Company Quick10K Filing
Quick10K
Sun Communities
Closing Price ($) Shares Out (MM) Market Cap ($MM)
$122.06 87 $10,560
10-Q 2019-03-31 Quarter: 2019-03-31
10-K 2018-12-31 Annual: 2018-12-31
10-Q 2018-09-30 Quarter: 2018-09-30
10-Q 2018-06-30 Quarter: 2018-06-30
10-Q 2018-03-31 Quarter: 2018-03-31
10-K 2017-12-31 Annual: 2017-12-31
10-Q 2017-09-30 Quarter: 2017-09-30
10-Q 2017-06-30 Quarter: 2017-06-30
10-Q 2017-03-31 Quarter: 2017-03-31
10-K 2016-12-31 Annual: 2016-12-31
10-Q 2016-09-30 Quarter: 2016-09-30
10-Q 2016-06-30 Quarter: 2016-06-30
10-Q 2016-03-31 Quarter: 2016-03-31
10-K 2015-12-31 Annual: 2015-12-31
10-Q 2015-09-30 Quarter: 2015-09-30
10-Q 2015-06-30 Quarter: 2015-06-30
10-Q 2015-03-31 Quarter: 2015-03-31
10-K 2014-12-31 Annual: 2014-12-31
10-Q 2014-09-30 Quarter: 2014-09-30
10-Q 2014-06-30 Quarter: 2014-06-30
10-Q 2014-03-31 Quarter: 2014-03-31
10-K 2013-12-31 Annual: 2013-12-31
8-K 2019-04-24 Earnings, Exhibits
8-K 2019-02-22 Other Events
8-K 2019-02-20 Earnings, Exhibits
8-K 2019-02-19 Other Events, Exhibits
8-K 2019-02-05 Enter Agreement, Sale of Shares, Exhibits
8-K 2018-12-04 Other Events, Exhibits
8-K 2018-11-07 Regulation FD, Exhibits
8-K 2018-10-24 Earnings, Exhibits
8-K 2018-09-19 Regulation FD, Exhibits
8-K 2018-09-07 Enter Agreement, Other Events, Exhibits
8-K 2018-07-25 Earnings, Exhibits
8-K 2018-06-04 Regulation FD, Exhibits
8-K 2018-05-18 Shareholder Vote
8-K 2018-04-26 Other Events, Exhibits
8-K 2018-04-23 Earnings, Exhibits
8-K 2018-03-07 Other Events, Exhibits
8-K 2018-02-27 Regulation FD, Exhibits
8-K 2018-02-13 Other Events, Exhibits
HST Host Hotels & Resorts 14,080
EMN Eastman Chemical 10,490
ACIW ACI Worldwide 3,750
QES Quintana Energy Services 136
MSBF MSB Financial 90
EARS Auris Medical Holding 9
PCFO Pacific Office Properties Trust 0
VRME Verifyme 0
CPTP Capital Properties 0
WCVC West Coast Ventures Group 0
SUI 2019-03-31
Part I - Financial Information
Item 1. Consolidated Financial Statements
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations
Item 3. Quantitative and Qualitative Disclosures About Market Risk
Item 4. Controls and Procedures
Part II - Other Information
Item 1. Legal Proceedings
Item 1A. Risk Factors
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
Item 6. Exhibits
EX-31.1 exhibit311-03312019ceo.htm
EX-31.2 exhibit312-03312019cfo.htm
EX-32.1 exhibit321-03312019ceo.htm

Sun Communities Earnings 2019-03-31

SUI 10Q Quarterly Report

Balance SheetIncome StatementCash Flow

Document
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-Q

[ X ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 2019.
 
or

[    ] TRANSITION PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission file number 1-12616

SUN COMMUNITIES INC
(Exact Name of Registrant as Specified in its Charter)

Maryland
 
38-2730780
(State of Incorporation)
 
(I.R.S. Employer Identification No.)
 
