Sun Communities, Inc. Reports 2020 Fourth Quarter Results and 2021 Guidance

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Southfield, MI, Feb. 17, 2021 (GLOBE NEWSWIRE) -- Sun Communities, Inc. (NYSE: SUI) (the “Company”), a real estate investment trust (“REIT”) that owns and operates, or has an interest in, manufactured housing (“MH”) communities, recreational vehicle (“RV”) resorts and marinas, (collectively, the “properties”), today reported its fourth quarter results for 2020.

Financial Results for the Quarter and Year Ended December 31, 2020

For the quarter ended December 31, 2020, total revenues increased $82.4 million, or 27.3 percent, to approximately $384.3 million compared to $301.8 million for the same period in 2019. Net income attributable to common stockholders was approximately $7.6 million, or $0.07 per diluted common share, for the quarter ended December 31, 2020.

For the year ended December 31, 2020, total revenues increased $134.3 million, or 10.6 percent, to approximately $1.4 billion compared to $1.3 billion for the same period in 2019. Net income attributable to common stockholders was $131.6 million, or $1.34 per diluted common share, for the year ended December 31, 2020.

Non-GAAP Financial Measures and Portfolio Performance

  • Core Funds from Operations (“Core FFO”)(1) for the quarter ended December 31, 2020, was $1.16 per diluted share and OP unit (“Share”) as compared to $1.10 in the corresponding period in 2019, a 5.5 percent increase. Core FFO(1) for the year ended December 31, 2020, was $5.09 per Share as compared to $4.92 in the prior year, an increase of 3.5 percent.

  • Same Community(2) Net Operating Income (“NOI”)(1) increased by 2.1 percent and 4.0 percent for the quarter and year ended December 31, 2020, respectively, as compared to the corresponding periods in 2019.

  • Acquired approximately $3.0 billion of operating properties including the $2.1 billion acquisition of Safe Harbor Marinas in 2020.

  • MH and Annual RV Revenue Producing Sites increased by 578 sites in the fourth quarter and 2,505 sites during the year ended December 31, 2020, bringing total portfolio occupancy to 97.3 percent.

  • MH and Annual RV Rent Collections for the fourth quarter were over 96.0 percent and 97.0 percent, respectively.

Gary Shiffman, Chief Executive Officer stated, “As we reflect on the events of 2020, we are pleased with our performance and the demonstrated resilience and stability of our business and operating platform, particularly in light of the challenging environment. We generated 4.0 percent same community NOI growth, delivered 3.5 percent year over year Core FFO(1) per Share growth, deployed $3.0 billion into accretive acquisitions and raised approximately $1.9 billion in two equity offerings with strong investor demand. We are well positioned to continue delivering industry leading growth and have a new business line that broadens our opportunity set with the addition of Safe Harbor Marinas.”

Mr. Shiffman continued, “The dedication and perseverance of our team to create value for our shareholders continues to be a key factor in our success.”


OPERATING HIGHLIGHTS

Portfolio Occupancy

Total MH and annual RV occupancy was 97.3 percent at December 31, 2020, compared to 96.4 percent at December 31, 2019, an increase of 90 basis points.

During the quarter ended December 31, 2020, MH and annual RV revenue producing sites increased by 578 sites, bringing full year 2020 revenue producing site gains to 2,505 sites.


Same Community(2) Results

For the 367 MH and RV properties owned and operated by the Company since January 1, 2019, NOI(1) for the quarter ended December 31, 2020 increased 2.1 percent over the same period in 2019, resulting from a 5.7 percent increase in revenues and a 13.6 percent increase in expenses. Adjusted to remove the impact of $0.3 million of direct COVID-19 related health and safety expense, Same Community NOI(1) growth was 2.4 percent for the quarter ended December 31, 2020. Payroll, utilities and supplies and repair costs were elevated during the quarter primarily due to the extended season of the Company’s northern RV resorts. Same Community occupancy(3) increased to 98.8 percent at December 31, 2020 from 97.0 percent at December 31, 2019.

For the year ended December 31, 2020, NOI(1) increased 4.0 percent over the same period in 2019, resulting from a 3.6 percent increase in revenues and a 3.0 percent increase in expenses. Adjusted to remove the impact of $2.4 million of direct COVID-19 related health and safety expense, Same Community NOI(1) growth was 4.4 percent for the year ended December 31, 2020.


Home Sales

During the quarter ended December 31, 2020, the Company sold 782 homes as compared to 808 homes in the same period in 2019. The Company sold 156 and 140 new homes for the quarters ended December 31, 2020 and 2019, respectively, an increase of 11.4 percent. Pre-owned home sales were 626 in the fourth quarter 2020 as compared to 668 in the same period in 2019. Rental home sales, which are included in total pre-owned home sales, were 269 and 281 for the quarters ended December 31, 2020 and 2019, respectively.

During the year ended December 31, 2020, the Company sold 2,866 homes as compared to 3,439 homes sold during 2019. The Company sold 570 and 571 new homes during the years ended December 31, 2020 and 2019, respectively. Pre-owned home sales were 2,296 during the year ended December 31, 2020, as compared to 2,868 during 2019. Rental home sales, which are included in total pre-owned home sales, were 850 and 1,140 for the years ended December 31, 2020 and 2019, respectively.

Rent Collections

For the fourth quarter of 2020, MH and annual RV rent collections were over 96.0 percent and 97.0 percent, respectively, after adjusting for the impact of COVID-19 related hardship deferrals and prepaid rent balances.

January 2021 rent collections were 97.0 percent for MH and 97.0 percent for annual RV.


