Maryland | 1-12616 | 38-2730780 | ||
(State or other jurisdiction of incorporation) | (Commission File Number) | (IRS Employer Identification No.) |
27777 Franklin Rd. | ||
Suite 200 | ||
Southfield, Michigan | 48034 | |
(Address of Principal Executive Offices) | (Zip Code) |
(248) 208-2500 |
Item 2.02 | Results of Operations and Financial Condition |
Item 9.01 | Financial Statements and Exhibits |
(d) | Exhibits. |
99.1 | Press release issued October 29, 2013 |
SUN COMMUNITIES, INC. | |||
Dated: October 29, 2013 | By: | /s/ Karen J. Dearing | |
Karen J. Dearing, Executive Vice President, Chief Financial Officer, Secretary and Treasurer |
Exhibit No. | Description | |
99.1 | Press release issued October 29, 2013 | |
• | FFO(1) excluding $0.6 million of acquisitions costs was $0.82 per diluted share and OP unit ("Share") for the three months ended September 30, 2013 as compared to $0.71 per Share for the three months ended September 30, 2012. |
• | Same site Net Operating Income (“NOI”)(2) increased by 5.1 percent as compared to the three months ended September 30, 2012. |
• | Total portfolio occupancy increased by 2.8 from 86.8 percent at September 30, 2012 to 89.6 percent at September 30, 2013. |
• | Total home sales increased 23.3 percent as compared to the three months ended September 30, 2012. |
(1) | Funds from operations (“FFO”) is defined by the National Association of Real Estate Investment Trusts (“NAREIT”) as net income (loss) (computed in accordance with generally accepted accounting principles “GAAP”), excluding gains (or losses) from sales of depreciable operating property, plus real estate-related depreciation and amortization, and after adjustments for unconsolidated partnerships and joint ventures. FFO is a non-GAAP financial measure that management believes is a useful supplemental measure of the Company's operating performance. Management generally considers FFO to be a useful measure for reviewing comparative operating and financial performance because, by excluding gains and losses related to sales of previously depreciated operating real estate assets, impairment and excluding real estate asset depreciation and amortization (which can vary among owners of identical assets in similar condition based on historical cost accounting and useful life estimates), FFO provides a performance measure that, when compared year over year, reflects the impact to operations from trends in occupancy rates, rental rates and operating costs, providing perspective not readily apparent from net loss. Management believes that the use of FFO has been beneficial in improving the understanding of operating results of REITs among the investing public and making comparisons of REIT operating results more meaningful. FFO is computed in accordance with the Company's interpretation of standards established by NAREIT, which may not be comparable to FFO reported by other REITs that do not define the term in accordance with the current NAREIT definition or that interpret the current NAREIT definition differently than the Company. |
