EX-99.1 2 exhibit991pressrelease2016.htm EXHIBIT 99.1 - PRESS RELEASE Exhibit





                                        
NEWS RELEASE
August 2, 2016

Sun Communities, Inc. Reports 2016 Second Quarter Results

Southfield, Michigan, August 2, 2016 - Sun Communities, Inc. (NYSE: SUI) (the "Company"), a real estate investment trust ("REIT") that owns and operates manufactured housing ("MH") and recreational vehicle ("RV") communities, today reported its second quarter results.

Highlights: Three Months Ended June 30, 2016


•
Funds from operations ("FFO")(1) excluding certain items was $0.85 per diluted share and OP unit ("Share") for the three months ended June 30, 2016.

•
Home sales increased by 30.2 percent as compared to the second quarter of 2015.

•
Revenue producing sites increased by 501 sites for the quarter bringing total portfolio occupancy to 96.1 percent.

•
Same community Net Operating Income ("NOI")(2) increased by 6.9 percent as compared to the three months ended June 30, 2015.

•
Closed on the Carefree acquisition, a 103 community portfolio of MH and RV communities concentrated in Florida, California and Ontario, Canada.

"We delivered impressive second quarter results while working to close and begin the integration of the Carefree portfolio a month ahead of schedule,” said Gary A. Shiffman, Chairman and CEO. “We achieved same community NOI growth of 6.9 percent spurred by weighted average rent increases of 3.2% and occupancy gains of 250 basis points since June of 2015. In addition, we successfully added 501 rent producing sites to the portfolio and converted 278 rental sites to owners.  Home sales remain strong as well with a unit increase of 30 percent in the quarter. With the closing of Carefree behind us, we are focusing our efforts on its successful integration as we implement our practices to make Carefree as productive as the balance of our platform.”


Sun Communities, Inc. 2nd Quarter 2016                                 Page 2



FINANCIAL HIGHLIGHTS
(amounts in thousands)
 
Three Months Ended June 30, 2016
 
2016
 
2015
 
Change
 
% Change
FFO per Share excluding certain items - fully diluted(1)

$
0.85

 
$
0.87

 
$
(0.02
)
 
(2.3
)%
EBITDA (3)
$
94,882

 
$
84,862

 
$
10,020

 
11.8
 %
Diluted Earnings per Share
$
(0.12
)
 
$
0.23

 
$
(0.35
)
 
(152.2
)%

Previously communicated second quarter 2016 FFO(1) guidance was $0.79 to $0.81 per Share. The early close of the Carefree acquisition on June 9, 2016 reduced dilution from the issuance of equity prior to the closing of the transaction from $0.08 per Share to $0.06 per Share. The partial month contribution from Carefree was $0.01 per Share and strong performance from Sun’s portfolio contributed an additional $0.02 FFO(1) per Share for the quarter.

OPERATING HIGHLIGHTS

Community Occupancy

Total portfolio occupancy increased to 96.1 percent at June 30, 2016 from 93.5 percent at June 30, 2015 from a combination of occupancy gains, the acquisition of properties with higher occupancy and the disposition of properties with lower occupancy. During the second quarter of 2016, revenue producing sites increased by 501, as compared to 500 revenue producing sites gained in the second quarter of 2015.

Revenue producing sites increased by 1,093 for the six months ended June 30, 2016 as compared to 999 revenue producing sites gained during the six months ended June 30, 2015.

Same Community Results

For the 219 communities owned throughout 2016 and 2015, second quarter 2016 total revenues increased 5.6 percent and total expenses increased 2.7 percent, resulting in an increase in NOI(2) of 6.9 percent over the second quarter of 2015. The results were primarily driven by 250 basis points of occupancy gain to 96.4 percent and a weighted average rent increase of 3.2 percent compared to the same period last year.

For the six months ended June 30, 2016, total revenues increased by 6.1 percent and total expenses increased by 4.8 percent, resulting in an increase in NOI(2) of 6.6 percent over the six months ended June 30, 2015.

Home Sales

Total home sales were 750 for the second quarter as compared to 576 homes sold during the second quarter of 2015, a 30.2 percent increase, driven by the sale of an additional 180 pre-owned homes.

