NEWS RELEASE
October 23, 2017

Southfield, Michigan, October 23, 2017 - Sun Communities, Inc. (NYSE: SUI) (the "Company"), a real estate investment trust ("REIT") that owns and operates, or has an interest in, manufactured housing ("MH") and recreational vehicle ("RV") communities, today reported its third quarter results. 

Financial Results for the Quarter and Nine Months Ended September 30, 2017

For the quarter ended September 30, 2017, total revenues increased $18.5 million, or 7.4 percent, to $268.2 million compared to $249.7 million for the same period in 2016. Net income attributable to common stockholders was $24.1 million, or $0.31 per diluted common share, as compared to net income attributable to common stockholders of $18.9 million, or $0.27 net income per diluted common share, for the same period in 2016.

For the nine months ended September 30, 2017, total revenues increased $125.4 million, or 20.4 percent, to $740.5 million compared to $615.1 million for the same period in 2016. Net income attributable to common stockholders was $57.6 million, or $0.76 per diluted common share, as compared to net income attributable to common stockholders of $19.0 million, or $0.30 per diluted common share, for the same period in 2016.

Non-GAAP Financial Measures and Portfolio Performance

  • Funds from Operations ("FFO")(1) excluding certain items was $1.13 per diluted share and OP unit ("Share") for both the quarter ended September 30, 2017 and 2016.
     
  • Same Community Net Operating Income ("NOI")(1) increased by 7.7 percent and 6.8 percent for the quarter and nine months ended September 30, 2017, respectively, as compared to the same periods in 2016.
     
  • Revenue producing sites increased by 394 sites for the quarter ended September 30, 2017, as compared to an increase of 292 sites in the same period in 2016.  
     
  • Home sales volumes of 2,432 for the nine months ended September 30, 2017, increased from 2,410 for the same period in 2016.

"Our strength in the third quarter was driven by our continued ability to generate internal growth. Our same community NOI increased by 7.7 percent in the quarter boosted by a 160-basis point occupancy gain," said Gary A. Shiffman, Chairman and Chief Executive Officer. "We have laid the foundation for ongoing internal growth through our active expansion site development program, and we are confident in the consistent value-generation embedded in our platform. On the acquisition front we added four high quality, age-restricted MH and RV communities in California, further penetrating an important market for us. We have a high degree of visibility into our pipeline and expect to continue to deploy capital into similar quality communities."

OPERATING HIGHLIGHTS

Community Occupancy

Total portfolio occupancy was 96.2 percent at both September 30, 2017 and September 30, 2016, including the impact of recently completed but vacant expansion sites. During the quarter ended September 30, 2017, revenue producing sites increased by 394 sites, as compared to 292 revenue producing sites gained during the third quarter of 2016.

Revenue producing sites increased by 1,833 for the nine months ended September 30, 2017 as compared to 1,385 revenue producing sites gained during the nine months ended September 30, 2016.


Same Community Results

For the 231 communities owned since January 1, 2016, NOI(1) for the quarter ended September 30, 2017 increased 7.7 percent over the same period in 2016, driven by a 6.2 percent increase in revenues and a 2.9 percent increase in operating expenses.  Same Community occupancy increased to 97.2 percent at September 30, 2017 from 95.6 percent(9)(10) at September 30, 2016.

For the nine months ended September 30, 2017, total revenues increased by 5.9 percent while total expenses increased by 3.5 percent, resulting in an increase to NOI(1) of 6.8 percent over the nine months ended September 30, 2016.


Home Sales

Total home sales were 805 for the quarter ended September 30, 2017 as compared to 895 homes sold during the same period in 2016, a 10.1 percent decrease. During the nine months ended September 30, 2017, the Company sold 2,432 homes, compared to 2,410 homes sold for the same period ending 2016.

Rental homes sales, which are included in total home sales, were 286 for both quarters ended September 30, 2017 and 2016. Rental home sales were 828 and 858 for the nine months ended September 30, 2017 and 2016, respectively.


PORTFOLIO ACTIVITY

Acquisitions(2)

During the quarter ended September 30, 2017, the Company acquired a 331 site age-restricted RV resort located in Pismo Beach, California, for total consideration of $21.4 million. Additionally, the Company acquired three age-restricted MH communities during the quarter: Lazy J Ranch, with 220 sites in Arcata, California; Ocean West, with 130 sites in McKinleyville, California; and Caliente Sands, with 118 sites in Cathedral City, California, for total consideration of $32.8 million. 

Catastrophic Weather

On September 10, 2017, Hurricane Irma hit Florida as a Category 4 hurricane and impacted 121 of the Company's communities in Florida and three in Georgia. The Company recognized charges totaling $23.1 million comprised of $12.7 million for debris and tree removal, common area repairs and minor flooding damage, as well as $10.4 million for impaired assets at three communities containing 190 total sites located in the Florida Keys. These charges, which include management's best estimate of the total repair expense the Company will incur, were partially offset by estimated insurance recoveries of $15.3 million. The net charges of $7.8 million have been classified as "Catastrophic weather related charges" in the Consolidated Statements of Operations.  Expected insurance recoveries for loss of income and redevelopment costs greater than the impairment charge related to the three Florida Key communities cannot be estimated at this time and are excluded from the insurance recovery estimate recorded at September 30, 2017. The Company maintains property, casualty, flood and business interruption insurance for its community portfolio, subject to customary deductibles and limits.


BALANCE SHEET AND CAPITAL MARKETS ACTIVITY

Debt Transactions

As previously announced, during the quarter ended September 30, 2017, the Company assumed a $4.6 million collateralized term loan in connection with acquisition activities. The term loan has a remaining term of 9.8 years and bears interest at 4.34 percent. 

As of September 30, 2017, the Company had approximately $3.0 billion of debt outstanding. The weighted average interest rate was 4.56 percent and the weighted average maturity was 8.4 years. The Company had $137.4 million of unrestricted cash on hand.  At period-end the Company's net debt to trailing twelve month Recurring EBITDA(1) ratio was 6.0 times.

