Sun Communities, Inc. Reports 2021 Third Quarter Results

Sun Communities, Inc. Reports 2021 Third Quarter Results




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Southfield, MI, Oct. 25, 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, as a hobby means (“RV”) resorts and marinas, (collectively, the “similarities”), today reported its third quarter results for 2021.

Financial Results for the Quarter and Nine Months Ended September 30, 2021

For the quarter ended September 30, 2021, total revenues increased $283.8 million, or 70.9 percent, to approximately $684.3 million compared to $400.5 million for the same period in 2020. Net income attributable to shared stockholders increased $150.6 million, or 185.4 percent, to approximately $231.8 million, or $2.00 per diluted shared proportion, compared to net income attributable to shared stockholders of $81.2 million, or $0.83 per diluted shared proportion, for the same period in 2020.

For the nine months ended September 30, 2021, total revenues increased $716.1 million, or 70.6 percent, to $1.7 billion compared to approximately $1.0 billion for the same period in 2020. Net income attributable to shared stockholders increased $243.3 million, or 196.2 percent, to approximately $367.3 million, or $3.27 per diluted shared proportion, compared to net income attributable to shared stockholders of $124.0 million, or $1.29 per diluted shared proportion, for the same period in 2020.

Non-GAAP Financial Measures and Portfolio Performance

  • chief Funds from Operations (“chief FFO”)(1) for the quarter ended September 30, 2021, was $2.11 per diluted proportion and OP unit (“proportion”) as compared to $1.60 in the corresponding period in 2020, a 31.9 percent increase.
  • Same Community(2) Net Operating Income (“NOI”)(1) increased by 12.4 percent for the quarter ended September 30, 2021, as compared to the corresponding period in 2020.
  • Home Sales quantity increased 63.7 percent to 1,162 homes for the quarter ended September 30, 2021, as compared to 710 homes in the same period in 2020.
  • Acquisitions totaled $500.8 million during and later to the quarter ended September 30, 2021, including 9 MH communities, 7 RV resorts and 6 marinas.

Gary Shiffman, Chief Executive Officer stated, “We are pleased with our third quarter results which highlight successful execution across all of our growth strategies. The RV part continues to deliver strong results producing same community NOI growth of nearly 31 percent in the quarter, as we assistance from the need for outdoor experiences coming from existing and new Sun customers. As the leading industry consolidator, we have completed $1.1 billion of acquisitions year-to-date, and believe our cycle tested ability to create value by acquisitions will continue to consequence in accretive growth. We have remained active in the capital markets to sustain this growth including completing our second bond offering of the year. Our talented team will continue to execute on opportunities across operations, acquisitions, expansions and ground-up developments, providing us with a confident outlook.”

OPERATING HIGHLIGHTS

Portfolio Occupancy

Total MH and annual RV occupancy was 97.4 percent at September 30, 2021 as compared to 97.2 percent at September 30, 2020, an increase of 20 basis points.

During the quarter ended September 30, 2021, MH and annual RV revenue producing sites increased by 576 sites as compared to an increase of 776 sites during the quarter ended September 30, 2020.

During the nine months ended September 30, 2021, MH and annual RV revenue producing sites increased by 1,673 sites as compared to an increase of 1,927 sites during the nine months ended September 30, 2020.

Same Community(2) Results

For the 403 MH and RV similarities owned and operated by the Company since January 1, 2020, the following table reflects the percentage increases, in total and by part, for the quarter and nine months ended September 30, 2021:

  Quarter Ended September 30, 2021   Total Same Community   MH   RV Revenue 12.8  %   5.2  %   24.2  % Expense 13.7  %   12.7  %   14.8  % NOI 12.4  %   2.6  %   30.6  %   Nine Months Ended September 30, 2021   Total Same Community   MH   RV Revenue 12.9  %   5.8  %   27.4  % Expense 14.6  %   10.2  %   20.0  % NOI 12.1  %   4.3  %   32.8  %

Same Community modificated occupancy(3) increased to 98.9 percent at September 30, 2021 from 97.4 percent at September 30, 2020, an increase of 150 basis points.

Home Sales

The following table reflects the home sales quantity increases for the quarter and nine months ended September 30, 2021:

  Quarter Ended   Nine Months Ended   September 30, 2021   September 30, 2020   Change   % Change   September 30, 2021   September 30, 2020   Change   % Change New home sales quantity 207      155      52      33.5  %   583      414      169      40.8  % Pre-owned home sales quantity 955      555      400      72.1  %   2,572      1,670      902      54.0  % Total home sales quantity 1,162      710      452      63.7  %   3,155      2,084      1,071      51.4  %

Marina Results

Marina NOI was $64.5 million and $158.7 million for the quarter and nine months ended September 30, 2021, respectively. Refer to page 15 for additional information regarding the marina portfolio operating results.

PORTFOLIO ACTIVITY

Acquisitions and Dispositions

During and later to the quarter ended September 30, 2021, the Company acquired the following communities, resorts and marinas:

character Name   character kind   Sites,
Wet Slips and
Dry Storage Spaces   Development Sites   State / Province   Total
buy Price
(in millions)   Month Acquired Allen shelter   Marina   165      —      RI   $ 4.0      July Cisco Grove Campground & RV   RV   18      407      CA   6.6      July Four Leaf Portfolio(a)   MH   2,545      340      MI / IN   215.0      July Harborage Yacht Club   Marina   300      —      FL   22.0      July Zeman Portfolio(b)   RV   686      —      IL / NJ   15.2      July Southern Leisure Resort   RV   496      —      FL   17.8      August Sunroad Marina   Marina   617      —      CA   84.4      August Lazy Lakes RV   RV   99      —      FL   9.8      August Puerto del Rey   Marina   1,450      —      Puerto Rico   92.3      September Stingray Point   Marina   219      —      VA   2.9      September Detroit River   Marina   440      —      MI   8.8      September Jetstream RV Resort   RV   202      —      TX   17.5      September Subtotal       7,237      747          496.3                                  Acquisitions later to quarter end                 Beaver Brook Campground   RV   204      150      ME   4.5      October Subtotal       204      150          4.5                                  Total acquisitions       7,441      897          $ 500.8       

(a) Includes nine MH communities.

(b) Includes two RV communities.

During and later to the nine months ended September 30, 2021, the Company acquired 38 similarities totaling 11,910 sites, wet slips and dry storage spaces and 897 sites for expansion for a total buy price of $1.1 billion.

During the quarter ended September 30, 2021, the Company acquired three land parcels, which are located in Ft. Collins and Ft. Lupton, Colorado and Leighton, Michigan, approved for the development of over 500 MH sites, for total consideration of $7.7 million.

During the quarter ended September 30, 2021, the Company sold six MH communities located in Arizona, Illinois, Indiana and Missouri for $162.1 million.

Construction Activity

During the quarter ended September 30, 2021, the Company completed the construction of over 230 sites in two ground-up developments and over 90 expansion sites in two RV resorts.

During the nine months ended September 30, 2021, the Company completed the construction of over 580 sites in four ground-up developments and over 320 expansion sites in three MH communities and three RV resorts.

BALANCE SHEET, CAPITAL MARKETS ACTIVITY AND OTHER ITEMS

Debt

As of September 30, 2021, the Company had approximately $4.7 billion in debt noticeable. The weighted average interest rate was 3.3 percent and the weighted average maturity was 9.6 years. At September 30, 2021, the Company’s net debt to trailing twelve month Recurring EBITDA(1) ratio was 4.9 times. The Company had $71.6 million of unlimited cash on hand.

