Sun Communities, Inc. Reports 2023 Fourth Quarter and Full Year Results; Provides 2024 Guidance and Increases Annual Distribution Rate for 2024
Total Revenue Increased 7.8% and 8.6% for the Quarter and Full Year
Net Loss per Diluted Share of $0.65 and $1.72 for the Quarter and Full Year
Core FFO per Share of $1.34 and $7.10 for the Quarter and Full Year
Total Same Property NOI Increased by 9.6% and 7.3% for the Quarter and Full Year
Same Property Adjusted Occupancy for MH and RV Increased by 230 Basis Points, Year-over-Year
Revenue Producing Site Gains of 3,268 for the Year, Including 2,111 Transient-to-Annual RV Site Conversions
Establishing Guidance for 2024
Expecting Total Same Property NOI Growth of 4.8% - 6.0%
Expecting Core FFO per Share of $7.04 to $7.24
Increasing Annual Distribution by 1.1% in 2024, to $3.76 per share
*Southfield, MI, Feb. 20, 2024 (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 fourth quarter and full year results for 2023.
*Financial Results for the Quarter and **Year Ended December 31, 2023*
· For the quarter ended December 31, 2023, net loss attributable to common shareholders was $80.9 million, or $0.65 per diluted share, compared to net income attributable to common shareholders of $4.7 million, or $0.04 per diluted share for the same period in 2022.· For the year ended December 31, 2023, net loss attributable to common shareholders was $213.3 million, or $1.72 per diluted share, compared to net income attributable to common shareholders of $242.0 million, or $2.00 per diluted share, for the same period in 2022.
*Non-GAAP Financial Measures*
· *Core Funds from Operations ("Core FFO")* for the quarter and year ended December 31, 2023, were $1.34 per common share and dilutive convertible securities ("Share") and $7.10 per Share, respectively.· *Same Property Net Operating Income ("NOI") *increased by 9.6% and 7.3% for the quarter and year ended December 31, 2023, respectively, as compared to the corresponding periods in 2022.
"The fourth quarter culminated a year of solid real property performance. Same property NOI surpassed our expectations and highlights the resilience of our portfolio, supported by the robust demand and limited supply fundamentals of our properties," said Gary A. Shiffman, Chairman, President and CEO. "We realized solid occupancy gains in our manufactured housing and RV communities, high levels of conversion of transient to annual RV sites and continued double digit NOI increases in our marinas. In the UK, although real property performance remains strong, macro headwinds continue to impact home sales. We are focused on realizing the consistent growth our portfolio provides and delivering reliable results from our real property assets. By remaining disciplined in pursuing new acquisition and development activity, de-leveraging our balance sheet, and maximizing the efficiency of our operating platform, we are confident in our strategic positioning to re-accelerate earnings growth in the coming years."
*OPERATING HIGHLIGHTS*
*North America Portfolio Occupancy*
· MH and annual RV sites were 97.4% occupied at December 31, 2023, as compared to 96.8% at December 31, 2022.· During the quarter ended December 31, 2023, the number of MH and annual RV revenue producing sites increased by 683 sites, as compared to an increase of 613 sites during the corresponding period in 2022, an 11.4% increase. During the year ended December 31, 2023, MH and annual RV revenue producing sites increased by 3,268 sites, an 11.8% increase over the 2,922 sites gained during 2022.· Transient-to-annual RV site conversions totaled 296 sites during the fourth quarter of 2023 and accounted for 43.3% of the revenue producing site gains. Transient-to-annual RV site conversions totaled 2,111 and accounted for 64.6% of the revenue producing site gains for the year ended December 31, 2023.
*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 year ended December 31, 2023:
*Quarter Ended December 31, 2023* *MH* *RV* *Marina* *Total*
Revenue 7.6 % 2.1 % 8.2 % 6.3 %
Expense 4.8 % (4.7) % 0.4 % 0.3 %
*NOI* 8.6 % 9.3 % 12.5 % 9.6 % *Year Ended December 31, 2023* *MH* *RV* *Marina* *Total*
Revenue 7.0 % 3.3 % 9.1 % 6.2 %
Expense 7.5 % 1.4 % 3.9 % 4.2 %
*NOI* 6.8 % 4.8 % 11.7 % 7.3 %
*Number of Properties* 288 160 119 567
Same Property adjusted blended occupancy for MH and RV increased by 230 basis points to 98.9% at December 31, 2023, from 96.6% at December 31, 2022.
