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Sun Communities, Inc. Reports 2023 Second Quarter and Year-to-Date Results

     

Net Earnings per Diluted Share of $0.72 for the Quarter Increased by 18% Year-over-Year

Core FFO per Share of $1.96 for the Quarter, in line with Guidance

     

Same Property NOI Grew by 6.3% and 6.5%, for the Quarter and Year-to-Date over the 2022 Periods;
Strong Demand and Effective Expense Management Drove Outperformance

Same Property Adjusted Occupancy for MH and RV Increased by 170 Basis Points, Year-over-Year

Solid Transient-to-Annual RV Site Conversions of over 750 Sites

     

Revising Full-Year Core FFO per Share Guidance for 2023 to $7.09 - $7.23

Increasing Guidance for Total Same Property NOI Growth to 5.3% - 6.1%

     

Southfield, MI, July 26, 2023 (GLOBE NEWSWIRE) -- Sun Communities, Inc. (NYSE: SUI) (the "Company" or "SUI"), a real estate investment trust ("REIT") that owns and operates, or has an interest in, manufactured housing ("MH") and recreational vehicle ("RV") communities and marinas (collectively, the "properties"), today reported its second quarter results for 2023.

Financial Results for the Quarter and Six Months Ended June 30, 2023

  • For the quarter ended June 30, 2023, net income attributable to common shareholders was $89.8 million, or $0.72 per diluted share, compared to net income attributable to common shareholders of $74.0 million, or $0.61 per diluted share for the same period in 2022, an 18% increase.

  • For the six months ended June 30, 2023, net income attributable to common shareholders was $59.7 million, or $0.48 per diluted share, compared to net income attributable to common shareholders of $74.7 million, or $0.63 per diluted share, for the same period in 2022.

Non-GAAP Financial Measures

  • Core Funds from Operations ("Core FFO") for the quarter and six months ended June 30, 2023, were $1.96 per common share and dilutive convertible securities ("Share") and $3.19 per Share, respectively, representing 3.0% and 5.3% decreases as compared to the corresponding periods in 2022.

  • Same Property Net Operating Income ("NOI") increased by 6.3% and 6.5% for the quarter and six months ended June 30, 2023, respectively, as compared to the corresponding period in 2022.

"We delivered strong second quarter results that were in line with our expectations, driven by the reliability of our real property operations which produce steady growth through economic cycles," said Gary A. Shiffman, Chairman, President and CEO. "This growth was demonstrated across each of our segments which possess sustained compelling market dynamics. In Manufactured Housing, we are pleased with our ability to outpace inflation rates in rental income, while also realizing a steady increase in occupancy levels. In our RV segment, we continued to successfully convert transient guests into annual residents at a record pace. Our outperformance in Marinas was primarily fueled by robust demand, as our members recognize the value of our industry-leading marina network. In the UK, where a more challenging macro environment is creating home sales headwinds, we continue to see strength in real property income generation. Overall, we remain highly confident in our ability to produce solid cash flow growth and generate value throughout our exceptional MH, RV and Marina portfolios."

OPERATING HIGHLIGHTS

North America Portfolio Occupancy

  • Total MH and annual RV occupancy was 97.1% at June 30, 2023, as compared to 97.2% at June 30, 2022.

  • During the quarter ended June 30, 2023, the number of MH and annual RV revenue producing sites increased by 1,039 sites, as compared to an increase of 950 sites during the corresponding period in 2022, a 9.4% increase.

  • Transient-to-annual RV site conversions totaled over 750 sites during the second quarter of 2023 and account for 72.6% of the revenue producing site gains.

Same Property Results

For the properties owned and operated by the Company since at least January 1, 2022, the following table reflects the percentage changes for the quarter and six months ended June 30, 2023:

 Quarter Ended June 30, 2023
 MH RV Marina Total
Revenue        6.7        %         3.6        %         9.2        %         6.2        %
Expense        9.4        %         4.1        %         3.4        %         6.0        %
NOI        5.7        %         3.2        %         11.9        %         6.3        %
        
 Six Months Ended June 30, 2023
 MH RV Marina Total
Revenue        6.5        %         4.7        %         9.9        %         6.7        %
Expense        9.9        %         5.8        %         3.8        %         7.0        %
NOI        5.4        %         3.7        %         13.2        %         6.5        %
        
Number of Properties289  161  119  569 

Same Property adjusted blended occupancy for MH and RV increased 170 basis points to 98.7% at June 30, 2023, from 97.0% at June 30, 2022.

INVESTMENT ACTIVITY

During the quarter ended June 30, 2023, the Company expanded its existing communities by over 110 sites.

BALANCE SHEET, CAPITAL MARKETS ACTIVITY AND OTHER ITEMS

As of June 30, 2023, the Company had $7.6 billion in debt outstanding with a weighted average interest rate of 4.0% and a weighted average maturity of 7.1 years. At June 30, 2023, the Company's net debt to trailing twelve-month Recurring EBITDA ratio was 6.2 times.

2023 GUIDANCE UPDATE

The Company is updating full-year 2023 and establishing third quarter 2023 guidance for diluted EPS and Core FFO per Share as follows:

Reconciliation of Diluted EPS to Core FFO per Share

 Full-Year Ending December 31, 2023 Third Quarter Ending
September 30, 2023
 Prior FY Guidance Revised FY Range 
Diluted EPS $        2.12          $        2.32          $        2.11          $        2.25          $        1.36          $        1.43         
Depreciation and amortization          5.06                   5.06                   5.07                   5.07                   1.26                   1.26         
Gain / (loss) on sale of assets          (0.30)          (0.30)          (0.28)          (0.28)          (0.09)          (0.09)
Business combination expense and other acquisition related costs          0.07                   0.07                   0.09                   0.09                   0.01                   0.01         
Other adjustments(a)          0.27                   0.27                   0.10                   0.10                   (0.05)          (0.05)
Core FFO(b) per Share $        7.22          $        7.42          $        7.09          $        7.23          $        2.49          $        2.56         

(a) Other adjustments consist primarily of deferred taxes, changes in remeasurement gains / (losses), contingent legal and insurance gains and other items presented in the table that reconciles Net income attributable to SUI common shareholders to Core FFO on page 6.

(b) The Company's updated guidance translates forecasted results from operations in the UK using the relevant exchange rate in effect provided in the 2023 Guidance Assumptions table presented below. The impact of fluctuations in Canadian and Australian foreign currency rates on revised and initial guidance are not material.

The 2.2% downward revision to the midpoint of full-year guidance is due primarily to lower expected UK home sales NOI, higher interest expense related to short-term interest rate increases since April 26, 2023, and a modest reduction to expected Service, retail, dining and entertainment NOI as compared to prior guidance. In addition to the assumptions underlying the Company's revised 2023 guidance detailed in the table below, the Company expects total same property NOI to increase 3.2% - 4.5% during the third quarter ending September 30, 2023:

  FY 2022 Expected Change in 2023
2023 Guidance Assumptions (dollars in millions) Actual Results Prior FY Guidance July 26, 2023 Update
Consolidated Portfolio:      
Total real property NOI   6.1% - 7.0% 6.1% - 6.9%
Service, retail, dining and entertainment NOI   $53.3 - $55.3 $50.4 - $52.9
General and administrative expenses   $252.2 - $256.0 $249.9 - $255.4
       
North America home sales contribution to Core FFO(a)   $18.9 - $19.7 $18.9 - $21.7
       
UK      
UK real property NOI   $62.2 - $65.5 $63.6 - $65.6
UK home sales NOI   $79.1 - $82.4 $65.7 - $75.4
UK NOI   $141.3 - $147.9 $129.3 - $141.0
       
Same Property Portfolio(b)      
MH NOI (289 properties) $569.7 4.6% - 5.4% 5.2% - 5.8%
RV NOI (161 properties) $281.7 4.4% - 5.6% 3.4% - 4.6%
Marina NOI (119 properties) $210.8 6.8% - 8.0% 8.0% - 9.0%
       
Total Same Property Pool (569 Properties):      
Revenue from real property $1,601.0 6.2% - 6.6% 6.2% - 6.5%
Property operating expenses(c)(d) $538.8 7.9% - 8.8% 7.2% - 7.9%
Same Property NOI $1,062.2 5.0% - 6.0% 5.3% - 6.1%
       
Exchange rates in effect at: December 31, 2022 March 31, 2023 June 30, 2023
U.S. Dollar ("USD") / Pound Sterling ("GBP")  1.21 1.24 1.27
USD / Canadian Dollar ("CAD")  0.74 0.74 0.75
USD / Australian Dollar ("AUS")  0.68 0.67 0.66


Footnotes to 2023 Guidance Assumptions
(a)FFO from home sales in North America is net of home selling expenses and includes the gross profit from new and certain pre-owned home sales. Gross profit from pre-owned home sales of depreciated homes is excluded.
(b)The amounts in the table reflect constant currency, as currency figures included within the 2022 actual amounts have been translated at the assumed exchange rate used for 2023 guidance.
(c)Total Same Property results net $101.1 million of utility revenue for 2022 actual results and $108.0 million for 2023 guidance against the related utility expense in property operating expenses.
(d)2022 actual results exclude $1.3 million of expense incurred at recently acquired properties to bring them up to the Company's standards. The improvements included items such as tree trimming and painting costs that do not meet the Company's capitalization policy.


