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Sun Communities, Inc. Reports 2019 Third Quarter Results


Southfield, Michigan, Oct. 23, 2019 (GLOBE NEWSWIRE) --  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 2019.

Financial Results for the Quarter and Nine Months Ended September 30, 2019

For the quarter ended September 30, 2019, total revenues increased $39.0 million, or 12.1 percent, to $362.4 million compared to $323.4 million for the same period in 2018. Net income attributable to common stockholders was $57.0 million, or $0.63 per diluted common share, for the quarter ended September 30, 2019, as compared to net income attributable to common stockholders of $46.1 million, or $0.56 per diluted common share, for the same period in 2018.

For the nine months ended September 30, 2019, total revenues increased $109.4 million, or 12.8 percent, to $962.2 million compared to $852.8 million for the same period in 2018. Net income attributable to common stockholders was $131.7 million, or $1.50 per diluted common share, for the nine months ended September 30, 2019, as compared to net income attributable to common stockholders of $96.5 million, or $1.19 per diluted common share, for the same period in 2018.

Non-GAAP Financial Measures and Portfolio Performance

  • Core Funds from Operations (“Core FFO”)(1) for the quarter ended September 30, 2019, was $1.46 per diluted share and OP unit (“Share”) as compared to $1.35 in the prior year, an increase of 8.1 percent.
     
  • Same Community(2) Net Operating Income (“NOI”)(1) increased by 7.2 percent for the quarter ended September 30, 2019, as compared to the same period in 2018.
     
  • Same Community(2) Occupancy increased by 210 basis points to 98.3 percent, as compared to 96.2 percent at September 30, 2018.
     
  • Revenue Producing Sites increased by 766 sites for the quarter ended September 30, 2019, bringing total portfolio occupancy to 96.7 percent.

Gary Shiffman, Chief Executive Officer of Sun Communities stated, “During the third quarter, we continued our consistent track record of delivering strong organic growth, as portfolio-wide occupancy gains along with tight cost controls contributed to 7.2 percent same community NOI growth. These results were further enhanced by the solid performance at our recent acquisitions. Despite a competitive acquisition environment, Sun has completed over $444.0 million of transactions year to date which will strengthen our growth over time.  We believe that our ability to address sellers’ needs for flexible exit and monetization strategies will continue to be a competitive advantage in our pursuit of accretive acquisitions.”


OPERATING HIGHLIGHTS

Portfolio Occupancy

Total portfolio occupancy was 96.7 percent at September 30, 2019, compared to 96.1 percent at September 30, 2018.

During the quarter ended September 30, 2019, revenue producing sites increased by 766 sites, as compared to 628 revenue producing sites gained during the third quarter of 2018, a 22.0 percent increase.

During the nine months ended September 30, 2019, revenue producing sites increased by 2,005 sites, as compared to an increase of 1,878 revenue producing sites during the nine months ended September 30, 2018, a 6.8 percent increase.


Same Community(2) Results

For the 345 communities owned and operated by the Company since January 1, 2018, NOI(1) for the quarter ended September 30, 2019, increased 7.2 percent over the same period in 2018, as a result of a 6.1 percent increase in revenues, and 3.9 percent increase in operating expenses. Same Community occupancy(3) increased to 98.3 percent at September 30, 2019 from 96.2 percent at September 30, 2018.

For the nine months ended September 30, 2019, NOI(1) increased 7.2 percent over the same period in 2018, as a result of a 6.2 percent increase in revenues, and a 3.9 percent increase in operating expenses.


Home Sales

During the quarter ended September 30, 2019, the Company sold 906 homes as compared to 971 homes sold during the same period in 2018.  New home sales volume increased 14.4 percent to 167 new home sales for the quarter ended September 30, 2019, as compared to 146 homes in the same period in 2018. Rental home sales, which are included in total home sales, were 317 in 2019, as compared to 316 sold during 2018.

During the nine months ended September 30, 2019, 2,631 homes were sold compared to 2,751 for the same period in 2018. New home sales volume increased 11.7 percent to 431 new home sales for the nine months ended September 30, 2019, as compared to 386 homes during the same period in 2018.  Rental home sales, which are included in total home sales, were 859 in 2019, an increase of 4.1 percent over the 825 sold during 2018.


