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Sun Communities, Inc. Reports 2018 Third Quarter Results

 

NEWS RELEASE
October 24, 2018

Southfield, Michigan, October 24, 2018 - Sun Communities, Inc. (SUI) (the "Company"), a real estate investment trust ("REIT") that owns and operates, or has an interest in, manufactured housing ("MH") and recreational vehicle ("RV") communities, today reported its third quarter results for 2018.

Financial Results for the Quarter and Nine Months Ended September 30, 2018

For the quarter ended September 30, 2018, total revenues increased $55.3 million, or 20.6 percent, to $323.5 million compared to $268.2 million for the same period in 2017. Net income attributable to common stockholders was $46.1 million, or $0.56 per diluted common share, for the quarter ended September 30, 2018, as compared to net income attributable to common stockholders of $24.1 million, or $0.31 per diluted common share, for the same period in 2017.

For the nine months ended September 30, 2018, total revenues increased $112.3 million, or 15.2 percent, to $852.9 million compared to $740.5 million for the same period in 2017. Net income attributable to common stockholders was $96.5 million, or $1.19 per diluted common share, as compared to net income attributable to common stockholders of $57.6 million, or $0.76 per diluted common share, for the same period in 2017.

Non-GAAP Financial Measures and Portfolio Performance

  • Core Funds from Operations ("Core FFO")(1) for the quarter ended September 30, 2018, was $1.35 per diluted share and OP unit ("Share") as compared to $1.13 per Share in the prior year, an increase of 19.5 percent.
     
  • Same Community(2) Net Operating Income ("NOI")(1) increased by 6.2 percent for the quarter ended September 30, 2018, as compared to the same period in 2017.
     
  • Same Community occupancy(3) increased by 220 basis points to 97.8 percent, as compared to 95.6 percent at September 30, 2017.
     
  • Home sales volume increased 20.6 percent to 971 homes for the quarter ended September 30, 2018, as compared to 805 homes in the same period in 2017.  New home sales volume increased 43.1 percent to 146 homes for the quarter ended September 30, 2018, as compared to 102 homes in the same period in 2017.
     
  • Revenue producing sites increased by 628 sites for the quarter ended September 30, 2018, as compared to a 394 site increase in the same period in 2017.

Gary Shiffman, Chief Executive Officer of Sun Communities stated, "Our third quarter results demonstrate the ongoing strength of our platform. We delivered solid operational results and continued to position the Company for sustained long term growth.  Core FFO increased 19.5 percent driven by the strength of our MH and RV same community portfolio, 220 basis points in same community occupancy gains and the integration of communities acquired over the last twelve months.  Continued strength in our home sales provides evidence of the desirability of our communities and reinforces our commitment to pursue expansions and new developments - essential ingredients in providing sustained industry leading results."


OPERATING HIGHLIGHTS

Community Occupancy

Total portfolio occupancy was 96.1 percent at September 30, 2018, and 96.2 percent at September 30, 2017. The slight decline in occupancy was primarily attributable to recently constructed but vacant MH expansion sites.

During the quarter ended September 30, 2018, revenue producing sites increased by 628 sites, as compared to 394 revenue producing sites gained during the third quarter of 2017. During the nine months ended September 30, 2018, revenue producing sites increased by 1,878 sites, as compared to an increase of 1,833 revenue producing sites during the nine months ended September 30, 2017.


Same Community(2) Results

For the 336 stabilized communities owned and operated by the Company since January 1, 2017, NOI(1) for the quarter ended September 30, 2018 increased 6.2 percent over the same period in 2017, as a result of a 6.3 percent increase in revenues and a 6.6 percent increase in operating expenses. Expenses were elevated primarily as a result of supply and repair costs as well as changes to certain insurance claim reserves. Same Community occupancy(3) increased to 97.8 percent at September 30, 2018 from 95.6 percent at September 30, 2017.

For the nine months ended September 30, 2018, total revenues increased by 6.1 percent  while total expenses increased by 5.9 percent, resulting in an increase in NOI(1) of 6.2 percent over the nine months ended September 30, 2017.