Equity Transactions

During the quarter ended September 30, 2017, the Company entered into a new at the market ("ATM") equity sales program that has an aggregate offering price of up to $450.0 million.  The new ATM program replaced the Company's prior equity sales agreement that had an aggregate offering price of up to $250.0 million.

After quarter end, the Company announced a notice of redemption to the holders of its 7.125% Series A Cumulative Redeemable Preferred Stock, which it has elected to redeem on November 14, 2017. Holders will receive cash in the amount of $25.00, plus all accrued and unpaid dividends, which is equal to an aggregate payment of $25.14349 per share. In the aggregate, the Company will pay $85.5 million to redeem all of the  shares.

GUIDANCE 2017

The Company is updating fourth quarter 2017 guidance of FFO(1) per Share to be in the range of $0.96 to $0.99 and anticipates FFO(1) per Share of $4.15 to $4.18 for the full year 2017.

The Company also affirms 2017 full year guidance of Same Community NOI(1) growth of 6.4 percent to 6.8 percent. Guidance does not include prospective acquisitions or capital markets activity.

FFO(1) per Share estimates assume certain non-core items are adjusted from FFO(1). 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 third quarter operating results will be held on Tuesday, October 24, 2017 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 November 7, 2017 and can be accessed toll-free by calling 844-512-2921 or by calling 412-317-6671. The Conference ID number for the call and the replay is 13669386. 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, as of September 30, 2017, owned, operated, or had an interest in a portfolio of 348 communities comprising approximately 120,000 developed sites in 29 states and Ontario, Canada.

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. Attn: Investor Relations, 27777 Franklin Road, Ste. 200, Southfield, MI 48034.


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, changes in foreign currency exchange rates, the ability of manufactured home buyers to obtain financing and the level of repossessions by manufactured home lenders.  Further details of potential risks that may affect the Company are described in our periodic reports filed with the U.S. Securities and Exchange Commission, including in the "Risk Factors" section of the Company's Annual Report on Form 10-K for the year ended December 31, 2016.

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.


Investor Information                                                           



RESEARCH COVERAGE            
             
Firm   Analyst   Phone   Email
Bank of America Merrill Lynch   Joshua Dennerlein   (646) 855-1681   joshua.dennerlein@baml.com
BMO Capital Markets   John Kim   (212) 885-4115   johnp.kim@bmo.com
Citi Research   Michael Bilerman   (212) 816-1383   michael.bilerman@citi.com
    Nicholas Joseph   (212) 816-1909   nicholas.joseph@citi.com
Evercore ISI   Gwen Clark   (212) 446-5611   gwen.clark@evercoreisi.com
Green Street Advisors   Ryan Burke   (949) 640-8780   rburke@greenstreetadvisors.com
RBC Capital Markets   Neil Malkin   (440) 715-2651   neil.malkin@rbccm.com
Robert W. Baird & Co.   Drew Babin   (610) 238-6634   dbabin@rwbaird.com
Wells Fargo   Todd Stender   (562) 637-1371   todd.stender@wellsfargo.com
             
             
INQUIRIES            
             
Sun Communities welcomes questions or comments from stockholders, analysts, investment managers, media, or any prospective investor. Please address all inquiries to our Investor Relations department.
             
At Our Website   www.suncommunities.com        
             
By Email   investorrelations@suncommunities.com    
             
By Phone   (248) 208-2500        
             
             
             
             
             
             
             
             

Portfolio Overview                                                                           
(As of September 30, 2017)


 


Balance Sheets                                                                                                                                              
(amounts in thousands)


    9/30/2017   12/31/2016
ASSETS:        
Land   $ 1,079,708     $ 1,051,536  
Land improvements and buildings   5,024,937     4,825,043  
Rental homes and improvements   516,618     489,633  
Furniture, fixtures and equipment   140,894     130,127  
Investment property   6,762,157     6,496,339  
Accumulated depreciation   (1,188,332 )   (1,026,858 )
Investment property, net   5,573,825     5,469,481  
Cash and cash equivalents   137,448     8,164  
Inventory of manufactured homes   25,741     21,632  
Notes and other receivables, net   145,760     81,179  
Collateralized receivables, net (3)   134,015     143,870  
Other assets, net   141,047     146,450  
Total assets   $ 6,157,836     $ 5,870,776  
LIABILITIES:        
Mortgage loans payable   $ 2,822,640     $ 2,819,567  
Secured borrowings (3)   134,884     144,477  
Preferred OP units - mandatorily redeemable   45,903     45,903  
Lines of credit   -     100,095  
Distributions payable   56,520     51,896  
Other liabilities   291,074     279,667  
Total liabilities   3,351,021     3,441,605  
Series A-4 preferred stock   32,414     50,227  
Series A-4 preferred OP units   10,832     16,717  
STOCKHOLDERS' EQUITY:        
Series A preferred stock   34     34  
Common stock   793     732  
Additional paid-in capital   3,810,930     3,321,441  
Accumulated other comprehensive income (loss)   1,531     (3,181 )
Distributions in excess of accumulated earnings   (1,117,228 )   (1,023,415 )
  Total SUI stockholders' equity   2,696,060     2,295,611  
Noncontrolling interests:        
Common and preferred OP units   63,668     69,598  
Consolidated variable interest entities   3,841     (2,982 )
Total noncontrolling interest   67,509     66,616  
Total stockholders' equity   2,763,569     2,362,227  
Total liabilities & stockholders' equity   $ 6,157,836     $ 5,870,776  


Statements of Operations - Quarter to Date Comparison                                                            
(amounts in thousands, except per share amounts)


  Three Months Ended September 30,
  2017   2016   Change   % Change
REVENUES              
Income from real property (excluding transient revenue) $ 169,533     $ 158,020     $ 11,513     7.3 %
Transient revenue 28,730     26,304     2,426     9.2 %
Revenue from home sales 33,197     31,211     1,986     6.4 %
Rental home revenue 12,757     12,031     726     6.0 %
Ancillary revenues 17,017     16,446     571     3.5 %
Interest 5,920     4,705     1,215     25.8 %
Brokerage commissions and other revenues, net 1,091     984     107     10.9 %
Total revenues 268,245     249,701     18,544     7.4 %
               
