES      
       
The Company welcomes questions or comments from shareholders, analysts, investment managers, media or any prospective investor. Please address all inquiries to our Investor Relations department.
       
At Our Website www.suncommunities.com    
       
By Email investorrelations@suncommunities.com  
       
By Phone (248) 208-2500    

Portfolio Overview
(As of March 31, 2022)

 


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

 


 Quarter Ended
 3/31/2022 12/31/2021 9/30/2021 6/30/2021 3/31/2021 
Financial Information          
Total revenues$        548.5         $        542.4         $        684.3         $        603.9         $        442.0         
Net income$        1.5         $        14.8         $        250.2         $        120.8         $        28.0         
Net income attributable to Sun Communities Inc. common stockholders$        0.7         $        12.8         $        231.8         $        110.8         $        24.8         
Basic earnings per share*$        0.01         $        0.11         $        2.00         $        0.98         $        0.23         
Diluted earnings per share*$        0.01         $        0.11         $        2.00         $        0.98         $        0.23         
           
Cash distributions declared per common share*$        0.88         $        0.83         $        0.83         $        0.83         $        0.83         
           
FFO attributable to Sun Communities, Inc. common stockholders and dilutive convertible securities(1)(4)$        155.3         $        152.3         $        223.1         $        198.0         $        135.9         
FFO attributable to Sun Communities, Inc. common stockholders and dilutive convertible securities(1)(4) per share - fully diluted*$        1.28         $        1.28         $        1.92         $        1.70         $        1.22         
Core FFO attributable to Sun Communities, Inc. common stockholders and dilutive convertible securities(1)(4)$        162.8         $        155.8         $        244.5         $        209.6         $        141.0         
Core FFO attributable to Sun Communities, Inc. common stockholders and dilutive convertible securities(1)(4) per share - fully diluted*$        1.34         $        1.31         $        2.11         $        1.80         $        1.26         
Recurring EBITDA(1) $        221.0         $        208.6         $        314.5         $        268.2         $        190.8         
           
Balance Sheet          
Total assets$        13,914.2         $        13,494.1         $        12,583.3         $        12,041.0         $        11,454.2         
Total debt$        6,076.5         $        5,671.8         $        4,689.4         $        4,311.2         $        4,417.9         
Total liabilities$        6,980.7         $        6,474.6         $        5,488.5         $        5,099.6         $        5,101.5         


 Quarter Ended 
 3/31/2022 12/31/2021 9/30/2021 6/30/2021 3/31/2021 
Operating Information*          
Properties        603          602          584          569          562  
           
Manufactured home sites        98,895          98,621          98,301          97,448          96,876  
Annual RV sites        31,121          30,540          29,640          28,807          28,441  
Transient RV sites        29,267          29,847          27,922          27,032          26,295  
Total sites        159,283          159,008          155,863          153,287          151,612  
Marina wet slips and dry storage spaces(a)        45,725          45,155          43,615          40,179          39,338  
           
MH occupancy        96.7        %         96.6        %         96.6        %         96.7        %         96.5        % 
Annual RV occupancy        100.0        %         100.0        %         100.0        %         100.0        %         100.0        % 
Blended MH and annual RV occupancy        97.5        %         97.4        %         97.4        %         97.4        %         97.3        % 
           
New home sales volume        148          149          207          227          149  
Pre-owned home sales volume        689          784          955          931          686  
Total home sales volume        837          933          1,162          1,158          835  

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

 Quarter Ended 
 3/31/2022 12/31/2021 9/30/2021 6/30/2021 3/31/2021 
Revenue Producing Site Net Gains(5)*          
MH net leased sites        65         321         144                 226         127 
RV net leased sites        605         489         432                 357         387 
Total net leased sites        670         810         576                 583         514 

Consolidated Balance Sheets
(amounts in millions)

 


  March 31, 2022 December 31, 2021
Assets    
Land $        2,708.0          $        2,556.3         
Land improvements and buildings          10,169.4                   9,958.3         
Rental homes and improvements          583.1                   591.7         
Furniture, fixtures and equipment          684.8                   656.4         
Investment property          14,145.3                   13,762.7         
Accumulated depreciation  (2,441.5)          (2,337.2)
Investment property, net          11,703.8                   11,425.5         
Cash, cash equivalents and restricted cash          102.6                   78.2         
Marketable securities          158.3                   186.9         
Inventory of manufactured homes          63.3                   51.1         
Notes and other receivables, net          513.6                   469.6         
Goodwill          512.7                   495.4         
Other intangible assets, net          334.2                   306.8         
Other assets, net          525.7                   480.6         
Total Assets $        13,914.2          $        13,494.1         
Liabilities    
Secured debt $        3,366.6          $        3,380.7         
Unsecured debt          2,709.9                   2,291.1         
Distributions payable          104.5                   98.4         
Advanced reservation deposits and rent          335.1                   242.8         
Accrued expenses and accounts payable          228.0                   237.5         
Other liabilities          236.6                   224.1         
Total Liabilities          6,980.7                   6,474.6         
Commitments and contingencies    
Temporary equity          283.9                   288.9         
Shareholders' Equity    
Common stock          1.2                   1.2         
Additional paid-in capital          8,169.4                   8,175.6         
Accumulated other comprehensive income          25.9                   3.1         
Distributions in excess of accumulated earnings          (1,654.6)          (1,556.0)
Total Sun Communities, Inc. shareholders' equity          6,541.9                   6,623.9         
Noncontrolling interests    
Common and preferred OP units          86.8                   86.8         
Consolidated entities          20.9                   19.9         
Total noncontrolling interests          107.7                   106.7         
Total Shareholders' Equity          6,649.6                   6,730.6         
Total Liabilities, Temporary Equity and Shareholders' Equity $        13,914.2          $        13,494.1         