Home Sales

During the quarter ended September 30, 2018, the Company sold 971 homes as compared to 805 homes sold during the same period in 2017, a 20.6 percent increase. Rental home sales, which are included in total home sales, were 316 and 286 for the quarters ended September 30, 2018 and 2017, respectively.

During the nine months ended September 30, 2018, 2,751 homes were sold compared to 2,432 homes sold for the same period in 2017, a 13.1 percent increase. Rental sales, which are included in total home sales, were 825 and 828 for the nine months ended September 30, 2018 and 2017, respectively.


PORTFOLIO ACTIVITY

Acquisitions

As previously disclosed, during the quarter ended September 30, 2018, the Company acquired a 507 site age-restricted RV resort located in Desert Hot Springs, California for total consideration of $14.3 million. Additionally, during the quarter, the Company acquired a 210 site RV resort located in Petoskey, Michigan for total consideration of $9.0 million and a 114 site RV resort located in Moab, Utah for total consideration of $14.6 million.

Hurricanes Florence and Michael

The Company has concluded its initial assessment of the communities impacted by Hurricanes Florence and Michael which indicated minor damage primarily comprised of downed trees, wind related debris and damage to certain outdoor fixtures.


BALANCE SHEET AND CAPITAL MARKETS ACTIVITY

Debt Transactions

During the quarter ended September 30, 2018, the Company repaid one collateralized term loan of $30.5 million with an interest rate of 6.34 percent. The loan was due to mature on March 1, 2019.

As of September 30, 2018, the Company had $3.0 billion of debt outstanding. The weighted average interest rate was 4.50 percent and the weighted average maturity was 9.4 years. The Company had $113.6 million of unrestricted cash on hand. At period-end the Company`s net debt to trailing twelve month Recurring EBITDA(1) ratio was 5.4 times.

As previously disclosed, during the quarter ended September 30, 2018, the Company entered into a $228.0 million collateralized term loan with a 4.10 percent fixed rate and a 20 year term.

Equity Transactions

During the quarter ended September 30, 2018, the Company closed an underwritten registered public offering of 5,060,000 shares of common stock. Proceeds from the offering were $499.9 million after deducting expenses related to the offering. The Company used the net proceeds of this offering to repay borrowings under the revolving loan and the term loan under our senior credit facility.

During the quarter ended September 30, 2018, the Company issued 398,516 shares of common stock through its At-the-Market ("ATM") equity sales program at a weighted average price of $100.19 per share. Net proceeds from the sales were $39.4 million.


GUIDANCE 2018

The Company is updating full year 2018 total portfolio guidance to take into account the contribution from closed acquisitions and the impact of completed equity share issuances during the quarter. Updated guidance is as follows:

Total Portfolio
Number of communities: 370

    Q4 2018E   FY 2018E
Net Income per fully diluted share   $0.22 - $0.26   $1.41 - $1.45
Core FFO(1) per fully diluted share   $1.01 - $1.04   $4.57 - $4.60

The Company is adjusting its 2018 Same Community NOI(1) growth guidance range for the year to 6.75 percent to 7.0 percent, from the prior range of 6.75 percent to 7.25 percent, reflecting the impact of third quarter same community expenses. Guidance does not include prospective acquisitions or capital markets activity.

Core FFO(1) per Share estimates assume certain gain and loss items that management considers unrelated to the operational and financial performance of our core business will be adjusted from FFO(1). The estimates and assumptions presented above represent a range of possible outcomes and may differ materially from actual results. The estimates and assumptions are forward looking based on the Company`s current assessment of economic and market conditions, as well as other risks outlined below under the caption "Forward-Looking Statements."


EARNINGS CONFERENCE CALL

A conference call to discuss third quarter operating results will be held on Thursday, October 25, 2018 at 11:00 A.M. (ET). To participate, call toll-free 877-407-9039. Callers outside the U.S. or Canada can access the call at 201-689-8470. A replay will be available following the call through November 8, 2018 and can be accessed toll-free by calling 844-512-2921 or 412-317-6671. The Conference ID number for the call and the replay is 13682866. The conference call will be available live on Sun Communities` website www.suncommunities.com. Replay will also be available on the website.

