Sun Communities Inc. Files 10-Q for Period Ending March 31, 2024

TL;DR

<b>Sun Communities Inc. (SUI) filed its Q1 2024 10-Q, detailing financial positions as of March 31, 2024, and comparative periods.</b>

AI Summary

SUN COMMUNITIES INC (SUI) filed a Quarterly Report (10-Q) with the SEC on May 2, 2024. Filing is a 10-Q for Sun Communities Inc. (SUI) for the period ending March 31, 2024. The filing includes financial data for the quarters ending March 31, 2024, December 31, 2023, and March 31, 2023. Key financial statement components like Common Stock, Additional Paid-In Capital, Retained Earnings, and Noncontrolling Interest are detailed for these periods. The filing references specific dates including the report date (2024-05-02) and the period of report (2024-03-31). Segments mentioned include Manufactured Housing (MH), Recreational Vehicle (RV), and Marinas.

Why It Matters

For investors and stakeholders tracking SUN COMMUNITIES INC, this filing contains several important signals. This 10-Q filing provides investors with the latest quarterly financial snapshot of Sun Communities Inc., crucial for assessing performance and making investment decisions. The detailed breakdown of equity components and segment performance offers insights into the company's operational health and financial structure.

Risk Assessment

Risk Level: low — SUN COMMUNITIES INC shows low risk based on this filing. The filing is a standard quarterly report (10-Q) and does not contain immediate, significant new risks beyond those typically associated with real estate investment trusts.

Analyst Insight

Review the detailed segment performance (MH, RV, Marinas) and equity changes to understand the drivers of financial results for Q1 2024.

Revenue Breakdown

Key Numbers

• 2024-03-31 — Period of Report (Quarterly filing date)
• 2024-05-02 — Filed As Of Date (Filing submission date)
• 2024 Q1 — Reporting Quarter (Indicates the first quarter of 2024)
• 1231 — Fiscal Year End (Company's fiscal year closes on December 31st)

Key Players & Entities

• SUN COMMUNITIES INC (company) — Filer name
• SUI (company) — Ticker symbol
• 2024-03-31 (date) — Period of report
• 2024-05-02 (date) — Filed as of date
• 27777 FRANKLIN ROAD (address) — Business address
• SOUTHFIELD (location) — Business address city
• MD (location) — State of incorporation
• 6798 (industry) — Standard Industrial Classification

FAQ

Key Dates

• 2024-03-31: Quarter End Date — Marks the end of the reporting period for the 10-Q.
• 2024-05-02: Filing Date — Date the 10-Q was officially filed with the SEC.

Key Financial Figures

• $0.01 — ange on which registered Common Stock, $0.01 par value SUI New York Stock Exchange

Filing Documents

• sui-20240331.htm (10-Q) — 2824KB
• exhibit221-2024331listofis.htm (EX-22.1) — 7KB
• exhibit311-2024331ceocerti.htm (EX-31.1) — 9KB
• exhibit312-2024331cfocerti.htm (EX-31.2) — 9KB
• exhibit321-2024331ceoandcf.htm (EX-32.1) — 5KB
• sui-20240331_g1.jpg (GRAPHIC) — 649KB
• 0000912593-24-000190.txt (&nbsp;) — 17274KB
• sui-20240331.xsd (EX-101.SCH) — 112KB
• sui-20240331_cal.xml (EX-101.CAL) — 122KB
• sui-20240331_def.xml (EX-101.DEF) — 671KB
• sui-20240331_lab.xml (EX-101.LAB) — 972KB
• sui-20240331_pre.xml (EX-101.PRE) — 872KB
• sui-20240331_htm.xml (XML) — 3007KB

– FINANCIAL INFORMATION

PART I – FINANCIAL INFORMATION

Consolidated Financial Statements

Item 1. Consolidated Financial Statements Consolidated Balance Sheets as of March 31, 2024 (Unaudited) and December 31, 2023 1 Consolidated Statements of Operations for the Three Months Ended March 31, 2024 and 2023 (Unaudited) 2 Consolidated Statements of Comprehensive Loss for the Three Months Ended March 31, 2024 and 2023 (Unaudited) 3 Consolidated Statements of Equity for the Three Months Ended March 31, 2024 and 2023 (Unaudited) 4 Consolidated Statements of Cash Flows for the Three Months Ended March 31, 2024 and 2023 (Unaudited) 5

Notes to Consolidated Financial Statements (Unaudited) 6

Notes to Consolidated Financial Statements (Unaudited) 6

Management's Discussion and Analysis of Financial Condition and Results of Operations 40

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 40

Quantitative and Qualitative Disclosures about Market Risk 61

Item 3. Quantitative and Qualitative Disclosures about Market Risk 61

Controls and Procedures 62

Item 4. Controls and Procedures 62

– OTHER INFORMATION

PART II – OTHER INFORMATION

Legal Proceedings 63

Item 1. Legal Proceedings 63

Risk Factors 63

Item 1A. Risk Factors 63

Unregistered Sales of Equity Securities and Use of Proceeds 64

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 64

Exhibits 65

Item 6. Exhibits 65 Signatures 67 SUN COMMUNITIES, INC.