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

 


 Three Months Ended
 March 31, 2022 March 31, 2021 Change % Change
Revenues       
Real property (excluding transient)$        343.2          $        298.1          $        45.1                  15.1        %
Real property - transient         45.0                   32.5                   12.5                  38.5        %
Home sales         64.7                   52.2                   12.5                  23.9        %
Service, retail, dining and entertainment         80.8                   50.6                   30.2                  59.7        %
Interest         6.8                   2.6                   4.2                  161.5        %
Brokerage commissions and other, net         8.0                   6.0                   2.0                  33.3        %
Total Revenues         548.5                   442.0                   106.5                  24.1        %
Expenses       
Property operating and maintenance         129.3                   103.6                   25.7                  24.8        %
Real estate tax         26.1                   22.4                   3.7                  16.5        %
Home costs and selling         45.9                   41.6                   4.3                  10.3        %
Service, retail, dining and entertainment         70.5                   45.4                   25.1                  55.3        %
General and administrative         55.7                   38.2                   17.5                  45.8        %
Catastrophic event-related charges, net         —                   2.4                   (2.4) N/M
Business combinations         0.5                   1.2                   (0.7)         (58.3)        %
Depreciation and amortization         148.5                   123.9                   24.6                  19.9        %
Loss on extinguishment of debt         0.3                   —                   0.3          N/A
Interest         45.2                   39.5                   5.7                  14.4        %
Interest on mandatorily redeemable preferred OP units / equity         1.0                   1.0                   —                  —        %
Total Expenses         523.0                   419.2                   103.8                  24.8        %
Income Before Other Items         25.5                   22.8                   2.7                  11.8        %
Gain / (loss) on remeasurement of marketable securities         (34.5)          3.7                   (38.2) N/M
Loss on foreign currency translation         (2.2)          —                   (2.2) N/A
Gain on dispositions of properties         13.4                   —                   13.4          N/A
Other expense, net(6)         (0.6)          (0.5)          (0.1)         (20.0)        %
Gain on remeasurement of notes receivable         0.2                   0.4                   (0.2)         (50.0)        %
Income from nonconsolidated affiliates         0.9                   1.2                   (0.3)         (25.0)        %
Gain on remeasurement of investment in nonconsolidated affiliates         0.1                   0.1                   —                  —        %
Current tax benefit / (expense)         (1.3)          0.2                   (1.5) N/M
Deferred tax benefit         —                   0.1                   (0.1) N/M
Net Income         1.5                   28.0                   (26.5)         (94.6)        %
Less: Preferred return to preferred OP units / equity interests         3.0                   2.9                   0.1                  3.4        %
Less: Income / (loss) attributable to noncontrolling interests         (2.2)          0.3                   (2.5) N/M
Net Income Attributable to Sun Communities, Inc.$        0.7          $        24.8          $        (24.1)         (97.2)        %
        
Weighted average common shares outstanding - basic         115.3                   107.9                   7.4                  6.9        %
Weighted average common shares outstanding - diluted         115.9                   108.2                   7.7                  7.1        %
        
Basic earnings per share$        0.01          $        0.23          $        (0.22)         (95.7)        %
Diluted earnings per share$        0.01          $        0.23          $        (0.22)         (95.7)        %

N/M = Percentage change is not meaningful.

N/A = Percentage change is not applicable.

Outstanding Securities and Capitalization
(amounts in millions, units / shares outstanding in thousands, except for *)

 


Outstanding Securities - As of March 31, 2022
          
 Number of Units / Shares Outstanding Conversion Rate* If Converted(a) Issuance Price*
Per Unit
 Annual Distribution Rate
Non-convertible Securities         
Common shares116,207 N/A N/A N/A $3.52^
          
Convertible Securities         
Common OP units2,551 1.0000 2,551 N/A Mirrors common shares distributions
          
Series A-1 preferred OP units272 2.4390 664 $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 units85 0.6897 59 $100 5.50%
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.

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

Capitalization - As of March 31, 2022      
       
Equity Shares Share Price* Total
Common shares         116,207         $        175.29         $        20,369.9        
Common OP units         2,551         $        175.29                  447.2        
Subtotal         118,758           $        20,817.1        
       
Preferred OP units, as converted         2,802         $        175.29                  491.2        
Total diluted shares outstanding         121,560           $        21,308.3        
       
Debt      
Secured debt     $        3,366.6        
Unsecured debt              2,709.9        
Total debt     $        6,076.5        
       
Total Capitalization     $        27,384.8        

Reconciliations to Non-GAAP Financial Measures

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

 


 Three Months Ended
 March 31, 2022 March 31, 2021
Net Income Attributable to Sun Communities, Inc. Common Shareholders$        0.7          $        24.8         
Adjustments   
Depreciation and amortization         148.3                   123.8         
(Gain) / loss on remeasurement of marketable securities         34.5                   (3.7)
Gain on remeasurement of investment in nonconsolidated affiliates         (0.1)          (0.1)
Gain on remeasurement of notes receivable         (0.2)          (0.4)
Loss attributable to noncontrolling interests         (2.2)          (0.1)
Preferred return to preferred OP units         2.8                   0.5         
Gain on dispositions of properties         (13.4)          —         
Gain on dispositions of assets, net         (15.1)          (8.2)
FFO Attributable to Sun Communities, Inc. Common Shareholders and Dilutive Convertible Securities(1)(4)$        155.3          $        136.6         
    