EXPENSES              
Property operating and maintenance 59,249     57,089     2,160     3.8 %
Real estate taxes 13,053     12,384     669     5.4 %
Cost of home sales 25,094     21,935     3,159     14.4 %
Rental home operating and maintenance 6,775     6,350     425     6.7 %
Ancillary expenses 9,993     9,449     544     5.8 %
Home selling expenses 3,290     2,643     647     24.5 %
General and administrative 18,267     16,575     1,692     10.2 %
Transaction costs 2,167     4,191     (2,024 )   (48.3 )%
Depreciation and amortization 64,232     61,483     2,749     4.5 %
Interest 32,085     33,800     (1,715 )   (5.1 )%
Interest on mandatorily redeemable preferred OP units 790     789     1     0.1 %
Total expenses 234,995     226,688     8,307     3.7 %
Income before other items 33,250     23,013     10,237     44.5 %
Catastrophic weather related charges (7,756 )   -     (7,756 )   N/A
Other income, net (4) 3,345     -     3,345     N/A
Current tax benefit / (expense) 38     (283 )   321     113.4 %
Deferred tax benefit 81     -     81     N/A
Income from affiliate transactions -     500     (500 )   100.0 %
Net income 28,958     23,230     5,728     24.7 %
Less: Preferred return to preferred OP units (1,112 )   (1,257 )   145     (11.5 )%
Less: Amounts attributable to noncontrolling interests (1,776 )   (879 )   (897 )   102.1 %
Less: Preferred stock distribution (1,955 )   (2,197 )   242     (11.0 )%
NET INCOME ATTRIBUTABLE TO SUI $ 24,115     $ 18,897     $ 5,218     27.6 %
               
Weighted average common shares outstanding:              
Basic 78,369     68,655     9,714     14.2 %
Diluted 78,808     69,069     9,739     14.1 %
Earnings per share:              
Basic $ 0.31     $ 0.27     $ 0.04     14.8 %
Diluted $ 0.31     $ 0.27     $ 0.04     14.8 %


Statements of Operations - Year to Date Comparison                                                                              
(amounts in thousands, except per share amounts)


  Nine Months Ended September 30,
  2017   2016   Change   % Change
REVENUES:              
Income from real property (excluding transient revenue) $ 495,179     $ 406,221     $ 88,958     21.9 %
Transient revenue 65,599     47,339     18,260     38.6 %
Revenue from home sales 91,319     81,987     9,332     11.4 %
Rental home revenue 37,774     35,696     2,078     5.8 %
Ancillary revenues 32,086     28,442     3,644     12.8 %
Interest 15,609     13,322     2,287     17.2 %
Brokerage commissions and other revenues, net 2,978     2,137     841     39.4 %
Total revenues 740,544     615,144     125,400     20.4 %
               
EXPENSES:              
Property operating and maintenance 159,861     125,357     34,504     27.5 %
Real estate taxes 39,322     32,122     7,200     22.4 %
Cost of home sales 67,999     58,803     9,196     15.6 %
Rental home operating and maintenance 16,821     17,637     (816 )   (4.6 )%
Ancillary expenses 21,719     18,697     3,022     16.2 %
Home selling expenses 9,391     7,240     2,151     29.7 %
General and administrative 56,188     46,910     9,278     19.8 %
Transaction costs 6,990     27,891     (20,901 )   (74.9 )%
Depreciation and amortization 189,719     159,565     30,154     18.9 %
Extinguishment of debt 759     -     759     N/A
Interest 95,765     88,522     7,243     8.2 %
Interest on mandatorily redeemable preferred OP units 2,361     2,363     (2 )   (0.1 )%
Total expenses 666,895     585,107     81,788     14.0 %
Income before other items 73,649     30,037     43,612     145.2 %
Catastrophic weather related charges (8,124 )   -     (8,124 )   N/A
Other income, net (4) 5,340     -     5,340     N/A
Current tax expense (133 )   (567 )   434     76.5 %
Deferred tax benefit 745     -     745     N/A
Income from affiliate transactions -     500     (500 )   100.0 %
Net income 71,477     29,970     41,507     138.5 %
Less: Preferred return to preferred OP units (3,482 )   (3,793 )   311     (8.2 )%
Less: Amounts attributable to noncontrolling interests (4,179 )   (460 )   (3,719 )   808.5 %
Less: Preferred stock distribution (6,233 )   (6,748 )   515     (7.6 )%
NET INCOME ATTRIBUTABLE TO SUI $ 57,583     $ 18,969     38,614     203.6 %
               
Weighted average common shares outstanding:              
Basic 75,234     63,716     11,518     18.1 %
Diluted 75,846     64,146     11,700     18.2 %
Earnings per share:              
Basic $ 0.76     $ 0.30     $ 0.46     153.3 %
Diluted $ 0.76     $ 0.30     $ 0.46     153.3 %


Outstanding Securities and Capitalization             
(in thousands except for *)

Outstanding Securities - As of September 30, 2017
                   
  Number of Units/Shares Outstanding   Conversion Rate*   If Converted   Issuance Price per unit*   Annual Distribution Rate*
Convertible Securities                  
Series A-1 preferred OP units 349   2.4390   851   $100   6.0%
Series A-3 preferred OP units 40   1.8605   74   $100   4.5%
Series A-4 preferred OP units 425   0.4444   189   $25   6.5%
Series C preferred OP units 316   1.1100   351   $100   4.5%
Common OP units 2,757   1.0000   2,757   N/A   Mirrors common shares distributions
Series A-4 cumulative convertible preferred stock 1,085   0.4444   482   $25   6.5%
                   
Non-Convertible Securities                  
Preferred stock (SUI-PrA) 3,400   N/A   N/A   $25   7.125%
Common shares 79,341   N/A   N/A   N/A   $2.68^
^ Annual distribution is based on the last quarterly distribution annualized.

