Sun Communities, Inc. Reports 2023 Third Quarter and Year-to-Date Results
Net Earnings per Diluted Share of $1.31 for the Quarter
Core FFO per Share of $2.57 for the Quarter Exceeded the High-End of Guidance Range
Total Same Property NOI Grew by 6.7% for the Quarter over the 2022 Period, Exceeding the High-End of Guidance Range by 220 Basis Points
Strong Demand and Effective Expense Management Continue to Drive Outperformance
Same Property Adjusted Occupancy for MH and RV Increased by 170 Basis Points, Year-over-Year
Transient-to-Annual RV Site Conversions of nearly 537 Sites for the Quarter and 1,815 for the Year-to-Date
Revising Full-Year Core FFO per Share Guidance for 2023 to $7.05 - $7.13
Increasing Guidance Range for Full-Year Total Same Property NOI Growth to 6.0% - 6.4%
Establishing Preliminary Guidance for 2024 Rental Rate Increases of 5.4% for MH, 6.5% for Annual RV, and 5.6% for Marina in North America, and 7.1% for UK
*Southfield, MI, Oct. 25, 2023 (GLOBE NEWSWIRE) -- Sun Communities, Inc. (NYSE: SUI) *(the "Company" or "SUI"), a real estate investment trust ("REIT") that owns and operates, or has an interest in, manufactured housing ("MH") and recreational vehicle ("RV") communities and marinas (collectively, the "properties"), today reported its third quarter results for 2023.
*Financial Results for the Quarter and **Nine Months Ended September 30, 2023*
· For the quarter ended September 30, 2023, net income attributable to common shareholders was $163.1 million, or $1.31 per diluted share, compared to net income attributable to common shareholders of $162.6 million, or $1.32 per diluted share for the same period in 2022.· For the nine months ended September 30, 2023, net income attributable to common shareholders was $222.8 million, or $1.79 per diluted share, compared to net income attributable to common shareholders of $237.3 million, or $1.97 per diluted share, for the same period in 2022.
*Non-GAAP Financial Measures*
· *Core Funds from Operations ("Core FFO")* for the quarter and nine months ended September 30, 2023, were $2.57 per common share and dilutive convertible securities ("Share") and $5.76 per Share, respectively.· *Same Property Net Operating Income ("NOI") *increased by 6.7% and 6.6% for the quarter and nine months ended September 30, 2023, respectively, as compared to the corresponding periods in 2022.
"In the third quarter, we again delivered strong performance in our core real property portfolio, with Same Property NOI growth and Core FFO exceeding our expectations," said Gary A. Shiffman, Chairman, President and CEO. "This strength was exhibited across Manufactured Housing, RV and Marinas, all of which demonstrate the continued favorable backdrop of high demand and limited supply. Furthermore, we are positioned for ongoing organic growth with 2024 expected rental rate increases of approximately 5.4% for MH, 6.5% for RV, and 5.6% for Marina in North America and 7.1% for UK." He continued, "Our current objectives include implementing select changes to help our best-in-class portfolio deliver the FFO per share growth Sun shareholders historically have enjoyed. These changes include selective capital recycling opportunities and using the proceeds to de-lever. With the strength of our core business, which has a positive track record throughout economic cycles, and our focus on our durable cash flow business, we remain confident in our ability to create shareholder value."
*OPERATING HIGHLIGHTS*
*North America Portfolio Occupancy*
· Total MH and annual RV occupancy was 97.2% at September 30, 2023, as compared to 97.1% at September 30, 2022.· During the quarter ended September 30, 2023, the number of MH and annual RV revenue producing sites increased by 744 sites, as compared to an increase of 689 sites during the corresponding period in 2022, an 8.0% increase.· Transient-to-annual RV site conversions totaled 537 sites during the third quarter of 2023 and account for 72.2% of the revenue producing site gains. Total transient-to-annual RV site conversions totaled 1,815 for the nine months ended September 30, 2023.
*Same Property* *Results*
For the properties owned and operated by the Company since at least January 1, 2022, the following table reflects the percentage changes for the quarter and nine months ended September 30, 2023:
*Quarter Ended September 30, 2023* *MH* *RV* *Marina* *Total*
Revenue 7.4 % 2.2 % 8.4 % 5.5 %
Expense 5.7 % (0.8) % 7.4 % 3.0 %
*NOI* 8.0 % 4.1 % 8.9 % 6.7 % *Nine Months Ended September 30, 2023* *MH* *RV* *Marina* *Total*
Revenue 6.8 % 3.6 % 9.4 % 6.2 %
Expense 8.5 % 3.1 % 5.1 % 5.5 %
*NOI* 6.2 % 3.9 % 11.5 % 6.6 %
*Number of Properties* 288 161 119 568
Same Property adjusted blended occupancy for MH and RV increased by 170 basis points to 98.8% at September 30, 2023, from 97.1% at September 30, 2022.
