<PAGE> 1
FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
[x] Quarterly report pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
FOR THE QUARTERLY PERIOD ENDED JUNE 30, 1997
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.)
31700 Middlebelt Road
Suite 145
Farmington Hills, Michigan 48334
(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code: (810) 932-3100
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 [ ]
APPLICABLE ONLY TO CORPORATE ISSUERS:
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date:
16,287,686 shares of Common Stock, $.01 par value as of July 31, 1997
Page 1 of 14
<PAGE> 2
SUN COMMUNITIES, INC.
INDEX
___________
PAGES
PART I
Item 1. Financial Statements:
Consolidated Balance Sheets as of June 30, 1997 and
December 31, 1996 3
Consolidated Statements of Income for the Periods
Ended June 30, 1997 and 1996 4
Consolidated Statements of Cash Flows for the Six Months
Ended June 30, 1997 and 1996 5
Notes to Consolidated Financial Statements 6-7
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 8-12
PART II
- -------
Item 4. Submission of Matter to a Vote of Security Holders 13
Item 5. Ratios of Earnings to Fixed Charges 13
Item 6.(a) Exhibits required by Item 601 of Regulation S-K 13
Item 6.(b) Reports on Form 8-K 13
Signatures 14
2
<PAGE> 3
SUN COMMUNITIES, INC.
CONSOLIDATED BALANCE SHEETS
JUNE 30, 1997 AND DECEMBER 31, 1996
(IN THOUSANDS)
__________
<TABLE>
<CAPTION>
ASSETS 1997 1996
------------ -----------
<S> <C> <C>
Investment in rental property, net $ 568,296 $ 558,278
Cash and cash equivalents 1,355 9,236
Investment in affiliates 12,972 5,103
Other assets 14,338 12,439
----------- -----------
Total assets $ 596,961 $ 585,056
============ ===========
LIABILITIES AND EQUITY
Liabilities:
Debt $ 185,000 $ 185,000
Accounts payable and accrued expenses 8,987 7,718
Deposits and other liabilities 8,897 9,123
Distributions payable 9,244 --
------------ -----------
Total liabilities 212,128 201,841
------------ -----------
Minority interests 80,830 82,283
------------ -----------
Stockholders' equity:
Preferred stock, $.01 par value, 10,000 shares
authorized, none issued
Common stock, $.01 par value, 100,000 shares
authorized, 15,977 and 15,389 issued and
outstanding in 1997 and 1996, respectively 160 154
Paid-in capital 344,861 328,321
Officers' notes (11,773) (9,173)
Distributions in excess of accumulated earnings (29,245) (18,370)
------------ -----------
Total stockholders' equity 304,003 300,932
------------ -----------
Total liabilities and equity $ 596,961 $ 585,056
============ ===========
</TABLE>
The accompanying notes are an integral part
of the consolidated financial statements.
3
<PAGE> 4
SUN COMMUNITIES, INC.
CONSOLIDATED STATEMENTS OF INCOME
FOR THE PERIODS ENDED JUNE 30, 1997 AND 1996
(IN THOUSANDS)
______________
<TABLE>
<CAPTION> FOR THE SIX FOR THE THREE
MONTHS ENDED MONTHS ENDED
JUNE 30 JUNE 30
----------------------- ------------------------
1997 1996 1997 1996
---------- --------- ---------- ---------
<S> <C> <C> <C> <C>
Revenues:
Rental income $ 44,790 $ 29,254 $ 22,152 $ 17,259
Interest and other income 1,836 1,337 1,081 890
---------- ---------- ---------- ---------
Total revenues 46,626 30,591 23,233 18,149
---------- ---------- ---------- ---------
Expenses:
Property operating and maintenance 10,197 6,483 5,050 3,862
Real estate taxes 3,740 2,266 1,877 1,398
General and administrative 2,196 1,525 1,118 826
Depreciation and amortization 9,777 6,510 4,956 3,750
Interest 6,799 4,704 3,354 2,666
---------- ---------- ---------- ---------
Total expenses 32,709 21,488 16,355 12,502
---------- ---------- ---------- ---------
Income before extraordinary item and
minority interests 13,917 9,103 6,878 5,647
Extraordinary item, early extinguishment of
debt -- (6,896) -- (6,896)
---------- ---------- ---------- --------
Income before minority interest 13,917 2,207 6,878 (1,249)
Less income allocated to minority interests:
Preferred OP Units 1,252 417 626 417
Common OP Units 1,650 328 805 (191)
---------- ---------- ---------- --------
Net income $ 11,015 $ 1,462 $ 5,447 $ (1,475)
========== ========== ========== ========
Earnings per share:
Income before extraordinary item $ .70 $ .62 $ .34 $ .32
Extraordinary item -- (.49) -- (.42)
---------- ---------- ---------- --------
Net income $ .70 $ .13 $ .34 $ (.10)
========== ========== ========== ========
Distributions declared per common share
outstanding $ .94 $ 1.365 $ .47 $ .455
========== ========== ========== ========
Weighted average common shares outstanding 15,778 12,250 15,924 14,064
========== ========== ========== ========
</TABLE>
The accompanying notes are an integral part
of the consolidated financial statements.