PORTFOLIO ACTIVITY

Acquisitions

During and subsequent to the quarter ended December 31, 2020, the Company acquired the following communities and resorts:

Property Name

Property Type

Sites

State

Total Purchase Price (in millions)

Month Acquired

Gig Harbor

RV

115

WA

$

15.3

November

Maine MH Portfolio(a)

MH

1,083

ME

$

81.3

November

Mouse Mountain

MH / RV

304

FL

$

15.5

December

Lakeview Mobile Estates

MH

296

CA

$

23.8

December

Shenandoah Acres

RV

522

VA

$

17.0

December

Jellystone at Barton Lake

RV

555

IN

$

24.0

December

Kittatinny Portfolio(b)

RV

527

NY & PA

$

16.3

December

Association Island KOA

RV

294

NY

$

15.0

January

Blue Water

RV

177

UT

$

9.0

February

Tranquility MHC

MH

25

FL

$

1.3

February

3,898

$

218.5

(a) Includes six MH communities.

(b) Includes two RV resorts.

During and subsequent to the quarter ended December 31, 2020, the Company acquired the following marinas:

Property Name

Wet Slips & Dry Storage Spaces

State

Total Purchase Price (in millions)

Month Acquired

Safe Harbor Marinas(a)

37,305

Various

$

2,016.4

October

Hideaway Bay(b)

628

GA

$

32.9

November

Anacapa Isle(b)

453

CA

$

13.9

December

Annapolis

184

MD

$

31.0

December

Wickford

60

RI

$

3.5

December

Rybovich Portfolio(c)

78

FL

$

368.8

December

Rockland

173

ME

$

16.0

December

Islamorada and Angler House(d)

251

FL

$

18.0

February

39,132

$

2,500.5

(a) Includes 99 owned marinas located in 22 states. In conjunction with the acquisition, the Company issued Series H preferred OP units. As of December 31, 2020, 581,407 Series H preferred OP units were outstanding.

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

(c) Includes two marinas. In conjunction with the acquisition, the Company issued Series I preferred OP units. As of December 31, 2020, 922,000 Series I preferred OP units were outstanding.

(d) Includes two marinas.

During the year ended December 31, 2020, the Company acquired 24 MH communities and RV resorts with 6,919 sites and 106 marinas with over 38,800 wet slips and dry rack storage spaces for a total purchase price of approximately $3.0 billion.

Construction Activity

During the quarter ended December 31, 2020, the Company completed the construction of nearly 50 sites in two ground-up developments and one redevelopment property, and over 120 expansion sites in one RV resort and one MH community. Full-year ground-up and redevelopment site deliveries were over 1,000 sites in five properties and over 300 total expansion sites in eight properties.


BALANCE SHEET, CAPITAL MARKETS ACTIVITY AND OTHER ITEMS

Debt Transactions

As of December 31, 2020, the Company had approximately $4.8 billion of debt outstanding. The weighted average interest rate was 3.4 percent and the weighted average maturity was 9.4 years. The Company had $83.0 million of unrestricted cash on hand. At December 31, 2020, the Company’s net debt to trailing twelve-month Recurring EBITDA(1) ratio was 6.9 times, which includes all of Safe Harbor’s debt, but only two months of its EBITDA contribution.

During the quarter ended December 31, 2020, as previously disclosed, the Company entered into a new $260.0 million term loan secured by 11 MH and RV properties. The loan has a 12-year maturity and a fixed interest rate of 2.64 percent.

Equity Transactions

During the quarter ended December 31, 2020, as previously disclosed, the Company closed an underwritten registered public offering of 9,200,000 shares of common stock. Proceeds from the offering were $1.2 billion after deducting expenses related to the offering. The Company used the net proceeds of the offering to fund the cash portion of the acquisition of Safe Harbor and for working capital and general corporate purposes.

2021 Distributions

The Company’s Board of Directors has approved setting the 2021 annual distribution rate at $3.32 per common share, an increase of $0.16, or 5.1 percent, over the current $3.16 per common share for 2020. This increase will begin with the first quarter distribution to be paid in April 2021. While the Board of Directors has adopted the new annual distribution policy, the amount of each quarterly distribution on the Company's common stock will be subject to approval by the Board of Directors.

New Director

On February 11, 2020 the Board of Directors increased the size of the board from seven to eight directors and appointed Tonya Allen to the Company’s Board of Directors as an independent director. Ms. Allen brings an expert perspective on sustainability and social issues, an important focus for the Company.


2021 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 through the date of this release and 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, as well as other risks outlined below under the caption Cautionary Statement Regarding Forward-Looking Statements.

Notes to 2021 guidance:

  • Includes contributions from recently completed acquisitions

    • $218.5 million of MH community and RV resort acquisitions in the fourth quarter 2020 and subsequent to year end

    • $437.3 million of marina acquisitions subsequent to the closing of the Safe Harbor transaction on October 30, 2020

  • Includes a lower transient RV revenue estimate of $8.0 - $10.0 million in the first quarter 2021 due to the extension of the Canadian border closure order and the California travel restrictions imposed through early February, 2021

Earnings and Core FFO(1)

Net Income

Weighted average common shares outstanding (in millions)

106.9

First quarter 2021, basic earnings per share

$0.08 - $0.12

Full year 2021, basic earnings per share

$1.66 - $1.82


Core FFO(1)

Weighted average common shares outstanding, fully diluted (in millions)(i)

112.7

First quarter 2021, Core FFO(1) per Share

$1.13 - $1.17

Full year 2021, Core FFO(1) per Share

$5.79 - $5.95

(i) Certain securities that are dilutive to the computation of Core FFO(1) per fully diluted share in the table above have been excluded from the computation of net income per fully diluted share, as inclusion of these securities would have been anti-dilutive to net income per fully diluted share.