*INVESTMENT ACTIVITY*
During the quarter ended September 30, 2023, the Company:
· Expanded its existing communities by nearly 170 sites.· Delivered over 70 sites at one ground-up development property.
*BALANCE SHEET, CAPITAL MARKETS ACTIVITY AND OTHER ITEMS*
As of September 30, 2023, the Company had $7.7 billion in debt outstanding with a weighted average interest rate of 4.1% and a weighted average maturity of 6.8 years. At September 30, 2023, the Company's net debt to trailing twelve-month Recurring EBITDA ratio was 6.1 times.
During the quarter, the Company entered into interest rate swap contracts to hedge variable rate borrowings of $125.0 million in aggregate under its senior credit facility. The interest rate swaps lock in a weighted average SOFR rate of 4.771%, and inclusive of spread, an all-in rate of 5.681% through the maturity date of April 7, 2026.
Subsequent to the quarter, the Company:
· Entered into an interest rate swap contract to hedge variable rate borrowings of $25.0 million under its senior credit facility. The interest rate swap lock in a weighted average SOFR rate of 4.684%, and inclusive of spread, an all-in rate of 5.594% through the term loan maturity date of April 7, 2026.· Terminated one SOFR interest rate swap hedging variable rate borrowings of $50.0 million under its senior credit facility and received a cash settlement payment of $6.0 million. The net accumulated gain is included in Accumulated other comprehensive income on the Company's Consolidated Balance Sheets, and will be amortized as a reduction to Interest expense over the term of the hedged transaction.· Entered into a new mortgage term loan for $252.8 million that matures in November 2030 and bears interest at a fixed rate of 6.49%. The proceeds were used to repay $117.8 million of mortgage term loans that mature in 2023 and pay down amounts drawn under the Company's senior credit facility.· Sold its 41.8 million share position in Ingenia Communities Group (ASX: INA), generating $102.5 million of proceeds, net of underwriting and other estimated fees, with an estimated realized loss of $9.0 million. The proceeds were used to pay down amounts drawn under the Company's senior credit facility.
UK Notes Receivable from Real Estate Operators
From time to time, the Company extends loans to third party real estate developers and operators to facilitate the Company's potential acquisition and development pipeline. At September 30, 2023, the Company had a $361.1 million note receivable due from Royale Holdings Group HoldCo Limited, a real estate development owner / operator in the UK, and certain other parties (the "Note"). As of the same date, the borrowings under the Note bear interest at a weighted average rate of 12.4%. The Note is not related to the Company's manufactured housing portfolio in the UK that operates under the Park Holidays brand.
Since inception, the Company has elected to measure the Note at fair value, using pricing models with the assistance of third-party valuation specialists, in accordance with Accounting Standards Codification Topic 820, "Fair Value Measurements and Disclosures." The Company has also periodically engaged third party valuation specialists to appraise the collateral in order to assess the fair value of the Note.
The Note is collateralized by a first-priority security interest in three real estate properties and three MH manufacturers in the UK. The real estate collateral consists of MH development properties that comprised a significant majority of the total appraised value of all collateral securing the Note at September 30, 2023.
The Note matured on July 31, 2023, and remained due at September 30, 2023. On September 29, 2023, the Company appointed receivers over the real estate collateral and is assessing courses of action with respect to the other collateral.
The Company expects the receivers to start to market the real estate collateral for sale during the fourth quarter of 2023. Upon completion of the marketing process, the Company may elect to credit bid certain amounts due under the Note for the real estate collateral. If that were to occur and no third-party bid is received that exceeds the Company's credit bid, the Company may elect to receive the real estate collateral in satisfaction of related amounts due under the Note. If a third-party bid is received that exceeds the Company's bid, the Company will receive the cash proceeds of that bid up to the outstanding loan amount including interest, fees, and penalties, as applicable.
UK Contemplated Asset Sale
As previously disclosed, the Company had agreed to sell an operating MH community in the UK, Sandy Bay, in February 2023, which was expected to close in the third quarter. While the sale contract is no longer in effect, the asset remained classified as held for sale at September 30, 2023.
