<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 SEPTEMBER 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: (248) 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:
16,557,252 shares of Common Stock, $.01 par value as of October 31, 1997
Page 1 of 16
<PAGE> 2
SUN COMMUNITIES, INC.
INDEX
___________
<TABLE>
<CAPTION>
PAGES
-----
<S> <C> <C>
PART I
Item 1. Financial Statements:
Consolidated Balance Sheets as of September 30, 1997 and
December 31, 1996 3
Consolidated Statements of Income for the Periods
Ended September 30, 1997 and 1996 4
Consolidated Statements of Cash Flows for the Nine Months
Ended September 30, 1997 and 1996 5
Notes to Consolidated Financial Statements 6-8
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 9-13
PART II
Item 5. Ratios of Earnings to Fixed Charges 14
Item 6.(a) Exhibits required by Item 601 of Regulation S-K 14
Item 6.(b) Reports on Form 8-K 14
Signatures 15
</TABLE>
2
<PAGE> 3
SUN COMMUNITIES, INC.
CONSOLIDATED BALANCE SHEETS
SEPTEMBER 30, 1997 AND DECEMBER 31, 1996
(IN THOUSANDS)
__________
<TABLE>
<CAPTION>
ASSETS 1997 1996
---------- ----------
<S> <C> <C>
Investment in rental property, net $ 586,342 $ 558,278
Cash and cash equivalents 1,730 9,236
Investment in affiliates 18,030 5,103
Mortgage notes receivable 17,918 4,176
Other assets 14,324 8,263
---------- ----------
Total assets $ 638.344 $ 585,056
========== ==========
LIABILITIES AND EQUITY
Liabilities:
Line of credit $ 20,000 $ --
Debt 195,000 185,000
Accounts payable and accrued expenses 13,230 7,718
Deposits and other liabilities 7,990 9,123
Distributions payable 9,393 --
---------- ---------
Total liabilities 245,613 201,841
---------- ---------
Minority interests 80,533 82,283
---------- ---------
Stockholders' equity:
Preferred stock, $.01 par value, 10,000 shares
authorized, none issued
Common stock, $.01 par value, 100,000 shares
authorized, 16,294 and 15,389 issued and
outstanding in 1997 and 1996, respectively 163 154
Paid-in capital 355,127 328,321
Officers' notes (11,773) (9,173)
Distributions in excess of accumulated earnings (31,319) (18,370)
---------- ---------
Total stockholders' equity 312,198 300,932
---------- ---------
Total liabilities and equity $ 638,344 $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 SEPTEMBER 30, 1997 AND 1996
(IN THOUSANDS)
--------
<TABLE>
<CAPTION>
FOR THE NINE FOR THE THREE
MONTHS ENDED MONTHS ENDED
SEPTEMBER 30 SEPTEMBER 30
------------------- --------------
1997 1996 1997 1996
---- ---- ---- ----
<S> <C> <C> <C> <C>
Revenues:
Income from property $68,632 $50,128 $23,177 $20,279
Interest and other income 2,111 1,325 940 583
------ ----- ------- -------
Total revenues 70,743 51,453 24,117 20,862
------- ------- ------ ------
Expenses:
Property operating and maintenance 15,620 11,204 5,423 4,721
Real estate taxes 5,578 3,987 1,838 1,721
General and administrative 3,312 2,407 1,116 882
Depreciation and amortization 14,927 10,530 5,150 4,020
Interest 10,397 7,944 3,598 3,240
------- ------- ------ ------
Total expenses 49,834 36,072 17,125 14,584
------- ------ ------ ------
Income before extraordinary item and
minority interests 20,909 15,381 6,992 6,278
Extraordinary item, early extinguishment of
debt -- (6,896) --
------- ------ ------ ------
Income before minority interest 20,909 8,485 6,992 6,278
Less income allocated to minority interests:
Preferred OP Units 1,879 1,043 627 626
Common OP Units 2,442 968 792 640
------- ------ ------ ------
Net income $16,588 $6,474 $5,573 $5,012
======= ====== ====== ======
Earnings per share:
Income before extraordinary item $ 1.04 $.95 $.34 $.33
Extraordinary item -- (.46) -- --
------- ------ ------ ------
Net income $ 1.04 $.49 $.34 $.33
======= ====== ====== ======
Distributions declared per common share
outstanding $1.865 $1.81 $.47 $.455
======= ====== ====== ======
Weighted average common shares outstanding 15,933 13,198 16,243 15,092
======= ====== ====== ======
</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 NINE MONTHS ENDED SEPTEMBER 30, 1997 AND 1996
(IN THOUSANDS)
__________
<TABLE>
<CAPTION>
1997 1996
---- ----
<S> <C> <C>
Cash flows from operating activities:
Net income $ 16,588 $ 6,474
Adjustments to reconcile net income to net
cash provided by operating activities:
Income allocated to minority interests 2,442 968
Extraordinary item, net of prepayment penalties -- 1,390
Depreciation and amortization 14,927 10,530
Deferred financing costs 116 195
(Increase) decrease in other assets (4,599) 402
Increase in accounts payable and other
liabilities 5,025 7,907
