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


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*         
Properties552   432   426   424   422  
          
Manufactured home sites96,688   95,209   94,232   93,834   93,821  
Annual RV sites27,564   26,817   26,240   26,148   26,056  
Transient RV sites25,043   23,728   22,360   21,880   21,416  
Total sites149,295   145,754   142,832   141,862   141,293  
          
Wet slips and dry storage spaces38,881   N/A N/A N/A N/A
          
MH occupancy96.6 % 96.4 % 96.5 % 95.8 % 95.5 %
RV annual occupancy100.0 % 100.0 % 100.0 % 100.0 % 100.0 %
Total blended MH and annual RV occupancy97.3 % 97.2 % 97.3 % 96.7 % 96.4 %
          
New home sales156   155   140   119   140  
Pre-owned home sales626   555   471   644   668  
Total home sales782   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 sites247   349   759   287   437  
RV net leased sites331   427   92   13   232  
Total net leased sites578   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 revenue27,929    19,886    8,043    40.4  % 134,691    121,504    13,187    10.9  %
Revenue from home sales48,920    45,271    3,649    8.1  % 175,699    181,936    (6,237)  (3.4)%
Rental home revenue16,035    14,745    1,290    8.7  % 62,646    57,572    5,074    8.8  %
Ancillary revenue35,644    10,481    25,163    240.1  % 102,017    77,638    24,379    31.4  %
Interest income2,510    3,368    (858)  (25.5)% 10,119    17,857    (7,738)  (43.3)%
Brokerage commissions and other revenues, net4,162    2,937    1,225    41.7  % 17,230    14,127    3,103    22.0  %
Total Revenues384,265    301,819    82,446    27.3  % 1,398,347    1,264,037    134,310    10.6  %
Expenses               
Property operating and maintenance88,889    63,486    25,403    40.0  % 308,797    266,378    42,419    15.9  %
Real estate taxes20,265    15,425    4,840    31.4  % 72,606    61,880    10,726    17.3  %
Cost of home sales36,434    34,327    2,107    6.1  % 131,884    134,357    (2,473)  (1.8)%
Rental home operating and maintenance6,058    5,542    516    9.3  % 22,186    21,995    191    0.9  %
Ancillary expenses27,671    9,099    18,572    204.1  % 63,402    47,432    15,970    33.7  %
Home selling expenses4,626    3,768    858    22.8  % 15,134    14,690    444    3.0  %
General and administrative expenses31,795    25,434    6,361    25.0  % 111,288    93,964    17,324    18.4  %
Catastrophic weather-related charges, net831    435    396    91.0  % 885    1,737    (852)  (49.1)%
Business combination expense23,008    —    23,008    N/A 23,008    —    23,008    N/A
Depreciation and amortization117,423    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 expense35,013    33,259    1,754    5.3  % 129,071    133,153    (4,082)  (3.1)%
Interest on mandatorily redeemable preferred OP units / equity1,047    1,207    (160)  (13.3)% 4,177    4,698    (521)  (11.1)%
Total Expenses393,060    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 securities8,765    17,692    (8,927)  (50.5)% 6,129    34,240    (28,111)  (82.1)%
Gain on foreign currency translation10,480    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 affiliates392    (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 benefit761    258    503    195.0  % 1,565    222    1,343    605.0  %
Net Income9,818    30,685    (20,867)  (68.0)% 147,451    177,379    (29,928)  (16.9)%
Less: Preferred return to preferred OP units / equity2,136    1,418    718    50.6  % 6,935    6,058    877    14.5  %
Less: Income attributable to noncontrolling interests96    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 - basic104,275    91,342    12,933    14.2  % 97,521    88,460    9,061    10.2  %
Weighted average common shares outstanding - diluted104,744    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 shares107,626 N/A N/A N/A $3.16^
          
Convertible Securities         
Common OP units2,607 1.0000 2,607 N/A Mirrors common shares distributions
          
Series A-1 preferred OP units295 2.4390 719 $100 6.00%
Series A-3 preferred OP units40 1.8605 75 $100 4.50%
Series C preferred OP units306 1.1100 340 $100 4.50%
Series D preferred OP units489 0.8000 391 $100 3.80%
Series E preferred OP units90 0.6897 62 $100 5.25%
Series F preferred OP units90 0.6250 56 $100 3.00%
Series G preferred OP units241 0.6452 155 $100 3.20%
Series H preferred OP units581 0.6098 355 $100 3.00%
Series I preferred OP units922 0.6098 562 $100 3.00%