Rental homes sales, which are included in total home sales, were 278 and 207 for the quarter ended June 30, 2016 and 2015, respectively, a 34.3 percent increase.

During the six months ended June 30, 2016, 1,515 homes were sold compared to 1,119 for the same period ending 2015. Rental home sales, which are included in total home sales, were 572 and 388 for the six months ended June 30, 2016 and 2015, respectively.

Sun Communities, Inc. 2nd Quarter 2016                                 Page 3




Acquisitions (4) 

In June, the Company completed the acquisition of the Carefree portfolio for $1.68 billion which is comprised of 103 manufactured housing and recreational vehicle communities located in prime coastal markets with over 27,000 total sites. The Company continues to expect the Carefree acquisition to be accretive over the first 12 months but due to the geographic concentration in Florida and related seasonality of RV communities, revenue recognition for this portfolio is weighted toward the first and second quarters of the year.

The Company also acquired one RV community in Florida during the quarter comprised of 183 sites, for total consideration of $7.0 million.


BALANCE SHEET AND CAPITAL MARKETS ACTIVITY

Debt Transactions

To fund a portion of the acquisition price of the Carefree portfolio the Company completed two financings that totaled approximately $743.0 million. The first financing, which closed on June 3, 2016, consists of two ten-year loans for an aggregate amount of $338.0 million at a weighted average interest rate of 3.69 percent. The second financing, which closed on June 9, 2016, consists of three loans with maturities between ten and twelve years for an aggregate amount of $405.0 million at a weighted average interest rate of 3.64 percent.

As of June 30, 2016, the Company had approximately $3.3 billion of debt outstanding. The weighted average interest rate was 4.39 percent and the weighted average maturity was 8.8 years. The Company had $31.4 million of unrestricted cash on hand. At period-end the Company’s net debt to trailing twelve month EBITDA(3) ratio was 9.1 times. This ratio was elevated at the period end as it is calculated on trailing EBITDA which does not give credit for the income produced by the Carefree acquisition. The Company anticipates that this ratio will improve to near its stated goal of at or below 7.0 times by mid- 2017.

Equity Transaction

During the quarter the Company sold 485,000 shares of common stock through its At the Market equity sales program at a weighted average price of $71.86 per share. Net proceeds from the sales were $34.4 million.

GUIDANCE 2016

The Company is updating its 2016 guidance for the impact of the Carefree acquisition, its other acquisitions, and other affiliated capital transactions.
 
The Company anticipates FFO(1) per Share for full year 2016 to be in the range of $3.75 to $3.80.
The following items are reflected in the revised guidance:
•
Impact of March equity (date of offering until Carefree closing)
and June ATM issuance         $(0.09) per Share
•
Estimated contribution from Carefree and other acquired properties        $0.07 per Share
•
Year to date outperformance of portfolio                    $0.04 per Share

Sun Communities, Inc. 2nd Quarter 2016                                 Page 4




The Company anticipates FFO(1) per Share of $1.10 to $1.12 for the third quarter and $0.90 to $0.93 for the fourth quarter.

FFO(1) per Share estimates assume certain non-core items are adjusted from FFO(1) as noted in the table contained in this press release. The estimates and assumptions presented above represent a range of possible outcomes and may differ materially from actual results. The estimates and assumptions are forward looking based on the Company's current assessment of economic and market conditions, as well as other risks outlined below under the caption "Forward-Looking Statements."

EARNINGS CONFERENCE CALL

A conference call to discuss first quarter operating results will be held on Tuesday, August 2, 2016 at 11:00 A.M. (ET). To participate, call toll-free 877-407-4018. Callers outside the U.S. or Canada can access the call at 201-689-8471. A replay will be available following the call through August 16, 2016 and can be accessed toll-free by calling 877-870-5176 or by calling 858-384-5517. The Conference ID number for the call and the replay is 13640455. The conference call will be available live on Sun Communities' website www.suncommunities.com. Replay will also be available on the website.

Sun Communities, Inc. is a REIT that currently owns and operates a portfolio of 337 communities comprising approximately117,000 developed sites.