Adjustments   
Business combination expense and other acquisition related costs(7)         3.1                   1.9         
Loss on extinguishment of debt         0.3                   —         
Catastrophic event-related charges, net         —                   2.4         
Loss of earnings - catastrophic event-related         —                   0.2         
Loss on foreign currency translation         2.2                   —         
Other adjustments, net(8)         1.9                   (0.1)
Core FFO Attributable to Sun Communities, Inc. Common Shareholders and Dilutive Convertible Securities(1)(4)$        162.8          $        141.0         
    
Weighted average common shares outstanding - basic         115.3                   107.9         
Add   
Common shares dilutive effect from forward equity sale         0.2                   0.2         
Restricted stock         0.4                   0.2         
Common OP units         2.5                   2.6         
Common stock issuable upon conversion of certain preferred OP units         2.8                   0.8         
Weighted Average Common Shares Outstanding - Fully Diluted         121.2                   111.7         
    
FFO Attributable to Sun Communities, Inc. Common Shareholders and Dilutive Convertible Securities(1)(4) Per Share - Fully Diluted$        1.28          $        1.22         
    
Core FFO Attributable to Sun Communities, Inc. Common Shareholders and Dilutive Convertible Securities(1)(4) Per Share - Fully Diluted$        1.34          $        1.26         

Reconciliation of Basic Earnings per Share to Core FFO per Fully Diluted Share(1)(4) for Expected Full Year and Second Quarter 2022

 FY 2022E Q2 2022E
 Low High Low High
Basic earnings per share$        2.46          $        2.58          $        0.86          $        0.90         
Depreciation and amortization         4.65                   4.65                   1.12                   1.12         
Gain on sale of assets         (0.46)          (0.46)          (0.09)          (0.09)
NCI and preferred return to preferred OP units         0.09                   0.09                   0.03                   0.03         
Other adjustments*         0.46                   0.46                   0.05                   0.05         
Core FFO per fully diluted Share(1)(4)$        7.20          $        7.32          $        1.97          $        2.01         

* Other adjustments include the categories presented in the reconciliation of Net Income to Core FFO table in the supplemental.

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

 


 Three Months Ended
 March 31, 2022 March 31, 2021
Net Income Attributable to Sun Communities, Inc. Common Shareholders$        0.7          $        24.8         
Interest income         (6.8)          (2.6)
Brokerage commissions and other revenues, net         (8.0)          (6.0)
General and administrative expense         55.7                   38.2         
Catastrophic event-related charges, net         —                   2.4         
Business combination expense         0.5                   1.2         
Depreciation and amortization         148.5                   123.9         
Loss on extinguishment of debt         0.3                   —         
Interest expense         45.2                   39.5         
Interest on mandatorily redeemable preferred OP units / equity         1.0                   1.0         
(Gain) / loss on remeasurement of marketable securities         34.5                   (3.7)
Loss on foreign currency translation         2.2                   —         
Gain on disposition of properties         (13.4)          —         
Other expense, net(6)         0.6                   0.5         
Gain on remeasurement of notes receivable         (0.2)          (0.4)
Income from nonconsolidated affiliates         (0.9)          (1.2)
Gain on remeasurement of investment in nonconsolidated affiliates         (0.1)          (0.1)
Current tax (benefit) / expense         1.3                   (0.2)
Deferred tax benefit         —                   (0.1)
Preferred return to preferred OP units / equity interests         3.0                   2.9         
Less: Income / (loss) attributable to noncontrolling interests         (2.2)          0.3         
NOI(1)$        261.9          $        220.4         


 Three Months Ended
 March 31, 2022 March 31, 2021
Real Property NOI(1)$        232.8         $        204.6        
Home Sales NOI(1)         18.8                  10.6        
Service, retail, dining and entertainment NOI(1)         10.3                  5.2        
NOI(1)$        261.9         $        220.4        

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

 


 Three Months Ended
 March 31, 2022 March 31, 2021
Net Income Attributable to Sun Communities, Inc. Common Shareholders$        0.7          $        24.8         
Adjustments   
Depreciation and amortization         148.5                   123.9         
Loss on extinguishment of debt         0.3                   —         
Interest expense         45.2                   39.5         
Interest on mandatorily redeemable preferred OP units / equity         1.0                   1.0         
Current tax (benefit) / expense         1.3                   (0.2)
Deferred tax benefit         —                   (0.1)
Income from nonconsolidated affiliates         (0.9)          (1.2)
Less: Gain on dispositions of properties         (13.4)          —         
Less: Gain on dispositions of assets, net         (15.1)          (8.2)
EBITDAre(1)$        167.6          $        179.5         
Adjustments   
Catastrophic event-related charges, net         —                   2.4         
Business combination expense         0.5                   1.2         
(Gain) / loss on remeasurement of marketable securities         34.5                   (3.7)
Loss on foreign currency translation         2.2                   —         
Other expense, net(6)         0.6                   0.5         
Gain on remeasurement of notes receivable         (0.2)          (0.4)
Gain on remeasurement of investment in nonconsolidated affiliates         (0.1)          (0.1)
Preferred return to preferred OP units / equity interests         3.0                   2.9         
(Income) / loss attributable to noncontrolling interests         (2.2)          0.3         
Plus: Gain on dispositions of assets, net         15.1                   8.2         
Recurring EBITDA(1) $        221.0          $        190.8         

Non-GAAP and Other Financial Measures

Debt Analysis
(amounts in millions, except for *)

 


