Sun Communities, Inc. Reports 2021 Second Quarter Results

(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 second quarter results for 2021.

Financial Results for the Quarter and Six Months Ended June 30, 2021

For the quarter ended June 30, 2021, total revenues increased $300.6 million, or 99.1 percent, to approximately $603.9million compared to $303.3 million for the same period in 2020. Net income attributable to common stockholders increased $51.9 million or 88.0 percent, to approximately $110.8million, or $0.98 per diluted common share, compared to net income attributable to common stockholders of $58.9million, or $0.61 per diluted common share, for the same period in 2020.

For the six months ended June 30, 2021, total revenues increased $432.3million, or 70.5 percent, to $1.0billion compared to approximately $613.6million for the same period in 2020. Net income attributable to common stockholders increased $92.7million or 216.5 percent, to approximately $135.6million, or $1.22 per diluted common share, compared to net income attributable to common stockholders of $42.8million, or $0.45 per diluted common share, for the same period in 2020.

Non-GAAP Financial Measures and Portfolio Performance

  • Core Funds from Operations (“Core FFO”)(1) for the quarter ended June 30, 2021, was $1.80 per diluted share and OP unit (“Share”) as compared to $1.12 in the corresponding period in 2020, a 60.7 percent increase.
  • Same Community(2) Net Operating Income (“NOI”)(1)increased by 21.6 percent for the quarter ended June 30, 2021, as compared to the corresponding period in 2020.
  • Home Sales Volume increased 89.5 percent to 1,158 homes for the quarter ended June 30, 2021, as compared to 611 homes in the same period in 2020.
  • Acquisitions totaled $719.4 million during and subsequent to the quarter ended June 30, 2021, including 10 MH communities, two RV resorts and six marinas.

Gary Shiffman, Chief Executive Officer stated, “Sun’s ongoing strong momentum continued through the second quarter, as we saw robust performance across RV, Manufactured Housing and Marinas. Our RV business is demonstrating the growing appeal of an RV vacation for consumers, marinas are in the midst of an active boating season and our results continue to track ahead of our underwriting, and in our manufactured housing business, we are benefiting from sustained demand for affordable housing. Furthermore, our RV forward bookings have continued to accelerate and we are pleased to again increase our guidance for the year.”

Mr. Shiffman continued, “We have remained active in terms of new site deliveries and have more than 9,400 sites available for development, representing an attractive source of growth and value creation over time. We also deployed over $719 million in acquisitions, including six marinas as we begin to realize the meaningful consolidation opportunity we have in the marina industry. To support this ongoing growth, we are pleased to have received investment grade ratings and completed our inaugural unsecured bond issuance as we issued $600 million in senior unsecured notes. This additional financing option provides Sun enhanced financial flexibility to efficiently match fund our investment activities as we continue to realize compelling growth opportunities across all of our businesses.”

OPERATING HIGHLIGHTS

Portfolio Occupancy

Total MH and annual RV occupancy was 97.4 percent at June 30, 2021, compared to 97.3 percent at June 30, 2020, an increase of 10 basis points.

During the quarter ended June 30, 2021, MH and annual RV revenue producing sites increased by 583 sites, as compared to an increase of 851 revenue producing sites during the quarter ended June 30, 2020.

During the six months ended June 30, 2021, MH and annual RV revenue producing sites increased by 1,097 sites, as compared to an increase of 1,151 revenue producing sites during the six months ended June 30, 2020.

Same Community(2) Results

For the 405 MH and RV properties owned and operated by the Company since January 1, 2020, the following table reflects the NOI(1) percentage increases, in total and by segment, for the quarter and six months ended June 30, 2021:

Quarter Ended June 30, 2021
Total Same CommunityMHRV
Revenue22.5%6.9%64.4%
Expense24.7%11.8%41.9%
NOI21.6%5.4%85.1%

Six Months Ended June 30, 2021
Total Same CommunityMHRV
Revenue12.8%6.0%30.2%
Expense15.2%8.7%24.2%
NOI11.8%5.1%34.8%

Same Community adjusted occupancy(3) increased to 98.8 percent at June 30, 2021 from 97.2 percent at June 30, 2020.

Home Sales

During the quarter ended June 30, 2021, the Company sold 1,158 homes as compared to 611 homes in the same period in 2020, an increase of 89.5 percent. The Company sold 227 and 140 new homes for the quarters ended June 30, 2021 and 2020, respectively, an increase of 62.1 percent. Pre-owned home sales were 931 in the second quarter 2021 as compared to 471 in the same period in 2020, an increase of 97.7 percent.

During the six months ended June 30, 2021, the Company sold 1,993 homes as compared to 1,374 homes in the same period in 2020, an increase of 45.1 percent. The Company sold 376 and 259 new homes for the six months ended June 30, 2021 and 2020, respectively, an increase of 45.2 percent. Pre-owned home sales were 1,617 in the six months ended June 30, 2021 as compared to 1,115 in the same period in 2020, an increase of 45.0 percent.

Marina Results

Marina NOI was $62.8 million and $94.2 million for the quarter and six months ended June 30, 2021, respectively. Refer to page 15 for additional information regarding the marina portfolio operating results.

PORTFOLIO ACTIVITY

Acquisitions and Dispositions

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

Property NameProperty TypeSites,
Wet Slips and
Dry Storage Spaces		Development SitesState / ProvinceTotal
Purchase Price
(in millions)		Month Acquired
ThemeWorld RV ResortRV148—FL$25.0April
Sylvan Glen Estates(a)MH476—MI24.0April
Shelter Island BoatyardMarina55N/ACA10.0May
Lauderdale Marine CenterMarina202N/AFL340.2May
Apponaug Harbor(b)Marina378N/ARI6.6June
Cabrillo Isle(c)Marina483N/ACA46.9June
Marathon MarinaMarina147N/AFL19.1June
Subtotal1,889—471.8
Acquisitions subsequent to quarter end
Allen HarborMarina165N/ARI4.0July
Cisco Grove Campground & RVRV18407CA6.6July
Four Leaf Portfolio(d)MH2,714171MI / IN215.0July
Harborage Yacht ClubMarina300N/AFL22.0July
Subtotal3,197578247.6
Total acquisitions5,086578$719.4

(a) In conjunction with the acquisition, the Company issued 240,000 Series J preferred OP units.