 ^ 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 amortization117,354    98,950    376,897    328,646   
Depreciation on nonconsolidated affiliates38    —    66    —   
Gain on remeasurement of marketable securities(8,765)  (17,692)  (6,129)  (34,240) 
Loss on remeasurement of investment in nonconsolidated affiliates103    —    1,608    —   
Loss on remeasurement of notes receivable964    —    3,275    —   
Income attributable to noncontrolling interests   482    7,881    8,474   
Preferred return to preferred OP units494    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 expense23,008    —    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, net831    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 - basic104,275    91,342    97,521    88,460   
Add       
Common stock issuable upon conversion of stock options           
Restricted stock468    550    455    454   
Common OP units2,496    2,300    2,458    2,448   
Common stock issuable upon conversion of certain preferred OP units798    1,270    907    1,454   
Weighted Average Common Shares Outstanding - Fully Diluted108,038    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 amortization117,423    98,826    376,876    328,067   
Loss on extinguishment of debt—    3,027    5,209    16,505   
Interest expense35,013    33,259    129,071    133,153   
Interest on mandatorily redeemable preferred OP units / equity1,047    1,207    4,177    4,698   
Current tax expense328    189    790    1,095   
Deferred tax benefit(761)  (258)  (1,565)  (222) 
(Income) / loss from nonconsolidated affiliates(392)     (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, net831    435    885    1,737   
Business combination expense23,008    —    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 receivable964    —    3,275    —   
Loss on remeasurement of investment in nonconsolidated affiliates103    —    1,608    —   
Preferred return to preferred OP units / equity2,136    1,418    6,935    6,058   
Income attributable to noncontrolling interests96    720    8,902    9,768   
Preferred stock distribution—    —    —    1,288   
Plus: Gain on dispositions of assets, net6,929    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 expenses4,626    3,768    15,134    14,690   
General and administrative expenses31,795    25,434    111,288    93,964   
Catastrophic weather-related charges, net831    435    885    1,737   
Business combination expense23,008    —    23,008    —   
Depreciation and amortization117,423    98,826    376,876    328,067   
Loss on extinguishment of debt—    3,027    5,209    16,505   
Interest expense35,013    33,259    129,071    133,153   
Interest on mandatorily redeemable preferred OP units / equity1,047    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 receivable964    —    3,275    —   
Loss / (income) from nonconsolidated affiliates(392)     (1,740)  (1,374) 
Loss on remeasurement of investment in nonconsolidated affiliates103    —    1,608    —   
Current tax expense328    189    790    1,095   
Deferred tax benefit(761)  (258)  (1,565)  (222) 
Preferred return to preferred OP units / equity2,136    1,418    6,935    6,058   
Income attributable to noncontrolling interests96    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 Profit12,486    10,944    43,815    47,579   
Rental Program NOI(1)29,101    26,682    115,283    104,382   
Ancillary NOI(1) / Gross Profit7,973    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 redeemable35,249   35,249   35,249   35,249   35,249  
Preferred OP units - mandatorily redeemable34,663   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         
Fixed74.0 % 97.6 % 96.6 % 85.2 % 94.7 %
Floating26.0 % 2.4 % 3.4 % 14.8 % 5.3 %
Total100.0 % 100.0 % 100.0 % 100.0 % 100.0 %
          
Weighted Average Interest Rates         
Mortgage loans payable3.78 % 3.88 % 3.88 % 3.91 % 4.05 %
Preferred Equity - Sun NG Resorts - mandatorily redeemable6.00 % 6.00 % 6.00 % 6.00 % 6.00 %
Preferred OP units - mandatorily redeemable5.93 % 5.93 % 5.93 % 5.93 % 6.50 %
Lines of credit and other debt(6)2.08 % 1.32 % 2.03 % 1.85 % 2.71 %
Total average3.37 % 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 Value21.4 % 18.3 % 17.8 % 22.6 % 19.0 %
Net Debt / Gross Assets35.5 % 31.6 % 29.7 % 35.6 % 36.0 %
          
Coverage Ratios         
Recurring EBITDA(1) (TTM) / Interest4.9 4.8 4.5 4.5 4.4
Recurring EBITDA(1) (TTM) / Interest + Pref. Distributions + Pref. Stock Distribution4.8 4.6 4.4 4.3 4.2


