SOUTHFIELD, Mich., Aug. 7 /PRNewswire-FirstCall/ -- Sun
Communities, Inc. (NYSE:SUI) (the "Company"), a real estate
investment trust (REIT) that owns and operates manufactured housing
communities, today reported second quarter results. During the
quarter ended June 30, 2009, total revenues increased to $63.3
million as compared to $62.7 million in the second quarter of 2008,
excluding $2.6 million in revenues from gain on sales of vacant
land. Net loss for the second quarter of 2009 was $(2.3) million,
or $(0.12) per diluted common share, compared with a net loss of
$(7.4) million, or $(0.41) per diluted common share, for the same
period in 2008. Funds from operations (FFO)(1) increased to $12.5
million, or $0.60 per diluted share/OP Unit, in the second quarter
of 2009 as compared to $4.8 million, or $0.23 per diluted share/OP
Unit, in the second quarter of 2008. Included in net loss for the
second quarter of 2009 is equity loss from affiliate of $0.5
million from Origen Financial, Inc. ("Origen"). Included in net
loss for the second quarter of 2008 is equity loss from affiliate
of $7.7 million and severance charges of $0.9 million. (FFO)(1) for
the second quarter of 2009 and 2008, adjusted for these items,
would have been $13.0 million, or $0.62 per diluted share/OP Unit,
and $13.4 million, or $0.65 per diluted share/OP Unit,
respectively. For the six months ended June 30, 2009, total
revenues increased to $128.6 million, as compared to $126.7 million
for the same period in 2008, excluding $3.3 million in revenues
from gain on sales of vacant land. Net loss was $(1.4) million as
compared to $(10.5) million for the six months ended June 30, 2009
and 2008, respectively. FFO(1) increased to $28.8 million, or $1.39
per diluted share/OP Unit, for the six months ended June 30, 2009,
as compared to $15.8 million, or $0.77 per diluted share/OP Unit,
for the same period in 2008. Included in net loss for the six
months ended June 30, 2009 is equity loss from affiliate of $0.4
million. Included in net loss for the six months ended June 30,
2008 is equity loss from affiliate of $12.6 million and severance
charges of $0.9 million. (FFO)(1) for the six months ended June 30,
2009 and 2008, adjusted for these items, would have been $29.2
million, or $1.40 per diluted share/OP Unit, and $29.2 million, or
$1.43 per diluted share/OP Unit, respectively. For 136 communities
owned throughout 2009 and 2008, total revenues increased 1.5
percent for the quarter ended June 30, 2009, and total expenses
increased 2.1 percent, resulting in an increase in net operating
income(2) of 1.3 percent. Same property occupancy in manufactured
housing sites was 82.4 percent at June 30, 2009 and June 30, 2008.
Manufactured housing and permanent recreational vehicle revenue
producing sites increased by 123 for the second quarter of 2009,
compared to an increase of 103 sites during the second quarter of
2008. For the six months ended June 30, 2009 and 2008, manufactured
housing and permanent recreational vehicle revenue producing sites
increased by 289 and 125 sites, respectively, an increase of 164
sites period over period. The Company rented an additional 82 homes
in the second quarter of 2009 bringing the total number of occupied
rentals to 5,780 at June 30, 2009, as reflected in the accompanying
table. During the second quarter of 2009, 270 new and pre-owned
homes were sold, bringing the total of homes sold year to date to
518, an increase of 5.5 percent from the 491 homes sold during the
first six months of 2008. Rental home sales, included in total new
and pre-owned home sales above, totaled 178 and 346 for the three
and six months ended June 30, 2009, as compared to 156 and 292 for
the same periods in 2008. "Key operating metrics are on budget as
are our quarterly FFO results. The demand for affordable housing
was solid in the first half of the year and is expected to continue
resulting in additional growth during the second half of the year,"
said Gary A. Shiffman, Chairman and Chief Executive Officer. "Based
on results through June 30 and our forecasted results for the
remainder of the year, we affirm FFO guidance of $2.84 - $2.92 per
share," Shiffman added. During the quarter, the Company completed a
secured borrowing of $18.5 million of which $11.2 million was used
to repay mortgage notes that matured during the quarter. The
remaining proceeds were used to pay down the Company's unsecured
line of credit. "The completion of this secured borrowing
effectively meets our debt maturity requirements for the remainder
of 2009 and throughout 2010," Shiffman said. "With all near term
maturities covered, we are able to proactively strategize on
financing alternatives for longer term maturities while continuing
to focus on implementing our core operations business plan," added
Shiffman. A conference call to discuss second quarter operating
results will be held on August 7, 2009, at 11:00 A.M. EDT. To
participate, call toll-free 877-407-9039. Callers outside the U.S.