1Q21

2Q21

3Q21

4Q21

Seasonality of Core FFO(1)

19.6

%

26.2

%

32.8

%

21.4

%

Total MH and RV Portfolio

Number of properties: 446

2020 Actual
(in millions)

2021E
Change %

Income from real property

$

1,002.4

10.9% - 11.4%

Total property operating expenses

367.3

13.7% - 14.4%

Net operating income

$

635.1

8.8% - 10.1%


1Q21

2Q21

3Q21

4Q21

Seasonality of total MH and RV portfolio NOI

22.6

%

25.0

%

28.6

%

23.8

%


2021E

MH weighted average monthly rental rate increase

3.2

%

RV weighted average monthly rental rate increase

4.3

%

Blended weighted average monthly rental rate increase

3.4

%

Increase in revenue producing sites

2,150 - 2,350

New home sales volume

550 - 650

Pre-owned home sales volume

2,400 - 2,600

Newly built ground-up and expansion sites

1,200 - 1,600

General and Administrative Expenses

2021E

General and administrative expenses

$163.7 - $167.3

General and administrative expenses include the impact of the Company’s entry into the marina asset class. The marina portfolio is operated as an independent wholly-owned subsidiary retaining its own senior management, property management and back office operations. As significant growth potential through the consolidation of the highly fragmented marina industry is anticipated, costs associated with scaling to effectively operate a larger portfolio are required. As a general practice, marina acquisitions are underwritten with an expected incremental general and administrative cost of 3.0 percent of revenues.

Same Community(2) Portfolio

Number of MH and RV properties: 407

Same community NOI(1) growth is expected to be between 5.6 percent and 6.6 percent for full year 2021.

Marinas

NOI(1) inclusive of the contribution from service and ancillary operations is expected to be $163.0 million - $169.0 million.

1Q21

2Q21

3Q21

4Q21

Seasonality of marina NOI(1)

18.0

%

29.0

%

28.6

%

24.4

%



EARNINGS CONFERENCE CALL

A conference call to discuss fourth quarter operating results will be held on Thursday, February 18, 2021 at 11:00 A.M. (ET). To participate, call toll-free 877-407-9039. Callers outside the U.S. or Canada can access the call at 201-689-8470. A replay will be available following the call through March 4, 2021 and can be accessed toll-free by calling 844-512-2921 or 412-317-6671. The Conference ID number for the call and the replay is 13713712. 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 December 31, 2020, owned, operated, or had an interest in a portfolio of 552 developed MH, RV and marina properties comprising over 188,000 developed sites in 39 states and Ontario, Canada.

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


CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

This press release contains various “forward-looking statements” within the meaning of the Securities Act of 1933, as amended, and the Securities Exchange Act of 1934, as amended, and the Company intends that such forward-looking statements will be subject to the safe harbors created thereby. For this purpose, any statements contained in this press release that relate to expectations, beliefs, projections, future plans and strategies, trends or prospective events or developments and similar expressions concerning matters that are not historical facts are deemed to be forward-looking statements. Words such as “forecasts,” “intends,” “intend,” “intended,” “goal,” “estimate,” “estimates,” “expects,” “expect,” “expected,” “project,” “projected,” “projections,” “plans,” “predicts,” “potential,” “seeks,” “anticipates,” “anticipated,” “should,” “could,” “may,” “will,” “designed to,” “foreseeable future,” “believe,” “believes,” “scheduled,” “guidance”, “target” and similar expressions are intended to identify forward-looking statements, although not all forward looking statements contain these words. These forward-looking statements reflect the Company’s current views with respect to future events and financial performance, but involve known and unknown risks, uncertainties and other factors, both general and specific to the matters discussed in or incorporated herein, some of which are beyond the Company’s control. These risks, uncertainties and other factors may cause the Company’s actual results to be materially different from any future results expressed or implied by such forward-looking statements. In addition to the risks disclosed under “Risk Factors” contained in the Company’s Annual Report on Form 10-K for the year ended December 31, 2019, the Company’s Quarterly Reports on Form 10-Q for the quarters ended March 31, 2020 and September 30, 2020, and the Company’s other filings with the Securities and Exchange Commission from time to time, such risks, uncertainties and other factors include but are not limited to:

  • outbreaks of disease, including the COVID-19 pandemic, and related stay at home orders, quarantine policies and restrictions on travel, trade and business operations;

  • changes in general economic conditions, the real estate industry and the markets in which the Company operates;

  • difficulties in the Company’s ability to evaluate, finance, complete and integrate acquisitions, developments and expansions successfully;

  • the Company’s liquidity and refinancing demands;

  • the Company’s ability to obtain or refinance maturing debt;

  • the Company’s ability to maintain compliance with covenants contained in its debt facilities;

  • availability of capital;

  • changes in foreign currency exchange rates, including between the U.S. dollar and each of the Canadian and Australian dollars;

  • the Company’s ability to maintain rental rates and occupancy levels;

  • the Company’s ability to maintain effective internal control over financial reporting and disclosure controls and procedures;

  • increases in interest rates and operating costs, including insurance premiums and real property taxes;

  • risks related to natural disasters such as hurricanes, earthquakes, floods, and wildfires;

  • general volatility of the capital markets and the market price of shares of the Company’s capital stock;

  • the Company’s ability to maintain its status as a REIT;

  • changes in real estate and zoning laws and regulations;

  • legislative or regulatory changes, including changes to laws governing the taxation of REITs;

  • litigation, judgments or settlements;

  • competitive market forces;

  • the ability of purchasers of manufactured homes and boats to obtain financing; and

  • the level of repossessions by manufactured home and boat lenders.

Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date the statement was made. The Company undertakes no obligation to publicly update or revise any forward-looking statements included in this press release, whether as a result of new information, future events, changes in its expectations or otherwise, except as required by law.