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

CONTACT

Please address all inquiries to our investor relations department at our website www.suncommunities.com, by phone (248) 208-2500, by email investorrelations@suncommunities.com or by mail Sun Communities, Inc. Investor Relations, 27777 Franklin Road, Ste. 200, Southfield, MI 48034.


Sun Communities, Inc. 2nd Quarter 2016                                 Page 5



Forward-Looking Statements

This press release contains various "forward-looking statements" within the meaning of the Securities Act of 1933, as amended, and the Securities Exchange Act of 1934, as amended, and the Company intends that such forward-looking statements will be subject to the safe harbors created thereby. Forward-looking statements can be identified by words such as "will," "may," "could," "expect," "anticipate," "believes," "intends," "should," "plans," "estimates," "approximate," "guidance," and similar expressions in this press release that predict or indicate future events and trends and that do not report historical matters.

These forward-looking statements reflect the Company’s current views with respect to future events and financial performance, but involve known and unknown risks, uncertainties, and other factors, some of which are beyond the Company's control. These risks, uncertainties, and other factors may cause the actual results of the Company to be materially different from any future results expressed or implied by such forward-looking statements. Such risks and uncertainties include national, regional and local economic climates, the ability to maintain rental rates and occupancy levels, competitive market forces, the performance of recent acquisitions, the ability to integrate future acquisitions smoothly and efficiently, changes in market rates of interest, the ability of manufactured home buyers to obtain financing, the level of repossessions by manufactured home lenders and those risks and uncertainties referenced under the headings entitled "Risk Factors" contained in the Company's 2015 Annual Report on Form 10-K, the Company's Quarterly Report on Form 10-Q for the Quarter ended June 30, 2016, and the Company’s other periodic filings with the Securities and Exchange Commission.

The forward-looking statements contained in this press release speak only as of the date hereof and the Company expressly disclaims any obligation to provide public updates, revisions or amendments to any forward-looking statements made herein to reflect changes in the Company’s assumptions, expectations of future events, or trends.


Sun Communities, Inc. 2nd Quarter 2016                                 Page 6



(1) 
Funds from operations attributable to Sun Communities, Inc. common stockholders and dilutive convertible securities ("FFO") is defined by the National Association of Real Estate Investment Trusts ("NAREIT") as net income (loss) (computed in accordance with generally accepted accounting principles "GAAP"), excluding gains (or losses) from sales of depreciable operating property, plus real estate-related depreciation and amortization, and after adjustments for unconsolidated 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. Management generally considers FFO to be a useful measure for reviewing comparative operating and financial performance because, 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 year over year, reflects the impact to operations from trends in occupancy rates, rental rates and operating costs, providing perspective not readily apparent from net loss. Management believes that 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. FFO is computed in accordance with the Company's interpretation of standards established by NAREIT, which may not be comparable to FFO reported by other REITs that do not define the term in accordance with the current NAREIT definition or that interpret the current NAREIT definition differently than the Company.

Because FFO excludes significant economic components of net income (loss) including depreciation and amortization, FFO should be used as an adjunct to net income (loss) and not as an alternative to net income (loss). The principal limitation of FFO is that it does not represent cash flow from operations as defined by GAAP and is a supplemental measure of performance that does not replace net income (loss) as a measure of performance or net cash provided by operating activities as a measure of liquidity. In addition, 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 only provides investors with an additional performance measure.

(2) 
Investors in and analysts following the real estate industry utilize NOI as a supplemental performance measure. NOI is derived from revenues minus property operating expenses and real estate taxes. NOI does not represent cash generated from operating activities in accordance with GAAP and should not be considered to be an alternative to net income (loss) (determined in accordance with GAAP) as an indication of the Company's financial performance or to be an alternative to cash flow from operating activities (determined in accordance with GAAP) 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. The Company believes that net income (loss) is the most directly comparable GAAP measurement to NOI. Net income (loss) includes interest and depreciation and amortization which often have no effect on the market value of a property and therefore limit its use as a performance measure. In addition, such expenses are often incurred at a parent company level and therefore are not necessarily linked to the performance of a real estate asset. The Company believes that NOI is helpful to investors as a 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 management tool 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, and therefore, NOI is a measure of the operating performance of the properties of the Company rather than of the Company overall.