 Quarter Ended
 3/31/2022 12/31/2021 9/30/2021 6/30/2021 3/31/2021
Debt Outstanding         
Secured debt$        3,366.6          $        3,380.7          $        3,403.4          $        3,457.7          $        3,472.9         
Unsecured debt         
Senior unsecured notes         1,186.7                   1,186.4                   591.3                   591.7                   —         
Line of credit and other debt(9)         1,453.3                   1,034.8                   624.8                   191.9                   875.1         
Preferred Equity - Sun NG Resorts - mandatorily redeemable         35.2                   35.2                   35.2                   35.2                   35.2         
Preferred OP units - mandatorily redeemable         34.7                   34.7                   34.7                   34.7                   34.7         
Total unsecured debt         2,709.9                   2,291.1                   1,286.0                   853.5                   945.0         
Total debt$        6,076.5          $        5,671.8          $        4,689.4          $        4,311.2          $        4,417.9         
          
% Fixed / Floating*         
Fixed         76.2        %          81.8        %          86.7        %          94.7        %          79.3        %
Floating         23.8        %          18.2        %          13.3        %          5.3        %          20.7        %
Total         100.0        %          100.0        %          100.0        %          100.0        %          100.0        %
          
Weighted Average Interest Rates*         
Secured debt         3.78        %          3.78        %          3.78        %          3.75        %          3.75        %
Senior unsecured notes         2.55        %          2.55        %          2.70        %          2.70        %          —        %
Line of credit and other debt(9)         1.25        %          0.98        %          0.98        %          0.93        %          1.77        %
Preferred Equity - Sun NG Resorts - mandatorily redeemable         6.00        %          6.00        %          6.00        %          6.00        %          6.00        %
Preferred OP units - mandatorily redeemable         5.93        %          5.93        %          5.93        %          5.93        %          5.93        %
Total average         2.96        %          3.04        %          3.30        %          3.52        %          3.39        %
          
Debt Ratios*         
Net Debt / Recurring EBITDA(1) (TTM)         5.9                   5.7                   4.9                   5.1                   6.1         
Net Debt / Enterprise Value         21.9        %          18.0        %          17.1        %          16.8        %          19.7        %
Net Debt / Gross Assets         36.6        %          35.4        %          31.2        %          29.6        %          31.8        %
          
Coverage Ratios*         
Recurring EBITDA(1) (TTM) / Interest 6.2   6.2   6.1   5.6   5.0 
Recurring EBITDA(1) (TTM) / Interest + Pref. Distributions + Pref. Stock Distribution 6.0   6.0   6.0   5.5   4.8 


Maturities / Principal Amortization Next Five Years 2022   2023   2024   2025   2026 
Secured debt         
Maturities$        70.7          $        185.6          $        315.3          $        50.5          $        521.6         
Principal amortization         46.0                   60.9                   57.4                   54.0                   45.9         
Line of credit and other debt(9)         6.8                   10.0                   213.0                   1,223.5                   —         
Preferred Equity - Sun NG Resorts - mandatorily redeemable         —                   —                   33.4                   1.8                   —         
Preferred OP units - mandatorily redeemable         —                   —                   27.4                   —                   —         
Total$        123.5          $        256.5          $        646.5          $        1,329.8          $        567.5         
          
Weighted average rate of maturities*         4.48        %          4.08        %          4.47        %          4.04        %          3.75        %

Same Property(2) Summary - MH / RV
(amounts in millions)

 


                        
 Three Months Ended
 Total Same Property - MH/RV MH RV
 March 31, 2022 March 31, 2021 Change % Change(a) March 31, 2022 March 31, 2021 Change % Change(a) March 31, 2022 March 31, 2021 Change % Change(a)
Financial Information                       
Revenue                       
Real property (excluding transient)$        233.1         $        218.7         $        14.4                 6.6        % $        182.4         $        174.9         $        7.5                  4.3        % $        50.7         $        43.8         $        6.9                  15.5        %
Real property - transient         39.1                  30.3                  8.8                 28.9        %          0.5                  0.6                  (0.1)         (23.1)        %          38.6                  29.7                  8.9                  30.0        %
Other         7.6                  7.2                  0.4                 5.5        %          4.9                  4.4                  0.5                  11.1        %          2.7                  2.8                  (0.1)         (3.3)        %
Total Operating         279.8                  256.2                  23.6                 9.2        %          187.8                  179.9                  7.9                  4.4        %          92.0                  76.3                  15.7                  20.5        %
Expense                       
Property Operating(10)(11)         88.9                  78.9                  10.0                 12.7        %          47.7                  43.9                  3.8                  8.7        %          41.2                  35.0                  6.2                  17.6        %
Real Property NOI(1)$        190.9         $        177.3         $        13.6                 7.7        % $        140.1         $        136.0         $        4.1                  3.0        % $        50.8         $        41.3         $        9.5                  22.9        %

(a) Percentages are calculated based on unrounded numbers.

