Maryland
|
38-2730780
|
|
(State
of Incorporation)
|
(I.R.S.
Employer Identification No.)
|
|
27777
Franklin Rd.
|
||
Suite
200
|
||
Southfield,
Michigan
|
48034
|
|
(Address
of Principal Executive Offices)
|
(Zip
Code)
|
(248)
208-2500
|
Large
accelerated filer [ ]
|
Accelerated
filer [ X ]
|
Non-accelerated
filer [ ]
|
Smaller
reporting company [ ]
|
Pages
|
||
PART
I – FINANCIAL INFORMATION
|
||
Item
1.
|
Financial
Statements (Unaudited):
|
|
Consolidated
Balance Sheets ─ March 31, 2010 and December 31, 2009
|
3
|
|
Consolidated
Statements of Operations ─ Periods Ended March 31, 2010 and
2009
|
4
|
|
Consolidated
Statements of Comprehensive Income ─ Periods Ended March 31, 2010 and
2009
|
5
|
|
Consolidated
Statement of Stockholders’ Deficit ─ Three Months Ended March 31,
2010
|
5
|
|
Consolidated
Statements of Cash Flows ─ Three Months Ended March 31, 2010 and
2009
|
6
|
|
Notes
to Consolidated Financial Statements
|
7
|
|
Item
2.
|
Management’s
Discussion and Analysis of Financial Condition and Results of
Operations
|
24
|
Item
3.
|
Quantitative
and Qualitative Disclosures about Market Risk
|
35
|
Item
4.
|
Controls
and Procedures
|
36
|
PART
II – OTHER INFORMATION
|
||
Item
1.
|
Legal
Proceedings
|
37
|
Item
1A.
|
Risk
Factors
|
37
|
Item
2.
|
Unregistered
Sales of Equity Securities and Use of Proceeds
|
37
|
Item
6.
|
Exhibits
|
38
|
Signatures
|
39
|
(Unaudited)
|
||||||||
March
31, 2010
|
December
31, 2009
|
|||||||
ASSETS
|
||||||||
Investment
property, net
|
$
|
1,052,973
|
$
|
1,064,305
|
||||
Cash
and cash equivalents
|
8,054
|
4,496
|
||||||
Inventory
of manufactured homes
|
2,698
|
3,934
|
||||||
Investment
in affiliates
|
827
|
1,646
|
||||||
Notes
and other receivables
|
77,945
|
74,030
|
||||||
Other
assets
|
30,832
|
32,954
|
||||||
TOTAL
ASSETS
|
$
|
1,173,329
|
$
|
1,181,365
|
||||
LIABILITIES
|
||||||||
Debt
|
$
|
1,157,962
|
$
|
1,159,442
|
||||
Lines
of credit
|
98,525
|
94,465
|
||||||
Other
liabilities
|
35,178
|
38,766
|
||||||
TOTAL
LIABILITIES
|
1,291,665
|
1,292,673
|
||||||
Commitments
and contingencies
|
||||||||
STOCKHOLDERS’
DEFICIT
|
||||||||
Preferred
stock, $0.01 par value, 10,000 shares authorized, none
issued
|
$
|
-
|
$
|
-
|
||||
Common stock, $0.01 par value, 90,000 shares
authorized
(March 31, 2010 and December 31, 2009, 20,789 and 20,635 shares issued
respectively)
|
208
|
206
|
||||||
Additional
paid-in capital
|
467,146
|
463,811
|
||||||
Officer's
notes
|
(3,217
|
)
|
(5,028
|
)
|
||||
Accumulated
other comprehensive loss
|
(2,246
|
)
|
(1,858
|
)
|
||||
Distributions
in excess of accumulated earnings
|
(508,890
|
)
|
(498,370
|
)
|
||||
Treasury
stock, at cost (March 31, 2010 and December 31, 2009, 1,802
shares)
|
(63,600
|
)
|
(63,600
|
)
|
||||
Total
Sun Communities, Inc. stockholders' deficit
|
(110,599
|
)
|
(104,839
|
)
|
||||
Noncontrolling
interests
|
(7,737
|
)
|
(6,469
|
)
|
||||
TOTAL
STOCKHOLDERS’ DEFICIT
|
(118,336
|
)
|
(111,308
|
)
|
||||
TOTAL
LIABILITIES AND STOCKHOLDERS’ DEFICIT
|
$
|
1,173,329
|
$
|
1,181,365
|
Three
Months Ended March 31,
|
||||||||
2010
|
2009
|
|||||||
REVENUES
|
||||||||
Income
from real property
|
$
|
52,007
|
$
|
50,999
|
||||
Revenue
from home sales
|
8,037
|
7,461
|
||||||
Rental
home revenue
|
5,079
|
5,200
|
||||||
Ancillary
revenues, net
|
226
|
195
|
||||||
Interest
|
1,796
|
1,272
|
||||||
Other
income, net
|
272
|
157
|
||||||
Total
revenues
|
67,417
|
65,284
|
||||||
COSTS
AND EXPENSES
|
||||||||
Property
operating and maintenance
|
13,040
|
12,605
|
||||||
Real
estate taxes
|
4,180
|
4,184
|
||||||
Cost
of home sales
|
6,244
|
5,423
|
||||||
Rental
home operating and maintenance
|
3,623
|
4,537
|
||||||
General
and administrative - real property
|
3,490
|
4,166
|
||||||
General
and administrative - home sales and rentals
|
1,933
|
1,826
|
||||||
Depreciation
and amortization
|
16,573
|
16,204
|
||||||
Interest
|
15,105
|
14,245
|
||||||
Interest
on mandatorily redeemable debt
|
817
|
835
|
||||||
Total
expenses
|
