Sun Communities, Inc. Reports 2020 Fourth Quarter Results and 2021 Guidance

Source: Nasdaq GlobeNewswire / 17 Feb 2021 16:20:31 America/Chicago

Southfield, MI, Feb. 17, 2021 (GLOBE NEWSWIRE) -- 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”) communities, recreational vehicle (“RV”) resorts and marinas, (collectively, the “properties”), today reported its fourth quarter results for 2020.

Financial Results for the Quarter and Year Ended December 31, 2020

For the quarter ended December 31, 2020, total revenues increased $82.4 million, or 27.3 percent, to approximately $384.3 million compared to $301.8 million for the same period in 2019. Net income attributable to common stockholders was approximately $7.6 million, or $0.07 per diluted common share, for the quarter ended December 31, 2020.

For the year ended December 31, 2020, total revenues increased $134.3 million, or 10.6 percent, to approximately $1.4 billion compared to $1.3 billion for the same period in 2019. Net income attributable to common stockholders was $131.6 million, or $1.34 per diluted common share, for the year ended December 31, 2020.

Non-GAAP Financial Measures and Portfolio Performance

Core Funds from Operations (“Core FFO”)⁽¹⁾ for the quarter ended December 31, 2020, was $1.16 per diluted share and OP unit (“Share”) as compared to $1.10 in the corresponding period in 2019, a 5.5 percent increase. Core FFO⁽¹⁾ for the year ended December 31, 2020, was $5.09 per Share as compared to $4.92 in the prior year, an increase of 3.5 percent.
Same Community⁽²⁾ Net Operating Income (“NOI”)⁽¹⁾ increased by 2.1 percent and 4.0 percent for the quarter and year ended December 31, 2020, respectively, as compared to the corresponding periods in 2019.
Acquired approximately $3.0 billion of operating properties including the $2.1 billion acquisition of Safe Harbor Marinas in 2020.
MH and Annual RV Revenue Producing Sites increased by 578 sites in the fourth quarter and 2,505 sites during the year ended December 31, 2020, bringing total portfolio occupancy to 97.3 percent.
MH and Annual RV Rent Collections for the fourth quarter were over 96.0 percent and 97.0 percent, respectively.

Gary Shiffman, Chief Executive Officer stated, “As we reflect on the events of 2020, we are pleased with our performance and the demonstrated resilience and stability of our business and operating platform, particularly in light of the challenging environment. We generated 4.0 percent same community NOI growth, delivered 3.5 percent year over year Core FFO⁽¹⁾ per Share growth, deployed $3.0 billion into accretive acquisitions and raised approximately $1.9 billion in two equity offerings with strong investor demand. We are well positioned to continue delivering industry leading growth and have a new business line that broadens our opportunity set with the addition of Safe Harbor Marinas.”

Mr. Shiffman continued, “The dedication and perseverance of our team to create value for our shareholders continues to be a key factor in our success.”

OPERATING HIGHLIGHTS

Portfolio Occupancy

Total MH and annual RV occupancy was 97.3 percent at December 31, 2020, compared to 96.4 percent at December 31, 2019, an increase of 90 basis points.

During the quarter ended December 31, 2020, MH and annual RV revenue producing sites increased by 578 sites, bringing full year 2020 revenue producing site gains to 2,505 sites.

Same Community⁽²⁾Results

For the 367 MH and RV properties owned and operated by the Company since January 1, 2019, NOI⁽¹⁾ for the quarter ended December 31, 2020 increased 2.1 percent over the same period in 2019, resulting from a 5.7 percent increase in revenues and a 13.6 percent increase in expenses. Adjusted to remove the impact of $0.3 million of direct COVID-19 related health and safety expense, Same Community NOI⁽¹⁾ growth was 2.4 percent for the quarter ended December 31, 2020. Payroll, utilities and supplies and repair costs were elevated during the quarter primarily due to the extended season of the Company’s northern RV resorts. Same Community occupancy⁽³⁾ increased to 98.8 percent at December 31, 2020 from 97.0 percent at December 31, 2019.

For the year ended December 31, 2020, NOI⁽¹⁾ increased 4.0 percent over the same period in 2019, resulting from a 3.6 percent increase in revenues and a 3.0 percent increase in expenses. Adjusted to remove the impact of $2.4 million of direct COVID-19 related health and safety expense, Same Community NOI⁽¹⁾ growth was 4.4 percent for the year ended December 31, 2020.

Home Sales

During the quarter ended December 31, 2020, the Company sold 782 homes as compared to 808 homes in the same period in 2019. The Company sold 156 and 140 new homes for the quarters ended December 31, 2020 and 2019, respectively, an increase of 11.4 percent. Pre-owned home sales were 626 in the fourth quarter 2020 as compared to 668 in the same period in 2019. Rental home sales, which are included in total pre-owned home sales, were 269 and 281 for the quarters ended December 31, 2020 and 2019, respectively.

During the year ended December 31, 2020, the Company sold 2,866 homes as compared to 3,439 homes sold during 2019. The Company sold 570 and 571 new homes during the years ended December 31, 2020 and 2019, respectively. Pre-owned home sales were 2,296 during the year ended December 31, 2020, as compared to 2,868 during 2019. Rental home sales, which are included in total pre-owned home sales, were 850 and 1,140 for the years ended December 31, 2020 and 2019, respectively.

Rent Collections

For the fourth quarter of 2020, MH and annual RV rent collections were over 96.0 percent and 97.0 percent, respectively, after adjusting for the impact of COVID-19 related hardship deferrals and prepaid rent balances.

January 2021 rent collections were 97.0 percent for MH and 97.0 percent for annual RV.

PORTFOLIO ACTIVITY

Acquisitions

During and subsequent to the quarter ended December 31, 2020, the Company acquired the following communities and resorts:

Property Name	Property Type	Sites	State	Total Purchase Price (in millions)		Month Acquired
Gig Harbor	RV	115	WA	$	15.3	November
Maine MH Portfolio^(a)	MH	1,083	ME	$	81.3	November
Mouse Mountain	MH / RV	304	FL	$	15.5	December
Lakeview Mobile Estates	MH	296	CA	$	23.8	December
Shenandoah Acres	RV	522	VA	$	17.0	December
Jellystone at Barton Lake	RV	555	IN	$	24.0	December
Kittatinny Portfolio^(b)	RV	527	NY & PA	$	16.3	December
Association Island KOA	RV	294	NY	$	15.0	January
Blue Water	RV	177	UT	$	9.0	February
Tranquility MHC	MH	25	FL	$	1.3	February
		3,898		$	218.5

^(a) Includes six MH communities.

^(b) Includes two RV resorts.

During and subsequent to the quarter ended December 31, 2020, the Company acquired the following marinas:

Property Name	Wet Slips & Dry Storage Spaces	State	Total Purchase Price (in millions)		Month Acquired
Safe Harbor Marinas^(a)	37,305	Various	$	2,016.4	October
Hideaway Bay^(b)	628	GA	$	32.9	November
Anacapa Isle^(b)	453	CA	$	13.9	December
Annapolis	184	MD	$	31.0	December
Wickford	60	RI	$	3.5	December
Rybovich Portfolio^(c)	78	FL	$	368.8	December
Rockland	173	ME	$	16.0	December
Islamorada and Angler House^(d)	251	FL	$	18.0	February
	39,132		$	2,500.5

^(a)Includes 99 owned marinas located in 22 states. In conjunction with the acquisition, the Company issued Series H preferred OP units. As of December 31, 2020, 581,407 Series H preferred OP units were outstanding.

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

^(c) Includes two marinas. In conjunction with the acquisition, the Company issued Series I preferred OP units. As of December 31, 2020, 922,000 Series I preferred OP units were outstanding.

^(d) Includes two marinas.

During the year ended December 31, 2020, the Company acquired 24 MH communities and RV resorts with 6,919 sites and 106 marinas with over 38,800 wet slips and dry rack storage spaces for a total purchase price of approximately $3.0 billion.

Construction Activity

During the quarter ended December 31, 2020, the Company completed the construction of nearly 50 sites in two ground-up developments and one redevelopment property, and over 120 expansion sites in one RV resort and one MH community. Full-year ground-up and redevelopment site deliveries were over 1,000 sites in five properties and over 300 total expansion sites in eight properties.