PORTFOLIO ACTIVITY

Acquisitions

During the quarter ended September 30, 2019, the Company acquired the following communities:

Community Name   Type   Sites     Expansion Sites   State   Total Purchase Price (in millions)   Month Acquired
Glen Ellis   RV   244       40     NH   $ 6.0     September
Leisure Point Resort   MH / RV   502   (1)       DE   $ 44.5     September
Chincoteague Island   RV             VA   $ 19.5     August
Reunion Lake   RV   202       69     LA   $ 23.5     July

(1) Contains 201 MH sites and 301 RV sites.

For the nine months ended September 30, 2019, the Company acquired 14 communities, totaling 5,058 sites, for a total purchase price of $444.2 million.

Pending Transaction - Jensen Portfolio

On August 22, 2019, the Company entered into an agreement to acquire a 31-community manufactured housing portfolio (the “Jensen Portfolio”) for $343.6 million. The Jensen Portfolio has 5,230 operating sites and 466 additional sites available for development. The 31 communities are located in eight states across the eastern United States.  The purchase price will be paid through a combination of $274.8 million shares of common stock and cash consideration. We expect to acquire the Jensen Portfolio no later than October 31, 2019. However, the closing is subject to the satisfaction of customary closing conditions, including obtaining certain third party consents. If these conditions are not satisfied or waived, or if the merger agreement is otherwise terminated in accordance with its terms, then the acquisition will not be consummated.

Construction Activity

During the quarter ended September 30, 2019, the Company completed the construction of 485 sites at the following ground-up developments:

Community Name   Type   State   Completed Construction Sites   Remaining Construction Sites (1)
Carolina Pines   RV   SC   105     460
Jellystone Golden Valley   RV   NC   113     202
River Run Ranch   RV   CO   215     929
Smith Creek Crossing   MH   CO   52     258

(1) Remaining sites are approximate and may be adjusted as final construction is completed.

During the quarter ended September 30, 2019, the Company completed the construction of 177 expansion sites in three communities. Year to date, the Company has completed the construction of 365 expansion sites in 10 communities. The Company expects to complete the construction of an additional 800 to 1,000 expansion sites by year end.


BALANCE SHEET AND CAPITAL MARKETS ACTIVITY

Series A-4 Preferred Stock and Series A-4 Preferred OP Units Conversion

The Company intends to convert 1,051,501 shares of Series A-4 preferred stock and 405,656 Series A-4 preferred OP units issued by the Operating Partnership into its common stock and common OP units. Each share of Series A-4 preferred stock is convertible into approximately 0.4444 shares of common stock and each Series A-4 preferred OP unit is convertible into approximately 0.4444 common OP units. The Company has the right under its charter and the Operating Partnership’s partnership agreement to convert these securities, if at any time after November 26, 2019, the volume weighted average of the daily volume weighted average price of a share of its common stock on the New York Stock Exchange is equal to or greater than $64.97 for at least 20 trading days in a period of 30 consecutive trading days (the “Pricing Target”). On October 17, 2019, the Company’s Board of Directors approved the conversion of all of the Series A-4 preferred stock and Series A-4 preferred OP units into common stock and common OP units, respectively, provided that the Pricing Target is satisfied on November 27, 2019. If the Pricing target is satisfied, the conversion is expected to occur on December 13, 2019.

Debt Transactions

As of September 30, 2019, the Company had $3.3 billion of debt outstanding. The weighted average interest rate was 4.3 percent and the weighted average maturity was 9.8 years. The Company had $26.2 million of unrestricted cash on hand. At period-end the Company’s net debt to trailing twelve month Recurring EBITDA(1) ratio was 5.3 times.

During the quarter ended September 30, 2019, the Company completed a $250.0 million ten-year term loan transaction which carries an interest rate of 2.925 percent.  Concurrently, the Company repaid a $134.0 million term loan which was due to mature in May 2023.