Senior Unsecured Notes

later to the quarter ended September 30, 2021, Sun Communities Operating Limited Partnership (“SCOLP”), the Company’s operating partnership, issued $450.0 million of senior unsecured notes with an interest rate of 2.3 percent and a seven-year term, due November 1, 2028 (the “2028 Notes”), and $150.0 million of senior unsecured notes with an interest rate of 2.7 percent, with a 10-year term, due July 15, 2031 (the “2031 Notes”). The 2031 Notes are additional notes of the same series as the $600.0 million aggregate principal amount of 2.7 percent Senior Notes which are due July 15, 2031 that SCOLP issued on June 28, 2021. The net proceeds from the offering were approximately $595.5 million after deducting underwriters’ discounts and estimated offering expenses.

Equity Transaction

At the Market Offering

In September 2021, the Company completed the sale of 107,400 forward shares of shared stock for $21.4 million under the terms of its At the Market Offering Sales Agreement. The average price before underwriting discounts and commissions was $199.42 per proportion. The Company expects to settle the forward shares by September 2022.

2021 GUIDANCE

The Company is providing revised or initial 2021 guidance for the following metrics:

      past Range   Revised Range           FY 2021E   FY 2021E   4Q 2021E Basic earnings per proportion     $2.24 – $2.36   $3.42 – $3.48   $0.15 – $0.21 chief FFO(1) per fully diluted proportion     $6.25 – $6.37   $6.44 – $6.50   $1.24 – $1.30

Basic earnings per proportion and chief FFO(1) per fully diluted proportion and calculated independently for each quarter; as a consequence, the sum of the quarters may differ from the annual calculation. complete year 2021 guidance is based on the annual calculation.

      past Range   Revised Range           FY 2021E   FY 2021E   4Q 2021E Same Community NOI(1) growth     9.9% – 10.7%   10.9% – 11.1%   7.2% – 8.0%

Guidance estimates include acquisitions completed by the date of this release and exclude any prospective acquisitions or capital markets activity.

The estimates and assumptions presented above represent a range of possible outcomes and may differ materially from actual results. The estimates and assumptions are forward looking based on the Company’s current assessment of economic and market conditions, in addition as other risks outlined below under the caption “Cautionary Statement Regarding Forward-Looking Statements.”

EARNINGS CONFERENCE CALL

A conference call to discuss third quarter results will be held on Tuesday, October 26, 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 obtainable following the call by November 9, 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 13722742. The conference call will be obtainable live on Sun Communities’ website located at www.suncommunities.com. The replay will also be obtainable on the website.

Sun Communities, Inc. is a REIT that, as of September 30, 2021, owned, operated, or had an interest in a portfolio of 584 developed MH, RV and marina similarities comprising nearly 155,900 developed sites and nearly 44,900 wet slips and dry storage spaces in 38 states, Canada and Puerto Rico.

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 unprotected to the safe harbors produced 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,” “calculate,” “estimates,” “expects,” “expect,” “expected,” “project,” “projected,” “projections,” “plans,” “predicts,” “possible,” “seeks,” “anticipates,” “expected,” “should,” “could,” “may,” “will,” “designed to,” “foreseeable future,” “believe,” “believes,” “scheduled,” “guidance,” “target” and similar expressions are intended to clarify forward-looking statements, although not all forward looking statements contain these words. These forward-looking statements mirror the Company’s current views with respect to future events and financial performance, but include 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, 2020 and in the Company’s other filings with the Securities and Exchange Commission now and then, 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 estimate, finance, complete and integrate acquisitions, developments and expansions successfully;
  • the Company’s liquidity and refinancing demands;
  • the Company’s ability to acquire or refinance maturing debt;
  • the Company’s ability to continue compliance with covenants contained in its debt facilities and its senior unsecured notes;
  • availability of capital;
  • changes in foreign money exchange rates, including between the U.S. dollar and each of the Canadian and Australian dollars;
  • the Company’s ability to continue rental rates and occupancy levels;
  • the Company’s ability to continue effective internal control over financial reporting and disclosure controls and procedures;
  • increases in interest rates and operating costs, including insurance premiums and real character taxes;
  • risks related to natural disasters such as hurricanes, earthquakes, floods, droughts and wildfires;
  • general volatility of the capital markets and the market price of shares of the Company’s capital stock;
  • the Company’s ability to continue its position 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 acquire financing; and
  • the level of repossessions by manufactured home and boat lenders.

Readers are warned 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 consequence 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 statements.

Investor Information

RESEARCH COVERAGE                           Firm   Analyst   Phone   Email Bank of America Merrill Lynch   Joshua Dennerlein   (646) 855-1681   [email protected] Barclays   Anthony Powell   (212) 526-8768   [email protected]     Allison Gelman   (212) 526-3367   [email protected] Berenberg Capital Markets   Keegan Carl   (646) 949-9052   [email protected] BMO Capital Markets   John Kim   (212) 885-4115   [email protected] Citi Research   Michael Bilerman   (212) 816-1383   [email protected]     Nicholas Joseph   (212) 816-1909   [email protected] Evercore ISI   Steve Sakwa   (212) 446-9462   [email protected]     Samir Khanal   (212) 888-3796   [email protected] Green Street Advisors   John Pawlowski   (949) 640-8780   [email protected] Robert W. Baird & Co.   Wesley Golladay   (216) 737-7510   [email protected] RBC Capital Markets   Brad Heffern   (512) 708-6311   [email protected] UBS   Michael Goldsmith   (212) 713-2951   [email protected]                             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   [email protected]                   By Phone   (248) 208-2500        

Portfolio Overview
(As of September 30, 2021)


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

  Quarter Ended   9/30/2021   6/30/2021   3/31/2021   12/31/2020   9/30/2020 Financial Information                   Total revenues $ 684,294      $ 603,863      $ 442,015      $ 384,265      $ 400,514    Net income $ 250,161      $ 120,849      $ 27,941      $ 9,818      $ 89,756    Net income attributable to Sun Communities Inc. shared stockholders $ 231,770      $ 110,770      $ 24,782      $ 7,586      $ 81,204    Basic earnings per proportion* $ 2.00      $ 0.98      $ 0.23      $ 0.07      $ 0.83    Diluted earnings per proportion* $ 2.00      $ 0.98      $ 0.23      $ 0.07      $ 0.83                        Cash distributions declared per shared proportion* $ 0.83      $ 0.83      $ 0.83      $ 0.79      $ 0.79                        Recurring EBITDA(1) $ 314,499      $ 268,225      $ 190,830      $ 168,527      $ 199,321    FFO attributable to Sun Communities, Inc. shared stockholders and dilutive convertible securities(1)(4) $ 223,069      $ 198,017      $ 135,925      $ 110,849      $ 165,209    chief FFO attributable to Sun Communities, Inc. shared stockholders and dilutive convertible securities(1)(4) $ 244,535      $ 209,620      $ 141,036      $ 124,872      $ 162,624    FFO attributable to Sun Communities, Inc. shared stockholders and dilutive convertible securities(1)(4) per proportion – fully diluted* $ 1.92      $ 1.70      $ 1.22      $ 1.03      $ 1.63    chief FFO attributable to Sun Communities, Inc. shared stockholders and dilutive convertible securities(1)(4) per proportion – fully diluted* $ 2.11      $ 1.80      $ 1.26      $ 1.16      $ 1.60                        Balance Sheet                   Total assets $ 12,583,296      $ 12,040,990      $ 11,454,209      $ 11,206,586      $ 8,335,717    Total debt $ 4,689,437      $ 4,311,175      $ 4,417,935      $ 4,757,076      $ 3,340,613    Total limitations $ 5,488,469      $ 5,099,563      $ 5,101,512      $ 5,314,879      $ 3,791,922      Quarter Ended   9/30/2021   6/30/2021   3/31/2021   12/31/2020   9/30/2020 Operating Information*                   similarities 584   569   562   552   432                     Manufactured home sites 98,301   97,448   96,876   96,688   95,209 Annual RV sites 29,640   28,807   28,441   27,564   26,817 Transient RV sites 27,922   27,032   26,295   25,043   23,728 Total sites 155,863   153,287   151,612   149,295   145,754 Marina wet slips and dry storage spaces 44,859   41,275   38,753   38,152   N/A                     MH occupancy 96.6  %   96.7  %   96.5  %   96.6  %   96.4  % Annual RV occupancy 100.0  %   100.0  %   100.0  %   100.0  %   100.0  % Blended MH and annual RV occupancy 97.4  %   97.4  %   97.3  %   97.3  %   97.2  %                     New home sales quantity 207   227   149   156   155 Pre-owned home sales quantity 955   931   686   626   555 Total home sales quantity 1,162   1,158   835   782   710   Quarter Ended   9/30/2021   6/30/2021   3/31/2021   12/31/2020   9/30/2020 Revenue Producing Site Net Gains(5)                   MH net leased sites 144   226   127      247   349 RV net leased sites 432   357   387      331   427 Total net leased sites 576   583   514      578   776