Capitalization - As of September 30, 2017            
             
Equity   Shares   Share Price*   Total
Common shares   79,341     $ 85.68     $ 6,797,937  
Common OP units   2,757     $ 85.68     236,220  
Subtotal   82,098         $ 7,034,157  
             
Series A-1 preferred OP units   851     $ 85.68     72,914  
Series A-3 preferred OP units   74     $ 85.68     6,340  
Series A-4 preferred OP units   189     $ 85.68     16,194  
Series C preferred OP units   351     $ 85.68     30,074  
Total diluted shares outstanding   83,563         $ 7,159,679  
 
Debt
Mortgage loans payable           $ 2,822,640  
Secured borrowings (3)           134,884  
Preferred OP units - mandatorily redeemable           45,903  
Lines of credit           -  
Total Debt           $ 3,003,427  
 
Preferred
Perpetual preferred   3,400     $ 25.00     $ 85,000  
A-4 preferred stock   1,085     $ 25.00     $ 27,125  
Total Capitalization           $ 10,275,231  

Reconciliations to Non-GAAP Financial Measures


Reconciliation of Net Income Attributable to Sun Communities, Inc. Common Stockholders to Funds from Operations                                                                               
(amounts in thousands except for per share data)


  Three Months Ended September 30,   Nine Months Ended
 September 30,
  2017   2016   2017   2016
Net income attributable to Sun Communities, Inc. common stockholders $ 24,115     18,897     $ 57,583     $ 18,969  
Adjustments:              
Depreciation and amortization 64,484     61,809     190,143     159,225  
Amounts attributable to noncontrolling interests 1,608     685     3,710     255  
Preferred return to preferred OP units 578     616     1,750     1,858  
Preferred distribution to Series A-4 preferred stock 441     683     1,666     -  
Gain on disposition of assets, net (4,309 )   (4,667 )   (11,342 )   (12,226 )
FFO attributable to Sun Communities, Inc. common stockholders and dilutive convertible securities (1) (6)

 
86,917     78,023     243,510     168,081  
Adjustments:              
Transaction costs 2,167     4,191     6,990     27,891  
Other acquisition related costs (5) 343     1,467     2,712     1,467  
Income from affiliate transactions -     (500 )   -     (500 )
Extinguishment of debt -     -     759     -  
Catastrophic weather related charges 7,756     -     8,124     -  
Other income, net (4) (3,345 )   -     (5,340 )   -  
Debt premium write-off -     -     (438 )   -  
Deferred tax benefit (81 )   -     (745 )   -  
FFO attributable to Sun Communities, Inc. common stockholders and dilutive convertible securities excluding certain items (1) (6)

 
$ 93,757     $ 83,181     $ 255,572     $ 196,939  
               
Weighted average common shares outstanding - basic: 78,369     68,655     75,241     63,716  
Add:              
Common stock issuable upon conversion of stock options 2     8     2     10  
Restricted stock 437     406     610     437  
Common OP units 2,761     2,856     2,758     2,861  
Common stock issuable upon conversion of Series A-1 preferred OP units 858     920     877     932  
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 482     747     620     -  
Weighted average common shares outstanding - fully diluted 82,984     73,667     80,183     68,031  
               
FFO attributable to Sun Communities, Inc. common stockholders and dilutive convertible securities (1) (6) per share - fully diluted

 
$ 1.05     $ 1.06     $ 3.04     $ 2.47  
FFO attributable to Sun Communities, Inc. common stockholders and dilutive convertible securities (1) (6) per share excluding certain items - fully diluted

 
$ 1.13     $ 1.13     $ 3.19     $ 2.89  


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



  Three Months Ended
 September 30,
  Nine Months Ended
 September 30,
  2017   2016   2017   2016
Net income attributable to Sun Communities, Inc., common stockholders $ 24,115     $ 18,897     $ 57,583     $ 18,969  
Interest 32,085     33,800     95,765     88,522  
Interest on mandatorily redeemable preferred OP units 790     789     2,361     2,363  
Depreciation and amortization 64,232     61,483     189,719     159,565  
Extinguishment of debt -     -     759     -  
Transaction costs 2,167     4,191     6,990     27,891  
Catastrophic weather related charges 7,756     -     8,124     -  
Other income, net (4) (3,345 )   -     (5,340 )   -  
Current tax (benefit) / expense (38 )   283     133     567  
Deferred tax benefit (81 )   -     (745 )   -  
Income from affiliate transactions -     (500 )   -     (500 )
Preferred return to preferred OP units 1,112     1,257     3,482     3,793  
Amounts attributable to noncontrolling interests 1,776     879     4,179     460  
Preferred stock distribution 1,955     2,197     6,233     6,748  
RECURRING EBITDA (1) $ 132,524     $ 123,276     $ 369,243     $ 308,378  


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



  Three Months Ended
 September 30,
  Nine Months Ended
 September 30,
  2017   2016   2017   2016
Net income attributable to Sun Communities, Inc., common stockholders: $ 24,115     $ 18,897     $ 57,583     $ 18,969  
Other revenues (7,011 )   (5,689 )   (18,587 )   (15,459 )
Home selling expenses 3,290     2,643     9,391     7,240  
General and administrative 18,267     16,575     56,188     46,910  
Transaction costs 2,167     4,191     6,990     27,891  
Depreciation and amortization 64,232     61,483     189,719     159,565  
Extinguishment of debt -     -     759     -  
Interest expense 32,875     34,589     98,126     90,885  
Catastrophic weather related charges 7,756     -     8,124     -  
Other income, net (4) (3,345 )   -     (5,340 )   -  
Current tax (benefit) / expense (38 )   283     133     567  
Deferred tax benefit (81 )   -     (745 )   -  
Income from affiliate transactions -     (500 )   -     (500 )
Preferred return to preferred OP units 1,112     1,257     3,482     3,793  
Amounts attributable to noncontrolling interests 1,776     879     4,179     460  
Preferred stock distributions 1,955     2,197     6,233     6,748  
NOI(1) / Gross Profit $ 147,070     $ 136,805     $ 416,235     $ 347,069  