GUIDANCE 2019

The Company is revising its 2019 guidance for the following metrics:

    Previous Range
 FY 2019E
  Revised Range
FY 2019E
  4Q 2019E
Net Income per fully diluted share   $1.81 - $1.87   $1.77 - $1.81   $0.28 - $0.32
Core FFO (1) per fully diluted share   $4.84 - $4.90   $4.86 - $4.90   $1.04 - $1.08

Same Community(2) Portfolio
Number of communities: 345

  2019E Change %
Income from real property 6.0% - 6.2%
Total property operating expenses 4.1% - 4.5%
Net operating income (1) 6.8% - 7.2%

Guidance estimates include the 31-community Jensen Portfolio acquisition, which is expected to close by October 31, 2019, and exclude any other prospective acquisitions and 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 24, 2019 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 7, 2019 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 13694212. The conference call will be available live on Sun Communities’ website located at www.suncommunities.com. The replay will also be available on the website.

Sun Communities, Inc. is a REIT that, as of September 30, 2019, owned, operated, or had an interest in a portfolio of 389 communities comprising over 134,000 developed sites in 32 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
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, 2019)



Balance Sheets                                                                                                                                              
(amounts in thousands)


    (Unaudited)    
    September 30, 2019   December 31, 2018
Assets        
Land   $ 1,311,103     $ 1,201,945  
Land improvements and buildings   6,200,895     5,586,250  
Rental homes and improvements   614,002     571,661  
Furniture, fixtures and equipment   251,363     201,090  
Investment property   8,377,363     7,560,946  
Accumulated depreciation   (1,619,924 )   (1,442,630 )
Investment property, net   6,757,439     6,118,316  
Cash and cash equivalents   26,198     50,311  
Marketable securities   64,818     49,037  
Inventory of manufactured homes   55,234     49,199  
Notes and other receivables, net   174,934     160,077  
Collateralized receivables, net (4)   93,054     106,924  
Other assets, net   226,177     176,162  
Total Assets   $ 7,397,854     $ 6,710,026  
Liabilities        
Mortgage loans payable   $ 2,967,128     $ 2,815,957  
Secured borrowings on collateralized receivables (4)   93,669     107,731  
Preferred Equity - Sun NG Resorts - mandatorily redeemable   35,249     35,277  
Preferred OP units - mandatorily redeemable   34,663     37,338  
Lines of credit (5)   140,632     128,000  
Distributions payable   69,726     63,249  
Advanced reservation deposits and rent   137,797     133,698  
Other liabilities   242,119     157,862  
Total Liabilities   3,720,983     3,479,112  
Commitments and contingencies        
Series A-4 preferred stock   31,402     31,739  
Series A-4 preferred OP units   9,540     9,877  
Series D preferred OP units   51,248      
Equity Interests - NG Sun LLC and NG Whitewater   27,461     21,976  
Stockholders' Equity        
Common stock   907     864  
Additional paid-in capital   4,854,958     4,398,949  
Accumulated other comprehensive loss   (2,825 )   (4,504 )
Distributions in excess of accumulated earnings   (1,353,214 )   (1,288,486 )
Total Sun Communities, Inc. stockholders' equity   3,499,826     3,106,823  
Noncontrolling interests        
Common and preferred OP units   49,540     53,354  
Consolidated variable interest entities   7,854     7,145  
Total noncontrolling interests   57,394     60,499  
Total Stockholders' Equity   3,557,220     3,167,322  
Total Liabilities, Temporary Equity and Stockholders' Equity   $ 7,397,854     $ 6,710,026  