(2) | Investors in and analysts following the real estate industry utilize NOI as a supplemental performance measure. NOI is derived from revenues minus property operating expenses and real estate taxes. NOI does not represent cash generated from operating activities in accordance with GAAP and should not be considered to be an alternative to net income (loss) (determined in accordance with GAAP) as an indication of the Company's financial performance or to be an alternative to cash flow from operating activities (determined in accordance with GAAP) as a measure of the Company's liquidity; nor is it indicative of funds available for the Company's cash needs, including its ability to make cash distributions. The Company believes that net income (loss) is the most directly comparable GAAP measurement to NOI. Net income (loss) includes interest and depreciation and amortization which often have no effect on the market value of a property and therefore limit its use as a performance measure. In addition, such expenses are often incurred at a parent company level and therefore are not necessarily linked to the performance of a real estate asset. The Company believes that NOI is helpful to investors as a measure of operating performance because it is an indicator of the return on property investment, and provides a method of comparing property performance over time. The Company uses NOI as a key management tool when evaluating performance and growth of particular properties and/or groups of properties. The principal limitation of NOI is that it excludes depreciation, |
(unaudited) September 30, 2013 | December 31, 2012 | ||||||
ASSETS | |||||||
Investment property, net (including $56,326 for consolidated variable interest entities at September 30, 2013 and December 31, 2012) | $ | 1,695,317 | $ | 1,518,136 | |||
Cash and cash equivalents | 4,955 | 29,508 | |||||
Inventory of manufactured homes | 4,005 | 7,527 | |||||
Notes and other receivables, net | 170,584 | 139,850 | |||||
Other assets | 61,830 | 59,607 | |||||
TOTAL ASSETS | $ | 1,936,691 | $ | 1,754,628 | |||
LIABILITIES | |||||||
Debt (including $45,386 and $45,900 for consolidated variable interest entities at September 30, 2013 and December 31, 2012, respectively) | $ | 1,353,448 | $ | 1,423,720 | |||
Lines of credit | 54,765 | 29,781 | |||||
Other liabilities | 108,782 | 88,137 | |||||
TOTAL LIABILITIES | $ | 1,516,995 | $ | 1,541,638 | |||
Commitments and contingencies | |||||||
STOCKHOLDERS’ EQUITY | |||||||
Preferred stock, $0.01 par value, 10,000 shares authorized (3,400 shares issued at September 30, 2013 and December 31, 2012, respectively) | $ | 34 | $ | 34 | |||
Common stock, $0.01 par value. Authorized: 90,000 shares; Issued and outstanding: 36,140 at September 30, 2013 and 29,755 shares at December 31, 2012 | 361 | 298 | |||||
Additional paid-in capital | 1,140,625 | 876,620 | |||||
Accumulated other comprehensive loss | (454 | ) | (696 | ) | |||
Distributions in excess of accumulated earnings | (739,197 | ) | (683,734 | ) | |||
Total Sun Communities, Inc. stockholders' equity | 401,369 | 192,522 | |||||
Noncontrolling interests: | |||||||
Series A-1 preferred OP units | 45,548 | 45,548 | |||||
Series A-3 preferred OP units | 3,463 | — | |||||
Common OP units | (29,764 | ) | (24,572 | ) | |||
Consolidated variable interest entities | (920 | ) | (508 | ) | |||
Total noncontrolling interest | 18,327 | 20,468 | |||||
TOTAL STOCKHOLDERS’ EQUITY | 419,696 | 212,990 | |||||
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY | $ | 1,936,691 | $ | 1,754,628 |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
