SUN COMMUNITIES Reports Financials and Non-Reliance on Past Statements

TL;DR

**SUN COMMUNITIES just flagged issues with old financial statements, so watch out for potential restatements!**

AI Summary

SUN COMMUNITIES INC filed an 8-K on February 20, 2024, reporting on its results of operations and financial condition, as well as a non-reliance on previously issued financial statements. The earliest event reported was February 15, 2024. The company, based in Southfield, Michigan, operates as a Real Estate Investment Trust (REIT).

Why It Matters

This filing indicates that SUN COMMUNITIES INC has identified issues with its past financial reporting, which could impact investor confidence and the company's stock valuation.

Risk Assessment

Risk Level: high — The non-reliance on previously issued financial statements indicates a significant issue with past financial reporting, which often leads to restatements and can negatively impact investor trust and stock price.

Key Players & Entities

• SUN COMMUNITIES INC (company) — Registrant
• February 15, 2024 (date) — Date of earliest event reported
• February 20, 2024 (date) — Filing date
• Maryland (company) — State of incorporation
• Southfield, Michigan (company) — Principal Executive Offices

FAQ

Key Financial Figures

• $0.01 — nge on which registered Common Stock, $0.01 par value SUI New York Stock Exchange
• $15.4 million — odwill impairment increases net loss by $15.4 million; For the three and six month periods e
• $309.7 million — net income to net loss by the amount of $309.7 million and $325.0 million, respectively; For
• $325.0 m — oss by the amount of $309.7 million and $325.0 million, respectively; For the three mon
• $44.8 million — odwill impairment reduces net income by $44.8 million; and for the nine month period ended Se
• $369.9 million — net income to net loss by the amount of $369.9 million. These adjustments have no impact to

Filing Documents

• sui-20240215.htm (8-K) — 60KB
• exhibit991pressreleaseands.htm (EX-99.1) — 1766KB
• a2023-suppcoverxq4xv03a.jpg (GRAPHIC) — 1710KB
• chart-8c44c077216b4c4bad9a.jpg (GRAPHIC) — 105KB
• sui-20240215_g1.jpg (GRAPHIC) — 15KB
• sunlogofilea23a.jpg (GRAPHIC) — 24KB
• 0000912593-24-000066.txt ( ) — 4638KB
• sui-20240215.xsd (EX-101.SCH) — 2KB
• sui-20240215_lab.xml (EX-101.LAB) — 25KB
• sui-20240215_pre.xml (EX-101.PRE) — 13KB
• sui-20240215_htm.xml (XML) — 3KB

02

Item 2.02 Results of Operations and Financial Condition On February 20, 2024, Sun Communities, Inc. (the "Company") issued a press release, furnished as Exhibit 99.1 and incorporated herein by reference, announcing its financial results for the period ended December 31, 2023, and certain other information. The Company will hold an investor conference call and webcast at 11:00 a.m. ET on February 21, 2024 to discuss the financial results for the period ended December 31, 2023. The information contained in this Item 2.02, including Exhibit 99.1, is being furnished and shall not be deemed to be "filed" for purposes of the Securities Exchange Act of 1934, as amended (the "Exchange Act").

02

Item 4.02 Non-Reliance on Previously Issued Financial Statements or a Related Audit Report or Completed Interim Review (a) In 2022, the Company acquired a portfolio of holiday park properties located in the United Kingdom ("Park Holidays"), a reporting unit within the Company's manufactured housing segment. During the course of management's 2023 year-end procedures, the Company reviewed the controls relating to the valuation of the Park Holidays business and the associated goodwill at March 31, 2023, June 30, 2023 and September 30, 2023 (collectively, the "Interim Period End Dates"). In connection with that review, the Company concluded that changes in certain triggering factors relevant to the valuation of the Park Holidays business, including reduced financial projections and increased interest rates, should have been taken into account when preparing its previously issued unaudited interim consolidated financial statements (collectively, the "Interim Financial Statements") as of and for the period ended March 31, 2023, as of and for the period ended June 30, 2023, and as of and for the period ended September 30, 2023 (collectively, the "Interim Periods"), included in the Company's Quarterly Reports on Form 10-Q for the quarters ended March 31, 2023, June 30, 2023 and September 30, 2023, respectively. Management undertook a full review of the valuations and determined that as of each Interim Period End Date, the Company should have recognized non-cash impairments to goodwill for the Park Holidays business. On February 15, 2024, the Audit Committee of the Board of Directors (the "Audit Committee") of the Company, after discussion with the management of the Company, concluded that the Interim Financial Statements should no longer be relied upon due to errors in such financial statements. Similarly, any previously furnished or filed reports, related earnings releases, investor presentations or similar communications of the Company describing the Interim Financia