BALANCE SHEET, CAPITAL MARKETS ACTIVITY AND OTHER ITEMS

Debt Transactions

As of December 31, 2020, the Company had approximately $4.8 billion of debt outstanding. The weighted average interest rate was 3.4 percent and the weighted average maturity was 9.4 years. The Company had $83.0 million of unrestricted cash on hand. At December 31, 2020, the Company’s net debt to trailing twelve-month Recurring EBITDA⁽¹⁾ ratio was 6.9 times, which includes all of Safe Harbor’s debt, but only two months of its EBITDA contribution.

During the quarter ended December 31, 2020, as previously disclosed, the Company entered into a new $260.0 million term loan secured by 11 MH and RV properties. The loan has a 12-year maturity and a fixed interest rate of 2.64 percent.

Equity Transactions

During the quarter ended December 31, 2020, as previously disclosed, the Company closed an underwritten registered public offering of 9,200,000 shares of common stock. Proceeds from the offering were $1.2 billion after deducting expenses related to the offering. The Company used the net proceeds of the offering to fund the cash portion of the acquisition of Safe Harbor and for working capital and general corporate purposes.

2021 Distributions

The Company’s Board of Directors has approved setting the 2021 annual distribution rate at $3.32 per common share, an increase of $0.16, or 5.1 percent, over the current $3.16 per common share for 2020. This increase will begin with the first quarter distribution to be paid in April 2021. While the Board of Directors has adopted the new annual distribution policy, the amount of each quarterly distribution on the Company's common stock will be subject to approval by the Board of Directors.

New Director

On February 11, 2020 the Board of Directors increased the size of the board from seven to eight directors and appointed Tonya Allen to the Company’s Board of Directors as an independent director. Ms. Allen brings an expert perspective on sustainability and social issues, an important focus for the Company.

2021 GUIDANCE

The estimates and assumptions presented below represent a range of possible outcomes and may differ materially from actual results. These estimates include contributions from all acquisitions through the date of this release and exclude prospective acquisitions and capital markets activity. The estimates and assumptions are forward-looking based on the Company’s current assessment of economic and market conditions, as well as other risks outlined below under the caption Cautionary Statement Regarding Forward-Looking Statements.

Notes to 2021 guidance:

Includes contributions from recently completed acquisitions
- $218.5 million of MH community and RV resort acquisitions in the fourth quarter 2020 and subsequent to year end
- $437.3 million of marina acquisitions subsequent to the closing of the Safe Harbor transaction on October 30, 2020
Includes a lower transient RV revenue estimate of $8.0 - $10.0 million in the first quarter 2021 due to the extension of the Canadian border closure order and the California travel restrictions imposed through early February, 2021

Earnings and Core FFO⁽¹⁾

	Net Income
Weighted average common shares outstanding (in millions)	106.9
First quarter 2021, basic earnings per share	$0.08 - $0.12
Full year 2021, basic earnings per share	$1.66 - $1.82

	Core FFO⁽¹⁾
Weighted average common shares outstanding, fully diluted (in millions)⁽ⁱ⁾	112.7
First quarter 2021, Core FFO⁽¹⁾ per Share	$1.13 - $1.17
Full year 2021, Core FFO⁽¹⁾per Share	$5.79 - $5.95

(i) Certain securities that are dilutive to the computation of Core FFO⁽¹⁾ per fully diluted share in the table above have been excluded from the computation of net income per fully diluted share, as inclusion of these securities would have been anti-dilutive to net income per fully diluted share.

		1Q21			2Q21			3Q21			4Q21
Seasonality of Core FFO⁽¹⁾		19.6	%		26.2	%		32.8	%		21.4	%

Total MH and RV Portfolio

Number of properties: 446

	2020 Actual (in millions)		2021E Change %
Income from real property	$	1,002.4	10.9% - 11.4%
Total property operating expenses	367.3		13.7% - 14.4%
Net operating income	$	635.1	8.8% - 10.1%

		1Q21			2Q21			3Q21			4Q21
Seasonality of total MH and RV portfolio NOI		22.6	%		25.0	%		28.6	%		23.8	%

	2021E
MH weighted average monthly rental rate increase	3.2	%
RV weighted average monthly rental rate increase	4.3	%
Blended weighted average monthly rental rate increase	3.4	%

Increase in revenue producing sites	2,150 - 2,350

New home sales volume	550 - 650
Pre-owned home sales volume	2,400 - 2,600

Newly built ground-up and expansion sites	1,200 - 1,600

General and Administrative Expenses

		2021E
General and administrative expenses		$163.7 - $167.3

General and administrative expenses include the impact of the Company’s entry into the marina asset class. The marina portfolio is operated as an independent wholly-owned subsidiary retaining its own senior management, property management and back office operations. As significant growth potential through the consolidation of the highly fragmented marina industry is anticipated, costs associated with scaling to effectively operate a larger portfolio are required. As a general practice, marina acquisitions are underwritten with an expected incremental general and administrative cost of 3.0 percent of revenues.

Same Community⁽²⁾Portfolio

Number of MH and RV properties: 407

Same community NOI⁽¹⁾ growth is expected to be between 5.6 percent and 6.6 percent for full year 2021.

Marinas

NOI⁽¹⁾ inclusive of the contribution from service and ancillary operations is expected to be $163.0 million - $169.0 million.

		1Q21			2Q21			3Q21			4Q21
Seasonality of marina NOI⁽¹⁾		18.0	%		29.0	%		28.6	%		24.4	%

EARNINGS CONFERENCE CALL

A conference call to discuss fourth quarter operating results will be held on Thursday, February 18, 2021 at 11:00 A.M. (ET). To participate, call toll-free 877-407-9039. Callers outside the U.S. or Canada can access the call at 201-689-8470. A replay will be available following the call through March 4, 2021 and can be accessed toll-free by calling 844-512-2921 or 412-317-6671. The Conference ID number for the call and the replay is 13713712. The conference call will be available live on Sun Communities’ website located at www.suncommunities.com. The replay will also be available on the website.

Sun Communities, Inc. is a REIT that, as of December 31, 2020, owned, operated, or had an interest in a portfolio of 552 developed MH, RV and marina properties comprising over 188,000 developed sites in 39 states and Ontario, Canada.

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

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

This press release contains various “forward-looking statements” within the meaning of the Securities Act of 1933, as amended, and the Securities Exchange Act of 1934, as amended, and the Company intends that such forward-looking statements will be subject to the safe harbors created thereby. For this purpose, any statements contained in this press release that relate to expectations, beliefs, projections, future plans and strategies, trends or prospective events or developments and similar expressions concerning matters that are not historical facts are deemed to be forward-looking statements. Words such as “forecasts,” “intends,” “intend,” “intended,” “goal,” “estimate,” “estimates,” “expects,” “expect,” “expected,” “project,” “projected,” “projections,” “plans,” “predicts,” “potential,” “seeks,” “anticipates,” “anticipated,” “should,” “could,” “may,” “will,” “designed to,” “foreseeable future,” “believe,” “believes,” “scheduled,” “guidance”, “target” and similar expressions are intended to identify forward-looking statements, although not all forward looking statements contain these words. These forward-looking statements reflect the Company’s current views with respect to future events and financial performance, but involve known and unknown risks, uncertainties and other factors, both general and specific to the matters discussed in or incorporated herein, some of which are beyond the Company’s control. These risks, uncertainties and other factors may cause the Company’s actual results to be materially different from any future results expressed or implied by such forward-looking statements. In addition to the risks disclosed under “Risk Factors” contained in the Company’s Annual Report on Form 10-K for the year ended December 31, 2019, the Company’s Quarterly Reports on Form 10-Q for the quarters ended March 31, 2020 and September 30, 2020, and the Company’s other filings with the Securities and Exchange Commission from time to time, such risks, uncertainties and other factors include but are not limited to:

outbreaks of disease, including the COVID-19 pandemic, and related stay at home orders, quarantine policies and restrictions on travel, trade and business operations;
changes in general economic conditions, the real estate industry and the markets in which the Company operates;
difficulties in the Company’s ability to evaluate, finance, complete and integrate acquisitions, developments and expansions successfully;
the Company’s liquidity and refinancing demands;
the Company’s ability to obtain or refinance maturing debt;
the Company’s ability to maintain compliance with covenants contained in its debt facilities;
availability of capital;
changes in foreign currency exchange rates, including between the U.S. dollar and each of the Canadian and Australian dollars;
the Company’s ability to maintain rental rates and occupancy levels;
the Company’s ability to maintain effective internal control over financial reporting and disclosure controls and procedures;
increases in interest rates and operating costs, including insurance premiums and real property taxes;
risks related to natural disasters such as hurricanes, earthquakes, floods, and wildfires;
general volatility of the capital markets and the market price of shares of the Company’s capital stock;
the Company’s ability to maintain its status as a REIT;
changes in real estate and zoning laws and regulations;
legislative or regulatory changes, including changes to laws governing the taxation of REITs;
litigation, judgments or settlements;
competitive market forces;
the ability of purchasers of manufactured homes and boats to obtain financing; and
the level of repossessions by manufactured home 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 in this press release, whether as a result of new information, future events, changes in its expectations or otherwise, except as required by law.