 
 
27777 Franklin Rd.
 
 
Suite 200
 
 
Southfield, Michigan
 
48034
(Address of Principal Executive Offices)
 
(Zip Code)

(248) 208-2500
(Registrant’s telephone number, including area code)

Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.   Yes [ X ]  No [   ]

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).  Yes [ X ]  No [   ]

Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. (Check one):

Large accelerated filer [ X ]
Accelerated filer [ ]
Non-accelerated filer [   ]
Smaller reporting company [   ]
Emerging growth company [ ]
 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to section to Section 13(a) of the Exchange Act. [ ]

Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes [   ]  No [ X ]

Number of shares of Common Stock, $0.01 par value per share, outstanding as of April 18, 2019:  86,505,876



INDEX

 
 
 
 
Consolidated Financial Statements:
 
 
Consolidated Balance Sheets as of March 31, 2019 (Unaudited) and December 31, 2018
 
Consolidated Statements of Operations for the Three Months Ended March 31, 2019 and 2018 (Unaudited)
 
Consolidated Statements of Comprehensive Income for the Three Months Ended March 31, 2019 and 2018 (Unaudited)
 
 
Consolidated Statements of Cash Flows for the Three Months Ended March 31, 2019 and 2018 (Unaudited)
 
 
 
 
 
 
Exhibit Index
 






PART I – FINANCIAL INFORMATION
ITEM 1.  CONSOLIDATED FINANCIAL STATEMENTS
SUN COMMUNITIES, INC.
CONSOLIDATED BALANCE SHEETS
(Unaudited - in thousands, except per share amounts)
 
(unaudited) 
 March 31, 2019
 
December 31, 2018
ASSETS
 
 
 
Land
$
1,279,306

 
$
1,201,945

Land improvements and buildings
5,899,149

 
5,586,250

Rental homes and improvements
585,994

 
571,661

Furniture, fixtures and equipment
208,177

 
201,090

Investment property
7,972,626

 
7,560,946

Accumulated depreciation
(1,501,370
)
 
(1,442,630
)
Investment property, net (including $314,669 and $308,171 for consolidated variable interest entities at March 31, 2019 and December 31, 2018; see Note 8)
6,471,256

 
6,118,316

Cash and cash equivalents
21,946

 
50,311

Marketable securities
50,501

 
49,037

Inventory of manufactured homes
52,993

 
49,199

Notes and other receivables, net
179,814

 
160,077

Collateralized receivables, net
101,938

 
106,924

Other assets, net (including $22,369 and $19,809 for consolidated variable interest entities at March 31, 2019 and December 31, 2018; see Note 8)
220,214

 
176,162

TOTAL ASSETS
$
7,098,662

 
$
6,710,026

LIABILITIES
 
 
 
Mortgage loans payable (including $43,913 and $44,172 for consolidated variable interest entities at March 31, 2019 and December 31, 2018; see Note 8)
$
2,879,017

 
$
2,815,957

Secured borrowings on collateralized receivables
102,676

 
107,731

Preferred Equity - Sun NG RV Resorts LLC - mandatorily redeemable (fully attributable to consolidated variable interest entities; See Note 8)
35,249

 
35,277

Preferred OP units - mandatorily redeemable
34,663

 
37,338

Lines of credit
396,512

 
128,000

Distributions payable
66,887

 
63,249

Advanced reservation deposits and rent
151,860

 
133,698

Other liabilities (including $21,049 and $6,914 for consolidated variable interest entities at March 31, 2019 and December 31, 2018; see Note 8)
179,461

 
157,862

TOTAL LIABILITIES
3,846,325

 
3,479,112

Commitments and contingencies (see Note 17)
 
 
 
Series A-4 preferred stock, $0.01 par value. Issued and outstanding:1,063 shares at March 31, 2019 and December 31, 2018
31,739

 
31,739

Series A-4 preferred OP units
9,784

 
9,877

Series D preferred OP units
51,738

 

Equity Interests - NG Sun LLC (fully attributable to consolidated variable interest entities; See Note 8)
22,167

 
21,976

STOCKHOLDERS' EQUITY
 
 
 
Common stock, $0.01 par value. Authorized: 180,000 shares; Issued and outstanding:86,463 shares at March 31, 2019 and 86,357 shares at December 31, 2018
865