Consolidated Balance Sheets
(amounts in thousands)

    September 30, 2021   December 31, 2020 Assets         Land   $ 2,457,236        $ 2,119,364      Land improvements and buildings   9,469,247        8,480,597      Rental homes and improvements   591,367        637,603      Furniture, fixtures and equipment   590,829        447,039      Investment character   13,108,679        11,684,603      Accumulated depreciation   (2,232,243 )     (1,968,812 )   Investment character, net   10,876,436        9,715,791      Cash, cash equivalents and restricted cash   85,619        92,641      Marketable securities   160,321        124,726      Inventory of manufactured homes   43,708        46,643      Notes and other receivables, net   256,924        221,650      Goodwill   461,609        428,833      Other intangible assets, net   297,625        305,611      Other assets, net   401,054        270,691      Total Assets   $ 12,583,296        $ 11,206,586      limitations         Secured debt   $ 3,403,436        $ 3,489,983      Unsecured debt   1,286,001        1,267,093      Distributions payable   98,453        86,988      progressive reservation deposits and rent   223,471        187,730      Accrued expenses and accounts payable   232,590        148,435      Other limitations   244,518        134,650      Total limitations   5,488,469        5,314,879      Commitments and contingencies         permanent equity   292,394        264,379      Stockholders’ Equity         shared stock   1,160        1,076      Additional paid-in capital   8,170,322        7,087,658      Accumulated other comprehensive income   1,752        3,178      Distributions in excess of accumulated earnings   (1,475,634 )     (1,566,636 )   Total Sun Communities, Inc. stockholders’ equity   6,697,600        5,525,276      Noncontrolling interests         shared and preferred OP units   85,756        85,968      Consolidated entities   19,077        16,084      Total noncontrolling interests   104,833        102,052      Total Stockholders’ Equity   6,802,433        5,627,328      Total Liabilities, permanent Equity and Stockholders’ Equity   $ 12,583,296        $ 11,206,586     

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

  Three Months Ended   Nine Months Ended   September 30, 2021   September 30, 2020   Change   % Change   September 30, 2021   September 30, 2020   Change   % Change Revenues                               Real character (excluding transient) $ 352,553        $ 240,076        $ 112,477        46.9    %   $ 979,537        $ 693,491        $ 286,046        41.2    % Real character – transient 126,072        80,412        45,660        56.8    %   235,606        136,473        99,133        72.6    % Home sales 81,099        47,662        33,437        70.2    %   215,146        126,779        88,367        69.7    % Service, retail, dining and entertainment 113,039        23,859        89,180        373.8    %   270,103        36,662        233,441        636.7    % Interest 2,690        2,624        66        2.5    %   8,040        7,609        431        5.7    % Brokerage commissions and other, net 8,841        5,881        2,960        50.3    %   21,740        13,068        8,672        66.4    % Total Revenues 684,294        400,514        283,780        70.9    %   1,730,172        1,014,082        716,090        70.6    % Expenses                               character operating and maintenance 158,095        98,775        59,320        60.1    %   391,609        239,413        152,196        63.6    % Real estate tax 24,751        17,442        7,309        41.9    %   70,361        52,341        18,020        34.4    % Home costs and selling 56,567        39,899        16,668        41.8    %   156,920        105,989        50,931        48.1    % Service, retail, dining and entertainment 87,106        17,615        69,491        394.5    %   211,122        31,539        179,583        569.4    % General and administrative 43,276        26,834        16,442        61.3    %   126,606        78,710        47,896        60.9    % extreme event-related charges, net 328        14        314        N/M   3,097        54        3,043        N/M Business combination —        —        —        N/A   1,031        —        1,031        N/A Depreciation and amortization 127,091        88,499        38,592        43.6    %   378,068        259,453        118,615        45.7    % Loss on extinguishment of debt —        —        —        N/A   8,108        5,209        2,899        55.7    % Interest 39,026        30,214        8,812        29.2    %   116,224        94,058        22,166        23.6    % Interest on mandatorily redeemable preferred OP units / equity 1,047        1,047        —        —    %   3,124        3,130        (6 )     (0.2 ) % Total Expenses 537,287        320,339        216,948        67.7    %   1,466,270        869,896        596,374        68.6    % Income Before Other Items 147,007        80,175        66,832        83.4    %   263,902        144,186        119,716        83.0    % Gain / (loss) on remeasurement of marketable securities 12,072        1,492        10,580        709.1    %   43,227        (2,636 )     45,863        N/M Gain / (loss) on foreign money translation (7,028 )     5,023        (12,051 )     (239.9 ) %   (7,107 )     (2,496 )     (4,611 )     184.7    % Gain on dispositions of similarities 108,104        5,595        102,509        N/M   108,104        5,595        102,509        N/M Other expense, net(6) (9,372 )     (3,511 )     (5,861 )     (166.9 ) %   (10,041 )     (4,890 )     (5,151 )     105.3    % Gain / (loss) on remeasurement of notes receivable 92        (445 )     537        (120.7 ) %   561        (2,311 )     2,872        (124.3 ) % Income from nonconsolidated affiliates 962        1,204        (242 )     (20.1 ) %   2,927        1,348        1,579        117.1    % Loss on remeasurement of investment in nonconsolidated affiliates (119 )     (446 )     327        (73.3 ) %   (130 )     (1,505 )     1,375        (91.4 ) % Current tax assistance / (expense) (402 )     107        (509 )     (475.7 ) %   (1,418 )     (462 )     (956 )     206.9    % Deferred tax assistance / (expense) (1,155 )     562        (1,717 )     (305.5 ) %   (1,074 )     804        (1,878 )     (233.6 ) % Net Income 250,161        89,756        160,405        178.7    %   398,951        137,633        261,318        189.9    % Less: Preferred return to preferred OP units / equity interests 3,101        1,645        1,456        88.5    %   9,000        4,799        4,201        87.5    % Less: Income attributable to noncontrolling interests 15,290        6,907        8,383        121.4    %   22,629        8,806        13,823        157.0    % Net Income Attributable to Sun Communities, Inc. $ 231,770        $ 81,204        $ 150,566        185.4    %   $ 367,322        $ 124,028        $ 243,294        196.2    %                                 Weighted average shared shares noticeable – basic 115,136        97,542        17,594        18.0    %   111,717        95,270        16,447        17.3    % Weighted average shared shares noticeable – diluted 118,072        97,549        20,523        21.0    %   114,291        95,273        19,018        20.0    %                                 Basic earnings per proportion $ 2.00        $ 0.83        $ 1.17        141.0    %   $ 3.27        $ 1.29        $ 1.98        153.5    % Diluted earnings per proportion $ 2.00        $ 0.83        $ 1.17        141.0    %   $ 3.27        $ 1.29        $ 1.98        153.5    %

N/M = Percentage change is not meaningful.