*INVESTMENT ACTIVITY*
During the quarter ended December 31, 2023, the Company expanded its existing communities by over 30 sites and delivered over 75 sites at one ground-up development property.
Subsequent to the quarter, the Company acquired one land parcel zoned and entitled for MH development, located in the U.S. for an aggregate purchase price of $11.7 million.
*BALANCE SHEET, CAPITAL MARKETS ACTIVITY AND OTHER ITEMS*
As of December 31, 2023, the Company had $7.8 billion in debt outstanding with a weighted average interest rate of 4.2% and a weighted average maturity of 6.8 years. At December 31, 2023, the Company's net debt to trailing twelve-month Recurring EBITDA ratio was 6.1 times.
During the quarter, the Company:
· Entered into new mortgage term loans for $252.8 million in aggregate that mature in November 2030 and bear interest at a fixed rate of 6.49%. The proceeds were used to repay $117.8 million of mortgage term loans that matured in 2023 and pay down amounts drawn under the Company's senior credit facility.· Sold its 41.8 million share position in Ingenia Communities Group (ASX: INA), generating $102.5 million of proceeds, net of underwriting and other fees, with a realized loss of $8.0 million. The net proceeds were used to pay down amounts drawn under the Company's senior credit facility. The Company continues to own a 50% interest in Sungenia, a joint venture formed between the Company and the Ingenia Communities Group in November 2018.· Completed a transaction with an unrelated entity, whereby the Company received net cash proceeds of $53.4 million in exchange for relinquishing right, title and interest in certain MH installment notes receivable. Based on the transaction structure, which in the event of a borrower default allows the Company to repurchase the underlying homes collateralizing the notes, requirements for sale accounting were not met and the notes receivable continue to be recognized on the Company's consolidated balance sheets at December 31, 2023, and referred to as collateralized receivables. The proceeds were used to pay down borrowings outstanding under the Company's senior credit facility.
· Simplified the structure of certain of its consolidated variable interest entities, Sun NG Whitewater RV Resorts LLC, Sun NG Beaver Brook LLC, Sun NG RV Resorts and four standalone affiliates (collectively "Sun NG") in a transaction with the Company's joint venture partner in Sun NG:
· Sold the Company's majority equity interests in three properties for proceeds of $166.1 million, which resulted in a gain on disposition of $13.2 million; · Acquired all of the joint venture partner's noncontrolling equity interests in 14 properties and a significant portion of the noncontrolling equity interests in five stand-alone joint venture properties, for $149.5 million; and · Settled a total of $39.2 million of preferred equity interests, including $35.2 million of mandatorily redeemable equity interests classified as Unsecured debt, and issued Series L preferred OP units valued at $2.0 million.
· Sold its investment in Rezplot Systems LLC ("Rezplot"), a nonconsolidated affiliate. Rezplot is an RV reservation software technology company operating under the Campspot brand. Total proceeds of $27.5 million included the settlement of notes receivable from Rezplot with a recorded balance of $12.2 million and resulted in a gain on sale of $15.3 million.
Subsequent to the quarter, the Company:
· Issued $500.0 million of senior unsecured notes with an interest rate of 5.5% and a five-year term, due January 15, 2029, and received net proceeds of $495.4 million, after deducting underwriters' discounts and estimated offering expenses. The majority of the net proceeds were used to pay down borrowings outstanding under the Company's senior credit facility, reducing its floating-rate debt to total debt to approximately 10%.· Reached an agreement to sell two operating communities located in Florida and Arizona with 533 aggregated developed sites for total cash consideration of approximately $53.0 million. The sale is expected to close during the quarter ending March 31, 2024, with a total estimated gain of approximately $7.0 million.