*2023 GUIDANCE UPDATE*
The Company is updating full-year 2023 and establishing fourth quarter 2023 guidance for diluted EPS and Core FFO per Share as follows:
*Reconciliation of Diluted EPS to Core FFO per Share*
*Full-Year Ending **December 31, 2023* *Fourth Quarter*
*Ending *
*December 31, 2023* *Prior FY Guidance* *Revised FY Range*
*Diluted EPS* $ 2.11 $ 2.25 $ 1.92 $ 2.00 $ 0.12 $ 0.20
Depreciation and amortization 5.07 5.07 5.06 5.06 1.26 1.26
Distributions on preferred OP units 0.09 0.09 0.09 0.09 0.02 0.02
Noncontrolling interest 0.11 0.11 0.09 0.09 (0.01 ) (0.01 )
Gain on sale of assets (0.28 ) (0.28 ) (0.25 ) (0.25 ) (0.07 ) (0.07 )
Business combination expense and other acquisition related costs 0.09 0.09 0.12 0.12 0.01 0.01
Other adjustments^(a) (0.10 ) (0.10 ) 0.02 0.02 (0.05 ) (0.05 )
*Core FFO*^*(b)** per Share* $ 7.09 $ 7.23 $ 7.05 $ 7.13 $ 1.28 $ 1.36
^(a) Other adjustments consist primarily of deferred taxes, changes in remeasurement (gains) / losses, contingent legal and insurance gains and other items presented in the table that reconciles Net income attributable to SUI common shareholders to Core FFO on page 6.
^(b) The Company's updated guidance translates forecasted results from operations in the UK using the relevant exchange rate in effect provided in the 2023 Guidance Assumptions table presented below. The impact of fluctuations in Canadian and Australian foreign currency rates on revised and initial guidance are not material.
The $7.09 per Share midpoint of the revised full-year guidance range is 1.0% lower than the prior range provided in July, primarily reflecting higher interest expense related to the UK Note remaining outstanding and lower expected transient RV revenues.
For the fourth quarter ending December 31, 2023, the Company's guidance ranges assume Total Same Property NOI growth of 4.4% - 5.9%. The midpoints of Same Property NOI growth for the fourth quarter ending December 31, 2023 are 5.1% for Manufactured Housing, 3.6% for RV and 6.2% for Marina.
The assumptions underlying the Company's revised 2023 full-year guidance are as follows:
*FY 2022* *Expected Change in 2023*
*2023** Guidance Assumptions (dollars in millions)* *Results * *Prior FY Guidance* *Revised FY Range*
*Consolidated Portfolio:*
Total real property NOI 6.1% - 6.9% 6.9% - 7.1%
Service, retail, dining and entertainment NOI $50.4 - $52.9 $51.2 - $52.2
North America home sales contribution to Core FFO^(a) $18.9 - $21.7 $19.4 - $20.5
Interest income^(b) N/A $44.8 - $45.1
Brokerage commissions and other, net^(c) N/A $50.9 - $51.4
General and administrative expenses ($255.4) - ($249.9) ($253.6) - ($252.1)
*UK*
UK real property NOI^(d) $63.6 - $65.6 $64.1 - $65.1
UK home sales NOI $65.7 - $75.4 $68.2 - $72.2
UK NOI $129.3 - $141.0 $132.3 - $137.3
*Same Property Portfolio*^*(e)*
MH NOI (288 properties) $ 569.2 5.2% - 5.8% 5.8% - 6.1%
RV NOI (161 properties) $ 281.8 3.4% - 4.6% 3.5% - 4.2%
Marina NOI (119 properties) $ 210.8 8.0% - 9.0% 10.0% - 10.3%
*Total Same Property Pool (568 Properties):*
Revenue from real property $ 1,600.4 6.2% - 6.5% 5.8% - 6.0%
Property operating expenses^(f)(g) $ 538.6 7.2% - 7.9% 5.2% - 5.4%
*Same Property NOI* $ 1,061.8 5.3% - 6.1% 6.0% - 6.4%
*Exchange rates in effect at:* *December 31, 2022* *June 30, 2023* *September 30, 2023*
U.S. Dollar ("USD") / Pound Sterling ("GBP") 1.21 1.27 1.22
USD / Canadian Dollar ("CAD") 0.74 0.75 0.74
USD / Australian Dollar ("AUS") 0.68 0.66 0.64
*Footnotes to 2023 Guidance Assumptions*
(a) FFO from home sales in North America is net of home selling expenses and includes the gross profit from new and certain pre-owned home sales. Gross profit from pre-owned home sales of depreciated homes is excluded.