(b) Combined with an existing adjacent marina.

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

(d) Contains nine MH communities.

During and subsequent to the six months ended June 30, 2021 the Company acquired 28 properties totaling 7,666 sites, wet slips and dry storage spaces, and 578 sites for development for a total purchase price of $853.4 million.

Subsequent to the quarter ended June 30, 2021, the Company sold two MH communities located in Indiana and Missouri for $67.5million. The assets and liabilities associated with the transaction were classified as held for sale on the Consolidated Balance Sheets as of June 30, 2021.

Construction Activity

During the quarter ended June 30, 2021, the Company completed the construction of over 100 sites in two ground-up developments and over 120 expansion sites in two MH communities and one RV resort.

Year to date June 30, 2021, the Company completed the construction of over 350 sites in three ground-up development and over 230 expansion sites in three MH communities and one RV resort.

BALANCE SHEET, CAPITAL MARKETS ACTIVITY AND OTHER ITEMS

Debt

As of June 30, 2021, the Company had approximately $4.3 billion in debt outstanding. The weighted average interest rate was 3.5 percent and the weighted average maturity was 10.4 years. At June 30, 2021, the Company’s net debt to trailing twelve month Recurring EBITDA(1) ratio was 5.1 times. The Company had $103.5million of unrestricted cash on hand.

Senior Unsecured Notes

On June 14, 2021, the Company received investment grade ratings of BBB and Baa3 with a stable outlook from S&P Global and Moody’s, respectively.

On June 28, 2021, Sun Communities Operating Limited Partnership (“SCOLP”), the Company’s operating partnership, issued $600.0million of senior unsecured notes with an interest rate of 2.7 percent and a ten-year term, due 2031. The net proceeds from the offering were $592.4million, after deducting underwriters’ discount and estimated offering expenses.

Credit Agreement

On June 14, 2021, SCOLP, as borrower, and the Company, as guarantor, entered into a new credit agreement with certain lenders. The new credit agreement combines and replaces SCOLP’s $750.0million credit facility which was scheduled to mature May 21, 2023, and the $1.8billion credit facility of the Company’s marina subsidiary, Safe Harbor Marinas, LLC (the “Safe Harbor Facility”) which was scheduled to mature on October 11, 2024. The Safe Harbor Facility was terminated in connection with the execution of the new credit agreement and all amounts due and outstanding were repaid on or prior to the date of the New Credit Agreement. The Company recognized a loss on extinguishment of debt in its Consolidated Statement of Operations related to the termination of these prior credit facilities of $0.2 million and $7.9 million, respectively.

Pursuant to the New Credit Agreement, SCOLP may borrow up to $2.0billion under a revolving loan (the “New Credit Facility”) to fund the business of SCOLP and all its subsidiaries. The New Credit Facility has a four-year term ending June 14, 2025. Subject to the satisfaction of certain conditions, the term may be extended for two additional six-month periods, and additional borrowings not to exceed $1.0billion is permitted. However, the maturity date with respect to $500.0million of available borrowing under the New Credit Facility is October 11, 2024, which may not be extended. The New Credit Facility bears interest at a floating rate based on the Adjusted Eurocurrency Rate or Australian Bank Bill Swap Bid Rate (BBSY), plus a margin which can range from 0.725 percent to 1.400 percent. As of June 30, 2021, the margin based on our credit ratings was 0.850 percent on the New Credit Facility. The Company had $190.3 million of borrowings on the New Credit Facility as of June 30, 2021.
Equity Transactions

Public Equity Offering

In May and June 2021, the Company completed the physical settlement of the remaining 4,050,000 shares offered under the forward sale agreement pursuant to the Company’s March 2021 equity offering of 8,050,000 shares. Net proceeds of $539.7 million after deducting expenses related to the offering, were used to acquire assets and pay down the Safe Harbor Facility.

At the Market Offering Sales Agreements

In June 2021, the Company entered into an At the Market Offering (ATM) Sales Agreement (the “Sales Agreement”) with certain sales agents, forward sellers, pursuant to which the Company may sell, from time to time, up to an aggregate gross sales price of $500.0million of its common stock. No shares were sold during the quarter ending June 30, 2021 under the ATM program. Upon entering into the Sales Agreement, the Company simultaneously terminated its previous ATM sales agreement entered into in July 2017.

2021 GUIDANCE

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

Previous RangeRevised Range
FY 2021EFY 2021E3Q 2021E
Basic earnings per share$1.68 – $1.84$2.24 – $2.36$0.90 – $0.96
Core FFO(1) per fully diluted Share$5.92 – $6.08$6.25 – $6.37$2.00 – $2.06
1Q212Q213Q214Q21
Seasonality of Core FFO(1) per fully diluted Share20.0%28.5%32.1%19.4%

Seasonality of Core FFO(1) per fully diluted Share is based off of the midpoint of full year guidance.

Previous RangeRevised Range
FY 2021EFY 2021E3Q 2021E
Same Community NOI(1) growth7.5% – 8.5%9.9% – 10.7%11.2% – 12.0%

Guidance estimates include acquisitions completed through 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, as well as other risks outlined below under the caption “Cautionary Statement Regarding Forward-Looking Statements.”

EARNINGS CONFERENCE CALL

A conference call to discuss second quarter results will be held on Tuesday, July27, 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 August10, 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 13720116. 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 June 30, 2021, owned, operated, or had an interest in a portfolio of 569 developed MH, RV and marina properties comprising over 153,300 developed sites and nearly 41,300 wet slips and dry storage spaces 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, 2020 and in 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 and its senior unsecured notes;
  • 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 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 statements.

