Sun Communities Q3 2024 Filing Released

TL;DR

SUN Q3 2024 10-Q filed. Real estate asset values and financial details updated.

AI Summary

Sun Communities Inc. reported its third-quarter results for the period ending September 30, 2024. The company's filing details its real estate assets, including manufactured home communities and marinas. Key financial data and fair value measurements for its recurring fair value measurements are presented, with comparisons to the prior year's fiscal year-end.

Why It Matters

This filing provides investors with an update on Sun Communities' financial health and asset valuation as of Q3 2024, crucial for understanding the company's performance in the real estate investment trust sector.

Risk Assessment

Risk Level: low — This is a routine quarterly financial filing (10-Q) providing standard financial disclosures and not indicating any immediate or unusual risks.

Key Numbers

• 2024-09-30 — Reporting Date (End of the third quarter for the 2024 fiscal year.)
• 2023-12-31 — Prior Year End (End of the 2023 fiscal year, used for comparative financial reporting.)
• 2024-07-01 to 2024-09-30 — Q3 2024 Period (The specific quarter for which financial results are reported.)

Key Players & Entities

• SUN COMMUNITIES INC (company) — Filer
• 20240930 (date) — Conformed Period of Report
• 20241107 (date) — Filed as of Date
• 2482082500 (dollar_amount) — Business Phone

FAQ

Key Financial Figures

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

Filing Documents

• sui-20240930.htm (10-Q) — 3616KB
• exhibit221-2024930listofis.htm (EX-22.1) — 7KB
• exhibit311-2024930ceocerti.htm (EX-31.1) — 9KB
• exhibit312-2024930cfocerti.htm (EX-31.2) — 9KB
• exhibit321-2024930ceoandcf.htm (EX-32.1) — 5KB
• sui-20240930_g1.jpg (GRAPHIC) — 649KB
• 0000912593-24-000247.txt ( ) — 19604KB
• sui-20240930.xsd (EX-101.SCH) — 115KB
• sui-20240930_cal.xml (EX-101.CAL) — 153KB
• sui-20240930_def.xml (EX-101.DEF) — 695KB
• sui-20240930_lab.xml (EX-101.LAB) — 1001KB
• sui-20240930_pre.xml (EX-101.PRE) — 893KB
• sui-20240930_htm.xml (XML) — 3690KB

– FINANCIAL INFORMATION

PART I – FINANCIAL INFORMATION

Consolidated Financial Statements

Item 1. Consolidated Financial Statements Consolidated Balance Sheets as of September 30, 2024 (Unaudited) and December 31, 2023 1 Consolidated Statements of Operations for the Three and Nine Months Ended September 30, 2024 and 2023 (Unaudited) 2 Consolidated Statements of Comprehensive Income / (Loss) for the Three and Nine Months Ended September 30, 2024 and 2023 (Unaudited) 3 Consolidated Statements of Equity for the Three and Nine Months Ended September 30, 2024 and 2023 (Unaudited) 4 Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 2024 and 2023 (Unaudited) 6

Notes to Consolidated Financial Statements (Unaudited) 7

Notes to Consolidated Financial Statements (Unaudited) 7

Management's Discussion and Analysis of Financial Condition and Results of Operations 43

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 43

Quantitative and Qualitative Disclosures about Market Risk 65

Item 3. Quantitative and Qualitative Disclosures about Market Risk 65

Controls and Procedures 66

Item 4. Controls and Procedures 66

– OTHER INFORMATION

PART II – OTHER INFORMATION

Legal Proceedings 67

Item 1. Legal Proceedings 67

Risk Factors 67

Item 1A. Risk Factors 67

Unregistered Sales of Equity Securities and Use of Proceeds 68

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 68

Exhibits 69

Item 6. Exhibits 69 Signatures 70 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) September 30, 2024 December 31, 2023 Assets Land $ 4,646.2 $ 4,278.2 Land improvements and buildings 11,608.6 11,682.2 Rental homes and improvements 782.2 744.4 Furniture, fixtures and equipment 1,090.2 1,011.7 Investment property 18,127.2 17,716.5 Accumulated depreciation ( 3,635.7 ) ( 3,272.9 ) Investment property, net (see Note 8 at VIEs) 14,491.5 14,443.6 Cash, cash equivalents and restricted cash (see Note 8 at VIEs) 81.8 42.7 Inventory of manufactured homes 174.8 205.6 Notes and other receivables, net (includes $ 212.8 and $ 154.1 at fair value) 494.4 421.6 Collateralized receivables, net 52.8 56.2 Goodwill 742.6 733.0 Other intangible assets, net (see Note 8 at VIEs) 350.7 369.5 Other assets, net (see Note 8 at VIEs) 696.5 668.5 Total Assets $ 17,085.1 $ 16,940.7 Liabilities Mortgage loans payable (see Note 9; Note 8 at VIEs) $ 3,344.5 $ 3,478.9 Secured borrowings on collateralized receivables (see Note 5) 52.8 55.8 Unsecured debt (see Note 9) 3,927.5 4,242.6 Distributions payable 122.3 118.2 Advanced reservation deposits and rent (see Note 8 at VIEs) 382.4 344.5 Accrued expenses and accounts payable (see Note 8 at VIEs) 390.9 313.7 Other liabilities 1,025.3 953.1 Total Liabilities 9,245.7 9,506.8 Commitments and contingencies (see Note 17) Temporary equity (see Note 10; Note 8 at VIEs) 263.3 260.9 Shareholders' Equity Common stock, $ 0.01 par value. Authorized: 360.0 shares; Issued and outstanding: 127.4 at September 30, 2024 and 124.4 at December 31, 2023 1.3 1.2 Additional paid-in capital 9,853.6 9,466.9 Accumulated other comprehensive income 33.9 12.2 Distributions in excess of accumulated earnings ( 2,433.3 ) ( 2,397.5 ) Total SUI Shareholders' Equity 7,455.5 7,082.8 Noncontrolling interests Common and preferred OP units 119.8 90.2 Consolidated entities (see Note 8 at VIE