Seasonality (Updated as of July 26, 2023) 1Q23 2Q23 3Q23 4Q23
Same Property NOI:        
MH 25% 25% 25% 25%
RV 16% 25% 41% 18%
Marina 20% 27% 29% 24%
Total Same Property 21% 26% 30% 23%
         
UK NOI:        
Real property 10% 27% 42% 21%
Home sales 16% 33% 34% 17%
Total NOI from UK Operations 13% 30% 38% 19%
         
Consolidated Service, Retail, Dining and Entertainment NOI 5% 37% 49% 9%
         
Consolidated EBITDA 19% 27% 33% 21%
         
Core FFO per Share 17% 28% 35% 20%

The estimates and assumptions presented above represent a range of possible outcomes and may differ materially from actual results. These estimates include contributions from all acquisitions, dispositions and capital markets activity completed through July 26, 2023, and the effect of a property disposition under contract expected to close during the third quarter 2023. These estimates exclude all other prospective acquisitions, dispositions and capital markets activity. The estimates and assumptions are forward-looking based on the Company's current assessment of economic and market conditions and are subject to the other risks outlined below under the caption Cautionary Statement Regarding Forward-Looking Statements.

EARNINGS CONFERENCE CALL

A conference call to discuss second quarter results will be held on Thursday, July 27, 2023 at 12:00 P.M. (ET). To participate, call toll-free at (877) 407-9039. Callers outside the U.S. or Canada can access the call at (201) 689-8470. A replay will be available following the call through August 10, 2023 and can be accessed toll-free by calling (844) 512-2921 or (412) 317-6671. The Conference ID number for the call and the replay is 13739127. The conference call will be available live on the Company's website located at www.suncommunities.com. The replay will also be available on the website.

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

This press release contains various "forward-looking statements" within the meaning of the Securities Act of 1933, as amended (the "Securities Act"), and the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and the Company intends that such forward-looking statements will be subject to the safe harbors created thereby. For this purpose, any statements contained in this document that relate to expectations, beliefs, projections, future plans and strategies, trends or prospective events or developments and similar expressions concerning matters that are not historical facts are deemed to be forward-looking statements. Words such as "forecasts," "intends," "intend," "intended," "goal," "estimate," "estimates," "expects," "expect," "expected," "project," "projected," "projections," "plans," "predicts," "potential," "seeks," "anticipates," "anticipated," "should," "could," "may," "will," "designed to," "foreseeable future," "believe," "believes," "scheduled," "guidance," "target" and similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain these words. These forward-looking statements reflect the Company's current views with respect to future events and financial performance, but involve known and unknown risks and uncertainties, both general and specific to the matters discussed in this document, some of which are beyond the Company's control. These risks and uncertainties and other factors may cause the Company's actual results to be materially different from any future results expressed or implied by such forward-looking statements. In addition to the risks described under "Risk Factors" contained in the Company's Annual Report on Form 10-K for the year ended December 31, 2022, and in the Company's other filings with the Securities and Exchange Commission, from time to time, such risks, uncertainties and other factors include, but are not limited to:

Outbreaks of disease and related restrictions on business operations;
Changes in general economic conditions, including inflation, deflation and energy costs, the real estate industry and the markets within which the Company operates;
Difficulties in the Company's ability to evaluate, finance, complete and integrate acquisitions, developments and expansions successfully;
The Company's liquidity and refinancing demands;
The Company's ability to obtain or refinance maturing debt;
The Company's ability to maintain compliance with covenants contained in its debt facilities and its unsecured notes;
Availability of capital;
Changes in foreign currency exchange rates, including between the U.S. dollar and each of the Canadian dollar, Australian dollar and Pound sterling;
The Company's ability to maintain rental rates and occupancy levels;
The Company's ability to maintain effective internal control over financial reporting and disclosure controls and procedures;
Increases in interest rates and operating costs, including insurance premiums and real estate taxes;
Risks related to natural disasters such as hurricanes, earthquakes, floods, droughts and wildfires;
General volatility of the capital markets and the market price of shares of the Company's capital stock;
The Company's ability to maintain its status as a REIT;
Changes in real estate and zoning laws and regulations;
Legislative or regulatory changes, including changes to laws governing the taxation of REITs;
Litigation, judgments or settlements;
Competitive market forces;
The ability of purchasers of manufactured homes and boats to obtain financing; and
The level of repossessions by manufactured home and boat lenders.

Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date the statement was made. The Company undertakes no obligation to publicly update or revise any forward-looking statements included or incorporated by reference into this document, whether as a result of new information, future events, changes in the Company's expectations or otherwise, except as required by law.

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

Company Overview and Investor Information

 

The Company

Established in 1975, Sun Communities, Inc. became a publicly owned corporation in December 1993. The Company is a fully integrated REIT listed on the New York Stock Exchange under the symbol: SUI. As of June 30, 2023, the Company owned, operated, or had an interest in a portfolio of 671 developed MH, RV and Marina properties comprising approximately 180,060 developed sites and approximately 48,180 wet slips and dry storage spaces in the U.S., the UK and Canada.

For more information about the Company, please visit www.suncommunities.com.

Company Contacts 
  
ManagementInvestor Relations
  • Gary A. Shiffman, Chairman, President and CEO
Sara Ismail, Vice President
  • Fernando Castro-Caratini, EVP and CFO
(248) 208-2500
  • Bruce D. Thelen, EVP and COO
investorrelations@suncommunities.com
  


Corporate Debt Ratings 
Moody'sS&P
Baa3 | StableBBB | Stable
  


Equity Research Coverage    
Bank of America Merrill Lynch Joshua Dennerlein joshua.dennerlein@bofa.com
Barclays Anthony Powell anthony.powell@barclays.com
BMO Capital Markets John Kim jp.kim@bmo.com
Citi Research Nicholas Joseph nicholas.joseph@citi.com
  Eric Wolfe eric.wolfe@citi.com
Evercore ISI Samir Khanal samir.khanal@evercoreisi.com
  Steve Sakwa steve.sakwa@evercoreisi.com
Green Street Advisors John Pawlowski jpawlowski@greenstreetadvisors.com
JMP Securities Aaron Hecht ahecht@jmpsecurities.com
RBC Capital Markets Brad Heffern brad.heffern@rbccm.com
Robert W. Baird & Co. Wesley Golladay wgolladay@rwbaird.com
Truist Securities Anthony Hau anthony.hau@truist.com
UBS Michael Goldsmith michael.goldsmith@ubs.com
Wells Fargo James Feldman james.feldman@wellsfargo.com
Wolfe Research Andrew Rosivach arosivach@wolferesearch.com
  Keegan Carl kcarl@wolferesearch.com

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

 


 Quarters Ended
 6/30/2023 3/31/2023 12/31/2022 9/30/2022 6/30/2022
Financial Information         
Basic earnings / (loss) per share*$        0.72          $        (0.24        ) $        0.04          $        1.32          $        0.61         
Diluted earnings / (loss) per share*$        0.72          $        (0.24        ) $        0.04          $        1.32          $        0.61         
          
Cash distributions declared per common share*$        0.93          $        0.93          $        0.88          $        0.88          $        0.88         
          
FFO per Share(a)*$        1.95          $        1.14          $        1.02          $        2.54          $        1.95         
Core FFO per Share(a)*$        1.96          $        1.23          $        1.33          $        2.65          $        2.02         
          