 
864

Additional paid-in capital
4,398,641

 
4,398,949

Accumulated other comprehensive loss
(3,006
)
 
(4,504
)
Distributions in excess of accumulated earnings
(1,317,605
)
 
(1,288,486
)
Total Sun Communities, Inc. stockholders' equity
3,078,895

 
3,106,823

Noncontrolling interests
 
 
 
Common and preferred OP units
51,816

 
53,354

Consolidated variable interest entities
6,198

 
7,145

Total noncontrolling interests
58,014

 
60,499

TOTAL STOCKHOLDERS' EQUITY
3,136,909

 
3,167,322

TOTAL LIABILITIES, TEMPORARY EQUITY AND STOCKHOLDERS' EQUITY
$
7,098,662

 
$
6,710,026

See accompanying Notes to Consolidated Financial Statements.

1



SUN COMMUNITIES, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited - dollars in thousands, except per share amounts)
 
Three Months Ended March 31,
 
2019
 
2018
REVENUES
 
 
 
Income from real property
$
216,779

 
$
197,211

Revenue from home sales
39,618

 
34,900

Rental home revenue
13,971

 
13,020

Ancillary revenue
8,482

 
6,568

Interest
4,800

 
5,316

Brokerage commissions and other revenues, net
3,680

 
960

Total revenues
287,330

 
257,975

EXPENSES
 
 
 
Property operating and maintenance
57,909

 
51,630

Real estate taxes
15,330

 
13,836

Cost of home sales
29,277

 
26,571

Rental home operating and maintenance
4,788

 
5,227

Ancillary expenses
7,101

 
5,383

Home selling expenses
3,324

 
3,290

General and administrative
21,887

 
19,757

Catastrophic weather related charges, net
782

 
(2,213
)
Depreciation and amortization
76,556

 
66,437

Loss on extinguishment of debt
653

 
196

Interest
34,014

 
31,138

Interest on mandatorily redeemable preferred OP units / equity
1,094

 
619

Total expenses
252,715

 
221,871

Income Before Other Items
34,615

 
36,104

Remeasurement of marketable securities
267

 

Other income / (expense), net
1,898

 
(2,617
)
Income / (loss) from nonconsolidated affiliates
344

 
(59
)
Current tax expense
(214
)
 
(174
)
Deferred tax benefit
217

 
347

Net Income
37,127


33,601

Less: Preferred return to preferred OP units / equity
(1,323
)
 
(1,080
)
Less: Amounts attributable to noncontrolling interests
(1,041
)
 
(2,094
)
Net Income Attributable to Sun Communities, Inc.
34,763


30,427

Less: Preferred stock distribution
(432
)
 
(441
)
Net income attributable to Sun Communities, Inc. common stockholders
$
34,331


$
29,986

Weighted average common shares outstanding:
 
 
 
Basic
85,520

 
78,855

Diluted
86,033

 
79,464

Earnings per share (Refer to Note 14):
 

 
 
Basic
$
0.40

 
$
0.38

Diluted
$
0.40

 
$
0.38

See accompanying Notes to Consolidated Financial Statements.

2



SUN COMMUNITIES, INC.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(Unaudited - dollars in thousands)

 
Three Months Ended March 31,
 
2019
 
2018
Net income
$
37,127

 
$
33,601

Foreign currency translation adjustment
1,575

 
(1,861
)
Total comprehensive income
38,702

 
31,740

Less: Comprehensive income attributable to noncontrolling interests
1,118

 
2,005

Comprehensive income attributable to Sun Communities, Inc.
$
37,584

 
$
29,735



See accompanying Notes to Consolidated Financial Statements.