(3) 
EBITDA is defined as NOI plus other income, plus (minus) equity earnings (loss) from affiliates, minus general and administrative expenses. EBITDA includes EBITDA from discontinued operations.

(4) 
The consideration amounts presented with respect to acquired communities represent the economic transaction and do not contemplate the fair value purchase accounting required by GAAP.




Sun Communities, Inc. 2nd Quarter 2016                                 Page 7



Consolidated Balance Sheets    
(in thousands, except per share amounts)
 
(unaudited) 
 June 30, 2016
 
December 31, 2015
ASSETS
 
 
 
Land
$
458,349

 
$
451,340

Land improvements and buildings
5,294,663

 
3,535,909

Rental homes and improvements
477,875

 
460,480

Furniture, fixtures and equipment
107,123

 
102,746

Land held for future development
23,497

 
23,047

Investment property
6,361,507

 
4,573,522

Accumulated depreciation
(928,882
)
 
(852,407
)
Investment property, net (including $90,502 and $92,009 for consolidated variable interest entities at June 30, 2016 and December 31, 2015)
5,432,625

 
3,721,115

Cash and cash equivalents
31,441

 
45,086

Inventory of manufactured homes
29,044

 
14,828

Notes and other receivables, net
76,466

 
47,972

Collateralized receivables, net
144,017

 
139,768

Other assets, net
109,598

 
213,030

TOTAL ASSETS
$
5,823,191

 
$
4,181,799

LIABILITIES
 
 
 
Mortgage loans payable (including $63,010 and $64,082 for consolidated variable interest entities at June 30, 2016 and December 31, 2015)
$
2,792,021

 
$
2,125,267

Secured borrowings on collateralized receivables
144,684

 
140,440

Preferred OP units - mandatorily redeemable
45,903

 
45,903

Lines of credit
357,721

 
24,687

Distributions payable
47,992

 
41,265

Other liabilities (including $4,381 and $4,091 for consolidated variable interest entities at June 30, 2016 and December 31, 2015)
257,423

 
184,859

TOTAL LIABILITIES
$
3,645,744

 
$
2,562,421

Series A-4 preferred stock, $0.01 par value. Issued and outstanding: 1,682 shares at June 30, 2016 and 2,067 shares at December 31, 2015
$
50,227

 
$
61,732

Series A-4 preferred OP units
$
20,266

 
$
21,065

STOCKHOLDERS’ EQUITY
 
 
 
Series A preferred stock, $0.01 par value. Issued and outstanding: 3,400 shares at June 30, 2016 and December 31, 2015
$
34

 
$
34

Common stock, $0.01 par value. Authorized: 180,000 shares;
Issued and outstanding: 68,643 shares at June 30, 2016 and 58,395 shares at December 31, 2015
686

 
584

Additional paid-in capital
2,980,382

 
2,319,314

Accumulated other comprehensive income
1

 
—

Distributions in excess of accumulated earnings
(947,988
)
 
(864,122
)
Total Sun Communities, Inc. stockholders' equity
2,033,115

 
1,455,810

Noncontrolling interests:
 

 
 

Common and preferred OP units
76,166

 
82,538

Consolidated variable interest entities
(2,327
)
 
(1,767
)
Total noncontrolling interest
73,839

 
80,771

TOTAL STOCKHOLDERS’ EQUITY
2,106,954

 
1,536,581

TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY
$
5,823,191

 
$
4,181,799



Sun Communities, Inc. 2nd Quarter 2016                                 Page 8



Consolidated Statements of Operations
(in thousands, except per share amounts)
 
Three Months Ended June 30,
 
Six Months Ended June 30,
 
2016
 
2015
 
2016
 
2015
REVENUES
 
 
 
 
 
 
 
Income from real property
$
140,001

 
$
125,833

 
$
269,236

 
$
245,358

Revenue from home sales
26,039

 
18,734

 
50,776

 
35,568

Rental home revenue
11,957

 
11,495

 
23,665

 
22,624

Ancillary revenues
7,383

 
5,254

 
11,996

 
8,445

Interest
4,672

 
3,893

 
8,617

 
7,877

Brokerage commissions and other income, net
747

 
729

 
1,153

 
1,266

Total revenues
190,799

 
165,938

 
365,443

 
321,138

COSTS AND EXPENSES
 
 
 