Real Property NOI         
MH$        168.7          $        156.9          $        153.5          $        166.8          $        158.2         
RV         76.5                   45.8                   46.1                   127.0                   78.8         
Marinas         72.4                   52.0                   58.3                   77.8                   63.0         
Total$        317.6          $        254.7          $        257.9          $        371.6          $        300.0         
          
Recurring EBITDA$        339.7          $        237.4          $        236.3          $        408.1          $        328.4         
TTM Recurring EBITDA / Interest*4.3 x 4.6 x 5.2 x 5.7 x 5.9 x
          
Balance Sheet         
Total assets$        17,561.4          $        17,363.8          $        17,084.2          $        16,484.6          $        16,397.8         
Total debt$        7,614.0          $        7,462.0          $        7,197.2          $        6,711.0          $        6,930.9         
Total liabilities$        9,474.8          $        9,294.8          $        8,992.8          $        8,354.6          $        8,566.3         
          
Operating Information*         
Properties         
MH         354                   354                   353                   350                   349         
RV         182                   182                   182                   181                   182         
Marina         135                   135                   134                   131                   130         
Total         671                   671                   669                   662                   661         
          
Sites, Wet Slips and Dry Storage Spaces*         
Manufactured homes         118,170                   117,970                   118,020                   116,910                   116,420         
Annual RV         31,620                   30,860                   30,330                   32,030                   31,770         
Transient RV         30,270                   30,870                   31,180                   31,150                   31,990         
Total sites         180,060                   179,700                   179,530                   180,090                   180,180         
Marina wet slips and dry storage spaces(b)         48,180                   47,990                   47,820                   46,190                   45,910         
          
Occupancy*         
MH occupancy (including UK)         95.3        %          95.1        %          95.0        %          95.5        %          95.6        %
Annual RV occupancy         100.0        %          100.0        %          100.0        %          100.0        %          100.0        %
Blended MH and annual RV occupancy         96.3        %          96.1        %          96.0        %          96.5        %          96.6        %
          
MH and RV Revenue Producing Site Net Gains(c) (excluding UK Operations)*
MH leased sites, net         285                   278                   346                   122                   132         
RV leased sites, net         754                   524                   267                   567                   818         
Total leased sites, net         1,039                   802                   613                   689                   950         

(a)  Excludes the effects of certain anti-dilutive convertible securities.

(b)  Total wet slips and dry storage spaces are adjusted each quarter based on site configuration and usability.

(c)  Revenue producing site net gains do not include occupied sites acquired during the year.
(d)  
Portfolio Overview as of June 30, 2023

 


  MH & RV Properties
  Properties

 MH & Annual RV RV Transient Sites

 Total MH and RV Sites

 Sites for Development

Location  Sites Occupancy %   
Florida         129                 40,200                 97.4        %         4,200                 44,400                 3,400        
Michigan         85                 32,740                 96.8        %         660                 33,400                 1,250        
California         37                 6,900                 98.8        %         1,900                 8,800                 940        
Texas         31                 8,910                 94.9        %         2,510                 11,420                 1,960        
Ontario, Canada         16                 4,650                 100.0        %         530                 5,180                 1,470        
Connecticut         16                 1,910                 94.4        %         90                 2,000                 —        
Maine         16                 2,610                 95.0        %         1,090                 3,700                 200        
Arizona         13                 4,540                 93.8        %         970                 5,510                 —        
Indiana         12                 3,160                 97.4        %         1,020                 4,180                 180        
New Jersey         11                 2,960                 100.0        %         1,090                 4,050                 260        
Colorado         11                 2,800                 88.7        %         990                 3,790                 1,490        
Virginia         10                 1,480                 99.7        %         1,970                 3,450                 750        
New York         10                 1,500                 99.1        %         1,440                 2,940                 780        
New Hampshire         10                 1,740                 99.9        %         660                 2,400                 100        
Other         74                 15,740                 98.3        %         7,800                 23,540                 1,170        
North America Total         481                 131,840                 97.1        %         26,920                 158,760                 13,950        
United Kingdom         55                 17,950                 90.1        %         3,350                 21,300                 1,770        
Total         536                 149,790                 96.3        %         30,270                 180,060                 15,720        


  Marina  
  Properties

   Wet Slips and Dry Storage Spaces

  
Location      
Florida         21                   5,200          
Rhode Island         12                   3,460          
California         11                   5,710          
Connecticut         11                   3,330          
New York         9                   3,020          
Maryland         9                   2,630          
Massachusetts         9                   2,520          
Other         53                   22,310          
Total         135                   48,180          


  Properties

   Sites, Wet Slips and Dry Storage Spaces

  
       
Total Portfolio         671                   228,240          

Consolidated Balance Sheets
(amounts in millions)

 


 June 30, 2023 December 31, 2022
Assets   
Land$        4,039.5          $        4,322.3         
Land improvements and buildings         11,323.5                   10,903.4         
Rental homes and improvements         694.1                   645.2         
Furniture, fixtures and equipment         941.8                   839.0         
Investment property         16,998.9                   16,709.9         
Accumulated depreciation         (3,011.4)          (2,738.9)
Investment property, net         13,987.5                   13,971.0         
Cash, cash equivalents and restricted cash         68.7                   90.4         
Marketable securities         110.4                   127.3         
Inventory of manufactured homes         236.6                   202.7         
Notes and other receivables, net         733.3                   617.3         
Goodwill         1,104.2                   1,018.4         
Other intangible assets, net         385.4                   402.0         
Other assets, net         935.3                   655.1         
Total Assets$        17,561.4          $        17,084.2         
Liabilities   
Secured debt$        3,373.0          $        3,217.8         
Unsecured debt         4,241.0                   3,979.4         
Distributions payable         118.0                   111.3         
Advanced reservation deposits and rent         430.9                   352.1         
Accrued expenses and accounts payable         353.6                   396.3         
Other liabilities         958.3                   935.9         
Total Liabilities         9,474.8                   8,992.8         
Commitments and contingencies   
Temporary equity         298.1                   202.9         
Shareholders' Equity   
Common stock         1.2                   1.2         
Additional paid-in capital         9,567.5                   9,549.7         
Accumulated other comprehensive income / (loss)         37.6                   (9.9)
Distributions in excess of accumulated earnings         (1,898.2)          (1,731.2)
Total SUI shareholders' equity         7,708.1                   7,809.8         
Noncontrolling interests   
Common and preferred OP units         80.4                   78.7         
Total noncontrolling interests         80.4                   78.7         
Total Shareholders' Equity         7,788.5                   7,888.5         
Total Liabilities, Temporary Equity and Shareholders' Equity$        17,561.4          $        17,084.2         

Consolidated Statements of Operations
(amounts in millions, except for per share amounts)

 