Sun Communities, Inc. is a REIT that, as of September 30, 2018, owned, operated, or had an interest in a portfolio of 370 communities comprising over 127,000 developed sites in 31 states and Ontario, Canada.

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

CONTACT

Please address all inquiries to our investor relations department at our website www.suncommunities.com, by phone to (248) 208-2500, by email to investorrelations@suncommunities.com or by mail to Sun Communities, Inc. Attn: Investor Relations, 27777 Franklin Road, Ste. 200, Southfield, MI 48034.


Forward-Looking Statements

This press release contains various "forward-looking statements" within the meaning of the Securities Act of 1933, as amended, and the Securities Exchange Act of 1934, as amended, and the Company intends that such forward-looking statements will be subject to the safe harbors created thereby. Forward-looking statements can be identified by words such as "will," "may," "could," "expect," "anticipate," "believes," "intends," "should," "plans," "estimates," "approximate," "guidance," and similar expressions in this press release that predict or indicate future events and trends and that do not report historical matters.

These forward-looking statements reflect the Company`s current views with respect to future events and financial performance, but involve known and unknown risks, uncertainties, and other factors, some of which are beyond the Company`s control. These risks, uncertainties, and other factors may cause the actual results of the Company to be materially different from any future results expressed or implied by such forward-looking statements. Such risks and uncertainties include national, regional and local economic climates, the ability to maintain rental rates and occupancy levels, competitive market forces, the performance of recent acquisitions, the ability to integrate future acquisitions smoothly and efficiently, changes in market rates of interest, changes in foreign currency exchange rates, the ability of manufactured home buyers to obtain financing and the level of repossessions by manufactured home lenders.  Further details of potential risks that may affect the Company are described in its periodic reports filed with the U.S. Securities and Exchange Commission, including in the "Risk Factors" section of the Company`s Annual Report on Form 10-K.

The forward-looking statements contained in this press release speak only as of the date hereof and the Company expressly disclaims any obligation to provide public updates, revisions or amendments to any forward-looking statements made herein to reflect changes in the Company`s assumptions, expectations of future events, or trends.


Investor Information                                                           


RESEARCH COVERAGE            
             
Firm   Analyst   Phone   Email
Bank of America Merrill Lynch   Joshua Dennerlein   (646) 855-1681   joshua.dennerlein@baml.com
BMO Capital Markets   John Kim   (212) 885-4115   johnp.kim@bmo.com
Citi Research   Michael Bilerman   (212) 816-1383   michael.bilerman@citi.com
    Nicholas Joseph   (212) 816-1909   nicholas.joseph@citi.com
Evercore ISI   Steve Sakwa   (212) 446-9462   steve.sakwa@evercoreisi.com
    Samir Khanal   (212) 888-3796   samir.khanal@evercoreisi.com
Green Street Advisors   John Pawlowski   (949) 640-8780   jpawlowski@greenstreetadvisors.com
    Ryan Lumb   (949) 640-8780   rlumb@greenstreetadvisors.com
RBC Capital Markets   Wes Golladay   (440) 715-2650   wes.golladay@rbccm.com
Robert W. Baird & Co.   Drew Babin   (610) 238-6634   dbabin@rwbaird.com
Wells Fargo   Todd Stender   (562) 637-1371   todd.stender@wellsfargo.com
             
             
INQUIRIES            
             
Sun Communities welcomes questions or comments from stockholders, analysts, investment managers, media, or any prospective investor. Please address all inquiries to our Investor Relations department.
             