UK Note Receivable
As previously announced, the Company completed an administration process related to three real estate assets that collateralized the majority of a note receivable extended to Royale Holdings Group HoldCo Limited ("Royale Life"). On December 28, 2023, the Company acquired the assets through a credit bid, a potential outcome that management had previously discussed. During the quarter, the Company engaged third party valuation specialists to appraise the assets in accordance with Accounting Standards Codification Topic 820 – Fair Value Measurements and Disclosures and recognized such assets at fair value totaling $263.8 million, as Investment Property on the Company's Consolidated Balance Sheets as of December 31, 2023. There was no resulting remeasurement adjustment.
The Company also previously announced that the note receivable was further collateralized by a first priority security interest in three MH manufacturers in the UK and that it was continuing to work through courses of action in connection with such collateral. These assets were remeasured during the fourth quarter which resulted in an unfavorable adjustment of $102.9 million.
Subsequent to quarter end, the Company completed a receivership process related to the manufacturers. The receivers sold such assets for total consideration of $10.7 million, resulting in cash proceeds to the Company of approximately $7.0 million, net of non-cash consideration and fees. The sale of these assets resulted in an incremental fair value remeasurement adjustment of $0.8 million.
Sandy Bay Update
As previously disclosed, the Company had agreed to sell Sandy Bay, an MH operating community in the UK. The property had been classified as held for sale on its Consolidated Balance Sheets at September 30, 2023. As of December 31, 2023, the asset was reclassified as held for use and the Company is now operating the property.
Park Holidays Goodwill Impairment
During year end audit procedures, the Company reviewed controls relating to the valuation of its Park Holidays business and associated goodwill. In connection with the review, the Company concluded that changes in certain triggering factors relevant to the valuation of the Park Holidays business, including financial projections and increased interest rates, should have been taken into account when preparing the Company’s interim financial statements for the quarters ended March 31, 2023, June 30, 2023, and September 30, 2023. The total non-cash goodwill impairment recognized during 2023 was $369.9 million. The Company intends to restate such interim financial statements in its Annual Report on Form 10-K for the fiscal year ended December 31, 2023.
*2024 Distributions*
The Company's Board of Directors has approved setting the 2024 annual distribution rate at $3.76 per common share and unit, an increase of $0.04, or 1.1%, over the current annual dividend rate of $3.72 per common share and unit for 2023. This increase will begin with the first quarter distribution to be paid in April 2024. While the Board of Directors has adopted the new annual distribution policy, the amount of each quarterly distribution on the Company's common stock will be subject to approval by the Board of Directors.
*New Directors*
On February 15, 2024, the Company added Jerry Ehlinger and Craig A. Leupold to its Board of Directors as independent directors. Mr. Ehlinger and Mr. Leupold bring new and thoughtful real estate industry perspectives to the Company.
*2024 GUIDANCE*
The Company is establishing full year and first quarter 2024 guidance for diluted EPS and Core FFO per Share as follows:
*First Quarter** Ending **March 31, 2024* *Full Year Ending *
*December 31, 2024* *Low* *High* *Low* *High*
*Diluted EPS* $ (0.08 ) $ (0.03 ) $ 2.08 $ 2.28
Depreciation and amortization 1.32 1.32 5.35 5.35
Gain on sale of assets (0.05 ) (0.05 ) (0.30 ) (0.30 )
Distributions on preferred OP units 0.02 0.02 0.10 0.10
Noncontrolling interest — — 0.10 0.10
Transaction costs and other non-recurring G&A expenses 0.02 0.02 0.07 0.07
Deferred tax benefit (0.02 ) (0.02 ) (0.18 ) (0.18 )
Difference in weighted average share count attributed to dilutive convertible securities — — (0.11 ) (0.11 )
Other adjustments^(b) (0.07 ) (0.07 ) (0.07 ) (0.07 )
*Core FFO*^*(c)** per Share* $ 1.14 $ 1.19 $ 7.04 $ 7.24
^(a) The diluted share counts for the quarter ending March 31, 2024 and the year ending December 31, 2024 are 129.7 million and 129.8 million, respectively.
^(b) Other adjustments consist primarily of remeasurement (gains) / losses, contingent legal and insurance gains and other items presented in the table that reconciles Net income / (loss) attributable to SUI common shareholders to Core FFO on page 6.