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


  Three Months Ended   Nine Months Ended
  September 30, 2019   September 30, 2018   Change   % Change   September 30, 2019   September 30, 2018   Change   % Change
Revenues                              
Income from real property (excluding transient revenue) $ 202,205     $ 184,414     $ 17,791     9.6 %   $ 588,272     $ 536,704     $ 51,568     9.6 %
Transient revenue 54,218     45,193     9,025     20.0 %   111,029     88,784     22,245     25.1 %
Revenue from home sales 49,805     46,131     3,674     8.0 %   136,665     122,248     14,417     11.8 %
Rental home revenue 14,444     13,589     855     6.3 %   42,827     39,957     2,870     7.2 %
Ancillary revenue 31,999     27,608     4,391     15.9 %   57,746     46,207     11,539     25.0 %
Interest income 4,770     5,256     (486 )   (9.2 )%   14,489     15,849     (1,360 )   (8.6 )%
Brokerage commissions and other revenues, net 5,002     1,222     3,780     309.3 %   11,190     3,073     8,117     264.1 %
Total Revenues 362,443     323,413     39,030     12.1 %   962,218     852,822     109,396     12.8 %
Expenses                              
Property operating and maintenance 79,095     71,656     7,439     10.4 %   202,892     181,977     20,915     11.5 %
Real estate taxes 15,399     14,533     866     6.0 %   46,455     42,445     4,010     9.4 %
Cost of home sales 36,318     33,692     2,626     7.8 %   100,030     91,195     8,835     9.7 %
Rental home operating and maintenance 6,008     6,236     (228 )   (3.7 )%   15,887     16,778     (891 )   (5.3 )%
Ancillary expenses 18,707     15,361     3,346     21.8 %   38,288     28,985     9,303     32.1 %
Home selling expenses 3,988     4,043     (55 )   (1.4 )%   10,938     11,319     (381 )   (3.4 )%
General and administrative expenses 22,975     19,763     3,212     16.3 %   68,559     60,972     7,587     12.4 %
Catastrophic weather related charges, net 341     173     168     97.1 %   1,302     (1,987 )   3,289     (165.5 )%
Depreciation and amortization 76,532     71,982     4,550     6.3 %   229,241     206,192     23,049     11.2 %
Loss on extinguishment of debt 12,755     528     12,227     2,315.7 %   13,478     1,255     12,223     973.9 %
Interest expense 32,219     33,932     (1,713 )   (5.0 )%   99,894     98,321     1,573     1.6 %
Interest on mandatorily redeemable preferred OP units / equity 1,216     1,142     74     6.5 %   3,491     2,551     940     36.8 %
Total Expenses 305,553     273,041     32,512     11.9 %   830,455     740,003     90,452     12.2 %
Income Before Other Items 56,890     50,372     6,518     12.9 %   131,763     112,819     18,944     16.8 %
Remeasurement of marketable securities 12,661         12,661     N/A   16,548         16,548     N/A
Other income / (expense), net (6) (4,408 )   1,231     (5,639 )   (458.1 )%   (1,489 )   (3,214 )   1,725     (53.7 )%
Income from nonconsolidated affiliates 77     126     (49 )   (38.9 )%   814     59     755     1,279.7 %
Current tax expense (420 )   (213 )   (207 )   97.2 %   (906 )   (612 )   (294 )   48.0 %
Deferred tax benefit / (expense) (349 )   199     (548 )   (275.4 )%   (36 )   434     (470 )   (108.3 )%
Net Income 64,451     51,715     12,736     24.6 %   146,694     109,486     37,208     34.0 %
Less: Preferred return to preferred OP units / equity (1,599 )   (1,152 )   447     38.8 %   (4,640 )   (3,335 )   1,305     39.1 %
Less: Amounts attributable to noncontrolling interests (5,422 )   (4,071 )   1,351     33.2 %   (9,048 )   (8,392 )   656     7.8 %
Net Income attributable to Sun Communities, Inc. 57,430     46,492     10,938     23.5 %   133,006     97,759     35,247     36.1 %
Less: Preferred stock distribution (428 )   (432 )   (4 )   (0.9 )%   (1,288 )   (1,305 )   (17 )   (1.3 )%
Net Income attributable to Sun Communities, Inc. common stockholders $ 57,002     $ 46,060     $ 10,942     23.8 %   $ 131,718     $ 96,454     $ 35,264     36.6 %
                               
Weighted average common shares outstanding - basic 89,847     81,599     8,248     10.1 %   87,499     80,022     7,477     9.3 %
Weighted average common shares outstanding - diluted 90,332     82,081     8,251     10.1 %   87,931     80,024     7,907     9.9 %
                               
Basic earnings per share $ 0.63     $ 0.56     $ 0.07     12.5 %   $ 1.49     $ 1.19     $ 0.30     25.2 %
Diluted earnings per share $ 0.63     $ 0.56     $ 0.07     12.5 %   $ 1.50     $ 1.19     $ 0.31     26.1

 

 

 

 
%


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

Outstanding Securities - As of September 30, 2019
                   
  Number of Units/Shares Outstanding   Conversion Rate*   If Converted   Issuance Price per unit*   Annual Distribution Rate*
Non-convertible securities                  
Common shares 90,683   N/A   N/A   N/A   $3.00^
                   
Convertible securities                  
Series A-1 preferred OP units 316   2.4390   771   $ 100   6.0 %
Series A-3 preferred OP units 40   1.8605   75   $ 100   4.5 %
Series A-4 preferred OP units 406   0.4444   180   $ 25   6.5 %
Series C preferred OP units 310   1.1100   345   $ 100   4.5 %
Series D preferred OP units 489   0.8000   391   $ 100   3.8 %
Common OP units 2,282   1.0000   2,282   N/A   Mirrors common shares distributions
Series A-4 preferred stock 1,052   0.4444   468   $ 25   6.5 %
^ Annual distribution is based on the last quarterly distribution annualized.