4
<PAGE> 5
SUN COMMUNITIES, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE SIX MONTHS ENDED JUNE 30, 1997 AND 1996
(IN THOUSANDS)
__________
<TABLE>
<CAPTION>
1997 1996
----------- ---------
<S> <C> <C>
Cash flows from operating activities:
Net income $ 11,015 $ 1,462
Adjustments to reconcile net income to net
cash provided by operating activities:
Income allocated to minority interests 1,650 328
Extraordinary item, net of prepayment penalties -- 1,390
Depreciation and amortization costs 9,777 6,510
Deferred financing costs 77 158
(Increase) decrease in other assets (2,402) 1,358
Increase in accounts payable and other
liabilities 1,670 6,886
---------- ----------
Net cash provided by operating activities 21,787 18,092
---------- ----------
Cash flows from investing activities:
Investment in rental properties (19,318) (58,115)
Investment in affiliates (7,869) 74
Officer note (2,600) --
---------- ----------
Net cash used in investing activities (29,787) (58,041)
---------- ----------
Cash flows from financing activities:
Distributions (16,376) (11,094)
Proceeds from borrowings -- 180,000
Repayments on borrowings -- (238,490)
Net proceeds from sale of common stock -- 117,874
Stock options and dividend reinvestment plan 16,546 2,977
Payments for deferred financing costs (51) (209)
---------- ----------
Net cash provided by financing activities 119 51,058
---------- ----------
Net increase (decrease) in cash and cash equivalents (7,881) 11,109
Cash and cash equivalents, beginning of period 9,236 121
---------- ----------
Cash and cash equivalents, end of period $ 1,355 $ 11,230
========== ==========
Supplemental Information:
OP units issued for rental properties -- $ 39,959
Debt assumed for rental properties -- 131,435
</TABLE>
The accompanying notes are an integral part
of the consolidated financial statements
5
<PAGE> 6
SUN COMMUNITIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
________
1. BASIS OF PRESENTATION:
These unaudited condensed consolidated financial statements of Sun
Communities, Inc., a Maryland corporation (the "Company"), have been
prepared pursuant to the Securities and Exchange Commission ("SEC") rules
and regulations and should be read in conjunction with the financial
statements and notes thereto of the Company as of December 31, 1996. The
following notes to consolidated financial statements present interim
disclosures as required by the SEC. The accompanying consolidated
financial statements reflect, in the opinion of management, all
adjustments necessary for a fair presentation of the interim financial
statements. All such adjustments are of a normal and recurring nature.
Certain reclassifications have been made to the prior period financial
statements to conform with current period presentation.
2. RENTAL PROPERTY:
The following summarizes rental property (in thousands):
<TABLE>
<CAPTION>
June 30, December 31,
1997 1996
---------------- ---------------
<S> <C> <C>
Land $ 60,929 $ 58,943
Land improvements and buildings 529,262 510,726
Furniture, fixtures, equipment 11,062 9,826
Property under development 6,878 9,318
--------------- --------------
608,131 588,813
Accumulated depreciation (39,835) (30,535)
--------------- --------------
Rental property, net $ 568,296 $ 558,278
=============== ==============
</TABLE>
3. NOTES RECEIVABLE:
Included in other assets at June 30, 1997 and 1996 are $4.2 million of
second and third mortgage notes collateralized by manufactured housing
communities located in Alberta, Canada bearing interest at an average
rate of 17 percent.