At Our Website   www.suncommunities.com        
             
By Email   investorrelations@suncommunities.com    
             
By Phone   (248) 208-2500        
             
             
             
             
             
             
             
             


Portfolio Overview                                                                           
(As of September 30, 2018)

 


Balance Sheets                                                                                                                                              
(amounts in thousands)

    9/30/2018   12/31/2017
ASSETS:        
Land   $ 1,187,502     $ 1,107,838  
Land improvements and buildings   5,523,554     5,102,014  
Rental homes and improvements   559,290     528,074  
Furniture, fixtures and equipment   174,315     144,953  
Investment property   7,444,661     6,882,879  
Accumulated depreciation   (1,390,684 )   (1,237,525 )
Investment property, net   6,053,977     5,645,354  
Cash and cash equivalents   113,556     10,127  
Inventory of manufactured homes   41,030     30,430  
Notes and other receivables, net   167,698     163,496  
Collateralized receivables, net (4)   112,228     128,246  
Other assets, net   165,237     134,304  
Total assets   $ 6,653,726     $ 6,111,957  
LIABILITIES:        
Mortgage loans payable   $ 2,819,225     $ 2,867,356  
Secured borrowings (4)   113,089     129,182  
Preferred Equity - Sun NG Resorts - mandatorily redeemable   35,277     -  
Preferred OP units - mandatorily redeemable   37,338     41,443  
Lines of credit (5)   -     41,257  
Distributions payable   63,250     55,225  
Advanced reservation deposits and rent   135,647     132,205  
Other liabilities   163,459     138,536  
Total liabilities   3,367,285     3,405,204  
Commitments and contingencies   -     -  
Series A-4 preferred stock   31,739     32,414  
Series A-4 preferred OP units   10,026     10,652  
Equity Interests - NG Sun LLC   21,976     -  
STOCKHOLDERS` EQUITY:        
Common stock   864     797  
Additional paid-in capital   4,396,092     3,758,533  
Accumulated other comprehensive (loss) / income   (390 )   1,102  
Distributions in excess of accumulated earnings   (1,237,428 )   (1,162,001 )
Total SUI stockholders` equity   3,159,138     2,598,431  
Noncontrolling interests:        
Common and preferred OP units   56,018     60,971  
Consolidated variable interest entities   7,544     4,285  
Total noncontrolling interests   63,562     65,256  
Total stockholders` equity   3,222,700     2,663,687  
Total liabilities & stockholders` equity   $ 6,653,726     $ 6,111,957  



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

  Three Months Ended September 30,
  2018   2017   Change   % Change
REVENUES:              
Income from real property (excluding transient revenue) $ 184,414     $ 169,533     $ 14,881     8.8 %
Transient revenue 45,193     28,730     16,463     57.3 %
Revenue from home sales 46,131     33,197     12,934     39.0 %
Rental home revenue 13,589     12,757     832     6.5 %
Ancillary revenues 27,608     17,017     10,591     62.2 %
Interest 5,256     5,920     (664 )   (11.2 )%
Brokerage commissions and other revenues, net 1,347     1,091     256     23.5 %
Total revenues 323,538     268,245     55,293     20.6 %
               
EXPENSES:              
Property operating and maintenance 71,364     59,249     12,115     20.4 %
Real estate taxes 14,533     13,053     1,480     11.3 %
Cost of home sales 33,692     25,094     8,598     34.3 %
Rental home operating and maintenance 6,139     6,775     (636 )   (9.4 )%
Ancillary expenses 15,361     10,086     5,275     52.3 %
Home selling expenses 4,043     3,290     753     22.9 %
General and administrative 20,127     18,174     1,953     10.7 %
Transaction costs (6) 24     2,167     (2,143 )   (98.9 )%
Catastrophic weather related charges, net 173     7,756     (7,583 )   (97.8 )%
Depreciation and amortization 71,982     64,232     7,750     12.1 %
Loss on extinguishment of debt 939     -     939     N/A
Interest 33,521     32,085     1,436     4.5 %
Interest on mandatorily redeemable preferred OP units / equity 1,142     790     352     44.6 %
Total expenses 273,040     242,751     30,289     12.5 %
Income before other items 50,498     25,494     25,004     98.1 %
Other income, net (7) 1,231     3,345     (2,114 )   (63.2 )%
Current tax (expense) / benefit (213 )   38     (251 )   (660.5 )%
Deferred tax benefit 199     81     118     145.7 %
Net income 51,715     28,958     22,757     78.6 %
Less: Preferred return to preferred OP units / equity (1,152 )   (1,112 )   (40 )   3.6 %
Less: Amounts attributable to noncontrolling interests (4,071 )   (1,776 )   (2,295 )   129.2 %
Less: Preferred stock distribution (432 )   (1,955 )   1,523     (77.9 )%
NET INCOME ATTRIBUTABLE TO SUI $ 46,060     $ 24,115     $ 21,945     91.0 %
               