65,005
|
64,025
|
||||||
Income
before income taxes and equity income (loss) from
affiliates
|
2,412
|
1,259
|
||||||
Provision
for state income taxes
|
(132
|
)
|
(133
|
)
|
||||
Equity
income (loss) from affiliates
|
(819
|
)
|
27
|
|||||
Income
from continuing operations
|
1,461
|
1,153
|
||||||
Loss
from discontinued operations
|
-
|
(172
|
)
|
|||||
Net
income
|
1,461
|
981
|
||||||
Less:
amounts attributable to noncontrolling interests
|
124
|
104
|
||||||
Net
income attributable to Sun Communities, Inc. common
stockholders
|
$
|
1,337
|
$
|
877
|
||||
Amounts
attributable to Sun Communities, Inc. common
stockholders:
|
||||||||
Income
from continuing operations, net of state income
taxes
|
$
|
1,337
|
$
|
1,031
|
||||
Loss
from discontinued operations, net of state income
taxes
|
-
|
(154
|
)
|
|||||
Net
income attributable to Sun Communities, Inc. common
stockholders
|
$
|
1,337
|
$
|
877
|
||||
Weighted
average common shares outstanding:
|
||||||||
Basic
|
18,842
|
18,511
|
||||||
Diluted
|
20,984
|
20,698
|
||||||
Basic
and diluted earnings (loss) per share:
|
||||||||
Continuing
operations
|
$
|
0.07
|
$
|
0.06
|
||||
Discontinued
operations
|
-
|
(0.01
|
)
|
|||||
Basic
and diluted earnings per share
|
$
|
0.07
|
$
|
0.05
|
||||
Cash
dividends per common share:
|
$
|
0.63
|
$
|
0.63
|
Three
Months Ended
March
31,
|
||||||||
2010
|
2009
|
|||||||
Net
income
|
$
|
1,461
|
$
|
981
|
||||
Unrealized
loss on interest rate swaps
|
(432
|
)
|
(4
|
)
|
||||
Total
comprehensive income
|
1,029
|
977
|
||||||
Less:
amounts attributable to noncontrolling interests
|
80
|
104
|
||||||
Comprehensive
income attributable to Sun Communities, Inc. common
stockholders
|
$
|
949
|
$
|
873
|
Common
Stock
|
Additional
Paid-in Capital
|
Officer's
Notes
|
Accumulated
Other Comprehensive Loss
|
Distributions
in Excess of Accumulated Earnings
|
Treasury
Stock
|
Total
Sun Communities Stockholders' Deficit
|
Non-controlling
Interest
|
Total
Stockholders' Deficit
|
||||||||||||||||||||||||||||
Balance
as of December 31, 2009
|
$
|
206
|
$
|
463,811
|
$
|
(5,028
|
)
|
$
|
(1,858
|
)
|
$
|
(498,370
|
)
|
$
|
(63,600
|
)
|
$
|
(104,839
|
)
|
$
|
(6,469
|
)
|
$
|
(111,308
|
)
|
|||||||||||
Issuance
of common stock, net
|
2
|
3,093
|
-
|
-
|
-
|
-
|
3,095
|
-
|
3,095
|
|||||||||||||||||||||||||||
Stock-based
compensation - amortization and forfeitures
|
-
|
242
|
-
|
-
|
8
|
-
|
250
|
-
|
250
|
|||||||||||||||||||||||||||
Net
income
|
-
|
-
|
-
|
-
|
1,337
|
-
|
1,337
|
124
|
1,461
|
|||||||||||||||||||||||||||
Unrealized
loss on interest rate swaps and cap
|
-
|
-
|
-
|
(388
|
)
|
-
|
-
|
(388
|
)
|
(44
|
)
|
(432
|
)
|
|||||||||||||||||||||||
Repayment
of officer's notes
|
-
|
-
|
1,811
|
-
|
-
|
-
|
1,811
|
-
|
1,811
|
|||||||||||||||||||||||||||
Cash
distributions declared of $0.63 per share
|
-
|
-
|
-
|
-
|
(11,865
|
)
|
-
|
(11,865
|
)
|
(1,348
|
)
|
(13,213
|
)
|
|||||||||||||||||||||||
Balance
as of
March
31, 2010
|
$
|
208
|
$
|
467,146
|
$
|
(3,217
|
)
|
$
|
(2,246
|
)
|
$
|
(508,890
|
)
|
$
|
(63,600
|
)
|
$
|
(110,599
|
)
|
$
|
(7,737
|
)
|
$
|
(118,336
|
)
|
Three
Months Ended March 31,
|
||||||||
2010
|
2009
|
|||||||
OPERATING
ACTIVITIES:
|
||||||||
Net
income
|
$
|
1,461
|
$
|
981
|
||||
Less:
Loss from discontinued operations, net of tax
|
-
|
(172
|
)
|
|||||
Income
from continuing operations
|
1,461
|
1,153
|
||||||
Adjustments
to reconcile income from continuing operations to net cash provided by
operating activities:
|
||||||||
Gain
on disposal of other assets and depreciated homes,
net
|
(849
|
)
|
(1,327
|
)
|
||||
Loss
(gain) on valuation of derivative instruments
|
6
|
(3
|
)
|
|||||
Stock
compensation expense
|
289
|
418
|
||||||
Depreciation
and amortization
|
17,206
|
16,789
|
||||||
Amortization
of deferred financing costs
|
430
|
395
|
||||||
Equity
(income) loss from affiliates, net
|
819
|
(27
|
)
|
|||||
Change
in notes receivable from financed sales of inventory homes, net of
repayments
|
(1,381
|
)
|