                        


 As of     
 March 31, 2022 March 31, 2021 Change % Change
Other Information       
Number of properties         425                   425                   —           
        
MH occupancy         97.3        %      
RV occupancy         100.0        %      
MH & RV blended occupancy(3)         97.9        %      
        
Adjusted MH occupancy(3)         98.1        %      
Adjusted RV occupancy(3)         100.0        %      
Adjusted MH & RV blended occupancy(3)         98.5        %          96.9        %          1.6        %  
        
Sites available for development         7,645                   8,243                   (598        )  
        
Monthly base rent per site - MH$        620          $        597          $        23          3.8%(14)
Monthly base rent per site - RV(13)$        553          $        522          $        31          6.0%(14)
Monthly base rent per site - Total(13)$        604          $        580          $        24          4.2%(14)

Same Property(2) Summary - Marina
(amounts in millions)

 


 Three Months Ended
Financial InformationMarch 31, 2022 March 31, 2021 Change % Change(a)
Revenue       
Real property (excluding transient)$        45.8         $        43.3         $        2.5                 5.6        %
Real property - transient         1.4                  0.9                  0.5                 58.7        %
Other         2.3                  1.7                  0.6                 34.3        %
Total Operating         49.5                  45.9                  3.6                 7.7        %
Expense       
Property Operating(12)         24.4                  21.1                  3.3                 15.2        %
Real Property NOI$        25.1         $        24.8         $        0.3                 1.2        %

(a) Percentages are calculated based on unrounded numbers.

        


 As of     
 March 31, 2022 March 31, 2021 Change % Change
Other Information       
Number of properties        101                 101                 —                 —        %

Acquisitions and Other Summary(15)
(amounts in millions, except for statistical data)

 


  
 Three Months Ended
 March 31, 2022
Financial Information 
Revenues 
Real property (excluding transient)$        27.8 
Real property - transient         4.5 
Other         2.0 
Total Operating         34.3 
Expenses 
Property Operating(a)         17.6 
Real Property NOI$        16.7 
  
Other Information March 31, 2022
Number of properties         77         
Occupied sites         5,245         
Developed sites         5,898         
Occupancy %         88.9        %
Transient sites         7,518         
Wet slip and dry storage spaces         10,002         

(a) Acquisitions and Other results net $20.4 million of certain utility revenue against the related utility expense in property operating and maintenance expense for the quarter ended March 31, 2022.

Home Sales Summary
(amounts in millions, except for *)

 


        
 Three Months Ended
 March 31, 2022 March 31, 2021 Change % Change
Financial Information       
New Homes       
New home sales$        26.6          $        23.0          $        3.6                  15.7        %
New home cost of sales         21.6                   18.7                   2.9                  15.5        %
Gross profit – new homes         5.0                   4.3                   0.7                  16.3        %
Gross margin % – new homes         18.8        %          18.7        %          0.1        %  
Average selling price – new homes*$        179,730          $        154,174          $        25,556                  16.6        %
        
Pre-owned Homes       
Pre-owned home sales$        38.1          $        29.2          $        8.9                  30.5        %
Pre-owned home cost of sales         19.8                   18.6                   1.2                  6.5        %
Gross profit – pre-owned homes         18.3                   10.6                   7.7                  72.6        %
Gross margin % – pre-owned homes         48.0        %          36.4        %          11.6        %  
Average selling price – pre-owned homes*$        55,298          $        42,605          $        12,693                  29.8        %
        
Total Home Sales       
Revenue from home sales$        64.7          $        52.2          $        12.5                  23.9        %
Cost of home sales         41.4                   37.3                   4.1                  11.0        %
Home selling expenses         4.5                   4.3                   0.2                  4.7        %
Home Sales NOI(1)$        18.8          $        10.6          $        8.2                  77.4        %
        
Other Information       
New home sales volume*         148                   149                   (1        )         (0.7)        %
Pre-owned home sales volume*         689                   686                   3                  0.4        %
Total home sales volume*         837                   835                   2                  0.2        %

Rental Program Summary
(amounts in millions, except for *)

 


        
 Three Months Ended
 March 31, 2022 March 31, 2021 Change % Change
Financial Information       
Revenues       
Home rent$        16.1         $        17.0         $        (0.9)         (5.3)        %
Site rent         16.1                  19.1                  (3.0)         (15.7)        %
Total         32.2                  36.1                  (3.9)         (10.8)        %
        
Expenses       
Rental Program operating and maintenance         4.9                  5.2                  (0.3)         (5.8)        %
Rental Program NOI(1)$        27.3         $        30.9         $        (3.6)         (11.7)        %
        
Other Information       
Number of sold rental homes*         177                  211                  (34)         (16.1)        %
Number of occupied rentals, end of period*         9,467                  11,473                  (2,006)         (17.5)        %
Investment in occupied rental homes, end of period$        541.9         $        621.9         $        (80.0)         (12.9)        %
Weighted average monthly rental rate, end of period*$        1,139         $        1,055         $        84                  8.0        %

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.

Marina Summary
(amounts in millions, except for statistical data)

 


         
  Three Months Ended
  March 31, 2022 March 31, 2021 Change % Change
Financial Information        
Revenues        
Real property (excluding transient) $        67.0         $        46.1         $        20.9                 45.3        %
Real property - transient          2.5                  0.9                  1.6                 177.8        %
Other          2.9                  1.6                  1.3                 81.3        %
Total Operating          72.4                  48.6                  23.8                 49.0        %
Expenses        
Property Operating          33.2                  23.6                  9.6                 40.7        %
Real Property NOI          39.2                  25.0                  14.2                 56.8        %
Service, retail, dining and entertainment        
Revenue          71.2                  44.4                  26.8                 60.4        %
Expense          59.8                  38.0                  21.8                 57.4        %
NOI          11.4                  6.4                  5.0                 78.1        %
         
Marina NOI $        50.6         $        31.4         $        19.2                 61.1        %
         
Statistical information        
Number of properties          128          110          18         16.4        %
Total wet slips and dry storage spaces          45,725          39,338          6,387         16.2        %

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

We have reclassified utility revenue of $4.3 million and $2.6 million for the three months ended March 31, 2022 and 2021, to reflect the utility expenses associated with our marina properties portfolio net of recovery.