 Quarter Ended Six Months Ended
 June 30, 2023 June 30, 2022 % Change June 30, 2023 June 30, 2022 % Change
Revenues           
Real property (excluding transient)$        430.3          $        390.0                  10.3        % $        828.3          $        732.8                  13.0        %
Real property - transient         95.9                   98.1                  (2.2)        %          139.3                   143.1                  (2.7)        %
Home sales         122.6                   142.7                  (14.1)        %          208.9                   207.4                  0.7        %
Service, retail, dining and entertainment         190.9                   167.6                  13.9        %          293.5                   248.8                  18.0        %
Interest         14.0                   7.3                  91.8        %          25.4                   14.1                  80.1        %
Brokerage commissions and other, net         9.8                   8.6                  14.0        %          19.3                   16.6                  16.3        %
Total Revenues         863.5                   814.3                  6.0        %          1,514.7                   1,362.8                  11.1        %
Expenses           
Property operating and maintenance         178.6                   160.4                  11.3        %          335.2                   284.5                  17.8        %
Real estate tax         30.0                   27.7                  8.3        %          60.1                   53.8                  11.7        %
Home costs and selling         81.2                   92.9                  (12.6)        %          144.4                   138.8                  4.0        %
Service, retail, dining and entertainment         171.7                   142.7                  20.3        %          271.7                   218.4                  24.4        %
General and administrative         62.3                   62.2                  0.2        %          126.2                   117.9                  7.0        %
Catastrophic event-related charges, net         (0.1)          0.1          N/M          0.9                   0.1          N/M
Business combinations         0.2                   15.0                  (98.7)        %          3.0                   15.5                  (80.6)        %
Depreciation and amortization         164.1                   150.1                  9.3        %          319.7                   298.0                  7.3        %
Asset impairments         6.5                   0.1          N/M          8.9                   0.7          N/M
Loss on extinguishment of debt         —                   0.1                  (100.0)        %          —                   0.4                  (100.0)        %
Interest         79.2                   55.3                  43.2        %          155.8                   100.5                  55.0        %
Interest on mandatorily redeemable preferred OP units / equity         0.9                   1.1                  (18.2)        %          1.9                   2.1                  (9.5)        %
Total Expenses         774.6                   707.7                  9.5        %          1,427.8                   1,230.7                  16.0        %
Income Before Other Items         88.9                   106.6                  (16.6)        %          86.9                   132.1                  (34.2)        %
Gain / (loss) on remeasurement of marketable securities         5.8                   (32.3) N/M          (14.1)          (66.8)         (78.9)        %
Gain on foreign currency exchanges         2.7                   9.0                  —                   —                   6.8                  —         
Gain / (loss) on dispositions of properties         (0.6)          (0.1) N/M          (2.2)          13.3          N/M
Other income / (expense), net(a)         (0.8)          0.4          N/M          (1.8)          (0.2) N/M
Gain / (loss) on remeasurement of notes receivable         (0.1)          —          N/A          (1.8)          0.2          N/M
Income / (loss) from nonconsolidated affiliates         (0.7)          0.9          N/M          (0.9)          1.8          N/M
Gain / (loss) on remeasurement of investment in nonconsolidated affiliates         —                   0.4                  (100.0)        %          (4.5)          0.5          N/M
Current tax expense         (5.4)          (3.9)         38.5        %          (9.3)          (5.2)         78.8        %
Deferred tax benefit         7.7                   0.3          N/M          12.3                   0.3          N/M
Net Income         97.5                   81.3                  19.9        %          64.6                   82.8                  (22.0)        %
Less: Preferred return to preferred OP units / equity interests         3.3                   3.1                  —                   5.7                   6.1                  —         
Less: Income / (loss) attributable to noncontrolling interests         4.4                   4.2                  4.8        %          (0.8)          2.0          N/M
Net Income Attributable to SUI Common Shareholders$        89.8          $        74.0                  21.4        % $        59.7          $        74.7                  (20.1)        %
            
Weighted average common shares outstanding - basic(a)         123.4                   120.0                  2.8        %          123.4                   117.6                  4.9        %
Weighted average common shares outstanding - diluted(a)         123.4                   120.0                  2.8        %          123.4                   120.4                  2.5        %
            
Basic earnings per share$        0.72          $        0.61                  18.0        % $        0.48          $        0.63                  (23.8)        %
Diluted earnings per share(b)$        0.72          $        0.61                  18.0        % $        0.48          $        0.63                  (23.8)        %

(a) Refer to Definitions and Notes for additional information.

(b) Excludes the effect of certain anti-dilutive convertible securities.

N/M = Percentage change is not meaningful.

N/A = Percentage change is not applicable.

Reconciliation of Net Income Attributable to SUI Common Shareholders to Core FFO
(amounts in millions, except for per share data)

 


 Quarter Ended Six Months Ended
 June 30, 2023 June 30, 2022 June 30, 2023 June 30, 2022
Net Income Attributable to SUI Common Shareholders$        89.8          $        74.0          $        59.7          $        74.7         
Adjustments       
Depreciation and amortization         163.4                   149.4                   318.3                   297.1         
Depreciation on nonconsolidated affiliates         0.1                   0.1                   0.1                   0.1         
Asset impairments         6.5                   0.1                   8.9                   0.7         
(Gain) / loss on remeasurement of marketable securities         (5.8)          32.3                   14.1                   66.8         
(Gain) / loss on remeasurement of investment in nonconsolidated affiliates         —                   (0.4)          4.5                   (0.5)
(Gain) / loss on remeasurement of notes receivable         0.1                   —                   1.8                   (0.2)
(Gain) / loss on dispositions of properties, including tax effect         0.8                   0.1                   4.3                   (13.3)
Add: Returns on preferred OP units         1.5                   3.4                   5.2                   6.7         
Add: Income / (loss) attributable to noncontrolling interests         3.3                   4.2                   (1.1)          2.0         
Gain on dispositions of assets, net         (10.6)          (17.2)          (18.5)          (32.3)
FFO(a)$        249.1          $        246.0          $        397.3          $        401.8         
        
Adjustments       
Business combination expense and other acquisition related costs(a)         4.9                   17.8                   11.4                   20.9         
Loss on extinguishment of debt         —                   0.1                   —                   0.4         
Catastrophic event-related charges, net         (0.1)          0.2                   0.9                   0.2         
Loss of earnings - catastrophic event-related charges, net         5.5                   —                   11.0                   —         
Gain on foreign currency exchanges         (2.7)          (9.0)          —                   (6.8)
Other adjustments, net(a)         (7.1)          (0.5)          (10.7)          1.4         
Core FFO(a)(b)$        249.6          $        254.6          $        409.9          $        417.9         
        
Weighted Average Common Shares Outstanding - Diluted         127.4                   126.0                   128.6                   123.9         
        
FFO per Share(b)$        1.95          $        1.95          $        3.09          $        3.24         
        
Core FFO per Share(b)$        1.96          $        2.02          $        3.19          $        3.37         

(a) Refer to Definitions and Notes for additional information, including the Home sales contribution to FFO.

(b) Excludes the effect of certain anti-dilutive convertible securities.

    

Reconciliation of Net Income Attributable to SUI Common Shareholders to NOI
(amounts in millions)

 


 Quarter Ended Six Months Ended
 June 30, 2023 June 30, 2022 June 30, 2023 June 30, 2022
Net Income Attributable to SUI Common Shareholders$        89.8          $        74.0          $        59.7          $        74.7         
Interest income         (14.0)          (7.3)          (25.4)          (14.1)
Brokerage commissions and other revenues, net         (9.8)          (8.6)          (19.3)          (16.6)
General and administrative         62.3                   62.2                   126.2                   117.9         
Catastrophic event-related charges, net         (0.1)          0.1                   0.9                   0.1         
Business combination expense         0.2                   15.0                   3.0                   15.5         
Depreciation and amortization         164.1                   150.1                   319.7                   298.0         
Asset impairments         6.5                   0.1                   8.9                   0.7         
Loss on extinguishment of debt         —                   0.1                   —                   0.4         
Interest expense         79.2                   55.3                   155.8                   100.5         
Interest on mandatorily redeemable preferred OP units / equity         0.9                   1.1                   1.9                   2.1         
(Gain) / loss on remeasurement of marketable securities         (5.8)          32.3                   14.1                   66.8         
Gain on foreign currency exchanges         (2.7)          (9.0)          —                   (6.8)
(Gain) / loss on disposition of properties         0.6                   0.1                   2.2                   (13.3)
Other (income) / expense, net(a)         0.8                   (0.4)          1.8                   0.2         
(Gain) / loss on remeasurement of notes receivable         0.1                   —                   1.8                   (0.2)
(Income) / loss from nonconsolidated affiliates         0.7                   (0.9)          0.9                   (1.8)
(Gain) / loss on remeasurement of investment in nonconsolidated affiliates         —                   (0.4)          4.5                   (0.5)
Current tax expense         5.4                   3.9                   9.3                   5.2         
Deferred tax benefit         (7.7)          (0.3)          (12.3)          (0.3)
Preferred return to preferred OP units / equity interests         3.3                   3.1                   5.7                   6.1         
Add: Income / (loss) attributable to noncontrolling interests         4.4                   4.2                   (0.8)          2.0         
NOI$        378.2          $        374.7          $        658.6          $        636.6         


 Quarter Ended Six Months Ended
 June 30, 2023 June 30, 2022 June 30, 2023 June 30, 2022
Real Property NOI(a)$        317.6         $        300.0         $        572.3         $        537.6        
Home Sales NOI(a)         41.4                  49.8                  64.5                  68.6        
Service, retail, dining and entertainment NOI(a)         19.2                  24.9                  21.8                  30.4        
NOI$        378.2         $        374.7         $        658.6         $        636.6        

(a) Refer to Definitions and Notes for additional information.

