Sun Communities, Inc. Reports 2009 Fourth Quarter And Year End Results

SOUTHFIELD, Mich., March 11 /PRNewswire-FirstCall/ -- Sun Communities, Inc. (NYSE: SUI) (the "Company"), a real estate investment trust (REIT) that owns and operates manufactured housing communities, today reported fourth quarter and year ended December 31, 2009 results.

Financial Results

During the quarter ended December 31, 2009, total revenues increased to $64.7 million as compared to $63.0 million in the fourth quarter of 2008. Net loss for the fourth quarter of 2009 was $(2.9) million, or $(0.15) per diluted common share, compared with a net loss of $(18.5) million, or $(1.01) per diluted common share, for the same period in 2008. Funds from operations ("FFO")(1) increased to $14.7 million, or $0.70 per diluted share/OP Unit, in the fourth quarter of 2009 as compared to $(0.6) million, or $(0.03) per diluted share/OP Unit, in the fourth quarter of 2008.

For the year ended December 31, 2009, total revenues increased to $256.6 million, as compared to $251.0 million for the same period in 2008, excluding $3.3 million in revenues from gain on sales of vacant land. Net loss was $(6.3) million, or $(0.34) per diluted common share, as compared to $(34.5) million, or $(1.90) per diluted common share, for the years ended December 31, 2009 and 2008, respectively. FFO(1) increased to $56.0 million, or $2.69 per diluted share/OP Unit, for the year ended December 31, 2009, as compared to $26.5 million, or $1.29 per diluted share/OP Unit, for the same period in 2008.

FFO per diluted share/OP Unit, adjusted for the items delineated in the Reconciliation of Net Loss to Funds From Operations Table below, is $0.77 and $0.73 for the fourth quarter 2009 and 2008 and $2.86 and $2.78 for the years ended December 31, 2009 and 2008, respectively.

Operational Results

For the year ended December 31, 2009, revenue producing sites increased by 224 sites, compared to a decrease of 47 sites for the year ended December 31, 2008, an improvement of 271 sites period over period. Revenue producing sites decreased by 19 for the fourth quarter of 2009, compared to a decrease of 135 sites during the fourth quarter of 2008, an improvement of 116 sites period over period. The Company rented an additional 230 homes during 2009 bringing the total number of occupied rentals to 5,747 at December 31, 2009.

"We are pleased to report an increase in revenue producing sites for 2009 as this represents the first time our gains have exceeded 200 sites since the year 2000," said Gary A. Shiffman, Chairman and Chief Executive Officer. "We are further encouraged by strong occupancy results through February 2010 as revenue producing sites have increased by nearly 160 more sites than the same period in 2009 and we are currently projecting additional occupancy gains through March 31," Shiffman added.

Same site results

For 136 communities owned throughout 2009 and 2008, total revenues increased 1.5 percent for the year ended December 31, 2009, and total expenses increased 3.4 percent, resulting in an increase in net operating income(2) of 0.7 percent. Same property occupancy for revenue producing sites was 83.4 percent at December 31, 2009 compared to 83.1 percent at December 31, 2008.

Home sales

During the fourth quarter of 2009, 305 homes were sold, bringing the total of homes sold year to date to 1,116, an increase of 15.6 percent from the 965 homes sold during 2008.  Rental home sales, included in total home sales above, totaled 174 and 705 for the three and twelve months ended December 31, 2009, as compared to 153 and 596 for the same periods in 2008.

General & administrative expenses-real property

General and administrative expenses – real property includes a provision for $0.7 million related to a public notice from the Michigan Department of Treasury dated February 5, 2010 that is contradictory to guidance issued in 1999 with regard to the filing methodology for federally disregarded single member limited liability companies under the former Michigan Single Business Tax.  The provision includes an estimated tax liability for several single member limited liability companies for the years 1997-2007, whose taxable income was included in the Company's consolidated Michigan Single Business Tax returns for those years.  The ultimate payment of this liability is dependent on the outcome of expected litigation and/or legislation in the State of Michigan concerning this controversial notice.  

"We were able to achieve a majority of the goals we set out to accomplish in 2009 despite a difficult economic environment," said Shiffman. "During the decade we have successfully operated in the most challenging of times; within our industry, through the site built housing credit bubble build up and bust, and through severe local, national and global economic downturns. We are optimistic about 2010 and the accompanying guidance reflects another year of growth in Sun's key operating metrics," Shiffman added.