(1,038
|
)
|
||||
Change
in inventory, other assets and other receivables,
net
|
1,866
|
3,046
|
||||||
Change
in accounts payable and other liabilities
|
(3,005
|
)
|
(862
|
)
|
||||
Net
cash provided by operating activities of continuing
operations
|
16,842
|
18,544
|
||||||
Net
cash used for operating activities of discontinued
operations
|
-
|
(162
|
)
|
|||||
NET
CASH PROVIDED BY OPERATING ACTIVITIES
|
16,842
|
18,382
|
||||||
INVESTING
ACTIVITIES:
|
||||||||
Investment
in properties
|
(8,745
|
)
|
(10,070
|
)
|
||||
Proceeds
related to dispositions of land
|
-
|
2
|
||||||
Proceeds
related to disposition of other assets and depreciated homes,
net
|
333
|
314
|
||||||
Reduction
of notes receivable and officer's notes, net
|
2,035
|
3,422
|
||||||
NET
CASH USED FOR INVESTING ACTIVITIES
|
(6,377
|
)
|
(6,332
|
)
|
||||
FINANCING
ACTIVITIES:
|
||||||||
Issuance
and associated costs of common stock and OP units,
net
|
2,311
|
(131
|
)
|
|||||
Borrowings
on lines of credit
|
33,473
|
39,406
|
||||||
Payments
on lines of credit
|
(29,413
|
)
|
(41,378
|
)
|
||||
Payments
to retire preferred operating partnership units
|
(925
|
)
|
-
|
|||||
Proceeds
from issuance of notes payable and other debt
|
4,347
|
7,593
|
||||||
Payments
on notes payable and other debt
|
(3,470
|
)
|
(4,064
|
)
|
||||
Payments
for deferred financing costs
|
(17
|
)
|
(10
|
)
|
||||
Distributions
to stockholders and OP unit holders
|
(13,213
|
)
|
(13,040
|
)
|
||||
NET
CASH USED FOR FINANCING ACTIVITIES
|
(6,907
|
)
|
(11,624
|
)
|
||||
Net
increase in cash and cash equivalents
|
3,558
|
426
|
||||||
Cash
and cash equivalents, beginning of period
|
4,496
|
6,162
|
||||||
Cash
and cash equivalents, end of period
|
$
|
8,054
|
$
|
6,588
|
||||
SUPPLEMENTAL
INFORMATION:
|
||||||||
Cash
paid for interest
|
$
|
13,140
|
$
|
12,368
|
||||
Cash
paid for interest on mandatorily redeemable debt
|
$
|
817
|
$
|
834
|
||||
Cash
paid for state income taxes
|
$
|
-
|
$
|
-
|
||||
Noncash
investing and financing activities:
|
||||||||
Unrealized
loss on interest rate swaps
|
$
|
(432
|
)
|
$
|
(4
|
)
|
||
Reduction
in secured borrowing balance
|
$
|
1,432
|
$
|
770
|
||||
Receivable
for issuance of stock
|
$
|
784
|
$
|
-
|
Three
Months Ended
|
||||||||
March
31,
|
||||||||
2010
|
2009
|
|||||||
Total
revenues
|
$
|
-
|
$
|
183
|
||||
Total
expenses
|
-
|
(355
|
)
|
|||||
Loss
from discontinued operations
|
-
|
(172
|
)
|
|||||
Less: amounts
attributable to noncontrolling interest
|
-
|
(18
|
)
|
|||||
Loss
from discontinued operations attributable to Sun Communities, Inc. common
stockholders
|
$
|
-
|
$
|
(154
|
)
|
3.
|
Investment
Property
|
March
31, 2010
|
December
31, 2009
|
|||||||
Land
|
$
|
116,266
|
$
|
116,266
|
||||
Land
improvements and buildings
|
1,184,827
|
1,183,613
|
||||||
Rental
homes and improvements
|
203,337
|
203,435
|
||||||
Furniture,
fixtures, and equipment
|
35,579
|
35,400
|
||||||
Land
held for future development
|
26,986
|
26,986
|
||||||
Investment
property
|
1,566,995
|
1,565,700
|
||||||
Less:
Accumulated depreciation
|
(514,022
|
)
|
(501,395
|
)
|
||||
Investment
property, net
|
$
|
1,052,973
|
$
|
1,064,305
|
4.
|
Transfers
of Financial Assets
|
Number
of Payments
|
Recourse
%
|
|||
Less
than or equal to 15
|
100
|
%
|
||
Greater
than 15 but less than 64
|
90
|
%
|
||
64
or more
|
65
|
%
|
Beginning
balance as of December 31, 2009
|
$
|
52,368
|
||
Financed
sales of manufactured homes
|
4,347
|
|||
Principal
payments and payoffs from our customers
|
(801
|
)
|
||
Repurchases
|
(631
|
)
|
||
Total
activity
|
2,915
|
|||
Ending
balance as of March 31, 2010
|
$
|
55,283
|
5.
|
Notes
and Other Receivables
|
March
31, 2010
|
December
31, 2009
|
|||||||
Installment
notes receivable on manufactured homes, net
|
$
|
14,136
|
$
|
12,627
|
||||
Collateralized
receivables, net (see Note 4)
|
55,111
|
52,201
|
||||||
Other
receivables, net
|
8,698
|
9,202
|
||||||
Total
notes and other receivables, net
|
$
|
77,945
|
$
|
74,030
|
5.