or Canada can access the call at 201-689-8470. A replay will be
available following the call through August 21, 2009, and can be
accessed by dialing 877-660-6853 from the U.S. or 201-612-7415
outside the U.S. or Canada. The account number for the replay is
3055 and the ID number is 328231. The conference call will be
available live on Sun Communities website
http://www.suncommunities.com/. Replay will also be available on
the website. Sun Communities, Inc. is a real estate investment
trust (REIT) that currently owns and operates a portfolio of 136
communities comprising approximately 47,600 developed sites. (1)
Funds from operations ("FFO") is defined by the National
Association of Real Estate Investment Trusts ("NAREIT") as net
income (computed in accordance with generally accepted accounting
principles), excluding gains (or losses) from sales of depreciable
operating property, plus real estate-related depreciation and
amortization, and after adjustments for unconsolidated partnerships
and joint ventures. FFO is a non-GAAP financial measure that
management believes is a useful supplemental measure of the
Company's operating performance. Management generally considers FFO
to be a useful measure for reviewing comparative operating and
financial performance because, by excluding gains and losses
related to sales of previously depreciated operating real estate
assets and excluding real estate asset depreciation and
amortization (which can vary among owners of identical assets in
similar condition based on historical cost accounting and useful
life estimates), FFO provides a performance measure that, when
compared year over year, reflects the impact to operations from
trends in occupancy rates, rental rates and operating costs,
providing perspective not readily apparent from net income.
Management believes that the use of FFO has been beneficial in
improving the understanding of operating results of REITs among the
investing public and making comparisons of REIT operating results
more meaningful. Because FFO excludes significant economic
components of net income including depreciation and amortization,
FFO should be used as an adjunct to net income and not as an
alternative to net income. The principal limitation of FFO is that
it does not represent cash flow from operations as defined by GAAP
and is a supplemental measure of performance that does not replace
net income as a measure of performance or net cash provided by
operating activities as a measure of liquidity. In addition, FFO is
not intended as a measure of a REIT's ability to meet debt
principal repayments and other cash requirements, nor as a measure
of working capital. FFO only provides investors with an additional
performance measure. Other REITs may use different methods for
calculating FFO and, accordingly, the Company's FFO may not be
comparable to other REITs. (2) Investors in and analysts following
the real estate industry utilize net operating income ("NOI") as a
supplemental performance measure. NOI is derived from revenues
(determined in accordance with GAAP) minus property operating
expenses and real estate taxes (determined in accordance with
GAAP). NOI does not represent cash generated from operating
activities in accordance with GAAP and should not be considered to
be an alternative to net income (determined in accordance with
GAAP) as an indication of the Company's financial performance or to
be an alternative to cash flow from operating activities
(determined in accordance with GAAP) as a measure of the Company's
liquidity; nor is it indicative of funds available for the
Company's cash needs, including its ability to make cash
distributions. The Company believes that net income is the most
directly comparable GAAP measurement to net operating income. Net
income includes interest and depreciation and amortization which
often have no effect on the market value of a property and
therefore limit its use as a performance measure. In addition, such
expenses are often incurred at a parent company level and therefore
are not necessarily linked to the performance of a real estate
asset. The Company believes that net operating income is helpful to
investors as a measure of operating performance because it is an
indicator of the return on property investment, and provides a
method of comparing property performance over time. The Company
uses NOI as a key management tool when evaluating performance and
growth of particular properties and/or groups of properties. The
principal limitation of NOI is that it excludes depreciation,
amortization, interest expense, and non-property specific expenses
such as general and administrative expenses, all of which are
significant costs, and therefore, NOI is a measure of the operating
performance of the properties of the Company rather than of the
Company overall. For more information about Sun Communities, Inc.