  Three Months Ended
 September 30,
  Nine Months Ended
 September 30,
  2017   2016   2017   2016
Real Property NOI (1) $ 125,961     $ 114,851     $ 361,595     $ 296,081  
Rental Program NOI (1) 22,060     21,213     68,759     64,223  
Home Sales NOI(1) / Gross Profit 8,103     9,276     23,320     23,184  
Ancillary NOI(1) / Gross Profit 7,024     6,997     10,367     9,745  
Site rent from Rental Program (included in Real Property NOI) (1)(7) (16,078 )   (15,532 )   (47,806 )   (46,164 )
NOI(1) / Gross profit $ 147,070     $ 136,805     $ 416,235     $ 347,069  


Non-GAAP and Other Financial Measures


Financial Highlights                                                                                                                                     
(amounts in thousands, except per share data)


  Quarter Ended
  9/30/2017   6/30/2017   3/31/2017   12/31/2016   9/30/2016
OPERATING INFORMATION                  
Total revenues $ 268,245     $ 237,899     $ 234,400     $ 218,634     $ 249,701  
Net income $ 28,958     $ 16,974     $ 25,545     $ 1,501     $ 23,230  
Net income / (loss) attributable to common stockholders $ 24,115     $ 12,364     $ 21,104     $ (1,600 )   $ 18,897  
Earnings / (loss) per share basic $ 0.31     $ 0.16     $ 0.29     $ (0.02 )   $ 0.27  
Earnings / (loss) per share diluted $ 0.31     $ 0.16     $ 0.29     $ (0.02 )   $ 0.27  
                   
Recurring EBITDA (1) $ 132,524     $ 114,324     $ 122,395     $ 105,850     $ 123,276  
FFO attributable to Sun Communities, Inc. common stockholders and dilutive convertible securities(1) (6) $ 86,917     $ 73,202     $ 83,391     $ 57,572     $ 78,023  
FFO attributable to Sun Communities, Inc. common stockholders and dilutive convertible securities excluding certain items(1) (6) $ 93,757     $ 76,194     $ 85,621     $ 69,192     $ 83,181  
FFO attributable to Sun Communities, Inc. common stockholders and dilutive convertible securities (1) (6) per share - fully diluted $ 1.05     $ 0.92     $ 1.07     $ 0.75     $ 1.06  
FFO attributable to Sun Communities, Inc. common stockholders and dilutive convertible securities (1) (6) per share excluding certain items - fully diluted $ 1.13     $ 0.96     $ 1.10     $ 0.91     $ 1.13  
                   
BALANCE SHEETS                  
Total assets $ 6,157,836     $ 6,178,713     $ 5,902,447     $ 5,870,776     $ 5,904,706  
Total debt $ 3,003,427     $ 3,018,653     $ 3,140,547     $ 3,110,042     $ 3,102,993  
Total liabilities $ 3,351,021     $ 3,373,695     $ 3,478,132     $ 3,441,605     $ 3,429,743  


Debt Analysis                                                                                                                                                
(amounts in thousands)


  Quarter Ended
  9/30/2017   6/30/2017   3/31/2017   12/31/2016   9/30/2016
DEBT OUTSTANDING                  
Mortgage loans payable $ 2,822,640     $ 2,832,819     $ 2,774,645     $ 2,819,567     $ 2,854,831  
  Secured borrowings (3) 134,884     139,496     141,671     144,477     144,522  
Preferred OP units - mandatorily redeemable 45,903     45,903     45,903     45,903     45,903  
Lines of credit (8) -     435     178,328     100,095     57,737  
Total debt $ 3,003,427     $ 3,018,653     $ 3,140,547     $ 3,110,042     $ 3,102,993  
                   
% FIXED/FLOATING                  
Fixed 94.9 %   94.9 %   89.4 %   91.8 %   93.1 %
Floating 5.1 %   5.1 %   10.6 %   8.2 %   6.9 %
Total 100.0 %   100.0 %   100.0 %   100.0 %   100.0 %
                   
WEIGHTED AVERAGE INTEREST RATES                  
Mortgage loans payable 4.26 %   4.26 %   4.26 %   4.24 %   4.30 %
Preferred OP units - mandatorily redeemable 6.87 %   6.87 %   6.87 %   6.87 %   6.87 %
Lines of credit (8) - %   - %   2.52 %   2.14 %   1.93 %
Average before Secured borrowings 4.30 %   4.30 %   4.19 %   4.21 %   4.29 %
Secured borrowings (3) 9.98 %   9.99 %   10.01 %   10.03 %   10.06 %
Total average 4.56 %   4.56 %   4.45 %   4.48 %   4.56 %
                   
DEBT RATIOS                  
Net Debt / Recurring EBITDA(1) (TTM) 6.0     6.0     7.0     7.5     7.7  
Net Debt / Enterprise Value 28.3 %   27.2 %   32.8 %   33.8 %   32.8 %
Net Debt + Preferred Stock / Enterprise Value 29.4 %   28.4 %   34.2 %   35.2 %   34.2 %
Net Debt / Gross Assets 39.0 %   38.0 %   44.8 %   45.0 %   44.1 %
                   
COVERAGE RATIOS                  
Recurring EBITDA(1) (TTM) / Interest 3.5   3.4   3.3   3.2   3.1
  Recurring EBITDA(1) (TTM) / Interest + Pref.
Distributions + Pref. Stock Distribution
3.2   3.1   3.0   2.9   2.9

MATURITIES/PRINCIPAL AMORTIZATION NEXT FIVE YEARS 2017   2018   2019   2020   2021
Mortgage loans payable:                  
Maturities $ -     $ 26,186     $ 64,314     $ 58,078     $ 270,680  
Weighted average rate of maturities - %   6.13 %   6.24 %   5.92 %   5.53 %
Principal amortization 13,369     55,143     55,937     56,588     55,578  
Secured borrowings (3) 1,354     5,736     6,235     6,795     7,298  
Preferred OP units - mandatorily redeemable 3,670     7,570     -     -     -  
Total $ 18,393     $ 94,635     $ 126,486     $ 121,461     $ 333,556  