Although the Company believes that the expectations reflected in the forward-looking statements are reasonable, it cannot guarantee future results, levels of activity, performance or achievements. All written and oral forward-looking statements attributable to the Company or persons acting on its behalf are qualified in their entirety by these cautionary statement.

Investor Information

RESEARCH COVERAGE

Firm	Analyst	Phone	Email
Bank of America Merrill Lynch	Joshua Dennerlein	(646) 855-1681	joshua.dennerlein@baml.com
Berenberg Capital Markets	Keegan Carl	(646) 949-9052	keegan.carl@berenberg-us.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	Steve Sakwa	(212) 446-9462	steve.sakwa@evercoreisi.com
	Samir Khanal	(212) 888-3796	samir.khanal@evercoreisi.com
Green Street Advisors	John Pawlowski	(949) 640-8780	jpawlowski@greenstreetadvisors.com
Robert W. Baird & Co.	Wesley Golladay	(216) 737-7510	wgolladay@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 December 31, 2020)

Portfolio Map - 02-17-2021 v2.jpg

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

	Quarter Ended
	12/31/2020		9/30/2020		6/30/2020		3/31/2020			12/31/2019
Financial Information
Total revenues	$	384,265	$	400,514	$	303,266	$	310,302		$	301,819
Net income / (loss)	$	9,818	$	89,756	$	63,355	$	(15,478	)	$	30,685
Net income / (loss) attributable to Sun Communities Inc. common stockholders	$	7,586	$	81,204	$	58,910	$	(16,086	)	$	28,547
Basic earnings / (loss) per share*	$	0.07	$	0.83	$	0.61	$	(0.17	)	$	0.31
Diluted earnings / (loss) per share*	$	0.07	$	0.83	$	0.61	$	(0.17	)	$	0.31

Cash distributions declared per common share*	$	0.79	$	0.79	$	0.79	$	0.79		$	0.75

Recurring EBITDA⁽¹⁾	$	168,527	$	199,321	$	148,650	$	156,552		$	144,738
FFO attributable to Sun Communities, Inc. common stockholders and dilutive convertible securities⁽¹⁾⁽⁴⁾	$	110,849	$	165,209	$	118,092	$	95,046		$	105,533
Core FFO attributable to Sun Communities, Inc. common stockholders and dilutive convertible securities⁽¹⁾⁽⁴⁾	$	124,872	$	162,624	$	110,325	$	117,267		$	104,534
FFO attributable to Sun Communities, Inc. common stockholders and dilutive convertible securities⁽¹⁾⁽⁴⁾per share - fully diluted*	$	1.03	$	1.63	$	1.20	$	0.98		$	1.11
Core FFO attributable to Sun Communities, Inc. common stockholders and dilutive convertible securities⁽¹⁾⁽⁴⁾ per share - fully diluted*	$	1.16	$	1.60	$	1.12	$	1.22		$	1.10

Balance Sheet
Total assets	$	11,206,586	$	8,335,717	$	8,348,659	$	8,209,047		$	7,802,060
Total debt	$	4,757,076	$	3,340,613	$	3,390,771	$	3,926,494		$	3,434,402
Total liabilities	$	5,314,879	$	3,791,922	$	3,845,308	$	4,346,127		$	3,848,104

	Quarter Ended
	12/31/2020		9/30/2020		6/30/2020		3/31/2020		12/31/2019
Operating Information*
Properties	552		432		426		424		422

Manufactured home sites	96,688		95,209		94,232		93,834		93,821
Annual RV sites	27,564		26,817		26,240		26,148		26,056
Transient RV sites	25,043		23,728		22,360		21,880		21,416
Total sites	149,295		145,754		142,832		141,862		141,293

Wet slips and dry storage spaces	38,881		N/A		N/A		N/A		N/A

MH occupancy	96.6	%	96.4	%	96.5	%	95.8	%	95.5	%
RV annual occupancy	100.0	%	100.0	%	100.0	%	100.0	%	100.0	%
Total blended MH and annual RV occupancy	97.3	%	97.2	%	97.3	%	96.7	%	96.4	%

New home sales	156		155		140		119		140
Pre-owned home sales	626		555		471		644		668
Total home sales	782		710		611		763		808

	Quarter Ended
	12/31/2020	9/30/2020	6/30/2020	3/31/2020	12/31/2019
Net Leased Sites⁽⁵⁾
MH net leased sites	247	349	759	287	437
RV net leased sites	331	427	92	13	232
Total net leased sites	578	776	851	300	669

Consolidated Balance Sheets
(amounts in thousands)

	December 31, 2020			December 31, 2019
Assets
Land	$	2,119,364		$	1,414,279
Land improvements and buildings	8,480,597			6,595,272
Rental homes and improvements	637,603			627,175
Furniture, fixtures and equipment	447,039			282,874
Investment property	11,684,603			8,919,600
Accumulated depreciation	(1,968,812		)	(1,686,980		)
Investment property, net	9,715,791			7,232,620
Cash, cash equivalents and restricted cash	98,294			34,830
Marketable securities	124,726			94,727
Inventory of manufactured homes	46,643			62,061
Notes and other receivables, net	221,650			157,926
Goodwill	428,833			—
Other intangible assets, net	305,611			66,948
Other assets, net	265,038			152,948
Total Assets	$	11,206,586		$	7,802,060
Liabilities
Mortgage loans payable	$	3,444,967		$	3,180,592
Preferred Equity - Sun NG Resorts - mandatorily redeemable	35,249			35,249
Preferred OP units - mandatorily redeemable	34,663			34,663
Lines of credit and other debt⁽⁶⁾	1,242,197			183,898
Distributions payable	86,988			71,704
Advanced reservation deposits and rent	187,730			133,420
Accrued expenses and accounts payable	148,435			127,289
Other liabilities	134,650			81,289
Total Liabilities	5,314,879			3,848,104
Commitments and contingencies
Series D preferred OP units	49,600			50,913
Series F preferred OP units	8,871			—
Series G preferred OP units	25,074			—
Series H preferred OP units	57,833			—
Series I preferred OP units	94,532			—
Other redeemable noncontrolling interests	28,469			27,091
Stockholders' Equity
Common stock	1,076			932
Additional paid-in capital	7,087,658			5,213,264
Accumulated other comprehensive loss	3,178			(1,331		)
Distributions in excess of accumulated earnings	(1,566,636		)	(1,393,141		)
Total Sun Communities, Inc. stockholders' equity	5,525,276			3,819,724
Noncontrolling interests
Common and preferred OP units	85,968			47,686
Consolidated variable interest entities	16,084			8,542
Total noncontrolling interests	102,052			56,228
Total Stockholders' Equity	5,627,328			3,875,952
Total Liabilities, Temporary Equity and Stockholders' Equity	$	11,206,586		$	7,802,060