visit our website at http://www.suncommunities.com/ -FINANCIAL
TABLES FOLLOW- FORWARD LOOKING STATEMENTS This press release
contains various "forward-looking statements" within the meaning of
the Securities Act of 1933 and the Securities Exchange Act of 1934,
and the Company intends that such forward-looking statements will
be subject to the safe harbors created thereby. The words "will,"
"may," "could," "expect," "anticipate," "believes," "intends,"
"should," "plans," "estimates," "approximate", "guidance" and
similar expressions identify these forward-looking statements.
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 press release. These
risks and uncertainties may cause the actual results of the Company
to be materially different from any future results expressed or
implied by such forward-looking statements. Such risks and
uncertainties include the ability of manufactured home buyers to
obtain financing, the level of repossessions by manufactured home
lenders and those referenced under the headings entitled "Factors
That May Affect Future Results" or "Risk Factors" contained in the
Company's filings with the Securities and Exchange Commission. The
forward-looking statements contained in this press release speak
only as of the date hereof and the Company expressly disclaims any
obligation to provide public updates, revisions or amendments to
any forward- looking statements made herein to reflect changes in
the Company's expectations of future events. ADOPTION OF NEW
ACCOUNTING STANDARDS The Company adopted Statement of Financial
Accounting Standards (SFAS) No. 160, Noncontrolling Interests in
Consolidated Financial Statements ("SFAS 160") in the first quarter
of 2009 which required reclassification of prior period financial
information. The adoption of SFAS 160 resulted in the presentation
of noncontrolling interest, previously referred to as minority
interest, be reported as a separate component of equity in the
consolidated financial statements, and that losses be allocated to
the noncontrolling interest even if the allocation resulted in a
deficit balance. SUN COMMUNITIES, INC. CONSOLIDATED STATEMENTS OF
OPERATIONS FOR THE PERIODS ENDED JUNE 30, 2009 AND 2008 (In
thousands, except per share amounts) (Unaudited) Three Months Ended
Six Months Ended June 30, June 30, ------------------
---------------- 2009 2008 2009 2008 ---- ---- ---- ---- REVENUES
Income from real property $48,497 $47,655 $99,496 $98,004 Revenue
from home sales 8,218 8,768 15,679 16,271 Rental home revenue 5,187
5,136 10,387 10,132 Ancillary revenues, net 62 88 257 314 Interest
1,368 807 2,640 1,612 Other income (loss) (60) 2,829 97 3,700 ---
----- -- ----- Total revenues 63,272 65,283 128,556 130,033 ------
------ ------- ------- COSTS AND EXPENSES Property operating and
maintenance 12,787 12,314 25,392 24,388 Real estate taxes 4,118
4,170 8,302 8,339 Cost of home sales 5,844 6,981 11,267 12,820
Rental home operating and maintenance 4,022 3,965 8,559 7,431
General and administrative - real property 4,900 4,697 9,066 8,855
General and administrative - home sales and rentals 1,816 1,715
3,642 3,327 Depreciation and amortization 15,915 16,211 32,119
32,072 Interest 14,739 14,570 28,984 29,950 Interest on mandatorily
redeemable debt 835 844 1,670 1,688 --- --- ----- ----- Total
expenses 64,976 65,467 129,001 128,870 ------ ------ ------- ------
Income (loss) before income taxes and equity loss from affiliates
(1,704) (184) (445) 1,163 Benefit (provision) for state income tax
(146) (128) (279) 107 Equity loss from affiliates (517) (7,720)