MH and RV Property Summary(16)        
           
           
  3/31/2022 12/31/2021 9/30/2021 6/30/2021 3/31/2021
FLORIDA          
Properties         129                  132                  131                  129                  128         
MH & Annual RV Developed sites         40,774                  40,783                  40,500                  40,171                  40,011         
Occupied MH & Annual RV         40,046                  40,019                  39,747                  39,402                  39,283         
MH & Annual RV Occupancy %         98.2        %         98.1        %         98.1        %         98.1        %         98.2        %
Transient RV sites         5,648                  5,950                  6,163                  5,895                  5,823         
Sites for development         1,243                  1,268                  1,414                  1,414                  1,497         
MICHIGAN          
Properties         84                  84                  83                  75                  74         
MH & Annual RV Developed sites         32,318                  32,257                  31,997                  29,600                  29,092         
Occupied MH & Annual RV         31,132                  31,061                  30,782                  28,671                  28,145         
MH & Annual RV Occupancy %         96.3        %         96.3        %         96.2        %         96.9        %         96.7        %
Transient RV sites         806                  869                  554                  509                  541         
Sites for development         1,422                  1,422                  1,481                  1,182                  1,182         
CALIFORNIA          
Properties         36                  36                  37                  36                  36         
MH & Annual RV Developed sites         6,759                  6,787                  6,760                  6,736                  6,734         
Occupied MH & Annual RV         6,691                  6,672                  6,642                  6,613                  6,609         
MH & Annual RV Occupancy %         99.0        %         98.3        %         98.3        %         98.2        %         98.1        %
Transient RV sites         2,174                  2,147                  2,410                  2,416                  2,418         
Sites for development         694                  534                  534                  127                  127         
TEXAS           
Properties         30                  30                  26                  25                  24         
MH & Annual RV Developed sites         8,257                  8,192                  8,004                  7,947                  7,928         
Occupied MH & Annual RV         8,071                  8,006                  7,805                  7,731                  7,671         
MH & Annual RV Occupancy %         97.7        %         97.7        %         97.5        %         97.3        %         96.8        %
Transient RV sites         2,475                  2,576                  2,131                  1,835                  1,773         
Sites for development         1,184                  1,184                  1,066                  1,194                  1,275         
ONTARIO, CANADA          
Properties         16                  16                  16                  16                  16         
MH & Annual RV Developed sites         4,410                  4,363                  4,361                  4,302                  4,199         
Occupied MH & Annual RV         4,410                  4,363                  4,361                  4,302                  4,199         
MH & Annual RV Occupancy %         100.0        %         100.0        %         100.0        %         100.0        %         100.0        %
Transient RV sites         827                  874                  807                  870                  964         
Sites for development         1,429                  1,429                  1,525                  1,525                  1,525         
CONNECTICUT          
Properties         16                  16                  16                  16                  16         
MH & Annual RV Developed sites         1,896                  1,902                  1,901                  1,901                  1,897         
Occupied MH & Annual RV         1,756                  1,765                  1,760                  1,757                  1,746         
MH & Annual RV Occupancy %         92.6        %         92.8        %         92.6        %         92.4        %         92.0        %
Transient RV sites         109                  103                  104                  104                  108         
Sites for development         —                  —                  —                  —                  —         
MAINE          
Properties         15                  15                  13                  13                  13         
MH & Annual RV Developed sites         2,449                  2,424                  2,220                  2,204                  2,190         
Occupied MH & Annual RV         2,365                  2,339                  2,136                  2,127                  2,119         
MH & Annual RV Occupancy %         96.6        %         96.5        %         96.2        %         96.5        %         96.8        %
Transient RV sites         981                  1,007                  776                  792                  805         
Sites for development         180                  180                  30                  30                  30         
           