 
 
 
 
Property operating and maintenance
37,067

 
34,507

 
68,268

 
63,721

Real estate taxes
10,153

 
8,796

 
19,738

 
17,511

Cost of home sales
18,684

 
13,702

 
36,868

 
26,259

Rental home operating and maintenance
5,411

 
5,479

 
11,287

 
11,084

Ancillary expenses
5,201

 
4,149

 
8,709

 
6,695

Home selling expenses
2,858

 
1,797

 
5,136

 
3,487

General and administrative
16,543

 
12,646

 
30,335

 
24,274

Transaction costs
20,979

 
2,037

 
23,700

 
11,486

Depreciation and amortization
49,670

 
41,411

 
98,082

 
85,412

Extinguishment of debt
—

 
2,800

 
—

 
2,800

Interest
28,428

 
26,751

 
54,722

 
52,140

Interest on mandatorily redeemable preferred OP units
787

 
787

 
1,574

 
1,639

Total expenses
195,781

 
154,862

 
358,419

 
306,508

Income / (loss) before other items
(4,982
)
 
11,076

 
7,024

 
14,630

Gains / (losses) on disposition of properties, net
—

 
(13
)
 
—

 
8,756

Provision for income taxes
(56
)
 
(77
)
 
(284
)
 
(152
)
Distributions from affiliate
—

 
7,500

 
—

 
7,500

Net income / (loss)
(5,038
)
 
18,486

 
6,740

 
30,734

Less:  Preferred return to preferred OP units
1,263

 
1,361

 
2,536

 
2,390

Less:  Amounts attributable to noncontrolling interests
(695
)
 
743

 
(419
)
 
1,007

Net income / (loss) attributable to Sun Communities, Inc.
(5,606
)
 
16,382

 
4,623

 
27,337

Less: Preferred stock distributions
2,197

 
4,088

 
4,551

 
8,174

Net income / (loss) attributable to Sun Communities, Inc. common stockholders
$
(7,803
)
 
$
12,294

 
$
72

 
$
19,163

Weighted average common shares outstanding:
 
 
 
 
 
 
 
Basic
64,757

 
52,846

 
61,247

 
52,672

Diluted
64,757

 
53,237

 
61,673

 
53,060

Earnings per share:
 
 
 
 
 

 
 

Basic
$
(0.12
)
 
$
0.23

 
$
—

 
$
0.36

Diluted
$
(0.12
)
 
$
0.23

 
$
—

 
$
0.36



Sun Communities, Inc. 2nd Quarter 2016                                 Page 9



Reconciliation of Net Income to FFO(1) 
(in thousands, except per share amounts)
 
Three Months Ended June 30,
 
Six Months Ended June 30,
 
2016
 
2015
 
2016
 
2015
Net income (loss) attributable to Sun Communities, Inc. common stockholders
$
(7,803
)
 
$
12,294

 
$
72

 
$
19,163

Adjustments:
 

 
 

 
 
 
 
Preferred return to preferred OP units
618

 
668

 
1,243

 
1,344

Amounts attributable to noncontrolling interests
(779
)
 
566

 
(430
)
 
779

Preferred distribution to Series A-4 preferred stock
—

 
2,574

 
—

 
—

Depreciation and amortization
49,340

 
40,969

 
97,416

 
85,234

(Gain)/loss on disposition of properties, net
—

 
13

 
—

 
(8,756
)
Gain on disposition of assets, net
(3,903
)
 
(2,426
)
 
(7,558
)
 
(4,128
)
Funds from operations (FFO) attributable to Sun Communities, Inc. common stockholders and dilutive convertible securities (1)(5)
37,473

 
54,658

 
90,743

 
93,636

Adjustments:
 
 
 
 
 
 
 
Transaction costs
20,979

 
2,037

 
23,700

 
11,486

Distribution from affiliate
—

 
(7,500
)
 