2013 | 2012 | 2013 | 2012 | ||||||||||||
REVENUES | |||||||||||||||
Income from real property | $ | 80,158 | $ | 63,015 | $ | 234,969 | $ | 188,818 | |||||||
Revenue from home sales | 14,145 | 10,461 | 40,200 | 31,513 | |||||||||||
Rental home revenue | 8,445 | 6,712 | 23,783 | 19,514 | |||||||||||
Ancillary revenues, net | 932 | (112 | ) | 1,376 | (124 | ) | |||||||||
Interest | 3,442 | 2,847 | 9,587 | 7,907 | |||||||||||
Brokerage commissions and other income, net | 79 | 95 | 349 | 530 | |||||||||||
Total revenues | 107,201 | 83,018 | 310,264 | 248,158 | |||||||||||
COSTS AND EXPENSES | |||||||||||||||
Property operating and maintenance | 24,379 | 18,067 | 66,593 | 51,261 | |||||||||||
Real estate taxes | 5,602 | 4,933 | 17,146 | 14,741 | |||||||||||
Cost of home sales | 10,161 | 7,791 | 29,360 | 24,535 | |||||||||||
Rental home operating and maintenance | 5,504 | 5,118 | 14,252 | 13,090 | |||||||||||
General and administrative - real property | 5,927 | 5,165 | 19,086 | 15,405 | |||||||||||
General and administrative - home sales and rentals | 2,227 | 1,905 | 7,473 | 5,985 | |||||||||||
Acquisition related costs | 619 | 847 | 2,769 | 1,434 | |||||||||||
Depreciation and amortization | 28,790 | 22,092 | 80,116 | 63,027 | |||||||||||
Interest | 17,823 | 17,066 | 54,888 | 50,644 | |||||||||||
Interest on mandatorily redeemable debt | 809 | 825 | 2,430 | 2,499 | |||||||||||
Total expenses | 101,841 | 83,809 | 294,113 | 242,621 | |||||||||||
Income (loss) before income taxes and distributions from affiliate | 5,360 | (791 | ) | 16,151 | 5,537 | ||||||||||
Provision for state income taxes | (90 | ) | (84 | ) | (186 | ) | (190 | ) | |||||||
Distributions from affiliate | 700 | 600 | 1,550 | 3,250 | |||||||||||
Net income (loss) | 5,970 | (275 | ) | 17,515 | 8,597 | ||||||||||
Less: Preferred return to Series A-1 preferred OP units | 690 | 586 | 1,909 | 1,744 | |||||||||||
Less: Preferred return to Series A-3 preferred OP units | 45 | — | 121 | — | |||||||||||
Less: Amounts attributable to noncontrolling interests | (28 | ) | (211 | ) | 415 | 463 | |||||||||
Net income (loss) attributable to Sun Communities, Inc. | 5,263 | (650 | ) | 15,070 | 6,390 | ||||||||||
Less: Series A preferred stock distributions | 1,514 | — | 4,542 | — | |||||||||||
Net income (loss) attributable to Sun Communities, Inc. common stockholders | $ | 3,749 | $ | (650 | ) | $ | 10,528 | $ | 6,390 | ||||||
Weighted average common shares outstanding: | |||||||||||||||
Basic | 36,128 | 26,938 | 34,263 | 26,427 | |||||||||||
Diluted | 36,143 | 26,938 | 34,279 | 26,444 | |||||||||||
Earnings per share: | |||||||||||||||
Basic | $ | 0.10 | $ | (0.02 | ) | $ | 0.31 | $ | 0.24 | ||||||
Diluted | $ | 0.10 | $ | (0.02 | ) | $ | 0.31 | $ | 0.24 | ||||||
Dividends per common share: | $ | 0.63 | $ | 0.63 | $ | 1.89 | $ | 1.89 |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
2013 | 2012 | 2013 | 2012 | ||||||||||||
Net income attributable to Sun Communities, Inc. common stockholders | $ | 3,749 | $ | (650 | ) | $ | 10,528 | $ | 6,390 | ||||||
Adjustments: | |||||||||||||||
Preferred return to Series A-1 preferred OP units | 690 | 586 | 1,909 | 1,744 | |||||||||||
Preferred return to Series A-3 preferred OP units | 45 | — | 121 | — | |||||||||||