3



SUN COMMUNITIES, INC.
CONSOLIDATED STATEMENT OF STOCKHOLDERS’ EQUITY
(Unaudited - dollars in thousands)

 
 
 
Stockholders’ Equity
 
Temporary Equity
 
Common
Stock
Additional Paid-in Capital
Distributions in Excess of Accumulated Earnings
Accumulated Other Comprehensive Income / (Loss)
Non-controlling Interests
Total Stockholders’ Equity
Balance at December 31, 2018
$
63,592

 
$
864

$
4,398,949

$
(1,288,486
)
$
(4,504
)
$
60,499

$
3,167,322

Issuance of common stock and common OP units, net

 
1

(4,322
)



(4,321
)
Conversion of OP units

 

280



(280
)

Share-based compensation - amortization and forfeitures

 

3,719

74



3,793

Issuance of Series D OP Units
51,930

 






Foreign currency translation

 



1,498

77

1,575

Net income
178

 


36,086


863

36,949

Distributions
(272
)
 

15

(65,279
)

(3,145
)
(68,409
)
Balance at March 31, 2019
$
115,428

 
$
865

$
4,398,641

$
(1,317,605
)
$
(3,006
)
$
58,014

$
3,136,909


 
 
 
 
Stockholders’ Equity
 
Temporary Equity
 
Common
Stock
Additional Paid-in Capital
Distributions in Excess of Accumulated Earnings
Accumulated Other Comprehensive Income / (Loss)
Non-controlling Interests
Total Stockholders’ Equity
Balance at December 31, 2017
$
43,066

 
$
797

$
3,758,533

$
(1,162,001
)
$
1,102

$
65,256

$
2,663,687

Issuance of common stock and common OP units, net

 
2

(3,298
)



(3,296
)
Conversion of OP units
(60
)
 

342



(283
)
59

Share-based compensation - amortization and forfeitures

 

3,489

90



3,579

Foreign currency translation

 



(1,772
)
(89
)
(1,861
)
Net income
71

 


31,507


2,023

33,530

Distributions
(171
)
 


(57,159
)

(2,888
)
(60,047
)
Balance at March 31, 2018
$
42,906

 
$
799

$
3,759,066

$
(1,187,563
)
$
(670
)
$
64,019

$
2,635,651



See accompanying Notes to Consolidated Financial Statements.



4



SUN COMMUNITIES, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited - dollars in thousands)
 
Three Months Ended March 31,
 
2019
 
2018
OPERATING ACTIVITIES:
 
 
 
NET CASH PROVIDED BY OPERATING ACTIVITIES
$
103,141

 
$
80,905

INVESTING ACTIVITIES:
 
 
 
Investment in properties
(114,804
)
 
(68,524
)
Acquisitions of properties, net of cash acquired
(279,302
)
 
(2,384
)
Proceeds from dispositions of assets and depreciated homes, net
11,788

 
5,312

Purchases of notes receivable

 
(893
)
Other investing activities

 
(1,925
)
Repayments of notes and other receivables
1,030

 
679

Investments in nonconsolidated affiliates
(11,195
)
 
(783
)
NET CASH USED FOR INVESTING ACTIVITIES
(392,483
)
 
(68,518
)
FINANCING ACTIVITIES:
 
 
 
Issuance of common stock, OP units, and preferred OP units, net
(4,321
)
 
(3,296
)
Redemption of Series B-3 preferred OP units
(2,675
)
 
(4,105
)
Borrowings on lines of credit
1,428,948

 
302,355

Payments on lines of credit
(1,160,436
)
 
(201,853
)
Proceeds from issuance of other debt
265,000

 

Payments on other debt
(200,892
)
 
(43,883
)
Prepayment penalty on debt

 
(196
)
Proceeds received from return of prepaid deferred financing costs
1,618

 

Distributions to stockholders, OP unit holders, and preferred OP unit holders
(65,145
)
 
(56,881
)
Payments for deferred financing costs
(1,000
)
 
(605
)
NET CASH PROVIDED BY FINANCING ACTIVITIES
261,097

 
(8,464
)
Effect of exchange rate changes on cash, cash equivalents and restricted cash
158

 
(8
)
Net change in cash, cash equivalents and restricted cash
(28,087
)
 
3,915

Cash, cash equivalents and restricted cash, beginning of period
62,262

 
23,509

Cash, cash equivalents and restricted cash, end of period (See Note 16)
$
34,175

 
$
27,424

 
Three Months Ended March 31,
 
2019
 
2018
SUPPLEMENTAL INFORMATION:
 
 
 