- FINANCIAL INFORMATION

PART I - FINANCIAL INFORMATION

CONSOLIDATED FINANCIAL STATEMENTS

ITEM 1. CONSOLIDATED FINANCIAL STATEMENTS CONSOLIDATED BALANCE SHEETS (In millions, except for per share amounts) (Unaudited) March 31, 2024 December 31, 2023 Assets Land $ 4,551.7 $ 4,278.2 Land improvements and buildings 11,529.5 11,682.2 Rental homes and improvements 755.9 744.4 Furniture, fixtures and equipment 1,031.3 1,011.7 Investment property 17,868.4 17,716.5 Accumulated depreciation ( 3,410.5 ) ( 3,272.9 ) Investment property, net (see Note 8 at VIEs) 14,457.9 14,443.6 Cash, cash equivalents and restricted cash (see Note 8 at VIEs) 132.5 42.7 Inventory of manufactured homes 191.0 205.6 Notes and other receivables, net 469.1 421.6 Collateralized receivables, net 56.5 56.2 Goodwill 731.4 733.0 Other intangible assets, net (see Note 8 at VIEs) 361.7 369.5 Other assets, net (see Note 8 at VIEs) 713.2 668.5 Total Assets $ 17,113.3 $ 16,940.7 Liabilities Mortgage loans payable (see Note 9; Note 8 at VIEs) $ 3,465.5 $ 3,478.9 Secured borrowings on collateralized receivables (See Note 5) 56.1 55.8 Unsecured debt (see Note 9; Note 8 at VIEs) 4,350.4 4,242.6 Distributions payable 119.7 118.2 Advanced reservation deposits and rent (see Note 8 at VIEs) 480.4 344.5 Accrued expenses and accounts payable (see Note 8 at VIEs) 370.4 313.7 Other liabilities (see Note 8 at VIEs) 987.5 953.1 Total Liabilities 9,830.0 9,506.8 Commitments and contingencies (see Note 17) Temporary equity (see Note 10; Note 8 at VIEs) 259.7 260.9 Shareholders' Equity Common stock, $ 0.01 par value. Authorized: 360.0 shares; Issued and outstanding: 124.6 at March 31, 2024 and 124.4 at December 31, 2023 1.2 1.2 Additional paid-in capital 9,471.4 9,466.9 Accumulated other comprehensive income 6.7 12.2 Distributions in excess of accumulated earnings ( 2,540.6 ) ( 2,397.5 ) Total SUI shareholders' equity 6,938.7 7,082.8 Noncontrolling interests Common and preferred OP units 84.9 90.2 Total noncontrolling interests 84.9 90.2 Total Shareholder

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) 1. Basis of Presentation Sun Communities, Inc., and all wholly-owned or majority-owned and controlled subsidiaries, including Sun Communities Operating Limited Partnership (the "Operating Partnership"), Sun Home Services, Inc. ("SHS"), Safe Harbor Marinas, LLC ("Safe Harbor") and the entities through which we operate our business in the United Kingdom (collectively, "Park Holidays") are referred to herein as the "Company," "SUI," "us," "we," or "our." We follow accounting standards set by the Financial Accounting Standards Board ("FASB"). FASB establishes accounting principles generally accepted in the United States of America ("GAAP"), which we follow to ensure that we consistently report our financial condition, results of operations and cash flows. References to GAAP issued by the FASB in these footnotes are to the FASB Accounting Standards Codification ("ASC"). These unaudited Consolidated Financial Statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission ("SEC") for interim financial information and in accordance with GAAP. We present interim disclosures and certain information and footnote disclosures as required by SEC rules and regulations. Accordingly, the unaudited Consolidated Financial Statements do not include all of the information and footnotes required by GAAP for complete financial statements. The accompanying unaudited Consolidated Financial Statements reflect, in the opinion of management, all adjustments, including adjustments of a normal and recurring nature, necessary for a fair presentation of the interim financial statements. All significant intercompany transactions have been eliminated in consolidation. Certain reclassifications have been made to prior period financial statements in order to conform to current period presentation. There was no impact to prior period net income for any of the reclassifications. The results of