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

	Three Months Ended												Year Ended
	December 31, 2020			December 31, 2019			Change			% Change			December 31, 2020			December 31, 2019			Change			% Change
Revenues
Income from real property (excluding transient revenue)	$	249,065		$	205,131		$	43,934		21.4		%	$	895,945		$	793,403		$	102,542		12.9		%
Transient revenue	27,929			19,886			8,043			40.4		%	134,691			121,504			13,187			10.9		%
Revenue from home sales	48,920			45,271			3,649			8.1		%	175,699			181,936			(6,237		)	(3.4	)	%
Rental home revenue	16,035			14,745			1,290			8.7		%	62,646			57,572			5,074			8.8		%
Ancillary revenue	35,644			10,481			25,163			240.1		%	102,017			77,638			24,379			31.4		%
Interest income	2,510			3,368			(858		)	(25.5	)	%	10,119			17,857			(7,738		)	(43.3	)	%
Brokerage commissions and other revenues, net	4,162			2,937			1,225			41.7		%	17,230			14,127			3,103			22.0		%
Total Revenues	384,265			301,819			82,446			27.3		%	1,398,347			1,264,037			134,310			10.6		%
Expenses
Property operating and maintenance	88,889			63,486			25,403			40.0		%	308,797			266,378			42,419			15.9		%
Real estate taxes	20,265			15,425			4,840			31.4		%	72,606			61,880			10,726			17.3		%
Cost of home sales	36,434			34,327			2,107			6.1		%	131,884			134,357			(2,473		)	(1.8	)	%
Rental home operating and maintenance	6,058			5,542			516			9.3		%	22,186			21,995			191			0.9		%
Ancillary expenses	27,671			9,099			18,572			204.1		%	63,402			47,432			15,970			33.7		%
Home selling expenses	4,626			3,768			858			22.8		%	15,134			14,690			444			3.0		%
General and administrative expenses	31,795			25,434			6,361			25.0		%	111,288			93,964			17,324			18.4		%
Catastrophic weather-related charges, net	831			435			396			91.0		%	885			1,737			(852		)	(49.1	)	%
Business combination expense	23,008			—			23,008			N/A			23,008			—			23,008			N/A
Depreciation and amortization	117,423			98,826			18,597			18.8		%	376,876			328,067			48,809			14.9		%
Loss on extinguishment of debt	—			3,027			(3,027		)	N/A			5,209			16,505			(11,296		)	(68.4	)	%
Interest expense	35,013			33,259			1,754			5.3		%	129,071			133,153			(4,082		)	(3.1	)	%
Interest on mandatorily redeemable preferred OP units / equity	1,047			1,207			(160		)	(13.3	)	%	4,177			4,698			(521		)	(11.1	)	%
Total Expenses	393,060			293,835			99,225			33.8		%	1,264,523			1,124,856			139,667			12.4		%
Income / (Loss) Before Other Items	(8,795		)	7,984			(16,779		)	(210.2	)	%	133,824			139,181			(5,357		)	(3.8	)	%
Gain on remeasurement of marketable securities	8,765			17,692			(8,927		)	(50.5	)	%	6,129			34,240			(28,111		)	(82.1	)	%
Gain on foreign currency translation	10,480			4,522			5,958			131.8		%	8,039			4,557			3,482			76.4		%
Gain on disposition of property	—			—			—			N/A			5,595			—			5,595			N/A
Other income / (expense), net⁽⁷⁾	(390		)	424			(814		)	(192.0	)	%	(3,768		)	(1,100		)	(2,668		)	242.5		%
Loss on remeasurement of notes receivable	(964		)	—			(964		)	N/A			(3,275		)	—			(3,275		)	N/A
Income / (loss) from nonconsolidated affiliates	392			(6		)	398			N/M			1,740			1,374			366			26.6		%
Loss on remeasurement of investment in nonconsolidated affiliates	(103		)	—			(103		)	N/A			(1,608		)	—			(1,608		)	N/A
Current tax expense	(328		)	(189		)	(139		)	73.5		%	(790		)	(1,095		)	305			(27.9	)	%
Deferred tax benefit	761			258			503			195.0		%	1,565			222			1,343			605.0		%
Net Income	9,818			30,685			(20,867		)	(68.0	)	%	147,451			177,379			(29,928		)	(16.9	)	%
Less: Preferred return to preferred OP units / equity	2,136			1,418			718			50.6		%	6,935			6,058			877			14.5		%
Less: Income attributable to noncontrolling interests	96			720			(624		)	(86.7	)	%	8,902			9,768			(866		)	(8.9	)	%
Net Income Attributable to Sun Communities, Inc.	7,586			28,547			(20,961		)	(73.4	)	%	131,614			161,553			(29,939		)	(18.5	)	%
Less: Preferred stock distribution	—			—			—			N/A			—			1,288			(1,288		)	N/A
Net Income Attributable to Sun Communities, Inc. Common Stockholders	$	7,586		$	28,547		$	(20,961	)	(73.4	)	%	$	131,614		$	160,265		$	(28,651	)	(17.9	)	%

Weighted average common shares outstanding - basic	104,275			91,342			12,933			14.2		%	97,521			88,460			9,061			10.2		%
Weighted average common shares outstanding - diluted	104,744			91,893			12,851			14.0		%	97,522			88,915			8,607			9.7		%

Basic earnings per share	$	0.07		$	0.31		$	(0.24	)	(77.4	)	%	$	1.34		$	1.80		$	(0.46	)	(25.6	)	%
Diluted earnings per share	$	0.07		$	0.31		$	(0.24	)	(77.4	)	%	$	1.34		$	1.80		$	(0.46	)	(25.6	)	%

N/M = Percentage change is not meaningful.

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

Outstanding Securities - As of December 31, 2020

	Number of Units / Shares Outstanding	Conversion Rate*	If Converted⁽¹⁾	Issuance Price Per Unit*		Annual Distribution Rate*
Non-convertible Securities
Common shares	107,626	N/A	N/A	N/A		$3.16^

Convertible Securities
Common OP units	2,607	1.0000	2,607	N/A		Mirrors common shares distributions

Series A-1 preferred OP units	295	2.4390	719	$	100	6.00	%
Series A-3 preferred OP units	40	1.8605	75	$	100	4.50	%
Series C preferred OP units	306	1.1100	340	$	100	4.50	%
Series D preferred OP units	489	0.8000	391	$	100	3.80	%
Series E preferred OP units	90	0.6897	62	$	100	5.25	%
Series F preferred OP units	90	0.6250	56	$	100	3.00	%
Series G preferred OP units	241	0.6452	155	$	100	3.20	%
Series H preferred OP units	581	0.6098	355	$	100	3.00	%
Series I preferred OP units	922	0.6098	562	$	100	3.00	%

^ Annual distribution is based on the last quarterly distribution annualized.

⁽¹⁾Calculation may yield minor differences due to fractional shares paid in cash to the stockholder at conversion.

Capitalization - As of December 31, 2020

Equity	Shares	Share Price*		Total
Common shares	107,626	$	151.95	$	16,353,771
Common OP units	2,607	$	151.95	396,134
Subtotal	110,233			$	16,749,905

Preferred OP units as converted	2,715	$	151.95	$	412,544
Total diluted shares outstanding	112,948			17,162,449

Debt
Mortgage loans payable				$	3,444,967
Preferred Equity - Sun NG Resorts - mandatorily redeemable				35,249
Preferred OP units - mandatorily redeemable				34,663
Lines of credit and other debt⁽⁶⁾				1,242,197
Total debt				$	4,757,076

Total Capitalization				$	21,919,525

Reconciliations to Non-GAAP Financial Measures

Reconciliation of Net Income Attributable to Sun Communities, Inc. Common Stockholders to FFO⁽¹⁾
(amounts in thousands except for per share data)

	Three Months Ended						Year Ended
	December 31, 2020			December 31, 2019			December 31, 2020			December 31, 2019
Net Income Attributable To Sun Communities, Inc. Common Stockholders	$	7,586		$	28,547		$	131,614		$	160,265
Adjustments
Depreciation and amortization	117,354			98,950			376,897			328,646
Depreciation on nonconsolidated affiliates	38			—			66			—
Gain on remeasurement of marketable securities	(8,765		)	(17,692		)	(6,129		)	(34,240		)
Loss on remeasurement of investment in nonconsolidated affiliates	103			—			1,608			—
Loss on remeasurement of notes receivable	964			—			3,275			—
Income attributable to noncontrolling interests	4			482			7,881			8,474
Preferred return to preferred OP units	494			519			2,231			2,610
Preferred distribution to Series A-4 preferred stock	—			—			—			1,288
Gain on disposition of properties	—			—			(5,595		)	—
Gain on disposition of assets, net	(6,929		)	(5,273		)	(22,180		)	(26,356		)
FFO Attributable To Sun Communities, Inc. Common Stockholders And Dilutive Convertible Securities⁽¹⁾⁽⁴⁾	$	110,849		$	105,533		$	489,668		$	440,687
Adjustments
Business combination expense	23,008			—			23,008			—
Other acquisition related costs⁽⁸⁾	1,035			244			2,326			1,146
Loss on extinguishment of debt	—			3,027			5,209			16,505
Catastrophic weather-related charges, net	831			398			885			1,737
Gain on foreign currency translation	(10,480		)	(4,522		)	(8,039		)	(4,557		)
Other (income) / expense, net⁽⁷⁾	390			(424		)	3,768			1,100
Other adjustments^(a)	(761		)	278			(1,265		)	314
Core FFO Attributable To Sun Communities, Inc. Common Stockholders And Dilutive Convertible Securities⁽¹⁾⁽⁴⁾	$	124,872		$	104,534		$	515,560		$	456,932

Weighted average common shares outstanding - basic	104,275			91,342			97,521			88,460
Add
Common stock issuable upon conversion of stock options	1			1			1			1
Restricted stock	468			550			455			454
Common OP units	2,496			2,300			2,458			2,448
Common stock issuable upon conversion of certain preferred OP units	798			1,270			907			1,454
Weighted Average Common Shares Outstanding - Fully Diluted	108,038			95,463			101,342			92,817

FFO Attributable To Sun Communities, Inc. Common Stockholders And Dilutive Convertible Securities⁽¹⁾⁽⁴⁾ Per Share - Fully Diluted	$	1.03		$	1.11		$	4.83		$	4.75

Core FFO Attributable To Sun Communities, Inc. Common Stockholders And Dilutive Convertible Securities⁽¹⁾⁽⁴⁾ Per Share - Fully Diluted	$	1.16		$	1.10		$	5.09		$	4.92

^(a)Adjustments include deferred compensation amortization upon retirement and deferred tax (benefit) / expense.