Statements of Operations - Same Community                                                                     
(amounts in thousands except for Other Information)


  Three Months Ended September 30,   Nine Months Ended September 30,
  2017   2016   Change % Change   2017   2016   Change   % Change
REVENUES:                            
Income from real property $ 144,589     $ 136,137     $ 8,452   6.2 %   $ 404,353     $ 381,979     $ 22,374     5.9 %
                             
PROPERTY OPERATING EXPENSES:                      
Payroll and benefits 13,070     12,596     474   3.8 %   34,780     33,407     1,373     4.1 %
Legal, taxes & insurance 1,325     1,178     147   12.5 %   4,073     3,895     178     4.6 %
Utilities 8,961     8,821     140   1.6 %   22,905     22,082     823     3.7 %
Supplies and repair 5,702     5,862     (160 ) (2.7 )%   14,712     14,474     238     1.6 %
Other 4,078     3,955     123   3.1 %   10,550     10,412     138     1.3 %
Real estate taxes 9,631     9,148     483   5.3 %   29,104     27,943     1,161     4.2 %
Property operating expenses 42,767     41,560     1,207   2.9 %   116,124     112,213     3,911     3.5 %
NET OPERATING INCOME (NOI)(1) $ 101,822     $ 94,577     $ 7,245   7.7 %   $ 288,229     $ 269,766     $ 18,463     6.8 %

  As of September 30,  
  2017   2016   Change   % Change  
OTHER INFORMATION                
Number of properties 231     231     -        
                 
MH occupancy (9) 96.7 %              
RV occupancy (9) 100.0 %              
MH & RV blended occupancy (9) 97.2 %   95.6 % (10) 1.6 %      
                 
Sites available for development 6,003     7,177     (1,174 )   (16.4 )%  
                 
Monthly base rent per site - MH $ 514     $ 497     $ 17     3.5 % (12)
Monthly base rent per site - RV (11) $ 448     $ 433     $ 15     3.5 % (12)
Monthly base rent per site - Total $ 506     $ 489     $ 17     3.5 % (12)

Rental Program Summary    
(amounts in thousands except for *)


  Three Months Ended September 30,   Nine Months Ended September 30,
  2017   2016   Change   % Change   2017   2016   Change   % Change
REVENUES:                              
Rental home revenue $ 12,757     $ 12,031     $ 726     6.0 %   $ 37,774     $ 35,696     $ 2,078     5.8 %
Site rent included in Income from real property 16,078     15,532     546     3.5 %   47,806     46,164     1,642     3.6 %
Rental program revenue 28,835     27,563     1,272     4.6 %   85,580     81,860     3,720     4.5 %
                               
EXPENSES:                              
Commissions 891     551     340     61.7 %   1,902     1,710     192     11.2 %
Repairs and refurbishment 3,306     3,349     (43 )   (1.3 )%   7,950     9,288     (1,338 )   (14.4 )%
Taxes and insurance 1,546     1,446     100     6.9 %   4,489     4,178     311     7.4 %
Marketing and other 1,032     1,004     28     2.8 %   2,480     2,461     19     0.8 %
Rental program operating and maintenance 6,775     6,350     425     6.7 %   16,821     17,637     (816 )   (4.6 )%
NET OPERATING INCOME (NOI) (1) $ 22,060     $ 21,213     $ 847     4.0 %   $ 68,759     $ 64,223     $ 4,536     7.1 %
                               

Occupied rental home information as of September 30, 2017 and 2016:                
Number of occupied rentals, end of period*   10,960     10,797     163     1.5 %
Investment in occupied rental homes, end of period   $ 482,591     $ 453,521     $ 29,070     6.4 %
Number of sold rental homes (YTD)*   828     858     (30 )   (3.5 )%
Weighted average monthly rental rate, end of period*   $ 908     $ 879     $ 29     3.3 %


Home Sales Summary           
(amounts in thousands except for *)


  Three Months Ended September 30,   Nine Months Ended September 30,
  2017   2016   Change   % Change   2017   2016   Change   % Change
New home sales $ 10,331     $ 9,391     $ 940     10.0 %   $ 24,760     $ 20,472     $ 4,288     21.0 %
Pre-owned home sales 22,866     21,820     1,046     4.8 %   66,559     61,515     5,044     8.2 %
Revenue from home sales 33,197     31,211     1,986     6.4 %   91,319     81,987     9,332     11.4 %
                               
New home cost of sales 8,699     7,896     803     10.2 %   21,044     17,513     3,531     20.2 %
Pre-owned home cost of sales 16,395     14,039     2,356     16.8 %   46,955     41,290     5,665     13.7 %
Cost of home sales 25,094     21,935     3,159     14.4 %   67,999     58,803     9,196     15.6 %
                               
NOI / Gross Profit (1) $ 8,103     $ 9,276     $ (1,173 )   (12.7 )%   $ 23,320     $ 23,184     $ 136     0.6 %
                               
Gross profit - new homes $ 1,632     $ 1,495     $ 137     9.2 %   $ 3,716     $ 2,959     $ 757     25.6 %
Gross margin % - new homes 15.8 %   15.9 %   (0.1 )%       15.0 %   14.5 %   0.5 %    
Average selling price - new homes* $ 101,284     $ 90,298     $ 10,986     12.2 %   $ 95,598     $ 89,397     $ 6,201     6.9 %
                               
Gross profit - pre-owned homes $ 6,471     $ 7,781     $ (1,310 )   (16.8 )%   $ 19,604     $ 20,225     $ (621 )   (3.1 )%
Gross margin % - pre-owned homes 28.3 %   35.7 %   (7.4 )%       29.5 %   32.9 %   (3.4 )%    
Average selling price - pre-owned homes* $ 32,526     $ 27,585     $ 4,941     17.9 %   $ 30,630     $ 28,205     $ 2,425     8.6 %
                               