|
Notes
and Other Receivables, continued
|
March
31, 2010
|
December
31, 2009
|
|||||||||||||||||||||||
Secured
by
|
Secured
by
|
|||||||||||||||||||||||
Promissory
Notes
|
Outstanding
Principal Balance
|
Common
Stock
|
Common
OP Units
|
Outstanding
Principal Balance
|
Common
Stock
|
Common
OP Units
|
||||||||||||||||||
Secured
- $1.3 million
|
$
|
372
|
22,874
|
-
|
$
|
581
|
35,756
|
-
|
||||||||||||||||
Secured
- $6.6 million
|
1,889
|
50,790
|
36,539
|
2,952
|
79,395
|
57,118
|
||||||||||||||||||
Secured
- $1.0 million
|
292
|
27,040
|
-
|
457
|
42,268
|
-
|
||||||||||||||||||
Subtotal
secured notes
|
2,553
|
100,704
|
36,539
|
3,990
|
157,419
|
57,118
|
||||||||||||||||||
Unsecured
- $1.0 million
|
292
|
-
|
-
|
457
|
-
|
-
|
||||||||||||||||||
Unsecured
- $1.3 million
|
372
|
-
|
-
|
581
|
-
|
-
|
||||||||||||||||||
Subtotal
unsecured notes
|
664
|
-
|
-
|
1,038
|
-
|
-
|
||||||||||||||||||
Total
promissory notes
|
$
|
3,217
|
100,704
|
36,539
|
$
|
5,028
|
157,419
|
57,118
|
6.
|
Investment
in Affiliates
|
6.
|
Investment
in Affiliates, continued
|
Three
Months Ended
|
||||||||
March
31,
|
||||||||
2010
|
2009
|
|||||||
Revenues
|
$
|
19,615
|
$
|
22,815
|
||||
Expenses
|
23,862
|
22,302
|
||||||
Net
income
|
$
|
(4,247
|
)
|
$
|
513
|
7.
|
Debt
and Lines of Credit
|
Principal
Outstanding
|
Weighted
Average Years to Maturity
|
Weighted
Average Interest Rates
|
||||||||||||||||||||||
March
31, 2010
|
December
31, 2009
|
March
31, 2010
|
December
31, 2009
|
March
31, 2010
|
December
31, 2009
|
|||||||||||||||||||
Collateralized
term loans - CMBS
|
$
|
469,252
|
$
|
471,299
|
4.3
|
4.6
|
5.1
|
%
|
5.1
|
%
|
||||||||||||||
Collateralized
term loans - FNMA
|
372,407
|
373,501
|
4.2
|
4.4
|
4.1
|
%
|
4.1
|
%
|
||||||||||||||||
Preferred
OP Units
|
48,022
|
48,947
|
11.0
|
3.7
|
6.8
|
%
|
6.8
|
%
|
||||||||||||||||
Secured
borrowing (see Note 4)
|
55,283
|
52,368
|
13.5
|
13.8
|
11.1
|
%
|
10.9
|
%
|
||||||||||||||||
Mortgage
notes, other
|
212,998
|
213,327
|
5.4
|
5.6
|
5.1
|
%
|
5.2
|
%
|
||||||||||||||||
Total
debt
|
$
|
1,157,962
|
$
|
1,159,442
|
5.2
|
5.1
|
5.2
|
%
|
5.1
|
%
|
7.
|
Debt
and Lines of Credit, continued
|
7.
|
Debt
and Lines of Credit, continued
|
Maturities
and Amortization By Year
|
||||||||||||||||||||||||||||
Total
Due
|
2010
|
2011
|
2012
|
2013
|
2014
|
After
5 years
|
||||||||||||||||||||||
Lines
of credit
|
$
|
98,525
|
$
|
-
|
$
|
98,525
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
-
|
||||||||||||||
Mortgage
loans payable:
|
||||||||||||||||||||||||||||
Maturities
|
987,950
|
-
|
103,708
|
31,518
|
26,812
|
480,881
|
345,031
|
|||||||||||||||||||||
Principal
amortization
|
66,707
|
10,590
|
13,921
|
13,051
|
13,268
|
8,461
|
7,416
|
|||||||||||||||||||||
Preferred
OP Units
|
48,022
|
370
|
-
|
4,300
|
3,345
|
4,225
|
35,782
|
|||||||||||||||||||||
Secured
borrowing
|
55,283
|
1,583
|
2,306
|
2,553
|
2,758
|
3,010
|
43,073
|
|||||||||||||||||||||
Total
|
$
|
1,256,487
|
$
|
12,543
|
$
|
218,460
|
$
|
51,422
|
$
|
46,183
|
$
|
496,577
|
$
|
431,302
|
8.
|
Stockholders’
Deficit
|
9.
|
Other
Income
|
Three
Months Ended
|
||||||||
March
31,
|
||||||||
2010
|
2009
|
|||||||
Brokerage
commissions
|
$
|
139
|
$
|
135
|
||||
Gain
(loss) on disposition of assets, net
|
|
|
(118
|
)
|
|
|
17
|
|
Other,
net
|
|
|
251
|
|
|
|
5
|
|
Total
other income, net
|
|
$
|
272
|
|
|
$
|
157
|
10.