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

	Three Months Ended						Year Ended
	December 31, 2020			December 31, 2019			December 31, 2020			December 31, 2019
Net Income Attributable to Sun Communities, Inc. Common Stockholders	$	7,586		$	28,547		$	131,614		$	160,265
Adjustments
Depreciation and amortization	117,423			98,826			376,876			328,067
Loss on extinguishment of debt	—			3,027			5,209			16,505
Interest expense	35,013			33,259			129,071			133,153
Interest on mandatorily redeemable preferred OP units / equity	1,047			1,207			4,177			4,698
Current tax expense	328			189			790			1,095
Deferred tax benefit	(761		)	(258		)	(1,565		)	(222		)
(Income) / loss from nonconsolidated affiliates	(392		)	6			(1,740		)	(1,374		)
Less: Gain on dispositions of assets, net	(6,929		)	(5,273		)	(22,180		)	(26,356		)
Less: Gain on disposition of properties	—			—			(5,595		)	—
EBITDAre⁽¹⁾	$	153,315		$	159,530		$	616,657		$	615,831
Adjustments
Catastrophic weather related charges, net	831			435			885			1,737
Business combination expense	23,008			—			23,008			—
Gain on remeasurement of marketable securities	(8,765		)	(17,692		)	(6,129		)	(34,240		)
Gain on foreign currency translation	(10,480		)	(4,522		)	(8,039		)	(4,557		)
Other (income) / expense, net⁽⁶⁾	390			(424		)	3,768			1,100
Loss on remeasurement of notes receivable	964			—			3,275			—
Loss on remeasurement of investment in nonconsolidated affiliates	103			—			1,608			—
Preferred return to preferred OP units / equity	2,136			1,418			6,935			6,058
Income attributable to noncontrolling interests	96			720			8,902			9,768
Preferred stock distribution	—			—			—			1,288
Plus: Gain on dispositions of assets, net	6,929			5,273			22,180			26,356
Recurring EBITDA⁽¹⁾	$	168,527		$	144,738		$	673,050		$	623,341

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

	Three Months Ended						Year Ended
	December 31, 2020			December 31, 2019			December 31, 2020			December 31, 2019
Net Income Attributable to Sun Communities, Inc. Common Stockholders	$	7,586		$	28,547		$	131,614		$	160,265
Interest income	(2,510		)	(3,368		)	(10,119		)	(17,857		)
Brokerage commissions and other revenues, net	(4,162		)	(2,937		)	(17,230		)	(14,127		)
Home selling expenses	4,626			3,768			15,134			14,690
General and administrative expenses	31,795			25,434			111,288			93,964
Catastrophic weather-related charges, net	831			435			885			1,737
Business combination expense	23,008			—			23,008			—
Depreciation and amortization	117,423			98,826			376,876			328,067
Loss on extinguishment of debt	—			3,027			5,209			16,505
Interest expense	35,013			33,259			129,071			133,153
Interest on mandatorily redeemable preferred OP units / equity	1,047			1,207			4,177			4,698
Gain on remeasurement of marketable securities	(8,765		)	(17,692		)	(6,129		)	(34,240		)
Gain on foreign currency translation	(10,480		)	(4,522		)	(8,039		)	(4,557		)
Gain on disposition of property	—			—			(5,595		)	—
Other (income) / expense, net⁽⁷⁾	390			(424		)	3,768			1,100
Loss on remeasurement of notes receivable	964			—			3,275			—
Loss / (income) from nonconsolidated affiliates	(392		)	6			(1,740		)	(1,374		)
Loss on remeasurement of investment in nonconsolidated affiliates	103			—			1,608			—
Current tax expense	328			189			790			1,095
Deferred tax benefit	(761		)	(258		)	(1,565		)	(222		)
Preferred return to preferred OP units / equity	2,136			1,418			6,935			6,058
Income attributable to noncontrolling interests	96			720			8,902			9,768
Preferred stock distribution	—			—			—			1,288
NOI⁽¹⁾/ Gross Profit	$	198,276		$	167,635		$	772,123		$	700,011

	Three Months Ended						Year Ended
	December 31, 2020			December 31, 2019			December 31, 2020			December 31, 2019
Real Property NOI⁽¹⁾	$	167,840		$	146,106		$	649,233		$	586,649
Home Sales NOI⁽¹⁾/ Gross Profit	12,486			10,944			43,815			47,579
Rental Program NOI⁽¹⁾	29,101			26,682			115,283			104,382
Ancillary NOI⁽¹⁾/ Gross Profit	7,973			1,382			38,615			30,206
Site rent from Rental Program (included in Real Property NOI)⁽¹⁾⁽⁹⁾	(19,124		)	(17,479		)	(74,823		)	(68,805		)
NOI⁽¹⁾/ Gross Profit	$	198,276		$	167,635		$	772,123		$	700,011

Non-GAAP and Other Financial Measures

Debt Analysis
(amounts in thousands)

	Quarter Ended
	12/31/2020			9/30/2020			6/30/2020			3/31/2020			12/31/2019
Debt Outstanding
Mortgage loans payable	$	3,444,967		$	3,191,380		$	3,205,507		$	3,273,808		$	3,180,592
Preferred Equity - Sun NG Resorts - mandatorily redeemable	35,249			35,249			35,249			35,249			35,249
Preferred OP units - mandatorily redeemable	34,663			34,663			34,663			34,663			34,663
Lines of credit and other debt⁽⁶⁾	1,242,197			79,321			115,352			582,774			183,898
Total debt	$	4,757,076		$	3,340,613		$	3,390,771		$	3,926,494		$	3,434,402

% Fixed / Floating
Fixed	74.0		%	97.6		%	96.6		%	85.2		%	94.7		%
Floating	26.0		%	2.4		%	3.4		%	14.8		%	5.3		%
Total	100.0		%	100.0		%	100.0		%	100.0		%	100.0		%

Weighted Average Interest Rates
Mortgage loans payable	3.78		%	3.88		%	3.88		%	3.91		%	4.05		%
Preferred Equity - Sun NG Resorts - mandatorily redeemable	6.00		%	6.00		%	6.00		%	6.00		%	6.00		%
Preferred OP units - mandatorily redeemable	5.93		%	5.93		%	5.93		%	5.93		%	6.50		%
Lines of credit and other debt⁽⁶⁾	2.08		%	1.32		%	2.03		%	1.85		%	2.71		%
Total average	3.37		%	3.86		%	3.86		%	3.64		%	4.03		%

Debt Ratios
Net Debt / Recurring EBITDA⁽¹⁾ (TTM)	6.9			5.0			4.8			5.6			5.5
Net Debt / Enterprise Value	21.4		%	18.3		%	17.8		%	22.6		%	19.0		%
Net Debt / Gross Assets	35.5		%	31.6		%	29.7		%	35.6		%	36.0		%

Coverage Ratios
Recurring EBITDA⁽¹⁾ (TTM) / Interest	4.9			4.8			4.5			4.5			4.4
Recurring EBITDA⁽¹⁾(TTM) / Interest + Pref. Distributions + Pref. Stock Distribution	4.8			4.6			4.4			4.3			4.2