Investor Information

RESEARCH COVERAGE
FirmAnalystPhoneEmail
Bank of America Merrill LynchJoshua Dennerlein(646) 855-1681joshua.dennerlein@baml.com
Berenberg Capital MarketsKeegan Carl(646) 949-9052keegan.carl@berenberg-us.com
BMO Capital MarketsJohn Kim(212) 885-4115johnp.kim@bmo.com
Citi ResearchMichael Bilerman(212) 816-1383michael.bilerman@citi.com
Nicholas Joseph(212) 816-1909nicholas.joseph@citi.com
Evercore ISISteve Sakwa(212) 446-9462steve.sakwa@evercoreisi.com
Samir Khanal(212) 888-3796samir.khanal@evercoreisi.com
Green Street AdvisorsJohn Pawlowski(949) 640-8780jpawlowski@greenstreetadvisors.com
Robert W. Baird & Co.Wesley Golladay(216) 737-7510wgolladay@rwbaird.com
RBC Capital MarketsBrad Heffern(512) 708-6311brad.heffern@rbccm.com
UBSMichael Goldsmith(212) 713-2951michael.goldsmith@ubs.com
Wells FargoTodd Stender(562) 637-1371todd.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 Websitewww.suncommunities.com
By Emailinvestorrelations@suncommunities.com
By Phone(248) 208-2500

Portfolio Overview
(As of June 30, 2021)


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

Quarter Ended
6/30/20213/31/202112/31/20209/30/20206/30/2020
Financial Information
Total revenues$603,863$442,015$384,265$400,514$303,266
Net income$120,849$27,941$9,818$89,756$63,355
Net income attributable to Sun Communities Inc. common stockholders$110,770$24,782$7,586$81,204$58,910
Basic earnings per share*$0.98$0.23$0.07$0.83$0.61
Diluted earnings per share*$0.98$0.23$0.07$0.83$0.61
Cash distributions declared per common share*$0.83$0.83$0.79$0.79$0.79
Recurring EBITDA(1) $268,225$190,830$168,527$199,321$148,650
FFO attributable to Sun Communities, Inc. common stockholders and dilutive convertible securities(1)(4)$198,017$135,925$110,849$165,209$118,092
Core FFO attributable to Sun Communities, Inc. common stockholders and dilutive convertible securities(1)(4)$209,620$141,036$124,872$162,624$110,325
FFO attributable to Sun Communities, Inc. common stockholders and dilutive convertible securities(1)(4) per share – fully diluted*$1.70$1.22$1.03$1.63$1.20
Core FFO attributable to Sun Communities, Inc. common stockholders and dilutive convertible securities(1)(4) per share – fully diluted*$1.80$1.26$1.16$1.60$1.12
Balance Sheet
Total assets$12,040,990$11,454,209$11,206,586$8,335,717$8,348,659
Total debt$4,311,175$4,417,935$4,757,076$3,340,613$3,390,771
Total liabilities$5,099,563$5,101,512$5,314,879$3,791,922$3,845,308

Quarter Ended
6/30/20213/31/202112/31/20209/30/20206/30/2020
Operating Information*
Properties569562552432426
Manufactured home sites97,44896,87696,68895,20994,232
Annual RV sites28,80728,44127,56426,81726,240
Transient RV sites27,03226,29525,04323,72822,360
Total sites153,287151,612149,295145,754142,832
Marina wet slips and dry storage spaces41,27538,75338,152N/AN/A
MH occupancy96.7%96.5%96.6%96.4%96.5%
Annual RV occupancy100.0%100.0%100.0%100.0%100.0%
Blended MH and annual RV occupancy97.4%97.3%97.3%97.2%97.3%
New home sales227149156155140
Pre-owned home sales931686626555471
Total home sales1,158835782710611

Quarter Ended
6/30/20213/31/202112/31/20209/30/20206/30/2020
Revenue Producing Site Gains(5)
MH net leased sites226127247349759
RV net leased sites35738733142792
Total net leased sites583514578776851

Consolidated Balance Sheets
(amounts in thousands)

June 30, 2021December 31, 2020
Assets
Land$2,412,629$2,119,364
Land improvements and buildings8,995,0418,480,597
Rental homes and improvements622,397637,603
Furniture, fixtures and equipment529,549447,039
Investment property12,559,61611,684,603
Accumulated depreciation(2,165,564)(1,968,812)
Investment property, net10,394,0529,715,791
Cash, cash equivalents and restricted cash119,61292,641
Marketable securities153,049124,726
Inventory of manufactured homes43,68646,643
Notes and other receivables, net262,333221,650
Goodwill448,317428,833
Other intangible assets, net295,663305,611
Other assets, net324,278270,691
Total Assets$12,040,990$11,206,586
Liabilities
Secured debt$3,457,734$3,489,983
Unsecured debt853,4411,267,093
Distributions payable98,42986,988
Advanced reservation deposits and rent290,913187,730
Accrued expenses and accounts payable214,200148,435
Other liabilities184,846134,650
Total Liabilities5,099,5635,314,879
Commitments and contingencies
Temporary equity285,603264,379
Stockholders’ Equity
Common stock1,1591,076
Additional paid-in capital8,163,0957,087,658
Accumulated other comprehensive income5,1973,178
Distributions in excess of accumulated earnings(1,614,243)(1,566,636)
Total Sun Communities, Inc. stockholders’ equity6,555,2085,525,276
Noncontrolling interests
Common and preferred OP units82,86585,968
Consolidated variable interest entities17,75116,084
Total noncontrolling interests100,616102,052
Total Stockholders’ Equity6,655,8245,627,328
Total Liabilities, Temporary Equity and Stockholders’ Equity$12,040,990$11,206,586