Reconciliation of Net Income Attributable to SUI Common Shareholders to Recurring EBITDA
(amounts in millions)

 


 Quarter Ended Six Months Ended
 June 30, 2023 June 30, 2022 June 30, 2023 June 30, 2022
Net Income Attributable to SUI Common Shareholders$        89.8          $        74.0          $        59.7          $        74.7         
Adjustments       
Depreciation and amortization         164.1                   150.1                   319.7                   298.0         
Asset impairments         6.5                   0.1                   8.9                   0.7         
Loss on extinguishment of debt         —                   0.1                   —                   0.4         
Interest expense         79.2                   55.3                   155.8                   100.5         
Interest on mandatorily redeemable preferred OP units / equity         0.9                   1.1                   1.9                   2.1         
Current tax expense         5.4                   3.9                   9.3                   5.2         
Deferred tax benefit         (7.7)          (0.3)          (12.3)          (0.3)
(Income) / loss from nonconsolidated affiliates         0.7                   (0.9)          0.9                   (1.8)
Less: (Gain) / loss on dispositions of properties         0.6                   0.1                   2.2                   (13.3)
Less: Gain on dispositions of assets, net         (10.6)          (17.2)          (18.5)          (32.3)
EBITDAre$        328.9          $        266.3          $        527.6          $        433.9         
Adjustments       
Catastrophic event-related charges, net         (0.1)          0.1                   0.9                   0.1         
Business combination expense         0.2                   15.0                   3.0                   15.5         
(Gain) / loss on remeasurement of marketable securities         (5.8)          32.3                   14.1                   66.8         
Gain on foreign currency exchanges         (2.7)          (9.0)          —                   (6.8)
Other (income) / expense, net(a)         0.8                   (0.4)          1.8                   0.2         
(Gain) / loss on remeasurement of notes receivable         0.1                   —                   1.8                   (0.2)
(Gain) / loss on remeasurement of investment in nonconsolidated affiliates         —                   (0.4)          4.5                   (0.5)
Preferred return to preferred OP units / equity interests         3.3                   3.1                   5.7                   6.1         
Add: Income / (loss) attributable to noncontrolling interests         4.4                   4.2                   (0.8)          2.0         
Add: Gain on dispositions of assets, net         10.6                   17.2                   18.5                   32.3         
Recurring EBITDA$        339.7          $        328.4          $        577.1          $        549.4         

(a) Refer to Definitions and Notes for additional information.

Real Property Operations - Total Portfolio
(amounts in millions, except statistical information)

 


 Quarter Ended June 30, 2023 Quarter Ended June 30, 2022
 MH       MH      
Financial InformationNorth America UK Total RV Marinas Total North America UK(a) Total RV Marinas Total
Revenues                       
Real property (excluding transient)$        224.0  $        28.4  $        252.4  $        72.7  $        105.2 $        430.3  $        209.0  $        20.0  $        229.0          $        69.1          $        91.9 $        390.0 
Real property - transient         0.3           13.4           13.7           75.5           6.7          95.9           0.4           12.9           13.3                   79.8                   5.0          98.1 
Total operating revenues         224.3           41.8           266.1           148.2           111.9          526.2           209.4           32.9           242.3                   148.9                   96.9          488.1 
Expenses                       
Property operating expenses         73.0           24.4           97.4           71.7           39.5          208.6           66.6           17.5           84.1                   70.1                   33.9          188.1 
Real Property NOI$        151.3  $        17.4  $        168.7  $        76.5  $        72.4 $        317.6  $        142.8  $        15.4  $        158.2          $        78.8          $        63.0 $        300.0 
                        
 Six Months Ended June 30, 2023 Six Months Ended June 30, 2022
 MH       MH      
Financial InformationNorth America UK Total RV Marinas Total North America UK(a) Total RV Marinas Total
Revenues                       
Real property (excluding transient)$        447.4  $        55.9  $        503.3  $        134.5  $        190.5 $        828.3  $        417.3  $        20.0  $        437.3          $        129.8          $        165.7 $        732.8 
Real property - transient         0.8           14.8           15.6           113.3           10.4          139.3           0.9           12.9           13.8                   121.8                   7.5          143.1 
Total operating revenues         448.2           70.7           518.9           247.8           200.9          967.6           418.2           32.9           451.1                   251.6                   173.2          875.9 
Expenses                       
Property operating expenses         146.4           46.9           193.3           125.5           76.5          395.3           131.9           17.5           149.4                   122.7                   66.2          338.3 
Real Property NOI$        301.8  $        23.8  $        325.6  $        122.3  $        124.4         $        572.3  $        286.3  $        15.4  $        301.7          $        128.9          $        107.0 $        537.6 
                        
 As of June 30, 2023 As of June 30, 2022
 MH       MH      
Other informationNorth America UK Total RV Marinas Total North America UK(a) Total RV Marinas Total
Number of properties         299 ��         55           354           182           135          671           296           53           349           182           130          661 
Sites, wet slips and dry storage spaces                       
Sites, wet slips and dry storage spaces(b)         100,220           17,950           118,170           31,620           48,180          197,970           99,180           17,240           116,420           31,770           45,910          194,100 
Transient sitesN/M          3,350           3,350           26,920  N/A          30,270  N/M          3,310           3,310           28,680  N/A          31,990 
Total         100,220           21,300           121,520           58,540           48,180          228,240           99,180           20,550           119,730           60,450           45,910          226,090 
                        
MH and Annual RV Occupancy         96.2        %          90.1        %          95.3        %          100.0        % N/A          96.3        %          96.3        %          91.4        %          95.6        %          100.0        % N/A          96.6        %

N/M = Not meaningful. N/A = Not applicable.

(a) UK amounts for the quarter and six months ended June 30, 2022 cover April 8, 2022 (date of acquisition) to June 30, 2022.

(b) MH annual sites included 9,721 and 9,204 rental homes in the Company's Rental Program during the quarter ended June 30, 2023 and 2022, respectively. The Company's investment in occupied rental homes at June 30, 2023 was $630.0 million, an increase of 17.8% from $535.0 million at June 30, 2022.

Real Property Operations - Same Property Portfolio(a)
(amounts in millions, except for statistical information)

 


 Quarter Ended June 30, 2023 Quarter Ended June 30, 2022 Total Change

 % Change(c)
 MH(b) RV(b) Marina Total MH(b) RV(b) Marina Total  MH RV Marina Total
Financial Information                         
Same Property Revenues                         
Real property (excluding transient)$        206.7         $        67.0         $        84.2         $        357.9         $        193.8         $        57.5         $        78.0         $        329.3         $        28.6                  6.7        %         16.2        %         8.1        %         8.7        %
Real property - transient         0.3                  69.9                  6.1                  76.3                  0.2                  74.5                  4.8                  79.5                  (3.2)         46.2        %         (6.1)        %         27.1        %         (4.0)        %
Total Same Property operating revenues         207.0                  136.9                  90.3                  434.2                  194.0                  132.0                132.0                 82.8                  408.8          25.4          6.7        %         3.6        %         9.2        %         6.2        %
Same Property Expenses                         
Same Property operating expenses(d)(e)         56.1                  62.1                  27.4                  145.6                  51.3                  59.6                  26.5                  137.4          8.2          9.4        %         4.1        %         3.4        %         6.0        %
Real Property NOI(e)$        150.9         $        74.8         $        62.9         $        288.6         $        142.7         $        72.4         $        56.3         $        271.4         $        17.2                  5.7        %         3.2        %         11.9        %         6.3        %
                          
Other Information                         
Number of properties         289                  161                  119                  569                  289                  161                  119                  569                  
Sites, wet slips and dry storage spaces         98,700                  54,610                  41,050                  194,360                  97,750                  54,310                  40,650                  192,710                  


        


                          
 Six Months Ended June 30, 2023 Six Months Ended June 30, 2022 Total Change

 % Change(c)
 MH(b) RV(b) Marina Total MH(b) RV(b) Marina Total  MH RV Marina Total
Financial Information                         
Same Property Revenues                         
Real property (excluding transient)$        410.6         $        124.3         $        153.6         $        688.5         $        385.2         $        107.3         $        141.2         $        633.7         $        54.8                  6.6        %         15.9        %         8.7        %         8.6        %
Real property - transient         0.6                  106.0                  9.6                  116.2                  0.7                  112.7                  7.2                  120.6                  (4.4)         (9.5)        %         (6.0)        %         33.7        %         (3.7)        %
Total Same Property operating revenues         411.2                  230.3                  163.2                  804.7                  385.9                  220.0                220.0                 148.4                  754.3                  50.4                  6.5        %         4.7        %         9.9        %         6.7        %
Same Property Expenses                         
Same Property operating expenses(d)(e)         110.0                  109.1                  54.4                  273.5                  100.1                  103.1                  52.4                  255.6                  17.9                  9.9        %         5.8        %         3.8        %         7.0        %
Real Property NOI(e)$        301.2         $        121.2         $        108.8         $        531.2         $        285.8         $        116.9         $        96.0         $        498.7         $        32.5                  5.4        %         3.7        %         13.2        %         6.5        %
                          
Other Information                         
Number of properties         289                  161                  119                  569                  289                  161                  119                  569                  
Sites, wet slips and dry storage spaces         98,700                  54,610                  41,050                  194,360                  97,750                  54,310                  40,650                  192,710                  

(a) Refer to the Definitions and Notes for additional information.