Maturities / Principal Amortization Next Five Years2021 2022 2023 2024 2025
Mortgage loans payable         
Maturities$—   $82,155   $185,618   $315,330   $50,528  
Principal amortization59,585   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 benefits21,440   19,472   1,968   10.1 % 81,897   82,727   (830)  (1.0)%
Legal, taxes, and insurance3,170   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 taxes15,786   14,039   1,747   12.4 % 63,706   59,649   4,057    6.8  %
Property operating expenses71,497   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 properties367   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 development6,682   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 sales17,922   16,817   1,105    6.6  % 65,533   61,557   3,976    6.5  %
NOI(1) / Gross Profit – new homes3,270   3,083   187    6.1  % 14,195   10,203   3,992    39.1  %
Gross margin % – new homes15.4 % 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 sales18,512   17,510   1,002    5.7  % 66,351   72,800   (6,449)  (8.9)%
NOI(1) / Gross Profit – pre-owned homes9,216   7,861   1,355    17.2  % 29,620   37,376   (7,756)  (20.8)%
Gross margin % – pre-owned homes33.2 % 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 sales36,434   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)%
                
Statistical Information               
New home sales volume*156   140   16    11.4  % 570   571   (1)  (0.2)%
Pre-owned home sales volume*626   668   (42)  (6.3)% 2,296   2,868   (572)  (19.9)%
Total home sales volume*782   808   (26)  (3.2)% 2,866   3,439   (573)  (16.7)%



Rental Program 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               
Revenues               
Rental home revenue$16,035   $14,745   $1,290    8.7  % $62,646   $57,572   $5,074    8.8  %
Site rent from Rental Program(1)(9)19,124   17,479   1,645    9.4  % 74,823   68,805   6,018    8.7  %
Rental Program revenue35,159   32,224   2,935    9.1  % 137,469   126,377   11,092    8.8  %
                
Expenses               
Repairs and refurbishment3,263   3,273   (10)  (0.3)% 11,886   12,591   (705)  (5.6)%
Taxes and insurance2,382   1,857   525    28.3  % 8,460   7,488   972    13.0  %
Other413   412      0.2  % 1,840   1,916   (76)  (4.0)%
Rental Program operating and maintenance6,058   5,542   516    9.3  % 22,186   21,995   191    0.9  %
Rental Program NOI(1)$29,101   $26,682   $2,419    9.1  % $115,283   $104,382   $10,901    10.4  %
                
Other Information               
Number of sold rental homes*269   281   (12)  (4.3)% 850   1,140   (290)  (25.4)%
Number of occupied rentals, end of period*        11,752   11,325   427    3.8  %
Investment in occupied rental homes, end of period        $629,162   $584,771   $44,391    7.6  %
Weighted average monthly rental rate, end of period*        $1,042   $997   $45    4.5  %



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

 


     
  Three Months Ended Year Ended
  December 31, 2020 December 31, 2020
Financial Information    
Revenues    
Income from real property $52,737   $115,994  
     
Property and Operating Expenses    
Payroll and benefits 9,791   19,348  
Legal, taxes & insurance 1,064   1,844  
Utilities 5,492   12,307  
Supplies and repairs 2,205   6,076  
Other 5,365   11,058  
Real estate taxes 4,479   8,900  
Property operating expenses 28,396   59,533  
Net operating income (NOI)(1) $24,341   $56,461  
     
Other Information - MH and RVs   December 31, 2020
Number of properties   79  
Occupied sites   11,070  
Developed sites   12,118  
Occupancy %   91.4 %
Transient sites   6,942  


Other Information - Marinas   December 31, 2020
Number of properties   106
Wet slips   29,530
Dry storage   9,351
Total wet slips and dry storage   38,881