^(c) The Company's initial guidance translates forecasted results from operations in Canada, Australia and the UK using the relevant exchange rates in effect on December 31, 2023, as follows:
*Exchange Rates in Effect at:* *December 31, 2023*
U.S. Dollar ("USD") / Pound Sterling ("GBP") 1.27
USD / Canadian Dollar ("CAD") 0.75
USD / Australian Dollar ("AUS") 0.68
The Company's guidance for the full year ending December 31, 2024 is reflected below. Note that certain prior period amounts have been reclassified to conform with current period presentation, with no effect on net income / (loss). The reclassifications more precisely align certain indirect expenses with underlying activity drivers. The Company has noted these line items in its guidance footnotes below, and has provided 2023 quarterly results that reflect these classifications in the "Definitions and Notes" section of this supplemental information package.
*FY 2023 Results*
*(in millions)*
*Expected % Change in FY **2024**Same Property Portfolio*^*(a)*
*North America*
Revenues from real property $ 1,737.3 6.4% - 6.8%
Total property operating expenses $ 582.9 8.1% - 9.1%
*Total North America Same Property NOI* *$* *1,154.4* *5.0% - 6.2%*
MH NOI $ 609.9 6.0% - 7.0%
RV NOI $ 291.7 2.1% - 3.5%
Marina NOI $ 252.7 6.1% - 7.5%
*UK*
Revenues from real property $ 138.9 4.8% - 5.4%
Total property operating expenses $ 69.1 7.4% - 8.4%
*Total UK Same Property NOI* *$* *69.8* *1.3% - 3.3%*
*Total Same Property NOI*^*(b)(c)* *$* *1,224.1* *4.8%** - **6.0%*
*Average Rental Rate Increases Expected*
MH 5.4 %
Annual RV 6.5 %
Marina 5.6 %
UK 7.1 %
For the first quarter ending March 31, 2024, the Company's guidance range assumes Total Same Property NOI growth of 6.0% - 7.3%.
*Consolidated Portfolio Guidance For 2024* *FY 2023 Results*
*(in millions)* *Expected*
*Change / Range*
* in FY 2024*
Revenues from real property $ 2,059.8 7.1% - 7.6%
Total property operating expenses^(d) $ 810.4 8.1% - 8.4%
*Total Real Property NOI* *$* *1,249.4* 6.3% - 7.3%
Service, retail, dining and entertainment NOI^(d) $ 68.5 $58.4 - $63.2
Interest income $ 45.4 $17.6 - $18.6
Brokerage commissions and other, net^(e)(f) $ 60.6 $44.8 - $47.2
FFO contribution from North American home sales^(d) $ 17.0 $14.4 - $15.9
Income from nonconsolidated affiliates $ 16.0 $13.7 - $14.7
General and administrative expenses^(d) $ 272.1 $262.2 - $267.4
Interest expense $ 325.8 $356.3 - $362.7
Current tax expense $ 14.5 $14.6 - $16.8
*FY 2023 Results*
*(in millions)*
*Expected *
*Range in FY **2024**UK Home Sales*
UK homes sales volume^(g) 2,857 2,650 - 2,850
FFO contribution from UK home sales ($ in millions)^(d)(g) $ 59.2 $62.3 - $69.9
*Other Guidance Assumptions * *Expected *
*Range in FY **2024*
Increase in revenue producing sites (North America) 2,450 - 2,750
*Seasonality* *1Q24* *2Q24* *3Q24* *4Q24*
*North America Same Property NOI:*
MH 25 % 25 % 25 % 25 %
RV 16 % 26 % 41 % 17 %
Marina 18 % 27 % 31 % 24 %
*Total* *21* *%* *25* *%* *30* *%* *24* *%*
*UK Same Property NOI* *13* *%* *26* *%* *41* *%* *20* *%*
*Home Sales FFO*
North America 24 % 32 % 26 % 18 %
UK 18 % 30 % 33 % 19 %
*Total Home Sales* *19* *%* *30* *%* *32* *%* *19* *%*
*Consolidated Service, Retail, Dining and Entertainment NOI* 3 % 36 % 47 % 14 %
*Consolidated EBITDA* 19 % 26 % 33 % 22 %
*Core FFO per Share* 16 % 27 % 36 % 21 %
*Footnotes to **2024** Guidance Assumptions*
(a) The amounts in the Same Property Portfolio table reflect constant currency, as Canadian and Pound Sterling currency figures included within the 2023 amounts have been translated at the assumed exchange rates used for 2024 guidance.