-------- --------
Net cash provided by operating activities 34,499 27,866
-------- --------
Cash flows from investing activities:
Investment in rental properties (42,214) (67,265)
Investment in affiliates (12,927) (366)
Mortgage notes receivable (13,742) --
Officer note (2,600) --
-------- --------
Net cash used in investing activities (71,483) (67,631)
-------- --------
Cash flows from financing activities:
Distributions (24,982) (18,206)
Proceeds from borrowings 30,000 180,000
Repayments on borrowings -- (238,490)
Net proceeds from sale of common stock -- 117,921
Stock options and dividend reinvestment plan 26,815 8,333
Payments for deferred financing costs (2,355) (209)
-------- --------
Net cash provided by financing activities 29,478 49,349
-------- --------
Net increase (decrease) in cash and cash equivalents (7,506) 9,584
Cash and cash equivalents, beginning of period 9,236 121
-------- --------
Cash and cash equivalents, end of period $ 1,730 $ 9,705
======== ========
Supplemental Information:
OP units issued for rental properties -- $ 39,959
Debt assumed for rental properties -- 131,435
Issuance of common stock for officer notes -- 523
</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. PORTFOLIO GROWTH:
As of September 30, 1997, the Company has acquired or financed 8 communities
comprising 2,948 developed sites and 338 development sites for $41.2 million.
3. RENTAL PROPERTY:
The following summarizes rental property (in thousands):
<TABLE>
<CAPTION>
September 30, December 31,
1997 1996
------------- -----------
<S> <C> <C>
Land $ 62,481 $ 58,943
Land improvements and buildings 546,005 510,726
Furniture, fixtures, equipment 11,463 9,826
Property under development 11,078 9,318
---------- ------------
631,027 588,813
Accumulated depreciation (44,685) (30,535)
---------- ------------
Rental property, net $ 586,342 $ 558,278
========== ============
</TABLE>
6
<PAGE> 7
SUN COMMUNITIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
________
4. NOTES RECEIVABLE:
Notes receivable consisted of the following (amounts in thousands):
<TABLE>
<CAPTION>
September 30, December 31,
1997 1996
--------- ----------
<S> <C> <C>
Motgage notes receivable with minimum
monthly interest payments at 7%,
maturing June 30, 2012, collateralized
by manufactured housing/ recreational
vehicle communities located in
Dover, DE (a) $ 13,742 $ --
Second mortgage and third shared appreciation
mortgage notes with monthly interest
payments at an average rate of 17
percent and excess interest as defined,
collateralized by manufactured housing
communities located in Alberta, Canada 4,176 4,176
--------- ----------
$ 17,918 $ 4,176
========= ==========
</TABLE>
(a) The stated interest rate is capped at 12%. The excess of the stated rate
over the pay rate is added to the principal balance and will also accrue
interest at the stated rate.
The officer 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.
5. DEBT:
The following table sets forth certain information regarding debt (in
thousands):
<TABLE>
<CAPTION>
September 30, December 31,
1997 1996
---------- ---------
<S> <C> <C>
Secured term loan, interest at 7.01%
due November 10, 2007 $ 45,000 $ --
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 65,000
Senior notes, interest at 7.625%, due
May 1, 2003 85,000 85,000
---------- ---------
$ 195,000 $ 185,000
========== =========
</TABLE>
The Company had $55 million available borrowings under its $75 million line of
credit at September 30, 1997.
7
<PAGE> 8
SUN COMMUNITIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
________
6. OTHER INCOME:
The components of interest and other income are as follows (in thousands):
<TABLE>
<CAPTION>
Nine Months Ended Three Months Ended
September 30, September 30,
1997 1996 1997 1996
-------- --------- ------- --------
<S> <C> <C> <C> <C>
Interest $ 1,027 $ 1,095 $ 328 $ 383
Equity earnings:
Sun Home Services, Inc. ("SHS") 875 230 493 200
Bingham Financial
Services Corporation,
a subsidiary of SHS 209 -- 119 --
-------- --------- ------- --------
$ 2,111 $ 1,325 $ 940 $ 583
======== ========= ======= ========
</TABLE>
8
<PAGE> 9
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 nine months ended September 30, 1997 and 1996
For the nine months ended September 30, 1997, net income before
extraordinary item and minority interests increased by 35.9 percent from
$15.4 million to $20.9 million, when compared to the nine months ended
September 30, 1996. The increase was due to increased revenues of $19.3
million while expenses increased by $13.8 million.