MH and RV Property Summary        
           
           
Properties 12/31/2020 9/30/2020 6/30/2020 3/31/2020 12/31/2019
FLORIDA          
Properties 128   127   125   125   125  
Developed sites(15) 39,803   39,517   39,241   39,380   39,230  
Occupied(15) 39,063   38,743   38,453   38,526   38,346  
Occupancy %(15) 98.1 % 98.0 % 98.0 % 97.8 % 97.7 %
Sites for development 1,497   1,427   1,427   1,527   1,527  
MICHIGAN          
Properties 74   74   72   72   72  
Developed sites(15) 29,086   29,086   27,901   27,883   27,905  
Occupied(15) 28,109   28,033   27,191   26,863   26,785  
Occupancy %(15) 96.6 % 96.4 % 97.5 % 96.3 % 96.0 %
Sites for development 1,182   1,182   1,182   1,115   1,115  
CALIFORNIA          
Properties 35   34   32   31   31  
Developed sites(15) 6,675   6,372   6,364   5,986   5,981  
Occupied(15) 6,602   6,290   6,272   5,948   5,941  
Occupancy %(15) 98.9 % 98.7 % 98.6 % 99.4 % 99.3 %
Sites for development 373   373   264   302   302  
TEXAS           
Properties 24   24   23   23   23  
Developed sites(15) 7,766   7,659   7,641   7,627   7,615  
Occupied(15) 7,572   7,427   7,289   7,076   7,006  
Occupancy %(15) 97.5 % 97.0 % 95.4 % 92.8 % 92.0 %
Sites for development 1,378   1,378   565   555   555  
ONTARIO, CANADA          
Properties 15   15   15   15   15  
Developed sites(15) 4,090   4,067   3,980   3,977   4,031  
Occupied(15) 4,090   4,067   3,980   3,977   4,031  
Occupancy %(15) 100.0 % 100.0 % 100.0 % 100.0 % 100.0 %
Sites for development 1,525   1,593   1,593   1,608   1,611  
ARIZONA          
Properties 14   13   13   13   13  
Developed sites(15) 4,323   4,274   4,259   4,268   4,263  
Occupied(15) 4,030   3,957   3,932   3,923   3,892  
Occupancy %(15) 93.2 % 92.6 % 92.3 % 91.9 % 91.3 %
Sites for development —   —   —   —   —  
INDIANA          
Properties 12   11   11   11   11  
Developed sites(15) 3,087   3,087   3,087   3,087   3,087  
Occupied(15) 2,950   2,957   2,961   2,914   2,900  
Occupancy %(15) 95.6 % 95.8 % 95.9 % 94.4 % 93.9 %
Sites for development 277   277   277   277   277  
COLORADO          
Properties 10   10   10   10   10  
Developed sites(14) 2,453   2,453   2,441   2,423   2,423  
Occupied(15) 2,380   2,365   2,327   2,318   2,322  
Occupancy %(15) 97.0 % 96.4 % 95.3 % 95.7 % 95.8 %
Sites for development 1,250   1,282   1,566   1,867   1,867  
           
OHIO           
Properties          
Developed sites(15) 2,790   2,790   2,778   2,768   2,770  
Occupied(15) 2,755   2,758   2,736   2,702   2,716  
Occupancy %(15) 98.7 % 98.9 % 98.5 % 97.6 % 98.1 %
Sites for development 22   22   22   59   59  
OTHER STATES           
Properties 125   115   116   115   113  
Developed sites(15) 24,179   22,721   22,780   22,583   22,572  
Occupied(15) 23,401   21,995   22,024   21,749   21,678  
Occupancy %(15) 96.8 % 96.8 % 96.7 % 96.3 % 96.0 %
Sites for development 2,521   2,596   2,846   2,980   2,980  
TOTAL - MH AND ANNUAL RV PORTFOLIO           
Properties 446   432   426   424   422  
Developed sites(15) 124,252   122,026   120,472   119,982   119,877  
Occupied(15) 120,952   118,592   117,165   115,996   115,617  
Occupancy %(15) 97.3 %(16)97.2 % 97.3 % 96.7 % 96.4 %
Sites for development(17) 10,025   10,130   9,742   10,290   10,293  
% Communities age restricted 33.2 % 33.6 % 34.0 % 34.0 % 34.1 %
           
TRANSIENT RV SITE SUMMARY          
Location          
Florida 6,011   5,993   5,547   5,311   5,465  
California 2,231   2,236   1,978   1,947   1,952  
Texas 1,810   1,917   1,590   1,612   1,623  
Maryland 1,515   1,515   1,515   1,488   1,488  
New York 1,422   900   911   916   923  
Arizona 1,337   1,386   1,401   1,392   1,397  
Indiana 1,089   534   534   534   534  
Ontario, Canada 966   920   1,007   1,009   939  
Colorado 962   930   574   291   291  
Maine 805   819   837   828   811  
New Jersey 813   828   857   875   864  
Virginia 737   564   598   630   324  
Other states 5,345   5,186   5,011   5,047   4,805  
Total Transient RV Sites 25,043   23,728   22,360   21,880   21,416  