(b) Total Same Property results net $129.2 million and $133.2 million of utility revenue against the related utility expense in property operating expenses for 2023 results and 2024 guidance, respectively.
(c) 2023 actual results exclude $0.4 million of expenses 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.
(d) The table below summarizes the impacts of 2023 expense reclassification. Please refer to the "Definitions and Notes" section for quarterly data. (in millions, except for *) *FY 2023 Reported * *FY 2023 Adjusted * Consolidated portfolio property operating expenses $ (807.9 ) $ (810.4 ) Service, retail, dining and entertainment NOI $ 53.9 $ 68.5 General and administrative expenses $ (270.2 ) $ (272.1 ) North America home sales FFO contribution $ 18.2 $ 17.0 UK home sales FFO contribution $ 68.3 $ 59.2 Average NOI margin per home sold* $ 24,300 $ 21,100
(e) Brokerage commissions and other, net includes $23.4 million and $21.0 million of business interruption income in 2023 and 2024, respectively.
(f) Brokerage commissions and other, net included approximately $8.5 million of lease income in 2023 that will be recognized in total real property NOI in 2024.
(g) Includes UK home sales from Park Holidays and Sandy Bay.
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 February 20, 2024. 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 fourth quarter results will be held on Wednesday February 21, 2024 at 11:00 A.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 March 6, 2024 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 13743159. The conference call will be available live on the Company's website located at www.suninc.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:
*∙* 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;
*∙* Outbreaks of disease and related restrictions on business operations;
*∙* 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;
*∙* The Company's remediation plan and its ability to remediate the material weakness in its internal control over financial reporting;
*∙* Expectations regarding the amount or frequency of impairment losses, including as a result of the write-down of intangible assets, including goodwill;
*∙* 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, including costs associated with prosecuting or defending claims and any adverse outcomes;
*∙* 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 December 31, 2023, the Company owned, operated, or had an interest in a portfolio of 667 developed MH, RV and Marina properties comprising 179,310 developed sites and approximately 48,030 wet slips and dry storage spaces in the U.S., the UK and Canada.
For more information about the Company, please visit www.suninc.com.
*Company Contacts*
*Management* *Investor 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's* *S&P*
Baa3 | Stable BBB | 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 Eric Wolfe eric.wolfe@citi.com Nicholas Joseph nicholas.joseph@citi.com
Deutsche Bank Conor Peaks conor.peaks@db.com Omotayo Okusanya omotayo.okusanya@db.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*
*($ in millions, except Per Share amounts)*
*Quarters Ended* *12/31/2023* *9/30/2023* *6/30/2023* *3/31/2023* *12/31/2022*