Cash paid for interest (net of capitalized interest of $1,357 and $1,184 respectively)
$
32,711

 
$
30,402

Cash paid for interest on mandatorily redeemable debt
$
1,094

 
$
619

Cash paid (refunds) for income taxes
$
(60
)
 
$
135

Noncash investing and financing activities:
 
 
 
Reduction in secured borrowing balance
$
5,055

 
$
5,105

Change in distributions declared and outstanding
$
3,536

 
$
3,337

Conversion of common and preferred OP units
$
280

 
$
342

Noncash investing and financing activities at the date of acquisition:
 
 
 
Acquisitions - Series D preferred interest
$
51,930

 
$

Acquisitions - Escrow
$
4,035

 
$

See accompanying Notes to Consolidated Financial Statements.

5

SUN COMMUNITIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)



1.      Basis of Presentation

Sun Communities, Inc., a Maryland corporation, and all wholly-owned or majority-owned and controlled subsidiaries, including Sun Communities Operating Limited Partnership (the “Operating Partnership”) and Sun Home Services, Inc. (“SHS”) are referred to herein as the “Company,” “us,” “we,” and “our.”

We follow accounting standards set by the Financial Accounting Standards Board (“FASB”). FASB sets generally accepted accounting principles (“GAAP”), which we follow to ensure that we consistently report our financial condition, results of operations, and cash flows. References to GAAP issued by the FASB in these footnotes are to the FASB Accounting Standards Codification (“ASC”).

These unaudited Consolidated Financial Statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”) for interim financial information and in accordance with GAAP. Pursuant to the SEC rules and regulations we present interim disclosures and certain information and footnote disclosures as required. Accordingly, the unaudited Consolidated Financial Statements do not include all of the information and footnotes required by GAAP for complete financial statements. The accompanying unaudited Consolidated Financial Statements reflect, in the opinion of management, all adjustments, including adjustments of a normal and recurring nature, necessary for a fair presentation of the interim financial statements. All intercompany transactions have been eliminated in consolidation. Certain reclassifications have been made to prior period financial statements in order to conform to current period presentation.

The results of operations for interim periods are not necessarily indicative of results that may be expected for any other interim period or for the full year. These unaudited Consolidated Financial Statements should be read in conjunction with the Consolidated Financial Statements and notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2018 as filed with the SEC on February 21, 2019 (the “2018 Annual Report”). These statements have been prepared on a basis that is substantially consistent with the accounting principles applied in our 2018 Annual Report.

2. Revenue
        
Disaggregation of Revenue

The following tables details our revenue by major source (in thousands):
 
Three Months Ended 
 March 31, 2019
 
Three Months Ended 
 March 31, 2018
 
Real Property Operations
 
Home Sales and Rentals
 
Consolidated
 
Real Property Operations
 
Home Sales and Rentals
 
Consolidated
REVENUE
 
 
 
 
 
 
 
 
 
 
 
Income from real property
$
216,779

 
$

 
$
216,779

 
$
197,211

 
$

 
$
197,211

Revenue from home sales

 
39,618

 
39,618

 

 
34,900

 
34,900

Rental home revenue

 
13,971

 
13,971

 

 
13,020

 
13,020

Ancillary revenues
8,482

 

 
8,482

 
6,568

 

 
6,568

Interest
4,800

 

 
4,800

 
5,316

 

 
5,316

Brokerage commissions and other revenues, net
3,680

 

 
3,680

 
960

 

 
960

Total revenue
$
233,741

 
$
53,589

 
$
287,330

 
$
210,055

 
$
47,920

 
$
257,975


Revenue Recognition Policies and Performance Obligations
On January 1, 2018, we adopted FASB Accounting Standards Update (“ASU”) 2014-09 “Revenue from Contracts with Customers” and the other related ASUs and amendments to the codification (collectively “ASC 606”). The core principle of ASC 606 is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. A five-step transactional analysis is required to determine how and when to recognize revenue. ASC 606 applies to all contracts with customers, except those that are within the scope of other topics in the FASB accounting standards codification.