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

noticeable Securities – As of September 30, 2021                       Number of Units / Shares noticeable   Conversion Rate*   If Converted(1)   Issuance Price Per Unit*   Annual dispensing Rate* Non-convertible Securities                   shared shares 115,959   N/A   N/A   N/A   $3.32^                     Convertible Securities                   shared OP units 2,528   1.0000   2,528   N/A   Mirrors shared shares distributions                     Series A-1 preferred OP units 275   2.4390   672   $ 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   5.00 % Series D preferred OP units 489   0.8000   391   $ 100   4.00 % 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 % Series J preferred OP units 240   0.6061   145   $ 100   2.85 %

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

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

Capitalization – As of September 30, 2021                           Equity   Shares   proportion Price*   Total shared shares   115,959      $ 185.10      $ 21,464,011    shared OP units   2,528      $ 185.10      467,933    Subtotal   118,487          $ 21,931,944                  Preferred OP units, as converted   2,813      $ 185.10      520,686    Total diluted shares noticeable   121,300          $ 22,452,630                  Debt             Secured debt           $ 3,403,436    Unsecured debt           1,286,001    Total debt           $ 4,689,437                  Total Capitalization           $ 27,142,067   

Reconciliations to Non-GAAP Financial Measures

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

  Three Months Ended   Nine Months Ended   September 30, 2021   September 30, 2020   September 30, 2021   September 30, 2020 Net Income Attributable to Sun Communities, Inc. shared Stockholders $ 231,770        $ 81,204        $ 367,322        $ 124,028      Adjustments               Depreciation and amortization 126,814        88,495        377,367        259,543      Depreciation on nonconsolidated affiliates 30        9        91        28      (Gain) / loss on remeasurement of marketable securities (12,072 )     (1,492 )     (43,227 )     2,636      Loss on remeasurement of investment in nonconsolidated affiliates 119        446        130        1,505      (Gain) / loss on remeasurement of notes receivable (92 )     445        (561 )     2,311      Income attributable to noncontrolling interests 4,616        6,196        13,678        7,725      Preferred return to preferred OP units —        498        —        1,498      Interest expense on Aspen preferred OP units 514        514        1,542        1,542      Gain on dispositions of similarities (108,104 )     (5,595 )     (108,104 )     (5,595 )   Gain on dispositions of assets, net (20,526 )     (5,511 )     (46,245 )     (15,251 )   FFO Attributable to Sun Communities, Inc. shared Stockholders and Dilutive Convertible Securities(1)(4) $ 223,069        $ 165,209        $ 561,993        $ 379,970                      Adjustments               Business combination expense and other acquisition related costs(7) 2,477        402        6,714        1,291      Loss on extinguishment of debt —        —        8,108        5,209      extreme event-related charges, net 318        15        3,096        54      (Gain) / loss on earnings – extreme event-related 200        (300 )     400        —      (Gain) / loss on foreign money translation 7,028        (5,024 )     7,107        2,496      Other adjustments, net(8) 11,443        2,322        11,505        2,819      chief FFO Attributable to Sun Communities, Inc. shared Stockholders and Dilutive Convertible Securities(1)(4) $ 244,535        $ 162,624        $ 598,923        $ 391,839                      Weighted average shared shares noticeable – basic 115,136        97,542        111,717        95,270      Add               shared shares dilutive effect from forward equity sale —        6        —        2      shared stock issuable upon conversion of stock options —        1        —        1      Restricted stock 438        390        414        395      shared OP units —        2,476        2,574        2,445      shared stock issuable upon conversion of certain preferred OP units 388        1,213        396        1,220      Weighted Average shared Shares noticeable – Fully Diluted 115,962        101,628        115,101        99,333                      FFO Attributable to Sun Communities, Inc. shared Stockholders and Dilutive Convertible Securities(1)(4) Per proportion – Fully Diluted $ 1.92        $ 1.63        $ 4.88        $ 3.83                      chief FFO Attributable to Sun Communities, Inc. shared Stockholders and Dilutive Convertible Securities(1)(4) Per proportion – Fully Diluted $ 2.11        $ 1.60        $ 5.20        $ 3.94     

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

  Three Months Ended   Nine Months Ended   September 30, 2021   September 30, 2020   September 30, 2021   September 30, 2020 Net Income Attributable to Sun Communities, Inc. shared Stockholders $ 231,770        $ 81,204        $ 367,322        $ 124,028      Interest income (2,690 )     (2,624 )     (8,040 )     (7,609 )   Brokerage commissions and other revenues, net (8,841 )     (5,881 )     (21,740 )     (13,068 )   General and administrative expense 43,276        26,834        126,606        78,710      extreme event-related charges, net 328        14        3,097        54      Business combination expense —        —        1,031        —      Depreciation and amortization 127,091        88,499        378,068        259,453      Loss on extinguishment of debt —        —        8,108        5,209      Interest expense 39,026        30,214        116,224        94,058      Interest on mandatorily redeemable preferred OP units / equity 1,047        1,047        3,124        3,130      (Gain) / loss on remeasurement of marketable securities (12,072 )     (1,492 )     (43,227 )     2,636      (Gain) / loss on foreign money translation 7,028        (5,023 )     7,107        2,496      Gain on dispositions of similarities (108,104 )     (5,595 )     (108,104 )     (5,595 )   Other expense, net(6) 9,372        3,511        10,041        4,890      (Gain) / loss on remeasurement of notes receivable (92 )     445        (561 )     2,311      Income from nonconsolidated affiliates (962 )     (1,204 )     (2,927 )     (1,348 )   Loss on remeasurement of investment in nonconsolidated affiliates 119        446        130        1,505      Current tax (assistance) / expense 402        (107 )     1,418        462      Deferred tax (assistance) / expense 1,155        (562 )     1,074        (804 )   Preferred return to preferred OP units / equity interests 3,101        1,645        9,000        4,799      Income attributable to noncontrolling interests 15,290        6,907        22,629        8,806      NOI(1) $ 346,244        $ 218,278        $ 870,380        $ 564,123        Three Months Ended   Nine Months Ended   September 30, 2021   September 30, 2020   September 30, 2021   September 30, 2020 Real character NOI(1) $ 295,779      $ 204,271      $ 753,173      $ 538,210    Home Sales NOI(1) 24,532      7,763      58,226      20,790    Service, retail, dining and entertainment NOI(1) 25,933      6,244      58,981      5,123    NOI(1) $ 346,244      $ 218,278      $ 870,380      $ 564,123   