*Financial Information*
Basic earnings / (loss) per share^ (a) $ (0.65 ) $ 0.97 $ (1.67 ) $ (0.36 ) $ 0.04
Diluted earnings / (loss) per share^(a) $ (0.65 ) $ 0.97 $ (1.68 ) $ (0.36 ) $ 0.04
Cash distributions declared per common share $ 0.93 $ 0.93 $ 0.93 $ 0.93 $ 0.88
FFO per Share^(a)(b) $ 1.41 $ 2.55 $ 1.96 $ 1.14 $ 1.02
Core FFO per Share^(b) $ 1.34 $ 2.57 $ 1.96 $ 1.23 $ 1.33
Real Property NOI
MH $ 169.3 $ 182.5 $ 168.7 $ 156.9 $ 153.5
RV 51.0 128.4 76.5 45.8 46.0
Marinas 65.3 83.1 72.4 52.0 58.3
Total $ 285.6 $ 394.0 $ 317.6 $ 254.7 $ 257.8
Recurring EBITDA $ 256.0 $ 433.0 $ 339.7 $ 237.4 $ 236.3
TTM Recurring EBITDA / Interest 3.9 x 4.0 x 4.3 x 4.6 x 5.2 x
Net Debt / TTM Recurring EBITDA 6.1 x 6.1 x 6.2 x 6.1 x 6.0 x
*Balance Sheet*
Total assets^(a) $ 16,940.7 $ 17,246.6 $ 17,234.9 $ 17,348.1 $ 17,084.2
Total debt $ 7,777.3 $ 7,665.0 $ 7,614.0 $ 7,462.0 $ 7,197.2
Total liabilities $ 9,506.8 $ 9,465.0 $ 9,474.8 $ 9,294.8 $ 8,992.8
*Operating Information*
Properties
MH 353 353 354 354 353
RV 179 182 182 182 182
Marina 135 135 135 135 134
Total 667 670 671 671 669
Sites, Wet Slips and Dry Storage Spaces
Manufactured homes 118,430 118,250 118,170 117,970 118,020
Annual RV 32,390 32,150 31,620 30,860 30,330
Transient sites 28,490 29,770 30,270 30,870 31,180
Total sites 179,310 180,170 180,060 179,700 179,530
Marina wet slips and dry storage spaces^(c) 48,030 48,030 48,180 47,990 47,820
*Occupancy*
MH occupancy (including UK) 95.5 % 95.4 % 95.3 % 95.1 % 95.0 %
Annual RV occupancy 100.0 % 100.0 % 100.0 % 100.0 % 100.0 %
Blended MH and annual RV occupancy 96.4 % 96.4 % 96.3 % 96.1 % 96.0 %
*MH and RV Revenue Producing Site Net Gains*^*(d)** (excluding UK Operations)*
MH leased sites, net 387 207 285 278 346
RV leased sites, net 296 537 754 524 267
Total leased sites, net 683 744 1,039 802 613
^(a) .As adjusted for Park Holidays non-cash goodwill impairment. Refer to Definitions and Notes for additional information.
^(b) Excludes the effects of certain anti-dilutive convertible securities.
^(c) Total wet slips and dry storage spaces are adjusted each quarter based on site configuration and usability.
^(d) Revenue producing site net gains do not include occupied sites acquired during the year.
*Portfolio Overview as of December 31, 2023*
*MH & RV Properties* *Properties*
*MH & Annual RV* *RV Transient Sites*
*Total MH and RV Sites*
*Sites for Development**Location* *Sites* *Occupancy %*
North America
Florida 129 40,650 97.7 % 3,760 44,410 3,400
Michigan 85 32,890 97.1 % 610 33,500 1,310
California 37 6,920 98.8 % 1,880 8,800 850
Texas 29 8,990 96.1 % 1,830 10,820 3,920
Ontario, Canada 16 4,700 100.0 % 480 5,180 1,450
Connecticut 16 1,920 95.0 % 80 2,000 —
Maine 15 2,470 96.0 % 1,070 3,540 200
Arizona 13 4,590 94.7 % 920 5,510 —
Indiana 12 3,150 97.8 % 1,030 4,180 180
New Jersey 11 2,970 100.0 % 1,070 4,040 260
Colorado 11 2,900 87.0 % 990 3,890 1,420
Virginia 10 1,500 99.9 % 1,950 3,450 750
New York 10 1,520 99.3 % 1,420 2,940 780
Other 83 17,540 98.7 % 8,200 25,740 1,010
North America Total 477 132,710 97.4 % 25,290 158,000 15,530
United Kingdom 55 18,110 89.5 % 3,200 21,310 2,450
*Total* *532* *150,820* *96.4* *%* *28,490* *179,310* *17,980*
*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