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) Restatement of Previously Issued Financial Statements As disclosed in our 2023 Annual Report, we restated the unaudited financial information as of and for the three months ended March 31, 2023, the three and six months ended June 30, 2023, and the three and nine months ended September 30, 2023 (collectively, the "2023 Interim Financial Statements"). Accordingly, certain prior period balances within our consolidated financial statements and the accompanying footnotes have been restated, where applicable. In 2022, we acquired a portfolio of holiday park properties located in the United Kingdom, which we refer to as our Park Holidays business, classified within our UK reporting segment. As disclosed in our Current Report on Form 8-K filed with the SEC on February 20, 2024, during the course of management's 2023 year-end procedures, we 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. In connection with that review, we concluded that there were triggering events relevant to the valuation of the Park Holidays business, including reduced financial projections and increases in interest rates, that should have been taken into account when preparing the 2023 Interim Financial Statements. Management undertook a full review of the valuations and determined that at each of March 31, 2023, June 30, 2023 and September 30, 2023, we should have recognized non-cash impairments to goodwill for the Park Holidays business. For the three months ended March 31, 2023, non-cash goodwill impairment increased Net loss on our Consolidated Statements of Operations by $ 15.4 million. 2. Revenue Our revenue consists of real property revenue at our MH, RV, Marina and UK properties, revenue from home sales, revenue from service, retail, dining and entertainment, interest income, and brokerage commissions and other reve

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued) (Unaudited) 3. Real Estate Acquisitions and Dispositions 2024 Acquisitions We did not acquire any operating properties during the three months ended March 31, 2024. During the same period, we entered into a ground lease to support one marina with eight wet slips and dry storage spaces. 2024 Development and Expansion Activities During the three months ended March 31, 2024, we acquired two land parcels located in the United States ("U.S.") for an aggregate purchase price of $ 12.9 million. In conjunction with one of the land parcel acquisitions, we issued 4,452 common OP units valued at $ 0.6 million. During the three months ended March 31, 2024, we acquired two buildings related to our marinas located in the U.S. for an aggregate purchase price of $ 13.7 million. 2024 Dispositions In February 2024, we sold two MH communities located in Arizona and Florida with 533 developed sites for total cash consideration of $ 51.7 million. The gain from the sale of the properties was $ 6.2 million and was recorded in Gain / (loss) on dispositions of properties on our Consolidated Statements of Operations. 2023 Acquisitions For the year ended December 31, 2023, we acquired the following properties: Property Name (1) Type Sites, Wet Slips and Dry Storage Spaces Development Sites State, Province or Country Month Acquired Fox Run MH: asset acquisition 68 72 MI January Savannah Yacht Center Marina: asset acquisition 24 — GA March Total 92 72 (1) Property names are subject to changes subsequent to acquisition. The following table summarizes the amounts of assets acquired, net of liabilities assumed at the acquisition date and the consideration paid for the acquisitions completed in 2023 (in millions): At Acquisition Date Consideration Investment in property Inventory of manufactured homes, boat parts and retail related items In-place leases, goodwill and other intangible assets Other assets / (l

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued) (Unaudited) 2023 Development and Expansion Activities During the year ended December 31, 2023, we acquired four land parcels located in the U.S. and one land parcel in the United Kingdom for an aggregate purchase price of $ 35.8 million. 2023 Dispositions In December 2023, as part of a transaction with our joint venture partners in Sun NG RV Resorts, Sun NG Whitewater RV Resorts LLC, Sun NG Beaver Brook LLC and four standalone affiliates (collectively, "Sun NG"), we disposed of our majority equity interest owned in three consolidated joint venture RV properties with 955 developed sites. In August 2023, we sold one MH community located in Maine with 155 developed sites at its net carrying value for cash consideration of $ 6.8 million. The property was previously classified as held for sale during the three months ended June 30, 2023, with its net carrying value of $ 13.1 million written down by $ 6.3 million within Asset impairments on our Consolidated Statements of Operations, to a fair value less cost to sell of $ 6.8 million. In February 2023, we sold two parcels of land in the United Kingdom for total consideration of $ 111.5 million. The consideration consisted of $ 108.8 million in the form of an operator note receivable that was added to an existing facility with a weighted average interest rate of 11.9 % per annum, due May 31, 2023 and subsequently extended to July 31, 2023 as part of the operator's total facility. On the date of sale, the carrying value of the note receivable approximated its fair value due to its short term nature. The dispositions resulted in a loss on sale totaling $ 2.2 million during the year ended December 31, 2023, net of the release of foreign currency translation losses from Accumulated other comprehensive income ("AOCI") of $ 11.9 million. The total loss on sale was recorded in Gain / (loss) on dispositions of properties on the Consolidated Statements of Operatio

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