|
Segment
Reporting
|
Three Months Ended March 31,
2010
|
Three Months Ended March 31,
2009
|
|||||||||||||||||||||||
Real Property Operations
|
Home Sales and Home Rentals
|
Consolidated
|
Real Property Operations
|
Home Sales and Home Rentals
|
Consolidated
|
|||||||||||||||||||
Revenues
|
$ | 52,007 | $ | 13,116 | $ | 65,123 | $ | 50,999 | $ | 12,661 | $ | 63,660 | ||||||||||||
Operating
expenses/Cost of sales
|
17,220 | 9,867 | 27,087 | 16,789 | 9,960 | 26,749 | ||||||||||||||||||
Net
operating income/Gross profit
|
34,787 | 3,249 | 38,036 | 34,210 | 2,701 | 36,911 | ||||||||||||||||||
Adjustments
to arrive at net income (loss):
|
||||||||||||||||||||||||
Other
revenues
|
2,073 | 221 | 2,294 | 1,429 | 195 | 1,624 | ||||||||||||||||||
General
and administrative
|
(3,490 | ) | (1,933 | ) | (5,423 | ) | (4,166 | ) | (1,826 | ) | (5,992 | ) | ||||||||||||
Depreciation
and amortization
|
(11,274 | ) | (5,299 | ) | (16,573 | ) | (11,120 | ) | (5,084 | ) | (16,204 | ) | ||||||||||||
Interest
expense
|
(15,838 | ) | (84 | ) | (15,922 | ) | (15,015 | ) | (65 | ) | (15,080 | ) | ||||||||||||
Equity
income (loss) from affiliates, net
|
(819 | ) | - | (819 | ) | 99 | (72 | ) | 27 | |||||||||||||||
Provision
for state income tax
|
(132 | ) | - | (132 | ) | (133 | ) | - | (133 | ) | ||||||||||||||
Income
(loss) from continuing operations
|
5,307 | (3,846 | ) | 1,461 | 5,304 | (4,151 | ) | 1,153 | ||||||||||||||||
Loss
from discontinued operations
|
- | - | - | (172 | ) | - | (172 | ) | ||||||||||||||||
Net
income (loss)
|
5,307 | (3,846 | ) | 1,461 | 5,132 | (4,151 | ) | 981 | ||||||||||||||||
Less: Net
income (loss) attributable to noncontrolling interest
|
519 | (395 | ) | 124 | 547 | (443 | ) | 104 | ||||||||||||||||
Net
income (loss) attributable to Sun Communities, Inc.
|
$ | 4,788 | $ | (3,451 | ) | $ | 1,337 | $ | 4,585 | $ | (3,708 | ) | $ | 877 |
March
31, 2010
|
December
31, 2009
|
|||||||||||||||||||||||
Real
Property
Operations
|
Home
Sales and Home Rentals
|
Consolidated
|
Real
Property
Operations
|
Home
Sales and Home Rentals
|
Consolidated
|
|||||||||||||||||||
Identifiable
assets:
|
||||||||||||||||||||||||
Investment
property, net
|
$
|
913,277
|
$
|
139,696
|
$
|
1,052,973
|
$
|
922,094
|
$
|
142,211
|
$
|
1,064,305
|
||||||||||||
Cash
and cash equivalents
|
7,471
|
583
|
8,054
|
4,616
|
(120
|
)
|
4,496
|
|||||||||||||||||
Inventory
of manufactured homes
|
-
|
2,698
|
2,698
|
-
|
3,934
|
3,934
|
||||||||||||||||||
Investment
in affiliate
|
827
|
-
|
827
|
1,646
|
-
|
1,646
|
||||||||||||||||||
Notes
and other receivables
|
74,302
|
3,643
|
77,945
|
69,625
|
4,405
|
74,030
|
||||||||||||||||||
Other
assets
|
28,288
|
2,544
|
30,832
|
30,624
|
2,330
|
32,954
|
||||||||||||||||||
Total
assets
|
$
|
1,024,165
|
$
|
149,164
|
$
|
1,173,329
|
$
|
1,028,605
|
$
|
152,760
|
$
|
1,181,365
|
11.
|
Derivative
Instruments and Hedging Activities
|
Type
|
Purpose
|
Effective
Date
|
Maturity
Date
|
Notional
(in
millions)
|
Based
on
|
Variable
Rate
|
Fixed
Rate
|
Spread
|
Effective
Fixed Rate
|
|||||||||
Swap
|
Floating
to Fixed Rate
|
09/04/02
|
07/03/12
|
25.0
|
3
Month LIBOR
|
0.2506%
|
4.7000%
|
2.0000%
|
6.7000%
|
|||||||||
Swap
|
Floating
to Fixed Rate
|
01/02/09
|
01/02/14
|
20.0
|
3
Month LIBOR
|
0.2506%
|
2.1450%
|
2.0000%
|
4.1450%
|
|||||||||
Swap
|
Floating
to Fixed Rate
|
02/13/09
|
02/13/11
|
25.0
|
1
Month LIBOR
|
0.2300%
|
1.5700%
|
2.0500%
|
3.6200%
|
|||||||||
Cap
|
Cap
Floating Rate
|
04/28/09
|
05/01/12
|
152.4
|
3
Month LIBOR
|
0.2901%
|
11.0000%
|
0.0000%
|
N/A
|
Asset
Derivatives
|
Liability
Derivatives
|
|||||||||||||||
Balance
Sheet Location
|
Fair
Value
|
Balance
Sheet Location
|
Fair
Value
|
|||||||||||||
Derivatives
designated as hedging instruments
|
March
31, 2010
|
December
31, 2009
|
March
31, 2010
|
December
31, 2009
|
||||||||||||
Interest
rate swaps and cap agreement
|
Other
assets
|
$
|
4
|
$
|
379
|
Other
liabilities
|
$
|
2,187
|
$
|
2,123
|
||||||
Total
derivatives designated as hedging instruments
|
$
|
4
|
$
|
379
|
$
|
2,187
|
$
|
2,123
|
11.