Massachusetts 9 2,520
Maryland 9 2,480
Other 53 22,310
*Total* *135* *48,030*
*Properties*
*Sites, Wet Slips and Dry Storage Spaces*
*Total Portfolio* *667* *227,340*
*Consolidated Balance Sheets*
*(amounts in millions)*
*December 31, 2023* *December 31, 2022*
*Assets*
Land $ 4,278.2 $ 4,322.3
Land improvements and buildings 11,682.2 10,903.4
Rental homes and improvements 744.4 645.2
Furniture, fixtures and equipment 1,011.7 839.0
Investment property 17,716.5 16,709.9
Accumulated depreciation (3,272.9 ) (2,738.9 )
Investment property, net 14,443.6 13,971.0
Cash, cash equivalents and restricted cash 42.7 90.4
Marketable securities — 127.3
Inventory of manufactured homes 205.6 202.7
Notes and other receivables, net 421.6 617.3
Collateralized receivables, net^(a) 56.2 —
Goodwill 733.0 1,018.4
Other intangible assets, net 369.5 402.0
Other assets, net 668.5 655.1
*Total Assets* $ 16,940.7 $ 17,084.2
*Liabilities*
Mortgage loans payable $ 3,478.9 $ 3,217.8
Secured borrowings on collateralized receivables^(a) 55.8 —
Unsecured debt 4,242.6 3,979.4
Distributions payable 118.2 111.3
Advanced reservation deposits and rent 344.5 352.1
Accrued expenses and accounts payable 313.7 396.3
Other liabilities 953.1 935.9
*Total Liabilities* 9,506.8 8,992.8
Commitments and contingencies
Temporary equity 260.9 202.9
*Shareholders' Equity*
Common stock 1.2 1.2
Additional paid-in capital 9,466.9 9,549.7
Accumulated other comprehensive income / (loss) 12.2 (9.9 )
Distributions in excess of accumulated earnings (2,397.5 ) (1,731.2 )
*Total SUI shareholders' equity* 7,082.8 7,809.8
Noncontrolling interests
Common and preferred OP units 90.2 78.7
Total noncontrolling interests 90.2 78.7
*Total Shareholders' Equity* 7,173.0 7,888.5
*Total Liabilities, Temporary Equity and Shareholders' Equity* $ 16,940.7 $ 17,084.2
^(a) Refer to "Secured borrowings on collateralized receivables" within Definitions and Notes for additional information.
*Consolidated Statements of Operations*
*(amounts in millions, except for per share amounts)*
*Quarter Ended* *Year Ended* *December 31, 2023* *December 31, 2022* *% Change* *December 31, 2023* *December 31, 2022* *% Change*
*Revenues*
Real property (excluding transient)^(a) $ 428.7 $ 390.8 9.7 % $ 1,714.2 $ 1,548.9 10.7 %
Real property - transient 44.7 49.8 (10.2) % 345.6 353.3 (2.2) %
Home sales 93.2 107.7 (13.5) % 419.9 465.8 (9.9) %
Service, retail, dining and entertainment 140.0 108.6 28.9 % 638.9 531.6 20.2 %
Interest 4.8 9.9 (51.5) % 45.4 35.2 29.0 %
Brokerage commissions and other, net 15.3 7.5 104.0 % 60.6 34.9 73.6 %
*Total Revenues* 726.7 674.3 7.8 % 3,224.6 2,969.7 8.6 %
*Expenses*
Property operating and maintenance^(a) 159.8 155.4 2.8 % 690.5 624.6 10.6 %
Real estate tax 28.0 27.4 2.2 % 117.4 110.6 6.1 %
Home costs and selling 70.5 76.0 (7.2) % 295.4 311.2 (5.1) %
Service, retail, dining and entertainment 134.6 109.4 23.0 % 585.0 472.7 23.8 %
General and administrative 77.8 69.8 11.5 % 270.2 256.8 5.2 %
Catastrophic event-related charges, net 6.0 5.2 15.4 % 3.8 17.5 N/M
Business combinations — 0.8 (100.0) % 3.0 24.7 (87.9) %
Depreciation and amortization 177.7 154.1 15.3 % 660.0 601.8 9.7 %
Asset impairments — 0.7 (100.0) % 10.1 3.0 236.7 %
Goodwill impairment — — N/A 369.9 — N/A