Although the Company believes that the expectations reflected in the forward-looking statements are reasonable, it cannot guarantee future results, levels of activity, performance or achievements. All written and oral forward-looking statements attributable to the Company or persons acting on its behalf are qualified in their entirety by these cautionary statement.


Investor Information


RESEARCH COVERAGE

Firm

Analyst

Phone

Email

Bank of America Merrill Lynch

Joshua Dennerlein

(646) 855-1681

joshua.dennerlein@baml.com

Berenberg Capital Markets

Keegan Carl

(646) 949-9052

keegan.carl@berenberg-us.com

BMO Capital Markets

John Kim

(212) 885-4115

johnp.kim@bmo.com

Citi Research

Michael Bilerman

(212) 816-1383

michael.bilerman@citi.com

Nicholas Joseph

(212) 816-1909

nicholas.joseph@citi.com

Evercore ISI

Steve Sakwa

(212) 446-9462

steve.sakwa@evercoreisi.com

Samir Khanal

(212) 888-3796

samir.khanal@evercoreisi.com

Green Street Advisors

John Pawlowski

(949) 640-8780

jpawlowski@greenstreetadvisors.com

Robert W. Baird & Co.

Wesley Golladay

(216) 737-7510

wgolladay@rwbaird.com

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 December 31, 2020)



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


Quarter Ended

12/31/2020

9/30/2020

6/30/2020

3/31/2020

12/31/2019

Financial Information

Total revenues

$

384,265

$

400,514

$

303,266

$

310,302

$

301,819

Net income / (loss)

$

9,818

$

89,756

$

63,355

$

(15,478

)

$

30,685

Net income / (loss) attributable to Sun Communities Inc. common stockholders

$

7,586

$

81,204

$

58,910

$

(16,086

)

$

28,547

Basic earnings / (loss) per share*

$

0.07

$

0.83

$

0.61

$

(0.17

)

$

0.31

Diluted earnings / (loss) per share*

$

0.07

$

0.83

$

0.61

$

(0.17

)

$

0.31

Cash distributions declared per common share*

$

0.79

$

0.79

$

0.79

$

0.79

$

0.75

Recurring EBITDA(1)

$

168,527

$

199,321

$

148,650

$

156,552

$

144,738

FFO attributable to Sun Communities, Inc. common stockholders and dilutive convertible securities(1)(4)

$

110,849

$

165,209

$

118,092

$

95,046

$

105,533

Core FFO attributable to Sun Communities, Inc. common stockholders and dilutive convertible securities(1)(4)

$

124,872

$

162,624

$

110,325

$

117,267

$

104,534

FFO attributable to Sun Communities, Inc. common stockholders and dilutive convertible securities(1)(4) per share - fully diluted*

$

1.03

$

1.63

$

1.20

$

0.98

$

1.11

Core FFO attributable to Sun Communities, Inc. common stockholders and dilutive convertible securities(1)(4) per share - fully diluted*

$

1.16

$

1.60

$

1.12

$

1.22

$

1.10

Balance Sheet

Total assets

$

11,206,586

$

8,335,717

$

8,348,659

$

8,209,047

$

7,802,060

Total debt

$

4,757,076

$

3,340,613

$

3,390,771

$

3,926,494

$

3,434,402

Total liabilities

$

5,314,879

$

3,791,922

$

3,845,308

$

4,346,127

$

3,848,104


Quarter Ended

12/31/2020

9/30/2020

6/30/2020

3/31/2020

12/31/2019

Operating Information*

Properties

552

432

426

424

422

Manufactured home sites

96,688

95,209

94,232

93,834

93,821

Annual RV sites

27,564

26,817

26,240

26,148

26,056

Transient RV sites

25,043

23,728

22,360

21,880

21,416

Total sites

149,295

145,754

142,832

141,862

141,293

Wet slips and dry storage spaces

38,881

N/A

N/A

N/A

N/A

MH occupancy

96.6

%

96.4

%

96.5

%

95.8

%

95.5

%

RV annual occupancy

100.0

%

100.0

%

100.0

%

100.0

%

100.0

%

Total blended MH and annual RV occupancy

97.3

%

97.2

%

97.3

%

96.7

%

96.4

%

New home sales

156

155

140

119

140

Pre-owned home sales

626

555

471

644

668

Total home sales

782

710

611

763

808


Quarter Ended

12/31/2020

9/30/2020

6/30/2020

3/31/2020

12/31/2019

Net Leased Sites(5)

MH net leased sites

247

349

759

287

437

RV net leased sites

331

427

92

13

232

Total net leased sites

578

776

851

300

669



Consolidated Balance Sheets
(amounts in thousands)


December 31, 2020

December 31, 2019

Assets

Land

$

2,119,364

$

1,414,279

Land improvements and buildings

8,480,597

6,595,272

Rental homes and improvements

637,603

627,175

Furniture, fixtures and equipment

447,039

282,874

Investment property

11,684,603

8,919,600

Accumulated depreciation

(1,968,812

)

(1,686,980

)

Investment property, net

9,715,791

7,232,620

Cash, cash equivalents and restricted cash

98,294

34,830

Marketable securities

124,726

94,727

Inventory of manufactured homes

46,643

62,061

Notes and other receivables, net

221,650

157,926

Goodwill

428,833

Other intangible assets, net

305,611

66,948

Other assets, net

265,038

152,948

Total Assets

$

11,206,586

$

7,802,060

Liabilities

Mortgage loans payable

$

3,444,967

$

3,180,592

Preferred Equity - Sun NG Resorts - mandatorily redeemable

35,249

35,249

Preferred OP units - mandatorily redeemable

34,663

34,663

Lines of credit and other debt(6)