Income from property increased by $18.5 million from $50.1 million to $68.6
million or 36.9 percent, due to acquisitions ($15.4 million), lease up of sites
($1.1 million) and increases in rents and other community revenues ($2.0
million).
Interest and other income increased by $.8 million from $1.3 million to $2.1
million or 59.3 percent due primarily to improved results at SHS and the
inception of operations at Bingham Financial Services Corporation.
Property operating and maintenance increased by $4.4 million from $11.2 million
to $15.6 million or 39.4 percent due primarily to acquisitions ($3.6 million).
Real estate taxes increased by $1.6 million from $4.0 million to $5.6 million
or 39.9 percent due primarily to acquisitions ($1.4 million).
General and administrative expenses increased by $.9 million from $2.4 million
to $3.3 million or 37.6 percent due primarily to increased staffing to manage
the growth of the company. General and administrative expenses as a
percentage of total revenues remained constant at 4.7 percent.
Earnings before interest, taxes, depreciation and amortization ("EBITDA")
increased by $12.3 million from $33.9 million to $46.2 million or 36.6 percent.
EBITDA declined slightly as a percentage of revenues from 65.8 percent to 65.4
percent.
Depreciation and amortization increased by $4.4 million from $10.5 million to
$14.9 million or 41.8 percent due primarily to acquisitions.
Interest expense increased by $2.5 million from $7.9 million to $10.4 million
or 30.9 percent primarily due to increased average debt outstanding.
The extraordinary item in the nine months ended September 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
________
Comparison of the Three Months Ended September 30, 1997 and 1996
Income from property increased by $2.9 million from $20.3 million to $23.2
million or 14.3 percent, due to acquisitions ($1.7 million), lease up of sites
($.4 million) and increases in rents and other community revenues ($.8
million).
Interest and other income increased by $.3 million from $.6 million to $.9
million or 61.2 percent due primarily to improved results at SHS and the
inception of operations at Bingham Financial Services Corporation.
Property operating and maintenance increased by $.7 million from $4.7 million
to $5.4 million or 14.9 percent, due primarily to acquisitions ($.5 million).
Real estate taxes increased by $.1 million from $1.7 million to $1.8 million or
6.8 percent due to acquisitions.
General and administrative expenses increased by $.2 million from $.9 million
to $1.1 million or 26.5 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 4.2 percent to 4.6 percent.
Earnings before interest, taxes, depreciation and amortization ("EBITDA")
increased by $2.2 million from $13.5 million to $15.7 million or 16.3 percent.
EBITDA increased as a percentage of revenues from 64.9 percent to 65.3 percent.
Depreciation and amortization increased by $1.1 million from $4.0 million to
$5.1 million or 28.1 percent due primarily to acquisitions.
Interest expense increased by $.4 million from $3.2 million to $3.6 million or
11.0 percent due to increased debt outstanding.
10
<PAGE> 11
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 nine months ended September 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 includes
sites where the Company's interest is in the form of shared appreciation notes
or where the Company is providing financing and managing the properties. Such
amounts relate to 1,243 sites in 1996 and 2,040 sites in 1997 and were formerly
classified in other income.
<TABLE>
<CAPTION>
SAME PROPERTY TOTAL PORTFOLIO
------------------ ---------------------
1997 1996 1997 1996
------ ------ ------ -------
<S> <C> <C> <C> <C>
Income from property $37,911 $ 35,618 $ 68,632 $ 50,128
------- -------- -------- --------
Property operating expenses:
Property operating and maintenance 7,569 7,183 15,620 11,204
Real estate taxes 2,893 2,696 5,578 3,987
------- -------- -------- --------
Property operating expenses 10,462 9,879 21,198 15,191
-------- -------- -------- --------
Property EBITDA $ 27,449 $ 25,739 $ 47,434 $ 34,937
======== ======== ======== ========
Number of properties 54 54 95 79
Developed sites 18,744 18,351 33,326 28,777
Occupied sites 17,786 17,256 30,965 26,867
Occupancy % 94.9%(1) 94.0%(1) 95.2%(1) 94.8%(1)
Weighted average monthly rent per site $ 249(1) $ 239(1) $ 256(1) $ 248 (1)
Sites available for development 1,728 2,277 3,288 3,461
Sites in development 319 681 762 662
</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 $2.3 million from
$35.6 million to $37.9 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 530 leased
sites at September 30, 1997 compared to September 30, 1996.
Property operating expenses increased by $.6 million from $9.9 million to $10.5
million, or 5.9 percent, due to increased occupancies and costs and increases
in assessments and millage rates by local taxing authorities. Property EBITDA
increased by $1.7 million from $25.7 million to $27.4 million, or 6.6 percent.
11
<PAGE> 12
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 $7.5 million to $1.7 million at
September 30, 1997 compared to $9.2 million at December 31, 1996 because cash
used in investing activities exceeded cash provided by operating activities
and financing activities.