The officers' notes are 10 year, LIBOR + 1.75% notes, collateralized
by 500,000 shares of the Company's common stock with personal liability
up to approximately $7.2 million.
6
<PAGE> 7
SUN COMMUNITIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
________
4. DEBT:
The following table sets forth certain information regarding debt at June
30, 1997 (in thousands):
Secured term loan, interest at LIBOR
plus 1.50%, due November 1, 1997 $ 35,000
Senior notes, interest at 7.375%, due
May 1, 2001 65,000
Senior notes, interest at 7.625%, due
May 1, 2003 85,000
-----------
$ 185,000
===========
5. OTHER INCOME:
The components of other income are as follows (in thousands):
<TABLE>
<CAPTION>
Six Months Ended Three Months Ended
June 30, June 30,
1997 1996 1997 1996
-------- -------- -------- ------
<S> <C> <C> <C> <C>
Interest:
Notes and mortgages $ 962 $ 742 $ 526 $ 376
Other 213 339 89 300
Other property revenues 279 226 127 114
Equity earnings - Sun Home
Services, Inc. ("SHS") 382 30 339 100
-------- -------- -------- ------
$ 1,836 $ 1,337 $ 1,081 $ 890
======== ======== ======== ======
</TABLE>
7
<PAGE> 8
SUN COMMUNITIES, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
________
OVERVIEW
The following discussion and analysis of the consolidated financial condition
and results of operations should be read in conjunction with the consolidated
financial statements and Notes thereto. Capitalized terms are used as defined
elsewhere in this Form 10-Q.
RESULTS OF OPERATIONS
Comparison of the six months ended June 30, 1997 and 1996
For the six months ended June 30, 1997, net income before minority
interests increased by 52.9 percent from $9.1 million to $13.9, when
compared to the six months ended June 30, 1996. The increase was due to
increased revenues of $16.0 million while expenses increased by $11.2 million.
Rental income increased by $15.5 million from $29.3 million to $44.8 million or
53.1 percent, due to acquisitions ($13.6 million), lease up of sites ($.7
million) and increases in rents and other community revenues ($1.2 million).
Other income increased by $.5 million from $1.3 million to $1.8 million or 37.3
percent due primarily to increased interest income and improved results at SHS.
Property operating and maintenance increased by $3.7 million from $6.5 million
to $10.2 million or 57.3 percent due primarily to acquisitions ($3.2 million).
Real estate taxes increased by $1.5 million from $2.3 million to $3.8 million
or 65.0 percent due primarily to acquisitions ($1.3 million).
General and administrative expenses increased by $.7 million from $1.5 million
to $2.2 million or 44.0 percent due primarily to increased staffing to manage
the growth of the company. General and administrative expenses as a percentage
of total revenues declined from 5.0 percent to 4.7 percent as a result of
economies of scale resulting from the company's growth.
Earnings before interest, taxes, depreciation and amortization ("EBITDA")
increased by $10.2 million from $20.3 million to $30.5 million or 50.0
percent. EBITDA declined as a percentage of revenues from 66.4 percent to 65.4
percent, primarily due to increased real estate taxes as a percentage of total
revenues.
Depreciation and amortization increased by $3.3 million from $6.5 million to
$9.8 million or 50.2 percent due primarily to acquisitions.
Interest expense increased by $2.1 million from $4.7 million to $6.8 million or
44.5 percent primarily due to increased average debt outstanding.
The extraordinary item in the six months ended June 30, 1996 results from the
early extinguishment of debt and includes prepayment penalties and related
deferred financing costs.
8
<PAGE> 9
SUN COMMUNITIES, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
________
Comparison of the Three Months Ended June 30, 1997 and 1996
Rental income increased by $4.9 million from $17.3 million to $22.2 million or
28.4 percent, due to acquisitions ($4.0 million), lease up of sites ($.3
million) and increases in rents and other community revenues ($.6 million).
Property operating and maintenance increased by $1.2 million from $3.9 million
to $5.1 million or 30.8 percent, due primarily to acquisitions ($1.0 million).
Real estate taxes increased by $.5 million from $1.4 million to $1.9 million or
34.3 percent due primarily to acquisitions ($.4 million).
General and administrative expenses increased by $.3 million from $.8 million
to $1.1 million or 35.3 percent, due primarily to increased staffing to manage
the growth of the company. General and administrative expenses as a percentage
of total revenues increased from 4.6 percent to 4.8 percent.