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

Three Months EndedSix Months Ended
June 30, 2021June 30, 2020Change% ChangeJune 30, 2021June 30, 2020Change% Change
Revenues
Real property (excluding transient)$328,907$225,413$103,49445.9%$626,984$453,415$173,56938.3%
Real property – transient76,99825,71451,284199.4%109,53456,06153,47395.4%
Home sales81,84838,53043,318112.4%134,04779,11754,93069.4%
Service, retail, dining and entertainment106,4527,70098,752N/M157,06412,803144,261N/M
Interest2,7192,635843.2%5,3504,9853657.3%
Brokerage commissions and other, net6,9393,2743,665111.9%12,8997,1875,71279.5%
Total Revenues603,863303,266300,59799.1%1,045,878613,568432,31070.5%
Expenses
Property operating and maintenance129,96170,80459,15783.6%233,514140,63892,87666.0%
Real estate tax23,20217,7235,47930.9%45,61034,89910,71130.7%
Home costs and selling58,76332,05126,71283.3%100,35366,09034,26351.8%
Service, retail, dining and entertainment78,5857,24271,343N/M124,01613,924110,092N/M
General and administrative45,12726,52718,60070.1%83,33051,87631,45460.6%
Catastrophic event-related charges, net355(566)921162.7%2,769402,729N/M
Business combination, net(201)—(201)N/A1,031—1,031N/A
Depreciation and amortization126,42387,26539,15844.9%249,727170,95478,77346.1%
Loss on extinguishment of debt8,1081,9306,178320.1%8,1085,2092,89955.7%
Interest37,68131,4286,25319.9%77,19863,84413,35420.9%
Interest on mandatorily redeemable preferred OP units / equity1,0411,042(1)(0.1)%2,0772,083(6)(0.3)%
Total Expenses509,045275,446233,59984.8%927,733549,557378,17668.8%
Income Before Other Items94,81827,82066,998240.8%118,14564,01154,13484.6%
Gain / (loss) on remeasurement of marketable securities27,49424,5192,97512.1%31,155(4,128)35,283N/M
Gain / (loss) on foreign currency translation(264)10,374(10,638)(102.5)%(239)(7,105)6,866(96.6)%
Other expense, net(6)(660)(821)16119.6%(1,759)(1,793)34(1.9)%
Gain / (loss) on remeasurement of notes receivable93246(153)(62.2)%469(1,866)2,335N/M
Income from nonconsolidated affiliates79492702N/M1,9651441,821N/M
Gain / (loss) on remeasurement of investment in nonconsolidated affiliates(115)1,132(1,247)(110.2)%(11)(1,059)1,048(99.0)%
Current tax expense(1,245)(119)(1,126)N/M(1,016)(569)(447)78.6%
Deferred tax benefit / (expense)(66)112(178)N/M81242(161)(66.5)%
Net Income120,84963,35557,49490.7%148,79047,877100,913210.8%
Less: Preferred return to preferred OP units / equity3,0351,5841,45191.6%5,8993,1542,74587.0%
Less: Income attributable to noncontrolling interests7,0442,8614,183146.2%7,3391,8995,440286.5%
Net Income Attributable to Sun Communities, Inc.$110,770$58,910$51,86088.0%$135,552$42,824$92,728216.5%
Weighted average common shares outstanding – basic112,08295,85916,22316.9%110,00794,13415,87316.9%
Weighted average common shares outstanding – diluted112,08295,86016,22216.9%112,59394,52518,06819.1%
Basic earnings per share$0.98$0.61$0.3760.7%$1.22$0.45$0.77171.1%
Diluted earnings per share$0.98$0.61$0.3760.7%$1.22$0.45$0.77171.1%

N/M = Percentage change is not meaningful.

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

Outstanding Securities – As of June 30, 2021
Number of Units / Shares OutstandingConversion Rate*If Converted(1)Issuance Price Per Unit*Annual Distribution Rate*
Non-convertible Securities
Common shares115,889N/AN/AN/A$3.32^
Convertible Securities
Common OP units2,5691.00002,569N/AMirrors common shares distributions
Series A-1 preferred OP units2882.4390703$1006.00%
Series A-3 preferred OP units401.860575$1004.50%
Series C preferred OP units3061.1100340$1005.00%
Series D preferred OP units4890.8000391$1004.00%
Series E preferred OP units900.689762$1005.25%
Series F preferred OP units900.625056$1003.00%
Series G preferred OP units2410.6452155$1003.20%
Series H preferred OP units5810.6098355$1003.00%
Series I preferred OP units9220.6098562$1003.00%
Series J preferred OP units2400.6061145$1002.85%

^ 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 June 30, 2021
EquitySharesShare Price*Total
Common shares115,889$171.40$19,863,375
Common OP units2,569$171.40440,327
Subtotal118,458$20,303,702
Preferred OP units as converted2,844$171.40487,462
Total diluted shares outstanding121,302$20,791,164
Debt
Secured debt$3,457,734
Unsecured debt853,441
Total debt$4,311,175
Total Capitalization$25,102,339

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 EndedSix Months Ended
June 30, 2021June 30, 2020June 30, 2021June 30, 2020
Net Income Attributable to Sun Communities, Inc. Common Stockholders$110,770$58,910$135,552$42,824
Adjustments
Depreciation and amortization126,22787,296249,303171,048
Depreciation on nonconsolidated affiliates31196119
(Gain) / loss on remeasurement of marketable securities(27,494)(24,519)(31,155)4,128
(Gain) / loss on remeasurement of investment in nonconsolidated affiliates115(1,132)111,059
(Gain) / loss on remeasurement of notes receivable(93)(246)(469)1,866
Income attributable to noncontrolling interests5,0331,9424,8861,646
Preferred return to preferred OP units478—9581,000
Interest expense on Aspen preferred OP units514—1,028—
Gain on disposition of assets, net(17,564)(4,178)(25,719)(9,740)
FFO Attributable to Sun Communities, Inc. Common Stockholders and Dilutive Convertible Securities(1)(4)$198,017$118,092$334,456$213,850
Adjustments
Business combination expense and other acquisition related costs(7)2,2845044,237889
Loss on extinguishment of debt8,1081,9308,1085,209
Catastrophic event-related charges, net364(567)2,77839
Loss of earnings – catastrophic event-related——200300
(Gain) / loss on foreign currency translation264(10,374)2397,105
Other expense, net5175521,233854
Deferred tax (benefits) / expenses66188(81)58
Core FFO Attributable to Sun Communities, Inc. Common Stockholders and Dilutive Convertible Securities(1)(4)$209,620$110,325$351,170$228,304
Weighted average common shares outstanding – basic112,08295,859110,00794,134
Add
Common stock issuable upon conversion of stock options—1—1
Restricted stock580305372390
Common OP units2,5772,4482,5862,430
Common stock issuable upon conversion of certain preferred OP units1,174—1,180815
Weighted Average Common Shares Outstanding – Fully Diluted116,41398,613114,14597,770
FFO Attributable to Sun Communities, Inc. Common Stockholders and Dilutive Convertible Securities(1)(4) Per Share – Fully Diluted$1.70$1.20$2.93$2.19
Core FFO Attributable to Sun Communities, Inc. Common Stockholders and Dilutive Convertible Securities(1)(4) Per Share – Fully Diluted$1.80$1.12$3.08$2.34