Weighted average common shares outstanding:              
Basic 81,599     78,369     3,230     4.1 %
Diluted 82,081     78,808     3,273     4.2 %
Earnings per share:              
Basic $ 0.56     $ 0.31     $ 0.25     80.6 %
Diluted $ 0.56     $ 0.31     $ 0.25     80.6 %



Statements of Operations - Year to Date Comparison                                                                              
(amounts in thousands, except per share amounts)

    Nine Months Ended September 30,
    2018   2017   Change   % Change
REVENUES:                
Income from real property (excluding transient revenue)   $ 536,704     $ 495,179     $ 41,525     8.4 %
Transient revenue   88,784     65,599     23,185     35.3 %
Revenue from home sales   122,248     91,319     30,929     33.9 %
Rental home revenue   39,957     37,774     2,183     5.8 %
Ancillary revenues   46,207     32,086     14,121     44.0 %
Interest   15,849     15,609     240     1.5 %
Brokerage commissions and other revenues, net   3,131     2,978     153     5.1 %
Total revenues   852,880     740,544     112,336     15.2 %
                 
EXPENSES:                
Property operating and maintenance   181,579     159,861     21,718     13.6 %
Real estate taxes   42,445     39,322     3,123     7.9 %
Cost of home sales   91,195     67,999     23,196     34.1 %
Rental home operating and maintenance   16,577     16,821     (244 )   (1.5 )%
Ancillary expenses   28,985     21,995     6,990     31.8 %
Home selling expenses   11,319     9,391     1,928     20.5 %
General and administrative   61,432     55,912     5,520     9.9 %
Transaction costs (6)   138     6,990     (6,852 )   (98.0 )%
Catastrophic weather related charges, net   (1,987 )   8,124     (10,111 )   (124.5 )%
Depreciation and amortization   206,192     189,719     16,473     8.7 %
Loss on extinguishment of debt   2,657     759     1,898     250.1 %
Interest   96,919     95,765     1,154     1.2 %
Interest on mandatorily redeemable preferred OP units / equity   2,551     2,361     190     8.0 %
Total expenses   740,002     675,019     64,983     9.6 %
Income before other items   112,878     65,525     47,353     72.3 %
Other (expense) / income, net (7)   (3,214 )   5,340     (8,554 )   (160.2 )%
Current tax expense   (612 )   (133 )   (479 )   (360.2 )%
Deferred tax benefit   434     745     (311 )   (41.7 )%
Net income   109,486     71,477     38,009     53.2 %
Less: Preferred return to preferred OP units / equity   (3,335 )   (3,482 )   147     (4.2 )%
Less: Amounts attributable to noncontrolling interests   (8,392 )   (4,179 )   (4,213 )   100.8 %
Less: Preferred stock distribution   (1,305 )   (6,233 )   4,928     (79.1 )%
NET INCOME ATTRIBUTABLE TO SUI   $ 96,454     $ 57,583     $ 38,871     67.5 %
                 
Weighted average common shares outstanding:                
Basic   80,022     75,234     4,788     6.4 %
Diluted   80,024     75,846     4,178     5.5 %
Earnings per share:                
Basic   $ 1.19     $ 0.76     $ 0.43     56.6 %
Diluted   $ 1.19     $ 0.76     $ 0.43     56.6 %



Outstanding Securities and Capitalization 
(in thousands except for *)