Home sales volume:                
New home sales* 102     104     (2 )   (1.9 )%   259     229     30     13.1 %
Pre-owned home sales* 703     791     (88 )   (11.1 )%   2,173     2,181     (8 )   (0.4 )%
Total homes sold* 805     895     (90 )   (10.1 )%   2,432     2,410     22     0.9 %

               


Acquisitions Summary - Properties Acquired in 2017 and 2016
(amounts in thousands except for statistical data)



    Three Months Ended
 September 30, 2017
  Nine Months Ended
 September 30, 2017
REVENUES:        
Income from real property   $ 45,760     $ 133,443  
PROPERTY AND OPERATING EXPENSES:        
Payroll and benefits   6,098     16,360  
Legal, taxes & insurance   596     1,266  
Utilities   6,890     17,755  
Supplies and repair   1,999     4,912  
Other   2,616     9,566  
Real estate taxes   3,422     10,218  
Property operating expenses   21,621     60,077  
         
NET OPERATING INCOME (NOI) (1)   $ 24,139     $ 73,366  
         
        As of September 30, 2017
Other information:        
Number of properties       117  
Occupied sites (13)       22,526  
Developed sites (13)       23,156  
Occupancy % (13)       97.3 %
Transient sites       7,208  
Monthly base rent per site - MH       $ 619  
Monthly base rent per site - RV (11)       $ 415  
Monthly base rent per site - Total (11)       $ 512  
Ancillary revenues, net (in thousands)       $ 2,384  
         
Home sales:        
Gross profit from home sales (in thousands)       $ 3,266  
New homes sales       64  
Pre-owned homes sales       209  
         
Occupied rental home information:        
Rental program NOI (1) (in thousands)       $ 611  
Number of occupied rentals, end of period       366  
Investment in occupied rental homes (in thousands)       $ 10,679  
Weighted average monthly rental rate       $ 890  


Property Summary                    
(includes MH and Annual RV's)    
                     
COMMUNITIES   9/30/2017   6/30/2017   3/31/2017   12/31/2016   9/30/2016
FLORIDA                    
Communities   121     121     121     121     121  
Developed sites (13)   36,587     36,661     36,533     36,326     36,050  
Occupied (13)   35,414     35,479     35,257     35,021     34,745  
Occupancy % (13)   96.8 %   96.8 %   96.5 %   96.4 %   96.4 %
Sites for development   1,469     1,368     1,359     1,461     1,455  
MICHIGAN                    
Communities   68     68     67     67     67  
Developed sites (13)   25,498     25,496     25,024     24,512     24,388  
Occupied (13)   23,996     23,924     23,443     23,248     23,218  
Occupancy % (13)   94.1 %   93.8 %   93.7 %   94.8 %   95.2 %
Sites for development   1,752     1,752     1,798     2,414     2,453  
TEXAS                    
Communities   21     21     21     21     21  
Developed sites (13)   6,410     6,312     6,292     6,186     6,088  
Occupied (13)   6,041     6,021     5,943     5,862     5,774  
Occupancy % (13)   94.2 %   95.4 %   94.5 %   94.8 %   94.8 %
Sites for development   1,277     1,345     1,387     1,474     1,455  
CALIFORNIA                    
Communities   27     23     23     22     22  
Developed sites (13)   5,693     4,894     4,865     4,862     4,863  
Occupied (13)   5,630     4,834     4,804     4,793     4,792  
Occupancy % (13)   98.9 %   98.8 %   98.7 %   98.6 %   98.5 %
Sites for development   379     367     411     332     332  
ONTARIO, CANADA                    
Communities   15     15     15     15     15  
Developed sites (13)   3,620     3,564     3,451     3,368     3,453  
Occupied (13)   3,620     3,564     3,451     3,368     3,453  
Occupancy % (13)   100.0 %   100.0 %   100.0 %   100.0 %   100.0 %
Sites for development   1,628     1,628     1,628     1,599     2,029  
ARIZONA                    
Communities   11     11     11     11     11  
Developed sites (13)   3,602     3,589     3,582     3,565     3,567  
Occupied (13)   3,410     3,383     3,370     3,338     3,305  
Occupancy % (13)   94.7 %   94.3 %   94.1 %   93.6 %   92.7 %
Sites for development   269     269     269     358     358  
INDIANA                    
Communities   11     11     11     11     11  
Developed sites (13)   2,900     2,900     2,900     2,900     2,900  
Occupied (13)   2,759     2,758     2,741     2,724     2,712  
Occupancy % (13)   95.1 %   95.1 %   94.5 %   93.9 %   93.5 %
Sites for development   330     330     330     316     316  
OHIO                    
Communities   9     9     9     9     9  
Developed sites (13)   2,757     2,735     2,719     2,715     2,719  
Occupied (13)   2,676     2,643     2,623     2,595     2,602  
Occupancy % (13)   97.1 %   96.6 %   96.5 %   95.6 %   95.7 %
Sites for development   75     75     75     -     -  
COLORADO                    
Communities   8     8     8     8     7  
Developed sites (13)   2,335     2,335     2,335     2,335     2,335  
Occupied (13)   2,318     2,326     2,329     2,325     2,323  
Occupancy % (13)   99.3 %   99.6 %   99.7 %   99.6 %   99.5 %
Sites for development   670     656     656     656     304  
OTHER STATES                    
Communities   57     57     56     56     55  
Developed sites (13)   14,957     14,891     14,567     14,313     14,415  
Occupied (13)   14,532     14,439     14,130     13,919     13,991  
Occupancy % (13)   97.2 %   97.0 %   97.0 %   97.3 %   97.1 %
Sites for development   2,540     2,582     1,977     1,727     1,723  
TOTAL - PORTFOLIO                    
Communities   348     344     342     341     339  
Developed sites (13)   104,359     103,377     102,268     101,082     100,778  
Occupied (13)   100,396     99,371     98,091     97,193     96,915  
MH & RV blended occupancy % (13)   96.2 %   96.1 %   95.9 %   96.2 %   96.2 %
Sites for development   10,389     10,372     9,890     10,337     10,425  
% Communities age restricted   33.6 %   32.8 %   33.0 %   33.1 %   33.3 %
                     