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

Three Months EndedSix Months Ended
June 30, 2021June 30, 2020June 30, 2021June 30, 2020
Net Income Attributable to Sun Communities, Inc. Common Stockholders$110,770$58,910$135,552$42,824
Interest income(2,719)(2,635)(5,350)(4,985)
Brokerage commissions and other revenues, net(6,939)(3,274)(12,899)(7,187)
General and administrative expense45,12726,52783,33051,876
Catastrophic event-related charges, net355(566)2,76940
Business combination expense, net(201)—1,031—
Depreciation and amortization126,42387,265249,727170,954
Loss on extinguishment of debt8,1081,9308,1085,209
Interest expense37,68131,42877,19863,844
Interest on mandatorily redeemable preferred OP units / equity1,0411,0422,0772,083
(Gain) / loss on remeasurement of marketable securities(27,494)(24,519)(31,155)4,128
(Gain) / loss on foreign currency translation264(10,374)2397,105
Other expense, net(6)6608211,7591,793
(Gain) / loss on remeasurement of notes receivable(93)(246)(469)1,866
Income from nonconsolidated affiliates(794)(92)(1,965)(144)
(Gain) / loss on remeasurement of investment in nonconsolidated affiliates115(1,132)111,059
Current tax expense1,2451191,016569
Deferred tax (benefit) / expense66(112)(81)(242)
Preferred return to preferred OP units / equity3,0351,5845,8993,154
Income attributable to noncontrolling interests7,0442,8617,3391,899
NOI(1)$303,694$169,537$524,136$345,845

Three Months EndedSix Months Ended
June 30, 2021June 30, 2020June 30, 2021June 30, 2020
Real Property NOI(1)$252,742$162,600$457,394$333,939
Home Sales NOI(1)23,0856,47933,69413,027
Service, retail, dining and entertainment NOI(1)27,86745833,048(1,121)
NOI(1)$303,694$169,537$524,136$345,845

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

Three Months EndedSix Months Ended
June 30, 2021June 30, 2020June 30, 2021June 30, 2020
Net Income Attributable to Sun Communities, Inc. Common Stockholders$110,770$58,910$135,552$42,824
Adjustments
Depreciation and amortization126,42387,265249,727170,954
Loss on extinguishment of debt8,1081,9308,1085,209
Interest expense37,68131,42877,19863,844
Interest on mandatorily redeemable preferred OP units / equity1,0411,0422,0772,083
Current tax expense1,2451191,016569
Deferred tax (benefit) / expense66(112)(81)(242)
Income from nonconsolidated affiliates(794)(92)(1,965)(144)
Less: Gain on dispositions of assets, net(17,564)(4,178)(25,719)(9,740)
EBITDAre(1)$266,976$176,312$445,913$275,357
Adjustments
Catastrophic event-related charges, net355(566)2,76940
Business combination expense(201)—1,031—
(Gain) / loss on remeasurement of marketable securities(27,494)(24,519)(31,155)4,128
(Gain) / loss on foreign currency translation264(10,374)2397,105
Other expense, net(6)6608211,7591,793
(Gain) / loss on remeasurement of notes receivable(93)(246)(469)1,866
(Gain) / loss on remeasurement of investment in nonconsolidated affiliates115(1,132)111,059
Preferred return to preferred OP units / equity3,0351,5845,8993,154
Income attributable to noncontrolling interests7,0442,8617,3391,899
Plus: Gain on dispositions of assets, net17,5644,17825,7199,740
Recurring EBITDA(1) $268,225$148,919$459,055$306,141

Non-GAAP and Other Financial Measures

Debt Analysis
(amounts in thousands)

Quarter Ended
6/30/20213/31/202112/31/20209/30/20206/30/2020
Debt Outstanding
Mortgage term loans$3,418,097$3,430,420$3,444,967$3,191,380$3,205,507
Collateralized term loan39,63742,51045,01647,54650,006
Total secured debt3,457,7343,472,9303,489,9833,238,9263,255,513
Senior unsecured notes591,688————
Line of credit and other debt191,841875,0931,197,18131,77565,346
Preferred Equity – Sun NG Resorts – mandatorily redeemable35,24935,24935,24935,24935,249
Preferred OP units – mandatorily redeemable34,66334,66334,66334,66334,663
Total unsecured debt853,441945,0051,267,093101,687135,258
Total debt$4,311,175$4,417,935$4,757,076$3,340,613$3,390,771
% Fixed / Floating
Fixed94.7%79.3%74.0%97.6%96.6%
Floating5.3%20.7%26.0%2.4%3.4%
Total100.0%100.0%100.0%100.0%100.0%
Weighted Average Interest Rates
Mortgage term loans3.78%3.78%3.78%3.88%3.88%
Collateralized term loan1.30%1.29%1.31%1.31%1.31%
Senior unsecured notes2.70%—%—%—%—%
Line of credit and other debt(8)0.93%1.77%2.11%1.34%2.57%
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%5.93%
Total average3.52%3.39%3.37%3.86%3.86%
Debt Ratios
Net Debt / Recurring EBITDA(1) (TTM)5.16.16.95.04.8
Net Debt / Enterprise Value16.8%19.7%21.4%18.3%17.8%
Net Debt / Gross Assets29.6%31.8%35.5%31.6%29.7%
Coverage Ratios
Recurring EBITDA(1) (TTM) / Interest5.65.04.94.84.5
Recurring EBITDA(1) (TTM) / Interest + Pref. Distributions + Pref. Stock Distribution5.54.84.84.64.4

Maturities / Principal Amortization Next Five Years20212022202320242025
Mortgage term loans
Maturities$—$82,155$185,619$315,330$50,529
Principal amortization30,08361,41160,78857,34453,933
Collateralized term loan4,62110,00025,016——
Line of credit and other debt—1,509——190,332
Preferred Equity – Sun NG Resorts – mandatorily redeemable———33,4281,821
Preferred OP units – mandatorily redeemable———27,373—
Total$34,704$155,075$271,423$433,475$296,615
Weighted average rate of maturities—%4.46%4.08%4.47%4.04%

Same Community(2)
(amounts in thousands)