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

  Three Months Ended   Nine Months Ended   September 30, 2021   September 30, 2020   September 30, 2021   September 30, 2020 Net Income Attributable to Sun Communities, Inc. shared Stockholders $ 231,770        $ 81,204        $ 367,322        $ 124,028      Adjustments               Depreciation and amortization 127,091        88,499        378,068        259,453      Loss on extinguishment of debt —        —        8,108        5,209      Interest expense 39,026        30,214        116,224        94,058      Interest on mandatorily redeemable preferred OP units / equity 1,047        1,047        3,124        3,130      Current tax (assistance) / expense 402        (107 )     1,418        462      Deferred tax (assistance) / expense 1,155        (562 )     1,074        (804 )   Income from nonconsolidated affiliates (962 )     (1,204 )     (2,927 )     (1,348 )   Less: Gain on dispositions of assets, net (20,526 )     (5,511 )     (46,245 )     (15,251 )   Less: Gain on dispositions of similarities (108,104 )     (5,595 )     (108,104 )     (5,595 )   EBITDAre(1) $ 270,899        $ 187,985        $ 718,062        $ 463,342      Adjustments               extreme event-related charges, net 328        14        3,097        54      Business combination expense —        —        1,031        —      (Gain) / loss on remeasurement of marketable securities (12,072 )     (1,492 )     (43,227 )     2,636      (Gain) / loss on foreign money translation 7,028        (5,023 )     7,107        2,496      Other expense, net(6) 9,372        3,511        10,041        4,890      (Gain) / loss on remeasurement of notes receivable (92 )     445        (561 )     2,311      Loss on remeasurement of investment in nonconsolidated affiliates 119        446        130        1,505      Preferred return to preferred OP units / equity interests 3,101        1,645        9,000        4,799      Income attributable to noncontrolling interests 15,290        6,907        22,629        8,806      Plus: Gain on dispositions of assets, net 20,526        5,511        46,245        15,251      Recurring EBITDA(1) $ 314,499        $ 199,949        $ 773,554        $ 506,090     

Non-GAAP and Other Financial Measures

Debt examination
(amounts in thousands)

  Quarter Ended   9/30/2021   6/30/2021   3/31/2021   12/31/2020   9/30/2020 Debt noticeable                   Secured debt $ 3,403,436      $ 3,457,734      $ 3,472,930      $ 3,489,983      $ 3,238,926    Unsecured debt                   Senior unsecured notes 591,252      591,688      —      —      —    Line of credit and other debt(9) 624,837      191,841      875,093      1,197,181      31,775    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    Total unsecured debt 1,286,001      853,441      945,005      1,267,093      101,687    Total debt $ 4,689,437      $ 4,311,175      $ 4,417,935      $ 4,757,076      $ 3,340,613                        % Fixed / Floating                   Fixed 86.7  %   94.7  %   79.3  %   74.0  %   97.6  % Floating 13.3  %   5.3  %   20.7  %   26.0  %   2.4  % Total 100.0  %   100.0  %   100.0  %   100.0  %   100.0  %                     Weighted Average Interest Rates                   Secured debt 3.78  %   3.75  %   3.75  %   3.75  %   3.84  % Senior unsecured notes 2.70  %   2.70  %   —  %   —  %   —  % Line of credit and other debt(9) 0.98  %   0.93  %   1.77  %   2.11  %   1.34  % Preferred Equity – Sun NG Resorts – mandatorily redeemable 6.00  %   6.00  %   6.00  %   6.00  %   6.00  % Preferred OP units – mandatorily redeemable 5.93  %   5.93  %   5.93  %   5.93  %   5.93  % Total average 3.30  %   3.52  %   3.39  %   3.37  %   3.86  %                     Debt Ratios                   Net Debt / Recurring EBITDA(1) (TTM) 4.9      5.1      6.1      6.9      5.0    Net Debt / Enterprise Value 17.1  %   16.8  %   19.7  %   21.4  %   18.3  % Net Debt / Gross Assets 31.2  %   29.6  %   31.8  %   35.5  %   31.6  %                     Coverage Ratios                   Recurring EBITDA(1) (TTM) / Interest 6.1   5.6   5.0   4.9   4.8 Recurring EBITDA(1) (TTM) / Interest + Pref. Distributions + Pref. Stock dispensing 6.0   5.5   4.8   4.8   4.6 Maturities / Principal Amortization Next Five Years 2021   2022   2023   2024   2025 Secured debt                   Maturities $ —      $ 82,155      $ 185,619      $ 315,330      $ 50,529    Principal amortization 15,194      61,411      60,788      57,344      53,933    Line of credit and other debt(9) 331      10,000      10,000      10,000      594,506    Preferred Equity – Sun NG Resorts – mandatorily redeemable —      —      —      33,428      1,821    Preferred OP units – mandatorily redeemable —      —      —      27,373      —    Total $ 15,525      $ 153,566      $ 256,407      $ 443,475      $ 700,789                        Weighted average rate of maturities —  %   4.46  %   4.08  %   4.47  %   4.04  %

Same Community(2) Summary
(amounts in thousands)

                                                  Three Months Ended   Total Same Community   MH   RV   September 30, 2021   September 30, 2020   Change   % Change   September 30, 2021   September 30, 2020   Change   % Change   September 30, 2021   September 30, 2020   Change   % Change Financial Information                                               Revenue                                               Real character (excluding transient) $ 220,291      $ 207,407      $ 12,884      6.2  %   $ 173,979      $ 167,051      $ 6,928        4.1    %   $ 46,312      $ 40,356      $ 5,956      14.8  % Real character – transient 87,049      67,408      19,641      29.1  %   238      242      (4 )     (1.7 ) %   86,811      67,166      19,645      29.2  % Other 13,352      9,375      3,977      42.4  %   4,845      2,863      1,982        69.2    %   8,507      6,512      1,995      30.6  % Total Operating 320,692      284,190      36,502      12.8  %   179,062      170,156      8,906        5.2    %   141,630      114,034      27,596      24.2  % Expense                                               character Operating(10)(11) 102,413      90,048      12,365      13.7  %   49,567      43,996      5,571        12.7    %   52,846      46,052      6,794      14.8  % Real character NOI(1) $ 218,279      $ 194,142      $ 24,137      12.4  %   $ 129,495      $ 126,160      $ 3,335        2.6    %   $ 88,784      $ 67,982      $ 20,802      30.6  %   Nine Months Ended   Total Same Community   MH   RV   September 30, 2021   September 30, 2020   Change   % Change   September 30, 2021   September 30, 2020   Change   % Change   September 30, 2021   September 30, 2020   Change   % Change Financial Information                                               Revenue                                               Real character (excluding Transient) $ 652,978      $ 615,711      $ 37,267      6.1  %   $ 518,511      $ 495,989      $ 22,522        4.5    %   $ 134,467      $ 119,722      $ 14,745      12.3  % Real character – transient 163,932      117,277      46,655      39.8  %   1,200      1,343      (143 )     (10.6 ) %   162,732      115,934      46,798      40.4  % Other 31,077      18,424      12,653      68.7  %   14,472      7,778      6,694        86.1    %   16,605      10,646      5,959      56.0  % Total Operating 847,987      751,412      96,575      12.9  %   534,183      505,110      29,073        5.8    %   313,804      246,302      67,502      27.4  % Expense                                               character Operating(10)(11) 261,754      228,314      33,440      14.6  %   136,927      124,297      12,630        10.2    %   124,827      104,017      20,810      20.0  % Real character NOI(1) $ 586,233      $ 523,098      $ 63,135      12.1  %   $ 397,256      $ 380,813      $ 16,443        4.3    %   $ 188,977      $ 142,285      $ 46,692      32.8  %

Same Community(2) Summary (continued)

  As of           September 30, 2021   September 30, 2020   Change   % Change Other Information               Number of similarities 403      403      —                          MH occupancy 97.5  %             RV occupancy 100.0  %             MH & RV blended occupancy(3) 98.1  %                             modificated MH occupancy(3) 98.5  %             modificated RV occupancy(3) 100.0  %             modificated MH & RV blended occupancy(3) 98.9  %   97.4  %   1.5    %                     Sites obtainable for development 7,092      7,453      (361 )                       Monthly base rent per site – MH $ 606      $ 586      $ 20        3.4%(13) Monthly base rent per site – RV(12) $ 528      $ 503      $ 25        5.0%(13) Monthly base rent per site – Total(12) $ 588      $ 567      $ 21        3.7%(13)

Marina Summary
(amounts in thousands except for statistical data)

              Three Months Ended   Nine Months Ended     September 30, 2021   September 30, 2021 Financial Information         Revenues         Real character (excluding transient)   $ 72,888      $ 180,908 Real character – transient   6,251      11,376 Other   5,815      11,134 Total Operating   84,954      203,418 Expenses         character Operating(a)   33,995      85,816 Real character NOI   50,959      117,602 Service, retail, dining and entertainment         Revenue   74,110      200,702 Expense   60,606      159,632 NOI   13,504      41,070           Marina NOI   $ 64,463      $ 158,672           Other Information – Marinas       September 30, 2021 Number of similarities(b)       120 Total wet slips and dry storage       44,859

(a) Marina results net $4.3 million and $10.5 million of certain utility revenue against the related utility expense in character operating and maintenance expense for the quarter and nine months ended September 30, 2021.