TRANSIENT RV PORTFOLIO SUMMARY                    
 Location                    
Florida   6,133     6,244     6,467     6,497     7,232  
Texas   1,392     1,403     1,412     1,407     1,446  
Ontario, Canada   1,262     1,314     1,451     1,500     1,485  
New Jersey   1,016     1,028     1,059     1,042     1,047  
Arizona   1,012     1,025     1,032     1,049     1,047  
California   808     808     840     513     478  
New York   623     630     588     830     484  
Maine   529     533     543     555     556  
Indiana   520     520     520     502     501  
Michigan   258     260     210     204     203  
Ohio   147     169     194     198     194  
Other locations   2,215     2,253     1,966     1,997     1,801  
Total transient RV sites   15,915     16,187     16,282     16,294     16,474  


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


  Recurring                    
  Capital Recurring                
  Expenditures Capital Lot     Expansion & Revenue
    Average/Site*   Expenditures (14)   Modifications (15)   Acquisitions (16)   Development (17)   Producing (18)
YTD 2017   $ 192     $ 12,551     $ 18,085     $ 136,117     $ 55,888     $ 1,250  
2016   $ 211     $ 17,613     $ 19,040     $ 1,822,564     $ 47,958     $ 2,631  
2015   $ 230     $ 20,344     $ 13,961     $ 1,214,482     $ 28,660     $ 4,497  

Operating Statistics for Manufactured Homes and Annual RV's



  Resident Net Leased New Home Pre-owned Brokered
LOCATIONS Move-outs Sites (19) Sales Home Sales Re-sales
Florida   783     553     118     281     934  
Michigan   364     458     25     1,012     98  
Texas   175     179     21     248     26  
California   26     16     6     16     26  
Arizona   39     72     19     18     135  
Ontario, Canada   161     252     24     31     191  
Indiana   37     35     1     165     15  
Ohio   80     81     -     89     4  
Colorado   9     (7 )   4     102     38  
Other locations   441     194     41     211     115  
Nine Months Ended September 30, 2017   2,115     1,833     259     2,173     1,582  

  Resident Net Leased New Home Pre-owned Brokered
TOTAL FOR YEAR ENDED Move-outs Sites (19) Sales Home Sales Re-sales
2016   1,722     1,686     329     2,843     1,655  
2015   1,344     1,905     273     2,210     1,244  

  Resident Resident
PERCENTAGE TRENDS Move-outs Re-sales
2017 (TTM)   1.9 %   6.4 %
2016   2.0 %   6.1 %
2015   2.0 %   5.9 %

Footnotes and Definitions       
          


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

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 period over period, reflects the impact to operations from trends in occupancy rates, rental rates, and operating costs, providing perspective not readily apparent from net income (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.  The Company also uses FFO excluding certain items, which excludes certain gain and loss items that management considers unrelated to the operational and financial performance of our core business.  We believe that this provides investors with another financial measure of our operating performance that is more comparable when evaluating period over period results.

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 that, when combined with measures computed in accordance with GAAP such as net income (loss), cash flow from operating activities, investing activities and financing activities, provide investors with an indication of our ability to service debt and to fund acquisitions and other expenditures.  Other REITs may use different methods for calculating FFO, accordingly, our FFO may not be comparable to other REITs.

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. Because of the inclusion of items such as interest, depreciation, and amortization, the use of 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. 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, therefore, NOI is a measure of the operating performance of the properties of the Company rather than of the Company overall.

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. The Company believes that net income (loss) is the most directly comparable GAAP measurement to EBITDA.

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

(3)  This is a transferred asset transaction which has been classified as collateralized receivables and the cash received from this transaction has been classified as a secured borrowing. The interest income and interest expense accrue at the same rate/amount.

(4)   Other income, net for the quarter ended September 30, 2017, is comprised of a foreign currency translation gain of $3.4 million partially offset by contingent liability re-measurement of $0.1 million.  For the nine months ended September 30, 2017, Other income, net is comprised of a foreign currency translation gain of $6.4 million, partially offset by contingent liability re-measurement of $1.1 million.

(5)  These costs represent the first year expenses incurred to bring 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.

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

(7)  The renter's monthly payment includes the site rent and an amount attributable to the leasing of the home. The site rent is reflected in Real Property NOI. For purposes of management analysis, the site rent is included in the Rental Program revenue to evaluate the incremental revenue gains associated with implementation of the Rental Program, and to assess the overall growth and performance of the Rental Program and financial impact on our operations.

(8)  Lines of credit also includes the Company's MH floor plan facility. The effective interest rate on the MH floor plan facility was 7.0 percent for all periods presented. However, the Company pays no interest if the floor plan balance is repaid within 60 days.

(9) MH occupancy excludes recently completed but vacant expansion sites. RV occupancy includes annual sites and excludes transient RV sites.

(10) The occupancy percentage for 2016 has been adjusted to reflect incremental growth period-over-period from filled expansion sites and the conversion of transient RV sites to annual RV sites.

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

(12) Calculated using actual results without rounding.

(13) Includes MH and annual RV sites, and excludes transient RV sites.

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

(15) Includes capital expenditures which 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.

(16) Acquisitions represent the purchase price of existing operating communities and land parcels to develop expansions or new communities. Acquisitions for the nine months ended September 30, 2017 also include $65.9 million of capital improvements identified during due diligence that are necessary to bring the community up to the Company's standards. 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, they often require 24 to 36 months after closing to complete.

(17) Expansion and development costs consist primarily of construction costs and costs necessary to complete home site improvements.

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

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

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


3rd Quarter 2017 Press Release and Supplemental



This announcement is distributed by Nasdaq Corporate Solutions on behalf of Nasdaq Corporate Solutions clients.
The issuer of this announcement warrants that they are solely responsible for the content, accuracy and originality of the information contained therein.
Source: Sun Communities via Globenewswire

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