Loss on extinguishment of debt — — N/A — 4.4 (100.0) %
Interest 85.9 67.6 27.1 % 325.8 229.8 41.8 %
Interest on mandatorily redeemable preferred OP units / equity 0.6 1.1 (45.5) % 3.3 4.2 (21.4) %
*Total Expenses* 740.9 667.5 11.0 % 3,334.4 2,661.3 25.3 %
*Income / (Loss) Before Other Items* (14.2 ) 6.8 N/M (109.8 ) 308.4 N/M
Gain / (loss) on remeasurement of marketable securities (8.0 ) 20.6 N/M (16.0 ) (53.4 ) (70.0) %
Gain / (loss) on foreign currency exchanges 6.2 (16.3 ) N/M (0.3 ) 5.4 N/M
Gain / (loss) on disposition of properties 13.9 (0.3 ) N/M 11.0 12.2 (9.8) %
Other expense, net^(b) (2.0 ) (4.7 ) (57.4) % (7.5 ) (2.1 ) 257.1 %
Loss on remeasurement of notes receivable (103.6 ) (0.9 ) N/M (106.7 ) (0.8 ) N/M
Income / (loss) from nonconsolidated affiliates 15.5 (0.9 ) N/M 16.0 2.9 N/M
Gain / (loss) on remeasurement of investment in nonconsolidated affiliates 0.3 (2.8 ) N/M (4.2 ) (2.7 ) 55.6 %
Current tax benefit / (expense) (0.6 ) 2.2 N/M (14.5 ) (10.3 ) 40.8 %
Deferred tax benefit 8.3 0.3 N/M 22.9 4.2 N/M
*Net Income / (Loss)* (84.2 ) 4.0 N/M (209.1 ) 263.8 N/M
Less: Preferred return to preferred OP units / equity interests 3.3 2.4 37.5 % 12.3 11.0 11.8 %
Less: Income / (loss) attributable to noncontrolling interests (6.6 ) (3.1 ) 112.9 % (8.1 ) 10.8 (175.0) %
*Net Income / (Loss) Attributable to SUI Common Stockholders* $ (80.9 ) $ 4.7 N/M $ (213.3 ) $ 242.0 (188.1) %
Weighted average common shares outstanding - basic^(b) 123.5 123.1 0.3 % 123.4 120.2 2.7 %
Weighted average common shares outstanding - diluted^(b) 126.4 125.8 0.5 % 123.8 122.9 0.7 %
Basic earnings / (loss) per share $ (0.65 ) $ 0.04 N/M $ (1.71 ) $ 2.00 N/M
Diluted earnings / (loss) per share^(c) $ (0.65 ) $ 0.04 N/M $ (1.72 ) $ 2.00 N/M
^(a) Refer to "Utility Revenues" within Definitions and Notes for additional information.
^(b) Refer to Definitions and Notes for additional information.
^(c) Excludes the effect of certain anti-dilutive convertible securities.
N/M = Not meaningful.
N/A = Not applicable.
*Reconciliation of Net Income / (Loss) Attributable to SUI Common Shareholders to Core FFO*
*(amounts in millions, except for per share data)*
*Quarter Ended* *Year Ended* *December 31, 2023* *December 31, 2022* *December 31, 2023* *December 31, 2022*
*Net Income / (Loss) Attributable to SUI Common Shareholders* $ (80.9 ) $ 4.7 $ (213.3 ) $ 242.0
Adjustments
Depreciation and amortization 176.7 153.3 657.2 599.6
Depreciation on nonconsolidated affiliates — — 0.2 0.1
Asset impairments — 0.7 10.1 3.0
Goodwill impairment — — 369.9 —
(Gain) / loss on remeasurement of marketable securities 8.0 (20.6 ) 16.0 53.4
(Gain) / loss on remeasurement of investment in nonconsolidated affiliates (0.3 ) 2.8 4.2 2.7
Loss on remeasurement of notes receivable 103.6 0.9 106.7 0.8
Loss on remeasurement of collateralized receivables and secured borrowings, net 0.4 — 0.4 —
(Gain) / loss on dispositions of properties, including tax effect (13.9 ) 0.3 (8.9 ) (12.2 )
Add: Returns on preferred OP units 3.2 0.5 11.8 9.5
Add: Income / (loss) attributable to noncontrolling interests (6.5 ) (2.5 ) (8.1 ) 10.4
Gain on dispositions of assets, net (9.0 ) (10.7 ) (38.0 ) (54.9 )
*FFO*^*(a)* $ 181.3 $ 129.4 908.2 $ 854.4
Adjustments
Business combination expense —