1,242,197

183,898

Distributions payable

86,988

71,704

Advanced reservation deposits and rent

187,730

133,420

Accrued expenses and accounts payable

148,435

127,289

Other liabilities

134,650

81,289

Total Liabilities

5,314,879

3,848,104

Commitments and contingencies

Series D preferred OP units

49,600

50,913

Series F preferred OP units

8,871

Series G preferred OP units

25,074

Series H preferred OP units

57,833

Series I preferred OP units

94,532

Other redeemable noncontrolling interests

28,469

27,091

Stockholders' Equity

Common stock

1,076

932

Additional paid-in capital

7,087,658

5,213,264

Accumulated other comprehensive loss

3,178

(1,331

)

Distributions in excess of accumulated earnings

(1,566,636

)

(1,393,141

)

Total Sun Communities, Inc. stockholders' equity

5,525,276

3,819,724

Noncontrolling interests

Common and preferred OP units

85,968

47,686

Consolidated variable interest entities

16,084

8,542

Total noncontrolling interests

102,052

56,228

Total Stockholders' Equity

5,627,328

3,875,952

Total Liabilities, Temporary Equity and Stockholders' Equity

$

11,206,586

$

7,802,060



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


Three Months Ended

Year Ended

December 31, 2020

December 31, 2019

Change

% Change

December 31, 2020

December 31, 2019

Change

% Change

Revenues

Income from real property (excluding transient revenue)

$

249,065

$

205,131

$

43,934

21.4

%

$

895,945

$

793,403

$

102,542

12.9

%

Transient revenue

27,929

19,886

8,043

40.4

%

134,691

121,504

13,187

10.9

%

Revenue from home sales

48,920

45,271

3,649

8.1

%

175,699

181,936

(6,237

)

(3.4

)

%

Rental home revenue

16,035

14,745

1,290

8.7

%

62,646

57,572

5,074

8.8

%

Ancillary revenue

35,644

10,481

25,163

240.1

%

102,017

77,638

24,379

31.4

%

Interest income

2,510

3,368

(858

)

(25.5

)

%

10,119

17,857

(7,738

)

(43.3

)

%

Brokerage commissions and other revenues, net

4,162

2,937

1,225

41.7

%

17,230

14,127

3,103

22.0

%

Total Revenues

384,265

301,819

82,446

27.3

%

1,398,347

1,264,037

134,310

10.6

%

Expenses

Property operating and maintenance

88,889

63,486

25,403

40.0

%

308,797

266,378

42,419

15.9

%

Real estate taxes

20,265

15,425

4,840

31.4

%

72,606

61,880

10,726

17.3

%

Cost of home sales

36,434

34,327

2,107

6.1

%

131,884

134,357

(2,473

)

(1.8

)

%

Rental home operating and maintenance

6,058

5,542

516

9.3

%

22,186

21,995

191

0.9

%

Ancillary expenses

27,671

9,099

18,572

204.1

%

63,402

47,432

15,970

33.7

%

Home selling expenses

4,626

3,768

858

22.8

%

15,134

14,690

444

3.0

%

General and administrative expenses

31,795

25,434

6,361

25.0

%

111,288

93,964

17,324

18.4

%

Catastrophic weather-related charges, net

831

435

396

91.0

%

885

1,737

(852

)

(49.1

)

%

Business combination expense

23,008

23,008

N/A

23,008

23,008

N/A

Depreciation and amortization

117,423

98,826

18,597

18.8

%

376,876

328,067

48,809

14.9

%

Loss on extinguishment of debt

3,027

(3,027

)

N/A

5,209

16,505

(11,296

)

(68.4

)

%

Interest expense

35,013

33,259

1,754

5.3

%

129,071

133,153

(4,082

)

(3.1

)

%

Interest on mandatorily redeemable preferred OP units / equity

1,047

1,207

(160

)

(13.3

)

%

4,177

4,698

(521

)

(11.1

)

%

Total Expenses

393,060

293,835

99,225

33.8

%

1,264,523

1,124,856

139,667

12.4

%

Income / (Loss) Before Other Items

(8,795

)

7,984

(16,779

)

(210.2

)

%

133,824

139,181

(5,357

)

(3.8

)

%

Gain on remeasurement of marketable securities

8,765

17,692

(8,927

)

(50.5

)

%

6,129

34,240

(28,111

)

(82.1

)

%

Gain on foreign currency translation

10,480

4,522

5,958

131.8

%

8,039

4,557

3,482

76.4

%

Gain on disposition of property

N/A

5,595

5,595

N/A

Other income / (expense), net(7)

(390

)

424

(814

)

(192.0

)

%

(3,768

)

(1,100

)

(2,668

)

242.5

%

Loss on remeasurement of notes receivable

(964

)

(964

)

N/A

(3,275

)

(3,275

)

N/A

Income / (loss) from nonconsolidated affiliates

392

(6

)

398

N/M

1,740

1,374

366

26.6

%

Loss on remeasurement of investment in nonconsolidated affiliates

(103

)

(103

)

N/A

(1,608

)

(1,608

)

N/A

Current tax expense

(328

)

(189

)

(139

)

73.5

%

(790

)

(1,095

)

305

(27.9

)

%

Deferred tax benefit

761

258

503

195.0

%

1,565

222

1,343

605.0

%

Net Income

9,818

30,685

(20,867

)

(68.0

)

%

147,451

177,379

(29,928

)

(16.9

)

%

Less: Preferred return to preferred OP units / equity

2,136

1,418

718

50.6

%

6,935

6,058

877

14.5

%

Less: Income attributable to noncontrolling interests

96

720

(624

)

(86.7

)

%

8,902

9,768

(866

)

(8.9

)

%

Net Income Attributable to Sun Communities, Inc.