Amounts attributable to noncontrolling interests | (28 | ) | (211 | ) | 415 | 463 | |||||||||
Depreciation and amortization | 29,242 | 22,365 | 80,926 | 63,798 | |||||||||||
Gain on disposition of assets, net | (2,190 | ) | (1,427 | ) | (5,806 | ) | (3,324 | ) | |||||||
Funds from operations ("FFO") (1) | 31,508 | 20,663 | 88,093 | 69,071 | |||||||||||
Adjustments: | |||||||||||||||
Acquisition related costs | 619 | 847 | 2,769 | 1,434 | |||||||||||
Funds from operations excluding certain items | $ | 32,127 | $ | 21,510 | $ | 90,862 | $ | 70,505 | |||||||
Weighted average common shares outstanding: | 35,499 | 26,938 | 33,802 | 26,145 | |||||||||||
Add: | |||||||||||||||
Common OP Units | 2,069 | 2,070 | 2,069 | 2,071 | |||||||||||
Restricted stock | 629 | 289 | 461 | 282 | |||||||||||
Common stock issuable upon conversion of Series A-1 preferred OP units | 1,111 | 1,111 | 1,111 | 1,111 | |||||||||||
Common stock issuable upon conversion of Series A-3 preferred OP units | 75 | — | 64 | — | |||||||||||
Common stock issuable upon conversion of stock options | 15 | 18 | 16 | 17 | |||||||||||
Weighted average common shares outstanding - fully diluted | 39,398 | 30,426 | 37,523 | 29,626 | |||||||||||
FFO(1) per Share - fully diluted | $ | 0.80 | $ | 0.68 | $ | 2.36 | $ | 2.34 | |||||||
FFO(1) per Share excluding certain items - fully diluted | $ | 0.82 | $ | 0.71 | $ | 2.44 | $ | 2.39 |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||||||||
2013 | 2012 | Change | % Change | 2013 | 2012 | Change | % Change | ||||||||||||||||||||||
REVENUES: | |||||||||||||||||||||||||||||
Income from real property | $ | 60,621 | $ | 57,835 | $ | 2,786 | 4.8 | % | $ | 183,699 | $ | 175,159 | $ | 8,540 | 4.9 | % | |||||||||||||
PROPERTY OPERATING EXPENSES: | |||||||||||||||||||||||||||||
Payroll and benefits | 5,451 | 5,054 | 397 | 7.9 | % | 15,739 | 14,608 | 1,131 | 7.7 | % | |||||||||||||||||||
Legal, taxes, & insurance | 1,100 | 865 | 235 | 27.2 | % | 2,955 | 2,283 | 672 | 29.4 | % | |||||||||||||||||||
Utilities | 3,217 | 3,234 | (17 | ) | (0.5 | )% | 10,370 | 10,159 | 211 | 2.1 | % | ||||||||||||||||||
Supplies and repair | 2,812 | 2,768 | 44 | 1.6 | % | 7,145 | 7,551 | (406 | ) | (5.4 | )% | ||||||||||||||||||
Other | 1,613 | 1,472 | 141 | 9.6 | % | 4,226 | 4,033 | 193 | 4.8 | % | |||||||||||||||||||
Real estate taxes | 4,754 | 4,806 | (52 | ) | (1.1 | )% | 14,677 | 14,545 | 132 | 0.9 | % | ||||||||||||||||||
Property operating expenses | 18,947 | 18,199 | 748 | 4.1 | % | 55,112 | 53,179 | 1,933 | 3.6 | % | |||||||||||||||||||
NET OPERATING INCOME ("NOI")(2) | $ | 41,674 | $ | 39,636 | $ | 2,038 | 5.1 | % | $ | 128,587 | $ | 121,980 | $ | 6,607 | 5.4 | % |
As of September 30, | |||||||||||
OTHER INFORMATION | 2013 | 2012 | Change | ||||||||
Number of properties | 159 | 159 | — | ||||||||
Developed sites | 55,138 | 54,844 | 294 | ||||||||
Occupied sites (3) | 46,445 | 45,163 | 1,282 | ||||||||
Occupancy % (3) (4) | 88.8 | % | 87.2 | % | 1.6 | % | |||||
Weighted average monthly rent per site - MH | $ | 443 | $ | 431 | $ | 12 | |||||
Weighted average monthly rent per site - Annual RV (5) | $ | 420 | $ | 409 | $ | 11 | |||||
Sites available for development | 5,924 | 6,217 | (293 | ) |
(3) | Occupied sites and occupancy % include manufactured housing and annual RV sites, and exclude transient RV sites. |