Earnings before interest, taxes, depreciation and amortization ("EBITDA")
increased by $3.1 million from $12.1 million to $15.2 million or 25.9 percent.
EBITDA declined as a percentage of revenues from 66.5 percent to 65.4 percent.
Depreciation and amortization increased by $1.2 million from $3.8 million to
$5.0 million or 32.2 percent due primarily to acquisitions.
Interest expense increased by $.7 million from $2.7 million to $3.4 million or
25.8 percent due to increased debt outstanding.
The extraordinary item in the three months ended June 30, 1996 results from the
early extinguishment of debt and includes prepayment penalties and related
deferred financing costs.
9
<PAGE> 10
SUN COMMUNITIES, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
________
SAME PROPERTY INFORMATION
The following table reflects property-level financial information as of and for
the six months ended June 30, 1997 and 1996. The "Same Property" data
represents information regarding the operation of communities owned as of
January 1, 1996. Site, occupancy, and rent data for those communities is
presented as of the last day of each period presented. The table excludes the
1,200 sites where the Company's interest is in the form of a shared
appreciation mortgage note.
<TABLE>
<CAPTION>
SAME PROPERTY TOTAL PORTFOLIO
------------------------ -------------------------
1997 1996 1997 1996
--------- ---------- --------- ----------
<S> <C> <C> <C> <C>
Property revenues, including other $ 25,096 $ 23,579 $ 45,069 $ 29,480
--------- ---------- ---------- ----------
Property operating expenses:
Property operating and maintenance 4,833 4,516 10,197 6,483
Real estate taxes 1,929 1,750 3,740 2,266
--------- ---------- ---------- ----------
Property operating expenses 6,762 6,266 13,937 8,749
--------- ---------- ---------- ----------
Property EBITDA $ 18,334 $ 17,313 $ 31,132 $ 20,731
========= ========== ========== ==========
Number of properties 52 52 84 77
Developed sites 17,535 16,970 30,400 27,380
Occupied sites 16,511 16,137 28,133 25,701
Occupancy % 94.2% 95.1% 94.7%(1) 95.4%(1)
Weighted average monthly rent per site $ 249 $ 237 $ 255 (1) $ 247 (1)
Sites available for development 1,732 2,643 3,312 2,872
Sites in development 398 624 736 643
</TABLE>
(1) Occupancy % and weighted average rent relates to manufactured housing
sites, excluding recreational vehicle sites.
On a same property basis, property revenues increased by $1.5 million from
$23.6 million to $25.1 million, or 6.4 percent, due primarily to increases in
rents and occupancy related charges including water and property tax pass
through. Also contributing to revenue growth was the increase of 374 leased
sites at June 30, 1997 compared to June 30, 1996.
Property operating expenses increased by $.5 million from $6.3 million to $6.8
million, or 7.9 percent, due to increased occupancies and costs and increases
in assessments and millage rates by local taxing authorities. Property EBITDA
increased by $1.0 million from $17.3 million to $18.3 million, or 5.9 percent.
10
<PAGE> 11
SUN COMMUNITIES, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
________
LIQUIDITY AND CAPITAL RESOURCES
Cash and cash equivalents decreased by $7.9 million to $1.4 million at June 30,
1997 compared to $9.2 million at December 31, 1996 primarily because cash used
in investing activities exceeded cash provided by operating activities.
Net cash provided by operating activities increased by $3.7 million to $21.8
million for the six months ended June 30, 1997 compared to $18.1 million for
the same period in 1996. Net income before depreciation and amortization,
minority interests and extraordinary item increased by $12.8 million which was
offset by $9.1 million of increases in other assets and liabilities.
Net cash used in investing activities was $29.8 million for the six months
ended June 30, 1997 compared to $58.0 million for the same period in 1996.
$38.8 million of this decrease was due to acquisition related activities with
the remaining balance attributable to the Company's investment in affiliates
and officer note.
Net cash provided by financing activities was $.1 million for the six months
ended June 30, 1997 due to the proceeds from the sale of common stock pursuant
to the Company's Dividend Reinvestment Plan exceeding the distributions paid
to Common OP Unit holders. For the same period in 1996, net cash provided by
financing activities was $51.1 million due to proceeds received from the sale
of stock and debt offset by debt repayments.