(b) Same Property results for the Company's MH and RV properties reflect constant currency for comparative purposes. Canadian currency figures in the prior comparative period have been translated at the average exchange rate of $0.7445 USD and $0.7420 USD per Canadian dollar during the quarter and six months ended June 30, 2023, respectively.

(c) Percentages are calculated based on unrounded numbers.

Real Property Operations - Same Property Portfolio(a) (Continued)

(amounts in millions, except for statistical information)

     

(d) The Company nets certain utility revenues (which include utility reimbursement revenues from residents) against related utility expenses in property operating expenses as follows (in millions):

 Quarter Ended June 30, 2023 Quarter Ended June 30, 2022
 MH RV Marina Total MH RV Marina Total
Utility revenue netted against related utility expense$        15.7         $        4.8         $        5.9         $        26.4         $        15.0         $        4.6         $        4.7         $        24.3        


 Six Months Ended June 30, 2023 Six Months Ended June 30, 2022
 MH RV Marina Total MH RV Marina Total
Utility revenue netted against related utility expense$        33.9         $        9.0         $        10.9         $        53.8         $        31.1         $        8.5         $        8.9         $        48.5        

(e) Total Same Property operating expenses consist of the following components for the periods shown (in millions) and exclude amounts invested into recently acquired properties to bring them up to the Company's standards:

 Quarter Ended Six Months Ended
 June 30, 2023 June 30, 2022 Change % Change June 30, 2023 June 30, 2022 Change % Change
Payroll and benefits$        49.0         $        48.2         $        0.8                 1.7        % $        91.4         $        87.9         $        3.5                 4.0        %
Real estate taxes         27.2                  26.6                  0.6                 2.1        %          54.9                  51.9                  3.0                 5.8        %
Supplies and repairs         20.9                  19.5                  1.4                 7.2        %          35.1                  34.0                  1.1                 3.1        %
Utilities         16.1                  15.5                  0.6                 3.5        %          30.5                  30.5                  —                 0.1        %
Legal, state / local taxes, and insurance         13.8                  9.3                  4.5                 49.2        %          28.0                  18.9                  9.1                 48.6        %
Other         18.6                  18.3                  0.3                 1.8        %          33.6                  32.4                  1.2                 3.6        %
Total Same Property Operating Expenses$        145.6         $        137.4         $        8.2                 6.0        % $        273.5         $        255.6         $        17.9                 7.0        %

Real Property Operations - Same Property Portfolio(a) (Continued)

  As of
  June 30, 2023 June 30, 2022
  MH RV MH RV
Other Information        
Number of properties          289                   161                   289                   161         
         
Sites        
MH and Annual RV sites          98,700                   31,340                   97,750                   29,240         
Transient RV sites N/M          23,270          N/M          25,070         
Total          98,700                   54,610                   97,750                   54,310         
         
MH and Annual RV Occupancy        
Occupancy(b)          96.9        %          100.0        %          96.9        %          100.0        %
Monthly base rent per site $        654          $        577          $        618          $        531         
% Change of monthly base rent(c)          5.7        %          8.6        % N/A N/A
         
Rental Program Statistics included in MH:        
Number of occupied sites, end of period(d)          9,640          N/A          9,200          N/A
Monthly rent per site – MH Rental Program $        1,261          N/A $        1,162          N/A
% Change(d)          8.5        % N/A N/A N/A

N/M = Not meaningful.

(a) Refer to Definitions and Notes for additional information.

(b) Same Property adjusted blended occupancy for MH and RV combined increased to 98.7% at June 30, 2023, from 97.0% at June 30, 2022. The 170 basis point increase was driven by MH expansion fills and the conversion of transient RV sites to annual sites.

(c) Calculated using actual results without rounding.

(d) Occupied rental program sites in Same Property are included in total sites.

Home Sales Summary
(amounts in millions, except for *)

 


 Quarter Ended Six Months Ended
Financial InformationJune 30, 2023 June 30, 2022 % Change June 30, 2023 June 30, 2022 % Change
North America           
Home sales$        62.3          $        82.1                  (24.1)        % $        109.5          $        146.8                  (25.4)        %
Home cost and selling expenses         45.6                   58.5                  (22.1)        %          82.2                   104.4                  (21.3)        %
NOI$        16.7          $        23.6                  (29.2)        % $        27.3          $        42.4                  (35.6)        %
NOI margin %*         26.8        %          28.7        %            24.9        %          28.9        %  
            
UK(a)           
Home sales$        60.3          $        60.6                  (0.5)        % $        99.4          $        60.6          64.0        %
Home cost and selling expenses         35.6                   34.4                  3.5        %          62.2                   34.4          80.8        %
NOI$        24.7          $        26.2                  (5.7)        % $        37.2          $        26.2          42.0        %
NOI margin %*         41.0        %          43.2        %            37.4        %          43.2        %  
            
Total(a)           
Home sales$        122.6          $        142.7                  (14.1)        % $        208.9          $        207.4                  0.7        %
Home cost and selling expenses         81.2                   92.9                  (12.6)        %          144.4                   138.8                  4.0        %
NOI$        41.4          $        49.8                  (16.9)        % $        64.5          $        68.6                  (6.0)        %
NOI margin %*         33.8        %          34.9        %            30.9        %          33.1        %  
            
Other information           
Units Sold:*           
North America         684                   977                  (30.0)        %          1,273                   1,814          (29.8)        %
UK(a)         837                   753                  11.2        %          1,426                   753          89.4        %
Total home sales(a)         1,521                   1,730                  (12.1)        %          2,699                   2,567          5.1        %
            
Average Selling Price:*           
North America$        91,082          $        84,033                  8.4        % $        86,017          $        80,926          6.3        %
UK(a)$        72,043          $        80,478                  (10.5)        % $        69,705          $        80,478          (13.4)        %

(a) UK amounts for the quarter and six months ended June 30, 2022 cover the period from April 8, 2022 (date of acquisition) through June 30, 2022.

Operating Statistics for MH and Annual RVs (excluding UK Operations)

 


  Resident Move-outs        
  % of Total Sites Number of Move-outs  Leased Sites, Net(b) New Home Sales Pre-owned Home Sales Brokered
Re-sales
2023 - YTD as of June 30         3.5        %(a)        4,447                 1,841                 262                 1,011                 1,193        
2022         3.0        %         5,170                 2,922                 703                 2,509                 2,864        
2021         2.7        %         5,276                 2,483                 732                 3,356                 3,528        

(a) Percentage calculated on a trailing 12-month basis.

(b) Net increase in revenue producing sites.

Acquisitions
(amounts in millions, except for *)

 


Property Name Property Type Number of Properties* Sites, Wet Slips and Dry Storage Spaces* Expansion or Development Sites* State, Province or Country Total Purchase / Sale Price Month Acquired
ACQUISITIONS              
Fox Run(a) MH         1                 68                 72         MI $        7.0         January
Savannah Yacht Center(b) Marina         1                 24                 —         GA          100.0         March
First Quarter 2023           2                 92                 72           $        107.0          
               
Acquisitions in 2023           2                 92                 72           $        107.0          

(a) In conjunction with the acquisition of this ground-up development project, the Company issued 31,289 Common OP units valued at $4.4 million. The Company also delivered 68 of the 140 sites during the first quarter.

(b) In conjunction with this acquisition, the Company issued one million Series K preferred OP units to cover the total purchase price of $100.0 million.