(490) (12,550) --- ----- --- ------ Loss from continuing operations
(2,367) (8,032) (1,214) (11,280) Loss from discontinued operations
(160) (270) (332) (511) --- --- --- --- Net loss (2,527) (8,302)
(1,546) (11,791) Less: Loss attributable to noncontrolling interest
(268) (934) (164) (1,328) --- --- --- ----- Net loss attributable
to Sun Communities, Inc. $(2,259) $(7,368) $(1,382) $(10,463)
======= ======= ======= ======== Weighted average common shares
outstanding: Basic 18,469 18,162 18,399 18,119 ====== ====== ======
====== Diluted 18,469 18,162 18,399 18,119 ====== ====== ======
====== Basic and diluted loss per share: Continuing operations
$(0.11) $(0.39) $(0.05) $(0.55) Discontinued operations (0.01)
(0.02) (0.02) (0.03) --- ---- ---- ---- Basic and diluted loss per
share $(0.12) $(0.41) $(0.07) $(0.58) ====== ====== ====== ======
Cash dividends per common share: $0.63 $0.63 $1.26 $1.26 =====
===== ===== ===== SUN COMMUNITIES, INC. CONSOLIDATED STATEMENTS OF
OPERATIONS, CONTINUED FOR THE PERIODS ENDED JUNE 30, 2009 AND 2008
(In thousands) (Unaudited) Three Months Ended Six Months Ended June
30, June 30, ------------------ ---------------- 2009 2008 2009
2008 ---- ---- ---- ---- Amounts attributable to Sun Communities,
Inc. common stockholders: Loss from continuing operations, net of
state income taxes $(2,116) $(7,129) $(1,085) $(10,010) Loss from
discontinued operations, net of state income taxes (143) (239)
(297) (453) --- --- --- --- Loss attributable to Sun Communities,
Inc. $(2,259) $(7,368) $(1,382) $(10,463) ======= ======= =======
======== RECONCILIATION OF NET LOSS TO FUNDS FROM OPERATIONS FOR
THE PERIODS ENDED JUNE 30, 2009 AND 2008 (In thousands, except per
share data) (Unaudited) Three Months Ended Six Months Ended June
30, June 30, ------------------ ---------------- 2009 2008 2009
2008 ---- ---- ---- ---- Net loss $(2,527) $(8,302) $(1,546)
$(11,791) Adjustments: Depreciation and amortization 16,414 16,814
33,035 33,263 Benefit for state income taxes (3) - (9) (13) (398)
Gain on disposition of assets, net (1,368) (3,727) (2,696) (5,269)
----- ----- ----- ----- Funds from operations (FFO) (1) $12,519
$4,776 $28,780 $15,805 ======= ====== ======= ======= Weighted
average common shares/OP Units outstanding: Basic 20,806 20,463
20,752 20,421 ====== ====== ====== ====== Diluted 20,806 20,514
20,752 20,473 ====== ====== ====== ====== FFO(1) per weighted
average Common Share/OP Unit - Basic $0.60 $0.23 $1.39 $0.77 =====
===== ===== ===== FFO(1) per weighted average Common Share/OP Unit
- Diluted $0.60 $0.23 $1.39 $0.77 ===== ===== ===== ===== The table
below adjusts FFO to exclude equity loss from affiliate (Origen)
and severance charges, in thousands. Three Months Ended Six Months
Ended June 30, June 30, ------------------ ---------------- 2009
2008 2009 2008 ---- ---- ---- ---- Net loss $(2,527) $(8,302)
$(1,546) $(11,791) Equity affiliate adjustment 474 7,720 375 12,550
Severance charges - 888 - 888 --- --- --- --- Adjusted net income
(loss) $(2,053) $306 $(1,171) $1,647 Depreciation and amortization
16,414 16,814 33,035 33,263 Benefit for state income taxes (3) -
(9) (13) (398) Gain on disposition of assets, net (1,368) (3,727)
(2,696) (5,269) ----- ----- ----- ----- Adjusted funds from
operations (FFO) (1) $12,993 $13,384 $29,155 $29,243 =======
======= ======= ======= Adjusted FFO per weighted avg. common
share/OP Unit - Diluted $0.62 $0.65 $1.40 $1.43 ===== ===== =====
===== (3) The tax benefit for the periods ended June 30, 2009 and
2008 represents the reversal of a tax provision for potential taxes