           
ARIZONA          
Properties         12                  12                  12                  14                  14         
MH & Annual RV Developed sites         4,184                  4,123                  4,071                  4,401                  4,391         
Occupied MH & Annual RV         3,994                  3,917                  3,853                  4,116                  4,101         
MH & Annual RV Occupancy %         95.5        %         95.0        %         94.6        %         93.5        %         93.4        %
Transient RV sites         1,124                  1,185                  1,237                  1,260                  1,270         
Sites for development         —                  —                  —                  —                  —         
INDIANA          
Properties         12                  12                  12                  12                  12         
MH & Annual RV Developed sites         3,184                  3,174                  3,057                  3,087                  3,087         
Occupied MH & Annual RV         3,049                  3,047                  2,963                  2,970                  2,961         
MH & Annual RV Occupancy %         95.8        %         96.0        %         96.9        %         96.2        %         95.9        %
Transient RV sites         992                  1,002                  1,089                  1,089                  1,089         
Sites for development         177                  177                  204                  277                  277         
NEW JERSEY          
Properties         11                  11                  9                  8                  8         
MH & Annual RV Developed sites         2,599                  2,554                  2,551                  2,396                  2,366         
Occupied MH & Annual RV         2,599                  2,554                  2,551                  2,396                  2,366         
MH & Annual RV Occupancy %         100.0        %         100.0        %         100.0        %         100.0        %         100.0        %
Transient RV sites         1,395                  1,436                  899                  762                  794         
Sites for development         262                  262                  262                  262                  262         
COLORADO          
Properties         10                  10                  10                  10                  10         
MH & Annual RV Developed sites         2,552                  2,552                  2,552                  2,453                  2,453         
Occupied MH & Annual RV         2,450                  2,442                  2,431                  2,420                  2,395         
MH & Annual RV Occupancy %         96.0        %         95.7        %         95.3        %         98.7        %         97.6        %
Transient RV sites         987                  987                  987                  987                  962         
Sites for development         1,744                  1,744                  1,629                  1,225                  1,250         
NEW HAMPSHIRE          
Properties         10                  10                  10                  10                  10         
MH & Annual RV Developed sites         1,743                  1,748                  1,777                  1,777                  1,776         
Occupied MH & Annual RV         1,736                  1,740                  1,769                  1,769                  1,769         
MH & Annual RV Occupancy %         99.6        %         99.5        %         99.5        %         99.5        %         99.6        %
Transient RV sites         655                  650                  602                  602                  456         
Sites for development         111                  111                  111                  151                  151         
NEW YORK          
Properties         10                  10                  10                  10                  10         
MH & Annual RV Developed sites         1,495                  1,482                  1,457                  1,457                  1,452         
Occupied MH & Annual RV         1,466                  1,455                  1,432                  1,428                  1,415         
MH & Annual RV Occupancy %         98.1        %         98.2        %         98.3        %         98.0        %         97.5        %
Transient RV sites         1,646                  1,659                  1,684                  1,684                  1,689         
Sites for development         371                  371                  371                  371                  371         
VIRGINIA          
Properties         10                  10                  9                  9                  8         
MH & Annual RV Developed sites         1,259                  1,253                  1,238                  1,198                  1,179         
Occupied MH & Annual RV         1,255                  1,251                  1,237                  1,194                  1,177         
MH & Annual RV Occupancy %         99.7        %         99.8        %         99.9        %         99.7        %         99.8        %
Transient RV sites         2,181                  2,182                  1,956                  1,996                  1,365         
Sites for development         367                  367                  162                  162                  162         
OHIO           
Properties         9                  9                  9                  9                  9         
MH & Annual RV Developed sites         2,796                  2,796                  2,796                  2,797                  2,797         
Occupied MH & Annual RV         2,755                  2,759                  2,753                  2,770                  2,760         
MH & Annual RV Occupancy %         98.5        %         98.7        %         98.5        %         99.0        %         98.7        %
Transient RV sites         129                  129                  129                  128                  128         
Sites for development         22                  22                  22                  22                  22         
OTHER STATES / COUNTRY          
Properties         65                  64                  61                  63                  64         
MH & Annual RV Developed sites         13,341                  12,771                  12,699                  13,828                  13,765         
Occupied MH & Annual RV         12,996                  12,443                  12,390                  13,344                  13,253         
MH & Annual RV Occupancy %         97.4        %         97.4        %         97.6        %         96.5        %         96.3        %
Transient RV sites         7,138                  7,091                  6,394                  6,103                  6,110         
Sites for development         2,171                  1,601                  1,501                  1,501                  1,545         
           
TOTAL - MH AND RV PORTFOLIO           
Properties         475                  477                  464                  455                  452         
MH & Annual RV Developed sites         130,016                  129,161                  127,941                  126,255                  125,317         
Occupied MH & Annual RV         126,771                  125,833                  124,612                  123,010                  121,969         
MH & Annual RV Occupancy %         97.5        %(17)        97.4        %         97.4        %         97.4        %         97.3        %
Transient RV sites         29,267                  29,847                  27,922                  27,032                  26,295         
Sites for development(18)         11,377                  10,672                  10,312                  9,443                  9,676         
MH Communities age restricted         120                  121                  121                  120                  120         


Marina Property Summary(a)          
           
           
  3/31/2022 12/31/2021 9/30/2021 6/30/2021 3/31/2021
FLORIDA          
Properties         20                 20                 19                 18                 16        
Total wet slips and dry storage spaces         5,235                 5,233                 4,825                 4,528                 4,274        
RHODE ISLAND          
Properties         12                 12                 12                 11                 11        
Total wet slips and dry storage spaces         3,465                 3,485                 3,485                 3,302                 3,302        
CONNECTICUT          
Properties         11                 11                 11                 11                 11        
Total wet slips and dry storage spaces         3,307                 3,299                 3,299                 3,299                 3,299        
CALIFORNIA          
Properties         9                 9                 8                 7                 5        
Total wet slips and dry storage spaces         4,118                 3,940                 3,527                 2,884                 2,297        
MARYLAND          
Properties         9                 9                 8                 8                 8        
Total wet slips and dry storage spaces         2,665                 2,645                 2,409                 2,409                 2,409        
MASSACHUSETTS          
Properties         9                 9                 9                 9                 9        
Total wet slips and dry storage spaces         2,518                 2,546                 2,546                 2,546                 2,546        
NEW YORK          
Properties         8                 8                 8                 8                 8        
Total wet slips and dry storage spaces         2,822                 2,783                 2,783                 2,783                 2,783        
OTHER STATES          
Properties         50                 47                 45                 42                 42        
Total wet slips and dry storage spaces         21,595                 21,224                 20,741                 18,428                 18,428        
TOTAL - MARINA PORTFOLIO          
Properties         128                 125                 120                 114                 110        
Total wet slips and dry storage spaces         45,725                 45,155                 43,615                 40,179                 39,338        

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

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

 


  Three Months Ended  Year Ended
  March 31, 2022 December 31, 2021 December 31, 2020
Financial information MH / RV Marina MH / RV Marina MH / RV Marina
Acquisitions(19)(a) $        214.2         $        127.0         $        944.3         $        852.9         $        571.9         $        2,533.7        
Expansion and Development(20)          45.1                  2.3                  191.8                  9.9                  248.2                  —        
Recurring Capital Expenditures(21)          11.5                  4.3                  45.3                  19.3                  31.4                  2.1        
Lot Modifications(22)          6.4         N/A          28.8         N/A          29.4         N/A
Growth Projects(23)          7.2                  15.5                  25.6                  51.4                  28.3                  —        
Rebranding(24)          3.7         N/A          6.1         N/A N/A N/A
Total $        288.1         $        149.1         $        1,241.9         $        933.5         $        909.2         $        2,535.8        
             