Marina Property Summary  
   
   
MARINAS 12/31/2020
MICHIGAN  
Properties  
Total wet slips and dry storage spaces 4,468  
FLORIDA  
Properties 14  
Total wet slips and dry storage spaces 3,573  
CONNECTICUT  
Properties 11  
Total wet slips and dry storage spaces 3,254  
GEORGIA  
Properties  
Total wet slips and dry storage spaces 2,834  
RHODE ISLAND  
Properties 11  
Total wet slips and dry storage spaces 2,690  
NEW YORK  
Properties  
Total wet slips and dry storage spaces 2,620  
OTHER STATES  
Properties 53  
Total wet slips and dry storage spaces 19,442  
TOTAL - MARINA PORTFOLIO  
Properties 106  
Total wet slips and dry storage spaces 38,881  



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

 


  Recurring
Capital Expenditures
Average / Site*
Recurring
Capital Expenditures(18)
 Lot
Modifications(19)
Acquisitions(20) Expansion
and
Development(21)
Revenue Producing /Expense Reduction Projects(22)Marina Related
Capital Expenditures(a)
2020$265  $31,398  $29,789  $3,099,547  $246,454  $23,683  $14,147  
2019$345  $30,382  $31,135  $930,668  $281,808  $9,638  N/A
2018$263  $24,265  $22,867  $414,840  $152,672  $3,864  N/A

 (a) Includes capital improvements at recently acquired marinas, recurring capital expenditures, revenue producing capital expenditures and expansion and development.


Operating Statistics for MH and Annual RVs

 


Locations Resident Move-outs Net Leased Sites(5) New Home Sales Pre-owned Home Sales Brokered
Re-sales
Florida 2,303   410   164   209   1,251  
Michigan 422   601   43   1,148   159  
Ontario, Canada 677   59   37   21   424  
Texas 398   566   73   254   68  
Arizona 81   138   43   28   143  
Indiana 67   50     187   18  
Ohio 95   39   —   98    
California 116   47   29   15   94  
Colorado 22   58   33   26   48  
Other states 1,184   537   144   310   343  
Year Ended December 31, 2020 5,365   2,505   570   2,296   2,557  


Total For Year Ended Resident Move-outs  Net Leased Sites(5) New Home Sales Pre-owned Home Sales Brokered
Re-sales
2019 4,139   2,674   571   2,868   2,231  
2018 3,435   2,600   526   3,103   2,147  


Percentage Trends Resident Move-outs  Resident
Re-sales
2020 3.3 % 6.9 %
2019 2.6 % 6.6 %
2018 2.4 % 7.2 %



Footnotes and Definitions                                                                

 
  1. Investors in and analysts following the real estate industry utilize funds from operations (“FFO”), net operating income (“NOI”), and earnings before interest, tax, depreciation and amortization (“EBITDA”) as supplemental performance measures. The Company believes that FFO, NOI, and EBITDA are appropriate measures given their wide use by and relevance to investors and analysts. Additionally, FFO, NOI, and EBITDA are commonly used in various ratios, pricing multiples, yields and returns and valuation calculations used to measure financial position, performance and value.
    • FFO, reflecting the assumption that real estate values rise or fall with market conditions, principally adjusts for the effects of generally accepted accounting principles (“GAAP”) depreciation and amortization of real estate assets.
    • NOI provides a measure of rental operations that does not factor in depreciation, amortization and non-property specific expenses such as general and administrative expenses.
    • EBITDA provides a further measure to evaluate ability to incur and service debt and to fund dividends and other cash needs.

FFO is defined by the National Association of Real Estate Investment Trusts (“NAREIT”) as GAAP net income (loss), excluding gains (or losses) from sales of depreciable operating property, plus real estate related depreciation and amortization, real estate related impairments, and after adjustments for nonconsolidated partnerships and joint ventures. FFO is a non-GAAP financial measure that management believes is a useful supplemental measure of the Company’s operating performance. By excluding gains and losses related to sales of previously depreciated operating real estate assets, impairment and excluding real estate asset depreciation and amortization (which can vary among owners of identical assets in similar condition based on historical cost accounting and useful life estimates), FFO provides a performance measure that, when compared period-over-period, reflects the impact to operations from trends in occupancy rates, rental rates, and operating costs, providing perspective not readily apparent from GAAP net income (loss). Management believes the use of FFO has been beneficial in improving the understanding of operating results of REITs among the investing public and making comparisons of REIT operating results more meaningful. The Company also uses FFO excluding certain gain and loss items that management considers unrelated to the operational and financial performance of our core business (“Core FFO”). The Company believes that Core FFO provides enhanced comparability for investor evaluations of period-over-period results.