(b) Interest income recognized from the UK Note during the first nine months ended September 30, 2023, totaled $27.9 million, or $0.22 per Share. No interest income from the UK Note is included in the Company's fourth quarter guidance. The following table summarizes the interest income contribution inclusive of fourth quarter guidance: Interest Income - 2023 Guidance Nine Months
Ended
September 30, 2023 4Q23
Guidance FY 2023
Guidance UK Note $ 27.9 $ 0.0 $ 27.9 Other 12.7 4.2 - 4.5 16.9 - 17.2 Total $ 40.6 $4.2 - $4.5 $44.8 - $45.1
(c) For the third quarter and nine months ended September 30, 2023, Brokerage commissions and other, net includes recognition of $12.9 million of business interruption proceeds, which nets against accrued 'Loss of earnings - catastrophic event-related charges, net' in the Reconciliation of Net Income Attributable to SUI Common Shareholders to Core FFO table.
(d) UK Real Property NOI is included in the Total Real Property NOI forecast and the properties are excluded from the 2023 Same Property pool.
(e) The amounts in the table reflect constant currency, as currency figures included within the 2022 actual amounts have been translated at the assumed exchange rate used for 2023 guidance.
(f) Total Same Property results net $101.1 million of utility revenue for 2022 actual results and $109.7 million for 2023 guidance against the related utility expense in property operating expenses.
(g) 2022 actual results exclude $1.3 million of expenses incurred at recently acquired properties to bring them up to the Company's standards. The improvements included items such as tree trimming and painting costs that do not meet the Company's capitalization policy.
*Seasonality (Updated as of October 25, 2023)* *1Q23* *2Q23* *3Q23* *4Q23*
*Same Property NOI:*
MH 25 % 25 % 25 % 25 %
RV 16 % 25 % 42 % 17 %
Marina 20 % 27 % 30 % 23 %
*Total Same Property* 21 % 26 % 30 % 23 %
*UK NOI:*
Real property 10 % 27 % 44 % 19 %
Home sales 18 % 35 % 33 % 14 %
*Total NOI from UK Operations* 14 % 31 % 38 % 17 %
*Consolidated Service, Retail, Dining and Entertainment NOI* 5 % 36 % 49 % 10 %
*Consolidated EBITDA* 19 % 27 % 34 % 20 %
*Core FFO per Share* 17 % 28 % 36 % 19 %
*Preliminary 2024 Rental Rate Increases*
The Company expects to realize the following rental rate increases, on average, during 2024:
*Average 2024 Rental Rate Increases Expected*
Manufactured Housing:
North America 5.4 %
UK 7.1 %
Annual RV 6.5 %
Marina 5.6 %
The estimates and assumptions presented above represent a range of possible outcomes and may differ materially from actual results. These estimates include contributions from all acquisitions, dispositions and capital markets activity completed through October 25, 2023. These estimates exclude all other prospective acquisitions, dispositions and capital markets activity. The estimates and assumptions are forward-looking based on the Company's current assessment of economic and market conditions and are subject to the other risks outlined below under the caption Cautionary Statement Regarding Forward-Looking Statements.
*EARNINGS CONFERENCE CALL*
A conference call to discuss third quarter results will be held on Thursday, October 26, 2023 at 2:00 P.M. (ET). To participate, call toll-free at (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 November 9, 2023 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 13739128. The conference call will be available live on the Company's website located at www.suncommunities.com. The replay will also be available on the website.
*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 (the "Securities Act"), and the Securities Exchange Act of 1934, as amended (the "Exchange Act"), 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 document 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 and uncertainties, both general and specific to the matters discussed in this document, some of which are beyond the Company's control. These risks and 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 described under "Risk Factors" contained in the Company's Annual Report on Form 10-K for the year ended December 31, 2022, 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 and related restrictions on business operations;
*∙* Changes in general economic conditions, including inflation, deflation and energy costs, the real estate industry and the markets within 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 unsecured notes;
*∙* Availability of capital;
*∙* Changes in foreign currency exchange rates, including between the U.S. dollar and each of the Canadian dollar, Australian dollar and Pound sterling;
*∙* 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 estate taxes;
*∙* Risks related to natural disasters such as hurricanes, earthquakes, floods, droughts and wildfires;
*∙* General volatility of the capital markets and the market price of shares of the Company's capital stock;
*∙* The Company's ability to 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, including costs associated with prosecuting or defending claims and any adverse outcomes;
*∙* Competitive market forces;
*∙* The ability of purchasers of manufactured homes and boats to obtain financing; and
*∙* The level of repossessions by manufactured home and boat lenders;
Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date the statement was made. The Company undertakes no obligation to publicly update or revise any forward-looking statements included or incorporated by reference into this document, whether as a result of new information, future events, changes in the Company's expectations or otherwise, except as required by law.