Three Months Ended
Total Same CommunityMHRV
June 30, 2021June 30, 2020Change% ChangeJune 30, 2021June 30, 2020Change% ChangeJune 30, 2021June 30, 2020Change% Change
Financial Information
Revenue
Real property (excluding transient)$219,693$205,449$14,2446.9%$174,158$166,473$7,6854.6%$45,535$38,976$6,55916.8%
Real property – transient51,48121,51029,971139.3%362173189109.2%51,11921,33729,782139.6%
Other10,7983,2197,579235.4%4,8691,1303,739330.9%5,9292,0893,840183.8%
Total Operating281,972230,17851,79422.5%179,389167,77611,6136.9%102,58362,40240,18164.4%
Expense
Property Operating(9)(10)87,45970,15917,30024.7%44,98440,2264,75811.8%42,47529,93312,54241.9%
Real Property NOI(1)$194,513$160,019$34,49421.6%$134,405$127,550$6,8555.4%$60,108$32,469$27,63985.1%

Six Months Ended
Total Same CommunityMHRV
June 30, 2021June 30, 2020Change% ChangeJune 30, 2021June 30, 2020Change% ChangeJune 30, 2021June 30, 2020Change% Change
Financial Information
Revenue
Real property (excluding Transient)$435,054$410,667$24,3875.9%$346,900$331,301$15,5994.7%$88,154$79,366$8,78811.1%
Real property – transient76,88349,86927,01454.2%9621,101(139)(12.6)%75,92148,76827,15355.7%
Other17,7939,0718,72296.2%9,6954,9404,75596.3%8,0984,1313,96796.0%
Total Operating529,730469,60760,12312.8%357,557337,34220,2156.0%172,173132,26539,90830.2%
Expense
Property Operating(9)(10)159,973138,87921,09415.2%87,98980,9117,0788.7%71,98457,96814,01624.2%
Real Property NOI(1)$369,757$330,728$39,02911.8%$269,568$256,431$13,1375.1%$100,189$74,297$25,89234.8%

Same Community(2) (continued)

As of
June 30, 2021June 30, 2020Change% Change
Other Information
Number of properties405405—
MH occupancy97.4%
RV occupancy100.0%
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%97.2%1.6%
Sites available for development7,2467,553(307)
Monthly base rent per site – MH$601$583$183.1%(12)
Monthly base rent per site – RV(11)$527$504$234.7%(12)
Monthly base rent per site – Total(11)$584$565$193.3%(12)

Marina Summary
(amounts in thousands except for statistical data)

Three Months EndedSix Months Ended
June 30, 2021June 30, 2021
Financial Information
Revenues
Real property (excluding transient)$61,914$108,020
Real property – transient4,2575,125
Other3,6715,319
Total Operating69,842118,464
Expenses
Property Operating(a)28,24651,821
Real Property NOI41,59666,643
Service, retail, dining and entertainment
Service, retail, dining and entertainment revenue82,238126,592
Service, retail, dining and entertainment expense61,01799,026
Service, Retail, Dining and Entertainment NOI21,22127,566
Marina NOI$62,817$94,209
Other Information – MarinasJune 30, 2021
Number of properties(b)114
Total wet slips and dry storage41,275

(a) Marina results net $3.7 million and $6.3 million of certain utility revenue against the related utility expense in property operating and maintenance expense for the quarter and six months ended June 30, 2021.

(b) Marina properties comprised of eight properties acquired in 2021 and 106 properties acquired in 2020.

MH and RV Acquisitions and Other Summary(13)
(amounts in thousands except for statistical data)

Three Months EndedSix Months Ended
June 30, 2021June 30, 2021
Financial Information
Revenues
Real property (excluding transient)$8,522$15,820
Real property – transient21,25927,525
Other income2,7673,122
Total Operating32,54846,467
Expenses
Property Operating(a)15,91525,475
Real Property NOI$16,633$20,992
Other Information – MH and RVsJune 30, 2021
Number of properties50
Occupied sites5,474
Developed sites6,322
Occupancy %86.6%
Transient sites8,122

(a) MH and RV Acquisitions and Other results net $1.1 million and $2.3 million of certain utility revenue against the related utility expense in property operating and maintenance expense for the quarter and six months ended June 30, 2021.

Home Sales Summary
(amounts in thousands except for *)

Three Months EndedSix Months Ended
June 30, 2021June 30, 2020Change% ChangeJune 30, 2021June 30, 2020Change% Change
Financial Information
New Homes
New home sales$34,761$19,206$15,55581.0%$57,733$34,802$22,93165.9%
New home cost of sales28,26915,70712,56280.0%46,94328,31718,62665.8%
Gross Profit – new homes6,4923,4992,99385.5%10,7906,4854,30566.4%
Gross margin % – new homes18.7%18.2%0.5%18.7%18.6%0.1%
Average selling price – new homes*$153,132$137,186$15,94611.6%$153,545$134,371$19,17414.3%
Pre-owned Homes
Pre-owned home sales$47,087$19,324$27,763143.7%$76,314$44,315$31,99972.2%
Pre-owned home cost of sales25,94513,47412,47192.6%44,52930,89613,63344.1%
Gross Profit – pre-owned homes21,1425,85015,292261.4%31,78513,41918,366136.9%
Gross margin % – pre-owned homes44.9%30.3%14.6%41.7%30.3%11.4%
Average selling price – pre-owned homes*$50,577$41,028$9,54923.3%$47,195$39,744$7,45118.7%
Total Home Sales
Revenue from home sales$81,848$38,530$43,318112.4%$134,047$79,117$54,93069.4%
Cost of home sales54,21429,18125,03385.8%91,47259,21332,25954.5%
Home selling expenses4,5492,8701,67958.5%8,8816,8772,00429.1%
Home Sales NOI(1)$23,085$6,479$16,606256.3%$33,694$13,027$20,667158.6%
Statistical Information
New home sales volume*2271408762.1%37625911745.2%
Pre-owned home sales volume*93147146097.7%1,6171,11550245.0%
Total home sales volume*1,15861154789.5%1,9931,37461945.1%

Rental Program Summary
(amounts in thousands except for *)