Capitalization - As of September 30, 2019            
             
Equity   Shares   Share Price*   Total
Common shares   90,683     $ 148.45     $ 13,461,891  
Common OP units   2,282     $ 148.45     338,763  
Subtotal   92,965         $ 13,800,654  
             
Series A-1 preferred OP units   771     $ 148.45     $ 114,455  
Series A-3 preferred OP units   75     $ 148.45     11,134  
Series A-4 preferred OP units   180     $ 148.45     26,721  
Series C preferred OP units   345     $ 148.45     51,215  
Series D preferred OP units   391     $ 148.45     58,044  
Total diluted shares outstanding   94,727         $ 14,062,223  
 
Debt
Mortgage loans payable           $ 2,967,128  
Secured borrowings on collateralized receivables (4)           93,669  
Preferred Equity - Sun NG Resorts - mandatorily redeemable           35,249  
Preferred OP units - mandatorily redeemable           34,663  
Lines of credit (5)           140,632  
Total debt           $ 3,271,341  
 
Preferred
Series A-4 preferred stock   1,052     $ 25.00     $ 26,300  
Total Capitalization        

 

 

 

 

 

 

 

 

 

 

 
  $

 

 

 

 

 

 

 

 

 

 

 

 

 
17,359,864

 

 

 

 

 

 

 

 

 

 

 

 
 


Reconciliations to Non-GAAP Financial Measures


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


  Three Months Ended   Nine Months Ended
  September 30, 2019   September 30, 2018   September 30, 2019   September 30, 2018
Net income attributable to Sun Communities, Inc. common stockholders $ 57,002     $ 46,060     $ 131,718     $ 96,454  
Adjustments              
Depreciation and amortization 76,692     72,269     229,698     206,892  
Remeasurement of marketable securities (12,661 )       (16,548 )    
Amounts attributable to noncontrolling interests 4,839     4,311     7,720     7,724  
Preferred return to preferred OP units 530     549     1,594     1,654  
Preferred distribution to Series A-4 preferred stock 428     432     1,288     1,305  
Gain on disposition of assets, net (7,334 )   (6,603 )   (21,083 )   (16,977 )
FFO attributable to Sun Communities, Inc. common stockholders and dilutive convertible securities (1) (7)

$ 119,496     $ 117,018     $ 334,387     $ 297,052  
Adjustments              
Other acquisition related costs (8) 375     345     902     781  
Loss on extinguishment of debt 12,755     528     13,478     1,255  
Catastrophic weather related charges, net 363     173     1,339     (1,987 )
Loss of earnings - catastrophic weather related (9) (377 )   325         975  
Other (income) / expense (6) 4,408     (1,231 )   1,489     3,214  
Ground lease intangible write-off             817  
Deferred tax (benefit) / expense 349     (199 )   36     (434 )
Core FFO attributable to Sun Communities, Inc. common stockholders and dilutive convertible securities (1) (7)

$ 137,369     $ 116,959     $ 351,631     $ 301,673  
               
Weighted average common shares outstanding - basic 89,847     81,599     87,499     80,022  
Add              
Common stock issuable upon conversion of stock options 1     2     1     2  
Restricted stock 484     480     431     633  
Common OP units 2,284     2,731     2,498     2,735  
Common stock issuable upon conversion of Series A-4 preferred stock 467     472     467     472  
Common stock issuable upon conversion of Series A-3 preferred OP units 75     75     75     75  
Common stock issuable upon conversion of Series A-1 preferred OP units 780     813     792     825  
Common stock issuable upon conversion of Aspen preferred OP units     448          
Weighted average common shares outstanding - fully diluted 93,938     86,620     91,763     84,764  
               