Although the Company believes that the expectations reflected in the forward-looking statements are reasonable, the Company 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 the Company's behalf are qualified in their entirety by these cautionary statements.
*Company Overview and Investor Information*
*The Company*
Established in 1975, Sun Communities, Inc. became a publicly owned corporation in December 1993. The Company is a fully integrated REIT listed on the New York Stock Exchange under the symbol: SUI. As of September 30, 2023, the Company owned, operated, or had an interest in a portfolio of 670 developed MH, RV and Marina properties comprising approximately 180,170 developed sites and approximately 48,030 wet slips and dry storage spaces in the U.S., the UK and Canada.
For more information about the Company, please visit www.suncommunities.com.
*Company Contacts*
*Management* *Investor Relations*
· Gary A. Shiffman, Chairman, President and CEO
Sara Ismail, Vice President
· Fernando Castro-Caratini, EVP and CFO
(248) 208-2500
· Bruce D. Thelen, EVP and COO
investorrelations@suncommunities.com
*Corporate Debt Ratings*
*Moody's* *S&P*
Baa3 | Stable BBB | Stable
*Equity Research Coverage*
Bank of America Merrill Lynch Joshua Dennerlein joshua.dennerlein@bofa.com
Barclays Anthony Powell anthony.powell@barclays.com
BMO Capital Markets John Kim jp.kim@bmo.com
Citi Research Eric Wolfe eric.wolfe@citi.com Nicholas Joseph nicholas.joseph@citi.com
Evercore ISI Samir Khanal samir.khanal@evercoreisi.com Steve Sakwa steve.sakwa@evercoreisi.com
Green Street Advisors John Pawlowski jpawlowski@greenstreetadvisors.com
JMP Securities Aaron Hecht ahecht@jmpsecurities.com
RBC Capital Markets Brad Heffern brad.heffern@rbccm.com
Robert W. Baird & Co. Wesley Golladay wgolladay@rwbaird.com
Truist Securities Anthony Hau anthony.hau@truist.com
UBS Michael Goldsmith michael.goldsmith@ubs.com
Wells Fargo James Feldman james.feldman@wellsfargo.com
Wolfe Research Andrew Rosivach arosivach@wolferesearch.com Keegan Carl kcarl@wolferesearch.com
*Financial and Operating Highlights*
*(amounts in millions, except for *)*
*Quarters Ended* *9/30/2023* *6/30/2023* *3/31/2023* *12/31/2022* *9/30/2022*
*Financial Information*
Basic earnings / (loss) per share* $ 1.31 $ 0.72 $ (0.24 ) $ 0.04 $ 1.32
Diluted earnings / (loss) per share* $ 1.31 $ 0.72 $ (0.24 ) $ 0.04 $ 1.32
Cash distributions declared per common share* $ 0.93 $ 0.93 $ 0.93 $ 0.88 $ 0.88
FFO per Share^(a)* $ 2.55 $ 1.95 $ 1.14 $ 1.02 $ 2.54
Core FFO per Share^(a)* $ 2.57 $ 1.96 $ 1.23 $ 1.33 $ 2.65
Real Property NOI
MH $ 182.5 $ 168.7 $ 156.9 $ 153.5 $ 166.8
RV 128.4 76.5 45.8 46.1 127.0
Marinas 83.1 72.4 52.0 58.3 77.8
Total $ 394.0 $ 317.6 $ 254.7 $ 257.9 $ 371.6
Recurring EBITDA $ 433.0 $ 339.7 $ 237.4 $ 236.3 $ 408.1
TTM Recurring EBITDA / Interest* 4.0 x 4.3 x 4.6 x 5.2 x 5.7 x
Net Debt / TTM Recurring EBITDA 6.1 x 6.2 x 6.1 x 6.0 x 5.7 x
*Balance Sheet*
Total assets $ 17,605.3 $ 17,561.4 $ 17,363.8 $ 17,084.2 $ 16,484.6
Total debt $ 7,665.0 $ 7,614.0 $ 7,462.0 $ 7,197.2 $ 6,711.0
Total liabilities $ 9,465.0 $ 9,474.8 $ 9,294.8 $ 8,992.8 $ 8,354.6
*Operating Information****
Properties
MH 353 354 354 353 350
RV 182 182 182 182 181
Marina 135 135 135 134 131
Total 670 671 671 669 662
Sites, Wet Slips and Dry Storage Spaces*
Manufactured homes 118,250 118,170 117,970 118,020 116,910
Annual RV 32,150 31,620 30,860 30,330 32,030