Three Months EndedSix Months Ended
June 30, 2021June 30, 2020Change% ChangeJune 30, 2021June 30, 2020Change% Change
Financial Information
Revenues
Home rent$17,060$14,968$2,09214.0%$34,082$30,436$3,64612.0%
Site rent18,64918,591580.3%37,76636,5981,1683.2%
Total35,70933,5592,1506.4%71,84867,0344,8147.2%
Expenses
Rental Program operating and maintenance4,5614,4251363.1%9,7859,2485375.8%
Rental Program NOI(1)$31,148$29,134$2,0146.9%$62,063$57,786$4,2777.4%
Other Information
Number of sold rental homes*281122159130.3%49235613638.2%
Number of occupied rentals, end of period*10,95111,785(834)(7.1)%
Investment in occupied rental homes, end of period$601,798$621,327$(19,529)(3.1)%
Weighted average monthly rental rate, end of period*$1,076$1,018$585.7%

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

MH and RV Property Summary
6/30/20213/31/202112/31/20209/30/20206/30/2020
FLORIDA
Properties129128128127125
MH & Annual RV Developed sites(14)40,17140,01139,80339,51739,241
Occupied MH & Annual RV(14)39,40239,28339,06338,74338,453
MH & Annual RV Occupancy %(14)98.1%98.2%98.1%98.0%98.0%
Transient RV sites5,8955,8236,0115,9935,547
Sites for development1,4141,4971,4971,4271,427
MICHIGAN
Properties7574747472
MH & Annual RV Developed sites(14)29,60029,09229,08629,08627,901
Occupied MH & Annual RV(14)28,67128,14528,10928,03327,191
MH & Annual RV Occupancy %(14)96.9%96.7%96.6%96.4%97.5%
Transient RV sites509541546546572
Sites for development1,1821,1821,1821,1821,182
CALIFORNIA
Properties3636353432
MH & Annual RV Developed sites(14)6,7366,7346,6756,3726,364
Occupied MH & Annual RV(14)6,6136,6096,6026,2906,272
MH & Annual RV Occupancy %(14)98.2%98.1%98.9%98.7%98.6%
Transient RV sites2,4162,4182,2312,2361,978
Sites for development127127373373264
TEXAS
Properties2524242423
MH & Annual RV Developed sites(14)7,9477,9287,7667,6597,641
Occupied MH & Annual RV(14)7,7317,6717,5727,4277,289
MH & Annual RV Occupancy %(14)97.3%96.8%97.5%97.0%95.4%
Transient RV sites1,8351,7731,8101,9171,590
Sites for development1,1941,2751,3781,378565
ONTARIO, CANADA
Properties1616151515
MH & Annual RV Developed sites(14)4,3024,1994,0904,0673,980
Occupied MH & Annual RV(14)4,3024,1994,0904,0673,980
MH & Annual RV Occupancy %(14)100.0%100.0%100.0%100.0%100.0%
Transient RV sites8709649669201,007
Sites for development1,5251,5251,5251,5931,593
CONNECTICUT
Properties1616161616
MH & Annual RV Developed sites(14)1,9011,8971,8971,8981,898
Occupied MH & Annual RV(14)1,7571,7461,7391,7361,735
MH & Annual RV Occupancy %(14)92.4%92.0%91.7%91.5%91.4%
Transient RV sites104108108107107
Sites for development—————
ARIZONA
Properties1414141313
MH & Annual RV Developed sites(14)4,4014,3914,3234,2744,259
Occupied MH & Annual RV(14)4,1164,1014,0303,9573,932
MH & Annual RV Occupancy %(14)93.5%93.4%93.2%92.6%92.3%
Transient RV sites1,2601,2701,3371,3861,401
Sites for development—————
MAINE
Properties13131377
MH & Annual RV Developed sites(14)2,2042,1902,1901,0921,074
Occupied MH & Annual RV(14)2,1272,1192,1211,0891,069
MH & Annual RV Occupancy %(14)96.5%96.8%96.8%99.7%99.5%
Transient RV sites792805805819837
Sites for development3030303030
INDIANA
Properties1212121111
MH & Annual RV Developed sites(14)3,0873,0873,0873,0873,087
Occupied MH & Annual RV(14)2,9702,9612,9502,9572,961
MH & Annual RV Occupancy %(14)96.2%95.9%95.6%95.8%95.9%
Transient RV sites1,0891,0891,089534534
Sites for development277277277277277
COLORADO
Properties1010101010
MH & Annual RV Developed sites(14)2,4532,4532,4532,4532,441
Occupied MH & Annual RV(14)2,4202,3952,3802,3652,327
MH & Annual RV Occupancy %(14)98.7%97.6%97.0%96.4%95.3%
Transient RV sites987962962930574
Sites for development1,2251,2501,2501,2821,566
NEW HAMPSHIRE
Properties1010101010
MH & Annual RV Developed sites(14)1,7771,7761,7771,8331,827
Occupied MH & Annual RV(14)1,7691,7691,7671,8221,816
MH & Annual RV Occupancy %(14)99.5%99.6%99.4%99.4%99.4%
Transient RV sites602456460404410
Sites for development151151151151151
NEW YORK
Properties1010999
MH & Annual RV Developed sites(14)1,4571,4521,4191,4141,403
Occupied MH & Annual RV(14)1,4281,4151,3801,3711,358
MH & Annual RV Occupancy %(14)98.0%97.5%97.3%97.0%96.8%
Transient RV sites1,6841,6891,422900911
Sites for development371371371371371
OHIO
Properties99999
MH & Annual RV Developed sites(14)2,7972,7972,7902,7902,778
Occupied MH & Annual RV(14)2,7702,7602,7552,7582,736
MH & Annual RV Occupancy %(14)99.0%98.7%98.7%98.9%98.5%
Transient RV sites128128135135147
Sites for development2222222222
OTHER STATES
Properties8080777374
MH & Annual RV Developed sites(14)17,42217,31016,89616,48416,578
Occupied MH & Annual RV(14)16,93416,79616,39415,97716,046
MH & Annual RV Occupancy %(14)97.2%97.0%97.0%96.9%96.8%
Transient RV sites8,8618,2697,1616,9016,745
Sites for development1,9251,9691,9692,0442,294
TOTAL – MH AND RV PORTFOLIO
Properties455452446432426
MH & Annual RV Developed sites(14)126,255125,317124,252122,026120,472
Occupied MH & Annual RV(14)123,010121,969120,952118,592117,165
MH & Annual RV Occupancy %(14)97.4%(15)97.3%97.3%97.2%97.3%
Transient RV sites27,03226,29525,04323,72822,360
Sites for development(16)9,4439,67610,02510,1309,742
% Communities age restricted32.5%32.7%33.2%33.6%34.0%