payable on the sale of company assets related to the enactment of
the Michigan Business Tax. These taxes do not impact Funds from
Operations and would be payable from prospective proceeds of such
sales. SUN COMMUNITIES, INC. SELECTED BALANCE SHEET DATA (In
thousands) (Unaudited) June 30, 2009 December 31, 2008
------------- ----------------- Investment property before
accumulated depreciation $1,558,087 $1,549,339 Total assets
$1,192,249 $1,206,999 Total debt $1,234,520 $1,229,571 Total
noncontrolling interest and stockholders' deficit $(81,625)
$(59,882) SUN COMMUNITIES, INC. CONSOLIDATED STATEMENTS OF
COMPREHENSIVE LOSS FOR THE PERIODS ENDED JUNE 30, 2009 AND 2008 (In
thousands) (Unaudited) Three Months Ended Six Months Ended June 30,
June 30, ------------------ ---------------- 2009 2008 2009 2008
---- ---- ---- ---- Net loss $(2,527) $(8,302) $(1,546) $(11,791)
======= ======= ======= ======== Unrealized gain (loss) on interest
rate swaps 1,330 1,348 1,326 (68) ----- ----- ----- -- Total
comprehensive loss (1,197) (6,954) (220) (11,859) Less:
Comprehensive loss attributable to the noncontrolling interest
(127) (783) (23) (1,337) --- --- -- ----- Comprehensive loss
attributable to Sun Communities, Inc. $(1,070) $(6,171) $(197)
$(10,522) ======= ======= ===== ======== SUN COMMUNITIES, INC.
ADDITIONAL INFORMATION (Unaudited) SAME PROPERTY RESULTS
--------------------- For 136 communities owned throughout both
years (amounts in thousands): Three Months Ended June 30, Six
Months Ended June 30, ---------------------------
------------------------- 2009 2008 % change 2009 2008 % change
---- ---- -------- ---- ---- -------- Total revenue $45,863 $45,173
1.5% $94,012 $92,829 1.3% Total expense 14,279 13,992 2.1% 28,209
27,533 2.5% ------ ------ ------ ------ Net operating income(2)
$31,584 $31,181 1.3% $65,803 $65,296 0.8% ======= ======= =======
======= Same property occupancy and average monthly rent
information at June 30, 2009 and 2008: 2009 2008 ---- ---- Total
manufactured housing sites 42,300 42,280 Occupied manufactured
housing sites 34,868 34,823 Manufactured housing occupancy % 82.4%
82.4% Average monthly rent per site $399 $388 RENTAL PROGRAM
SUMMARY ---------------------- (In thousands, except for certain
statistical marked with *) Three Months Ended Six Months Ended June
30, June 30, ------------------ ---------------- 2009 2008 2009
2008 ---- ---- ---- ---- Rental home revenue $5,187 $5,136 $10,387
$10,132 Site rent from Rental Program 6,673 6,147 13,123 12,128
----- ----- ------ ------ Rental Program revenue 11,860 11,283
23,510 22,260 Expenses Payroll and commissions 596 554 1,379 1,077
Repairs and refurbishment 1,977 1,846 3,968 3,369 Taxes and
insurance 776 702 1,546 1,393 Marketing and other 673 863 1,666
1,592 --- --- ----- ----- Rental program operating and maintenance
4,022 3,965 8,559 7,431 ----- ----- ----- ----- Net operating
income (2) $7,838 $7,318 $14,951 $14,829 ====== ====== =======
======= Occupied rental homes information as of and for the six
months ended June 30, 2009 and 2008: Statistical Information 2009
2008 % change ---- ---- -------- Number of occupied rentals, end of
period* 5,780 5,480 5.5% Investment in occupied rental homes
$180,967 $167,304 8.2% Number of sold rental homes* 346 292 18.5%
Weighted average monthly rental rate* $726 $727 DATASOURCE: Sun
Communities, Inc. CONTACT: Karen J. Dearing, Chief Financial
Officer, Sun Communities, Inc., +1-248-208-2500 Web Site:
http://www.suncommunities.com/
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