Transient site 29,770 30,270 30,870 31,180 31,150
Total sites 180,170 180,060 179,700 179,530 180,090
Marina wet slips and dry storage spaces^(b) 48,030 48,180 47,990 47,820 46,190
*Occupancy**
MH occupancy (including UK) 95.4 % 95.3 % 95.1 % 95.0 % 95.5 %
Annual RV occupancy 100.0 % 100.0 % 100.0 % 100.0 % 100.0 %
Blended MH and annual RV occupancy 96.4 % 96.3 % 96.1 % 96.0 % 96.5 %
*MH and RV Revenue Producing Site Net Gains*^(c)* (excluding UK Operations)**
MH leased sites, net 207 285 278 346 122
RV leased sites, net 537 754 524 267 567
Total leased sites, net 744 1,039 802 613 689
^(a) Excludes the effects of certain anti-dilutive convertible securities.
^(b) Total wet slips and dry storage spaces are adjusted each quarter based on site configuration and usability.
^(c) Revenue producing site net gains do not include occupied sites acquired during the year.
^(d)
*Portfolio Overview as of September 30, 2023*
*MH & RV Properties* *Properties*
*MH & Annual RV* *RV Transient Sites*
*Total MH and RV Sites*
*Sites for Development**Location* *Sites* *Occupancy %*
North America
Florida 129 40,460 97.5 % 3,950 44,410 3,400
Michigan 85 32,850 96.7 % 630 33,480 1,300
California 37 6,920 98.8 % 1,880 8,800 850
Texas 31 8,950 95.2 % 2,580 11,530 4,000
Ontario, Canada 16 4,680 100.0 % 500 5,180 1,450
Connecticut 16 1,930 94.8 % 80 2,010 —
Maine 15 2,470 95.6 % 1,070 3,540 200
Arizona 13 4,570 94.4 % 940 5,510 —
Indiana 12 3,160 97.2 % 1,020 4,180 180
New Jersey 11 3,000 100.0 % 1,050 4,050 260
Colorado 11 2,810 89.1 % 990 3,800 1,490
Virginia 10 1,480 99.9 % 1,970 3,450 750
New York 10 1,520 99.1 % 1,420 2,940 780
New Hampshire 10 1,740 99.9 % 680 2,420 80
Other 74 15,810 98.5 % 7,730 23,540 940
North America Total 480 132,350 97.2 % 26,490 158,840 15,680
United Kingdom 55 18,050 90.6 % 3,280 21,330 2,290
*Total* *535* *150,400* *96.4* *%* *29,770* *180,170* *17,970*
*Marina* *Properties*
*Wet Slips and Dry Storage Spaces*
*Location*
Florida 21 5,200
Rhode Island 12 3,460
California 11 5,710
Connecticut 11 3,330
New York 9 3,020
Maryland 9 2,480
Massachusetts 9 2,520
Other 53 22,310
*Total* *135* *48,030*
*Properties*
*Sites, Wet Slips and Dry Storage Spaces*
*Total Portfolio* *670* *228,200*
*Consolidated Balance Sheets*
*(amounts in millions)*
*September 30, 2023* *December 31, 2022*
*Assets*
Land $ 3,996.4 $ 4,322.3
Land improvements and buildings 11,418.4 10,903.4
Rental homes and improvements 725.6 645.2
Furniture, fixtures and equipment 995.1 839.0
Investment property 17,135.5 16,709.9
Accumulated depreciation (3,144.8 ) (2,738.9 )
Investment property, net 13,990.7 13,971.0
Cash, cash equivalents and restricted cash 62.0 90.4
Marketable securities 112.8 127.3
Inventory of manufactured homes 219.8 202.7
Notes and other receivables, net 832.2 617.3
Goodwill 1,084.1 1,018.4
Other intangible assets, net 374.7 402.0
Other assets, net 929.0 655.1
*Total Assets* $ 17,605.3 $ 17,084.2
*Liabilities*
Secured debt $ 3,359.5 $ 3,217.8
Unsecured debt 4,305.5 3,979.4
Distributions payable 118.2 111.3
Advanced reservation deposits and rent 372.7 352.1
Accrued expenses and accounts payable 380.2 396.3
Other liabilities 928.9 935.9
*Total Liabilities* 9,465.0 8,992.8
Commitments and contingencies
Temporary equity 304.5 202.9
*Shareholders' Equity*
Common stock 1.2 1.2
Additional paid-in capital 9,581.6 9,549.7
Accumulated other comprehensive income / (loss) 5.2 (9.9 )