Maturities / Principal Amortization Next Five Years	2021			2022			2023			2024			2025
Mortgage loans payable
Maturities	$	—		$	82,155		$	185,618		$	315,330		$	50,528
Principal amortization	59,585			61,364			60,739			57,293			53,879
Preferred Equity - Sun NG Resorts - mandatorily redeemable	—			—			—			33,428			1,821
Preferred OP units - mandatorily redeemable	—			—			—			27,373			—
Lines of credit and other debt⁽⁶⁾	10,000			14,794			65,403			1,152,000			—
Total	$	69,585		$	158,313		$	311,760		$	1,585,424		$	106,228

Weighted average rate of maturities	—		%	4.46		%	4.08		%	4.47		%	4.04		%

Real Property Operations – Same Community⁽²⁾
(amounts in thousands except for Other Information)


	Three Months Ended								Year Ended
	December 31, 2020		December 31, 2019		Change		% Change		December 31, 2020		December 31, 2019		Change			% Change
Financial Information
Income from real property⁽¹⁰⁾	$	214,996	$	203,422	$	11,574	5.7	%	$	876,981	$	846,231	$	30,750		3.6		%

Property operating expenses
Payroll and benefits	21,440		19,472		1,968		10.1	%	81,897		82,727		(830		)	(1.0	)	%
Legal, taxes, and insurance	3,170		2,919		251		8.6	%	10,860		10,351		509			4.9		%
Utilities⁽¹⁰⁾	16,399		14,120		2,279		16.1	%	66,214		63,410		2,804			4.4		%
Supplies and repair⁽¹¹⁾	8,393		6,926		1,467		21.2	%	33,616		33,153		463			1.4		%
Other^(a)	6,309		5,462		847		15.5	%	27,916		26,738		1,178			4.4		%
Real estate taxes	15,786		14,039		1,747		12.4	%	63,706		59,649		4,057			6.8		%
Property operating expenses	71,497		62,938		8,559		13.6	%	284,209		276,028		8,181			3.0		%
Real Property NOI⁽¹⁾	$	143,499	$	140,484	$	3,015	2.1	%	$	592,772	$	570,203	$	22,569		4.0		%

^(a) Includes COVID-19 personal protective equipment expense of $0.3 million and $2.4 million for the quarter and year ended December 31, 2020, respectively.

	As of
	December 31, 2020			December 31, 2019			Change			% Change
Other Information
Number of properties	367			367			—

MH occupancy⁽³⁾	97.4		%
RV occupancy⁽³⁾	100.0		%
MH & RV blended occupancy⁽³⁾	98.0		%

Adjusted MH occupancy⁽³⁾	98.5		%
Adjusted RV occupancy⁽³⁾	100.0		%
Adjusted MH & RV blended occupancy⁽³⁾	98.8		%	97.0		%	1.8		%

Sites available for development	6,682			6,314			368

Monthly base rent per site - MH	$	600		$	580		$	20		3.4%⁽¹³⁾
Monthly base rent per site - RV⁽¹²⁾	$	514		$	488		$	26		5.4%⁽¹³⁾
Monthly base rent per site - Total⁽¹²⁾	$	579		$	558		$	21		3.8%⁽¹³⁾

Home Sales Summary
(amounts in thousands except for *)


	Three Months Ended													Year Ended
	December 31, 2020			December 31, 2019			Change				% Change			December 31, 2020			December 31, 2019			Change				% Change
Financial Information
New Homes
New home sales	$	21,192		$	19,900		$	1,292			6.5		%	$	79,728		$	71,760		$	7,968			11.1		%
New home cost of sales	17,922			16,817			1,105				6.6		%	65,533			61,557			3,976				6.5		%
NOI⁽¹⁾ / Gross Profit – new homes	3,270			3,083			187				6.1		%	14,195			10,203			3,992				39.1		%
Gross margin % – new homes	15.4		%	15.5		%	(0.1		)	%				17.8		%	14.2		%	3.6			%
Average selling price – new homes*	$	135,846		$	142,143		$	(6,297	)		(4.4	)	%	$	139,874		$	125,674		$	14,200			11.3		%

Pre-owned Homes
Pre-owned home sales	$	27,728		$	25,371		$	2,357			9.3		%	$	95,971		$	110,176		$	(14,205	)		(12.9	)	%
Pre-owned home cost of sales	18,512			17,510			1,002				5.7		%	66,351			72,800			(6,449		)		(8.9	)	%
NOI⁽¹⁾ / Gross Profit – pre-owned homes	9,216			7,861			1,355				17.2		%	29,620			37,376			(7,756		)		(20.8	)	%
Gross margin % – pre-owned homes	33.2		%	31.0		%	2.2			%				30.9		%	33.9		%	(3.0		)	%
Average selling price – pre-owned homes*	$	44,294		$	37,981		$	6,313			16.6		%	$	41,799		$	38,416		$	3,383			8.8		%

Total Home Sales
Revenue from home sales	$	48,920		$	45,271		$	3,649			8.1		%	$	175,699		$	181,936		$	(6,237	)		(3.4	)	%
Cost of home sales	36,434			34,327			2,107				6.1		%	131,884			134,357			(2,473		)		(1.8	)	%
NOI⁽¹⁾ / Gross Profit – home sales	$	12,486		$	10,944		$	1,542			14.1		%	$	43,815		$	47,579		$	(3,764	)		(7.9	)	%

Statistical Information
New home sales volume*	156			140			16				11.4		%	570			571			(1		)		(0.2	)	%
Pre-owned home sales volume*	626			668			(42		)		(6.3	)	%	2,296			2,868			(572		)		(19.9	)	%
Total home sales volume*	782			808			(26		)		(3.2	)	%	2,866			3,439			(573		)		(16.7	)	%

Rental Program Summary
(amounts in thousands except for *)


	Three Months Ended										Year Ended
	December 31, 2020		December 31, 2019		Change			% Change			December 31, 2020		December 31, 2019		Change			% Change
Financial Information
Revenues
Rental home revenue	$	16,035	$	14,745	$	1,290		8.7		%	$	62,646	$	57,572	$	5,074		8.8		%
Site rent from Rental Program⁽¹⁾⁽⁹⁾	19,124		17,479		1,645			9.4		%	74,823		68,805		6,018			8.7		%
Rental Program revenue	35,159		32,224		2,935			9.1		%	137,469		126,377		11,092			8.8		%

Expenses
Repairs and refurbishment	3,263		3,273		(10		)	(0.3	)	%	11,886		12,591		(705		)	(5.6	)	%
Taxes and insurance	2,382		1,857		525			28.3		%	8,460		7,488		972			13.0		%
Other	413		412		1			0.2		%	1,840		1,916		(76		)	(4.0	)	%
Rental Program operating and maintenance	6,058		5,542		516			9.3		%	22,186		21,995		191			0.9		%
Rental Program NOI⁽¹⁾	$	29,101	$	26,682	$	2,419		9.1		%	$	115,283	$	104,382	$	10,901		10.4		%

Other Information
Number of sold rental homes*	269		281		(12		)	(4.3	)	%	850		1,140		(290		)	(25.4	)	%
Number of occupied rentals, end of period*											11,752		11,325		427			3.8		%
Investment in occupied rental homes, end of period											$	629,162	$	584,771	$	44,391		7.6		%
Weighted average monthly rental rate, end of period*											$	1,042	$	997	$	45		4.5		%

Acquisitions and Other Summary⁽¹⁴⁾
(amounts in thousands except for statistical data)


	Three Months Ended		Year Ended
	December 31, 2020		December 31, 2020
Financial Information
Revenues
Income from real property	$	52,737	$	115,994

Property and Operating Expenses
Payroll and benefits	9,791		19,348
Legal, taxes & insurance	1,064		1,844
Utilities	5,492		12,307
Supplies and repairs	2,205		6,076
Other	5,365		11,058
Real estate taxes	4,479		8,900
Property operating expenses	28,396		59,533
Net operating income (NOI)⁽¹⁾	$	24,341	$	56,461

Other Information - MH and RVs			December 31, 2020
Number of properties			79
Occupied sites			11,070
Developed sites			12,118
Occupancy %			91.4		%
Transient sites			6,942

Other Information - Marinas				December 31, 2020
Number of properties				106
Wet slips				29,530
Dry storage				9,351
Total wet slips and dry storage				38,881