FFO attributable to Sun Communities, Inc. common stockholders and dilutive convertible securities (1) (7) per share - fully diluted

$ 1.27     $ 1.35     $ 3.64     $ 3.50  
Core FFO attributable to Sun Communities, Inc. common stockholders and dilutive convertible securities (1) (7) per share - fully diluted

$ 1.46     $ 1.35     $ 3.83     $ 3.56  


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


  Three Months Ended   Nine Months Ended
  September 30, 2019   September 30, 2018   September 30, 2019   September 30, 2018
Net Income attributable to Sun Communities, Inc. common stockholders $ 57,002     $ 46,060     $ 131,718     $ 96,454  
Adjustments              
Depreciation and amortization 76,532     71,982     229,241     206,192  
Loss on extinguishment of debt 12,755     528     13,478     1,255  
Interest expense 33,435     35,074     103,385     100,872  
Current tax expense 420     213     906     612  
Deferred tax (benefit) / expense 349     (199 )   36     (434 )
Income from nonconsolidated affiliates (77 )   (126 )   (814 )   (59 )
Less: Gain on dispositions of assets, net (7,334 )   (6,603 )   (21,083 )   (16,977 )
EBITDAre (1) $ 173,082     $ 146,929     $ 456,867     $ 387,915  
Adjustments              
Catastrophic weather related charges, net 341     173     1,302     (1,987 )
Remeasurement of marketable securities (12,661 )       (16,548 )    
Other (income) / expense, net (6) 4,408     (1,231 )   1,489     3,214  
Preferred return to preferred OP units / equity 1,599     1,152     4,640     3,335  
Amounts attributable to noncontrolling interests 5,422     4,071     9,048     8,392  
Preferred stock distribution 428     432     1,288     1,305  
Plus: Gain on dispositions of assets, net 7,334     6,603     21,083     16,977  
Recurring EBITDA (1) $ 179,953     $ 158,129     $ 479,169     $ 419,151  



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


  Three Months Ended   Nine Months Ended
  September 30, 2019   September 30, 2018   September 30, 2019   September 30, 2018
Net Income attributable to Sun Communities, Inc. common stockholders $ 57,002     $ 46,060     $ 131,718     $ 96,454  
Other revenues (9,772 )   (6,478 )   (25,679 )   (18,922 )
Home selling expenses 3,988     4,043     10,938     11,319  
General and administrative expenses 22,975     19,763     68,559     60,972  
Catastrophic weather related charges, net 341     173     1,302     (1,987 )
Depreciation and amortization 76,532     71,982     229,241     206,192  
Loss on extinguishment of debt 12,755     528     13,478     1,255  
Interest expense 33,435     35,074     103,385     100,872  
Remeasurement of marketable securities (12,661 )       (16,548 )    
Other (income) / expense, net (6) 4,408     (1,231 )   1,489     3,214  
Income from nonconsolidated affiliates (77 )   (126 )   (814 )   (59 )
Current tax expense 420     213     906     612  
Deferred tax (benefit) / expense 349     (199 )   36     (434 )
Preferred return to preferred OP units / equity 1,599     1,152     4,640     3,335  
Amounts attributable to noncontrolling interests 5,422     4,071     9,048     8,392  
Preferred stock distribution 428     432     1,288     1,305  
NOI (1) / Gross Profit $ 197,144     $ 175,457     $ 532,987     $ 472,520  


  Three Months Ended   Nine Months Ended
  September 30, 2019   September 30, 2018   September 30, 2019   September 30, 2018
Real Property NOI (1) $ 161,929     $ 143,418     $ 449,954     $ 401,066  
Home Sales NOI (1) / Gross Profit 13,487     12,439     36,635     31,053  
Rental Program NOI (1) 25,706     23,750     78,266     72,424  
Ancillary NOI (1) / Gross Profit 13,292     12,247     19,458     17,222  
Site rent from Rental Program (included in Real Property NOI) (1) (10) (17,270 )   (16,397 )   (51,326 )   (49,245 )
NOI (1) / Gross Profit $ 197,144     $ 175,457     $ 532,987     $ 472,520  