The Company believes that GAAP net income (loss) is the most directly comparable measure to FFO. The principal limitation of FFO is that it does not replace GAAP net income (loss) as a performance measure or GAAP cash flow from operations as a liquidity measure. Because FFO excludes significant economic components of GAAP net income (loss) including depreciation and amortization, FFO should be used as a supplement to GAAP net income (loss) and not as an alternative to it. Further, FFO is not intended as a measure of a REIT’s ability to meet debt principal repayments and other cash requirements, nor as a measure of working capital. FFO is calculated in accordance with the Company’s interpretation of standards established by NAREIT, which may not be comparable to FFO reported by other REITs that interpret the NAREIT definition differently.

NOI is derived from revenues minus property operating expenses and real estate taxes. NOI is a non-GAAP financial measure that the Company believes is helpful to investors as a supplemental measure of operating performance because it is an indicator of the return on property investment and provides a method of comparing property performance over time. The Company uses NOI as a key measure when evaluating performance and growth of particular properties and / or groups of properties. The principal limitation of NOI is that it excludes depreciation, amortization, interest expense and non-property specific expenses such as general and administrative expenses, all of which are significant costs. Therefore, NOI is a measure of the operating performance of the properties of the Company rather than of the Company overall.

The Company believes that GAAP net income (loss) is the most directly comparable measure to NOI. NOI should not be considered to be an alternative to GAAP net income (loss) as an indication of the Company’s financial performance or GAAP cash flow from operating activities as a measure of the Company’s liquidity; nor is it indicative of funds available for the Company’s cash needs, including its ability to make cash distributions. Because of the inclusion of items such as interest, depreciation, and amortization, the use of GAAP net income (loss) as a performance measure is limited as these items may not accurately reflect the actual change in market value of a property, in the case of depreciation and in the case of interest, may not necessarily be linked to the operating performance of a real estate asset, as it is often incurred at a parent company level and not at a property level.

EBITDA as defined by NAREIT (referred to as “EBITDAre”) is calculated as GAAP net income (loss), plus interest expense, plus income tax expense, plus depreciation and amortization, plus or minus losses or gains on the disposition of depreciated property (including losses or gains on change of control), plus impairment write-downs of depreciated property and of investments in nonconsolidated affiliates caused by a decrease in value of depreciated property in the affiliate, and adjustments to reflect the entity’s share of EBITDAre of nonconsolidated affiliates. EBITDAre is a non-GAAP financial measure that the Company uses to evaluate its ability to incur and service debt, fund dividends and other cash needs and cover fixed costs. Investors utilize EBITDAre as a supplemental measure to evaluate and compare investment quality and enterprise value of REITs. The Company also uses EBITDAre excluding certain gain and loss items that management considers unrelated to measurement of the Company’s performance on a basis that is independent of capital structure (“Recurring EBITDA”).

The Company believes that GAAP net income (loss) is the most directly comparable measure to EBITDAre. EBITDAre is not intended to be used as a measure of the Company’s cash generated by operations or its dividend-paying capacity, and should therefore not replace GAAP net income (loss) as an indication of the Company’s financial performance or GAAP cash flow from operating, investing and financing activities as measures of liquidity.

(2)   Same Community results reflect constant currency for comparative purposes. Canadian currency figures in the prior comparative period have been translated at 2020 average exchange rates.

(3)   The Same Community occupancy percentage is 97.4 percent for MH, 100.0 percent for RV, and 98.0 percent for the blended MH and RV. The MH and RV blended occupancy is derived from 112,134 developed sites, of which 109,882 were occupied. The Same Community occupancy percentage for 2019 has been adjusted to reflect incremental period-over-period growth from filled expansion sites and the conversion of transient RV sites to annual RV sites. The adjusted Same Community occupancy percentage for 2020 is derived from 111,196 developed sites, of which 109,882 were occupied. The number of developed sites excludes RV transient sites and approximately 950 recently completed but vacant MH expansion sites.

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

(5)  Net leased sites do not include occupied sites acquired during that year.