6

SUN COMMUNITIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)


As a real estate owner and operator, the majority of our revenue is derived from site and home leases that are accounted for pursuant to ASC 842 “Leases.” For transactions in the scope of ASC 606, we recognize revenue when control of goods or services transfers to the customer, in the amount that we expect to receive for the transfer of goods or provision of services. The adoption of ASC 606 did not result in any change to our accounting policies for revenue recognition. Accordingly, retrospective application to prior periods or a cumulative catch-up adjustment was unnecessary.
Income from real property - Residents in our communities lease the site on which their home is located, and either own or lease their home. Lease revenues for sites and homes fall under the scope of ASC 842, and are accounted for as operating leases with straight-line recognition. Resident leases are generally for one-year or month-to-month terms, and are renewable by mutual agreement from us and the resident, or in some cases, as provided by jurisdictional statute. Income from real property includes site leases for annual MH residents which are within the scope of ASC 842. Annual recreational vehicle (“RV”) site leases with residents are also included within the scope of ASC 842 and revenue is recorded within Income from real property. Non-lease components of our site lease contracts, which are primarily provision of utility services, are accounted for with the site lease as a single lease under ASC 842. Additionally, we include collections of real estate taxes from residents within Income from real property. The site rental associated with a transient RV resident stay is accounted for under ASC 842 and is recorded within Income from real property.
Revenue from home sales - Our taxable REIT subsidiary, SHS, sells manufactured homes (“MH”) to current and prospective residents in our communities. Prior to adoption of ASC 606, we recognized revenue for home sales pursuant to ASC 605 “Revenue Recognition,” as manufactured homes are tangible personal property that can be located on any land parcel. Manufactured homes are not permanent fixtures or improvements to the underlying real estate, and were therefore not considered to be subject to the guidance in ASC 360-20 “Real Estate Sales” by the Company. In accordance with the core principle of ASC 606, we recognize revenue from home sales at the time of closing when control of the home transfers to the customer. After closing of the sale transaction, we have no remaining performance obligation.

Rental home revenue - is comprised of rental agreements whereby we lease homes to residents in our communities. We account for these revenues under ASC 842.
Ancillary revenues - are primarily composed of proceeds from restaurant, golf, merchandise and other activities at our RV communities and are included in the scope of ASC 606. Short-term vacation home rentals are included within ancillary revenues and within the scope of ASC 842. Revenues are recognized at point of sale when control of the good or service transfers to the customer and our performance obligation is satisfied. In addition, ancillary revenues include the leasing of short term vacation rentals. Sales and other taxes that we collect concurrent with revenue-producing activities are excluded from the transaction price.
Interest income - is earned primarily on our notes and collateralized receivables, which includes installment loans for manufactured homes purchased by the Company from loan originators and transferred loans that previously did not meet the requirements for sale accounting. Interest income on these receivables is accrued based on the unpaid principal balances of the underlying loans on a level yield basis over the life of the loans. Interest income is not in the scope of ASC 606. Refer to Notes 4, “Collateralized Receivables and Transfers of Financial Assets” and 5, “Notes and Other Receivables” for additional information.
Broker commissions and other revenues, net - is primarily comprised of brokerage commissions for sales of manufactured homes, where we act as agent and arrange for a third party to transfer a manufactured home to a customer within one of our communities. Brokerage commission revenues are recognized on a net basis at closing, when the transaction is completed and our performance obligations have been fulfilled. Loan loss reserve expenses for our collateralized receivables and notes receivables are also included herein. Refer to Notes 4, “Collateralized Receivables and Transfers of Financial Assets” and 5, “Notes and Other Receivables” for additional information regarding our loan loss reserves.

Contract Balances

As of March 31, 2019 and December 31, 2018, we had $18.0 million and $16.1 million, respectively, of receivables from contracts with customers. Receivables from contracts with customers are presented as a component of Notes and other receivables on our Consolidated Balance Sheets. These receivables represent balances owed to us for previously completed performance obligations for sales of manufactured homes. Due to the nature of our revenue from contracts with customers, we do not have material contract assets or liabilities that fall under the scope of ASC 606.