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) For the three months ended March 31, 2023, we recorded non-cash goodwill impairment charges of $ 15.4 million, which increased Net loss on our Consolidated Statements of Operations. For the three and six months ended June 30, 2023, we recorded non-cash goodwill impairment charges of $ 309.7 million and $ 325.1 million, respectively, which changed Net income to Net loss on our Consolidated Statements of Operations by these corresponding amounts. For the three and nine months ended September 30, 2023, we recorded non-cash goodwill impairment charges of $ 44.8 million and $ 369.9 million, respectively, which reduced Net income on our Consolidated Statements of Operations during the three months ended September 30, 2023, and changed Net income to Net loss on our Consolidated Statements of Operations during the nine months ended September 30, 2023, by these corresponding amounts. 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 revenue. The following table disaggregates our revenue by major source and segment (in millions): Three Months Ended September 30, 2024 September 30, 2023 (1) MH RV Marina UK Consolidated MH RV Marina UK Consolidated Revenues Real property $ 240.4 $ 205.7 $ 131.8 $ 56.2 $ 634.1 $ 229.7 $ 211.0 $ 125.8 $ 52.3 $ 618.8 Home sales 37.7 9.3 — 58.3 105.3 48.8 13.6 — 55.4 117.8 Service, retail, dining and entertainment 1.5 40.4 125.2 19.1 186.2 1.8 46.7 139.1 17.9 205.5 Interest 3.7 1.6 0.2 — 5.5 13.7 1.4 0.1 — 15.2 Brokerage commissions and other, net 2.5 1.8 2.3 2.2 8.8 12.0 8.4 3.8 1.8 26.0 Total Revenues $ 285.8 $ 258.8 $ 259.5 $ 135.8 $ 939.9 $ 306.0 $ 281.1 $ 268.8 $ 127.4 $ 983.3 (1) Recast to reflect segment changes. Nine Months Ended September 30, 2024 September 30, 2023 (1)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued) (Unaudited) 3. Real Estate Acquisitions and Dispositions 2024 Acquisitions For the nine months ended September 30, 2024, we acquired the following properties: Property Name Type Sites, Wet Slips and Dry Storage Spaces State, Province or Country Month Acquired Port Milford Marina 92 CT April Oak Leaf (1) Marina 89 CT April Berth One Palm Beach (1) Marina 4 FL April Marina Village Yacht Harbor Marina 732 CA September Ventura Harbor Fuel (1) Marina — CA September Total 917 (1) Combined with an existing property. The following table summarizes the amount of assets acquired, net of liabilities assumed, at the acquisition date and the consideration paid for the acquisitions completed during the nine months ended September 30, 2024 (in millions): At Acquisition Date Consideration Investment in property Inventory of manufactured homes, boat parts and retail related items Goodwill and other intangible assets Other assets / (liabilities), net Total identifiable assets acquired net of liabilities assumed Cash and escrow Temporary and permanent equity (1) Total consideration Asset Acquisition Port Milford (2) $ 3.9 $ — $ 0.1 $ ( 0.4 ) $ 3.6 $ 1.1 $ 2.5 $ 3.6 Berth One Palm Beach (3) 2.9 — 0.1 0.2 3.2 3.2 — 3.2 Marina Village Yacht Harbor (4) 50.3 — — ( 0.2 ) 50.1 18.6 31.5 50.1 Business Combination Oak Leaf (3) 4.8 0.1 0.3 — 5.2 5.2 — 5.2 Venture Harbor Fuel (3)(5) 1.8 0.4 — 0.6 2.8 2.8 — 2.8 Total $ 63.7 $ 0.5 $ 0.5 $ 0.2 $ 64.9 $ 30.9 $ 34.0 $ 64.9 (1) Refer to Note 10, "Equity and Temporary Equity," for additional detail. (2) In conjunction with this acquisition, we issued 19,326 common Operating Partnership units ("OP units") valued at $ 2.5 million. (3) Combined with an existing property. (4) In conjunction with this acquisition, we issued 243,273 common OP units valued at $ 31.5 million. (5) The purchase price allocation is preliminary as of September 30, 2024, subject

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued) (Unaudited)

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