Capital Expenditures and Investments
(amounts in millions, except for *)

 


 Six Months Ended Year Ended
 June 30, 2023 December 31, 2022 December 31, 2021
 MH / RV Marina MH / RV Marina MH / RV Marina
Recurring Capital Expenditures(a)$        23.1         $        16.9         $        51.0         $        22.8         $        45.3         $        19.3        
            
Non-Recurring Capital Expenditures(a)           
Lot Modifications$        25.4         N/A $        39.1         N/A $        28.8         N/A
Growth Projects         13.0                  39.7                  28.4                  71.1                  25.6                  51.4        
Rebranding         3.4         N/A          15.0         N/A  6.1 N/A
Acquisitions         124.8                  159.1                  2,788.1                  522.5                  944.3                  852.9        
Expansion and Development         150.9                  15.7                  247.9                  13.9                  191.8                  9.9        
Total Non-Recurring Capital Expenditures         317.5                  214.5                  3,118.5                  607.5                  1,196.6                  914.2        
Total$        340.6         $        231.4         $        3,169.5         $        630.3         $        1,241.9         $        933.5        
Other Information           
Recurring Capex per Site, Slip and Dry Storage Spaces(b)*$        173         $        223         $        397         $        582         $        371          491

(a) Refer to Definitions and Notes for additional information.

(b) Average based on actual number of MH and RV sites and Marina wet slips and dry storage spaces associated with the recurring capital expenditures in each period.

Capitalization Overview
(Shares and units in thousands, dollar amounts in millions, except for *)

 


  As of
  June 30, 2023
Equity and enterprise value Common Equivalent Shares Share Price* Capitalization
Common shares         124,401         $        130.46         $        16,229.4         
Convertible securities      
Common OP units         2,446         $        130.46                  319.1         
Preferred OP units         2,654         $        130.46                  346.2         
Diluted shares outstanding and market capitalization(a)         129,501                    16,894.7         
Plus: Debt, per the balance sheet              7,614.0         
Total capitalization              24,508.7         
Less: Cash and cash equivalents (excluding restricted cash)              (49.0)
Enterprise value(b)     $        24,459.7         
       
       
Debt   Weighted Average Maturity
(in years)*
 Debt Outstanding
Secured debt    9.5 $        3,373.0         
Unsecured debt    5.2          4,241.0         
Total debt, per consolidated balance sheet    7.1          7,614.0         
Plus: Unamortized deferred financing costs and discounts / premiums on debt              41.7         
Total debt(b)     $        7,655.7         
       
       
Corporate debt rating and outlook      
Moody's     Baa3 | Stable
S&P     BBB | Stable

(a) Refer to "Securities" within Definitions and Notes for additional information related to our securities outstanding.

(b) Refer to "Enterprise Value" and "Net Debt" within Definitions and Notes for additional information.

Summary of Outstanding Debt

(amounts in millions, except for *)

 


  Quarter Ended
  June 30, 2023
  Debt Outstanding Weighted Average Interest Rate(a)* Maturity Date*
Secured Debt $        3,373.0                 3.81        % Various
       
Unsecured Debt:      
Senior Credit Facility:      
Revolving credit facilities (in USD)(b)          884.8                 5.60        % April 2026
GBP term loan (in USD)(c)          1,106.4                 4.55        % April 2025
Total senior credit facility          1,991.2            
Other unsecured term loan          11.7                 6.13        % October 2025
Senior credit facility and other term loan          2,002.9                 5.02        %  
       
Senior Unsecured Notes:      
2028 senior unsecured notes          446.5                 2.30        % November 2028
2031 senior unsecured notes          742.0                 2.70        % July 2031
2032 senior unsecured notes          592.2                 3.60        % April 2032
2033 senior unsecured notes          395.5                 5.51        % January 2033
Total Senior Unsecured Notes          2,176.2                 3.38        %  
       
Mandatorily redeemable preferred equity and OP units(d)          61.9                 6.22        % Various
Total Unsecured Debt          4,241.0                 4.19        %  
Total debt, per consolidated balance sheets          7,614.0                 4.02        %  
Plus: Unamortized deferred financing costs and discounts / premiums on debt(a)          41.7            
Total debt $        7,655.7            

(a)  Includes the effect of amortizing deferred financing costs, loan premiums / discounts and derivatives.

(b)  As of June 30, 2023, the Company's revolving credit facilities consisted of:

  • $355.0 million borrowed on its U.S. line of credit at the Secured Overnight Financing Rate ("SOFR") plus 85 basis points.
  • $465.2 million USD equivalent borrowed on its GBP line of credit at the Daily Sterling Overnight Index Average ("SONIA") plus 85 basis points.
  • $64.6 million USD equivalent borrowed on its Australian line of credit at the Bank Bill Swap Bid Rate ("BBSY") plus 85 basis points.

(c)  As of June 30, 2023, an aggregate of £500.0 million ($633.1 million) was swapped to a weighted average fixed rate of 3.87%.

(d)  Mandatorily redeemable preferred equity and OP unit distributions are included within the line item 'Interest on mandatorily redeemable preferred OP units / equity' on the Company's Consolidated Statements of Operations.


Debt Maturities(e)

Year Secured Debt(f) Principal Amortization Senior
Credit Facility
 Senior
Unsecured Notes
 Other Unsecured Debt Total
2023 $        117.8         $        27.9         $        —         $        —         $        1.8         $        147.5        
2024          128.8                  56.4                  —                  —                  70.0                  255.2        
2025          50.5                  54.2                  1,108.7                  —                  1.8                  1,215.2        
2026          658.4                  46.2                  884.8                  —                  —                  1,589.4        
2027          4.0                  40.7                  —                  —                  —                  44.7        
Thereafter          1,576.3                  627.4                  —                  2,200.0                  —                  4,403.7        
Total $        2,535.8         $        852.8         $        1,993.5         $        2,200.0         $        73.6         $        7,655.7        

(e) Debt maturities include the unamortized deferred financing costs and discount / premiums associated with outstanding debt.

(f) For the secured debt maturing between 2023 - 2027:

 2023  2024  2025  2026  2027 
Weighted average interest rate        3.54        %         4.03        %         4.04        %         3.97        %         4.34        %

Debt Analysis

 


    As of
    June 30, 2023
Select Credit Ratios    
Net debt / TTM recurring EBITDA(a)   6.2 x
Net debt / enterprise value           30.9        %
Net debt / gross assets           36.8        %
Unencumbered assets / total assets           77.1        %
Floating rate debt / total debt(b)           17.9        %
     
Coverage Ratios    
TTM Recurring EBITDA(a) / interest   4.3 x
TTM Recurring EBITDA(a) / interest + preferred distributions + preferred stock distribution   4.2 x
     
Senior Credit Facility Covenants Requirement  
Maximum leverage ratio <65.0 %         34.4        %
Minimum fixed charge coverage ratio >1.40 x 3.44 x
Maximum secured leverage ratio <40.0 %         12.8        %
     
Senior Unsecured Note Covenants Requirement  
Total debt / total assets ≤60.0 %         41.0        %
Secured debt / total assets ≤40.0 %         18.1        %
Consolidated income available for debt service / debt service ≥1.50 x 4.12 x
Unencumbered total asset value / total unsecured debt ≥150.0 %         337.2        %

(a) Refer to page 8 for additional detail on the Company's TTM Recurring EBITDA.

(b) Percentage includes the impact of hedge activities.

^ Excludes the Company's borrowings under its senior credit facility.

Definitions and Notes

 

Capital Expenditures and Investment Activity - The Company classifies its investments in properties into the following categories:

  • Recurring Capital Expenditures - Property recurring capital expenditures are necessary to maintain asset quality, including purchasing and replacing assets used to operate the communities and marinas. Recurring capital expenditures at the Company's MH and RV properties include items such as: major road, driveway and pool improvements; clubhouse renovations; adding or replacing streetlights; playground equipment; signage; maintenance facilities; manager housing and property vehicles. Recurring capital expenditures at the Company's marinas include items such as: dredging, dock repairs and improvements, and equipment maintenance and upgrades. The minimum capitalized amount is five hundred dollars.

  • Non-Recurring Capital Expenditures - The following investment and reinvestment activities are non-recurring in nature:

    • Lot Modifications - Lot modification capital expenditures are incurred to modify the foundational structures required to set a new home after a previous home has been removed. These expenditures are necessary to create a revenue stream from a new site renter and often improve the quality of the community. Other lot modification expenditures include land improvements added to annual RV sites to aid in the conversion of transient RV guests to annual contracts. See page 13 for move-out rates.

