Sun Communities SUI Q2 2025 Earnings Transcript | The Motley Fool

Image source: The Motley Fool. Date July 31, 2025, 2 p.m. ET Call participants Chairman of the Board and Former Chief Executive Officer - Gary A. Shiffman President and Chief Operating Officer - John Bandini McLaren Chief Financial Officer and Executive Vice President - Fernando Castro-Caratini Need a quote from a Motley Fool analyst? Email [email protected] Takeaways Completion of Safe Harbor Marinas sale -- Transaction closed April 30, fully repositioning Sun Communities ( SUI 0.08%) as a pure-play manufactured housing and RV operator. Debt reduction -- Approximately $3.3 billion of debt was repaid during the quarter, materially improving the balance sheet; total debt as of June 30 was $4.3 billion with a 3.4% weighted average interest rate and 7.6 years weighted average maturity. Capital returned to shareholders -- Over $830 million was returned through a special cash distribution and share repurchases; specifically, $521 million as a onetime $4 per share distribution and $300 million in repurchases of approximately 2.4 million shares. Core FFO per share -- Core FFO per share was $1.76, exceeding the high end of guidance. Same-property North American NOI growth -- Increased 4.9%, led primarily by manufactured housing and cost savings initiatives. Manufactured housing same-property NOI -- Grew 7.7% with occupancy up 60 basis points to 97.6%. RV same-property NOI -- Declined 1.1%, with a 0.9% revenue increase offset by a 3.1% expense increase. U.K. same-property NOI -- Rose 10.2%, supported by 9.5% revenue growth and partially offset by an 8.8% expense rise due to higher national minimum wage. U.K. ground lease buyout -- Acquired titles to 22 U.K. properties previously controlled via ground leases for approximately $199 million, eliminating material lease obligations and contributing about $26 million in gains and a 4.25% going-in yield. Share repurchase activity -- $300 million in share buybacks executed under a $1 billion program. Credit upgrades -- S&P Global raised the rating to BBB+ from BBB; Moody's to Baa2 from Baa3, citing deleveraging progress and balance sheet strength. Guidance increases -- 2025 FFO per share guidance raised to $6.51-$6.67; North American same-property NOI growth now guided to 4.7% midpoint; manufactured housing NOI growth targeted at 7.5% midpoint; U.K. same-property NOI guidance raised to 2.3%. Safe Harbor transaction 1031 proceeds -- About $1 billion was allocated to 1031 exchange accounts, with $565 million in acquisition targets identified so far and $431 million released into unrestricted cash. Reduction of floating rate debt -- Sun has 0 floating rate debt outstanding as of quarter-end. Leadership transition -- Charles Young appointed as next CEO and Board member, effective October 1; Gary A. Shiffman to become Non-Executive Chairman. Expense savings initiatives -- Over $17 million in first-half savings achieved, primarily in payroll, utilities, and standardized procurement, with opportunities for further savings in the remainder of 2025. Impairment charges and strategic shift -- Impairment charges in North America and the U.K. were tied to the decision to cease new greenfield development projects. Annual RV and transient RV performance -- Projected full-year decline of just over 9%...

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