3.      Real Estate Acquisitions

2019 Acquisitions


7

SUN COMMUNITIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)


In 2019 we acquired the following communities:

Community Name
 
Type
 
Sites
 
Development Sites
 
State
 
Month Acquired
Massey’s Landing RV
 
RV
 
291

 

 
DE
 
February
Shelby Properties(1)
 
MH
 
1,308

 

 
MI
 
February
Buena Vista
 
MH
 
400

 

 
AZ
 
February
Country Village Estates (2)
 
MH
 
518

 

 
OR
 
January
Hid’n Pines RV
 
RV
 
321

 

 
ME
 
January
Hacienda del Rio
 
MH (Age-Restricted)
 
730

 
70

 
FL
 
January
 
 
Total
 
3,568

 
70

 
 
 
 
(1) Contains two MH communities.
(2) In conjunction with the acquisition, we issued Series D Preferred Operating Partnership (“OP”) Units. As of March 31, 2019, 488,958 Series D Preferred OP Units were outstanding.

The following table summarizes the amounts of assets acquired net of liabilities assumed at the acquisition date and the consideration paid for the acquisitions completed in the three months ended March 31, 2019 (in thousands):
At Acquisition Date (1)
 
Massey's Landing
 
Shelby Properties
 
Buena Vista
 
Country Village
 
Hid'n Pines
 
Hacienda del Rio
 
Total
Investment in property
 
$
20,000

 
$
85,969

 
$
20,221

 
$
62,784

 
$
10,680

 
$
111,971

 
$
311,625

Inventory of manufactured homes
 

 
2,011

 
439

 

 

 
15

 
2,465

In-place leases and other intangible assets
 

 
6,520

 
1,590

 
2,020

 
70

 
3,280

 
13,480

Other assets (liabilities), net
 
(446
)
 
(1,015
)
 
(93
)
 
31

 
(233
)
 
(237
)
 
(1,993
)
Total identifiable assets acquired net of liabilities assumed
 
$
19,554

 
$
93,485

 
$
22,157

 
$
64,835

 
$
10,517

 
$
115,029

 
$
325,577

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Consideration
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and escrow
 
$
19,554

 
$
93,485

 
$
22,157

 
$
12,905

 
$
10,517

 
$
115,029

 
$
273,647

Series D Preferred OP units
 

 

 

 
51,930

 

 

 
51,930

Total consideration
 
$
19,554

 
$
93,485

 
$
22,157

 
$
64,835

 
$
10,517

 
$
115,029

 
$
325,577

(1) The purchase price allocations are preliminary and may be adjusted as final valuations are determined.

As of March 31,2019, the Company has incurred $5.1 million of additional capitalized transaction costs which have been allocated among the various categories above.

During the quarter, the Company entered into a four year Temporary Occupancy and Use Permit with the Port of San Diego to operate an RV resort located in Chula Vista, CA until such time as a new RV resort is constructed in the area. Concurrent with the transaction, we purchased tangible personal property from the prior owner of the RV resort for $0.3 million.

Refer to Note 19, “Subsequent Events,” for information regarding real estate acquisition activity after March 31, 2019.

The total amount of revenues and net income included in the Consolidated Statements of Operations for the three months ended March 31, 2019 related to the acquisitions completed in 2019 are set forth in the following table (in thousands):

 
 
Three Months Ended 
 March 31, 2019
 
 
(unaudited)
Total revenues
 
$
3,764

Net income
 
$
1,317




8

SUN COMMUNITIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)


The following unaudited pro forma financial information presents the results of our operations for the three months ended March 31, 2019 and 2018, as if the properties acquired in 2019 had been acquired on January 1, 2018. The unaudited pro forma results reflect certain adjustments for items that are not expected to have a continuing impact, such as adjustments for transaction costs incurred, management fees, and purchase accounting.