—

 
(7,500
)
Extinguishment of debt
—

 
2,800

 
—

 
2,800

FFO attributable to Sun Communities, Inc. common stockholders and dilutive convertible securities excluding certain items (1)(5)
$
58,452

 
$
51,995

 
$
114,443

 
$
100,422

 
 
 
 
 
 
 
 
Weighted average common shares outstanding - basic:
64,757

 
52,846

 
61,247

 
52,672

Add:
 
 
 
 
 
 
 
Common stock issuable upon conversion of stock options
9

 
12

 
9

 
14

Restricted stock
444

 
379

 
417

 
374

Common OP units
2,863

 
2,916

 
2,863

 
2,738

Common stock issuable upon conversion of Series A-1 preferred OP units
933

 
1,012

 
939

 
1,026

Common stock issuable upon conversion of Series A-3 preferred OP units
75

 
75

 
75

 
75

Common stock issuable upon conversion of Series A-4 preferred stock
—

 
2,829

 
—

 
—

Weighted average common shares outstanding - fully diluted
69,081

 
60,069

 
65,550

 
56,899

 
 
 
 
 
 
 
 
FFO(1) attributable to Sun Communities, Inc. common stockholders and dilutive convertible securities per Share - fully diluted
$
0.54


$
0.91


$
1.38


$
1.65

FFO (1) attributable to Sun Communities, Inc. common stockholders and dilutive convertible securities per Share excluding certain items - fully diluted
$
0.85


$
0.87


$
1.75


$
1.76


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


Sun Communities, Inc. 2nd Quarter 2016                                 Page 10



Statement of Operations – Same Community
(in thousands except for Other Information)

 
Three Months Ended June 30,
 
Six Months Ended June 30,
 
2016
 
2015
 
Change
 
% Change
 
2016
 
2015
 
Change
 
% Change
REVENUES:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Income from real property
$
114,262

 
$
108,193

 
$
6,069

 
5.6
 %
 
$
228,807

 
$
215,641

 
$
13,166

 
6.1
 %
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
PROPERTY OPERATING EXPENSES:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Payroll and benefits
9,974

 
9,647

 
327

 
3.4
 %
 
18,851

 
17,804

 
1,047

 
5.9
 %
Legal, taxes & insurance
1,373

 
1,704

 
(331
)
 
(19.4
)%
 
3,058

 
3,329

 
(271
)
 
(8.1
)%
Utilities
6,050

 
5,914

 
136

 
2.3
 %
 
12,446

 
12,153

 
293

 
2.4
 %
Supplies and repair
4,651

 
4,673

(10) 
(22
)
 
(0.5
)%
 
7,382

 
7,233

(10) 
149

 
2.1
 %
Other
3,169

 
3,249

 
(80
)
 
(2.5
)%
 
6,059

 
5,870

 
189

 
3.2
 %
Real estate taxes
8,735

 
7,862

 
873

 
11.1
 %
 
17,728

 
16,125

 
1,603

 
9.9
 %
Property operating expenses
33,952

 
33,049

 
903

 
2.7
 %
 
65,524

 
62,514

 
3,010

 
4.8
 %
NET OPERATING INCOME ("NOI")(2)
$
80,310

 
$
75,144

 
$
5,166

 
6.9
 %
 
$
163,283

 
$
153,127

 
$
10,156

 
6.6
 %
 
 
As of June 30,
OTHER INFORMATION
 
2016
 
2015
 
Change
 
% Change
Number of properties
 
219

 
219

 


 


 
 
 
 
 
 
 
 
 
Overall occupancy (6) (7)
 
96.4
%
 
93.9
%
(9) 
2.5
%
 
 
 
 
 
 
 
 
 
 
 
Sites available for development
 
6,071

 
6,574

 
(503
)
 
(7.7
)%
 
 
 
 
 
 
 
 
 
Monthly base rent per site - MH
 
$
491

 
$
475

 
$
16

 
3.4
 %
Monthly base rent per site - RV (8)
 