(b) Marina similarities consisted of 14 similarities acquired in 2021 and 106 similarities acquired in 2020.

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

              Three Months Ended   Nine Months Ended     September 30, 2021   September 30, 2021 Financial Information         Revenues         Real character (excluding transient)   $ 11,060   $ 29,248    Real character – transient   32,772   60,298    Other   4,168   7,357    Total Operating   48,000   96,903    Expenses         character Operating(a)   21,459   47,565    Real character NOI   $ 26,541   $ 49,338              Other Information – MH and RVs       September 30, 2021 Number of similarities       61    Occupied sites       7,312    Developed sites       8,357    Occupancy %       87.5  % Transient sites       9,293   

(a) MH and RV Acquisitions and Other results net $1.7 million and $4.1 million of certain utility revenue against the related utility expense in character operating and maintenance expense for the quarter and nine months ended September 30, 2021.

Home Sales Summary
(amounts in thousands except for *)

                                  Three Months Ended   Nine Months Ended   September 30, 2021   September 30, 2020   Change   % Change   September 30, 2021   September 30, 2020   Change   % Change Financial Information                               New Homes                               New home sales $ 31,433      $ 23,734      $ 7,699        32.4    %   $ 89,166      $ 58,536      $ 30,630        52.3  % New home cost of sales 25,856      19,294      6,562        34.0    %   72,799      47,611      25,188        52.9  % Gross Profit – new homes 5,577      4,440      1,137        25.6    %   16,367      10,925      5,442        49.8  % Gross margin % – new homes 17.7  %   18.7  %   (1.0 ) %       18.4  %   18.7  %   (0.3 ) %     Average selling price – new homes* $ 151,850      $ 153,123      $ (1,273 )     (0.8 ) %   $ 152,943      $ 141,391      $ 11,552        8.2  %                                 Pre-owned Homes                               Pre-owned home sales $ 49,666      $ 23,928      $ 25,738        107.6    %   $ 125,980      $ 68,243      $ 57,737        84.6  % Pre-owned home cost of sales 25,840      16,943      8,897        52.5    %   70,369      47,839      22,530        47.1  % Gross Profit – pre-owned homes 23,826      6,985      16,841        241.1    %   55,611      20,404      35,207        172.5  % Gross margin % – pre-owned homes 48.0  %   29.2  %   18.8    %       44.1  %   29.9  %   14.2    %     Average selling price – pre-owned homes* $ 52,006      $ 43,114      $ 8,892        20.6    %   $ 48,981      $ 40,864      $ 8,117        19.9  %                                 Total Home Sales                               Revenue from home sales $ 81,099      $ 47,662      $ 33,437        70.2    %   $ 215,146      $ 126,779      $ 88,367        69.7  % Cost of home sales 51,696      36,237      15,459        42.7    %   143,168      95,450      47,718        50.0  % Home selling expenses 4,871      3,662      1,209        33.0    %   13,752      10,539      3,213        30.5  % Home Sales NOI(1) $ 24,532      $ 7,763      $ 16,769        216.0    %   $ 58,226      $ 20,790      $ 37,436        180.1  %                                 Statistical Information                               New home sales quantity* 207      155      52        33.5    %   583      414      169        40.8  % Pre-owned home sales quantity* 955      555      400        72.1    %   2,572      1,670      902        54.0  % Total home sales quantity* 1,162      710      452        63.7    %   3,155      2,084      1,071        51.4  %

Rental Program Summary
(amounts in thousands except for *)

                                  Three Months Ended   Nine Months Ended   September 30, 2021   September 30, 2020   Change   % Change   September 30, 2021   September 30, 2020   Change   % Change Financial Information                               Revenues                               Home rent $ 16,369      $ 16,171      $ 198        1.2    %   $ 50,451      $ 46,607      $ 3,844        8.2    % Site rent 17,584      19,101      (1,517 )     (7.9 ) %   55,350      55,699      (349 )     (0.6 ) % Total 33,953      35,272      (1,319 )     (3.7 ) %   105,801      102,306      3,495        3.4    %                                 Expenses                               Rental Program operating and maintenance 5,547      5,328      219        4.1    %   15,332      14,576      756        5.2    % Rental Program NOI(1) $ 28,406      $ 29,944      $ (1,538 )     (5.1 ) %   $ 90,469      $ 87,730      $ 2,739        3.1    %                                 Other Information                               Number of sold rental homes* 307      225      82        36.4    %   799      581      218        37.5    % Number of occupied rentals, end of period*                 10,123      11,729      (1,606 )     (13.7 ) % Investment in occupied rental homes, end of period                 $ 559,021      $ 625,922      $ (66,901 )     (10.7 ) % Weighted average monthly rental rate, end of period*                 $ 1,114      $ 1,032      $ 82        7.9    %

Rental Program NOI is included in Real character NOI. Rental Program NOI is separately reviewed to estimate the overall growth and performance of the Rental Program and its financial impact on the Company’s operations.