Net cash provided by operating activities increased by $6.6 million to $34.5
million for the nine months ended September 30, 1997 compared to $27.9 million
for the same period in 1996. Net income before depreciation and amortization,
minority interests and extraordinary item increased by $14.6 million which was
offset by $8.0 million due to changes in other assets and liabilities.
Net cash used in investing activities increased by $3.9 million to $71.5
million from $67.6 million due to reduced investments in rental properties more
than offset by increased investments in affiliates and mortgage and officer
notes.
Net cash provided by financing activities was $29.5 million for the nine months
ended September 30, 1997 primarily due to $27.6 million of proceeds received
from debt borrowings, net of financing costs, and 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 $49.3 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 September 30, 1997, the Company's debt to total market capitalization
approximated 23% (assuming conversion of all Common and Preferred OP Units to
shares of common stock), with a weighted average maturity of approximately 5.9
years and a weighted average interest rate of 7.4%.
Recurring capital expenditures approximated $3.8 million, including $.4 million
for corporate office expansion, for the nine months ended September 30, 1997.
12
<PAGE> 13
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 September 30, 1997 and
1996:
<TABLE>
<CAPTION>
(IN THOUSANDS)
FOR THE NINE MONTHS FOR THE THREE MONTHS
ENDED SEPTEMBER 30 ENDED SEPTEMBER 30
1997 1996 1997 1996
------ ------ ------ ------
<S> <C> <C> <C> <C>
Income before allocation to minority
interests 20,909 15,381 $ 6,992 $ 6,278
Add depreciation and amortization, net
of corporate office depreciation 14,837 10,475 5,120 4,000
Deduct distribution to Preferred OP Units (1,879) (1,043) (627) (626)
-------- ------- ------- -------
Funds from operations $ 33,867 $24,813 $11,485 $ 9,652
======== ======= ======= =======
Weighted average shares and common
OP units outstanding 18,296 15,049 18,602 17,018
======== ======= ======= =======
FFO, per share/unit $ 1.85 $ 1.65 $ 0.62 $ 0.57
======== ======= ======= =======
</TABLE>
13
<PAGE> 14
PART II
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 nine months ended September 30, 1997
were 1.05:1, 1.05:1, 2.79:1, 3.03:1, 2.49:1, and 2.46:1, respectively.
ITEM 6.(A) - EXHIBITS REQUIRED BY ITEM 601 OF REGULATION S-K
EXHIBIT NO. DESCRIPTION
- ----------- -----------
12.1 Ratios of Earnings to Fixed Charges
27 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.
14
<PAGE> 15
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: November 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
15
<PAGE> 16
EXHIBIT INDEX
PAGE
FILED NUMBER
EXHIBIT NO. DESCRIPTION HEREWITH HEREIN
- ----------- ----------- -------- ------
12.1 Ratio of Earnings to Fixed Charges X
27 Financial Data Schedule X
16
<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
9 MONTHS DECEMBER 31,
ENDED ------------------------------------------------------------
9/30/97 1996 1995 1994 1993 1992
------- ---------- ------ ------ ------- ------
(UNAUDITED, IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C>
Earnings:
Net income $ 20,909 $ 21,953(1) $ 13,591 $ 8,924 $ 288 $ 272
Add fixed charges other
than capitalized interest 10,397 11,277 6,420 4,894 5,280 5,522
---------- -------- -------- ---------- -------- ------
$ 31,306 $ 33,230 $ 20,011 $ 13,818 $ 5,568 $5,794
========== ======== ======== ========== ======= ======
Fixed Charges:
Interest expense $ 10,397 $ 11,277 $ 6,420 $ 4,894 $ 5,280 $5,522
Preferred OP distribution 1,879 1,670 -- -- -- --
Capitalized interest 445 380 192 58 -- --
---------- -------- -------- ---------- ------- ------
Total fixed charges $ 12,721 $ 13,327 $ 6,612 $ 4,952 $ 5,280 $5,522
========== ======== ======== ========== ======= ======
Ratio of Earnings to
Fixed Charges: 2.46:1 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> SEP-30-1997
<CASH> 1,730
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 631,027
<DEPRECIATION> 44,685
<TOTAL-ASSETS> 638,344
<CURRENT-LIABILITIES> 20,000
<BONDS> 195,000
0
0
<COMMON> 163
<OTHER-SE> 312,035
<TOTAL-LIABILITY-AND-EQUITY> 638,344
<SALES> 0
<TOTAL-REVENUES> 70,743
<CGS> 0
<TOTAL-COSTS> 21,198
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 10,397
<INCOME-PRETAX> 20,909
<INCOME-TAX> 0
<INCOME-CONTINUING> 20,909
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 16,588
<EPS-PRIMARY> $1.04
<EPS-DILUTED> $1.04
</TABLE>