7,586

28,547

(20,961

)

(73.4

)

%

131,614

161,553

(29,939

)

(18.5

)

%

Less: Preferred stock distribution

N/A

1,288

(1,288

)

N/A

Net Income Attributable to Sun Communities, Inc. Common Stockholders

$

7,586

$

28,547

$

(20,961

)

(73.4

)

%

$

131,614

$

160,265

$

(28,651

)

(17.9

)

%

Weighted average common shares outstanding - basic

104,275

91,342

12,933

14.2

%

97,521

88,460

9,061

10.2

%

Weighted average common shares outstanding - diluted

104,744

91,893

12,851

14.0

%

97,522

88,915

8,607

9.7

%

Basic earnings per share

$

0.07

$

0.31

$

(0.24

)

(77.4

)

%

$

1.34

$

1.80

$

(0.46

)

(25.6

)

%

Diluted earnings per share

$

0.07

$

0.31

$

(0.24

)

(77.4

)

%

$

1.34

$

1.80

$

(0.46

)

(25.6

)

%

N/M = Percentage change is not meaningful.


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


Outstanding Securities - As of December 31, 2020

Number of Units / Shares Outstanding

Conversion Rate*

If Converted(1)

Issuance Price Per Unit*

Annual Distribution Rate*

Non-convertible Securities

Common shares

107,626

N/A

N/A

N/A

$3.16^

Convertible Securities

Common OP units

2,607

1.0000

2,607

N/A

Mirrors common shares distributions

Series A-1 preferred OP units

295

2.4390

719

$

100

6.00

%

Series A-3 preferred OP units

40

1.8605

75

$

100

4.50

%

Series C preferred OP units

306

1.1100

340

$

100

4.50

%

Series D preferred OP units

489

0.8000

391

$

100

3.80

%

Series E preferred OP units

90

0.6897

62

$

100

5.25

%

Series F preferred OP units

90

0.6250

56

$

100

3.00

%

Series G preferred OP units

241

0.6452

155

$

100

3.20

%

Series H preferred OP units

581

0.6098

355

$

100

3.00

%

Series I preferred OP units

922

0.6098

562

$

100

3.00

%

^ Annual distribution is based on the last quarterly distribution annualized.

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

Capitalization - As of December 31, 2020

Equity

Shares

Share Price*

Total

Common shares

107,626

$

151.95

$

16,353,771

Common OP units

2,607

$

151.95

396,134

Subtotal

110,233

$

16,749,905

Preferred OP units as converted

2,715

$

151.95

$

412,544

Total diluted shares outstanding

112,948

17,162,449

Debt

Mortgage loans payable

$

3,444,967

Preferred Equity - Sun NG Resorts - mandatorily redeemable

35,249

Preferred OP units - mandatorily redeemable

34,663

Lines of credit and other debt(6)

1,242,197

Total debt

$

4,757,076

Total Capitalization

$

21,919,525


Reconciliations to Non-GAAP Financial Measures


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


Three Months Ended

Year Ended

December 31, 2020

December 31, 2019

December 31, 2020

December 31, 2019

Net Income Attributable To Sun Communities, Inc. Common Stockholders

$

7,586

$

28,547

$

131,614

$

160,265

Adjustments

Depreciation and amortization

117,354

98,950

376,897

328,646

Depreciation on nonconsolidated affiliates

38

66

Gain on remeasurement of marketable securities

(8,765

)

(17,692

)

(6,129

)

(34,240

)

Loss on remeasurement of investment in nonconsolidated affiliates

103

1,608

Loss on remeasurement of notes receivable

964

3,275

Income attributable to noncontrolling interests

4

482

7,881

8,474

Preferred return to preferred OP units

494

519

2,231

2,610

Preferred distribution to Series A-4 preferred stock

1,288

Gain on disposition of properties

(5,595

)

Gain on disposition of assets, net

(6,929

)

(5,273

)

(22,180

)

(26,356

)

FFO Attributable To Sun Communities, Inc. Common Stockholders And Dilutive Convertible Securities(1)(4)

$

110,849

$

105,533

$

489,668

$

440,687

Adjustments

Business combination expense

23,008

23,008

Other acquisition related costs(8)

1,035

244

2,326

1,146

Loss on extinguishment of debt

3,027

5,209

16,505

Catastrophic weather-related charges, net

831

398

885

1,737

Gain on foreign currency translation

(10,480

)

(4,522

)

(8,039

)

(4,557

)

Other (income) / expense, net(7)

390

(424

)

3,768

1,100

Other adjustments(a)

(761

)

278

(1,265

)

314

Core FFO Attributable To Sun Communities, Inc. Common Stockholders And Dilutive Convertible Securities(1)(4)

$

124,872

$

104,534

$

515,560

$

456,932

Weighted average common shares outstanding - basic

104,275

91,342

97,521

88,460

Add

Common stock issuable upon conversion of stock options

1

1

1

1

Restricted stock

468

550

455

454

Common OP units

2,496

2,300

2,458

2,448

Common stock issuable upon conversion of certain preferred OP units

798

1,270

907

1,454

Weighted Average Common Shares Outstanding - Fully Diluted

108,038

95,463

101,342

92,817

FFO Attributable To Sun Communities, Inc. Common Stockholders And Dilutive Convertible Securities(1)(4) Per Share - Fully Diluted

$

1.03

$

1.11

$

4.83

$

4.75

Core FFO Attributable To Sun Communities, Inc. Common Stockholders And Dilutive Convertible Securities(1)(4) Per Share - Fully Diluted

$

1.16

$

1.10

$

5.09

$

4.92

(a) Adjustments include deferred compensation amortization upon retirement and deferred tax (benefit) / expense.