    • Growth Projects - Growth projects consist of revenue-generating or expense-reducing activities at MH, RV and marina properties. These include, but are not limited to, utility efficiency and renewable energy projects, site, slip or amenity upgrades such as the addition of a garage, shed or boat lift, and other special capital projects that substantiate an incremental rental increase.

    • Rebranding - Rebranding includes new signage at the Company's RV communities and costs of building an RV mobile application and updated website.

    • Acquisitions - Total acquisition investments represent the purchase price paid for operating properties and land parcels for future ground-up development and expansions activities (detailed for the current calendar year on page 14), plus any capital improvements identified during due diligence needed to bring acquired properties up to the Company's operating standards.

Capital improvements subsequent to acquisition often require 24 to 36 months to complete after closing and include upgrading clubhouses; landscaping; new street light systems; new mail delivery systems; pool renovations including larger decks, heaters and furniture; new maintenance facilities; lot modifications; and new signage including main signs and internal road signs.

For the six months ended June 30, 2023, the components of total acquisition investment are as follows (in millions):

  Six Months Ended June 30, 2023
  MH and RV Marina Total
Purchase price of acquisitions (including capitalized transaction cost) $        8.6         $        102.3         $        110.9        
Purchase price of land acquisitions (including capitalized transaction cost)(a)          37.9                  —                  37.9        
Capital improvements to recent acquisitions          78.3                  56.8                  135.1        
Total Acquisition Investments $        124.8         $        159.1         $        283.9        

(a) Includes the value allocated to infrastructure improvements associated with acquired land, when applicable.

  • Expansions and Developments - Expansion and development expenditures consist primarily of construction costs such as roads, activities, and amenities, and costs necessary to complete home and RV site improvements, such as driveways, sidewalks and landscaping at the Company's MH and RV communities. Expenditures also include costs to rebuild after damage has been incurred at MH, RV or marina properties, and research and development.

Enterprise Value - Equals total equity market capitalization, plus total indebtedness reported on the Company's balance sheet and less cash and cash equivalents (excluding restricted cash).

GAAP - U.S. Generally Accepted Accounting Principles.

Home Sales Contribution to FFO - The reconciliation of NOI from home sales to FFO from home sales for the quarter and six months ended June 30, 2023 is as follows (amounts in millions, except for *):

 Quarter Ended June 30, 2023 Six Months Ended June 30, 2023
 North America UK Total North America UK Total
Home Sales NOI$        16.7          $        24.7         $        41.4          $        27.3          $        37.2 $        64.5 
(Gain) / loss on dispositions of assets, net         (10.6        )          —                  (10.6        )          (18.5        )          —          (18.5)
FFO Contribution from home sales$        6.1          $        24.7         $        30.8          $        8.8          $        37.2 $        46.0 

Interest Expense - The following is a summary of the components of the Company's interest expense (in millions):

 Quarter Ended Six Months Ended
 June 30, 2023 June 30, 2022 June 30, 2023 June 30, 2022
Interest on Secured debt, Senior unsecured notes, Senior Credit Facility, Unsecured Term Loan and interest rate swaps$        75.1          $        51.5          $        147.5          $        94.3         
Lease related interest expense         3.6                   2.6                   7.1                   2.7         
Amortization of deferred financing costs, debt (premium) or discounts and losses on hedges         1.5                   1.2                   3.0                   2.4         
Senior credit facility commitment fees and other finance related charges         1.6                   1.8                   3.3                   3.9         
Capitalized interest         (2.6)          (1.8)          (5.1)          (2.8)
Interest Expense, per Consolidated Statements of Operations$        79.2          $        55.3          $        155.8         $        155.8        $        100.5         

NAREIT - The National Association of Real Estate Investment Trusts is the worldwide representative voice for REITs and real estate companies with an interest in U.S. real estate and capital markets. More information is available at www.reit.com.

Net Debt - The carrying value of debt, which includes unamortized premiums, discounts and deferred financing costs, less unrestricted cash.

Other Acquisition Related Costs - In the Company's Reconciliation of Net Income Attributable to SUI Common Shareholders to Core FFO on page 6, 'Other acquisition related costs' represent (a) nonrecurring integration expenses associated with acquisitions during the quarter and six months ended June 30, 2023 and 2022, (b) costs associated with potential acquisitions that will not close, (c) costs associated with the termination of the bridge loan commitment during the quarter ended March 31, 2022 related to the acquisition of Park Holidays and (d) 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.

Other adjustments, net - In the Company's Reconciliation of Net Income Attributable to SUI Common Shareholders to Core FFO on page 6, 'Other adjustments, net' consists of the following (in millions):

 Quarter Ended Six Months Ended
 June 30, 2023 June 30, 2022 June 30, 2023 June 30, 2022
Long term lease termination (benefit) / expense$        0.1          $        (0.3) $        0.7          $        (0.3)
Severance costs         0.4                   —                   0.4                   —         
Deferred tax benefit         (7.7)          (0.3)          (12.3)          (0.3)
RV rebranding non-recurring cost         —                   0.3                   —                   2.2         
Accelerated deferred compensation amortization         —                   0.1                   0.4                   0.1         
Other         0.1                   (0.3)          0.1                   (0.3)
Other adjustments, net$        (7.1) $        (0.5) $        (10.7) $        1.4         

Other income / (expense), net - In the Company's Consolidated Statements of Operations on page 5, 'Other income / (expense), net' consists of the following (in millions):

 Quarter Ended Six Months Ended
 June 30, 2023 June 30, 2022 June 30, 2023 June 30, 2022
Litigation settlement$        0.1          $        —         $        0.1          $        —         
Long term lease termination benefit / (expense)         (0.1)          0.3                  (0.7)          0.3         
Repair reserve on repossessed homes         (0.8)          0.1                  (1.2)          (0.5)
Other income / (expense), net$        (0.8) $        0.4         $        (1.8) $        (0.2)

Same Property - The Company defines Same Properties as those the Company has owned and operated continuously since at least January 1, 2022. Same properties exclude ground-up development properties, acquired properties and properties sold after December 31, 2021. The Same Property data may change from time-to-time depending on acquisitions, dispositions, management discretion, significant transactions or unique situations.

Securities - The Company had the following securities outstanding as of June 30, 2023:

 Number of Units / Shares Outstanding (in thousands) Conversion Rate(a) If Converted to
Common shares (in thousands)(b)
 Issuance Price
Per Unit
 Annual Distribution Rate
Non Convertible Securities         
Common shares        124,401         N/A N/A N/A $3.72(c)
          
Convertible Securities Classified as Equity         
Common OP units        2,446                 1.0000                 2,446         N/A Mirrors common share distributions
          
Preferred OP Units         
Series A-1        207                 2.4390                 506         $        100.00                 6.00        %
Series A-3        40                 1.8605                 75         $        100.00                 4.50        %
Series C        306                 1.1100                 340         $        100.00                 5.00        %
Series D        489                 0.8000                 391         $        100.00                 4.00        %
Series E        80                 0.6897                 55         $        100.00                 5.50        %
Series F        90                 0.6250                 56         $        100.00                 3.00        %
Series G        222                 0.6452                 144         $        100.00                 3.20        %
Series H        581                 0.6098                 355         $        100.00                 3.00        %
Series J        238                 0.6061                 144         $        100.00                 2.85        %
Series K        1,000                 0.5882                 588         $        100.00                 4.00        %
Total        3,253                   2,654            
Total convertible securities outstanding        5,699                   5,100            
          
Convertible Securities Classified as Debt         
Aspen preferred OP units        989                 0.3269                 323         $        27.00         Variable

(a) Exchange rates are subject to adjustment upon stock splits, recapitalizations and similar events. The exchange rates of certain series of OP units are approximated to four decimal places.

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

(c) Annual distribution is based on the last quarterly distribution annualized.

Share - In addition to reporting net income on a diluted basis ("EPS"), the Company reports FFO and Core FFO on a per common share and dilutive convertible securities basis (per "Share"). For the periods presented below, the Company's diluted weighted average common shares outstanding for EPS and FFO are as follows:

 Quarter Ended Six Months Ended
 June 30, 2023 June 30, 2022 June 30, 2023 June 30, 2022
Diluted Weighted Average Common Shares Outstanding - EPS       
Weighted average common shares outstanding - Basic        123.4                 120.0