MH and RV character Summary                                                                 9/30/2021   6/30/2021   3/31/2021   12/31/2020   9/30/2020 FLORIDA                     similarities   131      129      128      128      127    MH & Annual RV Developed sites(15)   40,500      40,171      40,011      39,803      39,517    Occupied MH & Annual RV(15)   39,747      39,402      39,283      39,063      38,743    MH & Annual RV Occupancy %(15)   98.1  %   98.1  %   98.2  %   98.1  %   98.0  % Transient RV sites   6,163      5,895      5,823      6,011      5,993    Sites for development   1,414      1,414      1,497      1,497      1,427    MICHIGAN                     similarities   83      75      74      74      74    MH & Annual RV Developed sites(15)   31,997      29,600      29,092      29,086      29,086    Occupied MH & Annual RV(15)   30,782      28,671      28,145      28,109      28,033    MH & Annual RV Occupancy %(15)   96.2  %   96.9  %   96.7  %   96.6  %   96.4  % Transient RV sites   554      509      541      546      546    Sites for development   1,481      1,182      1,182      1,182      1,182    CALIFORNIA                     similarities   37      36      36      35      34    MH & Annual RV Developed sites(15)   6,760      6,736      6,734      6,675      6,372    Occupied MH & Annual RV(15)   6,642      6,613      6,609      6,602      6,290    MH & Annual RV Occupancy %(15)   98.3  %   98.2  %   98.1  %   98.9  %   98.7  % Transient RV sites   2,410      2,416      2,418      2,231      2,236    Sites for development   534      127      127      373      373    TEXAS                     similarities   26      25      24      24      24    MH & Annual RV Developed sites(15)   8,004      7,947      7,928      7,766      7,659    Occupied MH & Annual RV(15)   7,805      7,731      7,671      7,572      7,427    MH & Annual RV Occupancy %(15)   97.5  %   97.3  %   96.8  %   97.5  %   97.0  % Transient RV sites   2,131      1,835      1,773      1,810      1,917    Sites for development   1,066      1,194      1,275      1,378      1,378    ONTARIO, CANADA                     similarities   16      16      16      15      15    MH & Annual RV Developed sites(15)   4,361      4,302      4,199      4,090      4,067    Occupied MH & Annual RV(15)   4,361      4,302      4,199      4,090      4,067    MH & Annual RV Occupancy %(15)   100.0  %   100.0  %   100.0  %   100.0  %   100.0  % Transient RV sites   807      870      964      966      920    Sites for development   1,525      1,525      1,525      1,525      1,593    CONNECTICUT                     similarities   16      16      16      16      16    MH & Annual RV Developed sites(15)   1,901      1,901      1,897      1,897      1,898    Occupied MH & Annual RV(15)   1,760      1,757      1,746      1,739      1,736    MH & Annual RV Occupancy %(15)   92.6  %   92.4  %   92.0  %   91.7  %   91.5  % Transient RV sites   104      104      108      108      107    Sites for development   —      —      —      —      —    MAINE                     similarities   13      13      13      13      7    MH & Annual RV Developed sites(15)   2,220      2,204      2,190      2,190      1,092    Occupied MH & Annual RV(15)   2,136      2,127      2,119      2,121      1,089    MH & Annual RV Occupancy %(15)   96.2  %   96.5  %   96.8  %   96.8  %   99.7  % Transient RV sites   776      792      805      805      819    Sites for development   30      30      30      30      30                                                                      ARIZONA                     similarities   12      14      14      14      13    MH & Annual RV Developed sites(15)   4,071      4,401      4,391      4,323      4,274    Occupied MH & Annual RV(15)   3,853      4,116      4,101      4,030      3,957    MH & Annual RV Occupancy %(15)   94.6  %   93.5  %   93.4  %   93.2  %   92.6  % Transient RV sites   1,237      1,260      1,270      1,337      1,386    Sites for development   —      —      —      —      —    INDIANA                     similarities   12      12      12      12      11    MH & Annual RV Developed sites(15)   3,057      3,087      3,087      3,087      3,087    Occupied MH & Annual RV(15)   2,963      2,970      2,961      2,950      2,957    MH & Annual RV Occupancy %(15)   96.9  %   96.2  %   95.9  %   95.6  %   95.8  % Transient RV sites   1,089      1,089      1,089      1,089      534    Sites for development   204      277      277      277      277    COLORADO                     similarities   10      10      10      10      10    MH & Annual RV Developed sites(15)   2,552      2,453      2,453      2,453      2,453    Occupied MH & Annual RV(15)   2,431      2,420      2,395      2,380      2,365    MH & Annual RV Occupancy %(15)   95.3  %   98.7  %   97.6  %   97.0  %   96.4  % Transient RV sites   987      987      962      962      930    Sites for development   1,629      1,225      1,250      1,250      1,282    NEW HAMPSHIRE                     similarities   10      10      10      10      10    MH & Annual RV Developed sites(15)   1,777      1,777      1,776      1,777      1,833    Occupied MH & Annual RV(15)   1,769      1,769      1,769      1,767      1,822    MH & Annual RV Occupancy %(15)   99.5  %   99.5  %   99.6  %   99.4  %   99.4  % Transient RV sites   602      602      456      460      404    Sites for development   111      151      151      151      151    NEW YORK                     similarities   10      10      10      9      9    MH & Annual RV Developed sites(15)   1,457      1,457      1,452      1,419      1,414    Occupied MH & Annual RV(15)   1,432      1,428      1,415      1,380      1,371    MH & Annual RV Occupancy %(15)   98.3  %   98.0  %   97.5  %   97.3  %   97.0  % Transient RV sites   1,684      1,684      1,689      1,422      900    Sites for development   371      371      371      371      371    OHIO                     similarities   9      9      9      9      9    MH & Annual RV Developed sites(15)   2,796      2,797      2,797      2,790      2,790    Occupied MH & Annual RV(15)   2,753      2,770      2,760      2,755      2,758    MH & Annual RV Occupancy %(15)   98.5  %   99.0  %   98.7  %   98.7  %   98.9  % Transient RV sites   129      128      128      135      135    Sites for development   22      22      22      22      22    OTHER STATES                     similarities   79      80      80      77      73    MH & Annual RV Developed sites(15)   16,488      17,422      17,310      16,896      16,484    Occupied MH & Annual RV(15)   16,178      16,934      16,796      16,394      15,977    MH & Annual RV Occupancy %(15)   98.1  %   97.2  %   97.0  %   97.0  %   96.9  % Transient RV sites   9,249      8,861      8,269      7,161      6,901    Sites for development   1,925      1,925      1,969      1,969      2,044                          TOTAL – MH AND RV PORTFOLIO                     similarities   464      455      452      446      432    MH & Annual RV Developed sites(15)   127,941      126,255      125,317      124,252      122,026    Occupied MH & Annual RV(15)   124,612      123,010      121,969      120,952      118,592    MH & Annual RV Occupancy %(15)   97.4  % (16) 97.4  %   97.3  %   97.3  %   97.2  % Transient RV sites   27,922      27,032      26,295      25,043      23,728    Sites for development(17)   10,312      9,443      9,676      10,025      10,130    % Communities age restricted   32.3  %   32.5  %   32.7  %   33.2  %   33.6  % Marina character Summary(a)                                                         9/30/2021   06/30/2021   3/31/2021   12/31/2020 FLORIDA                 similarities   19      18      16      14    Total wet slips and dry storage spaces   4,493      4,186      3,837      3,585    RHODE ISLAND                 similarities   12      11      11      11    Total wet slips and dry storage spaces   3,417      3,207      2,829      2,829    CONNECTICUT                 similarities   11      11      11      11    Total wet slips and dry storage spaces   3,278      3,262      3,262      3,262    MASSACHUSETTS                 similarities   9      9      9      7    Total wet slips and dry storage spaces   2,650      2,650      2,650      2,223    NEW YORK                 similarities   8      8      8      8    Total wet slips and dry storage spaces   2,630      2,629      2,629      2,629    MARYLAND                 similarities   8      8      8      8    Total wet slips and dry storage spaces   2,139      2,110      2,110      2,110    OTHER STATES                 similarities   53      49      47      47    Total wet slips and dry storage spaces   26,252      23,389      22,851      22,851    TOTAL – MARINA PORTFOLIO                 similarities   120      114      110      106    Total wet slips and dry storage spaces   44,859      41,433      40,168      39,489   

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

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

                            Nine Months Ended   Year Ended   Year Ended     September 30, 2021   December 31, 2020   December 31, 2019     MH / RV   Marina   MH / RV   Marina   MH / RV Recurring Capital Expenditures Average / Site*   $ 258      $ 259      $ 265      N/A   $ 345    Recurring Capital Expenditures(18)   $ 31,484      $ 10,292      $ 31,398      $ 2,074      $ 30,382    Lot Modifications(19)   $ 20,274      N/A   $ 29,414      N/A   $ 22,837    Acquisitions(20)(a)   $ 508,773      $ 711,366      $ 571,930      $ 2,533,741      $ 938,966    Expansion and Development(21)   $ 135,758      $ 9,866      $ 248,146      $ —      $ 281,808    Growth Projects(22)   $ 19,900      $ 37,771      $ 28,315      $ —      $ 9,638   

(a)  Acquisitions includes intangibles and goodwill included in buy price.