Other Information            
Recurring Capital Expenditures Average / Site* $        90         $        109         $        371         $        491         $        265         N/A

(a)  Acquisitions include 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         264                 343                  49                 75                 451        
Michigan         156                 71                  13                 385                 60        
Ontario, Canada         213                 47                  7                 2                 59        
Texas         96                 65                  14                 79                 30        
Arizona         20                 77                  18                 4                 53        
Indiana         12                 2                  —                 56                 5        
Ohio         20                 (4)         —                 28                 2        
California         25                 19                  7                 1                 34        
Colorado         1                 8                  9                 7                 12        
Connecticut         16                 (9)         6                 —                 6        
New York         41                 11                  3                 2                 2        
New Hampshire         —                 (4)         —                 1                 11        
Maine         41                 26                  2                 4                 4        
New Jersey         89                 45                  —                 —                 4        
Virginia         86                 4                  —                 3                 1        
Other states         285                 (31)         20                 42                 34        
Three Months Ended March 31, 2022         1,365                 670                  148                 689                 768        


Total For Year Ended Resident Move-outs  Net Leased Sites(5) New Home Sales Pre-owned Home Sales Brokered
Re-sales
2021         5,276                 2,483                 732                 3,356                 3,528        
2020         5,365                 2,505                 570                 2,296                 2,557        


Percentage Trends Resident Move-outs  Resident
Re-sales
2022 TTM         2.8        %         7.5        %
2021         2.7        %         8.4        %
2020         3.3        %         6.9        %

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. Furthermore, 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 Property results for our MH and RV properties reflect constant currency for comparative purposes. Canadian currency figures in the prior comparative period have been translated at 2022 average exchange rates.

(3)   The Same Property MH and RV blended occupancy for 2022 is derived from 124,118 developed sites, of which 121,526 were occupied. The Same Property adjusted MH and RV blended occupancy percentage is derived from 123,346 developed sites, of which 121,526 were occupied. The number of developed sites excludes RV transient sites and nearly 1,100 recently completed but vacant MH expansion sites.

The Same Property adjusted MH and RV blended occupancy percentage for 2021 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 expenses, net was as follows (in millions):

 Three Months Ended
 March 31, 2022 March 31, 2021
Contingent consideration expense$        —          $        (0.1)
Repair reserve on repossessed homes         (0.6)          (0.4)
Other expenses, net$        (0.6) $        (0.5)

(7)   Business combination expense and other acquisition related costs represent (a) 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, and (b) nonrecurring integration expenses associated with new acquisitions during the three months ended March 31, 2022 and 2021, and (c) dead deal costs related to acquisitions and (d) costs associated with the termination of the bridge loan commitment during the three months ended March 31, 2022 related to the acquisition of Park Holidays.

(8)   Other adjustments, net was as follows (in millions):

 Three Months Ended
 March 31, 2022 March 31, 2021
Contingent consideration expense$        —         $        0.1         
Deferred tax benefit         —                  (0.2)
RV rebranding non-recurring cost         1.9                  —         
Other adjustments, net$        1.9         $        (0.1)

(9)   Line of credit and other debt includes borrowings under the Company's $2.0 billion Senior Credit Facility and a $28.4 million unsecured term loan which had been secured prior to July 1, 2021.

Line of credit and other debt previously included borrowings under the Company's $2.0 billion credit facility, the debt under the Company's $12.0 million MH floor plan facility which was terminated in October 2021, and the unsecured term loan which had been secured prior to July 1, 2021.

(10)   Same Property results for our MH and RV properties net $19.6 million and $17.3 million of certain utility revenue against the related utility expense in property operating and maintenance expense for the three months ended March 31, 2022 and 2021, respectively.

(11)   Same Property supplies and repair expense for our MH and RV properties excludes $0.4 million for the three months ended March 31, 2021, 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)   Same Property results for our marina properties net $2.5 million and $2.6 million of utility revenue against the related utility expense in property operating and maintenance expense for the three months ended March 31, 2022 and 2021, respectively.

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

(14)   Calculated using actual results without rounding.

(15)   Acquisitions and Other is comprised of recent acquisitions, recently opened ground-up development projects in stabilization and properties undergoing redevelopment.

(16)   MH and annual RV developed sites, Occupied MH and annual RV, and MH and annual RV occupancy percentage includes MH and annual RV sites, and excludes transient RV sites, as applicable.

(17)   As of March 31, 2022, total portfolio MH occupancy was 96.7 percent inclusive of the impact of over 1,000 recently constructed but vacant MH expansion sites, and annual RV occupancy was 100.0 percent.

(18)   Total sites for development were comprised of approximately 72.8 percent for expansion, 22.4 percent for greenfield development and 4.8 percent for redevelopment.

(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. 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. These costs for the three months ended March 31, 2022 include $20.0 million at our MH and RV properties and $42.6 million at our marina properties. For the years ended December 31, 2021 and 2020, these costs were $75.8 million at our MH and RV properties and $100.7 million at our marina properties, and $40.6 million at our MH and RV properties, 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.

(20)   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, and research and development.

(21)   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.

(22)   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.

(23)   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.

(24)   Rebranding includes new signage at our RV resorts and costs of building an RV mobile application and updated website.

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

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