The Company expects to meet its short-term liquidity requirements generally
through its working capital provided by operating activities and proceeds from
the Company's Dividend Reinvestment Plan. The Company considers these sources
to be adequate and anticipates they will continue to be adequate to meet
operating requirements, capital improvements, investment in site development,
and payment of distributions by the Company in accordance with REIT
requirements in both the short and long term.
The Company expects to meet certain long-term liquidity requirements such as
scheduled debt maturities and property acquisitions through the issuance of
equity or debt securities, or interests in the Sun Communities Operating
Limited Partnership. The Company can also meet these requirements by utilizing
its $75 million line of credit which bears interest at LIBOR plus 1.25% and is
due November 1, 1999.
At June 30, 1997, the Company's debt to total market capitalization
approximated 22% (assuming conversion of all Common and Preferred OP Units to
shares of common stock), with a weighted average maturity of approximately 4.1
years and a weighted average interest rate of 7.5%.
Recurring capital expenditures approximated $1.9 million for the six months
ended June 30, 1997.
11
<PAGE> 12
SUN COMMUNITIES, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
________
OTHER
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 debt
restructuring and sales of property, plus depreciation and amortization, and
after adjustments for unconsolidated partnerships and joint ventures."
Industry analysts consider FFO to be an appropriate supplemental measure of the
operating performance of an equity REIT primarily because the computation of
FFO excludes historical cost depreciation as an expense and thereby facilitates
the comparison of REITs which have different cost bases in their assets.
Historical cost accounting for real estate assets implicitly assumes that the
value of real estate assets diminishes predictably over time, whereas real
estate values have instead historically risen or fallen based upon market
conditions. FFO does not represent cash flow from operations as defined by
generally accepted accounting principles 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.
The following table calculates FFO for the periods ended June 30, 1997 and
1996:
<TABLE>
<CAPTION>
(IN THOUSANDS)
FOR THE SIX MONTHS FOR THE THREE MONTHS
ENDED JUNE 30 ENDED JUNE 30
1997 1996 1997 1996
----------- ---------- ---------- -----------
<S> <C> <C> <C> <C>
Income before allocation to minority
interests $ 13,917 $ 9,103 $ 6,878 $ 5,647
Add depreciation and amortization, net
of corporate office depreciation 9,717 6,475 4,926 3,730
Deduct distribution to Preferred OP Units (1,252) (417) (626) (417)
--------- ---------- ----------- ----------
Funds from operations $ 22,382 $ 15,161 $ 11,178 $ 8,960
========= ========== =========== ==========
Weighted average shares and common
OP units outstanding 18,144 14,064 18,282 16,363
========= ========== =========== ==========
FFO, per share/unit $ 1.23 $ 1.08 $ 0.61 $ 0.55
========= ========== =========== ==========
</TABLE>
12
<PAGE> 13
PART II
ITEM 4. - SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
On May 29, 1997, the Company held its Annual Meeting of Shareholders. The
following matters were voted upon at the meeting:
(a) The election of two directors to serve until the 2000 Annual Meeting of
Shareholders or until their respective successors shall be elected and shall
qualify. The results of the election appear below:
<TABLE>
<CAPTION>
VOTES AGAINST ABSTENTIONS OR
NAME VOTES FOR OR WITHHELD BROKER NON-VOTES
---- --------- ----------- ----------------
<S> <C> <C> <C>
Ted J. Simon 10,840,419 0 20,259
Paul D. Lapides 10,846,477 0 14,201
</TABLE>
(b) An amendment to the Company's Charter as follows:
(i) amend Article VII, Section 7 to make that section specifically
subject to Article VII, Section 20 of the Company's Charter.
(ii) Amend Article VII, Section 20 to change the word "capital" to
"common, preferred, or any other class of equity".
<TABLE>
<CAPTION>
VOTES FOR VOTES AGAINST OR WITHHELD ABSTENTIONS OR BROKER NON-VOTES
--------- ------------------------- -------------------------------
<S> <C> <C>
10,694,399 42,148 124,131
</TABLE>
ITEM 5. - RATIOS OF EARNINGS TO FIXED CHARGES
The Company's ratios of earnings to fixed charges for the years December 31,
1992, 1993, 1994, 1995 and 1996, and the six months ended June 30, 1997 were
1.05:1, 1.05:1, 2.79:1, 3.03:1, 2.49:1, and 2.49:1, respectively.
