Sun Communities (SUI) Q3 2024 Earnings Transcript

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Nov. 6, 2024 astatine 5 p.m. ET

• Chairman & Chief Executive Officer — Gary Shiffman

• Chief Financial Officer — Fernando Castro-Caratini

• President — John McLaren

Gary Shiffman: Good afternoon, and convey you for joining america to sermon our 3rd 4th results, the strategical updates we are announcing and our guidance for 2024. First, I privation to stress my disappointment successful the results we are reporting and our revised outlook for the remainder of the year. As I volition discuss, we are acting swiftly to code our underperformance. As communicated, we person been focused connected executing our strategical initiatives to presumption Sun Communities to present sustained net maturation implicit the agelong term. The concern fundamentals of our portfolio stay strong. And we are assured that by continuing to execute connected our strategical priorities, the institution volition beryllium positioned for growth, thereby demonstrating the semipermanent worth of our assets.

These priorities arsenic articulated and executed successful 2024 see recycling non-strategic assets, reducing indebtedness and expanding the publication from yearly income streams. We proceed to marque advancement successful each of these areas. In the 3rd quarter, we disposed of 8 manufactured lodging communities for astir $300 million, on with 2 manufactured lodging onshore parcels for $37 million, bringing full proceeds from plus income to $392 cardinal year-to-date. As of September 30, our full indebtedness stood astatine $7.36 billion, a simplification of astir $450 cardinal from the extremity of 2023, and our floating to fixed complaint premix presently stands astatine astir 6%, down from 21% 2 years ago.

That said, we admit that our 3rd 4th results and our adjusted 2024 guidance are beneath some our and the market's expectations. And we are precise disappointed by our performance. Starting with our committee of directors, the full Sun enactment is committed to proactively addressing our challenges and restructuring Sun to unlock the worth and net imaginable of our portfolio arsenic we demonstrated for the past 2 decades. Before I code the acceleration of our strategical plans, I wanted to supply an update connected the caller abbreviated study issued connected Sun. Upon being made alert of the report, the committee tasked the Audit Committee to code the matters that person raised.

The Audit Committee engaged an autarkic third-party instrumentality steadfast to analyse the report. After a thorough review, the instrumentality steadfast has concluded its investigation, and determination person been nary changes to our fiscal reporting practices and the Audit Committee determined that the institution complied with its disclosure obligations. The institution reiterates its beardown committedness to maintaining precocious standards of firm governance and interior controls arsenic good arsenic timely and transparent disclosure successful compliance with applicable rules and regulations. Evident successful our results is the interaction of continuing volatility successful the transient components of our business, which we person been proactively moving to trim arsenic good arsenic outgo pressures.