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


Three Months Ended

Year Ended

December 31, 2020

December 31, 2019

December 31, 2020

December 31, 2019

Net Income Attributable to Sun Communities, Inc. Common Stockholders

$

7,586

$

28,547

$

131,614

$

160,265

Adjustments

Depreciation and amortization

117,423

98,826

376,876

328,067

Loss on extinguishment of debt

3,027

5,209

16,505

Interest expense

35,013

33,259

129,071

133,153

Interest on mandatorily redeemable preferred OP units / equity

1,047

1,207

4,177

4,698

Current tax expense

328

189

790

1,095

Deferred tax benefit

(761

)

(258

)

(1,565

)

(222

)

(Income) / loss from nonconsolidated affiliates

(392

)

6

(1,740

)

(1,374

)

Less: Gain on dispositions of assets, net

(6,929

)

(5,273

)

(22,180

)

(26,356

)

Less: Gain on disposition of properties

(5,595

)

EBITDAre(1)

$

153,315

$

159,530

$

616,657

$

615,831

Adjustments

Catastrophic weather related charges, net

831

435

885

1,737

Business combination expense

23,008

23,008

Gain on remeasurement of marketable securities

(8,765

)

(17,692

)

(6,129

)

(34,240

)

Gain on foreign currency translation

(10,480

)

(4,522

)

(8,039

)

(4,557

)

Other (income) / expense, net(6)

390

(424

)

3,768

1,100

Loss on remeasurement of notes receivable

964

3,275

Loss on remeasurement of investment in nonconsolidated affiliates

103

1,608

Preferred return to preferred OP units / equity

2,136

1,418

6,935

6,058

Income attributable to noncontrolling interests

96

720

8,902

9,768

Preferred stock distribution

1,288

Plus: Gain on dispositions of assets, net

6,929

5,273

22,180

26,356

Recurring EBITDA(1)

$

168,527

$

144,738

$

673,050

$

623,341



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


Three Months Ended

Year Ended

December 31, 2020

December 31, 2019

December 31, 2020

December 31, 2019

Net Income Attributable to Sun Communities, Inc. Common Stockholders

$

7,586

$

28,547

$

131,614

$

160,265

Interest income

(2,510

)

(3,368

)

(10,119

)

(17,857

)

Brokerage commissions and other revenues, net

(4,162

)

(2,937

)

(17,230

)

(14,127

)

Home selling expenses

4,626

3,768

15,134

14,690

General and administrative expenses

31,795

25,434

111,288

93,964

Catastrophic weather-related charges, net

831

435

885

1,737

Business combination expense

23,008

23,008

Depreciation and amortization

117,423

98,826

376,876

328,067

Loss on extinguishment of debt

3,027

5,209

16,505

Interest expense

35,013

33,259

129,071

133,153

Interest on mandatorily redeemable preferred OP units / equity

1,047

1,207

4,177

4,698

Gain on remeasurement of marketable securities

(8,765

)

(17,692

)

(6,129

)

(34,240

)

Gain on foreign currency translation

(10,480

)

(4,522

)

(8,039

)

(4,557

)

Gain on disposition of property

(5,595

)

Other (income) / expense, net(7)

390

(424

)

3,768

1,100

Loss on remeasurement of notes receivable

964

3,275

Loss / (income) from nonconsolidated affiliates

(392

)

6

(1,740

)

(1,374

)

Loss on remeasurement of investment in nonconsolidated affiliates

103

1,608

Current tax expense

328

189

790

1,095

Deferred tax benefit

(761

)

(258

)

(1,565

)

(222

)

Preferred return to preferred OP units / equity

2,136

1,418

6,935

6,058

Income attributable to noncontrolling interests

96

720

8,902

9,768

Preferred stock distribution

1,288

NOI(1) / Gross Profit

$

198,276

$

167,635

$

772,123

$

700,011


Three Months Ended

Year Ended

December 31, 2020

December 31, 2019

December 31, 2020

December 31, 2019

Real Property NOI(1)

$

167,840

$

146,106

$

649,233

$

586,649

Home Sales NOI(1) / Gross Profit

12,486

10,944

43,815

47,579

Rental Program NOI(1)

29,101

26,682

115,283

104,382

Ancillary NOI(1) / Gross Profit

7,973

1,382

38,615

30,206

Site rent from Rental Program (included in Real Property NOI)(1)(9)

(19,124

)

(17,479

)

(74,823

)

(68,805

)

NOI(1) / Gross Profit

$

198,276

$

167,635

$

772,123

$

700,011



Non-GAAP and Other Financial Measures


Debt Analysis
(amounts in thousands)


Quarter Ended

12/31/2020

9/30/2020

6/30/2020

3/31/2020

12/31/2019

Debt Outstanding

Mortgage loans payable

$

3,444,967

$

3,191,380

$

3,205,507

$

3,273,808

$

3,180,592

Preferred Equity - Sun NG Resorts - mandatorily redeemable

35,249

35,249

35,249

35,249

35,249

Preferred OP units - mandatorily redeemable

34,663

34,663

34,663

34,663

34,663

Lines of credit and other debt(6)

1,242,197

79,321

115,352

582,774

183,898

Total debt

$

4,757,076

$

3,340,613

$

3,390,771

$

3,926,494

$

3,434,402

% Fixed / Floating

Fixed

74.0

%

97.6

%

96.6

%

85.2

%

94.7

%

Floating

26.0

%

2.4

%

3.4

%

14.8

%

5.3

%

Total

100.0

%

100.0

%

100.0

%

100.0

%

100.0

%

Weighted Average Interest Rates

Mortgage loans payable

3.78

%

3.88

%

3.88

%

3.91

%

4.05

%

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

%

6.50

%

Lines of credit and other debt(6)