Non-GAAP and Other Financial Measures


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


  Quarter Ended
  9/30/2019   6/30/2019   3/31/2019   12/31/2018   9/30/2018
Financial Information                  
Total revenues $ 362,443     $ 312,445     $ 287,330     $ 274,004     $ 323,538  
Net income $ 64,451     $ 45,116     $ 37,127     $ 10,672     $ 51,715  
Net Income attributable to Sun Communities Inc. $ 57,002     $ 40,385     $ 34,331     $ 9,039     $ 46,060  
Basic earnings per share* $ 0.63     $ 0.46     $ 0.40     $ 0.11     $ 0.56  
Diluted earnings per share* $ 0.63     $ 0.46     $ 0.40     $ 0.11     $ 0.56  
                   
Cash distributions declared per common share* $ 0.75     $ 0.75     $ 0.75     $ 0.71     $ 0.71  
                   
Recurring EBITDA (1) $ 179,953     $ 151,502     $ 147,714     $ 133,335     $ 158,129  
FFO attributable to Sun Communities, Inc. common stockholders and dilutive convertible securities (1) (7)

$ 119,496     $ 108,112     $ 106,779     $ 88,562     $ 117,018  
Core FFO attributable to Sun Communities, Inc. common stockholders and dilutive convertible securities (1) (7)

$ 137,369     $ 108,002     $ 106,259     $ 92,695     $ 116,959  
FFO attributable to Sun Communities, Inc. common stockholders and dilutive convertible securities (1) (7) per share - fully diluted* $ 1.27     $ 1.18     $ 1.19     $ 0.98     $ 1.35  
Core FFO attributable to Sun Communities, Inc. common stockholders and dilutive convertible securities (1) (7) per share - fully diluted* $ 1.46     $ 1.18     $ 1.18     $ 1.03     $ 1.35  
                   
Balance Sheet                  
Total assets $ 7,397,854     $ 7,222,084     $ 7,098,662     $ 6,710,026     $ 6,653,726  
Total debt $ 3,271,341     $ 3,107,775     $ 3,448,117     $ 3,124,303     $ 3,004,929  
Total liabilities $ 3,720,983     $ 3,542,188     $ 3,846,325     $ 3,479,112     $ 3,367,285  


  Quarter Ended
  9/30/2019   6/30/2019   3/31/2019   12/31/2018   9/30/2018
Operating Information*                  
Communities 389     382     379     371     370  
                   
Manufactured home sites 88,024     87,555     87,425     84,428     84,033  
Annual RV sites 25,756     25,009     24,750     24,535     24,109  
Transient RV sites 20,882     20,585     20,173     19,491     19,432  
Total sites 134,662     133,149     132,348     128,454     127,574  
                   
MH occupancy 95.7 %   95.7 %   95.4 %   95.0 %   94.9 %
RV occupancy 100.0 %   100.0 %   100.0 %   100.0 %   100.0 %
Total blended MH and RV occupancy 96.7 %   96.6 %   96.4 %   96.1 %   96.1 %
                   
New home sales 167     139     125     140     146  
Pre-owned home sales 739     788     673     738     825  
Total home sales 906     927     798     878     971  


  Three Months Ended   Nine Months Ended
  September 30, 2019   September 30, 2019
Net Lease Sites (24)      
MH net lease sites 296     1,104  
RV net lease sites 470     901  
Total net leased sites 766     2,005  


Debt Analysis
(amounts in thousands)


...
  Quarter Ended
  9/30/2019   6/30/2019   3/31/2019   12/31/2018   9/30/2018
Debt Outstanding                  
Mortgage loans payable $ 2,967,128     $ 2,863,485     $ 2,879,017     $ 2,815,957     $ 2,819,225  
Secured borrowings on collateralized receivables (4) 93,669     98,299     102,676     107,731     113,089  
Preferred Equity - Sun NG Resorts - mandatorily redeemable 35,249     35,249     35,249     35,277     35,277  
Preferred OP units - mandatorily redeemable 34,663     34,663     34,663     37,338     37,338  
Lines of credit (5) 140,632     76,079     396,512     128,000      
Total debt $ 3,271,341     $ 3,107,775     $ 3,448,117     $ 3,124,303     $ 3,004,929  
                   
% Fixed / Floating                  
Fixed 95.7 %   97.6 %   88.5 %   95.9 %   100.0 %