Outstanding Securities - As of September 30, 2018
                   
  Number of Units/Shares Outstanding   Conversion Rate*   If Converted   Issuance Price per unit*   Annual Distribution Rate*
Convertible Securities                  
Series A-1 preferred OP units 332   2.4390   810   $100   6.0%
Series A-3 preferred OP units 40   1.8605   74   $100   4.5%
Series A-4 preferred OP units 410   0.4444   182   $25   6.5%
Series C preferred OP units 314   1.1100   349   $100   4.5%
Common OP units 2,729   1.0000   2,729   N/A   Mirrors common shares distributions
Series A-4 cumulative convertible preferred stock 1,063   0.4444   472   $25   6.5%
                   
Non-Convertible Securities                  
Common shares 86,355   N/A   N/A   N/A   $2.84^
^ Annual distribution is based on the last quarterly distribution annualized.


Capitalization - As of September 30, 2018            
             
Equity   Shares   Share Price*   Total
Common shares   86,355     $ 101.54     $ 8,768,487  
Common OP units   2,729     $ 101.54     277,103  
Subtotal   89,084         $ 9,045,590  
             
Series A-1 preferred OP units   810     $ 101.54     82,247  
Series A-3 preferred OP units   74     $ 101.54     7,514  
Series A-4 preferred OP units   182     $ 101.54     18,480  
Series C preferred OP units   349     $ 101.54     35,437  
Total diluted shares outstanding   90,499         $ 9,189,268  
 
Debt
Mortgage loans payable           $ 2,819,225  
Secured borrowings (4)           113,089  
Preferred Equity - Sun NG Resorts - mandatorily redeemable           35,277  
Preferred OP units - mandatorily redeemable           37,338  
Lines of credit (5)           -  
Total Debt           $ 3,004,929  
 
Preferred
A-4 preferred stock   1,063     $ 25.00     $ 26,575  
Total Capitalization           $ 12,220,772  


Reconciliations to Non-GAAP Financial Measures


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

  Three Months Ended
 September 30,
  Nine Months Ended
 September 30,
  2018   2017   2018   2017
Net income attributable to Sun Communities, Inc. common stockholders: $ 46,060     $ 24,115     $ 96,454     $ 57,583  
Adjustments:              
Depreciation and amortization 72,269     64,484     206,892     190,143  
Amounts attributable to noncontrolling interests 4,311     1,608     7,724     3,710  
Preferred return to preferred OP units 549     578     1,654     1,750  
Preferred distribution to Series A-4 preferred stock 432     441     1,305     1,666  
Gain on disposition of assets, net (6,603 )   (4,309 )   (16,977 )   (11,342 )
FFO attributable to Sun Communities, Inc. common stockholders and dilutive convertible securities (1) (8)

$ 117,018     $ 86,917     $ 297,052     $ 243,510  
Adjustments:              
Transaction costs (6) -     2,167     -     6,990  
Other acquisition related costs (9) 345     343     781     2,712  
Loss on extinguishment of debt 939     -     2,657     759  
Catastrophic weather related charges, net 173     7,756     (1,987 )   8,124  
Loss of earnings - catastrophic weather related (10) 325     -     975     -  
Other (income) / expense, net (7) (1,231 )   (3,345 )   3,214     (5,340 )
Debt premium write-off (411 )   -     (1,402 )   (438 )
Ground lease intangible write-off -     -     817     -  
Deferred tax benefit (199 )   (81 )   (434 )   (745 )
Core FFO attributable to Sun Communities, Inc. common stockholders and dilutive convertible securities (1) (8)

$ 116,959     $ 93,757     $ 301,673     $ 255,572  
               
Weighted average common shares outstanding - basic: 81,599     78,369     80,022     75,234  
Add:              
Common stock issuable upon conversion of stock options 2     2     2     2  
Restricted stock 480     437     633     610  
Common OP units 2,731     2,761     2,735     2,758  
Common stock issuable upon conversion of Series A-1 preferred OP units 813     858     825     877  
Common stock issuable upon conversion of Series A-4 preferred stock 472     482     472     620  
Common stock issuable upon conversion of Aspen preferred OP units 448     -     -     -  
Common stock issuable upon conversion of Series A-3 preferred OP units 75     75     75     75  
Weighted average common shares outstanding - fully diluted 86,620     82,984     84,764     80,176  
               