Forward-Looking Statements

Forward-Looking Statements This report contains various "forward-looking statements" within the meaning of the Securities Act of 1933, as amended (the "Securities Act"), and the Exchange Act, and the Company intends that such forward-looking statements will be subject to the safe harbors created thereby. For this purpose, any statements contained in this document that relate to expectations, beliefs, projections, future plans and strategies, trends or prospective events or developments and similar expressions concerning matters that are not historical facts are deemed to be forward-looking statements. Words such as "forecasts," "intends," "intend," "intended," "goal," "estimate," "estimates," "expects," "expect," "expected," "project," "projected," "projections," "plans," "predicts," "potential," "seeks," "anticipates," "anticipated," "should," "could," "may," "will," "designed to," "foreseeable future," "believe," "believes," "scheduled," "guidance," "target" and similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain these words. Such forward-looking statements include, without limitation, statements regarding the anticipated impact of the accounting error identified in the Company's previously issued financial statements and the impacts of the non-cash goodwill impairment amount on net income / (loss) described above. These forward-looking statements reflect the Company's current views with respect to future events and financial performance, but involve known and unknown risks and uncertainties, both general and specific to the matters discussed in this document, some of which are beyond the Company's control. These risks and uncertainties and other factors may cause the Company's actual results to be materially different from any future results expressed or implied by such forward-looking statements. In addition to the risks described under "Risk Factors" contained in the Company's Annual R

01

Item 8.01 Other Events Risk Factors Update The Company is also filing this Current Report on Form 8-K to supplement the risk factors described in its previous filings with the Securities and Exchange Commission with the following additional risk factors. We have identified a material weakness in our internal control over financial reporting which resulted in a material misstatement in certain of our previously issued interim unaudited consolidated financial statements, and we cannot provide assurances that this weakness will be effectively remediated or that additional material weaknesses will not occur in the future. A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the Company's annual or interim financial statements will not be prevented or detected on a timely basis. During the preparation of our Annual Report on Form 10-K for the year ended December 31, 2023, we identified a material weakness in our internal control over financial reporting relating to the design of management's review controls over assessments of goodwill for impairment at our Park Holidays business. As a result of this weakness, we concluded that our disclosure controls and procedures and internal controls over financial reporting were not effective as of March 31, 2023, June 30, 2023 and September 30, 2023 and intend to restate our interim unaudited consolidated financial statements as of those dates in our Annual Report on Form 10-K for the fiscal year ended December 31, 2023. We are actively engaged in the planning for, and implementation of, remediation efforts to address this material weakness but there can be no assurance that those efforts will be successful. A material weakness will not be considered remediated until the applicable controls operate for a sufficient period of time and management has concluded, through testing, that

Financial Statements and Exhibits

Financial Statements and Exhibits (d) Exhibits. Exhibit No. Description 99.1 Press release dated February 20 , 202 4 104 Cover Page Interactive Data File (embedded within the Inline XBRL document)

SIGNATURES

SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this Report to be signed on its behalf by the undersigned hereunto duly authorized. SUN COMMUNITIES, INC. Dated: February 20, 2024 By: /s/ Fernando Castro-Caratini Fernando Castro-Caratini, Executive Vice President, Chief Financial Officer, Secretary and Treasurer

View Full Filing

View this 8-K filing on SEC EDGAR