|
Derivative
Instruments and Hedging Activities,
continued
|
Derivatives
in cash flow hedging
|
Amount
of Gain or (Loss) Recognized in OCI (Effective Portion)
|
Location of Gain or
(Loss) Reclassified from Accumulated OCI into Income (Effective
Portion)
|
Amount of Gain or
(Loss) Reclassified from Accumulated OCI into Income (Effective
Portion)
|
Location of Gain or
(Loss) Recognized in Income on Derivative
(Ineffective Portion and Amount Excluded from Effectiveness
Testing)
|
Amount of Gain or
(Loss) Recognized in Income on Derivative
(Ineffective Portion and Amount Excluded from Effectiveness
Testing)
|
|||||||||||||||||||||
Three
Months Ended March 31,
|
Three
Months Ended March 31,
|
Three
Months Ended March 31,
|
||||||||||||||||||||||||
2010
|
2009
|
2010
|
2009
|
2010
|
2009
|
|||||||||||||||||||||
Interest
rate swaps and cap agreement
|
$
|
(432
|
)
|
$
|
(4
|
)
|
Interest
expense
|
$
|
-
|
$
|
-
|
Interest
expense
|
$
|
(6
|
)
|
$
|
3
|
|||||||||
Total
|
$
|
(432
|
)
|
$
|
(4
|
)
|
Total
|
$
|
-
|
$
|
-
|
Total
|
$
|
(6
|
)
|
$
|
3
|
12.
|
Income
Taxes
|
12.
|
Income
Taxes, continued
|
13.
|
Earnings
Per Share
|
Three
Months Ended
|
||||||||
March
31,
|
||||||||
Numerator
|
2010
|
2009
|
||||||
Basic
earnings: net income from continuing operations attributable to common
stockholders
|
$
|
1,337
|
$
|
1,031
|
||||
Add:
net income attributable to noncontrolling interests of operating
partnership
|
153
|
122
|
||||||
Diluted
earnings: net income from continuing operations available to common
stockholders and unitholders
|
$
|
1,490
|
$
|
1,153
|
||||
Denominator
|
||||||||
Weighted
average common shares outstanding
|
18,665
|
18,330
|
||||||
Weighted
average unvested restricted stock outstanding
|
177
|
181
|
||||||
Basic
weighted average common shares and unvested restricted stock
outstanding
|
18,842
|
18,511
|
||||||
Add:
dilutive securities
|
2,142
|
2,187
|
||||||
Diluted
weighted average common shares and securities
|
20,984
|
20,698
|
||||||
Basic
and diluted earnings per share from continuing operations available to
common stockholders
|
$
|
0.07
|
$
|
0.06
|
March
31,
|
||||||||
2010
|
2009
|
|||||||
Stock
options
|
131
|
205
|
||||||
Convertible
Preferred OP Units
|
526
|
526
|
||||||
Total
securities
|
657
|
731
|
14.
|
Fair
Value of Financial Instruments
|
14.
|
Fair
Value of Financial Instruments,
continued
|
March
31, 2010
|
December
31, 2009
|
|||||||||||||||
Carrying
Value
|
Fair
Value
|
Carrying
Value
|
Fair
Value
|
|||||||||||||
Financial
assets
|
||||||||||||||||
Derivative
instruments
|
$
|
4
|
$
|
4
|
$
|
379
|
$
|
379
|
||||||||
Installment
notes on manufactured homes, net
|
14,136
|
14,136
|
12,627
|
12,627
|
||||||||||||
Collateralized
receivables, net
|
55,111
|
-
|
52,201
|
-
|
||||||||||||
Financial
liabilities
|
||||||||||||||||
Derivative
instruments
|
$
|
2,187
|
$
|
2,187
|
$
|
2,123
|
$
|
2,123
|
||||||||
Long
term debt (excluding secured borrowing)
|
1,102,679
|
1,061,726
|
1,107,074
|
1,057,326
|
||||||||||||
Secured
borrowing
|
55,283
|
-
|
52,368
|
-
|
||||||||||||
Lines
of credit
|
98,525
|
98,525
|
94,465
|
94,465
|
Assets
|
Total
Fair Value
|
Level
1
|
Level
2
|
Level
3
|
||||||||||||
Derivative
instruments
|
$
|
4
|
$
|
-
|
$
|
4
|
$
|
-
|
||||||||
Total
assets
|
$
|
4
|
$
|
-
|
$
|
4
|
$
|
-
|
||||||||
Liabilities
|
||||||||||||||||
Derivative
instruments
|
$
|
2,187
|
$
|
-
|
$
|
2,187
|
$
|
-
|
||||||||
Total
liabilities
|
$
|
2,187
|
$
|
-
|
$
|
2,187
|
$
|
-
|
15.
|
Recent
Accounting Pronouncements
|
16.