(6)  Lines of credit and other debt includes the Company’s MH floor plan facility. The effective interest rate on the MH floor plan facility was 6.0 percent for the quarters ended December 31, September 30 and June 30, 2020, and 7.0 percent for the quarters ended March 31, 2020, and December 31, 2019. However, the Company pays no interest if the floor plan balance is repaid within 60 days.

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

 Three Months Ended Year Ended
 December 31, 2020 December 31, 2019 December 31, 2020 December 31, 2019
Foreign currency remeasurement gain / (loss)$(318)  $(16)  $(373)  $(77) 
Collateralized receivables derecognition gain—    587    —    587   
Contingent consideration value expense(72)  (82)  (2,962)  (1,503) 
Long term lease termination expense—    (65)  (433)  (107) 
Other expense, net$(390)  $424    $(3,768)  $(1,100) 

(8)   These costs represent the expenses incurred to bring recently acquired properties up to the Company’s operating standards, including items such as tree trimming and painting costs that do not meet the Company’s capitalization policy.

(9)   The renter’s monthly payment includes the site rent and an amount attributable to the home lease. The site rent is reflected in Real Property Operations’ segment revenue. For purposes of management analysis, site rent is included in Rental Program revenue to evaluate the incremental revenue gains associated with the Rental Program, and to assess the overall growth and performance of the Rental Program and financial impact on the Company’s operations.

(10) Same Community results net $9.3 million and $8.7 million of certain utility revenue against the related utility expense in property operating and maintenance expense for the three months ended December 31, 2020 and 2019, respectively. Same Community results net $37.7 million and $34.7 million of utility revenue against the related utility expense in property operating and maintenance expense for the years ended December 31, 2020 and 2019, respectively.

(11) Same Community supplies and repair expense excludes $0.1 million and $0.7 million for the three months and year ended December 31, 2019, of expenses incurred for recently acquired properties to bring the properties up to the Company’s operating standards, including items such as tree trimming and painting costs that do not meet the Company’s capitalization policy.

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

(13) Calculated using actual results without rounding.

(14) Acquisitions and other is comprised of 130 properties acquired and three properties that the Company has an interest in, but does not operate in 2020, 42 properties acquired in 2019, one property being operated under a temporary use permit, three Florida Keys properties that require redevelopment as a result of damage sustained from Hurricane Irma in 2017, five recently opened ground-up developments, one property undergoing redevelopment, and other miscellaneous transactions and activity.

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

(16) As of December 31, 2020, total portfolio MH occupancy was 96.6 percent inclusive of the impact of over 1,200 recently constructed but vacant MH expansion sites, and annual RV occupancy was 100.0 percent.

(17) Total sites for development were comprised of 75.7 percent for expansion, 22.2 percent for greenfield development and 2.2 percent for redevelopment.

(18) MH recurring capital expenditures are necessary to maintain asset quality, including purchasing and replacing assets used to operate the communities. These capital expenditures include items such as: major road, driveway, pool improvements; clubhouse renovations; adding or replacing street lights; playground equipment; signage; maintenance facilities; manager housing and property vehicles. The minimum capitalized amount is five hundred dollars.

(19) MH lot modification capital expenditures improve the asset quality of the community. These costs are incurred when an existing older home moves out, and the site is prepared for a new home, more often than not, a multi-sectional home. These activities, which are mandated by strict manufacturer’s installation requirements and state building code, include items such as new foundations, driveways, and utility upgrades.

(20) Capital expenditures related to acquisitions represent the purchase price of existing operating properties (including marinas) and land parcels to develop expansions or new properties. These costs for the year ended December 31, 2020 include $40.6 million of capital improvements identified during due diligence that are necessary to bring the communities to the Company’s operating standards. For the years ended December 31, 2019 and 2018, these costs were $50.7 million and $94.6 million, respectively. These include items such as: upgrading clubhouses; landscaping; new street light systems; new mail delivery systems; pool renovation including larger decks, heaters, and furniture; new maintenance facilities; and new signage including main signs and internal road signs. These are considered acquisition costs and although identified during due diligence, often require 24 to 36 months after closing to complete.

(21) MH expansion and development expenditures consist primarily of construction costs and costs necessary to complete home site improvements, such as driveways, sidewalks and landscaping.

(22) MH capital costs related to revenue generating activities consist primarily of garages, sheds, sub-metering of water, sewer and electricity. Revenue generating attractions at our RV resorts are also included here and, occasionally, a special capital project requested by residents and accompanied by an extra rental increase will be classified as revenue producing.

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


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