ITEM 6.(A) - EXHIBITS REQUIRED BY ITEM 601 OF REGULATION S-K
EXHIBIT NO. DESCRIPTION
- ----------- -----------
12.1 Ratios of Earnings to Fixed Charges
Financial Data Schedule
ITEM 6.(B) - REPORTS ON FORM 8-K
The Company did not file any reports on Form 8-K during the period covered by
this Form 10-Q.
13
<PAGE> 14
SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
Dated: August 12, 1997
SUN COMMUNITIES, INC.
BY: /s/ Gary A. Shiffman
---------------------
Gary A. Shiffman, President
BY: /s/ Jeffrey P. Jorissen
------------------------
Jeffrey P. Jorissen, Chief
Financial Officer and Secretary
14
<PAGE> 15
EXHIBIT INDEX
<TABLE>
<CAPTION>
PAGE
FILED NUMBER
EXHIBIT NO. DESCRIPTION HEREWITH HEREIN
- ----------- ----------- -------- ------
<S> <C> <C> <C>
12.1 Ratio of Earnings to Fixed Charges X
27 Financial Data Schedule X
</TABLE>
15
<PAGE> 1
EXHIBIT 12.1
COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
AND RATIO OF EARNINGS TO COMBINED FIXED CHARGES AND PREFERRED DIVIDENDS
The ratio of earnings to fixed charges for the Company
(including its predecessor-in-interest, Sundance Enterprises, Inc., the
partnerships affiliated with Sundance Enterprises, Inc., and the Company's
subsidiaries and majority-owned partnerships) presents the relationship of the
Company's earnings to its fixed charges. "Earnings" as used in the
computation, is based on net income (loss) from continuing operations (which
includes a charge to income for depreciation and amortization expense) before
income taxes, plus fixed charges. "Fixed charges" is comprised of (i) interest
charges, whether expensed or capitalized, and (ii) amortization of loan costs
and discounts or premiums relating to indebtedness of the Company and its
subsidiaries and majority-owned partnerships, excluding in all cases items
which would be or are eliminated in consolidation.
<TABLE>
<CAPTION>
YEAR ENDED
6 MONTHS DECEMBER 31,
ENDED ----------------------------------------------------------
6/30/97 1996 1995 1994 1993 1992
------------- ------ ------ ------ ------ -------
(unaudited, in thousands)
Earnings:
<S> <C> <C> <C> <C> <C> <C>
Net income (loss) $ 13,917 $ 21,953 (1) $ 13,591 $ 8,924 $ 288 $ 272
Add fixed charges other
than capitalized interest 6,799 11,277 6,420 4,894 5,280 5,522
--------- -------- --------- ---------- ------- -------
$ 20,716 $ 33,230 $ 20,011 $ 13,818 $ 5,568 $ 5,794
======= ======== ========= ========== ======= =======
Fixed Charges:
Interest expense $ 6,799 $ 11,277 $ 6,420 $ 4,894 $ 5,280 $ 5,522
Preferred OP distribution 1,252 1,670 --- --- --- ---
Capitalized interest 255 380 192 58 --- ---
------- ------ -------- --------- ------- -------
Total fixed charges $ 8,306 $ 13,327 $ 6,612 $ 4,952 $ 5,280 $ 5,522
======= ======= ======== ========= ======= =======
Ratio of Earnings to
Fixed Charges: 2.49:1 2.49:1 3.03:1 2.79:1 1.05:1 1.05:1
</TABLE>
(1) Before extraordinary item
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> JUN-30-1997
<CASH> 1,355
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 608,131
<DEPRECIATION> 39,835
<TOTAL-ASSETS> 596,961
<CURRENT-LIABILITIES> 0
<BONDS> 185,000
0
0
<COMMON> 160
<OTHER-SE> 303,843
<TOTAL-LIABILITY-AND-EQUITY> 596,961
<SALES> 0
<TOTAL-REVENUES> 46,626
<CGS> 0
<TOTAL-COSTS> 13,937
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 6,799
<INCOME-PRETAX> 13,917
<INCOME-TAX> 0
<INCOME-CONTINUING> 13,917
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 11,015
<EPS-PRIMARY> .70
<EPS-DILUTED> .70
</TABLE>