MH and RV Property Summary


Properties	12/31/2020			9/30/2020		6/30/2020		3/31/2020		12/31/2019
FLORIDA
Properties	128			127		125		125		125
Developed sites⁽¹⁵⁾	39,803			39,517		39,241		39,380		39,230
Occupied⁽¹⁵⁾	39,063			38,743		38,453		38,526		38,346
Occupancy %⁽¹⁵⁾	98.1	%		98.0	%	98.0	%	97.8	%	97.7	%
Sites for development	1,497			1,427		1,427		1,527		1,527
MICHIGAN
Properties	74			74		72		72		72
Developed sites⁽¹⁵⁾	29,086			29,086		27,901		27,883		27,905
Occupied⁽¹⁵⁾	28,109			28,033		27,191		26,863		26,785
Occupancy %⁽¹⁵⁾	96.6	%		96.4	%	97.5	%	96.3	%	96.0	%
Sites for development	1,182			1,182		1,182		1,115		1,115
CALIFORNIA
Properties	35			34		32		31		31
Developed sites⁽¹⁵⁾	6,675			6,372		6,364		5,986		5,981
Occupied⁽¹⁵⁾	6,602			6,290		6,272		5,948		5,941
Occupancy %⁽¹⁵⁾	98.9	%		98.7	%	98.6	%	99.4	%	99.3	%
Sites for development	373			373		264		302		302
TEXAS
Properties	24			24		23		23		23
Developed sites⁽¹⁵⁾	7,766			7,659		7,641		7,627		7,615
Occupied⁽¹⁵⁾	7,572			7,427		7,289		7,076		7,006
Occupancy %⁽¹⁵⁾	97.5	%		97.0	%	95.4	%	92.8	%	92.0	%
Sites for development	1,378			1,378		565		555		555
ONTARIO, CANADA
Properties	15			15		15		15		15
Developed sites⁽¹⁵⁾	4,090			4,067		3,980		3,977		4,031
Occupied⁽¹⁵⁾	4,090			4,067		3,980		3,977		4,031
Occupancy %⁽¹⁵⁾	100.0	%		100.0	%	100.0	%	100.0	%	100.0	%
Sites for development	1,525			1,593		1,593		1,608		1,611
ARIZONA
Properties	14			13		13		13		13
Developed sites⁽¹⁵⁾	4,323			4,274		4,259		4,268		4,263
Occupied⁽¹⁵⁾	4,030			3,957		3,932		3,923		3,892
Occupancy %⁽¹⁵⁾	93.2	%		92.6	%	92.3	%	91.9	%	91.3	%
Sites for development	—			—		—		—		—
INDIANA
Properties	12			11		11		11		11
Developed sites⁽¹⁵⁾	3,087			3,087		3,087		3,087		3,087
Occupied⁽¹⁵⁾	2,950			2,957		2,961		2,914		2,900
Occupancy %⁽¹⁵⁾	95.6	%		95.8	%	95.9	%	94.4	%	93.9	%
Sites for development	277			277		277		277		277
COLORADO
Properties	10			10		10		10		10
Developed sites⁽¹⁴⁾	2,453			2,453		2,441		2,423		2,423
Occupied⁽¹⁵⁾	2,380			2,365		2,327		2,318		2,322
Occupancy %⁽¹⁵⁾	97.0	%		96.4	%	95.3	%	95.7	%	95.8	%
Sites for development	1,250			1,282		1,566		1,867		1,867

OHIO
Properties	9			9		9		9		9
Developed sites⁽¹⁵⁾	2,790			2,790		2,778		2,768		2,770
Occupied⁽¹⁵⁾	2,755			2,758		2,736		2,702		2,716
Occupancy %⁽¹⁵⁾	98.7	%		98.9	%	98.5	%	97.6	%	98.1	%
Sites for development	22			22		22		59		59
OTHER STATES
Properties	125			115		116		115		113
Developed sites⁽¹⁵⁾	24,179			22,721		22,780		22,583		22,572
Occupied⁽¹⁵⁾	23,401			21,995		22,024		21,749		21,678
Occupancy %⁽¹⁵⁾	96.8	%		96.8	%	96.7	%	96.3	%	96.0	%
Sites for development	2,521			2,596		2,846		2,980		2,980
TOTAL - MH AND ANNUAL RV PORTFOLIO
Properties	446			432		426		424		422
Developed sites⁽¹⁵⁾	124,252			122,026		120,472		119,982		119,877
Occupied⁽¹⁵⁾	120,952			118,592		117,165		115,996		115,617
Occupancy %⁽¹⁵⁾	97.3	%	⁽¹⁶⁾	97.2	%	97.3	%	96.7	%	96.4	%
Sites for development⁽¹⁷⁾	10,025			10,130		9,742		10,290		10,293
% Communities age restricted	33.2	%		33.6	%	34.0	%	34.0	%	34.1	%

TRANSIENT RV SITE SUMMARY
Location
Florida	6,011			5,993		5,547		5,311		5,465
California	2,231			2,236		1,978		1,947		1,952
Texas	1,810			1,917		1,590		1,612		1,623
Maryland	1,515			1,515		1,515		1,488		1,488
New York	1,422			900		911		916		923
Arizona	1,337			1,386		1,401		1,392		1,397
Indiana	1,089			534		534		534		534
Ontario, Canada	966			920		1,007		1,009		939
Colorado	962			930		574		291		291
Maine	805			819		837		828		811
New Jersey	813			828		857		875		864
Virginia	737			564		598		630		324
Other states	5,345			5,186		5,011		5,047		4,805
Total Transient RV Sites	25,043			23,728		22,360		21,880		21,416

Marina Property Summary


MARINAS		12/31/2020
MICHIGAN
Properties		5
Total wet slips and dry storage spaces		4,468
FLORIDA
Properties		14
Total wet slips and dry storage spaces		3,573
CONNECTICUT
Properties		11
Total wet slips and dry storage spaces		3,254
GEORGIA
Properties		4
Total wet slips and dry storage spaces		2,834
RHODE ISLAND
Properties		11
Total wet slips and dry storage spaces		2,690
NEW YORK
Properties		8
Total wet slips and dry storage spaces		2,620
OTHER STATES
Properties		53
Total wet slips and dry storage spaces		19,442
TOTAL - MARINA PORTFOLIO
Properties		106
Total wet slips and dry storage spaces		38,881

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

	Recurring Capital Expenditures Average / Site*		Recurring Capital Expenditures⁽¹⁸⁾		Lot Modifications⁽¹⁹⁾		Acquisitions⁽²⁰⁾		Expansion and Development⁽²¹⁾		Revenue Producing /Expense Reduction Projects⁽²²⁾		Marina Related Capital Expenditures^(a)
2020	$	265	$	31,398	$	29,789	$	3,099,547	$	246,454	$	23,683	$	14,147
2019	$	345	$	30,382	$	31,135	$	930,668	$	281,808	$	9,638	N/A
2018	$	263	$	24,265	$	22,867	$	414,840	$	152,672	$	3,864	N/A

^(a)Includes capital improvements at recently acquired marinas, recurring capital expenditures, revenue producing capital expenditures and expansion and development.

Operating Statistics for MH and Annual RVs

Locations	Resident Move-outs	Net Leased Sites⁽⁵⁾	New Home Sales	Pre-owned Home Sales	Brokered Re-sales
Florida	2,303	410	164	209	1,251
Michigan	422	601	43	1,148	159
Ontario, Canada	677	59	37	21	424
Texas	398	566	73	254	68
Arizona	81	138	43	28	143
Indiana	67	50	4	187	18
Ohio	95	39	—	98	9
California	116	47	29	15	94
Colorado	22	58	33	26	48
Other states	1,184	537	144	310	343
Year Ended December 31, 2020	5,365	2,505	570	2,296	2,557

Total For Year Ended	Resident Move-outs	Net Leased Sites⁽⁵⁾	New Home Sales	Pre-owned Home Sales	Brokered Re-sales
2019	4,139	2,674	571	2,868	2,231
2018	3,435	2,600	526	3,103	2,147

Percentage Trends	Resident Move-outs		Resident Re-sales
2020	3.3	%	6.9	%
2019	2.6	%	6.6	%
2018	2.4	%	7.2	%

Footnotes and Definitions

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

FFO is defined by the National Association of Real Estate Investment Trusts (“NAREIT”) as GAAP net income (loss), excluding gains (or losses) from sales of depreciable operating property, plus real estate related depreciation and amortization, real estate related impairments, and after adjustments for nonconsolidated partnerships and joint ventures. FFO is a non-GAAP financial measure that management believes is a useful supplemental measure of the Company’s operating performance. By excluding gains and losses related to sales of previously depreciated operating real estate assets, impairment and excluding real estate asset depreciation and amortization (which can vary among owners of identical assets in similar condition based on historical cost accounting and useful life estimates), FFO provides a performance measure that, when compared period-over-period, reflects the impact to operations from trends in occupancy rates, rental rates, and operating costs, providing perspective not readily apparent from GAAP net income (loss). Management believes the use of FFO has been beneficial in improving the understanding of operating results of REITs among the investing public and making comparisons of REIT operating results more meaningful. The Company also uses FFO excluding certain gain and loss items that management considers unrelated to the operational and financial performance of our core business (“Core FFO”). The Company believes that Core FFO provides enhanced comparability for investor evaluations of period-over-period results.