Distributions in excess of accumulated earnings (1,848.2 ) (1,731.2 )
*Total SUI shareholders' equity* 7,739.8 7,809.8
Noncontrolling interests
Common and preferred OP units 96.0 78.7
Total noncontrolling interests 96.0 78.7
*Total Shareholders' Equity* 7,835.8 7,888.5
*Total Liabilities, Temporary Equity and Shareholders' Equity* $ 17,605.3 $ 17,084.2
*Consolidated Statements of Operations*
*(amounts in millions, except for per share amounts)*
*Quarter Ended* *Nine Months Ended* *September 30, 2023* *September 30, 2022* *% Change* *September 30, 2023* *September 30, 2022* *% Change*
*Revenues*
Real property (excluding transient) $ 457.2 $ 425.3 7.5 % $ 1,285.5 $ 1,158.1 11.0 %
Real property - transient 161.6 160.4 0.7 % 300.9 303.5 (0.9) %
Home sales 117.8 150.7 (21.8) % 326.7 358.1 (8.8) %
Service, retail, dining and entertainment 205.4 174.2 17.9 % 498.9 423.0 17.9 %
Interest 15.2 11.2 35.7 % 40.6 25.3 60.5 %
Brokerage commissions and other, net 26.0 10.8 140.7 % 45.3 27.4 65.3 %
*Total Revenues* 983.2 932.6 5.4 % 2,497.9 2,295.4 8.8 %
*Expenses*
Property operating and maintenance 195.5 184.7 5.8 % 530.7 469.2 13.1 %
Real estate tax 29.3 29.4 (0.3) % 89.4 83.2 7.5 %
Home costs and selling 80.5 96.4 (16.5) % 224.9 235.2 (4.4) %
Service, retail, dining and entertainment 178.7 144.9 23.3 % 450.4 363.3 24.0 %
General and administrative 66.2 69.1 (4.2) % 192.4 187.0 2.9 %
Catastrophic event-related charges, net (3.1 ) 12.2 (125.4) % (2.2 ) 12.3 (117.9) %
Business combinations — 8.4 (100.0) % 3.0 23.9 (87.4) %
Depreciation and amortization 162.6 149.7 8.6 % 482.3 447.7 7.7 %
Asset impairments 1.2 1.6 (25.0) % 10.1 2.3 N/M
Loss on extinguishment of debt — 4.0 (100.0) % — 4.4 (100.0) %
Interest 84.1 61.7 36.3 % 239.9 162.2 47.9 %
Interest on mandatorily redeemable preferred OP units / equity 0.8 1.0 (20.0) % 2.7 3.1 (12.9) %
*Total Expenses* 795.8 763.1 4.3 % 2,223.6 1,993.8 11.5 %
*Income Before Other Items* 187.4 169.5 10.6 % 274.3 301.6 (9.1) %
Gain / (loss) on remeasurement of marketable securities 6.1 (7.2 ) N/M (8.0 ) (74.0 ) (89.2) %
Gain / (loss) on foreign currency exchanges (6.5 ) 14.9 N/M (6.5 ) 21.7 N/M
Gain / (loss) on dispositions of properties (0.7 ) (0.8 ) (12.5) % (2.9 ) 12.5 N/M
Other income / (expense), net^(a) (3.7 ) 2.8 N/M (5.5 ) 2.6 N/M
Gain / (loss) on remeasurement of notes receivable (1.3 ) (0.1 ) N/M (3.1 ) 0.1 N/M
Income from nonconsolidated affiliates 1.4 2.0 (30.0) % 0.5 3.8 (86.8) %
Gain / (loss) on remeasurement of investment in nonconsolidated affiliates — (0.4 ) (100.0) % (4.5 ) 0.1 N/M
Current tax expense (4.6 ) (7.3 ) (37.0) % (13.9 ) (12.5 ) 11.2 %
Deferred tax benefit 2.3 3.6 (36.1) % 14.6 3.9 274.4 %
*Net Income* 180.4 177.0 1.9 % 245.0 259.8 (5.7) %
Less: Preferred return to preferred OP units / equity interests 3.3 2.5 32.0 % 9.0 8.6 4.7 %
Less: Income attributable to noncontrolling interests 14.0 11.9 17.6 % 13.2 13.9 (5.0) %
*Net Income Attributable to SUI Common Shareholders* $ 163.1 $ 162.6 0.3 % $ 222.8 $ 237.3 (6.1) %
Weighted average common shares outstanding - basic^(a) 123.5 122.4 0.9 % 123.4 119.2 3.5 %
Weighted average common shares outstanding - diluted^(a) 123.5 122.8 0.6 % 123.4 121.9 1.2 %
Basic earnings per share $ 1.31 $ 1.32 (0.8) % $ 1.79 $ 1.98 (9.6) %
Diluted earnings per share^(b) $ 1.31 $ 1.32 (0.8) % $ 1.79 $ 1.97 (9.1) %
^(a) Refer to Definitions and Notes for additional information.