$
432

 
$
417

 
$
15

 
3.6
 %
Monthly base rent per site - Total
 
$
483

 
$
468

 
$
15

 
3.2
 %

(6) Includes manufactured housing and annual/seasonal recreational vehicle sites and excludes transient recreational vehicle sites.
(7) Occupancy % excludes recently completed but vacant expansion sites.
(8) Monthly base rent per site pertains to annual/seasonal RV sites and excludes transient RV sites.
(9) Occupancy reflects current year gains from expansion sites and the conversion of transient RV guests to annual/seasonal RV contracts as vacant in 2015.
(10) Three and six months ending June 30, 2015 excludes $1.1 million of first year expenses for properties acquired in late 2014 and 2015 incurred to bring the properties up to Sun's operating standards. These costs did not meet the Company's capitalization policy.


Sun Communities, Inc. 2nd Quarter 2016                                 Page 11



Rental Program Summary
(amounts in thousands except for *)
 
Three Months Ended June 30,
 
Six Months Ended June 30,
 
2016
 
2015
 
Change
 
% Change
 
2016
 
2015
 
Change
 
% Change
REVENUES:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Rental home revenue
$
11,957

 
$
11,495

 
$
462

 
4.0
 %
 
$
23,665

 
$
22,624

 
$
1,041

 
4.6
 %
Site rent included in Income from real property
15,413

 
15,551

 
(138
)
 
(0.9
)%
 
30,631

 
30,678

 
(47
)
 
(0.2
)%
Rental Program revenue
27,370

 
27,046

 
324

 
1.2
 %
 
54,296

 
53,302

 
994

 
1.9
 %
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
EXPENSES:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Commissions
384

 
752

 
(368
)
 
(48.9
)%
 
1,159

 
1,586

 
(427
)
 
(26.9
)%
Repairs and refurbishment
3,273

 
2,322

 
951

 
41.0
 %
 
5,939

 
4,738

 
1,201

 
25.3
 %
Taxes and insurance
1,167

 
1,544

 
(377
)
 
(24.4
)%
 
2,732

 
3,020

 
(288
)
 
(9.5
)%
Marketing and other
587

 
861

 
(274
)
 
(31.8
)%
 
1,457

 
1,740

 
(283
)
 
(16.3
)%
Rental Program operating and maintenance
5,411

 
5,479

 
(68
)
 
(1.2
)%
 
11,287

 
11,084

 
203

 
1.8
 %
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
NET OPERATING INCOME ("NOI") (2)
$
21,959

 
$
21,567

 
$
392

 
1.8
 %
 
$
43,009

 
$
42,218

 
$
791

 
1.9
 %
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Occupied rental home information as of June 30, 2016 and 2015:
Number of occupied rentals, end of period* 
 
 
 
 


 


 
10,997

 
11,395

 
(398
)
 
(3.5
)%
Investment in occupied rental homes, end of period
 
 
 
 


 

 
$
453,869

 
$
445,446

 
$
8,423

 
1.9
 %
Number of sold rental homes* 
 
 
 
 


 
 
 
572

 
388

 
184

 
47.4
 %
Weighted average monthly rental rate, end of period* 
 
 
 
 


 

 
$
868

 
$
835

 
$
33

 
4.0
 %


Sun Communities, Inc. 2nd Quarter 2016                                 Page 12



Homes Sales Summary
(amounts in thousands except for *)
 
Three Months Ended June 30,
 
Six Months Ended June 30,
 
2016
 
2015
 
Change
 
% Change
 
2016
 
2015
 
Change
 
% Change
New home sales
$
5,612

 
$
5,175

 
$
437

 
8.4
 %
 
$
11,081

 
$
10,421

 
$
660

 
6.3
 %
Pre-owned home sales
20,427

 
13,559

 
6,868

 
50.7
 %
 
39,695

 
25,147

 
14,548

 
57.9
 %
Revenue from home sales
26,039

 
18,734

 
7,305

 
39.0
 %
 
50,776

 
35,568

 
15,208

 
42.8
 %
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
New home cost of sales
4,773