FFO attributable to Sun Communities, Inc. common stockholders and dilutive convertible securities (1) (8) per share - fully diluted $ 1.35     $ 1.05     $ 3.50     $ 3.04  
Core FFO attributable to Sun Communities, Inc. common stockholders and dilutive convertible securities (1) (8) per share - fully diluted

$ 1.35     $ 1.13     $ 3.56     $ 3.19  


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


  Three Months Ended
 September 30,
  Nine Months Ended
 September 30,
  2018   2017   2018   2017
Net income attributable to Sun Communities, Inc., common stockholders: $ 46,060     $ 24,115     $ 96,454     $ 57,583  
Adjustments:              
Interest expense 34,663     32,875     99,470     98,126  
Loss on extinguishment of debt 939     -     2,657     759  
Current tax (benefit) / expense 213     (38 )   612     133  
Deferred tax benefit (199 )   (81 )   (434 )   (745 )
Depreciation and amortization 71,982     64,232     206,192     189,719  
Gain on disposition of assets, net (6,603 )   (4,309 )   (16,977 )   (11,342 )
EBITDAre (1) $ 147,055     $ 116,794     $ 387,974     $ 334,233  
Adjustments:              
Transaction costs (6) 24     2,167     138     6,990  
Other (income) / expense, net (7) (1,231 )   (3,345 )   3,214     (5,340 )
Catastrophic weather related charges, net 173     7,756     (1,987 )   8,124  
Preferred return to preferred OP units / equity 1,152     1,112     3,335     3,482  
Amounts attributable to noncontrolling interests 4,071     1,776     8,392     4,179  
Preferred stock distribution 432     1,955     1,305     6,233  
Plus: Gain on dispositions of assets, net 6,603     4,309     16,977     11,342  
Recurring EBITDA (1) $ 158,279     $ 132,524     $ 419,348     $ 369,243  



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


  Three Months Ended
 September 30,
  Nine Months Ended
 September 30,
  2018   2017   2018   2017
Net income attributable to Sun Communities, Inc., common stockholders: $ 46,060     $ 24,115     $ 96,454     $ 57,583  
Other revenues (6,603 )   (7,011 )   (18,980 )   (18,587 )
Home selling expenses 4,043     3,290     11,319     9,391  
General and administrative 20,127     18,174     61,432     55,912  
Transaction costs (6) 24     2,167     138     6,990  
Depreciation and amortization 71,982     64,232     206,192     189,719  
Loss on extinguishment of debt 939     -     2,657     759  
Interest expense 34,663     32,875     99,470     98,126  
Catastrophic weather related charges, net 173     7,756     (1,987 )   8,124  
Other (income) / expense, net (7) (1,231 )   (3,345 )   3,214     (5,340 )
Current tax expense / (benefit) 213     (38 )   612     133  
Deferred tax benefit (199 )   (81 )   (434 )   (745 )
Preferred return to preferred OP units / equity 1,152     1,112     3,335     3,482  
Amounts attributable to noncontrolling interests 4,071     1,776     8,392     4,179  
Preferred stock distribution 432     1,955     1,305     6,233  
NOI(1) / Gross Profit $ 175,846     $ 146,977     $ 473,119     $ 415,959  


  Three Months Ended
 September 30,
  Nine Months Ended
 September 30,
  2018   2017   2018   2017
Real Property NOI (1) $ 143,710     $ 125,961     $ 401,464     $ 361,595  
Rental Program NOI (1) 23,847     22,060     72,625     68,759  
Home Sales NOI (1) / Gross Profit 12,439     8,103     31,053     23,320  
Ancillary NOI (1) / Gross Profit 12,247     6,931     17,222     10,091  
Site rent from Rental Program (included in Real Property NOI) (1)(11) (16,397 )   (16,078 )   (49,245 )   (47,806 )
NOI (1) / Gross profit $ 175,846     $ 146,977     $ 473,119     $ 415,959  