2.08

%

1.32

%

2.03

%

1.85

%

2.71

%

Total average

3.37

%

3.86

%

3.86

%

3.64

%

4.03

%

Debt Ratios

Net Debt / Recurring EBITDA(1) (TTM)

6.9

5.0

4.8

5.6

5.5

Net Debt / Enterprise Value

21.4

%

18.3

%

17.8

%

22.6

%

19.0

%

Net Debt / Gross Assets

35.5

%

31.6

%

29.7

%

35.6

%

36.0

%

Coverage Ratios

Recurring EBITDA(1) (TTM) / Interest

4.9

4.8

4.5

4.5

4.4

Recurring EBITDA(1) (TTM) / Interest + Pref. Distributions + Pref. Stock Distribution

4.8

4.6

4.4

4.3

4.2


Maturities / Principal Amortization Next Five Years

2021

2022

2023

2024

2025

Mortgage loans payable

Maturities

$

$

82,155

$

185,618

$

315,330

$

50,528

Principal amortization

59,585

61,364

60,739

57,293

53,879

Preferred Equity - Sun NG Resorts - mandatorily redeemable

33,428

1,821

Preferred OP units - mandatorily redeemable

27,373

Lines of credit and other debt(6)

10,000

14,794

65,403

1,152,000

Total

$

69,585

$

158,313

$

311,760

$

1,585,424

$

106,228

Weighted average rate of maturities

%

4.46

%

4.08

%

4.47

%

4.04

%



Real Property Operations – Same Community(2)
(amounts in thousands except for Other Information)


Three Months Ended

Year Ended

December 31, 2020

December 31, 2019

Change

% Change

December 31, 2020

December 31, 2019

Change

% Change

Financial Information

Income from real property(10)

$

214,996

$

203,422

$

11,574

5.7

%

$

876,981

$

846,231

$

30,750

3.6

%

Property operating expenses

Payroll and benefits

21,440

19,472

1,968

10.1

%

81,897

82,727

(830

)

(1.0

)

%

Legal, taxes, and insurance

3,170

2,919

251

8.6

%

10,860

10,351

509

4.9

%

Utilities(10)

16,399

14,120

2,279

16.1

%

66,214

63,410

2,804

4.4

%

Supplies and repair(11)

8,393

6,926

1,467

21.2

%

33,616

33,153

463

1.4

%

Other(a)

6,309

5,462

847

15.5

%

27,916

26,738

1,178

4.4

%

Real estate taxes

15,786

14,039

1,747

12.4

%

63,706

59,649

4,057

6.8

%

Property operating expenses

71,497

62,938

8,559

13.6

%

284,209

276,028

8,181

3.0

%

Real Property NOI(1)

$

143,499

$

140,484

$

3,015

2.1

%

$

592,772

$

570,203

$

22,569

4.0

%

(a) Includes COVID-19 personal protective equipment expense of $0.3 million and $2.4 million for the quarter and year ended December 31, 2020, respectively.

As of

December 31, 2020

December 31, 2019

Change

% Change

Other Information

Number of properties

367

367

MH occupancy(3)

97.4

%

RV occupancy(3)

100.0

%

MH & RV blended occupancy(3)

98.0

%

Adjusted MH occupancy(3)

98.5

%

Adjusted RV occupancy(3)

100.0

%

Adjusted MH & RV blended occupancy(3)

98.8

%

97.0

%

1.8

%

Sites available for development

6,682

6,314

368

Monthly base rent per site - MH

$

600

$

580

$

20

3.4%(13)

Monthly base rent per site - RV(12)

$

514

$

488

$

26

5.4%(13)

Monthly base rent per site - Total(12)

$

579

$

558

$

21

3.8%(13)



Home Sales Summary
(amounts in thousands except for *)


Three Months Ended

Year Ended

December 31, 2020

December 31, 2019

Change

% Change

December 31, 2020

December 31, 2019

Change

% Change

Financial Information

New Homes

New home sales

$

21,192

$

19,900

$

1,292

6.5

%

$

79,728

$

71,760

$

7,968

11.1

%

New home cost of sales

17,922

16,817

1,105

6.6

%

65,533

61,557

3,976

6.5

%

NOI(1) / Gross Profit – new homes

3,270

3,083

187

6.1

%

14,195

10,203

3,992

39.1

%

Gross margin % – new homes

15.4

%

15.5

%

(0.1

)

%

17.8

%

14.2

%

3.6

%

Average selling price – new homes*

$

135,846

$

142,143

$

(6,297

)

(4.4

)

%

$

139,874

$

125,674

$

14,200

11.3

%

Pre-owned Homes

Pre-owned home sales

$

27,728

$

25,371

$

2,357

9.3

%

$

95,971

$

110,176

$

(14,205

)

(12.9

)

%

Pre-owned home cost of sales

18,512

17,510

1,002

5.7

%

66,351

72,800

(6,449

)

(8.9

)

%

NOI(1) / Gross Profit – pre-owned homes

9,216

7,861

1,355

17.2

%

29,620

37,376

(7,756

)

(20.8

)

%

Gross margin % – pre-owned homes

33.2

%

31.0

%

2.2

%

30.9

%

33.9

%

(3.0

)

%

Average selling price – pre-owned homes*

$

44,294

$

37,981

$

6,313

16.6

%

$

41,799

$

38,416

$

3,383

8.8

%

Total Home Sales

Revenue from home sales

$

48,920

$

45,271

$

3,649

8.1

%

$

175,699

$

181,936

$

(6,237

)

(3.4

)

%

Cost of home sales

36,434

34,327

2,107

6.1

%

131,884

134,357

(2,473

)

(1.8

)

%

NOI(1) / Gross Profit – home sales

$

12,486

$

10,944

$

1,542

14.1

%

$

43,815

$

47,579

$

(3,764

)

(7.9

)

%