The Company believes that GAAP net income (loss) is the most directly comparable measure to FFO. The principal limitation of FFO is that it does not replace GAAP net income (loss) as a performance measure or GAAP cash flow from operations as a liquidity measure. Because FFO excludes significant economic components of GAAP net income (loss) including depreciation and amortization, FFO should be used as a supplement to GAAP net income (loss) and not as an alternative to it. Further, FFO is not intended as a measure of a REIT’s ability to meet debt principal repayments and other cash requirements, nor as a measure of working capital. FFO is calculated in accordance with the Company’s interpretation of standards established by NAREIT, which may not be comparable to FFO reported by other REITs that interpret the NAREIT definition differently.

NOI is derived from revenues minus property operating expenses and real estate taxes. NOI is a non-GAAP financial measure that the Company believes is helpful to investors as a supplemental measure of operating performance because it is an indicator of the return on property investment and provides a method of comparing property performance over time. The Company uses NOI as a key measure when evaluating performance and growth of particular properties and / or groups of properties. The principal limitation of NOI is that it excludes depreciation, amortization, interest expense and non-property specific expenses such as general and administrative expenses, all of which are significant costs. Therefore, NOI is a measure of the operating performance of the properties of the Company rather than of the Company overall.

The Company believes that GAAP net income (loss) is the most directly comparable measure to NOI. NOI should not be considered to be an alternative to GAAP net income (loss) as an indication of the Company’s financial performance or GAAP cash flow from operating activities as a measure of the Company’s liquidity; nor is it indicative of funds available for the Company’s cash needs, including its ability to make cash distributions. Because of the inclusion of items such as interest, depreciation, and amortization, the use of GAAP net income (loss) as a performance measure is limited as these items may not accurately reflect the actual change in market value of a property, in the case of depreciation and in the case of interest, may not necessarily be linked to the operating performance of a real estate asset, as it is often incurred at a parent company level and not at a property level.

EBITDA as defined by NAREIT (referred to as “EBITDAre”) is calculated as GAAP net income (loss), plus interest expense, plus income tax expense, plus depreciation and amortization, plus or minus losses or gains on the disposition of depreciated property (including losses or gains on change of control), plus impairment write-downs of depreciated property and of investments in nonconsolidated affiliates caused by a decrease in value of depreciated property in the affiliate, and adjustments to reflect the entity’s share of EBITDAre of nonconsolidated affiliates. EBITDAre is a non-GAAP financial measure that the Company uses to evaluate its ability to incur and service debt, fund dividends and other cash needs and cover fixed costs. Investors utilize EBITDAre as a supplemental measure to evaluate and compare investment quality and enterprise value of REITs. The Company also uses EBITDAre excluding certain gain and loss items that management considers unrelated to measurement of the Company’s performance on a basis that is independent of capital structure (“Recurring EBITDA”).

The Company believes that GAAP net income (loss) is the most directly comparable measure to EBITDAre. EBITDAre is not intended to be used as a measure of the Company’s cash generated by operations or its dividend-paying capacity, and should therefore not replace GAAP net income (loss) as an indication of the Company’s financial performance or GAAP cash flow from operating, investing and financing activities as measures of liquidity.

(2) Same Community results reflect constant currency for comparative purposes. Canadian currency figures in the prior comparative period have been translated at 2020 average exchange rates.

(3) The Same Community occupancy percentage is 97.4 percent for MH, 100.0 percent for RV, and 98.0 percent for the blended MH and RV. The MH and RV blended occupancy is derived from 112,134 developed sites, of which 109,882 were occupied. The Same Community occupancy percentage for 2019 has been adjusted to reflect incremental period-over-period growth from filled expansion sites and the conversion of transient RV sites to annual RV sites. The adjusted Same Community occupancy percentage for 2020 is derived from 111,196 developed sites, of which 109,882 were occupied. The number of developed sites excludes RV transient sites and approximately 950 recently completed but vacant MH expansion sites.

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

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

(6) Lines of credit and other debt includes the Company’s MH floor plan facility. The effective interest rate on the MH floor plan facility was 6.0 percent for the quarters ended December 31, September 30 and June 30, 2020, and 7.0 percent for the quarters ended March 31, 2020, and December 31, 2019. However, the Company pays no interest if the floor plan balance is repaid within 60 days.

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

	Three Months Ended						Year Ended
	December 31, 2020			December 31, 2019			December 31, 2020			December 31, 2019
Foreign currency remeasurement gain / (loss)	$	(318	)	$	(16	)	$	(373	)	$	(77	)
Collateralized receivables derecognition gain	—			587			—			587
Contingent consideration value expense	(72		)	(82		)	(2,962		)	(1,503		)
Long term lease termination expense	—			(65		)	(433		)	(107		)
Other expense, net	$	(390	)	$	424		$	(3,768	)	$	(1,100	)

(8) These costs represent the expenses incurred to bring recently acquired properties up to the Company’s operating standards, including items such as tree trimming and painting costs that do not meet the Company’s capitalization policy.

(9) The renter’s monthly payment includes the site rent and an amount attributable to the home lease. The site rent is reflected in Real Property Operations’ segment revenue. For purposes of management analysis, site rent is included in Rental Program revenue to evaluate the incremental revenue gains associated with the Rental Program, and to assess the overall growth and performance of the Rental Program and financial impact on the Company’s operations.

(10) Same Community results net $9.3 million and $8.7 million of certain utility revenue against the related utility expense in property operating and maintenance expense for the three months ended December 31, 2020 and 2019, respectively. Same Community results net $37.7 million and $34.7 million of utility revenue against the related utility expense in property operating and maintenance expense for the years ended December 31, 2020 and 2019, respectively.

(11) Same Community supplies and repair expense excludes $0.1 million and $0.7 million for the three months and year ended December 31, 2019, of expenses incurred for recently acquired properties to bring the properties up to the Company’s operating standards, including items such as tree trimming and painting costs that do not meet the Company’s capitalization policy.

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

(13) Calculated using actual results without rounding.

(14) Acquisitions and other is comprised of 130 properties acquired and three properties that the Company has an interest in, but does not operate in 2020, 42 properties acquired in 2019, one property being operated under a temporary use permit, three Florida Keys properties that require redevelopment as a result of damage sustained from Hurricane Irma in 2017, five recently opened ground-up developments, one property undergoing redevelopment, and other miscellaneous transactions and activity.

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

(16) As of December 31, 2020, total portfolio MH occupancy was 96.6 percent inclusive of the impact of over 1,200 recently constructed but vacant MH expansion sites, and annual RV occupancy was 100.0 percent.

(17) Total sites for development were comprised of 75.7 percent for expansion, 22.2 percent for greenfield development and 2.2 percent for redevelopment.

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

(19) MH lot modification capital expenditures 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.

(20) Capital expenditures related to acquisitions represent the purchase price of existing operating properties (including marinas) and land parcels to develop expansions or new properties. These costs for the year ended December 31, 2020 include $40.6 million of capital improvements identified during due diligence that are necessary to bring the communities to the Company’s operating standards. For the years ended December 31, 2019 and 2018, these costs were $50.7 million and $94.6 million, respectively. These include items such as: upgrading clubhouses; landscaping; new street light systems; new mail delivery systems; pool renovation including larger decks, heaters, and furniture; new maintenance facilities; and new signage including main signs and internal road signs. These are considered acquisition costs and although identified during due diligence, often require 24 to 36 months after closing to complete.

(21) MH expansion and development expenditures consist primarily of construction costs and costs necessary to complete home site improvements, such as driveways, sidewalks and landscaping.

(22) MH capital costs related to revenue generating activities consist primarily of garages, sheds, 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.

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

Attachment

Exhibit 99.1 Press Release and Supplemental Package 2020.12.31

Sun Communities, Inc. Reports 2020 Fourth Quarter Results and 2021 Guidance

Set Language