Non-GAAP and Other Financial Measures


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

  Quarter Ended
  9/30/2018   6/30/2018   3/31/2018   12/31/2017   9/30/2017
FINANCIAL INFORMATION                  
Total revenues $ 323,538     $ 271,426     $ 257,916     $ 242,026     $ 268,245  
Net income 51,715     24,170     33,601     10,342     28,958  
Net income attributable to common stockholders 46,060     20,408     29,986     7,438     24,115  
Earnings per share basic* $ 0.56     $ 0.25     $ 0.38     $ 0.09     $ 0.31  
Earnings per share diluted* 0.56     0.25     0.38     0.09     0.31  
                   
Recurring EBITDA (1) $ 158,279     $ 128,790     $ 132,222     $ 119,408     $ 132,524  
FFO attributable to Sun Communities, Inc. common stockholders and dilutive convertible securities (1) (8)

117,018     85,623     94,976     76,609     86,917  
Core FFO attributable to Sun Communities, Inc. common stockholders and dilutive convertible securities (1) (8)

116,959     90,372     94,907     81,812     93,757  
FFO attributable to Sun Communities, Inc. common stockholders and dilutive convertible securities (1) (8) per share - fully diluted* $ 1.35     $ 1.02     $ 1.14     $ 0.92     $ 1.05  
Core FFO attributable to Sun Communities, Inc. common stockholders and dilutive convertible securities (1) (8) per share - fully diluted* 1.35     1.07     1.14     0.98     1.13  
                   
BALANCE SHEETS                  
Total assets $ 6,653,726     $ 6,492,348     $ 6,149,653     $ 6,111,957     $ 6,157,836  
Total debt 3,004,929     3,364,081     3,129,440     3,079,238     3,003,427  
Total liabilities 3,367,285     3,736,621     3,471,096     3,405,204     3,351,021  


  Quarter Ended
  9/30/2018   6/30/2018   3/31/2018   12/31/2017   9/30/2017
OPERATING INFORMATION*                  
New home sales 146     134     106     103     102  
Pre-owned home sales 825     809     731     747     703  
Total homes sold 971     943     837     850     805  
                   
Communities 370     367     350     350     348  
Developed sites 108,142     107,192     106,617     106,036     104,359  
Transient RV sites 19,432     19,007     15,693     15,856     15,915  
Total sites 127,574     126,199     122,310     121,892     120,274  
                   
MH occupancy 94.9 %   95.0 %   94.7 %   94.6 %   95.2 %
RV occupancy 100.0 %   100.0 %   100.0 %   100.0 %   100.0 %
Total blended MH and RV occupancy 96.1 %   96.1 %   95.8 %   95.8 %   96.2 %



Debt Analysis
(amounts in thousands)

  Quarter Ended
  9/30/2018   6/30/2018   3/31/2018   12/31/2017   9/30/2017
DEBT OUTSTANDING                  
Mortgage loans payable $ 2,819,225     $ 2,636,847     $ 2,826,225     $ 2,867,356     $ 2,822,640  
Secured borrowings (4) 113,089     118,242     124,077     129,182     134,884  
Preferred Equity - Sun NG Resorts - mandatorily redeemable 35,277     35,277     -     -     -  
Preferred OP units - mandatorily redeemable 37,338     37,338     37,338     41,443     45,903  
Lines of credit (5) -     536,377     141,800     41,257     -  
Total debt $ 3,004,929     $ 3,364,081     $ 3,129,440     $ 3,079,238     $ 3,003,427  
                   
% FIXED/FLOATING                  
Fixed 100.0 %   84.0 %   90.6 %   93.7 %   94.9 %
Floating - %   16.0 %   9.4 %   6.3 %   5.1 %
Total 100.0 %   100.0 %   100.0 %   100.0 %   100.0 %
                   
WEIGHTED AVERAGE INTEREST RATES                  
Mortgage loans payable 4.23 ...