^(b) Excludes the effect of certain anti-dilutive convertible securities.
N/M = Percentage change is not meaningful.
*Reconciliation of Net Income Attributable to SUI Common Shareholders to Core FFO*
*(amounts in millions, except for per share data)*
*Quarter Ended* *Nine Months Ended* *September 30, 2023* *September 30, 2022* *September 30, 2023* *September 30, 2022*
*Net Income Attributable to SUI Common Shareholders* $ 163.1 $ 162.6 $ 222.8 $ 237.3
Adjustments
Depreciation and amortization 162.2 149.2 480.5 446.3
Depreciation on nonconsolidated affiliates 0.1 — 0.2 0.1
Asset impairments 1.2 1.6 10.1 2.3
(Gain) / loss on remeasurement of marketable securities (6.1 ) 7.2 8.0 74.0
(Gain) / loss on remeasurement of investment in nonconsolidated affiliates — 0.4 4.5 (0.1 )
(Gain) / loss on remeasurement of notes receivable 1.3 0.1 3.1 (0.1 )
(Gain) / loss on dispositions of properties, including tax effect 0.7 0.8 5.0 (12.5 )
Add: Returns on preferred OP units 1.8 1.3 6.2 9.5
Add: Income attributable to noncontrolling interests 12.6 10.5 11.9 14.1
Gain on dispositions of assets, net (10.5 ) (11.9 ) (29.0 ) (44.2 )
*FFO*^*(a)* $ 326.4 $ 321.8 $ 723.3 $ 726.7
Adjustments
Business combination expense and other acquisition related costs^(a) 4.2 19.2 15.6 40.1
Loss on extinguishment of debt — 4.0 — 4.4
Catastrophic event-related charges, net (3.1 ) 12.2 (2.2 ) 12.3
Loss of earnings - catastrophic event-related charges, net^(b) (6.1 ) 0.2 4.9 0.2
(Gain) / loss on foreign currency exchanges 6.5 (14.9 ) 6.5 (21.7 )
Other adjustments, net^(a) 1.1 (6.5 ) (9.6 ) (5.1 )
*Core FFO*^*(a)(c)* $ 329.0 $ 336.0 $ 738.5 $ 756.9
*Weighted Average Common Shares Outstanding - Diluted* 128.0 126.7 128.3 125.4
*FFO per Share*^*(c)* $ 2.55 $ 2.54 $ 5.64 $ 5.80
*Core FFO per Share*^*(c)* $ 2.57 $ 2.65 $ 5.76 $ 6.04
^(a) Refer to Definitions and Notes for additional information.
^(b) Loss of earnings - catastrophic event-related charges, net include the following:
*Quarter Ended* *Nine Months Ended* *September 30, 2023* *September 30, 2023*
Hurricane Ian - Three Fort Myers, Florida RV communities impaired
Estimated loss of earnings in excess of the applicable business interruption deductible $ 6.3 $ 16.8
Insurance recoveries received for previously estimated loss of earnings through April 30, 2023 (11.8 ) (11.8 )
Hurricane Irma - Three Florida Keys communities impaired
Estimated loss of earnings in excess of the applicable business interruption deductible — 0.5
Reversal of unpaid previously estimated loss of earnings that the Company does not expect to recover (0.6 ) (0.6 )
Loss of earnings - catastrophic event-related charges, net $ (6.1 ) $ 4.9
^(c) Excludes the effect of certain anti-dilutive convertible securities.
Refer