|
Commitments
and Contingencies
|
Three
Months Ended
|
||||||||||||||||
March
31,
|
||||||||||||||||
Financial
Information (in thousands)
|
2010
|
2009
|
Change
|
%
Change
|
||||||||||||
Income
from Real Property
|
$
|
49,134
|
$
|
48,439
|
$
|
695
|
1.4
|
%
|
||||||||
Property
operating expenses:
|
||||||||||||||||
Payroll
and benefits
|
3,823
|
3,693
|
130
|
3.5
|
%
|
|||||||||||
Legal,
taxes, & insurance
|
610
|
774
|
(164
|
)
|
-21.2
|
%
|
||||||||||
Utilities
|
3,479
|
3,509
|
(30
|
)
|
-0.9
|
%
|
||||||||||
Supplies
and repair
|
1,300
|
1,194
|
106
|
8.9
|
%
|
|||||||||||
Other
|
955
|
875
|
80
|
9.1
|
%
|
|||||||||||
Real
estate taxes
|
4,180
|
4,184
|
(4
|
)
|
-0.1
|
%
|
||||||||||
Property
operating expenses
|
14,347
|
14,229
|
118
|
0.8
|
%
|
|||||||||||
Real
Property NOI
|
$
|
34,787
|
$
|
34,210
|
$
|
577
|
1.7
|
%
|
As
of March 31,
|
||||||||||||
Other
Information
|
2010
|
2009
|
Change
|
|||||||||
Number
of properties
|
136
|
136
|
-
|
|||||||||
Developed
sites
|
47,566
|
47,605
|
(39
|
)
|
||||||||
Occupied
sites (1)
|
38,177
|
37,877
|
300
|
|||||||||
Occupancy
% (1)
|
83.9
|
%
|
83.3
|
%
|
0.6
|
%
|
||||||
Weighted
average monthly rent per site (2)
|
$
|
407
|
$
|
397
|
$
|
10
|
||||||
Sites
available for development
|
5,588
|
5,583
|
5
|
(1)
|
Occupied sites and occupancy %
include manufactured housing and permanent recreational vehicle sites, and
exclude seasonal recreational vehicle
sites.
|
(2)
|
Average
rent relates only to manufactured housing sites, and excludes permanent
and seasonal recreational vehicle
sites.
|
Three
Months Ended
|
||||||||||||||||
March
31,
|
||||||||||||||||
Financial
Information
|
2010
|
2009
|
Change
|
%
Change
|
||||||||||||
Rental
home revenue
|
$
|
5,079
|
$
|
5,200
|
$
|
(121
|
)
|
-2.3
|
%
|
|||||||
Site
rent from Rental Program (1)
|
7,016
|
6,450
|
566
|
8.8
|
%
|
|||||||||||
Rental
Program revenue
|
12,095
|
11,650
|
445
|
3.8
|
%
|
|||||||||||
Expenses
|
||||||||||||||||
Payroll
and commissions
|
500
|
783
|
(283
|
)
|
-36.1
|
%
|
||||||||||
Repairs
and refurbishment
|
1,604
|
1,991
|
(387
|
)
|
-19.4
|
%
|
||||||||||
Taxes
and insurance
|
783
|
770
|
13
|
1.7
|
%
|
|||||||||||
Marketing
and other
|
736
|
993
|
(257
|
)
|
-25.9
|
%
|
||||||||||
Rental
Program operating and maintenance
|
3,623
|
4,537
|
(914
|
)
|
-20.1
|
%
|
||||||||||
Rental
Program NOI
|
$
|
8,472
|
$
|
7,113
|
$
|
1,359
|
19.1
|
%
|
||||||||
Other
Information
|
||||||||||||||||
Number
of occupied rentals, end of period*
|
5,950
|
5,698
|
252
|
4.4
|
%
|
|||||||||||
Investment
in occupied rental homes
|
$
|
188,697
|
$
|
177,755
|
$
|
10,942
|
6.2
|
%
|
||||||||
Number
of sold rental homes*
|
178
|
168
|
10
|
6.0
|
%
|
|||||||||||
Weighted
average monthly rental rate*
|
$
|
729
|
$
|
730
|
$
|
(1
|
)
|
-0.1
|
%
|
(1)
|
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 the Real
Property Operations segment. For purposes of management analysis, the site
rent is included in the Rental Program revenue to evaluate the growth and
performance of the Rental Program.
|
Three
Months Ended
|
||||||||||||||||
March
31,
|
||||||||||||||||
Financial
Information
|
2010
|
2009
|
Change
|
%
Change
|
||||||||||||
New
home sales
|
$
|
897
|
$
|
1,288
|
$
|
(391
|
)
|
-30.4
|
%
|
|||||||
Pre-owned
home sales
|
7,140
|
6,173
|
967
|
15.7
|
%
|
|||||||||||
Revenue
from homes sales
|
8,037
|
7,461
|
576
|
7.7
|
%
|
|||||||||||
New
home cost of sales
|
774
|
1,116
|
(342
|
)
|
-30.6
|
%
|
||||||||||
Pre-owned
home cost of sales
|
5,470
|
4,307
|
1,163
|
27.0
|
%
|
|||||||||||
Cost
of home sales
|
6,244
|
5,423
|
821
|
15.1
|
%
|
|||||||||||
NOI
/ Gross profit
|
$
|
1,793
|
$
|
2,038
|
$
|
(245
|
)
|
-12.0
|
%
|
|||||||
Gross
profit – new homes
|
123
|
172
|
(49
|
)
|
-28.5
|
%
|
||||||||||
Gross
margin % – new homes
|
13.7
|
%
|
13.4
|
%
|
0.3
|
%
|
||||||||||
Gross
profit – pre-owned homes
|
1,670
|
1,866
|
(196
|
)
|
-10.5
|
%
|
||||||||||
Gross
margin % – pre-owned homes
|
23.4
|
%
|
30.2
|
%
|
-6.8
|
%
|
||||||||||
Statistical
Information
|
||||||||||||||||
Home
sales volume:
|
||||||||||||||||
New
home sales
|
15
|
19
|
(4
|
)
|
-21.1
|
%
|
||||||||||
Pre-owned
home sales
|
310
|
229
|
81
|
35.4
|
%
|
|||||||||||
Total
homes sold
|
325
|
248
|
77
|
31.0
|
%
|
Three
Months Ended
|
||||||||
March
31,
|
||||||||
2010
|
2009
|
|||||||
Revenues
|
$
|
65,123
|
$
|
63,660
|
||||
Operating
expenses/Cost of sales