Marina Property Summary(a)
6/30/202103/31/202112/31/2020
FLORIDA
Properties181614
Total wet slips and dry storage spaces4,1863,8373,585
CONNECTICUT
Properties111111
Total wet slips and dry storage spaces3,2623,2623,262
RHODE ISLAND
Properties111111
Total wet slips and dry storage spaces3,2072,8292,829
MASSACHUSETTS
Properties997
Total wet slips and dry storage spaces2,6502,6502,223
NEW YORK
Properties888
Total wet slips and dry storage spaces2,6292,6292,629
MARYLAND
Properties888
Total wet slips and dry storage spaces2,1102,1102,110
OTHER STATES
Properties494747
Total wet slips and dry storage spaces23,23122,69322,693
TOTAL – MARINA PORTFOLIO
Properties114110106
Total wet slips and dry storage spaces41,27540,01039,331

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

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

Recurring Capital Expenditures Average / MH & RV Site*Recurring Capital Expenditures Average / Marina Site*Recurring Capital Expenditures – MH / RV(17)Recurring Capital Expenditures – Marina(17) Lot Modifications(18)Acquisitions(19) Expansion
and
Development(20)		Growth Projects(21)
YTD 2021$178$149$21,697$5,909$16,945$692,344$90,380$36,357
2020$265N/A$31,398$2,074$29,789$3,105,296$248,146$28,315
2019$345N/A$30,382N/A$31,135$930,668$281,808$9,638

Operating Statistics for MH and Annual RVs

LocationsResident Move-outsNet Leased Sites(5)New Home SalesPre-owned Home SalesBrokered
Re-sales
Florida1,251319116126972
Michigan24111329807124
Ontario, Canada471121435221
Texas1771594421339
Arizona60861523132
Indiana342051479
Ohio58151599
California681114482
Colorado140341621
Connecticut191820225
New York8724617
New Hampshire—24—22
Maine736661
Other states70216339208110
Six Months Ended June 30, 20213,2421,0973761,6171,774

Total For Year EndedResident Move-outs Net Leased Sites(5)New Home SalesPre-owned Home SalesBrokered
Re-sales
20205,3652,5055702,2962,557
20194,1392,6745712,8682,231

Percentage TrendsResident Move-outs Resident
Re-sales
2021 TTM2.1%8.1%
20203.3%6.9%
20192.6%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-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 2021 average exchange rates.

(3)The MH and RV blended occupancy is derived from 119,933 developed sites, of which 117,536 were occupied. The adjusted MH and RV blended occupancy percentage for 2020 has been adjusted to reflect incremental period-over-period growth from newly rented expansion sites and the conversion of transient RV sites to annual RV sites. The adjusted MH and RV blended occupancy percentage for 2021 is derived from 118,907 developed sites, of which 117,536 were occupied. The number of developed sites excludes RV transient sites and over 1,000 recently completed but vacant MH expansion sites.

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

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

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

Three Months EndedSix Months Ended
June 30, 2021June 30, 2020June 30, 2021June 30, 2020
Foreign currency remeasurement income / (loss)$181$(195)$159$(415)
Contingent consideration expense(72)(84)(143)(166)
Long term lease termination expense—(273)—(273)
GTSC repair reserve(144)(269)(525)(939)
Non-cash lease amortization expense(625)—(1,250)—
Other expenses, net$(660)$(821)$(1,759)$(1,793)

(7)Other acquisition related 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. These costs also include nonrecurring integration expenses associated with a new acquisition.

(8)Line of credit and other debt includes borrowings under the Company’s $2.0 billion New Credit Facility and a $12.0 million MH floor plan facility. The effective interest rate on the MH floor plan facility was 7.0 percent for the quarters ended June 30 and March 31, 2021, and 6.0 percent for the quarters ended December 31, September 30 and June 30, 2020. However, the Company pays no interest if the floor plan balance is repaid within 60 days.

(9)Same Community results net $16.8 million and $14.3 million of certain utility revenue against the related utility expense in property operating and maintenance expense for the three months ended June 30, 2021 and 2020, respectively. Same Community results net $33.2 million and $29.1 million of utility revenue against the related utility expense in property operating and maintenance expense for the six months ended June 30, 2021 and 2020, respectively.

(10)Same Community supplies and repair expense excludes $0.5million and $0.9million for the three and six months ended June 30, 2020, respectively, ofexpenses 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.

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

(12)Calculated using actual results without rounding.

(13)MH and RV acquisitions and other is comprised of eight properties acquired and five properties that the Company has an interest in, but does not operate in 2021, 23 properties acquired in 2020, two Florida Keys properties that require redevelopment as a result of damage sustained from Hurricane Irma in 2017, seven recently opened ground-up developments, one property undergoing redevelopment, four properties previously classified as held for sale and other miscellaneous transactions and activity.

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

(15)As of June 30, 2021, total portfolio MH occupancy was 96.7 percent inclusive of the impact of nearly 1,200 recently constructed but vacant MH expansion sites, and annual RV occupancy was 100.0 percent.

(16)Total sites for development were comprised of approximately 77.9 percent for expansion, 19.8 percent for greenfield development and 2.3 percent for redevelopment.

(17)Property recurring capital expenditures are necessary to maintain asset quality, including purchasing and replacing assets used to operate the communities, resorts and marinas. Recurring capital expenditures at our MH and RV properties 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. 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.

(18)Lot modification capital expenditures are MH expenditures necessary to 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.

(19)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 six months ended June 30, 2021 include $70.7 million of 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; 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.

(20)Expansion and development expenditures consist primarily of construction costs and costs necessary to complete home and RV site improvements, such as driveways, sidewalks and landscaping at our MH communities and RV resorts.

(21)Growth projects consist of revenue generating or expense reducing activities at MH communities, RV resorts and marinas. This includes, but is not limited to, utility efficiency and renewable energy projects, site, slip or amenity upgrades such as the addition of a garage, shed or boat lift, and other special capital projects that substantiate an incremental rental increase.

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


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