(4) | Occupancy % excludes recently completed but vacant expansion sites. |
(5) | Weighted average rent pertains to annual RV sites and excludes transient RV sites. |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||||||||
2013 | 2012 | Change | % Change | 2013 | 2012 | Change | % Change | ||||||||||||||||||||||
REVENUES: | |||||||||||||||||||||||||||||
Rental home revenue | $ | 8,445 | $ | 6,712 | $ | 1,733 | 25.8 | % | $ | 23,783 | $ | 19,514 | $ | 4,269 | 21.9 | % | |||||||||||||
Site rent included in income from real property | 11,884 | 9,837 | 2,047 | 20.8 | % | 34,115 | 28,364 | 5,751 | 20.3 | % | |||||||||||||||||||
Rental program revenue | 20,329 | 16,549 | 3,780 | 22.8 | % | 57,898 | 47,878 | 10,020 | 20.9 | % | |||||||||||||||||||
EXPENSES: | |||||||||||||||||||||||||||||
Commissions | 550 | 569 | (19 | ) | (3.3 | )% | 1,804 | 1,647 | 157 | 9.5 | % | ||||||||||||||||||
Repairs and refurbishment | 2,704 | 2,689 | 15 | 0.6 | % | 6,381 | 6,568 | (187 | ) | (2.8 | )% | ||||||||||||||||||
Taxes and insurance | 1,133 | 876 | 257 | 29.3 | % | 3,233 | 2,509 | 724 | 28.9 | % | |||||||||||||||||||
Marketing and other | 1,117 | 984 | 133 | 13.5 | % | 2,834 | 2,366 | 468 | 19.8 | % | |||||||||||||||||||
Rental program operating and maintenance | 5,504 | 5,118 | 386 | 7.5 | % | 14,252 | 13,090 | 1,162 | 8.9 | % | |||||||||||||||||||
NET OPERATING INCOME ("NOI") (2) | $ | 14,825 | $ | 11,431 | $ | 3,394 | 29.7 | % | $ | 43,646 | $ | 34,788 | $ | 8,858 | 25.5 | % | |||||||||||||
Occupied rental home information as of September 30, 2013 and 2012: | |||||||||||||||||||||||||||||
Number of occupied rentals, end of period* | 9,232 | 7,930 | 1,302 | 16.4 | % | ||||||||||||||||||||||||
Investment in occupied rental homes | $ | 338,110 | $ | 276,300 | $ | 61,810 | 22.4 | % | |||||||||||||||||||||
Number of sold rental homes* | 689 | 678 | 11 | 1.6 | % | ||||||||||||||||||||||||
Weighted average monthly rental rate* | $ | 795 | $ | 773 | $ | 22 | 2.8 | % |
Three Months Ended September 30, 2013 | Nine Months Ended September 30, 2013 | ||||||
REVENUES: | |||||||
Income from real property | $ | 15,388 | $ | 39,168 | |||
Revenue from home sales | 1,675 | 4,143 | |||||
Rental home revenue | 303 | 628 | |||||
Ancillary revenues, net | 1,019 | 1,282 | |||||
Total revenues | 18,385 | 45,221 | |||||
COSTS AND EXPENSES: | |||||||
Property operating and maintenance | 6,037 | 14,057 | |||||
Real estate taxes | 848 | 2,469 | |||||
Cost of home sales | 1,377 | 3,357 | |||||
Rental home operating and maintenance | 119 | 258 | |||||
Total expenses | 8,381 | 20,141 | |||||
NET OPERATING INCOME ("NOI") (2) | $ | 10,004 | $ | 25,080 | |||
Home sales volume : | |||||||
Pre-Owned Homes | 95 | ||||||
As of September 30, 2013 | |||||||
Other information: | |||||||
Number of properties | 26 | ||||||
Developed sites | 12,967 | ||||||
Occupied sites (3) | 7,838 | ||||||
Occupancy % (3) | 96.9 | % | |||||
Weighted average monthly rent per site - MH | $ | 421 | |||||
Weighted average monthly rent per site - Annual RV (5) | $ | 350 | |||||
Occupied rental home information : | |||||||
Number of occupied rentals, end of period | 331 | ||||||
Investment in occupied rental homes (in thousands) | $ | 13,613 | |||||
Weighted average monthly rental rate | $ | 872 |
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