|
27,087
|
26,749
|
||||||
NOI/gross
profit
|
38,036
|
36,911
|
||||||
Adjustments
to arrive at net loss:
|
||||||||
Other
revenues
|
2,294
|
1,624
|
||||||
General
and administrative
|
(5,423
|
)
|
(5,992
|
)
|
||||
Depreciation
and amortization
|
(16,573
|
)
|
(16,204
|
)
|
||||
Interest
expense
|
(15,922
|
)
|
(15,080
|
)
|
||||
Equity
income from affiliates
|
(819
|
)
|
27
|
|||||
Provision
for state income taxes
|
(132
|
)
|
(133
|
)
|
||||
Income
from continuing operations
|
1,461
|
1,153
|
||||||
Loss
from discontinued operations
|
-
|
(172
|
)
|
|||||
Net
income
|
1,461
|
981
|
||||||
Less:
amounts attributable to noncontrolling interest
|
124
|
104
|
||||||
Net
income attributable to Sun Communities, Inc. common
stockholders
|
$
|
1,337
|
$
|
877
|
Three
Months Ended
|
||||||||
March
31,
|
||||||||
2010
|
2009
|
|||||||
Net
income
|
$
|
1,461
|
$
|
981
|
||||
Adjustments:
|
||||||||
Depreciation
and amortization
|
17,034
|
16,621
|
||||||
Benefit
for state income taxes (1)
|
(11
|
)
|
(13
|
)
|
||||
Gain
on disposition of assets, net
|
(849
|
)
|
(1,328
|
)
|
||||
Funds
from operations (FFO)
|
$
|
17,635
|
$
|
16,261
|
||||
Weighted
average Common Shares/OP Units outstanding:
|
||||||||
Basic
|
20,981
|
20,698
|
||||||
Diluted
|
20,984
|
20,698
|
||||||
FFO
per weighted average Common Share/OP Unit - Basic
|
$
|
0.84
|
$
|
0.79
|
||||
FFO
per weighted average Common Share/OP Unit - Diluted
|
$
|
0.84
|
$
|
0.79
|
Three
Months Ended
|
||||||||
March
31,
|
||||||||
2010
|
2009
|
|||||||
Net
income
|
$
|
1,461
|
$
|
981
|
||||
Michigan
Business tax reversal
|
(740
|
)
|
-
|
|||||
Equity
affiliate adjustment
|
819
|
(99
|
)
|
|||||
Adjusted
net income
|
1,540
|
882
|
||||||
Depreciation
and amortization
|
17,034
|
16,621
|
||||||
Benefit
for state income taxes (1)
|
(11
|
)
|
(13
|
)
|
||||
Gain
on disposition of assets, net
|
(849
|
)
|
(1,328
|
)
|
||||
Adjusted
funds from operations (FFO)
|
$
|
17,714
|
$
|
16,162
|
||||
Adjusted
FFO per weighted average Common Share/OP Unit -
Diluted
|
$
|
0.84
|
$
|
0.78
|
2010
|
$0.4
million
|
2011
|
$103.7
million and any balance outstanding on the unsecured line of credit or the
floor plan facility
|
2012
|
$35.8
million
|
2013
|
$30.2
million
|
2014
|
$485.1
million
|
|
(a)
|
Under
the supervision and with the participation of our management, including
the Chief Executive Officer, Gary A. Shiffman, and Chief Financial
Officer, Karen J. Dearing, we evaluated the effectiveness of the design
and operation of our disclosure controls and procedures as of the end of
the period covered by this quarterly report, pursuant to Rule 13a-15 of
the Securities Exchange Act of 1934 (the “Exchange Act”). Based upon that
evaluation, our Chief Executive Officer and Chief Financial Officer
concluded that our disclosure controls and procedures as of the end of the
period covered by this report were effective to ensure that information we
are required to disclose in our filings with the SEC under the Exchange
Act is recorded, processed, summarized and reported, within the time
periods specified in the SEC’s rules and forms, and to ensure that
information we are required to disclose in the reports that we file under
the Exchange Act is accumulated and communicated to our management,
including our principal executive officer and principal financial officer,
as appropriate to allow timely decisions regarding required
disclosure.
|
|
(b)
|
There
have been no changes in our internal control over financial reporting
during the quarterly period ended March 31, 2010 that have materially
affected, or are reasonably likely to materially affect, our internal
control over financial reporting.
|
Exhibit
No.
|
Description
|
|
31.1
|
Certification
of Chief Executive Officer pursuant to Securities Exchange Act Rules
13a-14(a)/15(d)-14(a), as adopted pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002.
|
|
31.2
|
Certification
of Chief Financial Officer pursuant to Securities Exchange Act Rules
13a-14(a)/15(d)-14(a), as adopted pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002.
|
|
32
|
Certification
pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of
the Sarbanes-Oxley Act of 2002
|
SUN
COMMUNITIES, INC.
|
|||
Dated:
May 6, 2010
|
By:
|
/s/
Karen J. Dearing
|
|
Karen
J. Dearing, Chief Financial Officer and Secretary
(Duly
authorized officer and principal financial
officer)
|