 
4,418

 
355

 
8.0
 %
 
9,617

 
8,609

 
1,008

 
11.7
 %
Pre-owned home cost of sales
13,911

 
9,284

 
4,627

 
49.8
 %
 
27,251

 
17,650

 
9,601

 
54.4
 %
Cost of home sales
18,684

 
13,702

 
4,982

 
36.4
 %
 
36,868

 
26,259

 
10,609

 
40.4
 %
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
NOI / Gross Profit (2)
$
7,355

 
$
5,032

 
$
2,323

 
46.2
 %
 
$
13,908

 
$
9,309

 
$
4,599

 
49.4
 %
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Gross profit – new homes
$
839

 
$
757

 
$
82

 
10.8
 %
 
$
1,464

 
$
1,812

 
$
(348
)
 
(19.2
)%
Gross margin % – new homes
15.0
%
 
14.6
%
 
0.4
%
 
 
 
13.2
%
 
17.4
%
 
(4.2
)%
 
 
Average selling price - new homes*
$
95,119

 
$
79,615

 
$
15,504

 
19.5
 %
 
$
88,648

 
$
79,550

 
$
9,098

 
11.4
 %
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Gross profit – pre-owned homes
$
6,516

 
$
4,275

 
$
2,241

 
52.4
 %
 
$
12,444

 
$
7,497

 
$
4,947

 
66.0
 %
Gross margin % – pre-owned homes
31.9
%
 
31.5
%
 
0.4
%
 
 
 
31.3
%
 
29.8
%
 
1.5
 %
 
 
Average selling price - pre-owned homes*
$
29,562

 
$
26,534

 
$
3,028

 
11.4
 %
 
$
28,558

 
$
25,452


$
3,106

 
12.2
 %
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Home sales volume:
 
 
 
 
 
 
 
 
New home sales*
59

 
65

 
(6
)
 
(9.2
)%
 
125

 
131

 
(6
)
 
(4.6
)%
Pre-owned home sales*
691

 
511

 
180

 
35.2
 %
 
1,390

 
988

 
402

 
40.7
 %
Total homes sold*
750

 
576

 
174


30.2
 %

1,515

 
1,119

 
396


35.4
 %


Sun Communities, Inc. 2nd Quarter 2016                                 Page 13



Acquisition Summary - Properties Acquired in 2015 and 2016
(amounts in thousands except for statistical data)

 
Three Months Ended
June 30, 2016
 
Six Months Ended 
 June 30, 2016
REVENUES:
 
 
 
Income from real property (excluding transient revenue)
$
16,724

 
$
23,674

Transient revenue
3,976

 
5,340

Revenue from home sales
2,532

 
4,374

Rental home revenue
150

 
199

Ancillary revenues
2,068

 
2,593

Total revenues
25,450

 
36,180

COSTS AND EXPENSES:
 
 
 
Property operating and maintenance
6,192

 
8,410

Real estate taxes
1,485

 
2,074

Cost of home sales
1,714

 
3,153

Rental home operating and maintenance
23

 
45

Ancillary expense
1,217

 
1,690

            Total expenses
10,631

 
15,372

 
 
 
 
NET OPERATING INCOME ("NOI") (2)
$
14,819

 
$
20,808

 
 
 
 
 
 
 
 
 
 
 
As of June 30, 2016
Other information:
 
 
 
Number of properties
 
 
118

Transient sites
 
 
8,860

Occupied sites (12)
 
 
24,969

Developed sites (12)
 
 
33,829

Occupancy % (12)
 
 
73.8
%
Monthly base rent per site - MH
 
 
$
597

Monthly base rent per site - RV (11)
 
 
$
386

Monthly base rent per site - Total (11)
 
 
$
506

 
 
 
 
Home sales volume:
 
 
 
New homes
 
 
19

Pre-owned homes
 
 
68

 
 
 
 
Occupied rental home information:
 
 
 
Number of occupied rentals, end of period
 
 
284

Investment in occupied rental homes (in thousands)
 
 
$
4,027

Weighted average monthly rental rate
 
 
$
913


(11) Monthly base rent per site pertains to annual/seasonal recreational vehicle sites and excludes transient recreational vehicle sites.
(12) Includes manufactured housing and annual/seasonal recreational vehicle sites and excludes transient recreational vehicle sites.


Sun Communities, Inc. 2nd Quarter 2016                                 Page 14