Operating Statistics for MH and Annual RVs

Locations   Resident Move-outs   Net Leased Sites(5)   New Home Sales   Pre-owned Home Sales   Brokered
Re-sales Florida   1,851      572        153      177      1,415    Michigan   327      154        43      1,334      196    Ontario, Canada   526      180        93      6      420    Texas   278      233        71      344      69    Arizona   88      124        30      35      171    Indiana   46      31        7      220      13    Ohio   68      (2 )     1      109      15    California   100      22        23      8      109    Colorado   3      51        43      23      36    Connecticut   26      21        29      2      44    New York   90      25        10      7      9    New Hampshire   —      2        4      —      37    Maine   80      15        10      9      3    Other states   837      245        66      298      176    Nine Months Ended September 30, 2021   4,320      1,673        583      2,572      2,713    Total For Year Ended   Resident Move-outs   Net Leased Sites(5)   New Home Sales   Pre-owned Home Sales   Brokered
Re-sales 2020   5,365      2,505      570      2,296      2,557    2019   4,139      2,674      571      2,868      2,231    Percentage Trends   Resident Move-outs   Resident
Re-sales 2021 TTM   2.9  %   8.3  % 2020   3.3  %   6.9  % 2019   2.6  %   6.6  %

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-character specific expenses such as general and administrative expenses.
  • EBITDA provides a further measure to estimate 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 character, 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 before 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 freely apparent from GAAP net income (loss). Management believes the use of FFO has been advantageous 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 chief business (“chief FFO”). The Company believes that chief 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 meaningful economic elements 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 different 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 character 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 character investment and provides a method of comparing character performance over time. The Company uses NOI as a meaningful measure when evaluating performance and growth of particular similarities and / or groups of similarities. The principal limitation of NOI is that it excludes depreciation, amortization, interest expense and non-character specific expenses such as general and administrative expenses, all of which are meaningful costs. consequently, NOI is a measure of the operating performance of the similarities of the Company instead of 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 different 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 obtainable 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 precisely mirror the actual change in market value of a character, in the case of depreciation and in the case of interest, may not necessarily be connected to the operating performance of a real estate asset, as it is often incurred at a parent company level and not at a character 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 character (including losses or gains on change of control), plus impairment write-downs of depreciated character and of investments in nonconsolidated affiliates caused by a decline in value of depreciated character in the affiliate, and adjustments to mirror the entity’s proportion of EBITDAre of nonconsolidated affiliates. EBITDAre is a non-GAAP financial measure that the Company uses to estimate 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 estimate 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 consequently 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 mirror continued money for comparative purposes. Canadian money figures in the prior comparative period have been translated at 2021 average exchange rates.

(3)   The MH and RV blended occupancy for 2021 is derived from 119,584 developed sites, of which 117,300 were occupied. The modificated MH and RV blended occupancy percentage is derived from 118,641 developed sites, of which 117,300 were occupied. The number of developed sites excludes RV transient sites and over 900 recently completed but vacant MH expansion sites.

The modificated MH and RV blended occupancy percentage for 2020 has been modificated to mirror incremental period-over-period growth from newly rented expansion sites and the conversion of transient RV sites to annual RV sites.

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

(5)   Revenue producing site net gains do not include occupied sites acquired during that year.

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

  Three Months Ended   Nine Months Ended   September 30, 2021   September 30, 2020   September 30, 2021   September 30, 2020 Contingent consideration expense $ (9,196 )     $ (2,724 )     $ (9,339 )     $ (2,890 )   Long term lease termination expense —        (160 )     —        (433 )   Repair save on repossessed homes (176 )     (627 )     (702 )     (1,567 )   Other expenses, net $ (9,372 )     $ (3,511 )     $ (10,041 )     $ (4,890 )  

(7)   Other acquisition related costs represent the expenses incurred to bring recently acquired similarities 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. These costs also include nonrecurring integration expenses associated with a new acquisition.

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

  Three Months Ended   Nine Months Ended   September 30, 2021   September 30, 2020   September 30, 2021   September 30, 2020 Contingent consideration expense $ 9,196      $ 2,724        $ 9,339      $ 2,890      Long term lease termination expense —      160        —      433      Deferred tax (assistance) / expense 1,155      (562 )     1,074      (804 )   RV rebranding non-recurring cost 1,092      —        1,092      —      deferred compensation amortization upon retirement —      —        —      300      Other adjustments, net $ 11,443      $ 2,322        $ 11,505      $ 2,819     

(9)   Line of credit and other debt includes borrowings under the Company’s $2.0 billion credit facility, a $12.0 million MH floor plan facility, and a $35.3 million unsecured term loan which had been secured prior to July 1, 2021.

(10)   Same Community results net $19.1 million and $18.3 million of certain utility revenue against the related utility expense in character operating and maintenance expense for the three months ended September 30, 2021 and 2020, respectively. Same Community results net $52.2 million and $47.3 million of utility revenue against the related utility expense in character operating and maintenance expense for the nine months ended September 30, 2021 and 2020, respectively.

(11)   Same Community supplies and repair expense excludes $0.4 million and $1.2 million for the three and nine months ended September 30, 2020, respectively, of expenses incurred for recently acquired similarities to bring the similarities 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)   MH and RV acquisitions and other is comprised of 21 similarities acquired in 2021, one character acquired in which the Company has an interest in, but does not function in 2021, and five similarities that the Company has an interest in, but does not function in 2021, 23 similarities acquired in 2020, two Florida Keys similarities that require redevelopment as a consequence of damage consistent from Hurricane Irma in 2017, seven recently opened ground-up developments, two similarities 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 September 30, 2021, total portfolio MH occupancy was 96.6 percent inclusive of the impact of nearly 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 approximately 73.1 percent for expansion, 20.8 percent for greenfield development and 6.1 percent for redevelopment.

(18)   character recurring capital expenditures are necessary to continue asset quality, including purchasing and replacing assets used to function the communities, resorts and marinas. Recurring capital expenditures at our MH and RV similarities include items such as: major road, driveway, pool improvements; clubhouse renovations; adding or replacing street lights; playground equipment; signage; maintenance facilities; manager housing and character vehicles. Recurring capital expenditures at our marinas include items such as: dredging, dock repairs and improvements, and equipment maintenance and upgrades. The minimum capitalized amount is five hundred dollars.

(19)   Lot alteration capital expenditures are incurred to modify the foundational structures required to set a new home after a past home has been removed. These expenditures are necessary to create a revenue stream from a new site renter and often enhance the quality of the community. Other lot alteration expenditures include land improvements additional to annual RV sites to aid in the conversion of transient RV guests to annual contracts.

(20)   Capital expenditures related to acquisitions represent the buy price of existing operating similarities (including marinas) and land parcels to develop expansions or new similarities. These costs for the nine months ended September 30, 2021 include $54.3 million at our MH and RV similarities and $69.9 million at our marina similarities. Expenditures be make up of consistently capital improvements identified during due diligence that are necessary to bring the communities, resorts and marinas to the Company’s operating standards. For the years ended December 31, 2020 and 2019, these costs were $40.6 million and $50.7 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; lot modifications; and new signage including main signs and internal road signs. These are considered acquisition costs and although identified during due diligence, often require 24 to 36 months after closing to complete.

(21)   Expansion and development expenditures consist chiefly of construction costs such as roads, activities, and amenities, and costs necessary to complete home and RV site improvements, such as driveways, sidewalks and landscaping at our MH communities and RV resorts. Expenditures also include costs to rebuild after damage has been incurred at MH, RV or marina similarities.

(22)   Growth projects be make up of consistently revenue generating or expense reducing activities at MH communities, RV resorts and marinas. This includes, but is not limited to, utility efficiency and replaceable energy projects, site, slip or facilities upgrades such as the addition of a garage, discarded or boat lift, and other special capital projects that substantiate an incremental rental increase.

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

  • Press Release and Supplemental Package 2021.09.30

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