The information presented below has been prepared for comparative purposes only and does not purport to be indicative of either future results of operations or the results of operations that would have actually occurred had the acquisition been consummated on January 1, 2018 (in thousands, except per-share data):
 
 
Three Months Ended March 31,
 
 
(unaudited)
 
 
2019
 
2018
Total revenues
 
$
289,253

 
$
263,706

Net income attributable to Sun Communities, Inc. common stockholders
 
$
34,885

 
$
31,732

Net income per share attributable to Sun Communities, Inc. common stockholders - basic
 
$
0.41

 
$
0.40

Net income per share attributable to Sun Communities, Inc. common stockholders - diluted
 
$
0.41

 
$
0.40



2018 Acquisitions

In 2018 we acquired the following communities:
Community Name
 
Type
 
Sites
 
Development Sites
 
State
 
Month Acquired
Leaf Verde RV Resort
 
RV
 
376

 

 
AZ
 
October
Archview
 
RV
 
114

 
50

 
UT
 
August
Petoskey KOA
 
RV
 
210

 

 
MI
 
August
The Sands RV and Golf Resort
 
RV (Age Restricted)
 
507

 

 
CA
 
July
Sun NG RV Resorts LLC (1)(2)
 
RV
 
2,700

 
940

 
Various
 
June
Silver Creek
 
RV
 
264

 
176

 
MI
 
June
Highway West (1)
 
RV
 
536

 

 
UT & OR
 
June
Compass RV
 
RV
 
175

 

 
FL
 
May
 
 
Total
 
4,882

 
1,166

 
 
 
 

(1) Highway West and Sun NG RV Resorts LLC are comprised of 4 RV and 10 RV resorts, respectively.
(2) Refer to Note 8, “Consolidated Variable Interest Entities,” Note 9, “Debt and Lines of Credit,” and Note 10, “Equity and Temporary Equity” in our accompanying Consolidated Financial Statements for additional information.



9

SUN COMMUNITIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)


The following table summarizes the amounts of assets acquired net of liabilities assumed at the acquisition date and the consideration paid for the acquisitions completed in 2018 (in thousands):
At Acquisition Date
 
Leaf Verde
 
Archview
 
Petoskey KOA
 
Sands
 
Sun NG Resorts
 
Silver Creek
 
Highway West
 
Compass
 
Total
Investment in property
 
$
11,587

 
$
14,550

 
$
8,730

 
$
13,790

 
$
240,649

 
$
7,250

 
$
36,500

 
$
13,930

 
$
346,986

In-place leases and other intangible assets
 
60

 

 
270

 
460

 
16,339

 

 

 
70

 
17,199

Debt assumed
 

 

 

 

 
(3,120
)
 

 

 

 
(3,120
)
Other liabilities, net
 

 

 

 

 
(11,990
)
 

 

 

 
(11,990
)
Total identifiable assets acquired net of liabilities assumed
 
$
11,647

 
$
14,550

 
$
9,000

 
$
14,250

 
$
241,878


$
7,250


$
36,500


$
14,000

 
$
349,075

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Consideration
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash
 
$
11,647

 
$
14,550

 
$
9,000

 
$
14,250

 
$
184,625

 
$
7,250

 
$
36,500

 
$
14,000

 
$
291,822

Preferred Equity - Sun NG Resorts
 

 

 

 

 
35,277

 

 

 

 
35,277

Equity Interests - NG Sun LLC
 

 

 

 

 
21,976

 

 

 

 
21,976

Total consideration
 
$
11,647

 
$
14,550

 
$
9,000

 
$
14,250

 
$
241,878

 
$
7,250

 
$
36,500

 
$
14,000

 
$
349,075




In 2018, we acquired the following land for expansion / development:
Name
 
Location
 
Type
 
Expansion / Development Sites
 
Cost (millions)
 
Month Acquired
Ocean West
 
McKinleyville, CA
 
MH
 
26

 
$
0.2

 
December
Water Oak Country Club Estates
 
Lady Lake, FL
 
MH
 
296

 
$
1.9

 
November
Oak Crest
 
Austin, TX
 
MH
 
220

 
$
4.2

 
October
Pecan Park
 
Jacksonville, FL
 
RV
 
158

 
$
1.3

 
September
Smith Creek Crossing
 
Granby, CO
 
MH
 
310

 
$
0.9

 
September
Apple Carr